samchain/econo-pairs-v1 huggingface dataset:
In order to produce a forecast that reflects a reasonable trade-off in monetary policy, we have also drawn up a set of guidelines, which are presented in the Inflation Report. The criteria cannot provide an absolutely precise guide as to how the interest rate should be set, but points to factors we should have considered and assessed. The central trade-off is between inflation prospects and the prospects for capacity utilisation in the economy, expressed in the chart by the output gap. The projections were published in Inflation Report 3/06. If monetary policy is to anchor inflation expectations around the target, the interest rate must be set so that inflation moves towards the target. Inflation should be stabilised near the target within a reasonable time horizon, normally 1-3 years. The inflation gap and the output gap should also be in reasonable proportion to each other until they close. Let me now look at monetary policy within a theoretical framework. In the literature on optimal monetary policy, the trade-offs are often specified in the form of a loss function, which the central bank attempts to minimise. In principle, many goal variables can be included in such a loss function, but it is normal to assume that inflation and the output gap are included. The cumulative loss can then be expressed by the following equation:  Here is inflation, is the inflation target and y is the output gap. is a discount factor.

The new rules provide pension funds in particular with incentives to lengthen asset maturities, improving the balance between asset and debt maturities. Increased demand for long-term bonds push up bond prices and push down yields. Normally, an investor will, on an expectations basis, be compensated in the form of a positive term premium for holding long-term bonds instead of rolling over short-term bonds. Various conditions  3  Though the literature is vast, see for example Ahrend, R., P. Catte and R. Price (2006) ‘Factors behind low long-term interest rates’, Working Papers 490, OECD, www.oecd.org, IMF (2005) ‘Global Imbalances: A Saving and Investment Perspective’, World Economic Outlook September 2005, www.imf.org, IMF (2006) ‘Awash with cash: Why are corporate savings so high?’, World Economic Outlook April 2006, www.imf.org, and Rajan, R. G. (2006) ‘Is there a global shortage of fixed assets?’, Remarks 1. December, www.imf.org  BIS Review 10/2007  7  relating to saving and investment patterns in the world economy and new accounting and solvency rules may have led to a marked fall in term premia in recent years. In some markets, they can even be negative. The level of long-term interest rates is frequently used as an indicator of the normal interest rate level. If low long-term interest rates are caused by extraordinary conditions and not expectations of low growth and low inflation, long-term market interest rates may underestimate the normal interest rate level. When preparing an interest rate forecast, we must have a view of what the normal interest rate level is.
Project Greenprint has focused on four digital utilities: an ESG disclosure portal; an ESG registry of green certifications; a data orchestrator; and a digital marketplace  MAS is piloting the ESG Disclosure Portal with SGX, to enable listed companies to carry out baseline sustainability reporting against a set of 27 core metrics. Titled ESGenome, the SGX portal allows companies' one-time inputs to be automatically mapped across a range of major sustainability standards and frameworks  9/11  BIS - Central bankers' speeches  Sustainability reports can be automatically generated from these inputs. For the next stage, we plan to scale ESGenome into a national-level disclosure utility that meets the reporting needs of all companies, following a public consultation. We will also cater for cross-border interoperability, to allow banks and investors to tap on disclosures outside Singapore. The ESG Registry uses distributed ledger technology to record and maintain the provenance of green certifications issued by various sectoral bodies. Titled ESGpedia, it allows banks to access various green certifications through a single interface. We will continue to build up the Registry's network of certifications, providing more confidence to users of these data. Data orchestration entails aggregating ESG data from multiple data sources to meet specific green and transition financing needs. This requires interoperability and consent-based access to major ESG data providers, utilities providers, sectoral platforms, and of course the ESG Registry itself. We are already doing small-scale pilots to identify financing gaps and technology solutions for decarbonisation in priority sectors such as energy, real estate, agriculture, and transportation.

The priority was to create a secure arrangement that will provide both exporters and importers with a simplified way to settle their transactions with a degree of ease similar to that with which they effect payments within their own countries. From this point forward, there is no doubt that the private sector will take it upon itself to create new financial products and further deepen the real-peso market. Indeed, deepening of the real-peso market, reduction of trade obstacles and access on the part of small and medium exporters are the primary objectives of this initiative. Despite noncompulsory, the facilities and lower costs of the SML should attract exporters and importers. There will be no foreign exchange contracts, despite documentation currently required will remain mandatory. The essential alteration for Brazilian exporters will be the need to register the operation in real. With elimination of a third currency in direct transactions among companies, exporters will set their prices in the currency of their own countries. Thus, they will be better able to calculate their margins precisely, since they will no longer be exposed to exchange rate risk. At the start, it will be possible to carry out trade operations between the two countries with terms of up to 360 days. Payments of services related to trade (for example, freight and insurance) can also be made in own currencies.
Telecom stocks have fallen seriously out of favour, particularly in Europe as the companies embark upon what the Economist has just described as perhaps the “biggest gamble in business history”. This is the $ billion investment in 3G licenses and networks - a lot of money to spend when the return on the investment is uncertain to say the least. It remains to be seen – outside Japan at least - how consumers will take to the mobile internet concept. The lukewarm response to WAP phones is not a good omen, although admittedly the technology in this case is much cruder than what is being claimed for 3G. Let us just hope that 3G will live up to the expectations. Even with the traditional pc-based internet, the signals are mixed. Everyone can see the ability of the internet to transform communication, flows of information and business processes. But the means to turn this into revenues and more especially into profits have proved to be somewhat elusive, as the closure or consolidation of a number of e-tailers has shown. In a period of radical transformation such as we are going through at present there are bound to be a number of false starts and failures before the business models that can successfully exploit the new technology emerge. This period of uncertainty poses important strategic challenges and increased risks for the banks in their role both as major users of the technology and as providers of funds to the companies which are putting that technology in place.

In addition to the low level of housing construction, demand for housing has risen mainly in metropolitan areas due to the greater numbers moving to these regions during the latter part of the 1990s. It is not surprising that a relatively constant, low supply, as well as high demand, should have contributed to the substantial price rises. Thus, low interest rates, an increase in disposable income and a low supply of new housing, together with high demand, are the fundamental factors that I believe have driven the rate of price increases from the mid 1990s. They also suffice to show that current price rises should not be described as an expectations-driven “bubble”. The same analysis can be performed for several other countries experiencing similar developments in their housing market, in particular the US. So did we have a housing market bubble during the crisis years at the beginning of the 1990s? I don't really believe that we did, at least not in the sense that homes were being bought for the purpose of speculation with a view to being sold once prices had risen further. Yes, prices rose sharply, especially in metropolitan regions, but these were due to reasons of a fundamental nature. Households' willingness to pay increased in line with their income during the economic upswing, the deregulation of the credit market led to the removal of some financing obstacles, and the supply of housing was, in the short term, highly inflexible. This is enough to fuel a steep rise in prices.
For the fixed income market, such tools might include raising the haircuts charged to securities dealers on their repo financing; raising the haircuts that the securities dealers assess against the collateralized borrowings of their customers as part of their prime brokerage business, or raising initial margin requirements on OTC derivatives transactions. Macroprudential tools are undoubtedly difficult to use effectively in practice. For example, it is difficult to judge their impact. If, for example, loan-to-value ratios for single-family mortgages are lowered by 5 percentage points, how big an impact will this have on housing demand? There also is a risk that the rules or regulations will simply be circumvented. For example, investors might move to instruments or to off-shore regimes with less stringent margin and leverage restrictions. Thus, it is important that the authorities have the ability to apply the macroprudential tools broadly throughout the financial sector. 11 None of this is going to be easy. A lot more work will be required to develop a portfolio of tools that could be used, that would be effective and would not be subject to significant evasion or unintended consequences. In terms of the use of macroprudential tools, let me briefly take note of another issue that requires significant consideration – the issue of governance. Who controls all these tools? Who decides when the tools will be deployed and how extensively or intensively? Having a sufficient toolkit seems like a good idea. But lodging all this authority within a single entity or institution might not be practical or desirable.

Those that had doubts about the importance of the innovation or the persistence of the gain in asset prices lose confidence in their opinions as they underperform and lose business and market share. Those who believed that the large gains in asset prices were justified by the innovation and who benefited from those beliefs become more dominant. Casual investors see the large rise in prices and jump in. This shift is important because, in markets, prices are driven by the marginal investor. As new and often less well-informed investors plunge in to participate in the boom, they can overwhelm the so-called “smart money” that gets frustrated after having lost repeatedly trying to take the other side. In this respect, a bias toward optimism may also play an important role. Studies have found that most people believe that they are above average in terms of their acumen, be it as investors, car drivers or in other activities. 5 This overconfidence may cause some people to keep investing in the asset, even when they are skeptical about its valuation because they are overly confident that they will anticipate the end of the bubble and be able to get out in time. Fifth, asset bubbles occur more easily when it is difficult to short the assets.
This is one considerable difference compared with the developments in the 1970s and 1980s. While real wages have risen by about 2.5 per cent a year since 1995, the annual increase in real wages was no more than around 1 per cent in 1970-89. So, even though nominal wages rose more than 9 per cent a year during the 1970s and 1980s, purchasing power improved by only about 1 per cent; the high inflation and devaluations eroded the rest. In fairness, I should add that in addition to the shift in stabilisation policy regime there were a number of significant changes in other areas too that may have contributed to the robust performance. For example, the rapid advances in information technology are likely to have contributed to the improved productivity. Another important factor underlying the stronger recorded productivity growth in the whole economy is the relatively smaller role of the public sector today compared with ten years ago. Yet another feature of the performance of the last ten years is deregulations and increased international competition, the latter boosted by membership of the EU and the ongoing integration of the world economy. So, Sweden’s economic performance after the crisis in the early 1990s has been healthy in many respects. This does not mean that there are no problem areas. One of these is employment. There was indeed a relatively fast upturn in employment after the crisis years.

Favourable results Looking back at the ten or so years that have passed since the change of regime, I think that most would agree with me that the shift in policy has turned out well and that the new stabilisation policy regime has lived up to our hopes. Sweden has gone from having been a high-inflation economy with recurring cost crises, high interest rates and unstable economic performance, to being an economy with low, relatively stable price rises and wage increases that put real money in people’s pockets, and where the risk of overheating and subsequent recession has diminished markedly. In an international perspective, too, the Swedish economy has performed well in the past decade, in stark contrast to the 1970s and 1980s. The robust performance is evident if you compare developments in a number of central variables during the 1970s and 1980s with their developments under the new stabilisation policy regime. (Chart 1.) In the 1970s and 1980s the rate of price increases stood at just over 8 per cent a year, while the corresponding rate since 1995 has been just below 2 per cent. The lower inflation rate has not entailed weaker growth in output. On the contrary, GDP growth has averaged around a half percentage point higher a year under the new regime. Productivity growth has also been more robust. The higher  BIS Review 59/2004  1  economic growth and productivity has contributed to healthy growth in real wages.
Blanchflower, D, Costa, R and Machin, S (2017), ‘The Return of Falling Real Wages’, CEP Real Wages Update, London School of Economics Centre for Economic Performance. Bradley, J (2016), ‘Self-employment in an equilibrium model of the labor market’, IZA Journal of Labor Economics, 5:6. Bryson, A (2014), ‘Union wage effects’, article for IZA World of Labor. Chapman, B (2017), ‘UK must combat unfulfilling jobs and commit to ‘good work’ economy, says Matthew Taylor’, article in The Independent. Evans, C (2011), ‘A risk management approach to monetary policy’, speech delivered at the Ball State University Center for Business and Economic Research Outlook Luncheon. Gardiner, L (2016), ‘A-typical year?’, article for the Resolution Foundation. Gregg, P, Fernandez Salgado, M and Machin, S (2014), ‘Real Wages and Unemployment in the Big Squeeze’, Economic Journal, 124 (576), pp. 408-432. Hamilton, B,H (2000), ‘Does Entrepreneurship Pay? An Empirical Analysis of the Returns of Self-Employment’, Journal of Political Economy, Vol. 108, No. 3, pp. 604-631. Hook, L (2015), ‘Year in a word: Gig economy’, article in the Financial Times. Hudson-Sharp, N and Runge, J (2017), ‘International trends in insecure Work’, Report for the TUC. IMF (2017), ‘Understanding the Downward Trend in Labor Income Shares’, IMF World Economic Outlook, April 2017. Lewis, HG (1986), Union Relative Wage Effects: A Survey, University of Chicago Press. Monetary Policy Committee (2017), ‘Monetary Policy Summary and minutes of the Monetary Policy Committee meeting ending on 14 June 2017’, Bank of England. OECD (2017), ‘OECD Employment Outlook 2017’, OECD Publishing, Paris.

And I see that as an illustration of a broader conviction: only through our unity and our solidarity will we overcome this trying ordeal for our country.
This sort of finance, called “Development Projects”, is mainly used to finance SME-s’ credit needs accompanied with technical assistance. The credit line funds are given from donors as soft loans and the government allocates them to banks to be used as commercial loans without harming the banking practice and the use of own bank capitals. As a consequence, a larger part of financial crediting sources is converted into commercial funds. Today, the microfinance institutions are operating as self sustained institutions with an increasing customer base. In the last 5-7 years several other institutions have been focusing on microfinance. Currently we have 133 individual savings and loans associations organized under 2 Unions, which operate in rural areas. The number of their members is around 18 thousand and the stock of their outstanding loans is around 12 million euro. In addition, we have 7 microfinance institutions with total assets amounting to 50 million euros, and loans of 43 million euros. Banks are also getting more active in microfinance despite their little interest so far. This can be explained with tightening competitive conditions in the market and the need to explore new investment opportunities. Now we see an increasing amount of credit going to small businesses, which often helps them in the initial stages. Banks are particularly active for the microfinance in the urban areas. In fact, one of the banks has initially started to operate as a microfinance institution. It still holds a respectful position in this market segment, particularly in the urban areas.

While acknowledging the role of the microfinance as an important tool for ensuring development opportunities to small businesses that otherwise may never access financial resources, one should keep in mind that microfinance is sound if it is provided by sound institutions. There is not much benefit if such institutions fail because of lenience of their internal rules and procedures, and/or because the supervisory authority has closed an eye on them because of their social role. This will also make other institutions become hesitant in engaging in microfinance. The relationship between the microfinance institutions and the banking sector regarding their interaction in the economy financing, is a delicate issue. Their coexistence is certainly “peaceful” at the early development stage of at least one of these groups of institutions, but as the economy grows and competition increases, they tend to move toward each-other. At that stage, it is important to pay special attention for ensuring clear “rules of the game” for their activity and to provide adequate policies that allow for structural reforms of these institutions and of their market influence. In conclusion, microfinance is a very important mean to achieve a balanced economic growth, by providing financial support to small and medium businesses which are vital for the medium and long term economic growth. Compared to some other countries in the region, microfinance in Albania have shown higher growth rates with good quality. However, there is ample room for enhancing it further.
These problems notwithstanding, the question of leverage in the hedge fund industry deserves further study. The primary focus should continue to be directed at the risk management operations and processes of the world’s major investment banks. They are the primary trading partners of the hedge fund industry. They are also the most important providers of leverage to the industry. Since the LTCM crisis, the global investment banks have clearly strengthened their risk management operations. On the other hand, the hedge fund business has become a significant source of profit for the big banks. Competition in providing lending and brokerage services to the hedge fund industry is fierce. Some erosion of lending standards is a likely consequence of such an intensely competitive environment. In light of the previously discussed difficulties in measuring leverage, senior bank executives, risk managers and bank supervisors should be particularly vigilant in ensuring disciplined lending frameworks, fierce competition notwithstanding. If the leading global investment banks maintain adequate counterparty risk and liquidity risk management systems and operations, leverage in the hedge fund industry should represent but a marginal risk to the stability of the global financial system. Fortunately, the global investment banking community is a small and concentrated one. Moreover, adequate bank supervisory structures exist and are currently being modernized. This should facilitate further study of the nexus between the risk taking of individual hedge funds and the risk management systems and processes within the world’s most important financial institutions.

Philipp M Hildebrand: Developments in the hedge fund industry Speech by Dr Philipp M Hildebrand, Member of the Governing Board of the Swiss National Bank, at the Swiss Finance Conference 2005, Zurich, 4 February 2005. *  *  *  Ladies and Gentlemen, Let me begin by thanking the organizers of the Finance Forum for the opportunity to be on today’s outstanding program. It is not often that a Swiss central banker gets to speak after a Nobel laureate. Both the gratification and the risks involved in doing so are self-evident. I will enjoy the former and try to ignore the latter. Adding value to the rich debate about hedge funds is a difficult task. It is generally recognized that hedge funds have made an important contribution to the transfer and diversification of risk through innovative asset management skills and techniques. They are a positive force in rendering global financial markets more liquid and therefore more flexible. My comments today will focus on those aspects of the hedge fund industry that strike me as particularly relevant with regard to the need to preserve and enhance liquid financial markets.1 After some general remarks about hedge funds and the hedge fund industry, I will explore the question of whether hedge funds can materially influence market volatility. I will also refer to one of the key characteristics of hedge funds – the use of leverage – and examine how such leverage might affect overall financial market stability.