samchain/econo-pairs-v1 huggingface dataset:
But they were not sufficient to get liquidity to non-banks quickly enough, or in sufficient scale. That also required large and aggressive asset purchase operations, what we call in the paper “go Big” and “go Fast”. I am not going to say more on this, save that it raises very important points about market structures, the extent of self-insurance against liquidity shocks by non-banks, and the nature of central bank interventions. This is the subject of a review currently being undertaken by the Financial Stability Board. The Covid crisis called on central banks to act in what has been the first big test of the post financial crisis world. Monetary policy has had to respond to an unprecedented shock. For many central banks, the main tool to date has been further Quantitative Easing, in unprecedented scale and pace of purchases. This has inevitably rekindled questions about exactly how QE works and whether its effectiveness is conditional on the state of the economy and the financial system – to what extent is its effectiveness state contingent? Moreover, looking across monetary policy and financial stability, it has re-emphasised the importance of central bank balance sheets as a direct tool of policy intervention, rather than primarily a passive by-product of the activity of setting the price of money and meeting the demand for reserves to satisfy the liquidity needs of the banking system. So what is our latest thinking on the effects of QE and how it works? Viewed from the depth of the Covid crisis, QE worked effectively.

Such effort can be as close as forming an alliance to pool the necessary data for model development, or as loose as sharing the costs of training and seminar similar to the one we are having here today. I should now end my talk. It has been a pleasure to share with you a regulator’s perspective on the implementation of Basel II and IFRS. I hope my remarks and observations have been useful. We are traveling on an important and challenging path towards achieving a robust and resilient financial system, and steady progress is being made. You, as a key stakeholder, are also an important part of this journey. I wish the rest of the seminar great success and accomplish its objective, and be interesting and educating to all. Thank you very much. 4  BIS Review 114/2007
Christian Noyer: Remaining challenges facing the euro area Speech with Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, at the Foreign Correspondents Club of Japan, Tokyo, 10 October 2012. *  *  *  Ladies and gentlemen, I would like to start by thanking the Foreign Correspondents Club of Japan for this invitation. I am delighted to be here with you today to discuss, here in Tokyo before an audience from different backgrounds, the situation in the euro area. For the past few years the euro area has been going through a major crisis. This crisis has multiple causes that call into question the institutional foundations of monetary union. I strongly believe that the different roots of this crisis have now been thoroughly analysed and are being effectively addressed. The main challenge facing the euro area is to pursue the efforts underway to return to balanced budgets, regain competitiveness and growth and strengthen Economic and Monetary Union. 1. What is the situation in the euro area? In early 2012 the outlook seemed encouraging. Confidence appeared to be steadily returning, the decisions taken, in particular the very long-term refinancing operations – had calmed the markets. Nevertheless, pressures quickly mounted again, reflecting especially the difficulties experienced by Greece and Spain. It became clear that the situation was still precarious, and that the solutions hitherto adopted in the euro area had to be enhanced in order to be truly lasting.

Such stability in the nominal exchange rate vis-à-vis the euro over the two-year period in ERM II would indicate that the economy has converged well and is flexible enough to absorb economic shocks without having to change the exchange rate. The signalling effects stem from the multilateral nature of ERM II. The joint announcement of a new member's central parity rate by all the parties involved sends a message to the markets that these various entities collectively consider that rate to be an appropriate exchange rate for the economy. Will participation in ERM II affect the status of the lira during this phase? During ERM II, the Central Bank will continue to play its current active role in the areas of monetary and exchange rate policy. The lira will continue to be the legal tender currency of Malta until the euro is adopted. Until then, and while Malta participates in ERM II, the euro will, to all intents and purposes, be treated as any other foreign currency. How will the central parity rate in ERM II be determined and what other decisions need to be taken with respect to Malta's participation in ERM II? The central parity rate will be jointly agreed by euro area ministers, known as the Eurogroup, Malta's Minister of Finance and the Governor of the Central Bank of Malta.
While theoretically feasible through issuance of central bank bills, large-scale sterilisation proves problematic in practice, especially in emerging economies, which are not always fully equipped with market-based policy instruments. In order to effectively control exuberant credit expansion, emerging economies have often had to recourse to large increases in reserve requirement ratios or even non-market policy instruments such as the rationing of credit. In a context in which credit and interest rates are largely administered, the fiscal cost of sterilisation can effectively be transferred to the banking sector, and ultimately to bank customers and stockholders; but that does not remove the opportunity costs of sterilisation for the private sector or the monetary risks of incomplete sterilisation. The bottom line is that in economies where largescale foreign asset accumulation needs to be sterilised, it is very likely that capital allocation efficiency will be reduced, especially if non-market instruments have to be used. Foreign reserves and international competition A second risk is that reserve hoarding may exacerbate trade competition and emphasise regional tensions. Emerging economies compete in their exports towards developed economies, as much as they compete with developed economies. As noted by Aizenman 4 “in a world with symmetric emerging markets competing in similar industries, competitive [reserve] hoarding tends to dissipate most competitive gains, leading to a “beggar-yourself” [outcome] and excessive hoarding”. By contrast “in an asymmetric world, an emerging market with low enough cost of sterilisation may win the hoarding war […] akin to the “beggar-thy-neighbor” outcome of asymmetric Tariff Wars”.

Building on the experience of currency crises, the IMF Guidelines for Foreign Exchange Reserve Management recognise that “official foreign exchange reserves are held in support of a range of objectives”, including to: •  “support and maintain confidence” in monetary and exchange rate policy, including the capacity to conduct foreign exchange interventions;  •  “limit external vulnerability by maintaining foreign currency liquidity to absorb shocks during times of crisis or when access to borrowing is curtailed, and in doing so,  •  provide a level of confidence to markets that a country can meet its external obligations.”  Not so long ago, the required level of forex reserves was inferred from empirical rules of thumb such as the “three months of imports” rule. After the experience of the 1990s, when financial crises were triggered by a drying-up of capital inflows, the ability of economies relying on international borrowing to service their external debt became a central criterion. The “Greenspan-Guidotti” rule thus recommends that reserves should enable full coverage of total short-term external debt in order to be able to pay back that debt in event of sudden stops, i.e. if and when foreign lenders do not roll-over their loans. The empirical literature provides evidence that, today, the level of forex reserves in some emerging economies appears excessive with respect to the level inferred from both rules.
Others have suggested that the event window on October 15 is a byproduct of regulatory changes that have reduced traditional dealers’ ability to serve as shock absorbers during periods of volatility by accommodating large net order flows. In particular, some market participants argue that recent regulatory changes have increased the cost that dealers face when expanding their balance sheets, leaving them less willing to do so for relatively lowmargin businesses, such as making markets in Treasury securities. If true, it may help explain how an unwinding of large positions, as may have been observed in the sixty minutes after retail sales on October 15, could have had such a large impact on yields. But it is far from clear that such changes, on their own, can explain the round-trip in prices during the event window itself. That said, it is possible that the dominance of electronic and automated trading and the changing composition of participants in the Treasury market have interacted with changes to dealer behavior – whether the result of regulatory incentives or other reasons – in a manner that makes unusual intraday price moves more probable. While it is precisely the intention of many recent regulatory initiatives to ensure that financial firms hold sufficient capital to support the size of their balance sheets and risk taking activities, there could be unintended consequences of these regulatory changes, including the possibility that sharp intraday price moves become more common.

If I may take the liberty of making my own, perhaps slightly partial and favourable, interpretation of this argument you could say that it is fairly well in line with what, as I maintained earlier, appears to be the prevalent view of asset prices’ principal role in a flexible inflation-targeting regime – that developments in asset prices in some situations might make it necessary for the central bank to try to take account of what can happen beyond the normal forecast horizon. So in this situation, in my opinion, an earlier initiation of a shift in policy would help to reduce the risk of a negative self-reinforcing spiral in the cyclical slowdown that sooner or later will come. Thus, seen in a longer-term perspective, such a measure could foster stability in the real economy and inflation. I want to underline that I of course do not mean by this that my colleagues in the Executive Board have not taken these kinds of considerations into account, but only that we have made somewhat different assessments of what the risks are and what currently may be the appropriate action. So it is a question – as I noted initially – of subtle differences in our opinions rather than a case of completely different ideas about how the economy will develop and what fundamentally needs to be done. When the Executive Board convenes in January, however, we shall have two new members, and it remains to be seen what their views are on this matter. Thank you!
Bank of Zambia and government participation in foreign exchange market •  As discussed during the meeting in Ndola and consistent with the code of conduct for the broad based interbank system, we would like to reiterate the fact that Bank of Zambia is a participant in the market like all other players. As such the Bank’s participation should not be seen as extraordinary but as part of the process. Equally, Government participation should be treated in a similar manner. •  In addition, a number of issues were raised in the workshop regarding the operations of the foreign exchange market and a report has been circulated to that effect. In this regard, the Bank of Zambia will soon write to the Bankers Association of Zambia (BAZ) outlining those issues that require action by all concerned parties. Use of EDP funds •  It has come to our attention that some intermediaries of the EDP funds are not utilizing the funds according to the agreed rules. In some instances, the intermediaries are not on-lending the funds to their clients. Such practices if allowed to continue will defeat the purpose of the efforts aimed at creating a sustainable source of wholesale medium- to long-term funds in our market. We wish to urge all of you to adhere to the established rules, failure to which those institutions engaged in unacceptable practices may not be able to secure such funding in the future thereby denying their clients critical project funding.

In addition, low lending rates would improve the investment climate in the country. 4. Outlook  The March 2004, inflation pressures were anticipated to slow down. Factors for this anticipation include the following: •  Given that the supply of fresh foodstuffs from the 2003/2004 agricultural season had started, inflationary pressures were likely to ease. Coupled with the lifting of the fishing ban in March 2004 and expected increase in the supply of fish on the market, these factors were expected to dampen food inflationary pressures;  •  The slow growth in broad money in January 2004 and the decline in average reserve money at end-February 2004 were expected to have a dampening effect on non-food inflation in March 2004;  •  The exchange rate of the Kwacha against other currencies was expected to remain relatively stable on account of improved foreign exchange supply on the market arising from favourable export receipts due to higher metal prices and increased non-traditional earnings especially of sugar, cotton lint, burley tobacco and cement; and  •  Government expenditure was expected to be within the targeted levels and this was expected to contribute to ensuring that net domestic financing of Government from the banking system would remain within the projected ceiling and thereby contribute to the anticipated drop in inflation. In view of these expectations, the Bank of Zambia will continue to implement appropriate monetary policy aimed at containing the growth in reserve money and broad money within the projections.
Zeti Akhtar Aziz: Brief overview of the Malaysian bond market Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the launch of the RM760 million Wawasan Bond by the International Bank for Reconstruction and Development, Kuala Lumpur, 27 April 2005. *  *  *  Assalamualaikum warahmatullahi wabarakatuh and good evening Mr Hiro Tsubota, Principal Financial Officer IBRD Mr Michael Bennett, Senior Legal Counsel, IBRD Dato' Nazir Razak, Chief Executive, CIMB Mr Jeremy Oliver, Managing Director, ABN AMRO Bank Malaysia Berhad Representatives from the Ministry of Finance, Bank Negara Malaysia and the Securities Commission Ladies and Gentlemen It gives me great pleasure to accept the invitation to witness the launch of the 760 million Ringgitdenominated Wawasan Bonds by the International Bank for Reconstruction and Development (IBRD). The decision to launch this bond in Malaysia is reflective of the confidence in the Malaysian capital market. This represents another milestone in the development of Malaysia's domestic bond market. Malaysia's regulatory institutions are committed to the development of the country's bond market to the advantage of borrowers and investors. Our financial system continues to be transformed and redefined to become increasingly more diversified, more robust and more competitive. The significant progress achieved in the development of our bond market has been an important part of this process. With the foundations for strong performance in our financial system now being achieved, steps have been initated to implement phased deregulation and liberalisation of the financial and capital markets.

This would indeed contribute to further broaden and develop the Islamic domestic capital market. This Islamic securities issuance is the largest Ringgit issuance by a supranational to-date. In closing, I would like to thank the International Bank for Reconstruction and Development for the confidence it has placed in the Malaysian capital market. We look forward to see other issuances by non-resident issuers into the Ringgit capital market, thereby contributing towards broadening and deepening the market. Such issues will have far reaching advantages for the domestic bond market. Let me once again, congratulate the World Bank and the Joint Lead Managers CIMB and ABN AMRO, for a successful issuance of the IBRD bond debut in Malaysia. Thank you. 2  BIS Review 29/2005
Svein Gjedrem: The economic outlook Address by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), to invited foreign embassy representatives, Norges Bank, Oslo, 31 March 2008. The address is based on the assessments presented at Norges Bank’s press conference following the Executive Board’s monetary policy meeting on 13 March, Monetary Policy Report 1/08 and on previous speeches. Please note that the text below may differ slightly from the actual presentation. *  *  *  Excellencies, Ladies and Gentlemen, Since our last meeting about a year ago, the international economic environment has changed quite dramatically. Starting in the US, turmoil in financial markets has quickly spread all over the world. The economic outlook for the US, and indeed the whole world, is weaker and a lot more uncertain than it was a year ago. In my presentation today, I will discuss the effects of the turmoil on the Norwegian economy and the consequences it may have for international growth. I will also talk a little about the Government Pension Fund – Global in the context of the ongoing debate on sovereign wealth funds. Continued turbulence in financial markets The current turbulence in financial markets has its roots in high credit growth and reduced saving over the past decade, most notably in the US. Low interest rates and strong output growth triggered a sharp rise in house prices and housing investment. House prices in the US started to fall in 2006.

Mervyn King: Monetary policy developments Speech by Mr Mervyn King, Governor of the Bank of England, to CBI Wales/CBI CYMRU, Cardiff, 11 June 2007. *  *  *  Chairman, First Minister, Ladies and Gentlemen, Two years ago I spent a few days walking along Offa’s Dyke. Up on the ridge, between Hay and Pandy, there is a magnificent 360° view. The patchwork quilt of green fields in England lies to the east. But the eye is drawn to the rugged and spectacular scenery of the Black Mountains in “Wild Wales” to the west. The landscape, however, is not everything because as George Borrow wrote in 1862: “Wales has something beyond wonderful scenery, its eventful history, and its illustrious men of yore to interest the visitor. Wales has a population, and a remarkable one.” It is a population that has had to adapt to great changes in the world economy over the past century and continues to do so today. You need only look outside at the Cardiff Bay development to see the way the Welsh economy has changed. When you take a flight, the aircraft may well have wings made in Wales. Your car might have a Welsh engine and be insured in Cardiff. And when you holiday in France your morning croissant has probably been baked in an oven made in Swansea. What happens in Wales matters for the UK economy. That is why the Bank of England has a team who live and work in Wales.
But, of course, this is not a precise forecast of the level of Global R*. Among the risks to this assessment are the other potential drivers that have not been considered in this model. For example, one potentially important driver, which is absent from the structural model simulation, is the rise in inequality. Existing results tend to suggest that the rise in inequality, as seen in recent decades, puts downward pressure on Global R*. [15] Another widespread trend that could push in the opposite direction is the growth in the provision of publicly-financed social security and healthcare. Rachel and Summers (2019) argue that that this trend would both reduce the incentives for households to accumulate wealth and crowd out private capital, resulting in upward pressure on Global R*. Of course, both inequality and social security provision are themselves endogenous to other underlying structural forces, including the demographic trends that I have already talked about. So incorporating these into our narrative requires a fuller consideration of these interactions. The Missing-Investment Puzzle  Page 9  I will now consider one of the potential implications of the past decline in Global R*, focusing on investment. Standard neoclassical theory, such as that underlying the structural model considered earlier, implies a strong co-movement between the safe real rate and rate of return on capital. This suggests that we would expect a fall in Global R* to be associated with a fall in the return on capital.

It is important to note that the mechanism is driven by the relative wealth levels of different cohorts within the population. It is true that, on average, retirees have low savings rates, as they run down their wealth to finance their retirement. However, the data show that in practice this effect is typically not very strong, so that the average household appears to broadly maintain their wealth during retirement. This tempers the extent to which the retirement of the baby-boom generation reverses the impact of ageing on the real interest rate. [13] These results imply that the effect of population ageing on Global R* has been large, and is expected to persist. While the paths of the underlying drivers are estimated only until 2015, the model-based simulation implies that the equilibrium real interest rate will continue to adjust until the population structure and stock of global capital reach an eventual ‘steady state’. Indeed, the simulation implies that the effects of past structural trends would continue to reduce Global R*, perhaps by another 1 percentage point, over the very long run. [14] So, importantly, what this model, and the data behind it, are telling us is that we should not expect that ageing, and the retirement of baby boomers, will lead to significant upward pressure on Global R* over coming years or decades. The substantial contribution of population ageing to the decline in Global R* in the past stems from the steady increase in longevity, and this mechanism leads to permanently lower Global R*.
This is precisely the aim of this conference. I thank you for your attention. BIS Review 108/2006  3

If there is no risk premium, the uncovered interest rate parity relates interest income in the domestic economy with interest income in the foreign economy via the expected change in the exchange rate. For a better understanding we may use the example of our current situation. The one-year interest rate in the Eurozone is slightly above 4%, while the Czech one-year interest rate is less than 3%. In spite of this negative interest rate differential we still see many investors holding Czech crowndenominated assets. Why? Simply because financial market participants expect the Czech crown to appreciate in the future and thus compensate for the negative interest rate differential. Although the uncovered interest rate parity has been heavily criticised and disapproved as being practically non-functioning, it is used in macroeconomic models. Well, as an economic modeller you simply do not have any other option. The uncovered interest rate parity is directly implied by the profitmaximising behaviour of financial market participants. We probably all agree that the behaviour of financial market participants is led by profit maximisation (given the level of risk). At the same time, however, surely at least a few of you here in the audience would seriously argue that a relationship such as the uncovered interest rate parity does not hold in reality and that it is a purely theoretical concept. The uncovered interest rate parity is, however, implied by the profit-seeking mechanism.