samchain/econo-pairs-v1 huggingface dataset:
But more importantly, gathering and processing this information is costly. There is no incentive for the various investors to incur these costs if they believe that others will do it and thus ensure the efficiency of the market. When banks are engaged in financial intermediation, they gather and process the information concerning their borrowers through their customer relations. Bank intermediation is therefore a means of overcoming the problems of the asymmetry of information and its accessibility. However, on a securitised market, where borrowers are directly in contact with lenders, this solution does not exist. The rating system is an answer to the problem, as it enables all players to have access to simple, clear and concise information on the credit risk attached to the various classes and categories of financial instruments. The rating activity has expanded in parallel with that of bond markets. All major issuers are now rated by one or more rating agencies. For them it is a sine qua non condition for widening their investor base. The rating system goes hand in hand with the development of large liquid, deep and international markets. It is a precondition and a tool for ensuring the smooth functioning of these markets. Securitisation, as we know it today, and which underpins national and international financial activity, would be impossible without these ratings. A further step was made with the expansion of structured products. The role of rating agencies now extends well beyond that of mere information providers.

These are the areas that institutions need to focus on to avoid becoming a “problem bank case” themselves. Let me move on now to consider the role of the banking supervisor in ensuring that an institution’s internal controls are adequate and effective. This is an area on which there has been greatly increased emphasis in recent years. Of course supervisors, like the management of financial institutions, have always been concerned with the quality of control systems. However, the approach has been rather piecemeal, and has focused on certain types of risk which are easily quantifiable, rather than the more intangible types of risk. What we are trying to do nowadays is to move towards a more systematic identification and assessment of the risks facing a bank across the whole range of its activities and the adequacy of the controls over these risks. This “risk-based” approach is intended to focus our attention on what we see as the institution’s key risk areas. Of course, the correct identification of the institution’s key risk areas is crucial in this. For most of Hong Kong’s local banks, credit risk, liquidity risk and perhaps BIS Review 48/1998  -4-  reputational risk remain the highest risk areas, but for individual institutions other forms of risk such as interest rate risk and market risk also come into the equation.
Kristina Persson: Globalisation, structural changes and monetary policy Speech by Ms Kristina Persson, Deputy Governor of Sveriges Riksbank, at at seminar arranged by the Confederation of Swedish Enterprise, Stockholm, 14 April 2004. *  *  *  Thank you for the invitation to take part in this important conversation on the consequences of globalisation for Swedish economic policy. I shall primarily highlight the significance for inflation and monetary policy, although I shall also briefly discuss the increased demands for structural changes and political management entailed by globalisation. Globalisation - or “the increasing interdependence of countries around the world as a result of growing cross-border trade in goods and services, investment and financial flows” (the IMF’s definition) - is not a new phenomenon. It has been going on for some time and has given rise to rapid structural changes with considerable demands for adaptation of people and businesses. It has led to a change in the division of labour and to specialisation, as well as access to new markets, which in turn has formed a base for increased real wages and growing welfare. How well Sweden can manage these requirements for change in the future will be decisive for our economic development. In recent years, both the scope and rate of change of the globalisation process appear to have increased.

This means that the Riksbank is as anxious that inflation should not be too low as that it should not be too high. In Sweden, the annual CPI inflation rate was negative in February, for the first time since the beginning of 1999. Is there a risk of this development continuing, and what can the Riksbank do if it does? To begin with, it is important to distinguish between whether price trends are governed by developments on the demand side or on the supply side. A period of falling prices is often due to aggregate demand being significantly lower than the total supply of goods and services in the economy. This type of situation can arise for two reasons: One is that demand could fall heavily, for instance, as a result of households for some reason reducing their consumption. The other is that supply could increase significantly, for instance as a result of technological advances leading to increased productivity. While demand-driven deflation is connected with weak production growth, the opposite applies to supply-driven deflation. These are usually termed “bad deflation” and “good deflation” respectively. In practice it is not so easy to distinguish between one sort of deflation and the other. Problems arise when demand is too low in relation to supply.
All of these forces are in flux. For the majority of the period since the UK joined the EU, the first factor – greater openness and deeper integration afforded by EU membership – very likely increased the UK’s dynamism. To be clear, by dynamism I mean the ability of an economy to grow and progress. Dynamism is reflected in the rate of productivity growth, the degree of labour engagement, the pace of new business creation and the rate of new innovation. In the period since joining the EU, the 2  BIS central bankers’ speeches  UK has had among the fastest per capita growth rates in the G73 has consistently been one of the top destinations for foreign capital amongst advanced economies as well as the top destination for Foreign Direct Investment in the EU. Today, the UK economy stands as one of the most flexible not just in the EU but across the advanced world. Since the crisis began, the second factor – shocks arising from our biggest and closest trading partner – has challenged UK dynamism and made it more volatile. In the aftermath of the crisis, it is essential that the third factor – EU rules, directives and regulation – continues to support the UK’s ability to address risks to financial stability in the future. 2. Openness, dynamism and stability  The UK is an open economy par excellence. In fact, the UK has bet on openness for almost two centuries. A bet that has paid off handsomely.

Broken lines refer to the Riksbank’s forecasts. 10  07  08  09  10  11  12  Sources: Statistics Sweden and the Riksbank  BIS Review 111/2009  7.High unemployment throughout the forecast period Unemployment, per cent of labour force, seasonally-adjusted data 14  14  12  12  10  10  8  8  6  6 Unemployment 16-64 years Unemployment 15-74 years September July  4 2  4 2 0  0 80  85  90  95  00  Note. Broken lines represent the Riksbank’s forecast, 15-74 age group. 05  10  Sources: Statistics Sweden and the Riksbank  8. CPI and CPIF Annual percentage change 5  5 CPI  4  4  CPIF  3  3  2  2  1  1  0  0  -1  -1 -2  -2 00  01  02  03  04  05  06  Note. Broken lines represent the Riksbank’s forecast. BIS Review 111/2009  07  08  09  10  11  12  Sources: Statistics Sweden and the Riksbank  11
DLT) and across borders  RTGS 24/7 Payments  DLT  4  30.3.2023  Swiss Payments Vision – an ecosystem for future-proof payments | Money Market Event | Andréa M. Maechler / Thomas Moser | © Swiss National Bank  Instant payments offer many benefits for the economy  In real time, final and around the clock like cash, but in electronic form  Lower costs and risks through shorter settlement chains Seamless connection with new services as part of automated value chains Cross-border payments thanks to links with other IP systems  Settlement in central bank money 5  30.3.2023  Account-based at commercial banks  Swiss Payments Vision – an ecosystem for future-proof payments | Money Market Event | Andréa M. Maechler / Thomas Moser | © Swiss National Bank  Instant payments – an innovation based on proven principles for futureproof payments  24/7  max.

Central banks issue money in the form of cash and book money. Everyone can hold cash. Central bank book money, on the other hand, can only be held by regulated commercial banks 1 in the form of sight deposits at the central bank. The diagram shows the central bank, in dark blue, as the bank of commercial banks. It manages the accounts of commercial banks, implements monetary policy, and performs its role as lender of last resort by providing liquidity to commercial banks in the form of sight deposits.2 Commercial banks create private money in the form of book money that customers deposit with them. They compete with each other and are therefore interested in offering their customers the banking services, such as credit and payment solutions, that best meet their needs. They are also responsible for complying with anti-money-laundering and know-yourcustomer rules. Commercial banks are thus the link between the financial system, shown in light blue with the central bank at its centre, and the rest of the economy (in green). Sound and appropriate regulation plays a key role here. Banks are authorised to create private money and can obtain liquidity from the central bank, but must at the same time comply with strict capital and liquidity requirements. This brings me to the second principle: All payments that are important for the system as a whole are to be settled in risk-free central bank money (cf. slide 2). 3 These payments are represented by the dark blue lines.
Given the small and externally-oriented nature of the Hong Kong economy and its role as an international financial centre, maintaining exchange rate stability against the US dollar, which is the most commonly used currency for conducting international trade and finance, is conducive to the long-term economic development of Hong Kong. Second, on linking the Hong Kong dollar to the renminbi instead of the US dollar: this is inappropriate and technically not feasible. The US dollar is still the most appropriate anchor currency for the Hong Kong dollar, taking into account factors such as international usage, business cycle synchronisation between Hong Kong and the US being higher than that between Hong Kong and the Mainland, the different stages of economic development between Hong Kong and the Mainland, and the fact that the renminbi is not freely convertible. Third, on inflation and the linked exchange rate system: it is true that the weakness of the US dollar and the strength of the renminbi may increase inflationary pressures in Hong Kong, but rapid growth in productivity in Hong Kong and diversification of sources of imports can in part mitigate the inflationary pressure. HKMA research showed that a 10% appreciation in the renminbi would increase Hong Kong’s inflation rate, as measured by the CCPI, by roughly 0.4 percentage points. Furthermore, only about 9-17% of imports retained in Hong Kong come from the Mainland.

And I believe that the best way of managing risks is for those concerned, not just the authorities responsible for the maintenance of systemic monetary and financial stability but more importantly also those actually assuming risks, whether as investors or as financial intermediaries, to be alert to them, and to understand that they may have peculiar characteristics. Then there are importantly those innocent parties in society, who are often hard-pressed to make ends meet or struggling to acquire a dwelling place, who could be further disadvantaged if there were monetary and financial instability, should the risks materialise to the extent of causing a shock of systemic dimension. Sub-prime crisis The FIRST such issue is the sub-prime crisis in the United States. The use of the word "crisis" is not an exaggeration on my part, notwithstanding the absence so far of anything approaching a crisis in Hong Kong. It is the word that is increasingly being used in the developed markets and in international finance when talking about the current difficulties in the United States and Europe that originated from sub-prime mortgages. At the risk of oversimplifying something that is really quite complex, let me make a few observations that might help understand what is going on. First, sub-prime mortgages are really mortgages extended to those who are, to put it bluntly and simply, not credit worthy. And as mortgages are assets on the books of the lenders, subprime mortgages are really sub-standard financial assets.
The purple bars build on the contribution of pull factors to the conditional 5th percentile of capital flows in the current quarter and two quarters ahead. Pull factors are proxied by domestic financial condition indices (DFCIs), which are mean-orthogonalised by a global financial conditions index (GFCI). The coefficient on the DFCIs is estimated by panel quantile regressions. Push factors are proxied by the Bank of England’s global financial conditions index. The chart shows PPP-weighted averages across the 13 EMEs in our panel. Chart 7: For EMEs, market-based finance accounted for all the increase in foreign lending since the crisis Structure of external liabilities for emerging market economies  Sources: IMF, EPFR and Bank of England calculations  20  All speeches are available online at www.bankofengland.co.uk/news/speeches  20  Chart 8: Market-based finance flows are particularly sensitive to push shocks The sensitivity of Capital Flow-at-Risk to push factors, by source of capital flow FDI  Banking  Market-based finance  of which: investment funds 0 -1 -2 -3 -4  Median  5th percentile  -5 Capital Flows-at-Risk as a % of GDP  Sources: IMF, EPFR, Bank calculations. Notes: Chart shows the sensitivity of different capital flows to a negative "push" shock. Coefficients are standardised by each component’s share of total flows e.g. the red MBF bar shows how total Capital Flows-at-Risk would respond to a one standard deviation tightening in global financial conditions if all capital flows were accounted for by MBF.

Gent Sejko: Intensifying mutual cooperation between Albania and Turkey Speech by Mr Gent Sejko, Governor of the Bank of Albania, at the signing of the Memorandum of Cooperation between the Bank of Albania and the Central Bank of the Republic of Turkey, Tirana, 6 November 2017. * * * Honourable Governor Çetinkaya, Your Excellency Ambassador Bayraktar, Dear members of the delegation from the Central Bank of the Republic of Turkey, Dear guests, Ladies and Gentlemen, I have the pleasure to have the Governor of the Central Bank of the Republic of Turkey, Mr Murat Çetinkaya, as our guest on a one-day visit to the Bank of Albania, on the occasion of the signing of a Memorandum of Cooperation. This memorandum is an expression of our common will and desire to continue and intensify the mutual cooperation that has been already in place for years. Opening addresses are supposed to be brief and I would rather not break with such tradition. However, I find it appropriate to share with you some thoughts on: (i) the international context surrounding the signing of this memorandum; (ii) the current level of the bilateral relations between Albania and Turkey; and, (iii) the main aspects of future cooperation. 1. International context Our institutions – the respective central banks – play a significant role in promoting and guaranteeing monetary and financial stability, supporting the sustainable development of our countries and the welfare of our citizens.
5 These aspects are important, for instance with regard to the discussions about various possible negative side-effects of the very expansionary monetary policy. One argument is that the low interest rate constitutes a danger to pensions as the return on pension savings becomes so low. But with regard to pensions, it is the long-term return that is important. This means it is the long-term real interest rate that is the most relevant variable. The solution to the problem is thus not that central banks should raise their policy rates, much less that the Riksbank should do so singlehandedly. To make interest rates persistently higher, one needs to implement 4 Bernanke (2016). Rogoff (2016) reasons similarly. 5 See, for instance, Rachel and Smith (2015) for a more detailed discussion and quantitative estimates of the  global real equilibrium rate. 4 [20]  structural measures that push up the long-term real interest rate. This is unfortunately not so easy to do. With reasonable estimates of the long-term real interest rate, the Riksbank's monetary policy has in recent years been clearly expansionary. The reasons why the Riksbank has conducted this policy are that inflation has undershot the target for a long time and that long-term inflation expectations have fallen to worryingly low levels. Around the turn of the year 2014-15 the situation was particularly serious. Expectations of inflation five years ahead had fallen some way below the target and there was a tendency towards acceleration in the decline (see Figure 7).

This underlines the significance of taking resolute action particularly when more long-term inflation expectations begin to deviate fairly substantially from the target level. There are also good reasons why the target is 2 per cent and not lower. Perhaps the most important is that there should be sufficient scope to cut the policy rate in the future if inflation becomes low or economic activity wanes. A lower inflation target would mean reaching the policy rate's lower bound more often and for longer. This is why there is currently an international discussion on whether the central banks’ inflation targets should be raised. 6 A somewhat paradoxical observation here is that many of those in the Swedish debate who are critical of negative policy rates are also critical of higher inflation targets, and often even advocate lower inflation targets. But with an unchanged or lower inflation target, it becomes even more important that the policy rate can be cut below zero. A further reason that I believe should not be underestimated is that wage formation can deteriorate when average inflation is too low. The reason is that in practice it has proved difficult to lower nominal wages. If inflation is low and nominal wages cannot 6 See, for example, Blanchard et al. (2010), Ball (2014) and Rosengren (2015). 5 [20]  be lowered, it becomes difficult to adjust real wages between individuals at a company and between different sectors. This can ultimately bring about both higher unemployment and poorer productivity growth in the economy.
Monetary policy is based on forecasts The Riksbank also uses forecasts to “plan” monetary policy. This planning is reflected in our repo-rate path and if developments take a different turn than forecast then we have to adjust the repo-rate path. It may seem that the Riksbank uses forecasts in roughly the same way as other players whose operations are also affected by the development of economic activity. There is, however, an important difference. The Riksbank can, in contrast to most other forecasters, affect the forecasts. This is the whole point of monetary policy. Put simply, we can say that a well-balanced monetary policy is characterised by the forecast for inflation being close to the inflation target and the forecast for resource utilisation being close to its normal level.1 There is nothing to say that we have to publish our forecasts. Life would in some respects be easier if we did not publish them. We would avoid the criticism we are subjected to when our forecasts prove to be wrong and we would be able to write in more general terms about economic developments without needing to present a detailed and cohesive forecast. For a long time, central banks were rather closed and secretive bodies and when, for example, the Riksbank began publishing its inflation forecasts in 1997 there were many people, not least in the world of central banking, who had misgivings; wouldn’t confidence be eroded if the forecasts turned out to be wrong?

The primary objective of the European System of Central Banks (made up of the European Central Bank and national central banks) will be price stability. The ECB Council of Governors (only those of countries participating in monetary union) will decide independently the level of official interest rates. Representatives of the European Council may attend the ECB Council meetings, but they will not participate in the voting procedure. Monetary union will be characterized by a single monetary policy and national fiscal policies. In this context, the issue of fiscal discipline and coordination is crucial. Sound fiscal policies will help the ESCB to maintain price stability. Coordinated fiscal policies will contribute to a balanced policy mix in Europe. Fiscal discipline will prevent free-rider strategies by countries running large deficits and raising funds at low interest rates, thanks to the credibility and stability of other countries. This question of European fiscal discipline is important in the context of the main criticisms which are presently enumerated, particularly from outside Europe, in the analysis of the concept of EMU. Without being exhaustive in this listing, I personally see four major criticisms: First, it is sometimes argued that EMU will lead to greater rigidity, in diverting attention from the necessary structural reforms and inducing an inward-looking posture over Europe at the very moment when global competition is of the essence.