samchain/econo-pairs-v1 huggingface dataset:
However, over time as the Asian countries make progress in restructuring their economies and strengthening their institutions, they will reassess the balance of risks, and perhaps modify some of these restrictions. Liberalisation of $ policy In Singapore, we are subject to the same trade-offs. But our circumstances are somewhat different as we were less severely affected by the crisis. Our financial services sector is also relatively larger and more established, compared to other countries in the region. By 1997, we had decided that we were sufficiently well established to shift from our previous highly conservative and risk-averse regulatory approach towards the financial industry and instead supervise with a lighter touch and accept calculated risks in order to promote its development. As part of this overall liberalisation, we progressively relaxed restrictions on the Singapore dollar, and fostered the growth of our capital markets, throughout the Asian crisis. Our monetary policy has been centred on the exchange rate since 1981. But as a large financial centre with open capital markets, we are exposed to large and sometimes, volatile capital flows. Thus we have long maintained an explicit policy of discouraging the internationalisation of the Singapore  2  BIS Review 19/2002  dollar, in order to support our monetary policy framework. We limited the use of the Singapore dollar by non-residents for purposes unrelated to the Singapore economy, for example currency speculation.

Ex post assessments of policies are admittedly much further along in their development at the practical level, and their benefits as a part of the overall public policy process are wellestablished in the most advanced democratic societies. Yet they also come up against theoretical and empirical limitations that we cannot conceal. On this front, Spain is lagging behind our peers. And this is not because of a lack of know-how but rather, in my opinion, on account of the existing limitations in the current administrative, political and social ecosystem which do not sufficiently encourage the insertion of the assessment process into the public-policy-programme design and review cycle. True, there have been some promising developments of late, such as the mandatory periodic evaluations to assess the functioning of the minimum income scheme. Yet in much of the Spanish administrative apparatus there are still significant technical hurdles to building potential ex ante or, at least, ex post assessments into the design of public programmes. These impediments not only limit the general government’s own ability to conduct thorough assessments, but also prevent the findings of external assessments from being fully harnessed. Political action to address them is also an important long-term policy; for example, the creation of technical posts and hiring mechanisms that attract people with adequate training. Setting up agencies without long-term hiring plans does not work. Nor is it just a question of public-sector shortcomings.
In the pre-turmoil period, supervisory authorities were more concerned about overburdening institutions with reporting requirements than with enforcing adequate disclosure. As such, an ESRB established before the summer of 2007, but with access to the same information base as the one available to central banks at the time, might not have made substantially different systemic risk assessments. In addition to the importance of having a more comprehensive information base, the crisis has led to a significant revamping of research into systemic risk and to greater input into the formulation of related policy recommendations. As I just mentioned, in addition to improvements in macro stress-testing techniques and the early warning signal literature, more attention is being paid to contagion and spill-over models, especially for the banking sector, to macro-financial risk-based flow-of-funds approach using contingent claims analysis, and to research tools to support regulatory and supervisory policy recommendations. One area in which a pre-crisis ESRB could have made a difference is in the conduct of country-specific analysis. Generally, ECB financial stability assessments focus on the euro area as a whole and rarely make distinctions between euro area countries. They mainly consider the risks and vulnerabilities common to most euro area countries; there is little analysis, let alone formulation, of policy recommendations, at country level. While this helps to distil the elements of the analysis relevant to the euro zone, country-specific vulnerabilities might end up receiving insufficient attention. The ESRB will have a clear mandate to pursue country analysis and to provide countryspecific policy recommendations if deemed necessary.

The issuance of risk warnings, in the context of safeguarding financial stability – where the analysis is centred on the downside risks and thus on highly improbable events – differs substantially from other types of analysis focused on a central, most probable, baseline scenario (such as the one supporting monetary policy). The translation of systemic risk assessments into proposals for concrete policy actions – of a prudential or supervisory nature – is also, to a large extent, new to the central banking community. 3. What went wrong? Confronted with the question of whether central banks and international bodies with financial stability competencies saw the financial crisis coming, it would be fair to answer “Yes, to some extent”.
Similarly, if you went to your personal lawyer and overheard him refer to you in conversation with his associate as a “counterparty,” rather than as a “client,” would you worry? You should. My point here is not that banking is a profession like medicine or law. My point is about how you see your customer and the service provided to that customer. A counterparty is not someone needing your help; “it” represents a profit opportunity – something to be exploited. Their loss is your gain. A customer, by contrast, is someone to be served. It is right to charge a fee to a customer, client, or patient, but the transaction is driven by the other person’s needs. Many financial services firms, however, refer to the people they do business with as counterparties. This is no accident. It characterizes the way in which the organization views the person it is facing in its businesses. Viewing customers as profit opportunities is inconsistent with a strong ethical culture. In my experience, firms that consider their operational model as service provider tend to have a better culture than those firms that consider their operational model as money maker. The second item that I would leave out is a conception of a bank as a money making machine. This is not to say that I would ignore profitability; that would be foolish and would destine a firm to a short life.

In better run firms, the rules are built on a foundation of the shared and well‐understood values of the institution. These values reflect a bank’s public function as a financial intermediary and recognize the privileges that come with a banking charter. 4 In other firms, however, compliance rules can be undermined by the values of the organization, resulting in an unhealthy dissonance. For example, if there are elaborate rules for complying with the tax laws of a particular jurisdiction, but the organizational value is to facilitate flight capital, a mixed message may be sent that tax compliance rules are just technicalities. Similarly, in the area of economic sanctions, if the sanction is perceived as something technical and implicating only a single currency, the bank might be sending an unintended message – that we comply with the sanction only because it represents a mandatory but silly rule of a single sovereign issuing a specific currency, and not because the sanction seeks to address a problem that all should find abhorrent, like financing a jurisdiction engaged in genocide. 5 What to leave out Thinking about culture like a package, there are some things that I would leave out. Again, without being exhaustive, here are three examples. First, I would leave out any depiction of the persons that an organization does business with as “counterparties.” If you went to your doctor and overheard her refer to you in conversation with office personnel as a “counterparty,” rather than as a “patient,” would you worry? I would.
Christian Noyer: Bank of France – Bank of Japan: converging views Opening speech by Mr Christian Noyer, Governor of the Bank of France, at a joint symposium of the Bank of France and the Bank of Japan, Paris, 8 January 2008. *  *  *  Mr Ambassador, Governors, Chairpersons, Professors, ladies and gentlemen, dear friends, I am delighted to welcome you today to the Banque de France together with the Governor of the Bank of Japan, Toshihiko Fukui. Yokosso Ilashaïmase ! Some of you have come as neighbours, and others have made the trip from Tokyo to attend this symposium, for which I would like to thank you wholeheartedly. And, as 2008 has just begun, I would like to wish you a very happy New Year: the year of the rat in the Japanese calendar, “Akemashite omedeto gozaïmasu nesumi doshi”. I recently read the following prediction concerning this year: “It will be particularly favourable for all forms of investments and savings (we all know that rodents hoard their food)”. The prediction went on to say (every word is true) “The influence of the rat curbs inflation”. As a euro area central banker, I welcome this omen. But coming back to what gathers us here today, 2008 is the year of friendship between France and Japan, celebrating the 150th anniversary of Franco-Japanese diplomatic and economic relations.

Rather in the best traditions of central banking, my conclusion is that the authorities as a whole need to remain vigilant and deepen our understanding, so that we can take appropriate action in the future if required – be that from a macro-prudential or supervisory perspective. Looking to the future  Financial markets are ever in a state of flux. In particular, the trend toward greater automation of trading – my focus today – looks certain to continue, both in already fast markets as well as those currently more reliant on traditional intermediation methods. Market participants have a clear interest here in understanding how risks to their businesses are evolving and in managing them prudently. For the authorities, we need to dig deep to understand what this means for the financial system as a whole: both to appreciate the benefits and to remain vigilant as to the risks. This remains very much in focus for the Bank and the FCA. It is important for us to ensure that regulation – both of individual participants, market infrastructure and the financial system as a whole – keeps pace with the changes in the type and distribution of risk. Only then can it provide an adequate guard against risks to prudentially regulated institutions and their counterparties. Regulation is most effective when informed by a rich and diverse set of research – and here we need help from the academic community. There is enormous potential for varied and interesting research in the area of fast markets.
Jean-Claude Trichet: Recovery, reform and renewal – Europe’s economic challenge Speech by Mr Jean-Claude Trichet, President of the European Central Bank, at the conference “The ECB and Its Watchers” XII, Frankfurt am Main, 9 July 2010. *  *  *  Ladies and Gentlemen, It is a pleasure to be with you in this 12th edition of the ECB Watchers’ Conference. Today, I would like to consider where we are in the financial crisis and the economic recovery; to describe the emerging contours of the post-crisis order both in Europe and the wider world; and to reflect on what has been achieved by the global policy response to the crisis and what remains to be done. 1. Where do we currently stand in the crisis? We are now almost three years into the crisis. The development of the crisis was marked by a progressive collapse of confidence: a seizing up of markets, dramatic financial events impacting the global financial system, a sharp decline in trade and a freefall in economic activity in the industrial world. We can all feel relief that the collective international efforts to avert catastrophe in the winter of 2008/09 have been successful. But events over the past few months have made clear that it is still too early to declare the crisis over. And, just as they have done throughout the crisis, governments and central banks in Europe and around the globe continue to respond to shifting economic and financial circumstances with swift, decisive and effective action.

In early May 2010, the gravity of the situation was such that public authorities in Europe had to step in, with unprecedented actions in terms of quantity and quality, to restore a sense of direction and renew confidence. Over the past three years much has been achieved; but much remains to be done. Restoring confidence and a clear sense of direction does not mean going back to business as usual – the crisis has shown that we need to make fundamental changes to the way we manage our financial systems, our public budgets and the interactions between the national and international institutions that oversee the world economy. There is a very strong unity of purpose among the world’s policy-makers: to eliminate the fragilities of the global financial system and the global economy in order to achieve strong, balanced and sustainable economic growth. We are now at a stage in which we have to finalise new rules and regulations that will help to make our economies more resilient in the future. This means that we are now in the time of implementation of decisions already taken and in the ultimate preparation of the new rules and regulations. It is a very important phase and it requires our full attention. I see three areas at the core of efforts that will contribute to shaping the contours of the postcrisis order: First, institutions. As the Nobel laureate Douglass North said 20 years ago, “Institutions exist to reduce uncertainty in the world.” That message remains true today.
Should monetary policy try to stabilize a broader set of indicators in the future, not just prices of consumer goods, but also real-estate or other asset prices? Does it make sense to have a separate currency but not to have an autonomous monetary policy, like the Baltic countries and Bulgaria, or to have a separate currency but not to have an effective lender of last resort, like Iceland? Doesn't the system of exchange-rate pegs, quasi-pegs or currency boards increase imbalances of those who are pegged, and thus their vulnerability in a crisis? These questions are important, but they are not being properly discussed in the current debate. Many forget that the state's role in the financial sector is already huge. Central banks, finance ministries and various state agencies across the globe do regulate and supervise the financial industry more, not less, than many other industries. Yet that is precisely why every further tightening of the screws should be carefully considered and analyzed, not adopted  BIS Review 10/2009  1  under pressure or threat, hastily or imprudently. One should bear in mind that regulation never distinguishes the bad banks from the good ones. And even this crisis has revealed that many financial institutions are in good shape and coping with its consequences quite well. Although many people won't admit it, new rules being drawn up today will radically affect the financial market tomorrow and beyond.

In general, most of these ideas are heading in the same direction: toward greater regulation and centralization of the financial sector, and toward less competition and a greater publicsector presence in the financial industry from now on. These thoughts – often presented in soft "Eurospeak" so as not to sound too alarming – seem as if their proponents thought them up long ago and were just waiting for a good opportunity to unveil them as miracle cures for all the financial world's ills and woes. It is as if we hadn't all known for years that unfortunately – in the world in general, and the financial one in particular – there are no such things as perfect rules, perfect regulation or, above all, perfect certainty. It is as if we'd forgotten that competition, rivalry, profit opportunities and staff motivation are not the spawn of the devil but do a lot of good. More important, the private part of the financial universe is being presented as a self-evident culprit of the crisis, while the role of the state faces much less scrutiny. The question of whether monetary authorities, prior to the crisis, properly regulated interest rates as a key price in the economy attracts much less attention in the debate than it should. The same is true for the question of whether the existing store of individual countries' supervision tools was used correctly and adequately before the crisis. This is interesting, as the crisis poses some new challenges and questions.
Measuring this effect precisely is of course hard, since we cannot easily identify what the counterfactual would have been in the absence of QE. But QE clearly acted to break a dangerous risk of transmission from severe market stress to the macro-economy, by avoiding a sharp tightening in financial conditions and thus an increase in effective interest rates. 3  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  3  QE is normally thought to work through a number of channels: including signalling of future central bank intentions and thus interest rates; so called ‘portfolio balance’ effects (i.e. by changing the composition of assets held by the private sector); and improving impaired market liquidity. The Monetary Policy Committee’s decision on QE in March differed somewhat from previous rounds of purchases. A larger amount of purchases, £ was announced as this was judged as necessary to support economic activity and ensure a sustainable return of inflation to target. And the purchases were to “be completed as soon as is operationally possible” to address the emerging financial market dysfunction. In the paper we draw two lessons from the experience. First, it reminds us that the effect of QE can be state contingent. Consistent with that, second, the pace of QE purchases may be more important during a period of market dysfunction associated with a widespread shock to liquidity demand. Indeed, when the MPC voted to expand QE further in June, in more normal market conditions, the pace of purchases was reduced.

Standing back from the Covid crisis, and looking at the UK case, there indeed is some evidence that the impact of QE over the past decade has been largest at times of market dysfunction and illiquidity. Of course the available event studies are very few in number. But, if this result proves robust, it suggests that “going big and fast” with QE is particularly effective in these conditions. I should stress that while the liquidity channel of QE appears to have been particularly relevant in terms of impact at a time of market dysfunction, such as that observed in March, the different channels of QE impact are by no means mutually exclusive. It seems likely that each channel operates to at least some extent most of the time, with all of them affecting long-term interest rates and thus economic activity and inflation. But this need not suggest that all the channels are equally powerful and persistent in all states of the world. Implications for the future  What does this mean for central bank balance sheets looking forwards? Again, two points stand out, though I should emphasise their tentative nature. First, a balance sheet intervention aimed solely at market functioning is likely to be more temporary, in terms of the duration of its need to be in place. To be clear, the asset purchases announced by the MPC in March were a response to much more than just market functioning, in terms of the effects of Covid on the outlook for the economy and inflation.
A critical aspect of CCAR was the development of independent detailed models for the key bank business lines to act as an independent check on the risk  2  BIS central bankers’ speeches  assessments by the banks. Of course, this effort also drew on work at the Board of Governors and the rest of the Federal Reserve System. As well, our economists have played a role in developing international and domestic regulatory policy with respect to bank capital and liquidity standards. For instance, measurement of capital losses over time, and various run-off rates of different types of liabilities by our economists informed this work. Also, our economists’ work on broker-dealer liquidity informed the design of the liquidity coverage ratio. Finally, our economists pay special attention to the emerging area of financial stability monitoring. This takes place in a number of realms, including participation in the work of the Basel Committees, such as the Committee on Global Financial Stability (CGFS) of the BIS, that I currently chair, and the Committee on Payments and Settlement Systems (CPSS), which I once chaired, the numerous workgroups and committees of the Financial Stability Board, and ongoing contributions to the Financial Stability Oversight Council (FSOC). With respect to the FSOC, for example, New York and Chicago Fed economists have played a key role in editing the FSOC annual reports. A few other examples of our economists’ involvement in prudential and regulator policy include:   GSE reform and housing market policy.

  Longer-term work to assess what monetary policy framework is most consistent with the goals of monetary policy and financial stability. New York Fed economists have made many contributions to the theory and measurement in New Keynesian models, focusing on monetary policy at the zero lower bound, and incorporating financial frictions into more standard macro models. 2  Dynamic stochastic general equilibrium (DSGE). BIS central bankers’ speeches  3  Microeconomic and regional policy New York Fed economists also have important opportunities supporting microeconomic and regional policy. These include the survey of consumer expectations, which will launch this month, and the consumer credit panel, which, using raw data supplied by Equifax, allows us to develop insights into consumer indebtedness at the micro-level. These panels give us and the public unique insights into household beliefs and behavior. One example is the work highlighting the growing aggregate student loan debt balance and repayment burden. An important responsibility for each of the Reserve Banks is coverage of economic development in its region. A significant aspect of this work at the New York Fed involves our regional press briefings, business surveys, and white papers. One notable example has been the New York Fed economists’ work in developing a white paper that highlighted some key choices that Puerto Rican policymakers might make to eliminate structural constraints that have impinged on the Island’s economic performance. I’m very pleased by the contributions of our economists in the Bank, whether they sit in the Research Group or elsewhere in the Bank.