samchain/econo-pairs-v1 huggingface dataset:
By far the greater challenge is to assess the potential impact of the failure of a major hedge fund on the firm's other exposures and other counterparties. This is a question about how correlated the firms other positions are to the risks the hedge fund is taking. It goes beyond the firm's direct credit exposure to the hedge fund, to the fund's overall risk profile. Large hedge funds typically use multiple prime brokers, and they are, of course, reluctant to disclose to those institutions real time information on their overall positions and trading strategies. So the banks and investment banks do not generally know what their overall exposure to credit and market risks might be in the event that a large fund is forced to liquidate positions. This knowledge gap has led many to advocate the provision of information on actual positions of the major funds, perhaps aggregated by a third party. According to the proponents, this would help market participants and regulators to identify potential concentrations or crowded trades, and that knowledge would help diffuse them before they became a problem. This type of transparency has understandable and enduring appeal, but it is unachievable. There is no feasible way to try to capture in real time the rapidly changing exposures of different institutions to different risks in any meaningful fashion. No one with access to that information could make sensible judgments about the level and nature of actual concentrations and whether the risks are excessive.

And I trust the Germans as well as the Italians, the French, the Spanish, the Dutch and all other fellow citizens were all aware of this aspect when they joined EMU. By the way Germany demonstrated how attached it is to the single currency when it argued in favour of the Stability and Growth Pact, which is precisely based on peer responsibility and peer pressure and is a vivid illustration of how our destinies are interconnected. Therefore, yes, I believe that Germany is fully aware of the fact that we are sharing a common destiny. Remember in the run up to the Maastricht treaty: both Helmut Schmidt and Helmut Kohl were at the forefront of European integration with their peers, following in the footsteps, in particular, of Robert Schuman and Alcide De Gasperi. Il Sole 24 Ore: Regarding Germany, the French finance minister did criticize its economic model based on exports rather than internal demand, pointing out that its partners cannot count sufficiently on German imports. Are you in agreement with Christine Lagarde? Trichet: No, and for a number of reasons. Firstly, had Germany not increase its competitiveness in the first 11 years of EMU by keeping its costs and inflation under control, the euro area as a whole would have had the threat of higher inflation and therefore a tougher monetary policy. Secondly, Germany, with a large current account surplus, is financing the current account deficit of other countries members of the euro area.
4  BIS Review 40/2008  Table II Access to Finance – 2006 Indicator  Pakistan  Bangladesh  India  Nepal  Demographic branch penetration (branches per 100,000 people)  4.73  6.37  1.73  4.96  7.69  9-28  Demographic ATM penetration (ATMs per 100,000 people)  0.29  1.93  0.28  1.25  5.67  39-167  Deposit accounts per 1,000 people  255.23  442.87  110.40  171.14  1117.82  976-2418  Loan accounts per 1,000 people  61.11  78.00  10.83  31.78  364.22  248-776  Geographic branch penetration (branches per 1000 sq. km.) 44.53  23.46  2.97  9.67  15.81  1-57  2.71  7.11  0.48  2.44  11.65  3-252  Access to Finance  Geographic ATM penetration (ATMs per 1000 sq. km.) Sri Lanka  Benchmark  Source: Getting Finance in South Asia Phase IV – 2008 World Bank  Visible areas of financial exclusion Financial exclusion and denial of access to credit exists in two clear areas, in particular, in formal credit markets and the payment system. According to available data, in Sri Lanka, at least 40 per cent of the farm households do not have access to formal sources of credit or bank accounts. The reliability of this number depends on the type of survey done and the source of information. Nevertheless, it is a significant number to work with.

Investing in Ethnicity & Race Speech given by Mark Carney, Governor Bank of England  Investing in Ethnicity & Race Conference 2019, Bank of England 28 March 2019  1  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  Introduction It’s a pleasure for the Bank of England to host this workshop on Investing in Ethnicity & Race. To pursue its mission, Bank of England must reflect the diversity of the people it serves. That hasn’t always been the case. Historically, central banks were run by the City for the City. The Bank’s first female Court member, Frances Heaton, was appointed only in 1993, while our first Black, Asian and Minority Ethnic (BAME) member, Lord Morris, followed five years later. I’m the 120th in a very long line of male, white Governors of the Bank. Over the last five years the Bank has implemented a concerted strategy to increase diversity and foster inclusion. These initiatives have had a material impact on all aspects of diversity at the Bank. We are now reinforcing them to further improve the retention and progression of BAME colleagues in particular, and to deepen progress on inclusion more generally. The Bank values diversity for at least three reasons. First, it is the right thing to do: a public institution should reflect the public it serves. Second, diversity helps to build the trust we need to fulfil our remits. The decisions that the Bank takes impact every UK citizen, but not everyone wants to be steeped in fan charts and stress testing.
All else equal, the removal of a considerable amount of this risk by the Fed’s purchases would be expected to lower agency MBS rates by lowering this extra return, thereby reducing primary mortgage rates, stimulating demand for housing, and prompting increased refinancing activity. Indeed,  3  See responses to June 2012 Survey of Primary Dealers. 4  For example, see Brainard and Tobin (1968), Vayanos and Vila (2009), Li and Wei (2012), Gagnon et al (2010), Krishnamurthy and Vissing-Jørgensen (2011), and Hancock and Passmore (2011). 2  BIS central bankers’ speeches  asset purchases do appear to have a meaningful impact on mortgage markets. For example, in the two days following the announcement of additional agency MBS purchases at the September 2012 FOMC meeting, agency MBS yields declined by roughly 30 basis points and option-adjusted spreads to Treasury securities narrowed by about 25 basis points. Over time, the primary mortgage rate also declined to about 3.3 percent, near its lowest levels on record. Even though the Committee is communicating a monthly pace and composition of purchases, in my opinion, the predominant effect on interest rates from changes in the Federal Reserve’s portfolio holdings comes from the expectations of the total stock of different risks that the Federal Reserve will remove from private investors and the length of time that it will hold these risks.

Nevertheless, developments in the krone are of considerable importance to interest-rate setting because exchange rate developments have an impact on inflation and output. When there are prospects of moderate economic activity, low wage growth and low inflation, Norges Bank will reduce the interest rate. This will normally result in a depreciation of the krone. Prices for imported goods and services will increase. A weaker krone strengthens the competitiveness of Norwegian enterprises and indirectly leads to higher output, employment and inflation. Themes in foreign exchange markets shift. In periods, investor focus on stock returns feeds through to exchange rate movements. During periods of political and economic unrest, investors may choose individual currencies as a safe haven - often the Swiss franc. In the autumn of 2002, the Norwegian krone was probably also perceived as a safe haven. Wide fluctuations between major currencies have a tendency to result in a weaker krone. In the past 12-18 months, developments in the interest rate differential between Norway and other countries appear to have had a particularly marked impact on our currency. Norwegian interest rates have been pushed down to the level prevailing abroad. Chart 10.
Among the companies in our regional network, the share expecting a sharper rise in selling prices is larger than the share expecting a slower rise in prices. TNS Gallup’s business sentiment survey gives a more neutral impression. Nevertheless, both surveys indicate expectations of a sharper rise in prices in the service sector. The other Nordic countries have also experienced falling inflation. BIS Review 18/2005  3  Inflation in the Nordic countries has declined, and is now relatively low in Sweden, Denmark, Finland and Norway. According to the harmonised indices of consumer prices, inflation in February was around 1 per cent in Denmark, Sweden and Norway, while the rise in prices remained unchanged in Finland, as measured by 12-month changes. By comparison, price inflation in the euro area was close to 2 per cent. A common feature of the low level of inflation in the Nordic countries seems to be the trend in prices for imported consumer goods, even though developments have not been entirely the same in all the Nordic countries. The upturn is broadly based, and its effects are no less pronounced here in Rogaland. Demand is increasing in all sectors, particularly in oil-related industries and the construction sector. The market outlook for export-oriented and oil-related industries in the next six months is very bright and optimism is greater now than in the previous round of interviews. Domestically oriented manufacturing has not experienced large fluctuations in demand and output to the same extent.

However, the impact on the krone exchange rate has been considerably dampened because external interest rates have remained low. High prices for oil and gas and other export goods also contributed to an appreciation of the krone last year. The depreciation of the krone in 2003 contributed to restraining the fall in prices for imported goods. The effect occurred gradually. Companies and importers may have preferred to observe changes in the exchange rate over time before changing their selling prices. After several expensive wage settlements and a short period when the krone exchange rate was high had weakened profitability in the Norwegian business sector, the depreciation of the krone contributed to curbing the decline in activity and employment. The recession was short-lived. Together with private consumption and fixed investment in the petroleum sector, traditional exports were an important factor underlying growth in the early stages of the upturn that started in the first half of 2003. Prices for many of our most important export goods have risen as a result of strong growth in new markets. Growth in Norway’s total exports excluding oil and gas is, however, lower than import growth among our trading partners. Mainland fixed investment has gradually become an important driving force behind the upturn. Investment has picked up in most industries and growth was stronger than expected towards the end of 2004. Norges Bank’s regional network has registered rising investment in all industries. Petroleum investment in particular appears to be growing at a faster pace than projected.
However, to optimise its benefits objectively, we need to overcome four clichés. I shall then turn to your banking industry and its three key challenges for tomorrow. ** I. Overcoming four clichés in order to optimise the euro area. I am fully aware of the criticisms and debates that exist here in Germany about the functioning of the euro area. Not everything is perfect; but Germany can be proud of having helped to create an internationally recognised currency inspired by its own core values: independence, respect for Treaties, price stability and a long-term approach. The ECB and the euro are the true descendants of the Bundesbank and Deutsche Mark. But today, if we want to move forward with a serene debate, we need to get rid of four clichés. Page 2 sur 7 The first one that needs to be overcome, including by some in my own country, is the somewhat lazy idea that economic union is a substitute for national reforms. I want to make this clear from the start: on the contrary, national reforms are a prerequisite for reinforcing the economic union. I am saying this as a completely independent central banker; the current French government is taking reforms very seriously. France has already reaped the first rewards: strong job creation – 1 million new jobs in the past four years – is lowering unemployment; growth – forecast at 1.3% this year – is proving more resilient than in the rest of the euro area.

Norman Chan: Hong Kong's pivotal role in infrastructure financing Keynote speech by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the Forum-cum-Dialogue on “Belt and Road Initiative: Infrastructure Financing”, Hong Kong, 15 October 2018. * * * Carrie (Leung), Susie (Cheung), Tony (Neoh), distinguished guests, ladies and gentlemen, 1. I am pleased to be invited to attend today’s Forum. Before I talk about what role Hong Kong can play in facilitating the financing for infrastructure projects, it would be useful if I refer to the enormous gap between the gigantic funding needs of infrastructure projects in the emerging market economies (EMEs) and the huge pool of global capital looking for investment opportunities. 2. It is beyond doubt that many EMEs do have a desperate need to bring in foreign investments in infrastructure, such as power plants, ports, airports, roads, railways, etc., all of which will certainly help them raise not only their living standards but also their capability in production and external trade. There is also no doubt that on the other side, there are billions or trillions of dollars eagerly looking for investment opportunities, especially those that can bring in steady long-term returns to the investors. When I ask investors or bankers why they are not putting their money into infrastructure projects that are waiting to be built and financed, the answer is there is a lack of “bankable” or “investible” projects.
It is currently larger than China’s, calculated as a percentage of GDP. However, there is nothing to suggest that this surplus is the result of underlying imbalances in the Swedish economy. In the first instance, it is rather the consequence of a relatively high, but justified, level of saving. There are therefore, in my view, no strong reasons to expect this surplus to become a deficit within the near future – something which would typically happen through a strengthening of the real exchange rate. In my opinion, the current account surplus is thus not in itself an indication of a stronger krona. What are the global imbalances and why have they arisen? When we speak about global imbalances we usually mean a situation in which deficits and surpluses in the current accounts of different countries appear to be unsustainable in the long term. 5 A surplus means that the value of a country’s total output exceeds the value of the country’s total consumption. In the same way as a household whose income exceeds its expenditure will save the difference, a current account surplus constitutes a form of saving for a country. In effect, the current account reflects the difference between total saving in the country and domestic investment. A countries income, which consists of the value of the goods and services produced there, can be used for consumption or for saving. Saving can in turn be used for domestic investment and for investment abroad.

The age dependency ratio, that is the ratio between people of pensionable age and people of working age, is expected to increase in Sweden from the current level of 30 per cent to 45 per cent by 2050. For Europe as a whole, however, the age dependency ratio is expected to increase from 25 per cent to 52 per cent. At the same time, of all the countries in the OECD only Norway, which is an oil exporter and Switzerland have larger current account surpluses as a percentage of GDP than Sweden. 17 The crisis of the 1990s perhaps meant that the Swedish public accepted the demand for a consolidation of public finances in a different way than in other countries. In many cases, these countries are being forced to conduct similar budget consolidation processes now  16  This is a somewhat controversial claim, however, as future generations can be expected to have higher real incomes due to the growth of productivity in the economy. 17  The National Institute of Economic Research “Sparsamma hushåll har skapat ett stort överskott i den svenska bytesbalansen” (“Thrifty households have created a large surplus in Sweden’s current account”). Article, 2011. 8  BIS central bankers’ speeches  instead. If so, this suggests that the differences in saving compared to other countries will decline in the long term, and thus also the Swedish current account surplus.
During the 1980s, aggregate output growth in the euro area was on average about 0.5 percentage point lower than the US rate of growth. Since the early 1990s, this gap has widened. During the past decade (1996-2005), when the euro area economy expanded on average at a relatively robust pace of 2.3%, within the range of estimates of its potential growth rate, the US economy experienced an economic boom driven mainly by advances in information and communication technologies and grew by an average rate of 3.4%, that is about 1 percentage point higher than the euro area average rate of growth (see Chart 2). We are currently experiencing a  2  BIS Review 43/2007  turnaround in the relative growth performance of the euro area and the US, which I will discuss later on. But I want first to focus on an examination of some key determinants of long-term growth of the European economy on the basis of its past performance. The relative decline in Europe’s trend growth since the mid-1990s does not imply that Europe has become a poorer continent: people’s living standards, as measured by real GDP per capita, have risen significantly over the past decade, especially in some countries including Greece. The European economy has enjoyed macroeonomic stability; there have been no financial crisis or severe fiscal imbalances although budgetary policies in a number of countries faced serious challenges.

The relative de-emphasis of institutions and values since the middle of the 20th century did not reflect a lack of recognition of their significance in affecting economic behaviour and public policy. I would argue that it was largely the result of various factors and assumptions: first, that for a given country institutions and values could be taken as given elements of the broader economic environment that evolved very gradually over time; second, that their effects on economic behaviour were indirect and relatively small, compared with the influence of other determining factors of demand and supply; and third, that their role in explaining market developments and economic relationships would be captured in terms of two key fundamental market determinants: “productive technology” and “preferences” of economic agents and authorities. There are two key questions of scientific and policy relevance. First, what are the underlying factors and forces that shape preferences, drive scientific and technological advances, foster innovation and nurture an entrepreneurial spirit that ultimately are encapsulated in the economy’s production processes and the functioning of markets? Second, to what extent does the observed economic performance of nations reflect these underlying factors and forces, which may be partly captured by economic institutions and prevailing economic cultures and social models? Since the late 1990s, increasing attention has been paid by economists and policy-makers to finding answers to these questions.
Additional challenge #1: Reinhart and Rogoff’s great contraction and debt overhang The Financial Crisis of 2008 left an enormous obstacle in the path of the U.S. recovery. From peak to trough, $ trillion of wealth was erased from household balance sheets. Although the value of households’ assets declined dramatically, their debt levels remained roughly the same. Many borrowers took on additional debt during the period of high and rising asset valuations, and high employment and income growth were key fundamentals for servicing these debt payments into the future. These debt burdens are key contributors to the headwinds I discussed earlier when I talked about the economic outlook. As I noted then, they appear to be substantially more onerous than we had expected. In their book This Time is Different, Carmen Reinhart and Ken Rogoff documented the substantially more detrimental effects that financial crises typically impose on economic recoveries.7 Recoveries following severe financial crises take many years longer than usual, and the risk of a second recession before the ultimate economic recovery returns to the previous business cycle peak is substantially higher. In a related study of the current U.S. experience, Reinhart and Rogoff show that the current anemic recovery is following the typical post-financial crisis path quite closely, given the size of the financial contraction.8 It would be nice to point to some features of the recovery that suggest greater progress relative to the Reinhart-Rogoff benchmark. But those are hard to come by.

The pre-requisites for such a switch of demand towards net exports seemed to have been put in place by the substantial depreciation in sterling that occurred during the financial crisis – sterling fell more than 25% between the middle of 2007 and the beginning of 2009 (Chart 6). Despite the slowdown in our main export markets, that should have been sufficient to give a kick to net exports. The performance of exports – particularly exports of services – has, however, to date been somewhat disappointing. It may be that this is just a matter of time – for instance, we are starting to hear stories of businesses bringing back activities that they had previously off-shored to emerging economies. But any further appreciation of sterling, which has risen almost 10% in trade-weighted terms since March, would not be particularly helpful in terms of facilitating a rebalancing towards net exports. Let me now turn to the role for monetary policy in supporting the recovery. When the MPC first provided explicit guidance over the future course of policy last August, the economy had shown early signs of recovery but we believed that there were still considerable underutilised resources in the economy that needed to be absorbed, otherwise we were likely to find inflation falling below our 2% target in the medium term. Our worry was that the mere sign of a return to decent growth rates could prompt premature expectations of rises in Bank Rate, dampening the recovery.