samchain/econo-pairs-v1 huggingface dataset:
To speed the process and avoid unnecessary delays that might exacerbate liquidity problems, and to halt any possible contagion to other parts of the system, the Banco de España took the swiftest of decisions while fully observing the provisions of the Law on the Discipline and Intervention of Credit Institutions. The conduct of the Banco de España has been informed by the lessons that all supervisors have drawn from the unfolding of the financial crisis in other developed countries. In particular, it is our resolve to prevent the problems of an individual credit institution degenerating to such an extent as to spread to other domestic banks and savings banks. BIS Review 42/2009  1  The speed behind the Banco de España's decision also justifies the urgency of and need for the Royal Decree-Law adopted by the government. Without going into details on the legislation, I would like to stress that the granting of guarantees by the Treasury has a dual purpose. First, it allows the Banco de España to act with full force, providing a very high volume of guarantees backing potentially significant funding. Such provision is necessary if the ailing credit institution is to meet all its commitments and honour all its payments. Since autumn 2008, when the suspension of payments by Lehman Brothers led to a risk of widespread collapse on the international financial markets, no country has allowed any credit institution active on international markets to suspend payments.

By doing so, we aim to collect a more accurate and complete representation of individuals’ subjective expectations, and the degree of uncertainty that they attach to their forecasts. Our method for eliciting density forecasts builds on a large body of empirical work, led by economist Charles Manski, which involves the use of probabilistic survey question formats to measure a respondent’s beliefs about an uncertain future event. Our specific question format was further tested during the experimental pilot phase of the project. Our density forecast question asks respondents to assign probabilities to pre-determined intervals or bins for future outcomes. For example, as shown on Slide 2, for year-ahead inflation, we ask for the “percent chance” that inflation will be between 0 percent and 2 percent, 2 percent and 4 percent, 4 percent and 8 percent, etc., with similar bins used for deflation. In a similar fashion, we solicit respondents’ density forecasts for year-ahead earnings growth, house price change expectations, and three-year ahead inflation. For each individual respondent, the resulting density forecast enables us to construct individual measures of central tendency (such as the density mean or median) and uncertainty (such as the density interquartile range). To compute these, we use each individual’s responses to the probabilistic questions to parametrically estimate the underlying forecast density function as proposed by Engelberg, Manski, and Williams in a 2009 Journal of Business and Economic Statistics article.
Hume and Sentance (2009) also provide an analysis of how global economic trends fostered the global credit boom of the mid-2000s. BIS central bankers’ speeches  9  Chart 9 – UK output and inflation since 1997 Annual percentage change in real GDP and consumer prices 6 4 2 0 -2 GDP growth  -4  CPI inflation -6 -8 1997  1999  2001  2003  2005  2007  2009  2011  Source: ONS One reaction to my analysis could be that we have to accept a lot more volatility in growth and inflation, and simply grin and bear it. To some extent this will be true if the global shocks are big enough and very sudden, as we discovered in late 2008 and early 2009 when we felt the full force of the global financial crisis. But even in these circumstances, monetary policy played an important role in stabilising the economy and heading off a downward spiral in demand and the associated deflationary threat. In the decade before the recent global turbulence, there were also significant fluctuations in the international climate, including the impact of the Asian Crisis, the “dotcom” boom and bust in the US, and global geo-political turbulence in the early 2000s. In response to these fluctuations, the MPC did respond by adjusting monetary policy and succeeded in keeping UK growth steady and inflation low and stable, as Chart 9 shows, albeit in a more benign global environment than we have seen recently.

In today’s speech, I want to highlight some of the key features of this highly integrated economic system and discuss some of the challenges it may pose in the future. In particular, I will discuss how the changing shape of the world economy affects the task of national monetary authorities, such as the MPC. In other words, how can economic policy-makers maintain stability when we are constantly in danger of being buffeted by powerful global economic forces? The rise of Asia and the changing shape of the world economy A key feature of the new global economy we now inhabit is the increasing economic strength of the Asia-Pacific region. Chart 2 shows that the top ten economies in this region – led by China, Japan and India – have already overtaken both the European Union and the United States in their share of world economic activity. This compares with the situation thirty years ago when these economies were collectively just half the size of the European economy, and about two-thirds the size of the United States. 2  BIS central bankers’ speeches  Chart 2 – The rise of Asia Percentage share of world GDP, at current market prices and exchange rates US  EU-27  40%  Asia-pacific G10 *  35% 30% 25% 20% 15% 10% 5% 0% 1980  1990  2000  2010  *: Includes Australia, China, India, Indonesia, Japan, Malaysia, Singapore, South Korea, Taiwan Province of China and Thailand.
Chart 3: Onshore and offshore rates for 3m dollar funding OIS +[25bps to 50bps] Central bank USD swap line rate Onshore via USD LIBOR Offshore via EUR Offshore via JPY Offshore via GBP  15 Mar: Swapline rate and maturity enhanced  20 Mar: Swapline frequency increased  Chart 4: Dollar swaps outstanding 20 Mar:  USD bn  Frequency increased  Other Bank of Canada Swiss National Bank Bank of England Bank of Japan European Central Bank Total  Per cent 3.5 3.0  15 Mar: Swapline rate and maturity enhanced  2.5  9 Mar 2.0 1.5  Mar.20  700  600 23 Mar: Federal Reserve announces further 500 measures  $ bn  700 400  20 Mar: Swapline frequency increased  600 300 500 200  400 100  Apr.20  May.20  200  1.0  100  0.5  Feb 20  Mar 20  Apr 20  May 20  0.0 Jun 20  Sources: Bloomberg and Bank calculations. Offshore funding calculations use FX swaps referencing 3 month Libor. The dotted light blue line indicates that prior to the 15 March 2020, swap lines were only offered at a 1-week, not 3 month, maturity. 300 0  0 2007  2009  2011  2013  Mar 20  Apr 20 May 20  Sources: Bloomberg, Federal Reserve and Bank calculations.

But as time went on, their speed and size – running to hundreds of billions of dollars – began to overwhelm dealers’ intermediation capacity, which was itself shrinking as the result of rising volatility and the operational challenges of remote working. Rising transaction costs and the breakdown in arbitrage relationships began feeding on themselves: a classic ‘doom loop’ (Chart 2). What was unique about this process, and potentially disastrous for the financial system, was that even the highest quality government assets were not good enough. Just like high street companies facing  1  Leverage rates of 40-60 times were common, but anecdotal reports suggest some ran much higher. 3  All speeches are available online at www.bankofengland.co.uk/news/speeches  3  evaporating revenues, market participants needed cash. In the days that followed, this so-called ‘dash for cash’ would spread to every corner of the global financial system.
With the banking sector in the euro area being an essential source of financing of the real economy, the integration of these markets plays an important role in the pass-through of monetary policy decisions to the lending rates of the banking sector. The financial crisis has challenged the stability and integration of European financial markets in an unprecedented way. It has thrown into reverse the steady integration seen since the inception of the euro. The causes for this were manifold. First, heterogeneous economic developments caused by financial and structural imbalances across euro area Member States led to outflows of funds from the countries that were perceived as more risky – in view of their large cumulated imbalances stemming from ample competitiveness gaps, high current account deficits and high private sector leverage – and led to inflows into countries with a safe-haven status. Second, imbalances in the banking sector arose from undue risk-taking, investment in opaque financial products and excessive leverage. This has caused some financial institutions to be cut off from wholesale funding markets and interbank funding. The seclusion of some financial institutions was also the result of the measures introduced by some Member States to ring-fence the domestic banking industry from foreign contagion. While this was an understandable response from regulators that had a domestic perspective in their institutional mandates, the consequence was a further fragmentation of financial markets. Third, in some countries, fiscal fragilities interacted with banking fragilities.

The result was higher cost and price inflation without the desired effect on competitiveness and employment. The Norwegian economy was lacking a nominal anchor during the devaluation period in the 1970s and 1980s, which fuelled inflation and instability. The ten-year period of devaluations is an example of how purely discretionary policymaking can lead the economy onto a suboptimal path, pointed out by Kydland and Prescott. The last devaluation came in 1986 after a fall in oil prices. Thereafter, the interest rate was used to keep the exchange rate fixed. The Norwegian economy had to undergo an extensive turnaround operation. Confidence in the Norwegian krone had to be restored in order to avoid persistently high inflation. This required very high interest rates. It took a long time for foreign exchange markets to gain confidence in the strategy shift in exchange rate policy. It was not until 1990 that Norwegian interest rates were on a par with external interest rates. By tying ourselves to a reaction pattern, monetary policy credibility was restored and the way was paved for more stable economic developments. In the wake of Kydland’s and Prescott’s recommendations, both fiscal policy and monetary policy have become more rule-based in many countries. Policy rules are useful in that they give weight to long-term objectives when faced with day-to-day economic policy challenges. Since the early 1990s, many countries have implemented institutional reforms, such as central bank independence in the conduct of monetary policy to reach government-defined objectives.
Officials from the Monetary Authority of Singapore have been in close dialogue with Vietnam MOF and SSC to develop a meaningful programme catered at helping Vietnamese enterprises understand the workings of the international capital markets and the regulatory standards as well as market standards required for a listing in an international market outside of Vietnam. We have invited representatives from the Singapore Exchange, as well as professionals from leading investment banks, accountants and lawyers to join us at today’s seminar, and they will cover a wide-ranging programme that helps to prepare Vietnamese enterprises on cross-border listings, training on corporate governance, listing rules and accounting standards, amongst others. I understand that there are also plans for Vietnamese companies to be introduced to institutional investors based in Singapore at a later stage. All these efforts will pave the way for Vietnam to tap on Singapore’s capital markets as an additional channel to connect with global investors. We believe this will contribute to speeding up the pace of Vietnam’s economic growth, even as you are taking significant measures to develop your own capital markets. Singapore is now home to a wide pool of institutional funds, with more than $ billion of assets under management. As a well-managed pro-business marketplace, Singapore is particularly  BIS Review 35/2007  1  attractive to international companies seeking an offshore listing. Currently, more than 700 companies are listed on the Singapore Exchange. Amongst them, more than 30% are foreign companies from around the globe.

The first of these is the launch of the code of conduct for FX dealers by the end of this quarter. On behalf of the Bank, I would like to thank everyone involved, especially the ACI, for your considerations and suggestions that have made this long-term project a feasible one. I hope that the code of conduct will help guide fair and ethical market practices and increase confidence among the market participants for many years to come. 10. Another development is in the area of market reference rate reform. The transaction-based valuations to the benchmark calculations for the Thai Baht implied interest rates (THBFIX) will be introduced in the second half of this year, in place of the current survey-based model. The change is in line with the approach adopted by many other countries to reduce the risk of rate manipulation that has become the subject of vast discussions over the past few years. With these reform efforts underway, I hope the Thai financial markets will continue to inspire confidence among the market participants and allow us to move through these uncertain times with minimum disruptions. 11. Ladies and gentlemen, without further delay, let me conclude by congratulating the winners of the FX awards once again. I would also like to reiterate my thanks to Thomson Reuters for the invitation as well as for your continuing support as an important facilitator and information provider in the Thai financial markets.
Apart from 2/3  BIS central bankers' speeches  elevating our understanding and subsequent implementation of your AML/CFT reporting obligations, or preventive measures, there should also be efforts to: 1. keep ourselves abreast with recent and emerging trends of ML/TF; 2. abide by all ethical obligations and applicable professional rules; and also 3. properly distinguish between legitimate client requests and transactions or structures that may be intended for criminal activities or to frustrate law enforcement. Today’s conference seeks to address the concerns raised by legal professionals that are often cited as a hurdle or stumbling block to effectively implement AML/CFT obligations. Themed, “Building AML/CFT Compliance Effectiveness: Risks and Challenges”, the conference will have: 1. discussions on the application of risk-based approach; 2. a discussion on AML/CFT compliance vis-à-vis the legal professional privilege and professional secrecy; 3. sharing of experience or best practices by industry players; and 4. finally, sharing by law enforcement agencies on ML and TF cases involving abuse of lawyers and other gatekeepers, to facilitate ML and TF related crimes or activities. Before I end, I wish to highlight two key updates: 1. first, Bank Negara Malaysia is in the midst of finalizing revision to Sector 5 Policy Document (or the AML/CFT Guidelines issued pursuant to the AMLA) and will be issuing the exposure draft in September.

All reporting institutions are invited to provide comments and views on the draft which may be organized through relevant licencing authorities, self-regulatory bodies, industry associations or directly to Bank Negara Malaysia; and 2. second, I would also like to take this opportunity to remind all reporting institutions, that Bank Negara Malaysia is increasing its supervisory and enforcement of AML/CFT compliance, in which we intend to pursue more deterrent action including taking appropriate enforcement actions under the AMLA, for any identified non-compliances, beginning 2020. As such we urge all reporting institutions present today to engage and discourse any compliance issues with the wide ranging of experts that we have lined up for this conference. With that, I wish everyone a fruitful discussion ahead and Selamat Menyambut Hari Kemerdekaan. 3/3  BIS central bankers' speeches
BIS Review 44/2006  5  interest of Europeans, but eventually in the interest of the whole global economy as an economically stronger Europe will also raise our contribution to economic prosperity elsewhere in the world. Thank you very much for your attention. 6  BIS Review 44/2006

In any event, based on the experience of Spain and other countries, I consider that in all key aspects of the resolution process, the direct involvement of the supervisor is crucial to avoid information gaps, prevent duplications and ensure efficient use of the resources employed to monitor financial institutions. 5  Conclusions  To conclude, I believe that as resolution authorities we have a very exciting policy agenda in front of us. Indeed, it is hard to think of other policy tasks which are so closely related to such a large number of first-order public objectives such as financial stability, the orderly functioning of the capital markets and the integrity of the public finances. Yet it is clear that, since resolution policy is arguably in its childhood as a recognised policy area, we still lack something like a comprehensive manual to guide our actions in the field. Therefore our decisions must often be taken as if we were exploring an uncharted territory full of legal and economic risks. That is why I think that events like this, which allow competent authorities to exchange experiences and thoughts, are no doubt extremely useful in counteracting our uncertainty until a sufficiently large store of knowledge, if not doctrine, becomes available. I wish to thank Antonio Carrascosa, Mario Delgado and the rest of the FROB team involved in the organisation of this conference, and all of you for your participation. Thank you. BIS central bankers’ speeches  5
Chart 15 plots real household disposable income per head across households grouped into five income categories. Because household spending differs materially depending on someone’s income – for example, poorer households spend proportionately more on food and energy – we deflate the income of each group using a price index which reflects their different spending patterns. Chart 15 paints a fairly reassuring picture. In general, lower income groups have fared somewhat better than higher income groups since the crisis: the lowest income quintile has seen disposable incomes rise by around 5% since 2007, while the highest quintile has seen income fall by around 5%. Those in the bottom half of the distribution have seen incomes rise since 2007, while those in the top half have seen them fall. This reflects the impact of the benefits and pensions system in supporting lower income households. As a result, the distribution of incomes across the UK has probably narrowed a little since 2007. Income inequality has, if anything, fallen. That means, when we look at measures of social welfare aggregated across different income groups, we find it has not performed very differently than aggregate real disposable income since the crisis (Chart 16). These patterns of gains and losses are, however, very different when we turn to wealth. Chart 17 plots the distribution of wealth gains since 2010 across income quintiles. It suggests a dramatically uneven pattern. Those in the bottom two-fifths of the income distribution have seen virtually no gains in their wealth since 2010.

For those with a long enough memory, this time’s recovery is likely to feel quite anaemic, relative to those in the past. A second potential explanation may lie in the fact that aggregate activity measures are sometimes a poor proxy for the average person’s income. GDP is a measure of the size of the economic pie, a pie that has grown substantially larger since 2009. But so too has the number of people eating it. Taking the two together, GDP per head has risen significantly more slowly than aggregate GDP since 2009. Indeed, GDP per head today is only around 1% above its pre-crisis peak (Chart 3). GDP measures income from all UK-based activities. But not all of that income flows to UK citizens. Some flows abroad to foreign owners of UK assets and some income is earned domestically on UK investments abroad. The amount of net income flowing overseas currently stands at around 3% of GDP. This is a record high. If we take net overseas income out of GDP, to give a measure of net national disposable income per head, it has recovered even more slowly than GDP per head. It is currently at levels little different than its pre-crisis peak (Chart 3). National income per head suggests there has scarcely been any recovery. Moreover, not all the income earned nationally flows directly and immediately to households. For example, some accrues to companies who may save it rather than distributing it to households as wages or dividends.
12103 6 For further details please refer to https://www.bankofengland.co.uk/speech/2017/changing-risk-and-the-search-for-yield-on-solvency-2capital 7 Financial Stability Report, December 2016, Bank of England. 5  5  All speeches are available online at www.bankofengland.co.uk/speeches  5  insurers have used internal securitisations backed by their equity release mortgage portfolios in order to create a senior tranche with the required fixed cashflows. Let us dig a little deeper into the Matching Adjustment. In principle, the higher discount rate on liabilities is intended to reflect the component of the spread over risk-free rates that compensates other investors for risks to which the insurers are not exposed. In the case of bonds, this is the liquidity premium for the risk that they might have to sell into secondary bond markets at a time when credit spreads are wide. Annuity writers are not exposed to this risk and can therefore earn the liquidity premium provided they can bear the credit risk and hold the assets until maturity. Mechanically, however, the Matching Adjustment is not calculated by estimating directly the market premium for any risks to which insurers are not exposed. Rather it is calculated indirectly as a residual by subtracting from the yield on an asset (1) risk-free rates and (2) an estimate of the required premium for risks to which insurers are exposed. In the case of bonds, insurers are exposed to the credit risk that the issuer is unable 8  to pay interest or principal at maturity.

There is a tendency by market participants and some policymakers to consider central banks to be “universal problem solvers” whose balance sheets can be used, without cost, for all purposes. There is also a doubt, at least an ambiguity, in the minds of some analysts, about the true purpose of government bond purchases. Central banks’ activism may create doubts as to their ability to stick to their core mandate – price stability – in the face of increasing pressures and constraints. Overall, the euro area is well protected against all of these risks thanks to the robustness of its institutional framework Price stability is unambiguously the priority objective of monetary policy Monetary financing of governments is strictly prohibited The Eurosystem (the ECB and National Central Banks) is extremely well capitalised, which protects its independence. This has allowed the Eurosystem to implement nonstandard measures on a large scale without endangering its credibility. Of course, we do not control fiscal policy. We will never accept a situation where fiscal imbalances could constrain monetary policy. It is very important, therefore, that credible fiscal consolidation takes place across the euro area. This will make it easier for the Eurosystem to be active in protecting financial stability. On the contrary, doubts over governments’ resolve to ensure the sustainability of public finances would make us powerless to fight instability and expose the euro area to great dangers. Now for the more normative aspects. We may have to live with nonstandard measures for a long time.