samchain/econo-pairs-v1 huggingface dataset:
However, the definition of this liquidity buffer, as well as what type of assets should be viewed as liquid, requires careful thought. We should keep in mind the lesson that market liquidity can vanish quickly and be extremely cautious about what securities we consider to be liquid. Furthermore, the power to dictate the type of assets a bank must hold will have an impact on asset markets. We must ensure that this power is not misused. From a central banker’s perspective, the content of the liquidity buffer has a bearing on the central bank’s policy on what assets to accept as collateral. In a crisis, it is the central bank’s  BIS Review 118/2009  3  decision on which securities to accept that defines liquid and illiquid assets – at least in the local currency. Therefore, the interplay of liquidity regulation and the central banks’ collateral requirements also warrants considerable reflection. Finally, liquidity regulation will make maturity transformation more costly. We clearly need more regulation today but, in casting additional regulation, we have to consider the costs. Too strict regulation would stifle competition, make financial services more expensive and, in the long run, hamper economic growth. On the other hand, too loose regulation would inspire speculation with taxpayers’ money and also reduce economic growth. Thus, the extent of financial regulation is – at least partly – a question of society’s risk tolerance. Liquidity buffers will create a cushion. However, the root of a liquidity crunch is a lack of confidence.

When it became apparent that some assets had turned sour – that they were lemons – confidence in the strength of individual banks’ balance sheets was eroded. Confidence in the banking sector as a whole was eroded, given the uncertainty over the extent of the problem – uncertainty over where the bad assets were located and the fear of possible bank-to-bank contagion. Such uncertainty over the extent and location of lemons, coupled with a fear of contagion, are normal features of any crisis. However, the opacity of some of the new financial products and the increased interconnectedness of the financial system inflated the degree of uncertainty and the fear of contagion, compared to past crises. The lack of confidence between the banks resulted in the breakdown of interbank markets. At the same time, previously liquid asset markets completely dried up, due to the lemon problem. As a consequence, banks found it costly – or even impossible – to obtain liquidity by selling assets. Basically, when there are lemons out there, bankers cannot tell convincing confidencecreating stories about the future. A precondition for the return to normal conditions, that is, to a situation where banks do not depend on central banks for liquidity, is that confidence is restored. Central banks have been injecting liquidity for two years now, but still the underlying problem – the lack of confidence – has not been fully solved. Normality will not return until the impaired assets are dealt with. Consequently, we convincingly need to go and get the lemons!
This diagnosis, far from making us complacent, should be a reminder that such credibility cannot be taken for granted; rather, it has been attained thanks to policies clearly geared to safeguarding price stability, policies which we are bound as central banks to persevere with. What does the immediate future hold for us? The prospects for the current year point to continuing strong economic growth rates, with a more balanced geographical distribution (owing to the firming of the expansion in the euro area and Japan) and with inflation contained. As I indicated earlier, there are two main risks to this central forecast. The first is related to the possibility of a further hike in oil and industrial commodities prices. Unlike in the past two years, in which price increases have been prompted by the buoyancy of the demand for energy, dearer oil might be linked on this occasion to supply constraints, which would exert a sharper effect on activity and prices and might bear adversely on agents' confidence. To ward off this possibility, steps must be taken to reduce the world economy's dependence on oil in the medium term, without prejudice to promoting an expansion in production and refining capacity. Moreover, progressive constraints on production globally may generate a greater response by wages and prices to an increase in energy prices.

In this respect, the volatility seen on international financial markets in recent weeks serves as a reminder of the need for prudent risk assessment and for the right resources to adapt to a broader and more demanding financial environment. But it is not only the conduct of national authorities that must rise to the challenges entailed by the ever-increasing complexity of our financial systems. At the international level, growing economic and financial integration requires reconsideration of the guiding principles of the multilateral financial institutions, which have hitherto remained perhaps too anchored in the bilateral supervision of national policies, without paying sufficient heed to the increasingly complex links globally. The strengthening of multilateral surveillance, especially in the financial realm, would thereby provide for a more effective contribution by these agencies to embedding international monetary and financial stability. The European environment in 2005 the euro area economy posted a modest average increase in GDP, and one lower than in 2004 and than in the other developed economic areas. Nonetheless, year-on-year growth was on a rising profile throughout 2005, attaining a rate of increase in line with potential in 2006 Q1. The economic performance differed, in fact, from the first to the second half of 2005. In the first six months output was markedly sluggish, the result among other factors of the temporary easing in the momentum of world trade, the strong increase in oil prices and the effects stemming from the appreciation, in the previous years, of the effective exchange rate of the euro.
Dimitar Bogov: Creating an environment for sustainable economic growth in Macedonia Opening address by Mr Dimitar Bogov, Governor of the National Bank of the Republic of Macedonia, at the 13th Macedonian Stock Exchange Annual Conference, Skopje, 4 May 2012. *  *  *  Honorable Mr. Zoran Stavrevski, Deputy President of the Government of the Republic of Macedonia and Minister of Finance, Honorable Mr. Ivan Steriev, Manager of the Macedonian Stock Exchange, Distinguished ladies and gentlemen, During my last year’s address at this conference I announced that “the National Bank will create environment for sustainable economic growth through price stability, stable Denar exchange rate and stable, competitive banking sector which will produce sound credit growth. In order to achieve this, I will seek to conduct policy of optimal level of reference interest rate and optimal level of prudential banking regulation. In my view, optimal interest rate is the lowest interest rate that provides Denar exchange rate stability and price stability, and optimal prudent banking regulation is a regulation that provides necessary bank liquidity and solvency, without being a regulatory burden on the banks’ balance sheets”. Concerning the latter, in September last year, we integrated the Denar and foreign currency liquidity rate in a single liquidity rate. Simultaneously, we recognized a long-term character of twenty percent of time deposits that fall due, promising that this percent will increase in future. With these measures, we ensured larger liquidity management flexibility and higher income for the banks without deteriorating liquidity indicators.

The Bank of Albania, in the framework of legislation approximation with the EU acquis, has increased the regulatory requirements to ensure more qualitative governance. But, beyond the formal fulfilment of the regulatory requirements, these principles are indispensable to be incorporated into and become part of the culture of the entire organisation. This is a long-term investment, which generates positive and stable outcomes. Second, while adopting better governance, the same expectation should be transmitted also to your clients. The principle not to accept informal data from firms when assessing their repayment capacities has provided absolute positive results in preventing the creation of new non-performing loans. Yet, the issue of informality is still present in our economy. Banks may do more in this regard by offering to your clients and encouraging them to use existing or personalised products, which ensure a higher circulation of funds within the system, enhance the interconnection between firms and clients, and facilitate the establishment of a more complete financial profile and a more precise assessment of the repayment capacity. Third, there is still a relatively high quantity of “intangible assets” in the balance sheet of banks, despite the insofar success. In total, the properties regained from legal processes are a high potential waiting to be transformed into funds. But, it may lose its value very quickly, becoming an unnecessary cost, which harms the reputation and competitiveness of banks.
And there’s some especially good news to report from the Capital region’s manufacturing sector: jobs are growing, and growing quite strongly – a testament to the success of the area’s burgeoning high tech sector. Since the recovery began, the area has added over 4,000 manufacturing jobs, many of which are tied to computers and electronics. That’s an increase of nearly 25 percent. This pace of job growth is four times as great as the national pace. In fact, there are now more people employed in the Capital region’s manufacturing sector than before the recession. Not many places can say that, and this is certainly not true for the nation as a whole. In part, the success of local manufacturing reflects the presence of strong partnerships between industry and higher education. These cooperative arrangements, which help in the creation, development and commercialization of new products and processes, drive innovation and put local companies at the leading edge of technology. Moreover, these partnerships directly support local jobs. Not only are students gaining real world experience by working in shared facilities while they are in school, but strong connections between local businesses and higher education institutions help workers train for jobs that are available, and help employers find the skilled workers they need. During my last trip to the region, I saw firsthand how universities and companies can successfully work together during my visits to the State University of New York Nanotech Center and the production facilities at Global Foundries.

Hence, a flexible ER needs to be appropriately articulated with other components on the macro policy framework. First of all, it is important to minimize financial exposure to ER risk. This involves curtailing currency mismatches in government, business, and bank balance sheets through regulation (macroprudential?) and the use of market hedging mechanisms, like FX derivatives. Second, a deep and stable domestic long-term capital market is essential for containing the impact of external financial shocks on the flow of credit. Some countries resolve this through a high propensity to save of the population; others may need to force savings through pension and insurance schemes. A large pool of domestic savings may need to be partly invested abroad to secure appropriate returns. In such case, a natural hedge may develop between institutional investors and other players which may facilitate the development of ER derivatives. Market products for ER hedging may also help mitigate the effect of ER fluctuation on tradables. This may be a cheaper source of insurance than the imperfect ER insurance provided by fixed-rate or managed regimes. A flexible ER regime also requires overcoming the fear of floating of monetary authorities. This is especially important given the pass-through of ER into domestic inflation. In particular, this requires a strong discipline in applying inflation targeting in a forward-looking mode, so as to filter short-term ER-induced fluctuations.
Today, only one central securities depository, Euroclear Sweden AB, has access to central bank money in Swedish kronor for securities settlement. Connecting to T2S, this access would be broadened to more than one central securities depository, improving competition in the market. T2S started operations in 2015 and has been developed as a multicurrency platform with the Danish krone available for settlement since October 2018. Like for TIPS, sharing the T2 and T2S platform with the Eurosystem will provide significant economies of scale. It also ensures access to the Eurosystem’s resources and expertise. This will help to keep future service developments in line with best practice. Moreover, connecting to both platforms will be important steps towards further European harmonisation of the Swedish financial market. The Riksbank views this as the best strategy to ensure that Swedish and foreign banks and investors will be able to settle their transactions in Swedish kronor in an efficient way. 12 [15]  As platforms for wholesale transactions, those effects of joining T2 and T2S will impact first the participants of the Riksbank’s current settlement services. Ultimately, however, this should bring about cost savings and other improvements also to end-users of financial services. One example could be issuers of debt instruments. In the future, more Swedish corporates may consider this type of financing. They will clearly benefit from settlement practices that are harmonised with larger European markets.

Harnessing Green Finance for Sustainable Development 2/4  BIS central bankers' speeches  The second area where Chongqing and Singapore can work closer together is green finance. COVID-19 has made us all more aware of the value of protecting the environment. China has committed to ambitious green policy goals including carbon neutrality by 2060. Chongqing has the important task of leading sustainable development in the Western Region and along the Yangtze River Economic Belt. Green finance will be a powerful tool to help achieve this. Green finance is also a key area of focus in Singapore. MAS has worked with the financial industry to launch a Green Finance Action Plan. It has four key strategies: strengthen the financial sector’s resilience to environmental risks; develop green financing solutions and markets for a sustainable economy; harness technology to enable trusted and efficient sustainable finance flows; and build knowledge and capabilities in sustainable finance. ASEAN too has prioritised green finance. Green finance volumes in ASEAN doubled last year and remained robust in 1H 2020, despite COVID-19. As Asia continues to urbanise, its demand for affordable and sustainable energy will only grow. There is great opportunity for the Western Region and ASEAN to collaborate on initiatives to support the large scale of green financing that is needed. Last year, Chinese and Singapore banks jointly issued over USD 2 billion in green bonds and loans in Singapore to finance Belt and Road projects.
with a rating below BBB) ceased to rise in June in Europe and in the United States, and thus, in contrast to those on investment-grade corporate debt (BBB or higher rating), have remained below their pre-crisis levels. This deterioration in corporate credit quality is a further element of vulnerability for financial stability. Past experience shows that extensive rating downgrades in the corporate sector can generate adverse second-round effects that exacerbate the crisis. The mechanism is as follows: since investment and pension funds, along with other institutional holders of corporate debt instruments, usually have restrictions in their mandates on their holdings of 14  non-investment-grade assets, if many of these securities become high-yield they have to be sold by these investors, leading to a further decline in value and thus greater losses for all holders. The importance of this vulnerability is illustrated by a recent analysis conducted by the ESRB.10 Specifically, it was estimated that, in Europe, almost half of corporate bonds with a BBB rating are held by investment funds, around a third by insurance companies, almost a quarter by credit institutions and the rest by pension funds. Investment funds and insurance companies are thus precisely the institutional investors that hold most of the BBBrated corporate debt, a third of which is associated with sectors considered as sensitive to COVID-19.

This involves government bond purchases and marks the launch of quantitative easing. 2  BIS central bankers’ speeches  Adding government securities and paper issued by supranational European institutions to the asset purchase programme was a very important step in the monetary easing and economic stimulus policy: the programme will run to September 2016 at least, with a monthly target of € billion for the three programmes as a whole, although government bonds will be the main component of the purchases and of the increase in the Eurosystem balance sheet. The programme is expected to give a significant monetary boost to the economy, keeping inflation in the medium term below, but close to, 2%. The monetary stimulus transmission mechanisms include both the easing of financing conditions for households and firms and, indirectly, the depreciation of the euro. Purchases of public securities will be allocated as follows: 88% to euro area sovereign and national government agency securities, and 12% to supranational institutions and international agencies resident in the euro area. Of the 88% of national government securities, 8 pp will be acquired by the ECB and the remaining 80% by national central banks, according to their capital key in the ECB, with some special rules for national central banks whose government debt markets are so small that these targets cannot be met.
The increased globalisation of Islamic finance and its greater integration with the international financial system increases the exposure of the system to contagion effect from such developments. In the dynamics of a financial crisis in the conventional financial system, this would be referred to as the second round effects. The first round effects is when developments within the financial system triggers the financial crisis which in turn impacts the real economy. The second round effects is when the resulting slower growth causes further strain to the financial sector. The experience has shown that when such crisis is not contained, the consequent deterioration in economic conditions results in a worsening of the financial crisis. For this reason, resolution has to take place quickly. For Malaysia, in the 1997-98 crisis, every effort was taken to give attention to financial sector resolution so as to prevent the spiral that could have set in as economic activity became affected by the financial crisis. In this indirect manner, Islamic finance would be affected by such financial turmoil. Slower economic growth and the reduction in the global liquidity would affect those institutions that are heavily reliant on a business model that focuses on real estate and asset finance. Islamic financial institutions would also be exposed to increased inventory risk due to the increased volatility and the reduction in asset prices.

In Malaysia , several steps have been taken. The establishment of the International Shariah Research Academy for Islamic Finance (ISRA) aims to engage in applied research on dynamic Shariah-centric innovation. ISRA can provide a global platform for greater global engagement and research with the focus on innovation. In addition, the Central Bank has also embarked on the initiative to develop the Shariah Parameters to promote more consistent application of Islamic financial contracts. This initiative aims to determine the essential features of Islamic financial products derived from underlying key Shariah contracts. These features will serve as a guide for the application of the Shariah contracts for the Islamic financial products. The second strategy is to raise the bar in the status of the Islamic financial infrastructure that supports the risk management and governance of Islamic financial institutions. To ensure sustainability of the resilience of Islamic finance, it is important to have the comprehensive enabling infrastructure that allows for the management of the risks that are peculiar to Islamic finance. There is a need for Islamic financial system to have the capital requirements, effective risk management and strong governance that are fully equipped to manage the risks that are specific to Islamic financial transactions. It is also important for the institutions to spread the risks by having prudent asset allocation based on different Islamic contracts so as to ensure a sustainable revenue stream and to ensure the institutions are in a position to absorb the extreme circumstances that occur during a crisis.