samchain/econo-pairs-v1 huggingface dataset:
In the LTCM situation, the  1  The Fed Facility was (and remains) secured by a pledge of a substantial portion of AIG’s assets, including ownership interests in the company’s domestic and foreign insurance subsidiaries. As additional compensation for the Fed Facility, AIG agreed to issue to a trust for the benefit of the Treasury, preferred stock convertible into 79 percent of AIG’s outstanding common stock. 2  BIS Review 73/2010  Federal Reserve called together a private sector consortium made up of LTCM’s major counterparties, who agreed to rescue LTCM by investing about $ billion in new equity, in return for a 90 percent equity stake in LTCM’s portfolio along with operational control. The counterparties made this decision after the Federal Reserve encouraged them to recognize their self-interest in saving LTCM. The consortium invested in LTCM because its members came to believe that the Federal Reserve staff was right. Several years later, when the investors received back all of their capital with interest, they came to see that the Federal Reserve was right. The market conditions in September 2008 presented a very different situation to AIG’s counterparties who, in the aftermath of Lehman’s failure, found themselves facing liquidity concerns that compelled them to maintain cash on their balance sheets rather than lend to AIG. Moreover, the unprecedented size of AIG’s liquidity need – ultimately more than $ billion – could not have been met by the private sector. There is, however, one very important similarity.

In Harvard Yard sits a statue of John Harvard, seated on a bronze throne, commemorating 1638, the year of the university’s founding. Tour-guides relish in pointing out that, in fact: No-one knows what John Harvard looked like, so it is unlikely to be a great resemblance of him; The college wasn’t founded in 1638, but two years earlier; And it wasn’t founded by John Harvard, but by the Court of the Massachusetts Bay Colony, which first voted to set up the university. The “Statue of the Three Lies” is part of Harvard legend. The Three Lies in question are harmless fun. But they should remind us how deeper untruths can persist, embodied in monuments or sustained by conventional wisdom and mores. We gather this evening almost seven years to the day that the failure of Lehman Brothers shattered conventional wisdom and laid bare three lies about finance. Unlike the statue’s three lies, those falsehoods have had lasting consequences. 1  So wrote F A Mackenzie, a Quebec-born writer and journalist who was the Daily Mail’s travelling correspondent in the Far East in the early 1900s. See Mackenzie, F A, “American shrines in Britain”, Chapter XLV in Hammerton, J A (ed.) (1926), Wonderful Britain: its highways, byways and historic places, Vol. 2.
Also, several thousand experts, including auditors, consultants, appraisers, etc., participated in the exercise and strict quality assurance was enforced both at the level of the national supervisory authorities and by the ECB. The results disclosed yesterday show that European banks have, in the main, a comfortable solvency cushion. A good number of them have been able in recent months to reinforce their solvency levels notably, meaning that the capital measures needed to comply with the requirements arising from the exercise are modest in scope. However, the analysis has shown that some European banks are in a vulnerable solvency position, which they should redress as soon as possible. All told, as important as the solvency assessment the exercise provides is the detailed information furnished on each bank. In particular, the asset quality review offers significant data on the potential shortcomings of the way in which the financial information disclosed by banks reflects the risk they assume. Here it can be seen, once again, that there is no widespread material understatement of risk, in the form of valuation failings or provisioning shortfalls. But there are European banks where the asset review has evidenced shortcomings of some significance. In the case of Spanish banks, the analysis has offered fairly satisfactory results. In particular, the asset quality review situates Spain as the country where fewest failings have been detected in proportion to the sector’s aggregate assets.

It plunged many economies into recession, considerably weakened public finances in many countries and, generally, entailed considerable losses in well-being. Fortunately, and this is a positive message worth emphasising, the authorities’ response was generally correct. In a relatively short time, sweeping regulatory changes – which you will be able to review in detail in this conference – were ushered in. Moreover, the euro area has managed, at unprecedented speed, to launch an institutional reform, namely the banking union, whose scope cannot be overstated and which entails the strengthening of the Monetary Union. In Spain, I believe the work done in reforming our financial system has had very satisfactory results. International agencies, in particular the IMF and the European Commission, have repeatedly testified to these results. So too have the markets, where there have been significant increases in the valuation of instruments issued by Spanish banks. And, most recently, there was further acknowledgement in the comprehensive assessment of the European banking sector by the ECB and the European Banking Authority. Given the importance of this exercise, as a prior step to the start-up of the Single Supervisory Mechanism (SSM), allow me to refer to the results disclosed yesterday, before discussing the most significant measures taken in Spain to strengthen the financial system and highlighting some of the challenges to be faced in the near future.
Investment in IT, which had been growing at around 20% a year, actually fell in the first quarter. As a result, and as in the UK, the US has experienced a fall in manufacturing output while consumption and the housing market appear more resilient. Prompt action by the Federal Reserve has so far limited the slowdown to a downturn in inventories and fixed investment. Whether the slowdown in the US will be more prolonged than is embodied in the current consensus view will depend critically upon personal consumption. And, in turn, that will depend upon expectations of future productivity and hence income growth in the US. If there were to be a reappraisal of the extent of the increase in productivity growth in the US, then there might be a further downward revision of asset prices and a lower path for consumption spending. So far, the evidence, both from consumption directly, and financial markets indirectly, suggests that no major reappraisal has occurred. Share prices have fallen from their peaks of last year. But price to earnings ratios remain well above historical levels. The average P/E ratio in the US since 1900 was around 14. The ratio peaked at over 30, falling back to current levels of well over 20. Interestingly, the divergence of valuation between hi-tech and other companies has virtually disappeared in recent months. There has also been a reduction in the perception of downside risks to equity returns.

What this argument suggests is that economists should be cautious about drawing strong conclusions about the future path of productivity growth. The changes in technology are real and evident in many aspects of our home and business lives. But their implications for aggregate productivity growth are much more uncertain. The two uncertainties facing the UK economy at present, namely the imbalances both at home and overseas, suggest that the Monetary Policy Committee may be in for a slightly bumpier ride over the next four years than during its first four. So far, the Monetary Policy Committee has managed to achieve an overall balance in the economy despite the contrasting fortunes of the internationally exposed and more sheltered sectors of the economy. But if these large imbalances are to unwind, then the Committee is likely to face a difficult challenge in trying to maintain a balance between total demand and supply. Controlling inflation in future may prove more difficult than over the past four years, and the longer the imbalances persist the greater the risk that the subsequent adjustments to demand, output and inflation are larger than those experienced recently. Any rebalancing of the economy is likely to be associated with a fall in the real exchange rate. But the magnitude and timing of that are not only uncertain, but also difficult for the MPC to influence. As Sir Samuel Brittan wrote recently about expected changes in exchange rates: "These developments are most likely to happen when they are least expected and least welcome".
Here, I would like to draw your attention to the large number of studies that stress the favorable effect of the presence of sufficiently developed, deepened and efficient derivatives markets on foreign direct investments. Dear Participants, In addition to all these benefits derivatives markets provide to the economy, they bear extra importance as a complementary element of financial markets in terms of their interaction with monetary policy and thus with the central bank. As it is known, establishing financial stability is one of the most important factors to be considered by all central banks that have set price stability as their primary objective. In this framework, derivatives markets, which help to sustain financial stability through their contribution by reducing volatility in the markets, support central banks in maintaining financial stability. The second contribution of derivatives markets to the monetary policies of central banks is that thanks to their functions in risk management and in providing information, they expedite and activate the transmission mechanism used by monetary policy in giving direction to the economy. 6  6  International Swaps and Derivatives Association, News Release on April 9, 2003. BIS Review 17/2005  Central banks adopt a long-term perspective in their target and try to affect the long-term movements of economic variables with the decisions they take. In this framework, it is crucial for a central bank to have as much information of a long-term nature about the economy and the future as possible.

Derivatives instruments are beneficial for all firms and the decision to use these instruments is largely shaped by the goals of the firm rather than its size. Here, I would like to touch upon a point about the information transmission function of derivatives markets. Derivatives markets offer economic agents the chance to price their expectations of the future. Thus, thanks to derivatives markets, expectations become measurable and through prices, more information concerning the future is shared with other economic agents. This structure enables a more effective resource allocation mechanism through more effective financial markets in the economy as a whole. Besides their contribution to the effectiveness of the resource allocation mechanism, the development of derivatives markets helps the financial sector to grow. Hence, derivatives markets contribute to the increase in national income and employment by indirectly encouraging more effective resource allocation and by providing value added. Derivatives markets introduce new investment instruments to the financial intermediary system, or in a broader sense, to the financial system. This, in turn, increases the number of instruments investors can use in order to diversify their portfolios and thus deepens financial markets. If we analyze what the diversity in investment instruments means for our country, we see that thanks to the derivatives markets, both real sector and financial sector investors will be able to manage their risks in diversity in line with the world markets and this structure will help our country to integrate with world markets.
31 The two strategies of ILS and public-private partnerships that I have highlighted earlier mark the metamorphosis of Singapore’s reinsurance industry as we transform from a mainstream traditional reinsurance hub, to a sophisticated full-fledged global capital for Asian risk transfer. 32 I invite you to be a part of this metamorphosis, as we chart new paths together in this journey that Singapore is embarking on. 33 Thank you very much. 4/4  BIS central bankers' speeches

However, in recognition of the effective lower bound on interest rates, the ECB has stated that it will also employ forward guidance, asset purchases and longer-term refinancing operations, or any other instrument, as appropriate. In this respect, let me very briefly mention some relevant elements in relation to these nonconventional monetary policy instruments. 6  Regarding forward guidance on interest rates, at end-July 2021, the ECB revised this monetary policy tool to bring it into line with the new strategy. In particular, the revised forward guidance incorporates the 2% symmetric inflation target and establishes three conditions that need to be fulfilled before the ECB Governing Council raises its interest rates. First, we have to observe “that inflation reaches 2% well ahead of the end of its projection horizon”. As ECB President Christine Lagarde explained following the announcement of the new forward guidance, “well ahead” basically refers to the mid-point of our projection horizon, which covers two to three years. 5 Second, inflation must be at 2% “[…] durably for the rest of the projection horizon”. And third, the Governing Council must consider "that the progress realised in underlying inflation is sufficiently advanced to be consistent with inflation stabilising at 2% over the medium term".
The Rt Hon Sir Edward George: A broad brush picture of the UK economy Speech by The Rt Hon Sir Edward George, Governor of the Bank of England, at the Asian Business Association Dinner, London, 19 March 2002. *  *  *  Thank you, Mr President, for that kind introduction. I'm delighted to be here. In fact it's the second time this year that I've had the pleasure of dining with representatives of the Asian Business Community in the UK. Just a couple of months ago, in Glasgow, I joined the Association of Business Community in paying tribute to Mr Yaqub Ali for the remarkable contribution that he has made to Scottish commercial and community life since he arrived here from Pakistan some 50 years ago. It was a very poignant occasion, coming as it did when the terrorist attacks of 11th September in New York and Washington were still fresh in our minds. Those events sadly have been sometimes represented - or misrepresented - as having something to do with ethnic or religious differences. But, as the universal condemnation of terrorism which followed the events of 11th September showed, they had nothing to do with ethnic or religious differences; they were a reflection of a fanaticism which has no place in any civilised society. Nevertheless they clearly had the capacity to accentuate perceived differences, and to provoke unwanted tensions within our international, national and local communities.

But more recent figures from the London Chamber's report, published last December, on the contribution of Asian business to London's economy, suggest that the ethnic minority population manages or owns some 20% of London's private sector businesses, with the Asian community alone accounting for half that - or some 10% of the total. These figures make a powerful point, which is underlined by the presence of so many Asian and nonAsian business and professional people here this evening. They illustrate very vividly the great benefit that can accrue to our society, as a whole, from providing the opportunity to all the people in the UK, whatever their background, to realise their full potential and achieve all that they can in their different fields. It underscores the importance of non-discrimination, whether ethnic or religious, sexual or social, to the material as well as the moral progress of our whole community. It is a real pleasure to be with you. In his letter of invitation to me, your Chairman - Subhash Thakrar - suggested that I could talk about anything I wanted to this evening, provided it was the state of the economy, and provided I tell you what precisely will happen to interest rates. Let me begin by trying to explain to you what we at the Bank - through the MPC - are tasked to do, and why. The task sounds straightforward.
Later today Marek Rozkrut will present results of an empirical study conducted at the NBP 25 showing that central bank communication strategies in the Czech Republic, Hungary and Poland exhibit large differences. The Czech National Bank seems to do a much better job than the other two banks in matching words with deeds. There is also some evidence that pursuance of too many targets under IT framework leads to inconsistencies also in central bank communication, as in the case of the Hungarian National Bank. Finally, to those of you, who intend to adopt IT in the future let me say one last thing. A standard view is that IT should not be introduced unless a number of criteria are fulfilled. As Piotr Szpunar will tell you in the first presentation, at the time Poland adopted IT one could claim we were not ready as we did not comply with all of these criteria (e.g. a robust and well examined transmission mechanism) 26 . Yet Poland succeeded. Today we have low inflation with fairly low interest rates. What was the source of this success? We could probably think of a bunch of factors, but one thing cannot be overlooked. “The evidence suggests that successful adoption of inflation targeting depends more on establishing a credible commitment to the strategy than on fulfilling a lengthy list of technical prerequisites 27 ”. To put it bluntly, credible commitment to price stability is the very key and there’s no substitute for it. Those who ignore it are bound to fail.

Krzysztof Rybiński: Inflation targeting and the challenges ahead Opening remarks by Mr Krzysztof Rybiński, Deputy President of the National Bank of Poland, at the “Inflation Targeting - Third Joint NBP & SNB Seminar on Monetary Policy”, Warsaw, 18-20 May 2006. *  *  *  Ladies and Gentlemen, I am pleased to welcome you at the third seminar on monetary policy organized jointly by the Swiss National Bank and the National Bank of Poland. Let me start by thanking staff members from the host central banks, who have not spared their efforts on preparing this seminar. For the first time in our seminar, apart from economists from the host central banks we have invited representatives of other central banks to share with us their knowledge and experience with inflation targeting. Thus I would like to warmly welcome our guests from the Czech National Bank – the first inflation targeter in Central and Eastern Europe, and from the Central Bank of Turkey – a brand new inflation targeter, which has adopted the framework only this year. The topic of this year’s seminar is inflation targeting (henceforth called IT). As the distinguished former Fed chairman Paul Volcker recently remarked 1 , inflation targeting may sound like an oxymoron since usually central banks strive to fight inflation rather than to breed it. So should we gather here to discuss ways of breeding inflation?
This is a balance of payments problem, as 94% of the claims on these banks are foreign and only 6% domestic, whereas 41% of the assets are domestic, including 21% in krónur (See Figure 11). Taking into account the part of these assets that are already financed in foreign currency, we get the result that unfinanced domestic assets that could revert to foreign residents with the unwinding of these estates will amount to 25% of GDP (see Figure 12). When considering the complication that this creates for Iceland, you should bear in mind that it is partly because the resolution of the third-largest bankruptcy in the history of mankind is taking place in one of the smallest countries in Europe. Therefore, potential outflows amounting to 40% of GDP might seek a speedy exit if we were to lift the capital controls tomorrow. If our relatively large FX reserves (30% of GDP) were our first line of defence, they would be wiped out completely, and then the exchange rate would give way, with potentially serious consequences for economic and financial stability in Iceland. We are currently working hard on solutions to this problem, and such solutions do exist. From a logical standpoint, the solution must take the form of either a significant reduction before early exit or a secure longer-term holding period before the controls are lifted. I am coming towards the end of my talk and will have to leave discussion of the lessons learned for the Q&A session.

The May MPR scenario suggested peak-to-trough falls of 60% and 40% respectively, based in part on results from the Bank’s Decision Maker Panel (DMP). The latest results from the DMP appear broadly consistent with this. Updating Staff’s nowcasts for these high-frequency data gives an estimated fall in Q2 GDP of around 20% relative to its pre-Covid peak. While this is an exceptionally weak number, that is not in itself news. The news is that it is 7 percentage points less than in the May MPR scenario. By comparison, an estimate based on the stringency-based model implies a broadly similar contraction in UK GDP in Q2 of 19% (Chart 7). It could be argued that, while these are large upward revisions in an absolute sense, they are still relatively modest by comparison with the falls already seen. And of course, some of this rise in spending might simply be the release of pent-up demand, which could dissipate subsequently. Against that, the evidence so far suggests the recovery is not simply the bringing-forward of spending. Were this higher level of spending maintained, it would put GDP on a different path than in the May MPR scenario. The cumulative loss of annual GDP in the May scenario, relative to the January MPR forecast, was around  11  All speeches are available online at www.bankofengland.co.uk/speeches  11  17%.