samchain/econo-pairs-v1 huggingface dataset:
This approach clearly showed its limits during the financial crisis. The financial fragmentation of EMU during the financial crisis was partly a result of the initial choices concerning EMU’s institutional architecture – to be precise, its minimalist design which left economic and financial policies mostly at national level. This was maybe due to an overriding faith in the efficiency of financial markets that – even though not shared by all of EMU’s founding fathers – prevailed in Maastricht. It has to be acknowledged, however, that over the following years, financial market integration in EMU and at global level, accelerated at a speed that was hard to grasp in those early days after the creation of Monetary Union. The introduction of the single currency gave a major impetus to financial integration in the euro area. Financial integration was impressive in terms of quantitative indicators but it was not sustainable – it proved to be shallow and reversible. In fact, it even contributed to the rapid contagion in the early days of the crisis.1 We learned the hard way that a single currency requires a financial system that is sustainably integrated and, indeed, as single as possible. Much has been done to correct the initial design failures of EMU. Along with the introduction of the euro, the EU’s Financial Services Action Plan was launched to provide an overall framework for the integration of financial services in Europe.

The central bank Governors of the BIS Global Economy Meeting, in their press statement of 25 May 2017, welcomed the launch of the Code, and confirmed their intention to embed the Code within their own practices4. In addition, given the increasing volume of FX activity taking place in Asia, the Asian central banks, including MAS, HKMA, Bank of Korea, the Reserve Bank of Australia, and the Reserve Bank of India also expressed support for the Code and will be engaging local participants to promote adherence to the Code. MAS, in our capacity as the central bank, is also in the process of embedding the Code within our practices. The central banking community has also considered our possible areas of influence. There are two such areas. The first is that we will encourage our FX counterparties to use the Statement; and The second is that we will make Code adherence a condition for membership to our respective Foreign Exchange Committees. The likely impact of these initiatives can be powerful – the major regional FXCs have more than 200 members within them – and these are amongst the largest participants in the FX market. So what is Singapore’s approach to the Code? Singapore is now Asia Pacific’s largest FX centre. The average daily turnover in Singapore exceeds $ trillion5. We have registered 11.7% CAGR growth over the last 6 years, and account for about 8% of global turnover.
With a reservation for other effects on this indicator from various interest rate premia that may fluctuate over time, this suggests a growing understanding of our policy. With a longer time horizon, the predictive error naturally tends to be larger. With a oneyear horizon the error presumably has less to do with imperfect communication or a lack of understanding of how our policy functions; it is no doubt more a matter of shifts in the whole picture of economic activity and inflation. Things are somewhat different in a three-month perspective; predictive errors then presumably also arise from misinterpretations of the Riksbank’s signals. During the past year the repo rate has been raised once and lowered once. This has required a great deal of the Riksbank in the way of communicating policy to the outside world and explaining the reasons for its measures. A study of the market’s prices, predictions and statements shows that the repo rate increase in December 1997 was broadly expected. It was, in fact, just at last year’s Conference here that an important piece of signalling took place. As regards the repo rate cut in June, on the other hand, the pattern of market expectations changed relatively late. The implied forward interest rate curves three months earlier show that the June cut had not yet been foreseen by market players. It was mainly in connection with an interview I gave some weeks before the decision that expectations shifted to a cut.

The institution that is responsible for the settlement of payments between financial institutions gains a considerable influence over the payment system as a whole. If 4 [8]  the settlement of payments had been a branch characterised by substantial competition and low entry barriers, it would not have been problem. But as payment settlement is instead characterised by economies of scale and network effects, Sweden actually has to choose between a public monopoly and some form of private monopoly. Even a privately-owned infrastructure can be supplied in a competitively neutral way without creating monopoly profits, but it must in that case be accompanied by regulations, supervision and oversight which is once again an unnecessary detour if the infrastructure could just as easily be directly supplied by a central bank. I therefore believe that both financial stability and competition on the payment market would benefit from the Riksbank supplying a payment system that is available whenever the participants wish to use it. Platform sharing with other central banks is cost-effective Platforms for settling instant payments must be able to process a large number of payments, be accessible 24/365 and offer first-class continuity solutions. The systems are therefore expensive and complex to develop. We have not calculated in detail how much it would cost for the Riksbank to develop or procure a system for the settlement of instant payments, but simple business economics speak against this type of project. Payment infrastructures entail substantial fixed costs.
Other countries also have major problems. In a worst case scenario, this could develop into a debt crisis in several countries, which also affects the bank system. In Sweden the surplus target has led to greater confidence and predictability with regard to developments in public finances. The strong public finances have also enabled us to use fiscal policy stimulus measures during the recession without jeopardising the long-term stability in public finances. The Riksbank supports the idea of a surplus target being included in the Budget Act and that the target should be set as a surplus of 1 per cent of GDP over the coming ten years. If fiscal policy is predictable and sustainable, then we at the Riksbank can make better assessments of resource utilisation and inflationary pressures. This helps us to conduct a well-balanced monetary policy. References Blanchard, Olivier, Dell’Ariccia, Giovanni, and Mauro, Macroeconomic Policy”, IMF Staff Position Note 10/03. Paolo  (2010),  “Rethinking  Leeper, Eric M. (2009), “Anchoring fiscal expectations”, SVERIGES RIKSBANK Economic Review, No. 3, 2009, Sveriges Riksbank. Reinhart, Carmen M. and Rogoff, Kenneth S. (2009), “The Aftermath of Financial Crises”, National Bureau of Economic Research Working Paper 14656. Reinhart, Carmen M. and  BIS Review 56/2010  7  Rogoff, Kenneth S. (2010), ”From Financial Crash to Debt Crisis”, National Bureau of Economic Research Working Paper 15795.

This deterioration in competitiveness can be illustrated by the fact that unit labour costs have increased by between 10 to 20 per cent more than in the euro area as a whole since 2000, and even more in relation to unit labour costs in Germany. The deterioration in competitiveness entails less chance of a boost from exports and thus poorer opportunities for a rapid recovery as international demand increases. (Slide: Unit labour costs compared to the euro area). The strong growth in domestic demand in recent years and the weaker competitiveness have resulted in a current account deficit and thus rising foreign debts. (Slide: Current account deficits). In the case of countries with their own currencies one would expect a depreciation of the currency to restore competitiveness. This opportunity is not available to the countries in the euro area. Here, it is instead necessary for wages and prices to fall in relation to other countries. One difficulty in this context is that both public and private debts and the interest payable grow in real terms – that is, a larger part of production goes to meeting the costs of the debts. Developments in Germany show that such internal cost-cutting in relation to other countries is fully possible. The combination of a muted growth in nominal wages and productivity improvements has led to unit labour costs in Germany falling by 15 per cent since 2000, compared with the euro area as a whole.
•  The forecasts of inflation are now based on an assumption that the repo rate will develop in line with market expectations. This new assumption makes it easier for us to refer to the entire interest rate path in our communication of monetary policy. •  Large fluctuations in asset prices entail risks that we must take into account, even if the theoretical analysis of the significance of the asset prices has not yet been fully developed. BIS Review 29/2006

The following are some of the attributes of an enterprise with good corporate governance:  2  BIS Review 79/2008  (i)  A well managed and coordinated company;  (ii)  Role and duties are clarified;  (iii)  Easier access to finance;  (iv)  Financial awareness and the ability to respond quickly;  (v)  Significant reduction in business risk and corporate failure; and  (vi)  Increase in monetary value of the firm. In the case of Zambia, a BoZ Microfinance Survey of 1999 highlighted that most of the MFIs were inadequately capitalised and had weak corporate governance structures. The survey also pointed out that there were about 98 MFIs operating across the country in an unregulated environment. The study further revealed that the nature of microfinance business in Zambia was generally targeted at the lower income group which have limited or no access to financial institutions offering financial services such as credit or savings. Following the study, broad consultations were held with various stakeholders, including Government, commercial banks and other financial institutions, and the general public. The purpose of the consultations was to ensure that the development of legislation relating to the microfinance sector was as comprehensive and appropriate as possible. The consultations by the Bank of Zambia were extended to various countries to obtain international best practice that could be of benefit to our local environment.
Overall, the transmission of our suite of measures to the financial system has been very effective. This is in no small part due to the strong complementarities between instruments, which ensure that all segments of the yield curve are influenced, thereby easing financial conditions more broadly (see Chart 7). Let me give two examples to illustrate the role played by complementarities in our policy design. First, the negative interest rate policy has supported the portfolio rebalancing channel of the APP 10 11 / 19  BIS central bankers' speeches  by encouraging banks to lend to the broad economy instead of holding onto liquidity. 10At the same time, the extra liquidity from the APP has dampened volatility at the short end of the curve. Second, the APP and its reinvestments have supported our enhanced forward guidance via the signalling channel.11 Asset purchases provide a strong signal that policy rates will remain low for an extended period of time. This effect is reinforced by the sequencing of our instruments, which is embedded in the structure of our forward guidance. At the same time, our forward guidance on rates reinforces the APP and reinvestments, since it anchors the short end of the risk-free curve and thereby ensures that the stimulus from the APP and the reinvestments is not offset. The improved financing conditions have made a considerable contribution to the macroeconomic performance of the euro area.

The funding cost relief is direct for those banks that switch from more expensive options to 9 / 19  BIS central bankers' speeches  TLTRO financing. However, there is also an indirect channel that benefits the entire banking system: while looking ahead banks will have to step up their issuance in order to satisfy regulatory requirements, the TLTRO programme will help avoid cliff effects by allowing banks drawing TLTRO funds to cancel or postpone plans to issue bonds in the market. This reduction in the supply of securities relative to what we would see in the absence of TLTRO III creates a scarcity channel that puts further downward pressure on bank bond yields, resulting in funding cost relief across the board. The upshot of cheaper bank funding is higher credit volumes and lower lending rates to the wider economy via the bank lending channel.9  10 / 19  BIS central bankers' speeches  In fact, our experience with previous TLTROs (TLTRO I and II) was that these operations had a significant effect on funding costs, particularly in more vulnerable euro area countries. Moreover, the lower funding costs were passed through to customers. Particularly in vulnerable countries, banks that participated in TLTROs cut their lending rates by more than their non-participating peers (see Chart 6). The policy package In assessing the impact of our policy package, we must also take into account that the instruments were designed to be complementary and mutually reinforcing.
Low interest rate levels have contributed to compressing banks’ net interest income given that, with zero proving an effective floor for the remuneration of most deposits, once that level is reached banks have not been able to continue reducing their funding costs in a setting in which risk-free returns have come to stand at negative values. In any event, the evidence available indicates that this negative effect on net interest income has been partly offset by a lesser pass-through of market movements to the interest rates on the outstanding balance of lending. It should be borne in mind, moreover, that the reduction in interest rates also has some positive effects on bank profits via various channels. On one hand, the expansionary monetary policy has a favourable impact on economic activity, boosting the demand for credit and for other banking services. On the other, the decline in the return on risk-free assets tends to raise the value of assets by reducing the discount factor implicit in their price, which translates into capital gains for the banks. Lastly, the decline in interest rates is conducive to a decline in loan default losses, as it reduces the debt burden and raises borrowers’ income as a result of the boost to economic activity it entails. Overall, the above points suggest that the net final impact of the low interest rate levels on bank profitability has been comparatively low compared with the other above-mentioned factors. I will now move on to the third major challenge the Spanish banking industry faces.

The European Fiscal Board interestingly proposed relying on a ceiling on the growth rate of primary public expenditure, net of discretionary revenue measures iv. c/ Making headway with a Financing Union for Investment and Innovation. Private risk-sharing mechanisms, which are less frequently considered than public ones, are just as important and effective, as we can see in the US where capital markets play a more important role as a buffer between states than fiscal transfers. Here, solidarity and responsibility are mutually reinforcing. The euro area has an abundant, and rarely mentioned, resource at its disposal: a savings surplus relative to investment, which amounted to EUR 360 billion last year. This resource is currently invested outside the euro area, even though our potential investment needs are substantial. A better allocation of European private savings requires more efficient crossborder financing channels – savings are not always where the investment need arises – and more efficient “transformation”: preferred savings instruments are often short-term and safe, while financing needs are often longer-term and riskier. This requires the combination of a more effective Banking Union and a “Capital Markets Union”, to make a genuine “Financing Union for Investment and Innovation”. European governments all agree in principle; let us now at last walk our talk, as a significant private booster to our collective exit strategy. d/ Keeping in place an accommodative monetary policy, against the backdrop of low inflation – 0.4% in April in the euro area.
So I’d like to begin by taking an opinion poll! I’d like to put to you two questions. The first is how many of you agree that monetary policy should have the control of inflation as its overriding objective? May I ask all those of you who agree that monetary policy should have control of inflation as its overriding objective, please, to raise a hand. Now please would those who disagree that monetary policy should have control of inflation as its overriding objective please raise a hand. Now let me ask you a second question - and I’m afraid that only those who voted in favour in response to the first question are entitled to vote this time - I don’t want a biased result. Given the objective of control of inflation - the 2½% inflation target - please would those of you who think interest rates should be higher than they are at present raise a hand? Please raise a hand now if you think interest rates are at the right level? And will those of you who think that interest rates should be lower than they are at present now please raise a hand - but remember you can only vote if you agreed that monetary policy should be directed to controlling inflation! Welcome to your first meeting of the Monetary Policy Committee! Your votes will all be individually recorded by the Chairman and published with the minutes in a fortnight’s time!

And the reasons for this cyclical pattern of structural reforms seem to be related to the fact that crises unmask weaknesses that were hidden by cyclical buoyancy, and these increase, at least partly, the social support for change. The labour market is clearly first among the structural reforms that are needed. For one thing, labour markets play a key role in the functioning of the economy, in particular as a mechanism for adjustment in the face of adverse shocks. And their functioning has implications for competitiveness and productivity, two variables crucial for the long-term growth of any economy and, in particular, for those countries participating in a monetary union, as is our case. Likewise, there is sufficient evidence that labour market institutions play a key role as determinants of their sound functioning. In particular, we have evidence that labour markets have been pivotal in the response of the different economies to the current crisis. And they can play a central role in the persistence of the negative effects of the financial crisis in the medium and long run. During the current recession output and unemployment responses differed markedly across the advanced economies. For instance, the peak-to-trough increase in unemployment during  2  BIS Review 65/2010  the crisis was around 7.5 percentage points in Ireland and Spain, while output dropped by more than 8% in Ireland and only half as much in Spain.
So far, more than 3600 people have completed the modules and a substantial number of them, one in five, have decided not to proceed with the purchase. This points to two things. Firstly, the module is successful in nudging participants to reassess their existing financial obligations before they can take on more than what they can handle. Secondly, it reinforces the need to continue pushing for financial education. Individuals need to know their capacity, and what they can afford before undertaking a commitment of this magnitude. We have established that every individual needs to play their part to ensure that they are fully aware of and are able to undertake the commitment of buying a house. However, the responsibility does not reside with the buyers alone. Industry players in the private sector also 1/3  BIS central bankers' speeches  have a role to play to support the national agenda of affordable homes. As one of the core players in the housing market, developers have a significant role to play. In providing the supply of homes for the public, developers should seek to provide homes at an affordable price point. Using international affordability metrics, houses in Malaysia are considered to be “seriously unaffordable” with a median multiple of five times. This, in turn, affects home ownership. Take the latest data of unsold residential properties of about 171,000 units. About 74% of them are priced beyond what ordinary Malaysians can afford.

At the recent release of the 2018 Financial Stability and Payment Systems Report, Bank Negara Malaysia reported that financial institutions in Malaysia will continue to support economic activity, including to households for affordable housing. Loan disbursements and net financing to households grew healthily last year by around 6.7% and 4.7% respectively. The approval rate stood at 71.3%, with around 70% of loans for first time buyers of properties priced below RM500,000. Finally, for policymakers, our role is to continue pursuing greater coordination with the private sector to build a sustainable housing market. In Malaysia, various initiatives have been announced to support this agenda, including the launch of Bank Negara Malaysia’s Fund for Affordable Homes, the National Home Ownership Campaign, stamp duty exemptions and provision of mortgage guarantees and rent-to-own schemes. While we are seeing a gradual rebalancing of housing supply towards the more affordable segments in Malaysia, it is important that future supply is tailored to the needs of future demand. As such, moving forward, it will be critical for Malaysia to accelerate the establishment of an integrated housing database. The database would be important to provide timely information to help build an efficient housing market through greater transparency and lead to better planning by policymakers and developers. The newly established single authority for affordable housing should play a proactive and strategic role in managing affordable housing in Malaysia. Local authorities and developers should also work together to reduce the cost of building houses.