samchain/econo-pairs-v1 huggingface dataset:
More recently in April, the Bank published the Code of Conduct for the Malaysian Wholesale Financial Markets to promote high standards of conduct and transparency in the domestic wholesale financial markets. The code is a binding obligation and it sets out the Bank’s 3/5  BIS central bankers' speeches  expectations for market participants to adhere to professional and ethical standards of conduct. The Bank views this standard as critical and timely in light of the incidences of ringgit-rate fixing misconduct and also involvement in the opaque NDF market. Another important aspect of preserving the integrity in the industry is by maintaining strict membership requirements for all participants. As an industry riding on trust as the main vehicle for business, the financial sector cannot afford to be tainted by the actions of a few bad apples. Any unscrupulous behaviour exhibited by a player should not be tolerated and be weeded out immediately from the industry. To protect the financial ecosystem, each organisation has the responsibility to investigate any misconduct and record the outcomes to allow other institutions in the market to make informed decisions on the ability of a person to serve with professionalism and integrity. In this regard, the Bank is currently pursuing an initiative that will mandate the sharing of employment references with future employers to mitigate the problem of ‘rolling bad apples’ within the Malaysian financial industry.

Given the importance of enterprise risk management, efforts need to be directed to give prominence to this function. It is time for the stature of risk functions to be elevated. Professional bodies like the IERP play a crucial role in stewarding this transformation by equipping risk management experts and raising their credibility through branding and professional qualifications. Events like this conference can help propel the risk management agenda forward. However, beyond technical competency, risk managers increasingly require confidence and communication skills to be the resounding voice in promoting risk culture. Risk managers need to have a seat at the executive table and play a role in shaping the risk profile and risk culture of your organisations. A study conducted by Harvard Business School highlights how leadership and communication by risk managers can influence the significance of their role within organisations. As expected, the study found that risk managers that proactively sought opportunities to raise their visibility were able to assert risk management perspectives and were better able to position themselves as critical voices within organisations. Ladies and gentlemen The task of a risk manager in an organisation is like that of a ship navigator. As you work closely 4/5  BIS central bankers' speeches  with your captain to navigate your ship across unknown waters, your job is to ensure you get your ship to its destination in one piece. You never know what hazards may lie ahead but whether it be foul weather, rough seas or hostile forces, you stand ever ready to face them.
But both short and long nominal and real interest rates have shown a negative trend since the mid-1990s and have fallen in Sweden and the rest of the world. This makes it misleading to now make direct historical comparisons of the level of the policy rate. The fact that monetary policy has been and still is too tight becomes clearer when one sees that the policy rate and the short real rates in Sweden have been raised since 2010, and then have been kept high in comparison with policy rates and the short real rates in the euro area, the United Kingdom and the United States. This is despite the fact that inflation in Sweden is significantly lower than in these economies while unemployment is about as high as in the United Kingdom and the United States (Figures 1–3). After having been close to the target in early 2010, CPIF inflation in Sweden has also since trended downwards to a rate of one per cent or below.1 Average inflation too low and average unemployment unnecessarily high since 1997 In a longer perspective, one can note that since 1997, when inflation expectations had been anchored to the inflation target, the average rate of inflation in Sweden measured using realtime data for the CPI has been 1.4 per cent, that is, 0.6 per cent below the target for the CPI, which is 2 per cent.

Zeti Akhtar Aziz: Grow your business – access to financing for SMEs in Malaysia Opening remarks by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the book launch of “Grow your business: access to financing for SMEs in Malaysia”, Kuala Lumpur, 27 August 2013. *  *  *  It is my pleasure to be here this morning for the launch of the SME financing guide book “Grow Your Business: Access to Financing for SMEs in Malaysia”. Significant attention has been given to SME development in view of its relative importance in our economy, in terms of its role in generating growth and employment. SMEs are an important agent of growth and will be a vital component that will support our nation’s aspirations to transition to become a high income economy. SMEs have become a formidable force in the economy, accounting for 97% of established businesses and employing 57% of the nation’s workforce. The SME contribution to GDP is now 33% and is projected to increase to 41% by 2020 as envisaged in the SME Master Plan that has been endorsed by National SME Development Council. As the economy becomes more sophisticated, so will the requirements of the SMEs. One of the major levers of growth for the SME sector is access to financing. Financial institutions therefore have an important role in the ecosystem for financing to SMEs. In the current environment, financial institutions provide 89% of the total SME financing.
First, persistent misperceptions of future spending power may generate a mix of demand that proves to be unsustainable. I believe this was an important factor underlying the crisis. Although output in deficit countries – like the UK – appeared to be growing at a sustainable rate, that gave a misleading impression of the sustainability of the Great Stability. In fact the level of domestic demand was too high and the level of net exports correspondingly too weak. Second, as Hyman Minsky described, periods of stability encourage exuberance in credit markets, leading eventually to instability. And third, low short-term policy rates may encourage investors to take on more risk than they would otherwise accept as they “search for yield”. It is arguable that monetary policy paid insufficient heed to the potential impact of such financial vulnerabilities. Financial shocks are costly because their effects can be too rapid for policy easily to offset, and because they hit potential supply so creating a trade-off between output and inflation. In other words, the Taylor frontier is less favourable (further from the origin), when account is taken of financial shocks, than we might have believed. Taking the entire period of inflation targeting – including the recent past – might give a more accurate indication of where this “Minsky-Taylor” frontier lies than using data for the Great Stability period alone (Chart 4). What implications does this have for monetary policy? Possibly none – if we can rely now on macroprudential tools to ensure financial sector resilience.

But set those tools to one side for a moment. Monetary policy could be used to reach a point more like P in Chart 5, with less variation in the output gap and more variation in inflation than we have actually experienced over the past 20 years. Put another way, higher interest rates in the run up to the financial crisis might have reduced the impact of the subsequent bust, at the cost of below-target inflation and below-trend output before the crisis hit.2 In practice new macroprudential tools and better micro-prudential supervision will improve the possibilities available to monetary policymakers. Having additional instruments in effect brings about a favourable shift in the Minsky-Taylor frontier (or surface) which defines the possibilities open to policymakers.3 Nevertheless, consistent with the new remit4 given to the Monetary Policy Committee by the UK Government last month, the experience of recent years suggests that there may be  2  A more detailed appraisal of this argument is contained in “Twenty years of inflation targeting”, a speech by Mervyn King (2012), available at http://www.bankofengland.co.uk/publications/Pages/speeches/2012/606.aspx. 3  A social planner would use both instruments together to pick the welfare maximising point on the frontier / surface, and in the UK the Monetary Policy Committee is expected to work closely with the Financial Policy Committee which has the statutory power to deploy macro-prudential instruments.
And Federal Reserve facilities include the Term Auction Facility, the Term Assert Backed Securities Loan Facility, the Primary Dealer Credit Facility, the Commercial Paper Funding Facility, the Term Securities Lending Facility, the ABCP Money Market Fund Liquidity Facility, the Money Market Investing Funding Facility, and the Term Discount Window Program. BIS central bankers’ speeches  3  in town”. But failure to make clear the limits to monetary policy risks disillusionment with central banks and the inevitable political pressure on them that would follow. Second, at the zero lower bound there is no clear distinction between monetary and fiscal policy. But it is still important to ensure that central banks do not take on to their balance sheets risks to the taxpayer that are properly matters that should be decided by elected politicians. To ensure price stability in the long run it is vital to maintain the operational independence of a central bank. Any decisions that put taxpayers’ money at risk must be made by finance ministries, and central banks must protect their balance sheets by imposing appropriate haircuts on collateral, and avoiding the purchase of risky private-sector assets. Third, and important even when we move away from the zero lower bound, the expansion of central bank responsibilities to include macroprudential policy and, in the case of the Bank of England, responsibility for regulating the banking system, has made independence much harder to define.

The Great Stability appeared to be a permanent break from earlier periods – periods when monetary policy exhibited more unpredictable behaviour and left the economy to the north-east of the Taylor frontier (Chart 2). And in one important sense it was – the dark days of double-digit inflation were consigned to the past. 1  The inflation measure used is the quarterly rate of increase of the GDP deflator, defined as the ratio of nominal GDP to real GDP. The output gap is estimated as the difference between the log of real GDP and the trend path of log GDP, derived using the HP-filter. Source: ONS and Bank of England calculations. BIS central bankers’ speeches  1  But the Great Stability was not representative of a new normal. The variance of the output gap – though not inflation – has been much higher over the past five years as the financial crisis generated a deep recession (Chart 3). So what have we learned? The banking and broader economic crisis has demonstrated that macroeconomic policy can face an additional trade-off between ensuring the soundness of the financial system in the medium term, and keeping output in line with potential output and inflation on target in the near term. Such a trade-off arises because financial vulnerabilities can build even while output is growing steadily and inflation is low and stable. Let me give three examples of the sort of underlying mechanisms at play.
As we just noted, in our reserve tiering system, banks with excess reserves have an incentive to lend those reserves to banks whose reserves fall short of their thresholds. Unless the borrowing capacity of these banks is substantial, there may still be excess reserves in the system even after all interbank trading is accounted for. This is precisely what we see in the 9  For each bank that is subject to the minimum reserve requirement, the individual threshold corresponds to the moving average of the minimum reserve requirements over the preceding 36 reference periods, multiplied by the applicable threshold factor. The instruction sheet governing interest on sight deposits provides further information. 10 We gained the insight that reserve tiering promotes interbank trading during the time when our policy rate was negative. As we applied a negative interest rate to reserves that exceeded bank-specific exemption thresholds, we were essentially making use of reserve tiering during this period. Fuhrer et al. (2021) investigate monetary policy implementation via reserve tiering both theoretically and empirically. Page 5/10  case shown on Slide 7. Even after factoring in interbank trading, there are still excess reserves, here depicted in light blue. In such an environment, the equilibrium interest rate that would prevail in the interbank money market would be relatively close to the lower remuneration rate on reserves, which is currently 0%.

11 This outcome would be undesirable for us, as we aim to steer secured short-term Swiss franc money market rates so that they remain close to the SNB policy rate. By reducing the stock of excess reserves, we also reduce the supply of reserves in the interbank money market. This lets us steer money market rates closer to our policy rate of 0.5%. That is precisely what the second element of our implementation approach accomplishes. To absorb excess reserves, we use open market operations. Specifically, we use term repos and SNB Bills, the latter being marketable debt claims on the SNB. 12 Term repos have a term of one week and are auctioned daily. SNB Bills, on the other hand, are auctioned on a weekly basis and with different terms from week to week. As Slide 8 shows, the effect of these operations is to replace the light-blue shaded rectangle with a light-green one. Our reserve-absorbing operations are offered with interest rates that are close to 0.5% on an overnight-equivalent basis. 13 This makes them particularly attractive to banks that hold excess reserves. By purchasing the instruments we offer, these banks can reduce the stock of excess reserves, which would otherwise be remunerated at 0%. It is important to emphasise that both interbank trading and the SNB’s reserve-absorbing operations are mechanisms for reducing the stock of excess reserves, possibly to the point where all excess reserves have been ‘soaked up’. How does the SNB’s approach determine money market rates?
Phase 3: Panic The bankruptcy of Lehman Brothers on September 15, 2008, precipitated a run on the global financial system of a previously unimaginable scale. The Federal Reserve was immediately confronted with a huge unanticipated call on its lender-of-last-resort power as a result of a substantial liquidity problem at one of world’s largest insurance companies, American International Group (AIG). The Federal Reserve’s decision on September 16 to lend to AIG was a classic lender-of-last-resort action of exactly the type envisaged by the statutory power given in 13(3). However, given the speed of developments that week, there has been considerable confusion and misperceptions over the validity of the initial decision to lend to AIG. 6 It was unknown on September 16 just how quickly the panic would spread and how harmful it would be to the real economy. By the next evening it was already obvious that the panic had spread to prime money market mutual funds with devastating effects. These funds provided short-term financing to numerous firms and institutions through the commercial paper market. A myriad of other breakdowns were occurring as trust vanished from the global financial system. Against this backdrop, the request for the $ billion Troubled Asset Relief Program (TARP) appropriation was made the next day.

To all the prize winners for 2006, I extend my sincere and heartfelt congratulations for well deserved awards. Please remember that it is not enough to only enjoy the glory of the moment, but also to take the responsibility to act as mentors to emergent writers. I believe that what the journalist fraternity needs is not individuals who excel alone, but a cadre of responsible reporters that leave an outstanding legacy. Let me also take this opportunity to thank ACCA, the sponsors of this event and prizes for their continuing support to economic, business and financial journalism. In conclusion, allow me to encourage our journalists to compete for international media awards as well. This will be the true barometer of where you stand as Zambian journalists because you will be judged against international best practice which is, in turn, the true barometer in global economy. As your patron, I wish you all the best in this and future endeavors that seek to raise the standards of journalism in the country. I thank you. 2  BIS Review 10/2007
A new regulatory framework was adopted for fiscal policy, including an expenditure ceiling and a surplus target, while the focus of monetary policy was aimed at keeping inflation in check. This increased stability and made policy more predictable, thus boosting the willingness to invest. The tax and social security systems were also reformed, not least by reorganising the pension system. Sweden’s entry into the EU’s common market together with deregulation in a number of important markets gave rise to increased competition and greater demands on businesses to use their resources more efficiently. It is likely that the faster growth experienced by the private sector compared to the public sector, as well as advances in IT during the latter stages of the 1990s, also contributed to higher potential growth. Reforms behind favourable growth in the labour market If we compare the situation in the Swedish labour market to that of the euro area, we can see a number of differences. Sweden was among the first in some areas to initiate reforms that helped improve the functioning of the economy. Deregulation carried out in the 1980s and at the beginning of the 1990s was partly the reason that Sweden performed relatively well after the crisis years. 2  BIS Review 45/2003  One such deregulation was an easing in working-hour legislation, which, for example, has made it possible to shop more or less round the clock in Stockholm today. It is only recently that this has started to catch on in the euro area.

Lars Nyberg: Developments in the property market Speech by Mr Lars Nyberg, Deputy Governor of Sveriges Riksbank, at Stock market day, Malmö, 18 October 2003. *  *  *  Ladies and gentlemen, At the Lisbon summit in March 2000 the EU’s heads of state and government decided to initiate an ambitious reform agenda that would extend over the entire decade. The goal was for the European economies to become “the most competitive and dynamic knowledgebased economies in the world by 2010”. Today, I intend to reflect upon what has happened with economic reforms in the light of the Lisbon agenda, both in Sweden and in the euro area in general. But first allow me to thank you for your invitation to speak here today. As I’m sure you all know, the Riksbank attaches great importance to participating at various events and speaking on issues of significance for monetary policy and financial stability. This is perhaps most true of issues regarding the current stance of monetary policy, of which we were informed a short time ago in conjunction with the Inflation Report that we published last Thursday and which resulted in the decision to leave the repo rate unchanged at 2.75 per cent. The interest rate decisions in particular usually attract great interest from the public and the media, which the Riksbank of course finds very gratifying.
For the United States, we assume a target inflation rate of 2.5 per cent, which is consistent with the Federal Reserve’s mandate to maintain price stability and is close to the average inflation rate within the sample. What is striking about these series is that, for the most part, they look more like trendstationary series than difference-stationary ones, with swings around a flattish line. The three exceptions are: Japan, which is not altogether surprising given that is was mired in deflation for much of the period; New Zealand, where inflation has systematically averaged above the mid-point of the target range; and Sweden, where the opposite is true. But for both New Zealand and Sweden, the behaviour is still more characteristic of trend stationarity than difference stationarity. Table 2 reports some formal (Augmented Dickey-Fuller) statistical tests of difference stationarity for these eight jurisdictions over the period 1993 Q4 to 2010 Q1 (excluding the euro area, where the tests run from the inception of the euro). The dependent variable is the change in the deviation of (the logarithm of) the target measure of prices from a path along which the price level grows at a rate corresponding to the central bank’s inflation objective. The regressors include a constant, a trend, 10 two lagged values of the dependant variable and the lagged level of the variable of interest, which should attract a zero coefficient if and only if the series is stationary in differences.

A strong monetary policy response was therefore essential. In pursuit of our mandate, we decided on a comprehensive package of measures to ensure that inflation moves towards our aim in a sustained manner. We lowered the interest rate on the deposit facility from –0.40% to –0.50%. This rate provides an anchor for short-term market interest rates, which serve as the reference for many types of loans and financial instruments. Lowering the deposit facility rate helps to further improve the borrowing conditions of households and businesses. Negative rates also encourage banks to lend to the real economy instead of holding onto liquidity, thus supporting the portfolio rebalancing 2/5  BIS central bankers' speeches  channel of the asset purchase programme (APP). The impact of the cut in the deposit facility rate is reinforced by our strengthened forward guidance on the likely direction of our monetary policy in the future. Specifically, we clarified that we expect our policy rates to stay “at their present or lower levels until we have seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within our projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics”. This enhanced guidance provides a clear signpost for rate expectations by linking our policy to more stringent conditions for the inflation outlook.