samchain/econo-pairs-v1 huggingface dataset:
I do think that there is too great a tendency to rely unthinkingly on the rating agencies in this area. 2  BIS Review 15/2001  Regulators have signalled their intent in this area in the new Basel Consultative package. Not only will banks need to demonstrate a clean break to earn a reduction in their capital requirements, but they will also need to consider the operational and reputational risks involved in securitisations and derivative deals. My third question is whether we collectively yet have a proper understanding of the way the credit transfer business is bridging the lending, securities and insurance markets. Contracts in banking, on the one hand, and insurance markets, on the other, are in some respects different animals. In securities markets, timing of payments is of the essence. An insurance contract, by contrast, is not typically a commitment to timely payment. If insurance companies are participating in this market, in part using reinsurance-type agreements and in part using derivative agreements, there may be imperfect hedges or liquidity risks. The relationship a borrower has with its lending banks has also traditionally been different to that with its bondholders. Any problems the borrower may have in servicing the debt are typically addressed in different ways by lenders and bondholders. This problem has surfaced recently with the debate about whether restructuring should be included within the definition of a credit event. ISDA is addressing the question and it is clearly desirable that a market standard agreement and set of defnitions should exist.

William C Dudley: The importance of financial conditions in the conduct of monetary policy Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the University of South Florida Sarasota-Manatee, Sarasota, Florida, 30 March 2017. * * * It is a pleasure to be here today. I would like to thank the University of South Florida for sponsoring this conference. As always, what I have to say today reflects my own views and not necessarily those of the Federal Open Market Committee (FOMC) or the Federal Reserve System.1 One aspect of today’s event is the dedication of a financial laboratory to help students learn about financial markets, which I think has great value. Knowledge of how financial markets operate is an important aspect of financial and economic literacy, and it leads to greater financial security over time. For example, one important lesson is that when the promised returns on an investment offering are extraordinarily high, it is because the investment is either very risky or fraudulent. When investing, it is important to remember that if it seems to be too good to be true, it likely is! Today, I want to take the opportunity to talk about the importance of financial markets in influencing the economic outlook and, in turn, U.S. monetary policy. This is a subject near and dear to my heart.
This workshop also demonstrates the stakeholders’ commitment to support the market development efforts as outlined in the Financial Sector Development Plan. Chairperson, over the recent past, the Zambian economy has performed well. This is reflected in a number of the key macroeconomic indicators. To mention but a few; the growth rate in real Gross Domestic Product (GDP) has remained positive and above 5%, we attained single-digit inflation, relative stability in the exchange rate of the Kwacha against major currencies, stable financial sector and improved banking services. These impressive economic trends suggest that the reform programmes that have been implemented are now bearing fruit. The reforms have focused on the restructuring of the economy, to let markets determine key decisions so as to allow the private sector lead, which has provided for increased investment in the economy. It is the contention of many financial analysts that there is no better market to determine prices than the secondary market. In that regard, this workshop is vital. Ladies and gentlemen, the importance of a secondary market cannot be overemphasized. By facilitating a ready mechanism through which financial claims can be transferred from one holder to another, a secondary market provides wide possibilities for issuers of long term securities to match their cash flows in a stable and cost effective manner. Investors with their diverse liquidity needs are assured that they can convert their investments into cash at any time and at a fair market price.

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So, five or so years on from the Washington summit, with the advanced economies just beginning to show signs of healing from the crisis, how well have we done? Have we created a safer international financial system? Were we able to sustain that commitment to act together? Or have we lost sight of Benjamin Franklin’s warning? BIS central bankers’ speeches  1  II. The reform programme  The G20 launched perhaps the most ambitious international regulatory reform programme in modern times. It also established a new body – the Financial Stability Board – to bring together the G20 members and the cats’ cradle of international standard setting bodies and to mobilise them behind the common reform programme endorsed by the G20 leaders. That programme was grouped around four main themes: First, prudential standards. Ensuring the system has the right reserves of capital and liquidity for the risks being carried. And to ensure that the leverage in the system does not run out of control. History teaches us that banking crises are in the end always crises of liquidity and of leverage. Second, addressing the risks that lie in the interconnections in the system. Most important here is perhaps the role in the crisis played by derivative instruments like credit default swaps traded “over the counter” between institutions. These were intended to protect against risk but when asset values dropped they transmitted the shock from the weakest institutions to the system as a whole.

BIS central bankers’ speeches  3  •  At the same time, the global search for yield in a zero interest rate environment led to strong capital flows into the region, inducing increases in credit and asset prices. •  The business cycle and financial cycle began to diverge: raising interest rates to quell financial imbalances could potentially put the real economy at risk. Getting in all the cracks but not filling them A second reason why monetary policy may be ill-suited to address financial stability risks is that it is a blunt instrument. It may get into all of the cracks but some cracks may be just too big to fill. Financial vulnerabilities are often not evenly spread across the economy. They tend to be concentrated in specific sectors, such as in real estate. Monetary policy may be too blunt to address such specific risks and can cause significant collateral damage on the rest of the economy if it is calibrated to mitigate sector-specific risks. There is some empirical evidence that the cost-benefit trade-off in using monetary policy to lean against financial stability risks does not look promising. •  Kenneth Kuttner and Illhyock Shim estimate that a 100 basis point increase in the short-term interest rate would reduce real housing price growth by only 1 percentage point in the following quarter. •  Lars Svensson, drawing from the Swedish experience, finds that the cost of leaning against financial stability risks is high – with inflation too low and unemployment too high.
In the US in 1919, a case against Henry Ford was brought before the Michigan Supreme Court by the Dodge brothers, a minority shareholder. They challenged Ford’s decision to reinvest the firm’s profits to expand the business and pay better wages, which they felt contradicted the purposes of the corporation – maximising shareholder return. The Court ruled that Ford owed a duty to his shareholders and ordered him to pay a special dividend (Fisch (2006)). In the light of these cases, lawyers began to debate shareholder primacy as a company objective. In a series of law review articles in the 1920s and 1930s, Adolf Berle proposed treating corporate managers as trustees with fiduciary obligations to act for the benefit of shareholders. Berle’s motivation, interestingly, was in having a corporate governance model that redistributed power away from managers and towards “the people”. BIS central bankers’ speeches  5  Together with economist Gardiner Means, Berle published in 1932 The Modern Corporation and Private Property (Berle and Means (1932)). It argued that the ever-wider dispersion of shareholders risked entrenching the power of management, creating “ownerless corporations”. Around the same time, Joseph Schumpeter warned that corporations could become increasingly bureaucratic and run for their own ends, hampering the dynamism of capitalism (Schumpeter (1942)). The solution proposed by Berle and Means was to give shareholders primacy in a company’s objectives, together with the control rights necessary to meet this objective. In the 1960s, Henry Manne started to weave Berle’s legal perspective into economics (Manne (1965)).

Additionally, where suitable, vetiver grass is utilised to reinforce road slopes and prevent erosion. The term "climate-resilient" is used to describe these roads, emphasising their ability to withstand environmental challenges without employing other technical jargon. 3 Water Revolving Fund in the Philippines. [Source] 4 Melaka State Climate Action Plan 2020-2030. [Source] 5 ADB Technical Assistance Report. [Source]  3/3  BIS - Central bankers' speeches
Such surveillance efforts could also lead to discovery of parties trading on privileged insider information. SGX has the power to suspend or de-list a counter if conditions for orderly trading are found to be absent. •  MAS will carry out independent surveillance on a selective basis, to ensure that SGX is performing its responsibilities effectively. •  The MAS will have the power under the proposed SFA to pursue civil prosecution of listed companies which fail to make timely disclosure of material information, and of any participants suspected of market misconduct. The recently introduced civil remedy regime for insider trading will be extended to cover other forms of market misconduct such as market manipulation, or the employment of fraud and deceit in dealing. Civil remedy, which lowers the burden of proof against offenders, will complement the present framework of criminal remedy for offences under securities law. d.  Supervision of brokers  •  SGX supervises and inspects brokers to ensure that they comply with SGX's rules, are prudentially sound, and uphold high standards of market integrity. SGX has to act swiftly and firmly to deal with any unprofessional conduct by brokers and their representatives. •  MAS conducts continuous off-site review of brokers' operations to check if they comply with statutory licensing requirements. Such off-site reviews will be complemented by MAS' selective, on-site inspection of brokers to assure itself of the competence and effectiveness of SGX's supervision.

  Banks become dependent on optimal market functioning at all times and on the confidence of market participants. BIS central bankers’ speeches  1  If this process goes too far, an external shock could turn a situation of vulnerability into a crisis. This is what is referred to as systemic risk – the risk that shocks will weaken the functioning of the financial system, rendering it unable to provide funding, execute payments or redistribute risk effectively. Systemic risk can build up over time through a rapid rise in asset prices and debt and in the form of increasing interdependence among institutions. Or systemic risk can build up when many institutions are exposed to the same risk factor, for example on the funding side. Vulnerability also in Norway A financial crisis can be triggered by domestic conditions or it can be triggered by external factors. This time, the crisis came to Norway through external channels. International funding channels dried up, creating a liquidity crisis in the Norwegian banking sector. We can never fully insulate the financial system from shocks. But we can increase our resilience. One of the ways we can do this is by keeping our own house in order – by preventing major imbalances from building up in the economy or in the financial system, and by ensuring that the financial system in general is robust. We will then also be capable of withstanding disturbances generated by external conditions.
It involves all prices being expressed in the same unit, usually called a unit of value, in exactly the same way as we need a standardised way of measuring distance. Money also has to have a stable value (money must be a “store of value”), as this makes it possible to postpone consumption. It also needs to be accepted by everybody. It must be easily accessible and easy to use (it must act as a general means of payment). For a long time, the most common form of money was coinage issued on royal authority, with its value being determined by its metal content. In Sweden, the copper standard was introduced at the start of the 17th century, in addition to the silver and gold standards that already existed. 5 But handling the copper coins proved to be clumsy, which contributed towards King Charles X Gustav granting permission, in 1656, for the formation of Sweden’s first bank, Stockholms Banco, which was allowed to accept coins in exchange for promissory notes. These promissory notes soon started to be used as money, as they were much easier to carry  It is unclear how common barter was in early, primitive economies but we know that money appeared several thousand years ago. See, for example, Humphrey (1985) “Barter and Economic Disintegration”. Man, New Series, Vol. 20, No. 1. 3 See Camera, G. (2017). “A perspective on electronic alternatives to traditional currencies”. Sveriges Riksbank Economic Review 2017:1.

If the Swedish payment system were to become dominated by private crypto-currencies or by something other than Swedish kronor, domestic monetary policy would be marginalised. The ongoing Riksbank Inquiry has examined the matter of cash in a so-called fast track and a few proposals on access to cash services have been produced. This could contribute to slowing down the trend of decreasing cash usage. However, there are indications that that the latter is mainly a consequence of reduced demand for cash. 30 I hope that the Riksbank Inquiry, in its final report, will put forward further proposals for the long term protection of Swedish kronor issued by the Riksbank, whichever form these may take, physical or digital. New legislation,  30 For an analysis of this development, see “Times are changing and so are payment patterns”. Guibourg, G. and Erlandsson, F. Economic Commentary No. 6 2018. Sveriges Riksbank. 12 [15]  strengthening the protection for Swedish kronor, should be technologically neutral to allow for a future totally dominated by electronic money. I would like to be clear that, as yet, we are only at the start of the analysis of the e-krona. Last autumn, we presented a few preliminary conclusions and, at the end of this year, we will decide whether and, if so, how we will proceed with the next stage of the project. Neither are we alone in the central banking world in considering this.
That said, irrespective of the instruments that may soon be adopted, both the objective and the main criteria that have been followed in recent years should, in my opinion, be maintained. The objective is clear and leaves little room for discussion: to have solid institutions that are able to contribute effectively to the financing of households and businesses. And it would also be useful to preserve the main criteria used hitherto in the financial restructuring. Specifically, I am referring to the anticipation of problems, minimisation of the use of public funds, reducing capacity, the conditionality of assistance, the emphasis on downsizing balance sheets and the promotion of transparency. First it is very important to anticipate problems. The primary obligation of a banking supervisor is to ensure at all times that the credit institutions operating are solvent and viable. However, good supervisors should not limit themselves to analysing the present, but should also anticipate possible scenarios of non-viability that might arise in the future and attempt to reduce problems to a minimum before they emerge. When the crisis broke, the 45 Spanish savings banks then existing were all solvent and viable. However, taking into account the new economic and financial environment stemming from the crisis, it was possible to foresee that while some of them were very well-managed and unquestionably sound, many others, within a matter of years or months, might eventually be non-viable.

However, some countries have gone the opposite way by moving securities and insurance supervision under the umbrella of the NCB. They have benefited from the independence and resources of the NCB. On the other hand, these sectors require partly different staff skills and methods and they include issues which are normally outside the mandate of a central bank such as investigations of market conduct and law enforcement actions against individual firms or persons. Failures in securities and insurance companies may affect overall confidence in the NCB, although these institutions are in most cases of limited interest to the NCB from the point of view of financial system stability. Such failures might even lead to what Professor Goodhart calls “a creep of the Central Bank safety net” 4 implying that exceptional liquidity assistance might be used for non-systematically important institutions. My conclusion is therefore that you should only bring securities and insurance supervision into the NCB if this is needed because they can not fulfil their tasks outside the NCB for some reason such as lack of independence or human resources. After having discussed whether supervision should be inside or outside the Ministries and the NCB, I now turn to the issue of unified supervision. These are some often-heard arguments for the consolidation of supervisory authorities: Consolidating supervision in one authority Information sharing and coordination will be facilitated if the different sector supervisors are located in the same authority. In my experience this is mostly true, both for practical and legal reasons.
I envisage the FMC and the industry to further collaborate and come up with the new strategies and ideas to deepen and support the development of our onshore market. Beyond trade or real sector activities, we should look at financial investments, in particular the non-resident investors in our bond market. We have 33.7% of our Government bond market held by such investors. There are opportunities in this domain. 4/5  BIS central bankers' speeches  Where are they hedging their foreign exchange exposures? What product can the industry offer for them to hedge onshore? Given these obvious opportunities, we need to develop solutions that will benefit the industry as a whole. The significant overseas investments by residents and foreign currency exposures arising from trade activities create a need for the domestic hedging market to be further deepened. In 2015, FX market transactions volume reached a staggering USD2.52 trillion, yet currency derivatives such as FX forwards and options only made up 5 and 1 percent of the total volume, respectively. Similar concerns also exist for the bond market. Both government and corporate bonds are still primarily held by residents, and we have one of the largest corporate bond markets in the region. Yet, this does not translate into the development of active hedging market activities. Credit derivatives made up less than 1 percent of ringgit derivatives volume in 2015. This prompts several questions. Are our investors able to hedge effectively or efficiently manage the exposures of their portfolios?

We can look at these churn rates on a more disaggregated basis by linking data on worker movements and 40  company performance. Chart 21 plots the evolution of churn rates for firms above and below the  productivity median. Pre-crisis churn rates were systematically (around 20%) higher in high-productivity firms than in low-productivity ones. Ideas and skills recycled more quickly in the upper than in the lower tiers of the productivity distribution. This may have contributed to the long tail problem. Other things equal, one might wish to see higher rates of labour market churn among poor-performing companies as a means of injecting new ideas, experience and skills, speeding-up the process of technological diffusion to them. In practice, the opposite appears to have been the case. The lower tail of UK companies, pre-crisis, had a stickier workforce. Post-crisis, things have changed. Churn rates among high and low productivity firms have converged, with churn rates among higher productivity companies falling sharply. This matches the productivity patterns seen post-crisis, with the slowdown focussed on previously high-performing companies. Slower churn among these companies, and the accompanying slower diffusion, may have contributed to their slowing productivity and them becoming part of that lower tail. A different way of slicing these granular data is to look at where workers are moving to. Again in an ideal world, we might wish to see high rates of worker transition to different points in the productivity distribution, to different sectors and different regions.