samchain/econo-pairs-v1 huggingface dataset:
Spain seemed to be in a different position with a positive fiscal balance, though this was mainly due to unsustainable high growth in the construction sector. This illustrates the first question, which is how to solve time inconsistency in fiscal policy. It is easier to follow the prescriptions of Keynes in bad times than in good times. This asymmetry may lead to an increase in budget deficits and sovereign debt over time, also referred to as the fiscal bias. As a result, many countries are forced to tighten policy in a period when the real economy would certainly benefit from further stimulus. The crisis caused fiscal balances to deteriorate by 8–10 percentage points of GDP. There is an immense difference between encountering a shock of this magnitude from a positive fiscal balance of 4 per cent and encountering it from a negative fiscal balance of 4 per cent. A similar time inconsistency problem, the inflation bias, has been a much debated issue in monetary policy. The solution has been central bank independence. The results have been fairly good. The question remains, is there a lesson to be learnt in the fields of fiscal policy and banking regulation? This crisis has been very benign to the Norwegian economy. One of the reasons, I believe, is that we had a national banking crisis only 20 years ago. Many of the executives in banks, corporations and government this time, had experienced the previous crisis. Hopefully, they had learned some useful lessons.

Nor Shamsiah Mohd Yunus: Raising the bar in compliance and enforcement Opening address by Ms Nor Shamsiah Mohd Yunus, Deputy Governor of the Central Bank of Malaysia, at the International Conference on Financial Crime and Terrorism Financing (IFCTF) 2011 – “Raising the Bar in Compliance and Enforcement”, Kuala Lumpur, 19 September 2011. *  *  *  It is my pleasure to wish all of you a warm welcome to this Third Annual International Conference on Financial Crime and Terrorism Financing. We are indeed privileged today to have the presence of Yang Berhormat Dato’ Seri Hishammuddin Tun Hussein, Minister of Home Affairs of Malaysia, who has kindly agreed to deliver the keynote address, and officiate the opening of this conference. His presence reflects the significance placed by the Government of Malaysia on the roles and contributions of the financial sector in supporting the national agenda to combat and reduce crime, particularly economic and financial crime as well as terrorist financing, which is crucial in maintaining the integrity and stability of our financial system. On behalf of the financial sector, I wish to extend our gratitude to Yang Berhormat Dato’ Seri for gracing today’s event. I also am heartened by the continuous and encouraging participation of the private and public sectors in this conference. Now in its third year, this conference has become a hallmark event that brings together various stakeholders in Malaysia and from abroad, to discuss issues relating to financial crimes and terrorist financing.
The need for structural reforms While EMU has been highly successful in restoring and furthering macroeconomic stability in its founding members, a number of economies in the euro area still have to undertake important actions to fully realise the advantages of a stable single currency. Structural economic impediments in a number of participating countries reduce employment opportunities and hold back the creation of real income compared to the pace that would be attainable, were available resources put to their most efficient uses. Insufficient productivity growth - coupled with unfavourable demographic trends - in turn undermine the sustainability of social security systems. In many countries these systems incorporate relatively generous provisions for insiders to the disadvantage of younger and more deprived cohorts of citizens. It is therefore widely recognised that a much better functioning of the labour markets, together with reforms of social security and protection, and the timely completion of the single market of goods and services, including financial services, would be significantly needed to improve the prospects of the euro area. In this respect, the ECB has very much welcomed and supported the impetus given by the Lisbon European Council to the economic reform process. The diagnosis of the situation that emerges from the Lisbon discussions is pertinent and unambiguous. As pointed out by a recent report written under the auspices of European Commission2, it is time for the European Union and its members to translate words into actions, especially in areas such as job creation, investment in research, and liberalisation of services.

The Bank of Zambia and the Government are, therefore, most grateful to our cooperating partners for helping us build capacity in our financial sector. Honourable Minister, it is also our view that the FSDP provides a unique opportunity through its structures, operating on the principle of private-public partnership, to take responsibility for overseeing the development of the financial education strategy for Zambia. One of the key issues that this partnership should help address is achieving consensus on resource requirements for implementing financial education programmes and agreeing suitable funding models that can generate a stream of resources to support sustained provision of financial education over the long-term. Ladies and Gentlemen, It is now my pleasure to call upon the Guest of Honour, to give us his key note address and to officially open this workshop. Honourable Minister Sir. 2  BIS Review 139/2010
In any case, from a supervisor’s perspective, large underwriters could be expected to avoid too much fluctuation in their limits. Third, with regard to stress testing, all banks should conduct dedicated stress tests for their leveraged finance portfolios – I mentioned that before. Such stress tests are helpful in identifying the consequences of downturns in the markets. Therefore, as part of our planned supervisory actions, stress-testing frameworks will be strengthened, particularly with regard to the underwriting pipeline. To sum up: the European market for leveraged finance has grown, and European banks have increased their exposure to it. We as supervisors are closely monitoring these developments. But we go beyond mere observation; we are also acting, combining individual and SSM-wide actions. First, we will address potential weaknesses at the level of individual institutions. 4  BIS central bankers’ speeches  Second, we are thinking about issuing relevant guidelines in order to define a common set of expectations for the entire banking sector. Conclusion Ladies and gentlemen, I would like to end with another quote from Leonard Porter Ayres. In September 1930, he said: “Now arises the emotion of fear. Things were brighter looking than they were. Now they look darker than they are.” To me, that quote perfectly describes the psychology of markets – or rather the psychology of human beings who constantly sway between being overly optimistic and overly pessimistic. Risk managers and supervisors have to fight that impulse.

We have to see things as they are, and not as we wish or fear them to be. That requires self-control, independence and farsightedness. And to be effective, it requires a voice that is heard. Having said that, do I see leveraged finance as the major risk for the European banking system? I do not see it as the biggest risk, but I see a certain danger that market players see things a tad brighter than they are. So it is up to me as a supervisor and up to you as risk managers to counterbalance this view. Thank you for your attention. BIS central bankers’ speeches  5
Figure 18: Exchange Rate Developments 2.1  1000  2  TL/Exhange Rate Basket (0,5 Euro+0,5 US Dollar)  900  EMBI+Turkey (right axis)  800  0.04 0.035  1.9 700  0.03 0.025  1.8  600  1.7  500  0.02  400  0.015  300  0.01  200  0.005  100  0  FX Volatility Brazil Hungary Poland S. Korea Chile  Czech Rep. Mexico S. Africa N. Zealand Turkey  1.6 1.5 1.4  01 07  04 07  07 07  10 07  01 08  04 08  07 08  10 08  01 09  04 09  03 06 09 12 03 06 09 12 03 06 09 12 03 06 06 06 06 07 07 07 07 08 08 08 08 09  Source: Bloomberg and CBT. The expectation that the global capital squeeze will not end in the upcoming period indicates that the potential pressure on the exchange rates of developing countries may persist. Tightness in financial conditions continued in the first quarter of the year. Prolonged uncertainties pertaining to the global economy accompanied with deceleration in economic  BIS Review 67/2009  11  activity kept the banks’ lending appetite at low levels. The elevation in credit risk, the decline in foreign financing facilities and the short maturity of deposits urged banks to be cautious in terms of credit supply and curbed the decline in credit interest rates.

This, together with the changes that have been made, both with regard to the framework for economic policy and our means of working, convinces me that the Riksbank will be perfectly able to manage the challenges that await us in the future. BIS Review 155/2008  7
Both the US and the UK Acts were prompted by preceding banking crises. In Hong Kong, the Office of the Commissioner of Banking was only established around 50 years ago in the 1960s, after a couple of rather unpleasant bank failures. Before then, banking was basically a free for all, although it did not mean that it was a wild jungle ruled by Tarzan or the Lion King. Back in those “good old days” during which banking supervision was not a prominent feature of our financial system, bank customers and depositors had to take care of their own interests by choosing very carefully who they could trust and bank with. It should also be borne in mind that internationally, the first Basel Capital Accord was only approved by the G10 Governors in 1988, meaning that we are only just approaching the 30th anniversary of this important milestone. 6. I know that you are going to say: you cannot find such a clock or time machine. In that case, the fast track solution is not quite available. So you will have to consider the slow track solution in trying to get rid of the bank supervisors. As I said earlier, a world in which there were no banking supervisors was not a wild jungle. For a long long time and well 1/5  BIS central bankers' speeches  before we had bank supervisors, bankers needed to earn the trust of depositors and customers in order to survive and thrive.

Any partner of a bank had the duty and right to warn against and take steps to constrain another partner from taking excessive risks, if such risks could bring down not just the culprit but all the partners who were jointly responsible for the well-being of the firm. In contrast, in modern times, banks operate predominantly in the form of limited companies, often listed on stock exchanges, with very diverse public ownership. Senior managers who run the bank do not have most of their personal worth tied up in the firm and the prospects for life-long employment have become few and far between. Nowadays (in particular during the period preceding the GFC), senior bank managers are generally rewarded by a combination of very high salaries coupled with very substantial annual bonuses tied to performance in the preceding year. Even where share options are included in their remuneration packages, the lock up or vesting period is relatively short – just a couple of years at most. The effect of this change is that the previously strong alignment of long term interest between bankers and customers has been materially weakened, leading to the classic situation of an agency problem, with the bank management using depositor funds to leverage up the scale of business while the downside risk that they face in doing so is limited.
We must thus accept that the necessary fiscal expansion in the short term should go hand-in-hand with a public finances restructuring plan in the medium term. I shall set out the reasons which, in my view, warrant the urgent launch of an ambitious, comprehensive, permanent and assessable strategy of structural reforms and fiscal consolidation. The strategy must be ambitious. The scale of the challenges the Spanish economy faces demands such ambition, if we truly aspire to lay the foundations for sustainable and balanced growth. We should infuse the design and implementation of the reforms with greater impetus, as their credible formulation may positively affect spending, investment and hiring decisions, even in the very short term. Fiscal consolidation should be applied once the economy moves back onto a sound growth path, but its definition and early communication would significantly benefit the credibility of our economic policy. The strategy should be comprehensive, taking into account the multiple interactions among the challenges we must face; such challenges, in many cases, call for international and, in particular, European action. Our ambition must be such as to decisively influence these actions. The strategy should be pursued with a view to it lasting. It is therefore vital that there should be a high degree of consensus. In my previously mentioned address to the Parliamentary Economic Committee, I referred to the need for a political agreement spanning several legislatures. I stand by that need today. Ultimately, any strategy conceived with a medium-term horizon has to be carefully assessed.

Adopting this culture of assessment in economic policy design should be one of its pillars. Allow me now to give you a brief overview of the impact of the pandemic on economic activity. Subsequently, I shall briefly address the content of the economic policy strategy I have just outlined. Details of this content are, in any event, in a document I forwarded to the Chair of this Committee to be distributed among its members. 2. The economic crisis caused by the coronavirus pandemic The pandemic has had an extraordinarily acute impact. In Q1, China saw the biggest decline in its GDP in history. In the United States, the unemployment rate rose to record highs. And euro area GDP fell by 3.6% in the same period. In Spain, despite the fact the lockdown measures only affected the last fortnight of Q1, GDP slumped by 5.2%, also the biggest quarter-on-quarter decline in our recent history. The fact that virtually all of the restrictions linked to the state of alert have been in force for more than half of Q2 will necessarily mean a significantly sharper decline in activity in this 2  period. On Banco de España estimates, this contraction in GDP might stand at between 16% and 22% relative to its Q1 level. The severity of the crisis has been particularly visible in employment. The adjustment from mid-March to end-May affected more than 26% of total employment. In parallel, the number of firms registered in Social Security records has undergone the biggest fall in its history.
Of course, such integration has to be brought to fruition in the other segments of the money market, i.e. the repo market and the short-term securities market. Further integration will enhance the efficiency of the euro area financial markets and will be beneficial to borrowers and investors alike. With regard to the capital markets, progress towards integration has been significant, both on the euro-denominated bond market and the equity market. The gross issuance of long-term debt securities denominated in euro amounted to 791 billion euro in 1999, against the equivalent of 902 billion euro for debt securities denominated in US dollars. The pace of euro-denominated issues remained brisk in the first three quarters of 2000 at 498 billion euros. According to the Bank for International Settlements, euro-area private sector borrowers have issued 76% of their debt in euros since 1 January 1999, compared with an average of 50% in the predecessor currencies since during the 1990s. Similarly, private borrowers resident outside the euro area issued more than a fifth of their international debt in euros from the beginning of 1999, roughly a twofold increase over the total share of the legacy currencies before the introduction of the euro. Furthermore, European investors have substantially diversified their bond portfolios since the introduction of the euro, encouraged by the removal of the exchange rate risk. This enables them to achieve higher rates of return for a given level of portfolio risk.

II.The euro as a catalyst for further progress While many acknowledge that the introduction of the euro has been broadly successful, one may ask at this point what needs to happen to ensure the success of the euro in the medium term. What is very encouraging in this respect is the fact that in a number of areas the euro itself appears to be as a catalyst for these conditions to be met. II.1. The euro and the single market a/ The euro is the crowning achievement of the single market. Need we mention the advantages inherent in the single market? It enables the productive sector to make significant economies of scale and allows savings to be allocated to the most efficient investments. It also enhances market visibility and boosts competition and innovation to the benefit of consumers. But the ultimate objective of the single market could not be achieved while monetary barriers continue to prevent the free flow of goods, services, capital and, in a way, people, by imposing unpredictable and erratic exchange-rate movements and transaction costs. The last step in this process will be made with the cash changeover at the end of this year; it will enable not only enterprises but all our citizens to enjoy all the advantages of using the same monetary instrument throughout the European continent, just like Americans do today throughout the territory of the United States. b/Moreover, the introduction of the euro brings about a significant change in the economic and financial environment.
Ajith Nivard Cabraal: Ensuring stability and integrity of the world’s financial system over the next few years Keynote address by Mr Ajith Nivard Cabraal, Governor of the Central Bank of Sri Lanka, 27th International Symposium on Economic Crime, Jesus College, University of Cambridge, Cambridge, 5 September 2009. *  *  *  Chairman, Professor Barry Rider, Distinguished Delegates, Ladies and Gentlemen; I am delighted to be here this afternoon at the historic University of Cambridge to deliver one of the closing addresses at your 27th International Symposium on Economic Crime. Thank you very much for your invitation, which I am honoured to accept. I am also happy that this year, 2009, marks the 800th Anniversary of this great institution. Therefore, I would like to take this opportunity to congratulate the University of Cambridge on reaching this amazing milestone, and extend my best wishes for the centuries ahead. Mr. Chairman, at your invitation, I would, today, discuss the ways and means of ensuring the stability and integrity of the world’s financial systems in the future. As in the case of all serious and complex reviews, our starting point should necessarily be to critically examine the basic and underlying reasons for this crisis.

By doing so, we could put in place a mechanism to ensure the effective supervision of conglomerates, particularly in the case of cross border institutions that are today described as those that are “too big to fail”. Sixth, we need to create large pools of global or regional funds that could be conveniently accessed by regulators in times of impending crisis for purposes of bail-out, so that crises are not allowed to spin out of control. In this regard, it may perhaps be easier for central banks in a particular region or a regional economic zone to provide leadership for the creation of such funds for the mutual benefit of the participating countries. Seventh, we have to develop mechanisms that ensure that there is greater transparency in rating methodologies and rating decisions. Credit rating agencies should be compelled to elaborate on their rating methodology and ensure strict compliance with Standards of Conduct which should be carefully reviewed in the light of the present gaps. We should also consider introducing serious penalties for inappropriate rating practices. There may, of course be some overlap of policy actions when we implement these strategies; but, by and large, if these are focused upon diligently, there is a reasonable likelihood that it would be possible to realize some of our key wishes and with it, ensure the stability and integrity of our financial systems.
Bonds being richer in the cash market will make it more difficult to borrow them via reverse repos. This should also push up the price in the repo market, all else equal. In addition, investors who own more expensive securities should be able to profit from them by obtaining lower funding costs in the repo market. In other words, because the cash and the repo market often intermediate the same asset, it is natural that changes in one market may have repercussions in the other.5 Both effects have clearly left a footprint in the repo market. But one needs to look beyond aggregate data to understand the full impact of the ECB’s APP. 2 / 10  BIS central bankers' speeches  For example, there has been no overall fall in average euro repo market turnover since the great financial crisis. Daily volumes in the repo market even rose in recent years, despite the considerable increase in excess liquidity. You can see this clearly on my first slide. According to MMSR data, turnover was close to € billion daily in the second quarter of this year, up from around € billion a few years ago. What has changed, however, is the type of transaction executed in the repo market. This you can see clearly on this slide and on the next. First, there has been a clear shift from unsecured to secured transactions since the crisis.

Regulation is forcing market participants to reexamine the extent of their engagement and make more efficient use of their balance sheets. This adjustment process coincides with central banks worldwide adopting a series of unconventional monetary policy measures that have also affected the nature and scope of repo market activity. Some of these effects will prove temporary, others more permanent. Their full impact can only be assessed in earnest once markets have fully transitioned to their new steady state. From a central bank perspective, it is important to ensure that our own measures do not adversely affect the intermediation capacity of repo markets. Our decision in December last year to also accept cash as collateral in our securities lending facility has proven very effective in this respect. It contributed to mitigating risks of extreme specialness, while preserving the effectiveness of our policy measures in the pursuit of our price stability objective. At the same time, a high degree of persistence in repo specialness lends support to the idea that the stock of securities already held by the ECB is likely to be a powerful channel through which our measures can help preserve accommodative financing conditions, even after the end of our net asset purchases. Thank you. 1 I would like to thank Riccardo Costantini for his contribution to this speech. I remain solely responsible for the  opinions contained herein. 2 See Gorton, G. (2012), “Securitized banking and the run on repo”, Journal of Financial Economics, Vol. 104(3),  pp. 425-451; and Holmstrom, B.