samchain/econo-pairs-v1 huggingface dataset:
In addition, global interest rates have fallen to near zero levels, virtually eliminating any interest rate differential, and thus further reducing the incentives for Swiss investors to re-export their excess savings abroad. Together, these developments largely explain the observed net inflows of private capital to Switzerland since the crisis, and, despite them being compensated by public sector capital exports through foreign exchange interventions by the SNB, the persistent strength of the Swiss franc. These developments also highlight a first key fact of Swiss monetary policy: At any point in time, the attractiveness of the Swiss franc for both domestic and foreign investors is predominantly determined by the size of the interest rate differential and the safe haven status, with the latter being particularly important in times of heightened uncertainty. In the current global environment of low interest rates, imposing negative rates is therefore a monetary policy necessity in order to re-establish a material interest rate differential vis-à-vis the major economies. The negative rate thus contributes to restoring the relative attractiveness of foreign currency investments for Swiss investors and corporates. At the same time, it reduces the incentive for foreign investors to invest in Swiss franc-denominated assets. Over time, this fundamental mechanism will contribute to reducing the current overvaluation of the Swiss franc. The SNB is fully aware that, despite its established necessity, a negative interest rate policy does not come without detrimental side effects, notably for financial stability and the efficient use of capital, to name just two areas of concern.

It has to be said at the outset that some of the pressures businesses are facing are the result of longrun structural change affecting the global economy. The spread of international free trade under the auspices of the WTO is undoubtedly a positive development for all of us at the macro-economic level, but it is an added challenge to existing producers at the micro-economic level, and this country is not alone in re-sourcing supplies to some of the transition economies in Eastern Europe or to emerging markets in Asia and elsewhere. Nor can we - or should we seek to - avoid the impact of technological change. But there are two main reasons for the particular pressures recently affecting the internationally exposed sectors of our economy: the synchronised economic slow down over the past year or so in all major industrial countries, on the one hand; and the puzzling and persistent weakness of the euro in foreign exchange markets not just against sterling but even more against the dollar, on the other. It is a striking fact that world trade in goods, which has grown at an average rate of around 7% since 1990, and grew by over 12% in the year 2000 alone, hardly grew at all last year! What that has meant for the UK manufacturing sector is that output in the year to January (the latest month for which we have internationally comparable data) fell by around 6%, and employment in manufacturing fell by 165,000 people, or by some 4%.
Beyond the financial sector, law and accounting firms have also expanded their expertise to provide trust-related services to support this growing industry. “Myths” versus reality 7. Notwithstanding the important and legitimate roles of trusts, the trust services industry has come under increased scrutiny for the confidentiality it provides. There is a misconception at times that trusts are mostly being used to conceal one’s identity or beneficial ownership for tax evasion or other illicit purposes. Indeed, if left unregulated, trust structures can be vulnerable to being abused by criminals. The Financial Action Taskforce (“FATF”), an inter-  BIS central bankers’ speeches  1  governmental body that sets the global standard for measures to combat money laundering, terrorist financing, and the financing of proliferation, has identified specific typologies to illustrate common activities related to money laundering. In one such example, criminals could set up trusts to receive stolen assets, and then separate themselves from the assets by creating multiple layers. Singapore’s regulatory framework deters and prevents such criminal abuse. 8. With the growing use of trusts, it is critical that we have in place regulatory frameworks that can support its development and help to ensure international confidence in the trust industry. Singapore maintains one of the most modern and robust frameworks for the regulation of trust companies – we are one of the first financial centres to have introduced mandatory licensing for trust companies, under the Trust Companies Act (“TCA”).

However, the reactivation of credit activity remains a challenging goal, which would require encouragement of the final demand and generation of business plans valid for bank financing, reduction of real and perceived risk in the economy, review of development strategies and commercial banks’ lending policies, as well as reduction of cost and non-cost elements in lending. All these factors are envisaged to gradually improve throughout the year; however, they will remain far from the pre-crisis levels. Bank of Albania’s monetary policy will continue to be prudent, chiefly oriented towards achievement of inflation target. The recent upward inflation trend might have been motivated by temporary-action and limited-intensity supply factors. The Bank of Albania has envisaged  BIS Review 28/2010  1  that the exceeding of 4 percent inflation rate will be for a short period of time and will not be followed by steady inflationary pressures. Our projections show that consumer price inflation will fall gradually towards the 3 percent targeted rate during 2010. However, we remain committed to taking all appropriate steps to ensure this performance and meet our legal mandate for price stability in the economy. 2  BIS Review 28/2010
-  Second, advantage should also be taken of the current cyclical conditions to intensify the structural reform agenda and prevent its reversal. In the case of the labour market, the level of temporary employment and repeated contract renewals should be reduced, without undermining job creation, active policies should be focused on the most effective measures to enhance employability and set in place mechanisms that facilitate greater alignment between wage conditions at individual firms and their productivity levels. These factor market reforms must be accompanied by product market reforms that encourage business competence and competition. Productivity gains in the economy also demand improvements in human and technological capital. -  Third, in the financial sphere, the Spanish financial system continues to face various significant challenges. Notably: (i) the need for banks to continue to actively manage their impaired assets, so that the financial system, through its lending activity, may continue to support economic growth; (ii) the need to recover profitability levels, without unduly easing credit standards; (iii) the need for credit institutions to strengthen their capitalisation levels, to adapt to a more demanding regulatory framework; and (iv) the need to address the competitive challenge stemming from the emergence of new technologies, competitors and services in the financial sphere.

At its next meeting, it is also time for the MPC to discuss the strategy for beginning to sell the gilts held in our Asset Purchase Facility portfolio. We will publish, alongside the Monetary Policy Report, more detail on how we will do this, to allow financial market participants to make the necessary preparations. This will ensure we have the option to commence a sales programme shortly after a confirmatory vote by the MPC, which could be as early as at our September meeting. Based on analysis conducted in conjunction with colleagues at the DMO, we are currently looking at a total reduction in the stock of gilts held by the APF, which covers both sales and gilt redemptions, of something in the region of £ in the first year. Our Market Intelligence suggests that’s broadly in line with what market participants are expecting. Let me end by going back to the plea that I be more cheerful. Lord Mayor, let me tell you about one thing that has made me most proud as Governor this year. Recently, the Governor of the National Bank of Ukraine, asked me if we had any spare armoured vehicles. He wanted to use them to support cash distribution around Ukraine. It so happened that we have stopped using our own transportation to move bank notes around this country, and our fleet of three vehicles was due to be taken out of service. Our staff immediately set about getting them ready, drove them to the Polish-Ukrainian border and handed them over.
Maybe the major dealers will not standardize as many trades as is desirable or, perhaps, CCPs will develop in too fragmented a manner so that the netting of risk doesn’t occur to the extent potentially feasible. Or the development of global CCPs could have unanticipated negative consequences for market structure, competition and/or efficiency. We must be open-minded about the potential need for mid-course corrections. We will need to ensure that the incentives are right to get the greatest amount of risk reduced in the most efficient manner. Currently, for example, we are evaluating how the changes in terms of the Basel capital and liquidity standards for banks will interact with the changes in the OTC derivatives regime in terms of influencing the incentives for standardizing OTC trades and mandatory clearing through CCPs. But we shouldn’t kid ourselves – we’ll be off in our forecast. Thus, we must be ready to make adjustments as this process unfolds and we learn more. As long as regulators, FMIs, and market participants make the effort, we should be able to make the financial system much safer, resilient, and transparent. The changes in train, if properly executed, should, over time, significantly reduce the shortcomings in the OTC derivatives market that exacerbated the financial crisis. Properly enacted and implemented, net exposures should be smaller because of the netting that occurs through the CCP process.

The idea is that because some dealers are likely to be long some trades to one dealer and short some trades to other dealers, passing both sets of trades through a single CCP can reduce the aggregate amount of risk in the system. This would occur as the long trades are netted out against the short trades, leaving only the remaining smaller net exposure of the dealer to the CCP. 2  BIS central bankers’ speeches  Inserting a CCP in between two counterparties to a trade can also help reduce the “run risk” faced by a potentially troubled dealer. As we saw during the crisis, market participants often abruptly pull their trades away from a dealer that they perceive to be weak, which in turn can have the self-fulfilling effect of magnifying market or liquidity pressures on the dealer. If, however, trades with the dealer are cleared through a CCP, direct exposures to the dealer are eliminated and replaced by exposures to the CCP itself. This risk shifting can reduce the incentives to suddenly halt trading with a dealer, for example, due to uncertainty about the dealer’s financial condition or future prospects. Mandatory reporting of trades to trade repositories is designed to ensure that the details of each contract are preserved and available to the regulatory authorities. Finally, the fact that CCPs will be central to the system dramatically increases their importance. In essence, global CCPs will be systemically important.
‘Innovation rate’ defined as R&D expenditure as a proportion of the previous year’s total assets. ‘TFP’ defined as (the exponential of) the log of net sales, minus the log of cost of goods sold (COGS), log of net property, plant and equipment level (PPE) multiplied by their respective coefficients retrieved in the estimation of mark-ups, and minus the estimated measurement error.. ‘TFP distance’ defined as the gap in a firm’s TFP from the most productive firm (in TFP terms) in a given year within the industry (measured at the 1-digit SIC level). Labour productivity defined as sum of operating income (before depreciation, depletion and amortization costs) plus labour expenses (to capture value-added), divided by number of employees (in line with Imrohoroğlu and Tüzel (2014)). To deal with outliers, and similar to De Loecker and Eeckhout (2018) and Díez et al (2018), we trim the top and bottom of 2% of observations for the investment rate, innovation rate, labour productivity and TFP before running regressions.

Attention at the highest management level is therefore vital to ensure the formulation of the most appropriate ICT strategies for banks to remain competitive. The new banking environment is about differentiating banking products and services that provide increased choices, control, security and accessibility. The ability of financial institutions to deliver products and services in the most efficient and effective manner will be key to determining performance and relevance. In this area, financial institutions in Malaysia have not been behind in embracing the rapidly evolving technologies and in taking initiatives to enhance the delivery channels. There are 12 banks offering Internet banking facilities while five have introduced mobile banking. The adoption of chip technology now also offers new forms of payment choices and higher security to the public. The introduction of the Bankcard to replace the magnetic stripe ATM cards and efforts towards migrating to EMV compliant credit cards before end-2004 is indeed an important step forward. A further development has been the introduction of the MEPS Cash, the national e-purse scheme as an alternative electronic payment mode to using cash for making retail payments. The ATM machines of the participating banks and terminals at retail outlets are being upgraded to facilitate MEPS Cash transactions. With these developments, specific programmes need to be implemented to promote the usage of MEPS Cash among the public and business entities. Indeed, this e-payment program is a good start to promote a wider use an acceptance of this means of payment.
And perhaps most important of all: Norwegian businesses and the social partners have previously shown an ability to restructure. That ability will also be decisive this time. Thank you for your attention. 4  BIS central bankers’ speeches  BIS central bankers’ speeches  5  6  BIS central bankers’ speeches

4  Including from a new independent evaluation office that reports directly to the non-executive Chairman. 6  BIS central bankers’ speeches  market participants take liquidity for granted and crowd into trades in anticipation of central bank action. The Bank is keenly alert to such risks. The FPC and the FSB are currently analysing these issues and welcome perspectives on whether the market, regulation or both should adjust for the good of the system. Conclusion With the main building blocks of reform in place, now is the time to take stock. It’s vital that we – public authorities and private market participants – work together to reverse the tide of ethical drift. This cannot be a one-off exercise. We need continuous engagement so that market infrastructure keeps pace with market innovation. That’s why the Bank is announcing that it will hold an Open Forum this Autumn which will bring together all stakeholders in FICC markets. Our goal is to discuss the prospects for market functioning, where regulations might overlap or conflict, and whether enough has been done to build the real markets the UK deserves. To prompt an open discussion, we are publishing a detailed paper which reviews these issues and draws out such questions. 5 Everyone has an interest in the future of financial markets, so I would strongly encourage you to engage with our Open Forum process online and at the conference itself. An Open and Accountable Bank welcomes your input.
Employment in the private sector has been increasing modestly, with some notable pockets of relatively brisk job creation in leisure and hospitality, professional and business services and private education and health services – employment in each of these sectors now far exceeds its prerecession levels. Cutbacks in government employment, however, have largely offset the private-sector gains realized over the past few years. 2  BIS central bankers’ speeches  Low labor force participation rates and high unemployment rates remain perhaps the biggest challenges to the Puerto Rico economy. Our earlier report cited low labor force participation among younger and less educated workers as one important factor limiting the Island’s competitiveness. Since that report, overall labor force participation has continued to decline. The unemployment rate on the Island has consistently exceeded the rate on the mainland by several percentage points. Although the rate has fallen by more than a full percentage point year to date, the gap with the mainland remains wide. Moreover, poor labor market opportunities for many workers have contributed to a significant increase in the rate of outmigration of Puerto Rico’s residents, accelerating the Island’s population decline. The prolonged period of weak economic growth has compounded Puerto Rico’s fiscal problems: Puerto Rico’s public sector debt has been on an upward trend for a decade. The stagnation of the economy and persistent fiscal deficits underlie this debt buildup.

These historical distributions can be compared with a normal curve calibrated to the same data. In each case, there is strong evidence of non-normality in the empirical distribution. Specifically, the tails of the historical distribution are often significantly higher than normality would imply. For real variables like GDP, around 18% of the data across the UK, US, Germany and Japan fall outside the ‘bell’ curve described by a best-fit normal distribution. For financial variables like equity prices, around 10% of that data fall outside the normal distribution. In both cases, there is evidence of out-sized dislocations in variables, which occur with far-higher frequency than normality would imply. This evidence is consistent with, if not proof of, complex system dynamics. Chart 6: Long-run distributions of economic and financial variables  UK House Prices: 1846-2015, Annual  Oil Prices: 1862-2015, Annual  M4 Credit Growth: 1881-2015, Annual  CPI inflation: 1662-2015, Annual  25  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  25  World GDP growth (across the UK, US,  UK GDP growth: 1701-2015, Annual  Germany, Japan): 1871-2015, Annual  UK wage growth: 1751-2015, Annual  Equity prices: 1709-2016, Monthly  Corporate bond spreads: 1854-2016, Monthly  Dollar-Sterling Exchange rate: 1791-2016, monthly  Source: Hills, Thomas and Dimsdale (2016); Bank calculations. Notes: For each empirical distribution f(x), a Gaussian fit to f(x) of the (𝑥−𝜇)2  form 𝑔(𝑥) = 𝐴exp (− ) is sought in which A, 𝜇 and 𝜎 are varied and optimised using the Levenberg–Marquardt non-linear least 2𝜎2 squares fitting algorithm.
In fact, the crisis of 2007–09 was characterized by runs on all four of the money-like instruments I mentioned earlier, namely repo, asset-backed commercial paper, money market mutual fund shares, and auction-rate securities. Those runs can lead to selling off the loans or securities that were financed by the issuance of those instruments and also may initiate fire sales. A fire sale is caused when assets are sold at a time when many of the likely buyers of those assets do not have the capacity to purchase them, leading to severe downward price adjustments. These price movements create additional problems for other financial sector players, as the declining value of the securities that were sold often means that the value of the securities that they hold are also marked down, reducing their ability to obtain or retain financing to hold their portfolio of securities. This can lead to additional sales, worsening the fire sale conditions, in a negative feedback loop that amplifies the initial shock to the financial sector. The emphasis on fire sales when private intermediaries encounter difficulty rolling over their short-term debt is complemented by research that posits that the role of banks is to create and preserve liquidity of their money-like liabilities such as deposits, repos, and other short-term debt.11 In normal times, these instruments are very safe and it is believed by people and institutions that invest in them that no special monitoring of those instruments is needed.

In other words, the total amount of all the currency in the country is only a comparatively small proportion of the total deposits in all the banks of the country. “What, then, happened during the last few days of February and the first few days of March? Because of undermined confidence on the part of the public, there was a general rush by a large portion of our population to turn bank deposits into currency or gold – a rush so great that the soundest banks couldn’t get enough currency to meet the demand. The reason for this was that on the spur of the moment it was, of course, impossible to sell perfectly sound assets of a bank and convert them into cash, except at panic prices far below their real value. By the afternoon of March third, a week ago last Friday, scarcely a bank in the country was open to do business. Proclamations closing them, in whole or in part, had been issued by the Governors in almost all the states. It was then that I issued the proclamation providing for the national bank holiday, and this was the first step in the Government’s reconstruction of our financial and economic fabric.”1 Roosevelt understood the recipe for a banking crisis: fractional reserve banking and an undermined confidence by the public in banks, which led to widespread runs on banks. In turn that led to panic prices on bank assets and bank closures.