samchain/econo-pairs-v1 huggingface dataset:
Savers want to hold their funds in highly liquid, short-term assets. But borrowers want to lock up their funding over long time periods. Banks help bridge that gap. Pushing banks hard on the liquidity side runs up against this constraint. 6  BIS central bankers’ speeches  clearing counterparties by the end of 2012. Similarly, I have my doubts whether the next set of industry recommendations to reduce risk in the triparty repo market will be sufficient to eliminate all the major potential sources of instability – including inadequate risk management practices and lack of resiliency to a dealer default. Experience suggests that it is not easy for market participants to agree on measures that enhance financial stability when this goal conflicts with the commercial and business interests. If the private sector falls short in this instance, public authorities may need to intervene and impose more forceful regulatory solutions. I also think that the scorecard is mixed with respect to making financial institutions, in their practices and structure, less prone to amplifying and propagating shocks. On one hand, the capital rules and the CCAR process should cause banks to husband their capital better during times of stress than was the case during the financial crisis. Also, compensation practices are improving in that more pay is deferred and over longer time periods. Similarly, risk management practices have improved.

BIS Review 27/2005  1  measurement issues currently explain between 0.5 and at most 1 percentage point of the growth differential between the EU and the United States.2 We should consider the upper limit of this range as a litmus test to the question of whether there is a structural growth differential between the EU and the United States. In addition to various measurement differences, about one percentage point of the difference in real GDP growth rates between the EU and the U.S. can be attributed to the higher growth rate of labour input in the U.S. for the period between 1980 and 1995. This is attributable to a stronger increase in the working population in the U.S. and a marked relative decline of effective working hours in the EU. Factors causing this decline in individual labour input can be divided into two categories: First, numerous rigidities in European labour markets were introduced over the past decades: working hour restrictions, minimum wage agreements, and other restrictions on the conditions of hiring and firing employees. These restrictions are often valid over a broad range of sectors and geographic areas irrespective of economic fundamentals. Second, changes in taxing labour evolved over time with significant tax cuts realized in the United States.3 In total, overall labour input for the period 1990 to 1995 increased in the U.S. by an average of 1.2% per annum against a decrease of 0.8% per annum in the EU-13. This is pictured in Graph 2.
Measured as a share of the labour force, seasonally adjusted unemployment is now 4.4 per cent, including persons on labour market programmes. The number of unemployed persons not on labour market programmes has fallen by 8 per cent since October 2003 to about 15 500. The largest reduction has been in manufacturing and the building and construction industry. 4  BIS Review 67/2004  According to the Directorate of Labour, a sharp decrease in the number of lay-offs has contributed to lower unemployment in manufacturing. Since July, oil prices have varied between USD 34 and 52, the highest nominal levels recorded. Measured in real prices, oil prices are nonetheless clearly lower than the levels recorded in the beginning of the 1980s. In contrast to earlier periods of sharply rising oil prices, the main reason behind the current rise in oil prices is a surge in demand and limited excess production capacity. Growth in oil demand has been particularly strong in regions where production is relatively energy-intensive, such as China and other non-OECD countries. China alone accounts for about 1/3 of global growth in oil demand this year. Moreover, there has been a marked reduction in excess production capacity in OPEC countries. Small production problems have therefore affected prices more than would otherwise have been the case. In the short term, oil prices constitute the greatest risk to the outlook for the global economy. High oil prices may contribute to a sharper-than-expected slowdown in global economic growth.

At its monetary policy meeting on 3 November, the Executive Board decided to leave the sight deposit rate unchanged at 1.75 per cent. At this meeting, the Executive Board did not see any clear alternatives to leaving the interest rate unchanged. In reaching its decision, the Executive Board has weighed the objective of bringing inflation back to target against the risk that output growth may eventually be too high. 6  BIS Review 67/2004
I see there being three main initiatives, namely: 1.  deposit protection;  2.  deregulation and other market reforms; and  3.  the credit reference agency. 3. On deposit protection, we are now coming to the end of the consultation period on the consultants report – in fact there are just two days left, so if you want to make a submission, you will have to hurry! Once we have collected in everyone’s comments we will carefully review them and determine whether to recommend going ahead with such a scheme and, if so, exactly how it should be structured. As you will be very aware, the views of the banks on this issue are mixed, whereas LegCo has given a clear endorsement, and most other parties are also in favour. But, assuming we do go ahead, this is really only the beginning, and there will be a lot of work to be done on the design features. For example, should coverage of the scheme be limited to $ or should it be $ Should funding be ex-ante or ex-post? Should premiums be risk-based? None of these issues have been decided yet, so we welcome any constructive comments and will certainly consider them carefully. 4. One particular question that has been raised is whether deposits with RLBs and DTCs should be covered. The consultant suggested not, primarily on the grounds that excluding them would be consistent with the institutional coverage of the current priority claims provisions.

Moreover, the aim of deposit protection is to protect small retail depositors, i.e. depositors with deposits of less than $ and DTCs and RLB do not have such depositors. However, the issue of whether their exclusion from coverage might adversely affect the business of RLBs and DTCs needs to be considered. Certainly one might argue that as the first $ of deposits of over $ with licensed banks would be covered, the same should apply to deposits with RLBs and DTCs. This is something that we will consider further in the light of the views that have been expressed. 5. Moving on to the issue of deregulation, July, of course, will see the full abolition of controls on interest rates. This is highly significant, as such controls are surely inimical to Hong Kong’s free competition ethos. Certainly this change in the status quo will provide certain challenges for institutions, but in the long run the competition, innovation and efficiency that the removal of such barriers will engender will help to keep Hong Kong’s banking sector competitive and profitable. We also, as you know, hold the view that some greater consolidation among the local banks would be desirable from this point of view, although we have not forced the issue. This is something, however, to which we would urge bank owners to give careful thought. 6. It is clear that as part of the process of deregulation of interest rates banks will be considering revising certain fees and charges. This, of course, is understandable.
High inflation and inflation that varies considerably over time result in random changes in the real value of assets and debt. This leads to unintended transfers between creditors and debtors. When inflation is high and variable over time, the function of prices as an information vehicle is also impaired. When inflation is low and stable, changes in relative prices are more easily discernible, and it is easier for households and businesses to make decisions about consumption and investment. Low and stable inflation is the best contribution monetary policy can make over time to employment, economic growth and welfare. The central banks in the first industrialised countries have attained a more independent status over the past 20 years. This is partly because Germany and its firm Bundesbank fared better during the period of high inflation in the 1970s and 1980s than many other countries. Arguments in favour of an independent central bank are also found in economic theory. Studies by Finn Kydland of Norway and Edward Prescott of the US at the end of the 1970s on economic policy rules were groundbreaking. 10 The insights gained from these studies provide arguments for ensuring central bank independence and deriving monetary policy objectives. History and theoretical studies have taught us that adverse effects may occur if the authorities do not take into account that households and enterprises are forward-looking when making decisions about consumption, investment, wages and prices. They base these decisions their expectations of economic policy in the future, not only on today’s policy.

Second, some EU bodies are obsessed with the “all EU countries must be same” approach. While there may be some point to this, why insist on it in the case of the single resolution system, for instance, if it has been negotiated that the SSM only applies to euro-area countries plus volunteers? One can hardly expect non-euro area countries not participating in the SSM to jump at the single resolution system if it means sharing the burden with those inside the banking union without the same treatment in the area of a fiscal back-stop. At the same time, would you join the SSM if you did not have a clue how the single resolution rules were going to work? The CNB’s position was: let’s discuss the whole thing (BU) in one shot as a one compact and coherent package where the balance between powers, duties, responsibilities and money always remains assured. And negotiate everything as a single animal, so that illogical inconsistencies are not being produced all along. Sure, that would take much more time, but the final outcome might look better and we would not build up the house from the roof down. We are debating the supervisory part first, while burden-sharing (money) is being left for the future. The sequence of steps should ideally be exactly the opposite one. Why? My observation is that the way the various bail-outs and the SSM have been negotiated so far shows that the readiness and willingness even among euro-area countries to share money is declining over time.
MAS will announce members of the Corporate Governance Council, and its terms of reference, early next year. Review of the Code of Corporate Governance ("the Code") An important and immediate task for the Council once it is set up will be to conduct a review of Singapore's Code of Corporate Governance. The Code was last reviewed in 2005 and took effect for all AGMs held on or after 1 January 2007. The Code has served us well. However, this financial crisis has thrown up valuable lessons on corporate governance. Members of our media, academia and the corporate and financial sector have also been suggesting possible improvements, and several overseas jurisdictions have also completed or are in the process of updating their own Codes. It is therefore timely for us to embark on another review. In determining the scope of the review, the Council could consider the suggestions for improvements from stakeholders, and developments in other jurisdictions, taking into account the local context where relevant. Higher standards for banks & insurance companies This financial crisis has shown that the failures of financial institutions with significant operations can destabilise the entire financial system, and severely disrupt economic activities. MAS' approach has been to require high regulatory and prudential standards for locally incorporated banks and life insurance companies as well as standards of corporate governance that are more stringent than what they have to observe as listed companies.

For example, the declared cumulated write-downs and credit-market losses of European banks so far 1 amount to almost USD 358 billion – of which euro area institutions account for less than USD 173 billion. At the same time, a total of USD 382 billion of fresh capital has been raised by European banks, while capital newly injected into euro area banks has reached USD 190 billion, thus exceeding the declared losses and write-downs. Unfortunately, more write-downs can be expected in the coming quarters. The total writedowns of banks globally since the eruption of the turmoil are estimated by the International Monetary Fund to reach USD 2.8 trillion, of which USD 737 billion would be borne by European banks. 2 These estimates depend on the underlying projection of the path of economic activity and assumptions about future asset market developments. Coping with this stress will pose a particular challenge for financial institutions – and this at a time when their shock-absorbing capacity has already been severely tested. A number of risks lie ahead, stemming from the external environment, notably a deeper and more prolonged recession in advanced economies, as well from the subdued economic activity in the euro area and its effect on banks’ balance sheets, notably on the quality of loans to non-financial corporations,  1  Figures are up to 19 April 2009 and include non-EU banks. 2  See IMF, Global Financial Stability Report, 21 April 2009, p. 28.
We will equally have the opportunity to listen today to Mr. Roberto Peccei’s “The Significance of Limits to Growth for the Work of the Club of Rome”, as well as to the co-authors of the first Report, Dennis Meadows and Jorgen Randers, who will look at the lessons of the first Report nowadays. In the new Report, “2052 – A Global Forecast for the Next Forty Years”, Jorgen Randers underlines the need to use the values or the lessons of the first Report for the future. And actually looking back 40 years, he will look to the next 40 years. We are eager to listen to him to see what the prospects are for the next 40 years. Looking at today’s agenda, I would like to mention the relationship between humankind and nature. We’ll have a special session, where Ernst Ulrich von Weizsäcker will discuss  BIS central bankers’ speeches  1  about “Factor Five: Transforming the Global Economy” and Anders Wijkman about “Bankrupting Nature”. I will also address the topic of transforming the financial and monetary system. I am sure that today’s debate will bring light to our faces and we will find together the best answers to the future of the humankind. I invite the panellists to start the first session. Thank you very much! 2  BIS central bankers’ speeches

), which have increased their exposure to risk transfer instruments, even though their investment policies remain fairly conservative. Third, banks themselves may, via credit derivatives, improve their risk management. They diversify their risk profiles by gaining exposure to companies or sectors in which they do not have customer relationships and by hedging risks while retaining customer relationships. Credit risk transfer mechanisms are also used by banks to deal with single-name concentration risk. Consequently, major improvements in risk measurement have been made. From a prudential viewpoint, the Basel II framework takes better account of risk mitigation techniques employed by banks, including the use of credit risk derivatives, and applies specific treatment to securitisation. BIS Review 33/2007  1  2. But this evolution should make us more – not less – vigilant regarding the assessment and tracking of risks. The wider benefits that CRT can bring should not give rise to a false sense of security. Risks do not disappear as a consequence of their transfer. Banks need to pay attention both to "residual risks" (e.g. tail or extreme event risks) and all of the risks (e.g. operational risk, documentation and settlement risk, legal risk) arising from the use of CRT. Furthermore, the growing complexity and volume of CRT transactions call for enhanced monitoring. Actually, understanding where risk ultimately lies and how risky exposures can build up is an essential prerequisite for safeguarding financial stability. The argument is fourfold: First, historically low interest rates and abundant liquidity have prompted an intense search for yield.
It remains to be seen to what extent the unease on the financial markets associated with the bank problems will affect economic activity going forward. Weak development during 2023, but also resilience It may also be useful to recall that the Swedish economy has recovered faster from the pandemic than many other economies. Employment is high in an international perspective. In addition, Sweden has strong public finances and is well equipped to target support to groups that are particularly hard hit when the economy is now slowing down, for example, targeted labour market measures. Such measures need not conflict with monetary policy when it comes to bringing down inflation. The same applies to reforms that make the economy function better, for example by strengthening competition on various markets. In addition to contributing to higher productivity, such reforms can actually help to dampen inflationary pressures for a while. The Economic Tendency Survey's confidence indicator clearly shows that households are very pessimistic about their own finances and the Swedish economy in general. The fact that households have found it more difficult is also noticeable in the retail sector, where sales have fallen since last spring. According to the confidence indicator, the retail trade is the part of the business sector where the mood is most gloomy. But for  8/10  BIS - Central bankers' speeches  February it also shows that confidence in the manufacturing industry rose slightly, after having fallen for several months in a row. Confidence also increased in the service sector.

1/10  BIS - Central bankers' speeches  Same inflation figures as in the early 1990s, but a different situation When I had just left the Stockholm School of Economics and started working at the Riksbank in 1990, inflation in Sweden was around 10 per cent. Now when I returned to the Bank at the start of this year, the inflation figures were at the same level. The background to, and reasons for, the high inflation now and then differ, of course. But the important thing is that the conditions for rectifying the situation are much better now. Looking at economic developments on average over the past thirty years or so, we have had low inflation combined with good economic growth, Real wages have increased steadily – with one exception last year – and we have also had, and still have, stable public finances. One important reason for this is the reforms of wage formation and the economic policy frameworks that Sweden implemented in the mid-1990s to address pricewage spirals, cost crises and an economic policy that was unable to stabilise developments. The inflation target and the transition to an independent central bank with a strong mandate to maintain that target were part of this. Since then, the inflation target and a monetary policy that independently steers towards this target have been a cornerstone of economic policy in Sweden. This is also reflected in the new Sveriges Riksbank Act, which applies from the start of this year.
So we have got rid of the politically unpleasant adjustment mechanism and have very little instead. Yes, the enlightened founding fathers (such as Otmar Issing) knew many of these things in advance and tried to minimize the free-riding by setting certain safeguards against it. Despite that, I believe many must be bitterly disappointed or shocked that many of these good rules proved to be so time-inconsistent, or dynamically inconsistent. Yes, many good rules have already been breached or are close to being breached (some of the Golden Rules of European law, one should add): •  the no bail-out clause  •  flirting with monetary financing of sovereign debts  •  consideration of something like potentially permanent public support for financial institutions operating on the single market  I believe that these rules are especially dear to this audience. So one has to ask: What are the prospects of the project when to keep it going you need first to breach some fundamental rules that should have created a solid and long-lasting basis for it? It is by definition hard to enforce rules among sovereigns, even when those rules are more important than fiscal or monetary ones – look at the United Nations, for instance.

The third principle is that the Central Bank does not use the exchange rate to target inflation. There are many examples of financial crises and economic disasters when the exchange rate has been used as an anti-inflationary tool, generating serious exchange setbacks that only brought on substantial, costly adjustments to the real sector and caused long-lasting harm to GDP potential. However – and I must say this not to fail on the second principle I mentioned earlier – the exchange rate does affect inflation and, yes, it is affected by monetary policy in the short term. This is a channel for transmitting monetary policy in open economies that mitigates the cost in terms of increased unemployment of meeting the inflation target. Let me rephrase this. Inflation is controlled via the interest rate: if the outlook is inflation rising, then the  BIS Review 135/2010  1  interest rate is raised. In a closed economy, interest rate hikes slow down demand, which means that they also slow down economic activity and employment, thereby controlling inflationary pressures. This allows medium- and long-term policy to be upheld but obviously inflicts short-term costs. That is what stability is all about. In an open economy, on the other hand, there is an additional channel and that is the temporary exchange rate appreciation that results from raising the interest rate and this diminishes the need to slow down economic activity.