samchain/econo-pairs-v1 huggingface dataset:
By repeated substitution, this asset pricing equation can be written as a generalised form of (1): (6)  The current share price is a function of future discounted dividend streams and a discounted terminal share price, where we have used: (7) (8)  Equation (7) says that the expected company-specific risk premium is constant and pre-determined based on period t information. Equation (8) says that expectations of future risk-free rates are defined by the path of the risk-free forward rate curve observed at time t. Equation (6) can be modified with a myopia coefficient to give a generalised version of (2): (9)  The null hypothesis – no short-termism – implies x = 1. Drawing on evidence across time and industrial sectors, it is this restriction we now test. 4. Testing for short-termism  The data comprises a panel of 624 firms listed on the UK FTSE and US S&P indices over the period 1980–2009.20 These span a broad range of industrial sectors, as shown in Table 2. Table 2 Number of firm level observations in each industry segment Energy Financials & Utilities  Index  Consumer  S&P  117  65  FTSE  52  14  20  6  Health  IT  Industrials Materials  Total  78  47  73  47  23  450  42  5  34  18  9  174  Data are from Thomson Reuters Datastream.

6. Instead of setting a quantitative threshold or target for Green investments, we believe our present approach is a more pragmatic and likely to be a more effective way of promoting Green and ESG investments. We will continue to work with like-minded investors to promote focus on good ESG practices in managing their investments. In the interest of transparency, the HKMA will also consider an appropriate framework for disclosing the Exchange Fund’s Green and ESG investment efforts without arousing market sensitivity in the process. Capacity Building in Green Finance: Centre for Green Finance (CGF) 7. Hong Kong is already one of the major green finance hubs in the world. Last year a total of $ billion of green bonds were issued and arranged in Hong Kong. Earlier this morning, the HKMA, as the implementation agent of the $ billion Government Green Bond Programme, announced that a roadshow will be held for a potential green bond offering. Under the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay 2/3  BIS central bankers' speeches  Area, Hong Kong is the designated green finance centre in the Area. With the launch of the Green and Sustainable Banking initiative and the rapid growth of the Green Bond market, Hong Kong possesses enormous potential to become a leading Green Finance Hub in the world. However, in pursuing our aspirations, there is a pressing need to upgrade our capacity and expertise in green finance in the financial industry. 8.
As a result of large exposure to subprime mortgages, partially as a result of an acquisition of a large California thrift, investors became concerned about the solvency of Wachovia. A loss of confidence in Wachovia led depositors, funders, and investors – those on the liability side of the bank’s balance sheet – to withdraw, pressuring the institution to sell itself. After a short bidding war between Wells Fargo and Citigroup, Wells Fargo prevailed and acquired Wachovia at the end of 2008. Washington Mutual or “WaMu” was the largest savings and loan holding company in the United States, with assets over $ billion. WaMu had grown rapidly, with a large exposure to residential real estate and a large concentration of both variable rate and subprime mortgages. Large depositors became concerned about the solvency of WaMu in September 2008 and began rapidly withdrawing funds. The institution failed later that month (on September 25) and was acquired by JP Morgan Chase. 3  Given time constraints, my remarks do not delve into the role of stress tests in macroprudential supervision. In my view, stress tests benefit macroprudential supervision in that (a) they embed an explicit link to macroeconomic scenarios and (b) they focus on the ability of the financial system as a whole to provide intermediation services to the real economy rather than just on the solvency of individual institutions. 2  BIS central bankers’ speeches  Figure 1 provides the capital ratios reported in the last financial filing for both Wachovia and Washington Mutual.

Eric S Rosengren: A US perspective on strengthening financial stability Speech by Mr Eric S Rosengren, President and Chief Executive Officer of the Federal Reserve Bank of Boston, at the Financial Stability Institute High-Level Meeting on the New Framework to Strengthen Financial Stability and Regulatory Priorities, St Petersburg, Russia, 24 May 2011. *  *  *  Of course, the views I express today are my own, not necessarily those of my colleagues on the Board of Governors or the Federal Open Market Committee (the FOMC). Good morning. I would like to thank Josef Tosovsky and the Financial Stability Institute for inviting me to speak today on financial stability and on regulatory and supervisory priorities in the United States. I would also like to thank Sergey Ignatiev and the Central Bank of the Russian Federation for hosting this very important event.1 I think it is crucial that we continue to share perspectives on financial stability and related issues. Clearly the events of the past four years have heightened our awareness of how interconnected our economies, our financial institutions, and our financial markets have become. When large global financial intermediaries become troubled, it impacts not just home country borrowers and, potentially, taxpayers; but increasingly can also have collateral impacts on host countries and their financial markets. Much has been learned in the United States over the past four years about gaps in our regulatory and supervisory framework.
Our higher level of interest rates we explain as a reflection of the fact that we continue to operate closer to capacity than elsewhere and with a tighter labour market. I'm not sure that our critics are convinced, let alone mollified! But I do find it encouraging that they continue for the most part to support the policy objective of continuously low inflation even if from their perspective we are too rigorous in our pursuit of that objective! We have in fact reduced interest rates by ¼% on four occasions so far this year. What is disappointing - both to us and our critics - is that while we have been able to compensate for the dampening effects  4  BIS Review 76/2001  of external factors - the exchange rate and the global economic slowdown - by encouraging stronger domestic consumption, we have not been able to alter the external environment itself, which is what our critics in the suffering sectors would really like to see. We have in effect increased the sectoral imbalance rather than reducing it. That may seem like second best but it is as much as anyone can reasonably ask of monetary policy. Mr Chairman, I have gone on for too long and perhaps you will think that I have been overly-defensive both of myself and of my central banking colleagues. That was not my intention. My intention rather was to explain what can and what cannot reasonably be expected of monetary policy in the present world economic situation.

The longer interest rates are held down by temporary factors, the greater may be the risk that households perceive the low rates as a permanent phenomenon. Even if they cope with interest expenditure when interest rates turn upwards, many households may be obliged to cut back consumption substantially, which would tend to dampen demand. At the same time, higher interest rates can subdue the increase in house prices. If the higher interest rates are accompanied by an increased supply of dwellings, that could also tend to hold house prices back. Even the demographic age structure may have a slight restraining effect on the future housing market. The population in active age groups grew throughout the 1990s but since 2000 there has been a minor reversal. The increased proportion in retirement may enlarge the supply of sizeable apartments and houses. However, changes in the composition of supply and demand occur slowly as a rule and are unlikely to lead to any drastic price adjustments. Moreover, higher interest rates will probably coincide with higher growth and increased household income, which by themselves counter the factors that subdue price developments. Assessing the magnitude of the overall effect will be difficult but most things suggest that prices will not fall sharply even if interest rates move up. Why has saving been so high? Historically, increased debt and rising house prices have been accompanied by a higher consumption ratio.
The Central Bank itself takes the view that criticism of its work is desirable. Within the Bank, all are aware that, for every decision made, several options were possible, and the decision to embrace one option over all others is accompanied by a variety of consequences. In making decisions under such circumstances, there must be ample room for comment, contrasting viewpoints, and criticism. And – thank goodness – the Central Bank has not been free of such comments and criticism. Indeed, most comments have been presented in a responsible and appropriate manner and have been both helpful and useful in the broadest sense. That is not to say that there aren’t exceptions – predictable canting litanies that are of little use to anyone – but valuable comments have nonetheless been salient and they are heard and considered. Last Tuesday, after the Easter holidays, the Bank announced several amendments to its internal rules and terms. Those amendments were designed to grease the wheels of the financial markets, which must now tolerate deteriorating operating conditions. The Icelandic government has also announced a bond issue that is launched with the same objective. Though the Central Bank does not wish to make too much of these changes, the purpose is to pave the way for easier operation of the financial system during at time of difficulty on the global front.

Even though it is fashionable at present to badmouth our local currency – even among those who ought to see it as their duty to refrain from indulging in such calumny – most currencies, large and small alike, have fluctuated wildly in the recent market turbulence; and it can easily happen that as soon as the króna depreciates, the yen and the Swiss franc, for example, appreciate even more, and borrowers who have been following the Pied Piper of Hamelin along the path of foreign loans end up trapped by their own gullibility. Despite the headwinds that face us now, not least in connection with the international financial markets and the profound impact that they could have on business here in Iceland, it is not necessarily a given that the Icelandic nation is careening headlong into a recession. It is much more likely that we will experience a slowdown and, at worst, a sharp economic dip that need not be long-lasting. We have experienced the like before and have been quick to shake off the effects of it with the adaptability that the Icelandic nation has so often demonstrated. It is reasonably clear, however, that the national economy will not achieve any real equilibrium unless there is a contraction in demand.
But there was little evidence of an additional very sharp tightening in the supply of credit last autumn that could explain the sharp fall in activity in the six to nine months after the collapse of Lehman’s in 2008Q4 and 2009Q1. There are two candidate, and mutually inclusive, explanations for the large impact on output. Expectations of future credit availability may have worsened sharply. Or, more plausibly, there may have been a more general increase in uncertainty as a result of the nearmeltdown in the financial sector, leading to an increase in precautionary savings, the postponement of planned investment projects and a running down of inventories. But either way, globalised supply chains ensured that the shock to demand was transmitted worldwide. History suggests that downturns associated with financial crises tend to be both deeper and longer-lasting than average. Reinhart and Rogoff (2008, 2009) have mapped the macroeconomic characteristics of the present financial crisis against preceding episodes in both advanced and emerging market economies. Their results can be summarised as follows: asset price collapses tend to be deep and prolonged; the aftermath of banking crises tend to be associated with substantial and prolonged falls in output; the downturns typically lead to a substantial build-up in public debt; and the antecedents of the present crisis appear remarkably similar to those in previous episodes. Fig.

Everything I have said so far about macro-prudential regulation has been couched in terms of moderating the impact of the credit cycle over time. But the earlier discussion of network effects highlighted the potential role played by large and highly interconnected financial intermediaries, graphically illustrated in the aftermath of the collapse of Lehman's. That points to another role for macro-prudential regulation, namely to increase the robustness of the financial system by requiring systemically important intermediaries to carry heavier capital requirements. So the cross-section dimension adds another set of instrument design issues. BIS Review 101/2009  15  Some lessons for the discipline Let me conclude with some observations regarding the implications of the crisis for the future development of our subject. In all probability, the Great Panic and the Great Contraction of 2008 will join the Great Depression of the 1930s and the Great Inflation of the 1970s as discipline-defining events. The struggle to understand and deal with the Great Depression led to the invention of macroeconomics as a distinct branch of the subject. In the case of the Great Inflation, economic theory for once led events, with the development of the natural rate hypothesis foreshadowing the subsequent take-off in inflation. But the subsequent decades were spent with refining our understanding of the inflationary process. What will be the legacy of the Great Panic and the Great Contraction? First, in my view it would be a mistake to look for a single guilty culprit.
Third, in relation to funding structures, the Central Bank is reviewing the liquidity rules governing the banks in order to strengthen management policies in this field, include binding regulatory limits on a consolidated basis, standardize the assumptions of our own models, expand information disclosure to the market about the liquidity position of each bank and move towards the new Basel liquidity standards. Finally, the bill of law sent to the National Congress to institutionalize the Financial Stability Board (FSB) is an important step, because it grants capabilities that provide more space to the authorities to monitor the risks facing the financial system and coordinate responses to them. To sum up, the Chilean economy is well positioned to address the changing internal and external conditions that we are already seeing. The adjustments observed in relative prices, the real exchange rate and interest rates have gone in the right direction to facilitate the adjustment of the economy. The Board follows closely the evolution of the external and domestic macroeconomic scenarios and their implications on inflation, and reiterates its commitment to conduct monetary policy in such a way that projected inflation stands at 3% in the policy horizon. At the same time, it will continue to improve financial legislation in order to maintain and enhance this resilience, in those issues that are legally mandated. Let me end with some final thoughts.

Although wholesale funding plays an important role in market discipline, it is particularly sensitive to changes in perceptions about the risk of issuers and to the assets’ liquidity in the secondary market. In addition, the events of recent years show that negative developments in foreign or local financial conglomerates may adversely affect the cost of funds in the wholesale market for the banks belonging to these groups. Accordingly, it is important that banks maintain a diversified funding base in terms of counterparties and maturities. Also, banks should use in their liquidity management stress tests and contingency plans that appropriately reflect their risks, business strategies, financial condition and financing ability under different scenarios. In addition, it is important that banks properly internalize the economic and reputational risks of their exposure to related entities, for which a proper corporate governance framework is crucial. In this context, I would like to bring to your attention four regulatory elements. First, the Superintendence of Banks and Financial Institutions (SBIF) perfected its regulatory framework on corporate governance in banks. Second, based on the possible contagion effects in financial conglomerates the SBIF enhanced the regulations restricting transactions with related debtors, increasing their supervision tools in this area.
Could these reinvestments exceed € billion next year, could they be closer to € billion, for example? The reinvestments are quite mechanical. They derive from past investment policy. As you know, we are committed to being very transparent. We are publishing the reinvestments 12 months in advance so you will have the numbers when they come. 2/4  BIS central bankers' speeches  There is some flexibility when it comes to reinvestments. Can the ECB and some national central banks reinvest a government bond into a corporate bond, or viceversa? That is not something we’ve discussed. That will be a technical discussion. What I don’t expect is any departure from the principle of capital key investment of government bonds, which has been a key principle at the heart of our public sector purchase programme. There are reports about some kind of “operation twist” from the ECB about buying longterm bonds. Is this happening? As I said, that’s not something we’ve discussed. That’s something you’re planning to discuss? That’s something that’s on the table? We will discuss the reinvestment policy; that will be a technical discussion. I don’t think it’s a major aspect of our monetary policy. With Brexit it seems like we’ve had a major step; on Friday night, after 12 hours of discussions, Theresa May managed to get some kind of blueprint. Do you see this as good news or bad news? The ECB is not part of the negotiations.

Benoît Cœuré: Interview with Bloomberg TV Interview with Mr Benoît Cœuré, Member of the Executive Board of the European Central Bank, and Bloomberg TV, conducted by Ms Caroline Connan and broadcast on 9 July 2018. * * *  Donald Trump has pulled the trigger on tariffs on China; China is retaliating. Could that complicate the ECB’s task going forward? What’s really important for us to gauge is the impact on business confidence, which so far has been limited. We see this escalation process: we start with skirmishes and then skirmishes may turn into clashes and then, at some point, clashes may turn into a fully-fledged war. That would be very bad for business confidence. So far, the backdrop is very strong growth in the Eurozone, resilient growth in the Eurozone, meaning that what we’ve seen so far doesn’t have the potential to derail the recovery. Can the ECB just sit back and watch this trade war happening? We are never sitting back and watching; we have to understand what’s going on. So far we believe that growth is strong enough to withstand the shock. Have you already seen some companies holding back investments because of these protectionist policies risks? Yes, that may happen. We are not complacent on the possible risks. A fully-fledged trade war would be extremely bad for the world economy – starting with the United States, by the way. The first victim would be American jobs, American workers. We very much hope that this doesn’t happen.
Even though the U.S. monetary authorities do not have a mandate that is as specifically directed at price stability as the ECB does, investors now have a choice and can vote with their feet. Thus the pressure is on the United States to deliver price stability as well. I find it very unlikely that we should again experience any time soon double digit inflation rates in the U.S., and this is very good news indeed for the good health of the international monetary system. 5. Conclusion  All in all, the introduction of the euro has been a very positive development for the international monetary system and for Switzerland as an economy strongly dependent on world trade. We benefit from the greater transparency offered by the euro and the lower transaction costs made possible by its creation. Perhaps for the first time in history, we are surrounded by an area that shares the same monetary policy objectives as we do, namely that of price stability. This explains to a large extent why the Swiss franc/euro exchange rate has been relatively stable over the past five years. But the presence of a single European currency has per se also shielded third currencies - like the Swiss franc - from too much volatility in the case of dollar turbulences. At the same time, we keep the trump card of an independent monetary policy that enables us to respond very rapidly to the specific needs of the Swiss economy.

Jean-Pierre Roth: The creation of the euro and the new international monetary order - a view from Switzerland Speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the 2nd Conference of the “Geld und Währung” Foundation on Financial Stability and Globalisation, Frankfurt, 3-4 June, 2004. *  1. *  *  Introduction  It is widely acknowledged that the birth of the euro on January 1, 1999 was a milestone in the process of European integration. Giving up national sovereignty in monetary matters was a very bold move of truly historical proportions. It will have long-lasting economic and political consequences. It should promote efficiency, transparency, and growth. The creation of a single currency should also act as catalyst towards further European integration. Moreover, and this is really what I would like to focus on today, the creation of the euro has changed the world’s monetary landscape. I believe that one can say without fear of exaggeration that it has led to a new international monetary order. And for most of it, this is very good news indeed. 2. Our pre-euro fears  To be honest, I must admit that prior to the introduction of the euro we were somewhat worried at the Swiss National Bank. Although we fully appreciated the benefits that Switzerland would draw from the creation of the euro in terms of increased transparency and lower transaction costs, we were also quite concerned about possible risks. We had three main fears.