samchain/econo-pairs-v1 huggingface dataset:
To sum up, this isn’t likely to be a case of black (only total unemployment matters) or white (only short-term unemployment matters) with respect to compensation cost trends. I suspect that the degree of attachment falls on average as one is unemployed for longer periods of time. But, I don’t believe that this pattern of attachment is stable. It is affected by the nature of the business cycle and how and why people have become long-term unemployed. Before I turn to the implications of the economic outlook for monetary policy, let me leave you with a final thought on inflation and our inflation objective. I think there is some confusion as to whether the FOMC’s 2 percent inflation objective is a ceiling or not. My own view is that  BIS central bankers’ speeches  3  2 percent is definitely not a ceiling. Once we reach 2 percent, I would expect that we would spend as much time slightly above 2 percent as below it, recognizing that we will hardly ever be exactly at 2 percent because of the inherent volatility in prices. If inflation were to drift above 2 percent, all else equal, then we would tend to resist such a rise. But, if inflation were slightly above 2 percent even as unemployment remained far above levels consistent with maximum employment, then the unemployment consideration would dominate because we would be further from the unemployment objective than we are from the inflation objective. This should not surprise anyone.

One natural question raised by that episode, though, is whether the need for such a large scale intervention could be avoided by addressing the structural causes of the “dash for cash”, and if not whether central banks should have facilities to provide the necessary liquidity to the financial system more efficiently. Those are topics that I don’t have time to get into in detail today but they are hugely important questions for central banks and ones with which the FPC is actively engaging.12 In the meantime the MPC has made clear that it stands ready to respond to any re-emergence of market dysfunction, and so avoid any associated tightening in monetary and financial conditions, as appropriate. b. Forward guidance – a high bar to tightening The second tool I want to consider is forward guidance – in other words future commitments on interest rates and other policy tools. Like QE, forward guidance is a tool the MPC had used several times before this crisis. In its 2013 review of the MPC remit, HM Treasury explicitly clarified that the Committee had the ability to deploy forward guidance as a policy tool, including where appropriate making it conditional on future developments.
Our third strategy is to create a high-performing and functional data infrastructure so that banks can benefit from data instead of being weighed down by it. We often hear comments that the lack of data has been a major impediment to banks’ competition with the big techs. But the reality is that a lot of data is scattered across different sectors, entities, and platforms. It is just that there is no efficient way for traditional financial institutions to tap into these treasure troves, with the consent of data subjects where necessary. 28. In order to leverage data to launch innovative financial solutions, and to unleash our city’s potential for the next generation of banking, we need to enhance Hong Kong’s financial data infrastructure. For example, as a start, we are building the Commercial Data Interchange (CDI). After joining CDI, you will be able to safely and quickly access corporates’ data, which, although always there, was previously almost inaccessible. What’s more, once CDI has been built, and related mechanisms established, your bank can connect with new data providers with minimal efforts. The need for customising connectivity for each partner will 3/5  BIS central bankers' speeches  become a thing of the past. 29. In many ways, CDI is unlike our existing financial infrastructures, such as the RTGS and FPS. For one thing, the architecture of CDI is more complex. Multiple parties are involved— banks, data providers, commercial entities, government departments, you name it.

We believe this new fintech strategy would provide the shot in the arm to elevate the banking industry to new heights. Brief recap of key achievements 6. Before I delve more deeply into the strategy, let us have a look at where we currently stand. 7. Last year, eight virtual banks launched their services to the public, marking a key milestone in Hong Kong’s Fintech Journey. The usage of Faster Payment System (FPS) has witnessed substantial growth since launch. So far, it has recorded over 8 million registrations, and is used by the general public in person-to-person payments, government payments, and payments to merchants. On average, more than 630,000 transactions are conducted daily, over twofold than a year ago. Our Fintech Supervisory Sandbox was also well received and more than 200 initiatives have been tested since launch. 8. These encouraging figures show how the HKMA’s Smart Banking initiatives have significantly driven the digital transformation of banking services. They also demonstrate Hong Kong people’s willingness to embrace fintech; and set us up for further fintech developments. Customers’ digital appetite will outlast the pandemic 9. Unfortunately, the city and the world were subsequently battered by COVID-19. But Hong Kong’s pre-pandemic fintech efforts were sufficient, for the time being at least. So we were able to enjoy largely uninterrupted high-quality digital financial services during the pandemic, allowing a wide range of commercial activities to continue in the city. In fact, COVID-19 demonstrated the sheer power of fintech. Fintech can fulfil gaps when traditional banking services are compromised. 10.
There is also concern, I suppose, on the likelihood of dominance in such co-ordination by the more influential economies in terms of size and financial clout. There has therefore been no attempt to identify the pros and cons of monetary policy co-ordination in Asia. The subject has not even featured in any of the discussions amongst the regional central bank groups that I know of. But one must of course keep an open mind on the subject. The contagious turmoil in the currencies and financial markets of Asia will I am sure stimulate some interest in it. Without pre-judging the outcome, I expect some initiative in putting the matter on the agenda for future discussions amongst monetary authorities in the region. 45. By contrast, there is a great deal of enthusiasm amongst monetary authorities of the region to promote Asian monetary co-operation when this does not inhibit the freedom to determine domestic policies. I am sure for example that we would be keen to talk to each other about how to strengthen our monetary defensive mechanisms against attacks on our currencies, and how to enhance the pain tolerance level of our financial systems so that we can absorb financial shocks more effectively. There is also considerable interest in building more robust financial infrastructures on the one hand to facilitate effective financial intermediation and on the other hand to limit the contagion effect of financial crises domestically and on a regional basis. I believe that this is a sensible way forward, at least for the time being.

What I intend to do this afternoon is first to define what international monetary co-operation is about, and in this connection, survey the attitudes of the parties that should have an interest in such co-operation and discuss the form of this co-operation. I wish to point out that these attitudes have, perhaps unintentionally, led to international monetary co-operation being regionalized. I shall then focus specifically on Asian monetary co-operation, covering the history, or the lack of it, and the monetary problems, current and potential ones, that Asian economies face. I shall then make a case for much greater monetary co-operation in Asia. I shall also suggest a way forward for Asian monetary co-operation, with a strategy and a list of issues to be addressed in such co-operation. Monetary Co-operation 4. Let me start now by attempting a definition on what monetary co-operation is about. The Oxford Dictionary defines “co-operation” as “working together to the same end”. So I suppose monetary co-operation can simply be defined as working together to the same monetary end. This then leads to the questions as to what that same monetary end should be, who should be working together and the form in which they should best work together, particularly when one is talking about monetary co-operation across monetary systems on a global or regional dimension. 5. The Articles of Agreement of the IMF provide some guidance on what that same monetary end should be.
Were these proposals to become mired in detail, they risk sinking, like the Tower of Basel, into the swamp. This is not because these proposals go too far but because they may not go far enough. These reform efforts have too many commas, semi-colons and sub-clauses. They would benefit from a few more full stops. That logic suggests cleaner solutions than are currently being implemented, if not than are currently being contemplated. Strict size limits and forced separation of commercial and investment banking are two frequently cited such radical options (Haldane (2010), Fisher (2011), Johnson and Kwak (2010)). The debate on them has waxed and waned on both sides of the Atlantic. A stalemate has been reached. Having risen to a peak of almost three in 1928, the largest US banks’ price-to-book ratios had by 1931 plummeted to below one. They remained close to these levels for several years afterwards (Chart 20). This discount implied that investors in the bank could improve their wealth by selling-off the banks’ assets separately. Investor pressures to separate began to mount. In response, a number of banks began selling off their equity brokerage affiliates, including the two largest banks, Chase National Bank and National City Bank in 1933. A number of banks delisted their shares. This response, led by the market, paved the way for the passage of Glass-Steagall in 1933. As Fuller (2009) puts it: “Divorce made a virtue of necessity and cursed and condemned bankers jumped at the opportunity to demonstrate their virtue”.

2001 20  Government financial balance 15  Current account  10  5  0  -5 Iceland  US  Denmark  Sweden  Finland  Norway  Source: OECD SG 240802  Another prominent feature is that, except for Iceland, the Nordic countries have a twin surplus in the public sector and on the current account. This implies a net outflow of capital from the region. The facts I have mentioned may lead outsiders to regard the Nordic region as one group, made up of similar economies. However, there are also some striking differences. Nordic countries – institutional differences EU-membership  Monetary policy regime  Sweden  Yes  Inflation target of 2 per cent (+/- 1 percentage points)  Denmark  Yes  ERM II  Finland  Yes  Member of EMU  Iceland  No (EEA-agreement)  Inflation target of 2½ per cent  Norway  No (EEA-agreement)  Inflation target of 2½ per cent  SG 240802  2  BIS Review 70/2002  We differ in our relations to the EU and with respect to monetary policy regimes. Sweden, Denmark and Finland are members of the EU. Finland is also a member of EMU. The Danish krone is linked to the euro through a fixed exchange rate, while Sweden, Iceland and Norway have inflation targets and a floating exchange rate. Our financial markets differ in size and structure. Bonds outstanding, March 2002.
Institutional responsibilities are divided between the Malta Financial Services Centre, which is responsible for the regulation and supervision of banking, insurance and investment services; and the Central Bank, which is charged with ensuring the stability of the system as a whole. The Central Bank is also responsible for the domestic payments system, which is being upgraded in line with developments in the euro area. BIS Review 46/2002  3  2  According to a recent background paper prepared by the European Central Bank(ECB) , Malta already has a domestic financial intermediation mechanism that broadly mirrors the composition of different financial market segments in the euro area member states. While there has been considerable growth of non-bank financial intermediaries and development in the money and capital markets, the banks remain the key financial institutions. Total bank assets amount to more than double GDP, whereas the ratio of domestic credit to GDP is broadly in line with the EU average. More importantly, the banking system is generally healthy, enjoying ample liquidity and a broad capital base, with the ratio between own funds and risk-weighted assets standing close to 14% in March of this year. Although there are concerns about the quality of loan portfolios after a recent period of rapid credit expansion, the banks have reinforced their capacity to assess and contain risk. In this regard, the sale of one of Malta’s two large banks to a major foreign banking group in 1999 was particularly important.

Our economy is undergoing fundamental structural changes, which are expected to provide us with a robust new platform on which the nation can build up a sustainable economy to continue its drive forward. In line with the medium-term policy framework of the Government, per capita GDP is targeted to surpass USD 4,000 by 2016, entering the economy into an upper middle income category country. Further, our medium-term economic strategy projects surpassing USD 7,000 per capita level by 2020. The Governor of the Central Bank and the Secretary to the Treasury highlighted the potential of our economy to achieve this target at the “Sri Lanka Economic Summit” held in August 2014. We know that this would require greater efforts in  2  BIS central bankers’ speeches  all fronts – the Government, the Central Bank and the private sector – that would support the economy in the transition to drive through the middle income path towards the higher end of the upper middle income category. This new economic model should be able to overcome the rising “economic gravity”, which would otherwise pull the economy into the “Middle Income Trap”. With the renewed acceleration in economic growth, we need to focus our attention on the next phase of economic development beyond 2016 and transforming the economy to achieve a sustained, inclusive and balanced growth. Sri Lanka’s drive beyond 2016 will largely depend on the strength and the dynamism of the financial sector.
Though they looked and felt like chaos, these dynamics were in fact manifestations of a new network order. The second key robustness result concerns the “long-tailed distribution” of connected networks. The degree of a node measures the number of links to other nodes. So the degree distribution could be thought of as a histogram of the number of links for each node. For a network whose links are randomly configured, this degree distribution would be symmetric and bell-shaped; it would have a fat middle and thin tails. 5  For example, Allen and Gale (op.cit). 6  For example, May and Anderson (1991), Albert et al (2004), Kinney et al (2005), Watts (2002). 7  For example, at the Bank of England by Nier et al (2008) and Gai and Kapadia (2008); and by Battiston et al (2009) and Gallegati et al (2008). BIS Review 53/2009  5  But many real-world networks do not exhibit these properties, including the internet, biological food webs and epidemiology networks. 8 Instead these networks have been found to have a thin middle and long, fat tails. There is a larger than expected number of nodes with both a smaller and a larger number of links than average. Some financial networks, such as payment systems, have also been found to exhibit long tails. 9 Long tails have been shown to have important implications for network robustness. In particular, long-tailed distributions have been shown to be more robust to random disturbances, but more susceptible to targeted attacks.10 Why?

Three areas in particular are discussed: •  Data and Communications: to allow a better understanding of network dynamics following a shock and thereby inform public communications. For example, learning from epidemiological experience in dealing with SARs, or from macroeconomic experience after the Great Depression, putting in place a system to map the global financial network and communicate to the public about its dynamics;  •  Regulation: to ensure appropriate control of the damaging network consequences of the failure of large, interconnected institutions. For example learning from experience in epidemiology by seeking actively to vaccinate the “super-spreaders” to avert financial contagion; and  •  Restructuring: to ensure the financial network is structured so as to reduce the chances of future systemic collapse. For example, learning from experience with engineering networks through more widespread implementation of central counterparties and intra-system netting arrangements, which reduce the financial network’s dimensionality and complexity. Networks and finance are not complete strangers. There has been growing interest among network theorists in applying their techniques to financial phenomena over the past few years. For example, network techniques have already been applied extensively to the  2  BIS Review 53/2009  dynamics of payment systems and inter-bank networks. 1 But the financial crisis of the past two years provides both a greater body of evidence, and a stronger incentive, to apply the lessons from other network disciplines to the pressing problems facing financial policymakers today.
As a working assumption we assume that the MPR will follow a trajectory similar to the one implied by financial asset prices during the ten days prior to this statistical closing of this Report. Thus, we assure that monetary policy will have responded swiftly to the changes in economic conditions and will remain expansionary through the whole projection horizon (figure 12). As always, the conduct of monetary policy and any possible adjustments to the MPR will be contingent on the effects of incoming information on the projected inflation dynamic. On the external front, there are some sources of uncertainty that may have significant effects but by their nature are very hard to quantify. For example, political and economic uncertainty surrounding European elections, worries about Brexit implementation and possible shifts towards protectionism in several developed economies. Other risks that have long lingered in the external scenario have varied in intensity. The US economy has evolved favorably, averting the risk of a new recession. The much awaited fiscal impulse could help to sustain somewhat higher growth in the years to come. However, it is also a source of risk, as its implementation may have problems or inflationary effects that might trigger a faster withdrawal of the monetary impulse, creating disruptions in financial markets. China continues to be a source of concern, especially its leverage, although its authorities have successfully weathered its gradual slowdown without causing disruptions, and this has been welcomed by markets.

Suhaimi Ali: Empowering DFIs to bridge funding gaps and drive economic and climate resilience Opening remarks by Mr Suhaimi Ali, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Green Finance Forum for Development Financial Institutions, Kuala Lumpur, 23 June 2023. *** Earlier this year, heavy rainfall flooded five states in Malaysia, forcing over 30,000 victims to leave their homes. In December last year, a tragic landslide in Batang Kali claimed the lives of 31 out of 92 victims. These events resulted in significant financial losses, infrastructure damage, and most tragically, loss of precious lives. Floods, droughts, heatwaves, loss of biodiversity, rising sea levels and coastal erosions are several climate risks we face going into the future due to climate change. Mitigation and adaptation efforts by all parties, including businesses and households, will be crucial to reduce these risks. DFIs have a role to play in this effort. As we navigate the path ahead, it is important that we avoid the pitfalls of hasty actions or inaction, while at the same time strive to preserve and advance decades-long progress in financial inclusion. My remarks this morning will touch on three imperatives, namely: (a) industry partnerships, (b) blended finance, and (c) policy influence; that in my view will sharpen the role of DFIs in contributing to Malaysia's aspiration to achieving net zero GHG emission by as early as 2050. Firstly, DFIs can catalyse change through purposeful partnerships with industry players, government agencies, and financial institutions.
This funding can be provided by the PMCCF either through purchases of eligible corporate bonds as the sole investor at issuance, or from purchases of portions of syndications at issuance. The secondary market corporate credit facility (SMCCF), also backed by the U.S. Treasury with funding from the Federal Reserve, will play an important complementary role to the PMCCF. Here again, there will be two mechanisms at work: the SMCCF may either purchase eligible corporate bonds with a remaining maturity of 5 years or less, or it can purchase U.S.-listed ETFs. For ETFs, the preponderance of holdings will be of ETFs whose primary investment objective is exposure to U.S. investment-grade corporate bonds, and the remainder will be in ETFs whose primary investment objective is exposure to U.S. high-yield corporate bonds. Taken together, the corporate credit facilities will have three main objectives when we go live in the coming weeks: first, to provide broad support for market functioning in secondary markets to allow for orderly and timely risk transfer in corporate credit; second, to support primary issuance for businesses at funding costs that better reflect normal liquidity conditions; and third, to reduce the incidence and severity of fire sales and/or indiscriminate liquidation. Municipal Liquidity Facility The last facility I’ll mention today is the municipal liquidity facility, which was designed to help 2/4  BIS central bankers' speeches  provide states, cities and counties with the funding needed to provide essential public services to their citizens.

With backing from the U.S. Treasury, the Federal Reserve established the commercial paper funding facility as a funding vehicle that can purchase new issuance of commercial paper from highly rated businesses and municipalities, and certain issuers that were downgraded after the virus shock. By providing assurances to issuers and investors that retiring commercial paper can be replaced with new issuance, the facility will promote confidence in the market and support the flow of credit to businesses and municipalities. Corporate Credit Facilities (CCFs) At the same time that short-term commercial paper markets were nearly frozen, so too were markets for longer-term corporate borrowing – at precisely the moment when companies most needed a financing buffer. Borrowing rates for investment-grade corporate issuers relative to Treasury securities increased by about 2.5 percentage points in the first half of March, while issuance for companies rated below investment grade came to a halt. In this context, the primary market corporate credit facility (PMCCF) was designed to provide funding for highly rated companies that need access to financing in order to maintain business operations during this period of dislocation. Again with backing from the U.S. Treasury, the Federal Reserve will create a funding vehicle to backstop eligible corporate borrowers for up to four years, at an interest rate that is better aligned with corporates’ underlying credit risk than was available through market-based financing during March.