samchain/econo-pairs-v1 huggingface dataset:
This is not a choice. If we don’t act effectively, the repercussions on the U.S. economy—and the global economy—are severe. In each of the past two notable market dislocations, the dysfunctions arose swiftly, and we, too, acted quickly to take steps that were effective in restoring the functioning and confidence in markets. But each event exposed weaknesses. Over time, weaknesses can erode confidence. So now, the challenge before us is this: How do we strengthen the most important market in the world in a way that helps us avoid having to take dramatic steps to cure impairments during the middle of a future crisis? How do we prepare for what we can’t foresee and can’t predict? Think Differently One thing that is clear when examining the causes of these market disruptions is that they were not primarily driven by economic forces, but rather by a failure of the markets to function in the ways they were expected to do in response to those particular circumstances. These sharp market disruptions teach us important lessons. A number of experts in this field— including the IAW G—have been doing excellent work in identifying potential solutions to ensure that similar disruptions don’t happen again. It’s essential that we all continue to work together to increase the resilience of the Treasury market—and this conference is a great opportunity to move that process forward. It’s also clear that we need not start from a position of how things are, but instead, how they should be.

Ms Hessius speaks about the monetary policy and growth conditions for Sweden’s economy  Speech given by Ms Kerstin Hessius, Deputy Governor of the Sveriges Riksbank at the Chairmens’ Conference of the Västmanland’s Local Authorities Association on 27 August 1999. * * * The whole speech The bright picture of the Swedish economy that has been coming to the fore in recent years now seems to be becoming increasingly distinct. Growth is stable and employment is rising, accompanied by price increases that are moderate. It is important now that this bright picture can become permanent and that the work of creating good conditions for long-term economic development continues. Today I shall be considering the economic situation in Sweden and the rest of the world, with some discussion of the conditions for consolidating the favourable trend. Functions of the Riksbank Ever since Sweden abandoned the fixed exchange rate regime in November 1992, monetary policy has been conducted with its sights on inflation. Sweden was one of the first countries to adopt an inflation targeting strategy. In many respects, the period with the inflation target has been characterised by good results in the Swedish economy. Interest rates and inflation have fallen to levels that are historically low and, after the crisis in the early 1990s, growth has been comparatively high and stable.
Ladies and gentlemen, at the end of my speech I declare the Ninth Conference on Payment and Securities Settlement Systems open, and I wish the chairman, Mr Michiel van Duveren and his colleagues, a successful Conference. Finally, I wish you all a pleasant stay, hoping that you will take with you nice memories of Ohrid, the city with thousands of years of history and beautiful nature that attract the tourists from all over the world. Тhank you very much for your participation in our Conference. 2  BIS central bankers’ speeches

Ladies and Gentlemen, letters such as these give us a picture of the key issues of the day for people in Switzerland, and how their lives are affected by specific economic circumstances. We always find this informative. However, the SNB’s monetary policy can never be focused solely on individual needs and concerns. Instead it must serve the interests of the country as a whole. And unfortunately, you can’t have your cake and eat it, as the saying goes. Or in the case of the two letters I quoted, you can’t have higher interest rates and a weaker Swiss franc at the same time. The SNB bases its monetary policy on careful consideration of its impact on the overall economy. For some four years now, we have centred on two key elements: the negative interest rate and our willingness to intervene in the foreign exchange market as necessary. The first of these in particular is a very unusual concept for many of our fellow citizens, and this is also reflected in the correspondence we receive. Some say that it runs contrary to economic logic, and creates major problems for savers and pension funds. Against the current backdrop, both the negative interest rate and our willingness to intervene in the foreign exchange market as necessary remain essential, however. This is the only way we can maintain the interest rate and exchange rate conditions in Switzerland that are necessary for us to perform our task of ensuring price stability while taking due account of economic developments.
We set out clearly and graphically the risks around those forecast, but it is the central case – what we think most likely to happen – that informs our policy decisions. For financial stability, the focus of the Financial Policy Committee (FPC) is not on the central case – on what is most likely to happen; rather it is on the risks – on what could happen even if it is not the most likely scenario. It is the risks, what could happen, that inform our policy decisions. Brexit  That is why our financial stability focus has been on the risks from a disorderly Brexit. The Bank has been working since the referendum to reduce the risks to financial stability and the risk of disruption to financial services, in the event, that the UK leaves the EU without a deal and without any transition period. This has been a pretty large task. Alongside the Treasury and the FCA we have made sure that we will have a working legal and regulatory framework for the financial sector at the point that EU law no longer applies in the UK. Over 10,000 pages of financial sector related EU legislation has been assessed to see what changes would be required to make the legislation operable in the UK statute book. Over 1,000 pages of amendments have been made by the Treasury in 50 statutory instruments.

However, formulating the right policy responses to monetary policy spillovers requires a better understanding of various spillover channels as well as mitigating factors that help reduce the sensitivity of EMEs to global monetary policy shocks. I would therefore like to thank you all for taking the time to join our Workshop today, which brings together seasoned researchers and policymakers dedicated to understanding these vital issues. I look forward to their insights and I hope you enjoy the Workshop. Thank you. Last revision date : 25 August 2022
Clearly these are deliberately exaggerated descriptions, and can’t be used by themselves to quantify the potential gains from changes in individual or collective behaviour. But one academic attempt to do just that, for a specific segment of the market, is shown in Chart 5. The range of observed spreads for transacting in euro/dollar FX forwards was found to be strikingly wide (ranging from 2 ‘pips’10 for the 25th percentile to 52.6 pips for the 90th percentile) – and strongly inversely correlated with a measure of client sophistication. On average, the unsophisticated – and over half the sample trade with only one bank – appeared to pay a much higher spread than their sophisticated peers. That premium could be all but eliminated if they instead traded on a multi-dealer platform: a rent estimated by the authors to be worth over €  Chart 5: Relationship between spreads on EUR/USD FX forwards and client sophistication  Source: ‘Discriminatory pricing of Over-The-Counter derivatives’ by Harold Hau, Peter Hoffmann, Sam Langfield and Yannick Timmer, December 201711  These results should be interpreted with some care. Higher spreads for less sophisticated clients may be capturing more than execution costs alone (FX forwards involve a credit element, for example). And tighter observed spreads for those using platforms and those with greater sophistication may underestimate true effective spreads if prices regularly move against them, through information leakage or otherwise. Spreads A ‘pip’ is the smallest amount by which any given exchange rate can change.

Tarisa Watanagase: Thailand’s economy in 2008 and preparations for the future Keynote address by Dr Tarisa Watanagase, Governor of the Bank of Thailand, at the luncheon gathering of US and Thai business representatives to celebrate the 175th anniversary of Thai-US relations, at the Ministry of Foreign Affairs, Bangkok, 29 April 2008. *  *  *  Excellencies, Distinguished US and Thai business representatives, Ladies and Gentlemen, It is my honour and pleasure to accept the Ministry of Foreign Affairs’ invitation to speak at this gathering of distinguished members of the US and Thai business corporations and to join you in celebrating the 175th anniversary of Thai-US relations. My goal today is to contribute to your understanding of the prospects of the Thai economy and investment environment in 2008 and beyond. My talk will comprise three parts. First, I would like to draw your attention to Thailand’s economic prospects and risks in the near term. Second, I will focus on some key challenges in enhancing the economy’s resiliency and competitiveness while managing those risks. Finally, I would like to highlight to you the roles of the Bank of Thailand in fostering economic and financial stability going forward. Ladies and Gentlemen, Since my last meeting with the American Chamber of Commerce in Bangkok last September, the economic tide has already turned in Thailand’s favour. In 2007, the Thai economy managed to grow by 4.8 percent for the whole year, given boost by GDP growth rate of 5.7 percent in the fourth quarter of the year.
Share of credit flows by interest rate type 100  percent  percent  100  10  10  0  0  Housing loans variable interest rate  Sep.17  20  Sep.16  20  Sep.15  30  Sep.14  30  Sep.13  40  Sep.12  40  Sep.11  50  Sep.10  50  Sep.17  60  Sep.16  60  Sep.15  70  Sep.14  70  Sep.13  80  Sep.12  80  Sep.11  90  Sep.10  90  Consumer loans (maturity below 5 years) fixed interest rate (1-5 years)  fixed interest rate  Source: NBR  20  Figure 28. Level of indebtedness by loan type and net monthly wage 60  percent  50 40 30 20 10 0 (minimum (average >2 x wage; wage; average average 2 x average wage wage] wage]  TOTAL  (minimum (average >2 x wage; wage; average average 2 x average wage wage] wage]  Housing loans  TOTAL  Consumer loans  DSTI for all loans in stock in September 2016 (median) DSTI for all loans in stock in September 2017 (median) DSTI of debtors with new loans in September 2016 (median) DSTI of debtors with new loans in September 2017 (median) Source: NBR, CB, MPF  21  Figure 29. Share of households with housing loans by income quintile (September 2017) 12  percent  Figure 30.

Financial stability is a public good which refers not only to banks, but also to the economy as a whole. Financial stability is influenced by the quality of the public policy mix. Since the previous Report (May 2017), financial stability has remained robust, yet we notice that certain vulnerabilities are still manifest or have been building up, especially with regard to upward pressures on the risk premium for emerging economies, tensions surrounding domestic macroeconomic equilibria stemming from slippages and uncertainty in the budgetary and fiscal policy and higher household indebtedness, the risks being compounded by the correlation between these factors. 1  Looking at macroeconomic fundamentals, several favourable indicators are noteworthy:       Romania’s major advantage is the low public debt stock (37.4 percent of GDP), together with the drop in the refinancing risk, due mainly to the extension in the maturity of public debt (Figures 1 and 2). Public debt spans mostly the medium or long term (94 percent of total, on the domestic and external markets alike – with domestic debt accounting for 48 percent of total or 17 percent of GDP) (Figure 3). Another advantage for Romania consists in the sizeable international reserves (Figure 4). Yet, international reserves play a preventive role and they cannot make up for the structural worsening of some indicators. The Romanian economy posted a high growth rate in the first nine months of 2017 (7 percent in the first three quarters of 2017 versus the same year-earlier period) (Figure 5).
It has been my unwavering objective to achieve full integration between financial supervision and the Central Bank’s other activities as quickly as possible, so as to strengthen supervision, monetary policy, and financial stability in Iceland. We have made good progress thus far, and we look forward to continuing on our shared path. Honoured guests: As I mentioned, Icelanders have been independent politically and economically for just over a century, even though the Central Bank is only 60 years old. Over this period, we have tried out virtually all versions of monetary policy: a currency union, a pegged exchange rate, a crawling peg, a floating exchange rate, and inflation targeting. Each of these monetary policy regimes has its advantages and disadvantages. But what matters most is that each of them requires a certain 4/5  BIS central bankers' speeches  institutional structure, and each requires that the Government and others follow specified and appropriate ground rules. If we have had problems running independent monetary policy, it is not necessarily because the policy itself has been wrong. It is far more likely that we have not followed the rules or have not had the right institutional architecture in place. Indeed, if we think the history of monetary policy in Iceland has been a thorny one, we should remember that we started out with a central bank that effectively didn’t exist until 1961, and until 2001 we had a central bank that did not have the independence it needed to apply its policy instruments effectively.

5  For example, O’Hara (2004). 4  BIS central bankers’ speeches  Frictions in pricing arise from the process of matching buyers and sellers. Here, the role of market-makers is key. The market-maker faces two types of problem. One is an inventorymanagement problem – how much stock to hold and at what price to buy and sell. The market-maker earns a bid-ask spread in return for solving this problem since they bear the risk that their inventory loses value. 6 Market-makers face a second, information-management problem. This arises from the possibility of trading with someone better informed about true prices than themselves – an adverse selection risk. Again, the market-maker earns a bid-ask spread to protect against this informational risk. 7 The bid-ask spread, then, is the market-makers’ insurance premium. It provides protection against risks from a depreciating or mis-priced inventory. As such, it also proxies the “liquidity” of the market – that is, its ability to absorb buy and sell orders and execute them without an impact on price. A wider bid-ask spread implies greater risk in the sense of the market’s ability to absorb volume without affecting prices. This basic framework can be used to assess the impact of the changing trading topology on systemic risk, moving from analysing market microstructure to market macrostructure. Take the effects of fragmentation. That heightens competition among trading platforms, offering differing execution options and wider access to participants. This would tend to attract liquidity providers, including cross-market arbitraging HFT.
These well-being measures suggest global living standards plateaued for the majority of the past 3000 years, before rocketing over the past 300. Prior to the Industrial Revolution, income was locked at close to subsistence levels. In line with Thomas Malthus’s predictions, they were sufficient to sustain the population, but no more. 16 For that reason, some have called this the Malthusian era. 17 If you think that’s sounds grim, the picture further back in history is, if anything, even less optimistic. Rather remarkably, estimates of global GDP have been constructed back to 1 million BC, the dawn of man. 18 Statistical agencies were thinly staffed back then, so these statistics need to be treated with an even greater than usual pinch of salt. Table 1 considers growth rates in per capita GDP and population over that longer sample. For much of the history of mankind, there was effectively no rise in either living standards or  13  Clark (2009). 14  For example, Clark (2009). 15  For example, Morris (2011). 16  Malthus (1798). 17  For example, Clark (2009). 18  DeLong (1998). BIS central bankers’ speeches  3  population. It is possible the most gradual of advances in living standards began tens of thousands of years ago, around the time modern man (homo sapiens) emerged and Neanderthal man (homo Neanderthalensis) disappeared. So the short history (the Golden era) and the long history (the Malthusian era) of growth could not be more different. Secular innovation followed a lengthy period of secular stagnation.

Acemoglu and Robinson (2013). 6  BIS central bankers’ speeches  20-fold. Prior to the Industrial Revolution, institutions in general, and government in particular, became an increasingly important growth-enabler. Institutional and infrastructural capital has continued to accumulate in the period since. Since 1950, the number of countries operating with democratic institutions has risen from around 25 to almost 90. 31 Legal systems globally have continued to improve in quality, and central bank numbers have continued to swell. Cross-country studies have found that the quality of these institutions and infrastructures is often key to driving growth. 32 In what is perhaps the most comprehensive study of historical experience, Daron Acemoglu and James Robinson have taken the institutional argument one step further. For them, the lack of good institutions is the defining reason “Why Nations Fail”. 33 You do not need to go that far to think they have really mattered historically for living standards. The final ingredient in the growth recipe is intellectual capital, for some the source of the Industrial Revolution, Hargreaves, Arkwright, Watt and all. Yet it would be wrong to think innovation somehow began in the 18th century. From the windmill in the 12th century, the mechanical clock in the 13th, the cannon in the 14th, the printing press in the 15th, the postal service in the 16th and the telescope and microscope in the 17th, the innovation escalator was in service well before the Industrial Revolution, albeit stepped and sticky.
And risks that may have been eclipsed by the pandemic remain live – whether geo-political, long term demographic trends, or climate change. While we know that climate change can create financial risks on both sides of insurers’ balance sheets, and that some combination of crystallization of physical and transition risk is inevitable, the timing and extent of specific impacts are highly uncertain, particularly on exposures to specific industries. What should firms and regulators be doing to prepare, in the face of these multiple and potentially interacting sources of risk and uncertainty? One significant response to unknown risks and uncertainty is stress testing and scenario analysis, and that is what I want to focus on today. Current firm-specific and sector-wide stress testing Stress testing is already a central feature of the Solvency II regulatory regime for insurers. Firm-specific stresses provide assurance that firms are highly likely to be able to meet their obligations to policyholders: the capital calculation can be thought of as a stylized, 1-in-200 severity stress test of the whole balance sheet. Firms are also required to undertake scenario analysis within their Own Risk and Solvency Assessment (ORSA).4 The ORSA process is designed for the firm to provide a narrative of the type of (bespoke) risks it is exposed to and to illustrate how resilient it is to those. To these firm-specific measures we have added periodic, regulator-led stress tests, whose purpose is to assess the sector’s ability to meet policyholder claims in a common scenario, which reflects micro- and macro-prudential concerns of the PRA.

In the future, we may well end up in the opposite situation with the repo rate being set higher than justified by this particular part of the economy. Longer fixed-rate periods desirable It is difficult to determine how large a proportion of variable interest rates is desirable in an economy, but I suspect that we have gone too far in that direction in Sweden. And by this I mean from the point of view of systemic risk. For an individual household there may be good reasons for choosing a variable interest rate, but for the economy as a whole it would probably be good if we could limit the proportion of variable rates. This can be achieved in different ways. In some countries, regulations have been used to either limit how large a proportion of the mortgage may have a variable interest rate or how much a variable interest rate may increase during the maturity of a mortgage. In other countries, long fixed-rate periods have become the norm without the need for regulations. The fact that this has not happened in Sweden indicates that the financial markets are not working well enough for some reason. This may, for example, be due to the lack of a market for mortgage bonds at really long maturities, or of regulations concerning how mortgages with long fixed-rate periods can be paid off prematurely.