samchain/econo-pairs-v1 huggingface dataset:
This was proven when legal action was taken on a few foreign banks that were severely fined for being involved in manipulative price fixing. Second, the pressure on the ringgit intensified when there were demand and supply imbalances in the domestic foreign exchange market. Our country has been a net exporter and the current account position in the balance of payments has always been in a surplus since more than a 3/4  BIS central bankers' speeches  decade ago. However, when the imbalances formed as a result of foreign exchange export proceeds not being converted into ringgit, conditions deteriorated and thus reduced the demand for the ringgit. Imbalances also occurred due to other specific factors. For example, in 2015, capital outflows due to the spending of Malaysians abroad amounted to RM41 billion, while outflows from foreign worker remittances amounted to RM34 billion. Hence, when the demand for the currency falls, the currency will consequently depreciate. To address these challenges, Bank Negara Malaysia and the Financial Markets Committee (FMC) had taken intervention measures to mitigate speculative activities in the offshore market and rebalance the demand and supply in the domestic foreign exchange market. In addition, measures to liberalise the domestic foreign exchange market will be intensified to spur market development and strengthen the ringgit‘s resilience and stability. As a result of these proactive steps, several positive developments can be observed. The disruptive influence of speculative activities on the ringgit in the offshore market has subsided.

With regard to inflation, one may ask “how much is too much?”. I  believe that the answer does not lie in pinning down certain numbers, but in the commitment to maintain a relatively low and stable inflation in the medium and long run. Experience has taught me that inflation is an insidious disease that should not be treated carelessly. With respect to real convergence, a question raised by many is “how fast is  fast enough?”. Again, I would not look for a certain figure; I would tackle this issue by approaching real convergence not as a race where the fastest track is also the right one, but rather as a complex process giving the steady runner (a marathoner rather than a sprinter) the opportunity to reap most of the potential benefits, while avoiding excessive risks. Much like the fable about the turtle and the rabbit, which we all know how it ends... Beyond targets and levels, and irrespective of the convergence gap an economy faces or the monetary policy regime a central bank opts for, what matters for both real convergence and price stability (as part of nominal convergence) is the consistency and the sustainability of the effort. In other words, being and staying on the right track. Thank you. 3/3  BIS central bankers' speeches
But it also presents us with many challenges: First, we must remember that our petroleum resources are part of our national wealth. When oil is extracted and sold, natural assets are transformed into financial wealth. Norway’s national wealth belongs not only to our generation, but also to future generations. This means that our petroleum wealth must be equitably distributed between generations. The authorities must therefore exercise fiscal discipline, taking into account long-term considerations. Moreover, the size of the cash flow from petroleum activities varies considerably. If petroleum revenues were to be used as they accrue, this would lead to considerable fluctuations in demand in the Norwegian economy, amplifying cyclical fluctuations as a result. Third, the use of petroleum revenues will have an impact on competitiveness in Norwegian business and industry. A high level and wide fluctuations in the use of petroleum revenues will have a negative impact on the operating parameters for internationally exposed industries. It is important that we succeed in maintaining an industry structure that promotes learning, innovation and development. The Government Petroleum Fund was established in 1990 with a view to safeguarding long-term considerations in the use of petroleum revenues. In March 2001, the fiscal rule and new guidelines for monetary policy were introduced. The fiscal rule implies that the central government budget deficit shall be equivalent over time to the expected real return on the Government Petroleum Fund. The new guidelines for economic policy received broad support in the Storting.

Likewise, a fall in oil prices will not have an immediate impact on the domestic economy, but result in a lower accumulation of foreign assets. Even though the Petroleum Fund and the fiscal rule shield the Norwegian economy to a certain extent from fluctuations in the oil market, the Norwegian economy will still be affected by developments in oil prices. If changes in oil prices influence growth in the global economy, this will in turn impact Norwegian exports of traditional goods and services. Petroleum investment on the Norwegian continental shelf is another important channel. Fluctuating oil prices contribute to wide variations in petroleum investment. This has spillover effects on the mainland economy. The value of the Petroleum Fund, measured as a percentage of GDP, will rise in the years ahead. On the other hand, Norway, like many other countries, is facing substantial fiscal challenges. The expected dependency ratio, i.e. the ratio of persons over the age of 67 to persons aged 20 to 66, will rise sharply in the years ahead. The National Insurance Scheme’s spending on old age and disability pensions, based on current social security rules, is increasing. The return on the Petroleum Fund can only cover a small portion of the higher pension expenditure. According to Ministry of Finance calculations, funding needs equivalent to 6 per cent of GDP will still be uncovered in 2060 given an oil price of NOK 230 (2005 prices) or around USD 35 per barrel. Oil futures six to seven years ahead are now higher than this.
It is high time we took pragmatic and decisive steps, beyond the three old clichés which are impeding progress towards a more sustainable European Monetary Union. They draw a pointless distinction between vision and pragmatism, European-level action and national reforms, and between risk reduction and risk sharing. There are three solutions: first, a “Financing Union for Investment and Innovation"; second, better coordination of economic policies supplemented by a stability-oriented instrument within the ESM (or EMF); and third, a euro area investment budget for the financing of common goods. Thank you for your attention. 3/3  BIS central bankers' speeches

And with Switzerland now being fully surrounded by euroland, is there any danger the euro replacing the Swiss franc? BIS Review 70/2004  3  Those are, of course, the questions we had to answer when the euro was launched in 1999. Our experience so far has shown that the much feared euroization of Switzerland has not taken place. To date, the Swiss franc has kept its attractiveness. It has been stable enough to be relied on as a valuable medium of exchange and store of value. Euros are accepted in Switzerland as a means of payment, like dollars or pounds sterling, but there is no sign of the franc being crowded out. A more important question, however, is the desirability of an independent monetary course for a small country located in the midst of the euro zone. Isn’t an autonomous policy a myth in a world where capital markets are so well integrated? Wouldn’t a country be better off by importing the monetary stability of its large neighbour? Unfortunately, the painful case of Argentina shows that fixing the exchange rate does not solve all the problems. When country-specific shocks are large and persistent, the absence of a national policy can be extremely costly. But let me again take the example of Switzerland. Shocks to the Swiss economy are not perfectly correlated with shocks to the euro area, and our business cycle is more influenced by developments in the investment goods market and in the financial market than the rest of Europe.
We must strategically adapt and adopt technologies now to remain relevant and competitive and provide support for sustainable improvement in the standard of living of the Thai people. 5  In closing, I would like to congratulate the IOD once again for fittingly organizing this Call for Action conference. Actions taken at the firm level can determine the direction of our country and whether we can efficiently catch up with rapid technological changes. These changes will also inevitably affect the whole ecosystem of Thailand. Therefore, I urge you all to think on a bigger picture on how your firms can help make Thailand’s digital transformation successful and fruitful. So, think big, stay informed, and act wisely. Only then we can be certain that together we could truly rise above disruptions. Thank you for your attention. *********  6

One way to deal with moral hazard would be to distinguish explicitly between two different risks facing each country: on the one hand idiosyncratic risk, created by national policies and country specific shocks; on the other hand, “systemic” risk stemming from aggregate liquidity shocks occurring on a broader – global or regional – scale. Countries would self insure against idiosyncratic risk by holding a sufficient amount of reserves. Protection against systemic risk would come from a multilateral mechanism for international liquidity provision. Of course, the distinction between idiosyncratic and systemic risk may be difficult and involves a broad degree of judgment. But two basic rules should be guiding future work on a multilateral safety net: (1) conditions for access should be specified ex ante; and (2) those conditions should be fully delinked from the situation of individual economies. Rather, they should depend on the state of the global economy and international financial markets. From the point of view of an individual country, access should be fully unconditional, once global conditions are met. A considerable amount of work is currently devoted to devise instruments of contingent capital for financial institutions in times of crisis. The same intellectual framework can be extended to liquidity. What is needed is contingent liquidity i.e. liquidity available to nations in times of aggregate shocks to the international financial system. This raises two questions: where would such liquidity come from? How could it be mobilized?
The gradual adjustment to the new regulatory framework over a sufficiently long period, also to take into account the weakened economic position of many developed countries and financial systems as a consequence of the crisis, will mitigate the impact of implementing the new rules. In the medium to long run, the transition to a regulatory framework designed to improve the capital  4  BIS central bankers’ speeches  position and the risk management practices of financial institutions will play a major role in fully restoring the credibility and public confidence in the financial system. Further initiatives aiming to improve the governance and transparency of capital markets and institutions will also be needed to restore the orderly functioning of the markets. In this regard, the ECB has launched, in cooperation with market participants, an initiative to disclose loan-by-loan level data in the European ABS market, which in our view will help reviving such market and mitigate some of the risks associated to those products. Of course, this initiative relies on the will of market participants to improve the way in which due diligence is performed. The commitment of the ECB and the Eurosystem in this regard may serve market participants as a benchmark. It is the duty of public institutions to live up to the highest governance standards, and therefore we strive at continuously improving our due diligence and risk management practices. We expect that financial institutions and private investors in general also will rethink their governance and risk management functions.

We challenge hard where we think model calibrations are weak based on either comparison with other insurers’ models or our own view of a risk. At the same time, though, we recognise that every insurer’s risk profile is different. Insurers are many and varied. The standard formula cannot be flexible enough to work well for all of them. For this reason, internal models are an important element of the Solvency II framework. Part of the reason for our intensive review of insurer models is that the interests of management and shareholders do not necessarily align with our own. Financial performance is measured by return on equity. Especially in a highly competitive trading environment, lowering regulatory capital requirements may seem a more achievable way to boost return on equity than increasing underlying profits. One legitimate approach is to reduce underlying risks. If an insurer’s internal model is well designed, lower risks should lead to a fall in 3  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  3  capital requirements. We become concerned when genuine risk reduction tips over into weakening of assumptions or more aggressive modelling of risks. It is one thing we look for when reviewing material model changes proposed by insurers. Another is selectivity. Insurers might seek to make changes to their models in areas where risks are reducing or they have overestimated them but neglect areas where risks are increasing or they have underestimated them.
The unrest in the international financial markets in the wake of the US subprime crisis has also led to an increase in the price of risk, which means for instance that it has become more expensive to borrow. In this way the effects can be compared to the effects of tighter monetary policy. But apart from the changed pricing, the uncertainty has also led to greater caution in general. This also has a certain dampening effect on economic activity. In Sweden, the effects of the unrest in the financial markets have been more limited than in, for instance, the United Kingdom, the United States and Germany. Over the past weeks there appears to have been some stabilisation. But the US mortgage market may present further surprises. If, for instance, house prices were to fall more than expected, this could once again increase the unrest in the markets and lead to rising interest rates and falling stock prices, not only in the United States. In a slightly longer perspective, this can also slow down growth in the US economy and even have contagion effects in Europe and the rest of the world. BIS Review 112/2007  5  …but strong developments here at home If one looks at developments in the Swedish economy, our assessment in September was that it was actually stronger than in June. Here the labour market and productivity deserve special attention. These are two of the most important factors, which determine how cost pressures and thereby inflation will develop.

They can be targeted to specific member countries or sectors to address the build-up of local imbalances, which cannot be addressed in an efficient way by the single monetary policy. Macroprudential measures have already been proposed or implemented in some euro area countries. Authorities have taken decisions to calibrate the systemic risk and countercyclical capital buffers, as well as sectoral capital requirements for real estate and housing, and to introduce caps on loan-to-value ratios to counteract emerging risks. Conclusion Our monetary policy measures have proven effective in sustaining a resilient recovery and addressing the risks to price stability. This in turn provides a strong contribution to financial sector resilience. Looking ahead, significant monetary policy stimulus is still needed to support the gradual build-up of price pressures for inflation to return to levels below, but close to, 2% in a durable fashion. At this stage of the cycle, careful monitoring of the risk-taking channel of monetary policy is important. While there is no evidence of excessive misalignment across asset classes in the euro area right now, there are signs that valuations are stretched in specific market segments. 4/5  BIS central bankers' speeches  Macroprudential instruments are best placed to counteract the emergence of specific financial imbalances in an efficient and targeted manner. Macroprudential policy and monetary policy thus complement one another in pursuit of their respective objectives. 1 For a comprehensive overview, see Carmen M. Reinhart and Kenneth S. Rogoff (2013), “Banking crises: An  equal opportunity menace”, Journal of Banking and Finance Vol. 37.
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In particular, the fund specific regulation coupled with regulation covering certain activities, such as derivatives and securities financing transactions, have addressed investor protection issues and risks from a microprudential perspective.2 At the same time, the growing fund sector is creating emerging vulnerabilities from a systemwide perspective.3 The asset management sector is highly connected with other parts of the financial system 2/7  BIS central bankers' speeches  through ownership links, common asset exposures and the provision of wholesale funding to banks. Investment funds are not only important depositors in banks; they also provide longerterm funding through the purchase of bank-issued debt securities. Euro area investment funds hold about EUR 400 billion or approximately 10% in outstanding debt securities issued by euro area banks. Banks, on the other hand, lend to funds mainly through repo transactions. So any potential shock to the investment fund sector may quickly spill over to other parts of the financial system. When identifying possible weak spots in the financial system, it is sometimes useful to look back to past crisis events. I recall some 20 years ago, when Long-Term Capital Management (LTCM), a large and highly interconnected hedge fund, collapsed, in the wake of turbulence from the 1998 Russian crisis. The rapidly changing market environment effectively turned LTCM’s business model into a key amplifier. LTCM was betting on longer-term developments in fixed-income markets using exceptionally high leverage. When the fund collapsed, fire-sale spillovers and counterparty exposures threatened to erode the stability of the financial system.
Recently, Matthew Rose, CEO of Burlington Northern Santa Fe (America’s second biggest rail company), expressed frustration at the focus on quarterly earnings when locomotives lasted for 20 years and tracks for 30 to 40 years. Echoes, here, of “quarterly capitalism”. This evidence – anecdotal, survey, quantitative – is broadly consistent with popular perceptions. Capital market myopia is real. It may be rising. For at least some of the jury, however, it remains inconclusive. In 2010, Richard Saunders (Chief Executive of the IMA) summed it up thus: “Now red lights start flashing for me when people talk about shorttermism, particularly when shareholders feature in the same sentence. What do people mean when they claim that shareholders behave in a short-term fashion? And what evidence do they have for it? I have yet to hear a convincing answer to either question”. 3. Testing for short-termism  In the quest for some concrete, quantitative evidence, our test of short-termism uses the forward-looking asset price framework of Miles (1993). A simple example illustrates the basic approach to testing myopia and its implications for project choice. (a)  A simple example  Consider an investment project costing $ This investment is riskless and pays $ at the end of each of 10 years.

The present value of the project is simply the sum of the cash-flows discounted by the risk-free rate, r: (1)  With a discount rate of 9%, the project’s cash-flows are worth $ today and its NPV is $ A firm or investor offered this project should rationally undertake the investment. Short-termism implies that agents may discount “excessively” future cash-flows, over and above the risk-free rate. Denote that short-termism parameter, x. The present value under myopic discounting then becomes: (2)  If x is less that unity, then the project’s cash-flows are discounted too heavily. For example, assume x = 0.95 so that one period ahead cash-flows are underestimated by 5%. Even with this modest degree of myopia, NPV calculations are affected significantly. A $ return received at the end of year 5 should be worth $ today. With myopia, it is worth $ Discounted cash-flows on the project are now worth $ meaning that the NPV of the project is negative. A myopic investor would walk away from this NPV-worthy project. Imagine instead that an investor were making choices based on average payback periods, rather than NPV. Under rational discounting, the project has a payback period of 9 years. Under myopic discounting, the payback period rises to 15 years. An investor might now think twice before investing their money, for their money is committed for almost twice as long. So short-termism implies that projects with positive returns, or a relatively short payback, may be misperceived as being negative return or having a relatively lengthy payback.
The current reference value for the HICP inflation criterion is influenced by countries whose energy needs are satisfied in varying degrees by non-oil fuels. At the same time, of the NMS that would not have satisfied the inflation criterion on the basis of the March 2006 data, some are more heavily dependent on oil imports, so that price levels generally in these countries have been reflecting the higher cost of oil and energy to a much greater degree than is the case in the reference countries. This argument could also apply to Malta in the future since not only is oil the sole source of electricity generation, but a high proportion of drinking water needs are also met by the transformation of sea water, a process that involves a high consumption of electricity. The difficulty of controlling inflation in current circumstances is indeed also reflected in the fact that three of the present euro area members exceed the inflation reference value by an average of 1 percentage point, and there is evidence pointing towards a divergence in inflation rates between these countries over the past five years. 9 Moreover, the NMS have registered rates of inflation between 2002 and 2005 that were around one half those recorded during the preceding four-year period. This is indicative of the significant degree of macroeconomic stabilisation taking place, at the same time that progress continued to be registered in terms of real convergence.

In fact, since 2000 real GDP growth in NMS was on average more than double that registered in the euro area member countries. These considerations acquire greater significance when viewed in the context of fiscal developments. On the basis of 2005 data, among the NMS participating in ERM II only Malta failed to satisfy the relevant criterion, with a fiscal deficit to GDP ratio of 3.3%. Malta, however, expects to be within the reference value by the end of this year. This represents a considerable fiscal consolidation effort, especially when viewed in the context of an average ratio of 6.7% during the first five years of this decade. This progress is expected to prove durable, as it has been based not only on tax measures, but also on the restructuring of public sector entities, spending cuts and efficiency improvements. Challenges to fiscal sustainability in NMS remain, nevertheless, mainly arising out of the future dynamics of the welfare system combined with population ageing, but these are hardly different from those being faced by euro area members. It is furthermore interesting to note that on average the NMS participating in ERM II recorded lower deficit to GDP ratios compared to the present euro area member countries in 2005, among whom five posted deficits in excess of 3%. The positive fiscal performance of these NMS is further underscored, with some individual exceptions, by their lower levels of public debt, which as a percentage of GDP average around one half of those of the current euro area member countries.