samchain/econo-pairs-v1 huggingface dataset:
Indeed, as we sit here worrying about it, there are people out there who are busy exploiting niches and opportunities which will mould the future structure of the economy. We can try to facilitate that process, or even to guide particular aspects which we reasonably expect to be important (eg the cyberport), but there will always be surprises. In any analysis of competitiveness there is inevitably scope for argument about the appropriateness of the statistics one is using. I believe that in the current Hong Kong conjuncture the popular measures such as the real exchange rate may have been lagging somewhat behind the recovery of competitiveness that may have actually occurred. Business decisions are influenced more by marginal prices and expectations of future prices, than by prevailing average prices; yet the measure of rentals which enters the CPI is typically based on an average of outstanding contracts and not the price at which new contracts are being struck which have over the past year or so fallen much more steeply. Thus, when thinking of business decisions, even assuming that residential rentals are a satisfactory proxy for rental costs affecting business, some adjustment for the marginal/average discrepancy may be needed at times when that discrepancy is significant - as it certainly is when one is at or near turning points in the rental cycle.

It was not surprising that during those times the financial stability was not of a main concern for the central bank. As the central banks learnt during the second half of eighties to deal more properly with inflationary disturbances, the price stability was broadly achieved again. Consequently, the interest in financial  BIS Review 20/2005  1  stability issue has been increasing during the nineties. In my opinion, there are two main reasons for it. First of all, central banks have learnt one important rule: that their role of the lender of last resort is something the central bank should be ready to fulfil, but in fact it is optimal, never to do it in practice. Second of all, the financial system is in the end completely incomparable to the pre-World-War-II system. Nowadays, we live in a global world and, although we are more capable of minimising the impact of inflationary disturbances, there are other types of shocks arising. To sum up, the main message we can learn from the history is that price stability as the ultimate goal of monetary policy is not in contradiction with the effort to achieve the financial stability. Indeed, on one hand, price stability is a necessary condition to achieve financial stability, as the inflationary disturbances have the potential to cause serious damages to the financial system; on the other hand, a sound financial system enables the monetary policy to smooth its actions in order to achieve price stability. Ladies and gentlemen, thank you for your attention.
Under the law, the New York Fed does not have the authority to provide what I would characterize as a “naked” guarantee – one that would be unsecured and not limited in amount, and would put the U.S. taxpayers at risk for the entirety of Lehman’s trading obligations. As Chairman Bernanke has observed, “the Federal Reserve has done, and will continue to do, everything possible within the limits of its authority to assist in restoring our nation to financial stability and economic prosperity….” 6 In this case, Lehman had no ability to pledge the amount of collateral required to satisfactorily secure a Fed guarantee, one large enough to credibly withstand a run by Lehman’s creditors and counterparties. As events subsequently played out, several weeks after Lehman weekend, on October 2, 2008, Congress passed the Emergency Economic Stabilization Act (EESA), which provides the U.S. Treasury Department with legal authority to issue a guarantee. 7 Again, the Federal Reserve did not then, and does not now, have such authority. Even if it had been legally possible, a Government guarantee would have also placed the taxpayer at enormous risk because it would have undermined deal certainty. It is important for the acquirer – and not a third party – to issue the guarantee because it gives the acquirer a strong incentive to close the deal and assume control of the target. For example, J.P. Morgan Chase, which proffered the guarantee needed to merge with Bear Stearns, negotiated a host of provisions from Bear Stearns that assured deal certainty.

Counterparties’ reluctance to deal with Lehman intensified starting on Monday, September 8, 2008, such that by Thursday, September 11, 2008, it was apparent to us that Lehman faced a liquidity crisis – i.e., it would not be able to pay its debts as they came due. The issue was no longer whether this public company could fashion its own rescue. We had come to the point of no return, where Lehman faced two alternatives: bankruptcy, or some kind of third-party rescue. The United States Treasury Department, working in conjunction with the Federal Reserve and the SEC, convened a meeting of the chief executive officers of major financial institutions at the New York Fed after the close of markets on Friday, September 12, 2008. Secretary Paulson opened the meeting with a short and plain declaration that there would be no public money to support Lehman. The Government then gave the CEOs two tasks. First, it was suggested they form a consortium to finance certain of Lehman’s illiquid assets in  3  Richard S. Fuld, Jr., Statement before the United States House of Representatives Committee on Financial Services, April 20, 2010. 4  Transcript, Hearing on Lehman Brothers Bankruptcy Examiner Report, United States House of Representatives Committee on Financial Services, April 20, 2008, pp. 136, 153. BIS Review 112/2010  3  order to facilitate an acquisition.
However, this does not necessarily exclude looking into the arguments for or against either alternative. As I already said, I believe that it is better to have supervision integrated in the central bank. First of all, the ongoing complex challenges to financial and economic stability call for identifying, using and corroborating tons of information in order to articulate the adequate policies. The central bank relies on its database and expertise, which are prerequisites for managing such a challenging environment. Beyond this major advantage, there are also other benefits of such an institutional arrangement. Independence from political influence is essential for effective supervision. And central banks are institutions enjoying a high level of independence that a newly-established government agency would not be able to gain, at least in the short run. Besides, clearly acknowledging the links between price stability and financial stability means that they need to be taken into account when formulating the monetary policy. Moreover, as Benoît Cœuré pointed out, data collected and analyses conducted as part of banking supervision provide valuable information about the financial sector and may feed into the assessment of the state of the economy, being useful for the monetary policy decision-making process. Of course, literature identifies some disadvantages of integrating supervision in the central bank. The risk of this arrangement resulting in a too loose monetary policy, due to the conflicting objectives, which I have already referred to, is an important drawback.

And if, within the criticism, there’s an implicit assumption that there’s an alternative universe in which everything else stays the same – real economic growth, real incomes and risky asset prices – but real interest rates are materially higher, then I’m not sure that’s right. I don’t think such a universe exists. Uncertainty and investment  Let me start with the August forecast, and the downward revision to investment in particular (Chart 1). It is often said that because consumer spending accounts for the lion’s share of aggregate demand - 65% of it in 2015, compared with 10% for business investment – the economic cycle depends mostly on household consumption. But investment is far more volatile than consumption (Charts 2 plots their growth rates, in annual data, since 1  1835 ). Allowing for this, their arithmetic contributions to aggregate demand growth are equally variable. There’s no reason to suppose investment is any less important than consumption in driving economic cycles. In fact, in many cycles, including during the financial crisis, it appears to move ahead of consumption. Chart 1: Business investment revised down in  Chart 2: Investment far more volatile than  August  consumption  Percent, 4qma 30 20  Standard deviations from mean .
By April of last year, it had fallen nearly 10 percentage points, which translates to 25 million fewer people working—an astounding drop. Fortunately, EPOP has risen considerably since then, but it’s still more than three percentage points below pre-pandemic levels. That difference translates to about eight and a half million fewer people working, close to the statistic I cited on the number of lost jobs that is based on a survey of employers. These are aggregate numbers and only tell part of the story. It’s also important to understand that the downturn has disproportionately affected certain sectors of the economy and segments of society. Service-sector jobs, especially those in hospitality and leisure, fell dramatically with last spring’s shutdown of the economy. And a large share of the job losses fell on Black and Hispanic households. Now I’ll turn to inflation, the other half of our dual mandate. With recent rises in energy prices and the reversals of last spring’s large price declines, the inflation rate has increased from the very low levels seen during the earlier stages of the pandemic. As the economy further reopens, these dynamics will continue to play out, and I expect inflation to run somewhat above our 2 percent longer-run goal for the remainder of this year. It’s important not to overreact to this volatility in prices resulting from the unique circumstances of the pandemic and instead stay focused on the underlying trends in inflation.

In fact, with accommodative financial conditions, strong fiscal support, and widespread vaccinations, I expect that the rate of economic growth this year will be the fastest that we’ve experienced since the early 1980s. And that’s not only a forecast—we are already seeing signs of this pivot to strong growth in the economic statistics, as I’ll discuss in a minute. If this sounds like good news, that’s because it is. But robust economic growth this year by itself isn’t enough to achieve the truly strong and full economic recovery that we are aiming for. We are still far from our goals of maximum employment and price stability, known as the Fed’s “dual mandate." 1/3  BIS central bankers' speeches  To inform our decision-making, we consider a broad range of factors that help us understand developments affecting economic growth, labor markets, and inflation. I’ll start with the most common measure of the overall economy: gross domestic product, or GDP. I mentioned that I expect GDP growth this year to be the fastest in decades. Specifically, I see inflation-adjusted, or real, GDP increasing around seven percent this year. This is welcome progress after the toughest period for the economy in living memory and a winter when the pandemic was particularly severe, and the economy suffered as a result. Despite the truly devastating effects of the pandemic on employment, recent job growth is the strongest it’s been since last summer.
To reduce the risks to the financial system and increase the degree of freedom for monetary policy, monetary policy needs to be complemented by an efficient macroprudential policy, among other things. Inflation targeting is based on an assignment that largely disregarded the risks inherent in financial stability. The Riksbank’s responsibility in this area is expressed in the legislation as the task of “promoting a safe and efficient payment system”. More specific details are not given. I consider that the Riksbank’s responsibility should include financial stability and this should be clarified in the Sveriges Riksbank Act. An important question in this context is what formal role the Riksbank should have in the work to reduce risks and vulnerabilities in the financial system. After the financial crisis, the framework surrounding the preventive work for financial stability has been reviewed in several countries, including Sweden. The outcome of the Swedish inquiries has not improved the Riksbank’s chances of working preventively on reducing the risks in the financial system – rather the opposite. I do not consider that dispersing responsibility among several different authorities and reducing the Riksbank’s role is a good solution for Sweden. The risk is that it will become unclear who is to act should a risk arise in the financial system and how accountability is to be demanded should a crisis nevertheless occur.

Just one year after the company started operating its direct cargo trains linking China and Europe, it made the bold decision to allow other producers on-board, giving up what was seen as a significant competitive advantage at the time. But the results were astonishing. By doing so, it was able to increase the frequency of departures which allowed it to move its products more quickly to Europe. Today, HP’s Europe-bound trains depart daily from China, with the higher frequency working to its own advantage. The notion of co-opetition is not entirely foreign to the world of insurance. Insurance marketplaces such as Lloyd’s of London have long operated arrangements that deliver advantages from pooling risks and information. In Malaysia, market mechanisms exist to move reinsurance documentation more efficiently between market participants, and to share information on fraud. The emergence of new technologies will take this further. Open application programming interfaces, or APIs, enable insurers to provide and obtain access to information that will significantly alter the operational process of insurers. But access to information would require a network of service providers who are willing to share data and information, without giving away one’s competitive edge. Investments in infrastructure, especially in ICT is very expensive. By pooling funds to build shared infrastructure, the burden becomes more manageable. More investments in IT will enable new possibilities to expand insurance reach, improve efficiency and increase effectiveness. Not long ago, the natural instinct would be to resist these forces of change.
In the UK, the starting point has been robust domestic demand; the leveraged-buyout sector aside, generally healthy corporate balance sheets; somewhat more vulnerable household balance sheets; 21 and potentially stretched commercial and residential property prices. At the Committee’s November meeting, I explored the case for an “insurance cut” addressed to the downside risks from tightening credit conditions. The case for such a cut was strengthened by Bank Rate, at 5¾%, standing at a level that was most probably mildly restrictive. But that had to be weighed against the upward pressures on inflation stemming largely from the rise in energy and other commodity prices. Our November projections seemed to me likely to validate the expectation already embodied in the money market curve that Bank Rate would over time be lowered, representing some offset to the tightening in liquidity and credit premia. That being so, on balance, I concluded that an immediate cut was not necessary; and that “no change” would give the Committee a valuable opportunity to explain in the Inflation Report the implications of both the credit and commodity shocks, underlining that the Committee remains focused on anchoring inflation expectations and so achieving the inflation target over the medium term. Looking ahead, I noted the importance of distinguishing between, on the one hand, the passing through into the macroeconomy of the shocks that had already occurred to credit conditions and to commodity prices; and, on the other hand, the possibility of new shocks on either or both fronts.

By reducing reliance on retail deposits, it reduced barriers to entry. Lenders’ margins fell (Chart 16), and credit conditions in the UK mortgage market eased. Conversely, the painful reminder that undiversified funding and income sources may leave a bank unusually vulnerable will probably bring about another shock to the structure of the market. The persistent tightening in mortgage credit that that would bring was a factor in the MPC’s November projections. In the near term, the extent to which the big or more diversified banks fill the gap will depend on the extent to which they too preserve capital and liquidity in the face of the harsh environment I have described. Money, or bank intermediation So far I have focused entirely on credit. Where does this leave money (or Money), the starting point for much traditional monetary analysis? Well, much that I have said about banks – their capacity, in the short run, to lever up their balance sheets and expand credit at will; their role in providing liquidity insurance to investment vehicles and corporates – turns precisely on their liabilities being money. And for this reason, banks are after all decisively different from other intermediaries. As transactions balances and so the means of exchange in our payments system, the moneyness of bank deposits lies at the core of credit intermediation.
Against this backdrop, we expect GDP growth of around 0.5% for 2023. Page 2/4  Berne, 15 December 2022 Thomas Jordan  News conference  Our forecast for Switzerland, as for the global economy, is subject to high uncertainty. A stronger economic downturn abroad or a pronounced energy shortage in Switzerland would, in particular, have a negative effect. Monetary policy outlook  Ladies and gentlemen, allow me to return to our monetary policy. Inflation has declined somewhat since August. While this development is welcome, it is still too early to sound the all-clear. In fact, the underlying inflationary pressure has increased again, due also to the high level of inflation abroad. In this environment, there is a danger that inflation could remain elevated in Switzerland in the medium term owing to second-round effects. The renewed tightening of our monetary policy is therefore necessary to ensure that inflation returns to the range consistent with price stability over the medium term. It cannot be ruled out that further increases in the SNB policy rate will be necessary to ensure price stability. I would like to conclude by addressing the development of the exchange rate and our activity on the foreign exchange market. Since the beginning of the year, the Swiss franc has appreciated by around 4% on a trade-weighted basis. This appreciation has helped ensure that less inflation has been imported from abroad, thus curbing the rise in inflation.

The bottom line is that the long-term sustainability of public debt should be ensured by credible but flexible fiscal rules. In parallel, we could maintain the possibility of responding to large shocks through a permanent common fiscal capacity; in this respect, the Next Generation EU package is a positive breakthrough, and could be made permanent, although with more limited amounts. A few days ago, Mario Draghi, speaking at the Italian Senate in his current capacity as Prime minister, rightly backed “an increasingly integrated European Union that will arrive at a common public budget capable of supporting countries in times of recession.” In addition, a fully-fledged capital markets union is more necessary than ever, in order to supplement public risk sharing with private risk sharing across the euro area. In conclusion, let me say a few words on chamber music. Many of you have already heard the famous Piano Trio Number 2 by Franz Schubert. The harmony of the three instruments has charmed generations of music lovers, including Stanley Kubrick in “Barry Lindon”. In this piece, none of the instruments should be the only game in its own town. And none of them should be dominated by any of the other two, otherwise the harmony is broken. Quite the contrary, we can hear each instrument and the beauty of the piece comes from the response of each instrument to the others. The same applies to the three macroeconomic policies: monetary, macroprudential and fiscal.
Is it worth accepting slightly weaker demand and thereby inflation over the coming years if the economy develops as we have assumed in our forecasts in order to perhaps reduce the effects of possible corrections following inflated asset prices and loan stocks? Before I get into a discussion of this dilemma, I would like to give a brief reminder of how central banks with price stability as their objective take into account developments in the real economy. Flexible inflation-targeting policy requires openness and clarity In the short term, monetary policy can affect demand in the economy. Most countries with an inflationtargeting policy use this possibility and conduct what is known as flexible inflation-targeting policy, which means that some consideration is given to short-term fluctuations in the real economy. However, in the long term growth is essentially determined by factors outside of the control of monetary policy, such as technology and population growth. As I mentioned earlier, monetary policy’s best contribution is to ensure that inflation is low and stable, which requires confidence in the target. This sets limits as to how much consideration can be given to short-term fluctuations in the real economy, but also limits the uncertain negative effects on inflation and the real economy that in some cases risk arising from a strong growth in asset prices and loans. To be able to maintain confidence, it is necessary that the inflation target has strong support from the general public, the politicians and the financial markets.

Lending to microfinance sector now counts for more than 10 per cent of the whole lending portfolio of the banking system. The quality of the microfinance loans has been satisfactory. On average, the portfolio at risk is between 1.5-2 percent, according to their reports. This is not only because of their small size (usually under 1.5 thousand euros each), but also because of the diversity of the projects, ensuring diversification of the loan portfolio. One should also say that the experience gained by the microfinance institutions in this area, have also played an important role for this good quality. The legal framework on microfinance was completed in 1996, with the approval of a special law that defined the principles upon which such institutions could be found and operate. Such principles for the specialized institutions included free will, reciprocal cooperation, capitalization of the profit and reinvestment in the community etc. Later developments made it necessary for the Law to change. Hence, a new Law “On Savings and Loans Associations and their Unions” was approved in Parliament on May of 2001. Several changes supported this new law. Besides the principles that were restated, the Law has defined the legal personality of the microfinance institutions, their permitted activities, the rights and the obligations of the members of the association, the managing structures of the associations and their functions, other important supervisory financial requirements and ratios, the role of the Unions and that of the Bank of Albania as the regulatory and the supervisory authority.