samchain/econo-pairs-v1 huggingface dataset:
Even before recent upward revisions in GDP figures, Turkey easily met the Maastricht criteria for the budget deficit and debt stock. Turkey has demonstrated significant improvement in the World Bank’s Governance Index since 2000. Thanks to better governance practices, competitiveness of Turkish economy has advanced drastically in recent years as well. In the last two years, Turkey moved up a total of 18 steps in the Global Competitiveness Index prepared by the World Economic Forum. Turkey also moved up 34 steps compared to the previous year in the Ease of Doing Business Index of the World Bank. Distinguished guests, I tried to highlight some of the important developments in Turkey regarding economic governance in recent years and the resulting improvement in the economic structure. All these led to improvement in the confidence, which was instrumental in further confidence building and credibility for the economic management. These are all key ingredients of good governance. These achievements, however, are not enough. We still have much to do in terms of reaching price stability and securing sustainable high growth rates. There is still much to be done to improve economic governance and to reach a level compatible with the EU-15 average. As we are going through difficult times both internally and externally, we should not lose the momentum gained in institutional capacity building. It is even more imperative at this juncture to show and utilize the dexterity that we gained from our past experiences.

Survey indicators point to a continued strong course in external demand in the manufacturing industry. The ratio of exports to imports reached a high plateau of some 85%. In the first half of the year, the real balancing in foreign trade is quite evident. Against this background, we expect that the current account will post a surplus in the rest of the year due to the strong upward trend in exports, and stimulus to tourism from the progress in the vaccination program. Turkey has gradually reduced its foreign trade deficit with Europe, but continues to run a deficit in trade with Asia. At this point, I would like to reiterate that the swap agreements we have made as the Central Bank essentially aim to facilitate trade in local currency. Distinguished Guests, Now, I would like to touch on the inflation outlook. Last Friday, August inflation data were released. Annual inflation increased by 0.30 points to 19.25%. In this period, the annual inflation rate of the B index, which is a core inflation indicator and obtained by excluding unprocessed food, energy, alcoholic beverages and tobacco from the CPI, decreased by 0.05 points to 18.46%, and that of the C index, which excludes processed food from the B index, declined by 0.46 points to 16.76%. In August, while annual inflation increased significantly in the food group, it posted a limited rise in services and receded across other main groups. Meanwhile, producer inflation continued to increase due to commodity prices, disruptions in supply chains and demand conditions.
Another mistake made by many institutions, in an attempt to recover past levels of profitability, was to significantly increase their levels of leverage. The rating agencies also made mistakes, of almost scandalous proportions. They surprised investors by downgrading some securities from triple AAA to junk bond status overnight. In many countries, indeed, regulators and supervisors also made mistakes, failing to limit the perverse effects of the dynamics and incentives that I have just mentioned. The weak regulation to which some financial market participants were subject, an over-complacent view of financial innovation, which failed to identify those developments that had proven themselves incapable of contributing value to the economy, and the lax interpretation of the international accounting standards in relation to the need to consolidate off-balance-sheet vehicles like conduits and SIVs, are illustrative in this respect. Finally, central banks have not been free from mistakes either. The long period of low interest rates in the United States and, albeit with some differences, in Europe and in the rest of the world too, led financial institutions, firms and households to become very highly leveraged. Although this stimulated economic growth, it also allowed the large imbalances that are now so starkly revealed to build up. This world-wide expansionary policy, the risks of which were clearly signalled by the BIS, has probably been the most important factor contributing to the present crisis.

Thus, for financial institutions with insuperable solvency problems, it is proposed that the appropriate rescue solution be implemented. For other institutions, that are solvent, but in difficulties that make a strengthening of their capital advisable, many governments have made capital available to them through shares, or other debt instruments that are, for regulatory purposes, deemed to be capital, such as preference shares. Apart from capital strengthening, and in order that solvent institutions should start to function again as normal and have access once more to financial markets that have remained blocked, government guarantees are going to be granted for issues of bank debt. This latter line of action, i.e. that relating to the availability of liquidity and financing, has been supplemented in the case of Spain by the purchase of highquality assets. Finally, and in order to boost the confidence of depositors, practically all countries have increased the amount covered by deposit guarantee schemes and have proposed reducing the period within which such deposits must, where necessary, be returned to depositors. The Spanish government has prepared a roadmap that envisages all these actions. It will be implemented not so much to alleviate solvency problems, which have not materialised in our country, as to help restore confidence and facilitate institutions’ access to financing. The ultimate aim is to avoid institutions’ financing difficulties being the cause of a reduction in lending to firms and households.
There needs to be awareness of the alternative assets that can be accumulated not only to generate an income stream but also towards building wealth. Of equal importance is to draw those operating in the informal sector into the formal sector, where their financial requirements, whether households or businesses can be better served. A further phenomenon taking place in Asia is the increased regional economic and financial integration that is taking place. This has manifested itself in increased intra-regional trade, investment flows and the increased intra-regional presence of corporations and financial institutions. A more recent phenomenon is the increased mobility of labour in the region. Of significance is the number of women who have ventured beyond their own borders in search of new employment opportunities. While data on this is not available, the statistics on remittances of income show this is a growing trend. Overseas employment is particularly evident in the manufacturing and services sectors. Financial literacy under these circumstances becomes even more vital. In venturing to new areas where different systems, languages and cultures prevail, it becomes important to have knowledge of the basic financial matters so as to maximise the benefits the new employment is expected to yield. As the formal economies of Asia prosper and grow, there is a greater need to integrate the informal sectors of the economy with the formal sector.

John C Williams: Preparing for the unknown Remarks (via videoconference) by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the 2021 US Treasury Market Conference, 17 November 2021. * * * As prepared for delivery  Introduction Good morning, and welcome to the seventh annual U.S. Treasury Market Conference. This is our second time gathering virtually. Although I miss seeing all of you in person here at the New York Fed, I am pleased that so many of you could join us today. This conference is a great opportunity for market participants, as well as members of five publicsector bodies—the Treasury, the Board of Governors, the SEC, the CFTC, and the New York Fed—to come together and take stock of the U.S. Treasury market. The events of the past 20 months have further underscored this market’s significance in the global economy—and the important role our five entities perform in ensuring that it functions as it should. In fact, the Inter-Agency Working Group for Treasury Market Surveillance (IAW G) came together to examine recent, notable disruptions to the Treasury market, and it issued a report ahead of this conference that identifies steps to strengthen its functioning and resilience.1 I won’t have time to go over the report in detail, but I strongly encourage everyone to read it. Severe disruptions to critical financial markets like we saw last spring should be rare.
The requirement will apply from 30 June 2015. The purpose of the countercyclical capital buffer is to enhance banks’ resilience to periods of large losses. The buffer rate will be increased when financial balances are building up or have built up over a period. In the event of an economic downturn and large bank losses, the buffer rate can be reduced, with a view to mitigating the procyclical effects of an undesired tightening of bank lending. The buffer is not an instrument in the ordinary management of business cycles. Changes in capital requirements may nonetheless influence banking behaviour and hence economic developments. Banks can satisfy increased capital requirements in several ways. They can raise equity from their owners and some banks have already done so. Should banks choose to increase their lending margins or restrict lending by other means, this will have an impact on economic activity and inflation. New capital requirements may therefore influence the conduct of monetary policy. While increased capital requirements will strengthen banks’ solidity and may mitigate the build-up of imbalances, we cannot proceed under the assumption that new regulations will eliminate the risk of financial instability. A robust monetary policy will therefore continue to take into account the risk of a build-up of financial imbalances. At the same time, monetary policy must not be overburdened. When assessing the monetary policy trade-offs, the primary objective of monetary policy must remain low and stable inflation. We will not lose sight of the inflation target.

At the recent Brookings-Yale conference looking back 10 years after the crisis, both former Federal Reserve Chairman Bernanke and Vice Chair Kohn expressed the view that too much weight was given to the predictions of the Fed's workhorse model FRB/US.6 Some of you might observe that model uncertainty is a well-developed field, and certainly staff of the Federal Reserve Board and the Reserve Banks all appreciate the importance of using a diverse set of models with different transmission mechanisms, estimation approaches, and solution methods. Further, the Great Recession has generated considerable interest in approaches that allow for nonlinear reactions and fat tails, as Marco Del Negro will explore this afternoon. While I am incredibly sympathetic to the idea that more sophisticated modeling can improve judgment and decision-making—especially as I spent much of my career working on such technical issues—this approach has limits. If one had to summarize the message of the Superforecasting book in one line, it would be the well-known quip, "Forecasting is hard, especially about the future. "7 To illustrate some of the learnings from the book, I invite you to consider a standard problem: What is the probability the U.S. economy will be in a recession over some period of time? This is similar to the focus on binary outcomes in the IARPA tournaments. One simple, wisdom-of-the-crowd-based approach to this question would be to poll you all right now given a specific time frame. Rather than disturb your lunch, we can instead consider using the wisdom of the market.
At the same time, it is necessary that the legal and practical adaptations that are a precondition for our participation be prepared and decided upon before the EU’s finance ministers within the scope of the ECOFIN Council take the final decision. If the referendum results in a “yes” vote, the Riksbank will be required to help ensure that entry into monetary union proceeds in a stable, smooth manner. Since the middle of the 1990s, the Riksbank has been collaborating with the financial sector via the SIFS group - Consultation and Information with the Financial Sector - with a view to ascertaining the adaptation measures necessary ahead of a potential Swedish changeover to the euro and how long these measures would take to implement. The aim has been to make the time between a Swedish Riksdag decision in favour of participation and entry itself as short as possible. The Swedish government has recommended that Sweden, in the event of a “yes” vote, should strive to enter monetary union on 1 January 2006, and that this should be carried out through a direct changeover or “big bang”. The switch-over of all electronic transactions in society would then be made simultaneously with the cash changeover. This proposal has been welcomed by the financial sector, and there are good chances therefore of a smooth, efficient changeover to the euro at the beginning of 2006. For the Riksbank, a changeover to the euro would of course be a major project.

3 See, e.g., Office of the Comptroller of the Currency, OCC Guidelines Establishing Heightened Standards for  Certain Large Insured National Banks, Insured Federal Savings Associations, and Insured Federal Branches (2014); Basel Committee on Banking Supervision, Review of the Principles for the Sound Management of Operational Risk (2014). 4 See Financial Conduct Authority, Behaviour and Compliance in Organizations, Occasional Paper 24 (Dec.  2016). 5 Id. 6 See William C. Dudley, Enhancing Financial Stability by Improving Culture in the Financial Services Industry,  Remarks at the Workshop on Reforming Culture and Behavior in the Financial Services Industry (Oct. 20, 2014). 7 See Salz Review: An Independent Review Of Barclays’ Business Practices 191–92 (2013) (collecting sources). 8 See Wieke W. Scholten, Banking on Team Ethics: A team climate perspective on root causes of misconduct in  financial services 110–13 (2018) (summarizing psychological research on moral climates that may facilitate misconduct). 9 See Nicholas Morris and David Vines, Capital Failure 15–16 (2014) ((“Trustworthiness requires conscious  choices to be made rather than merely being the outcome of a reliable process.”). 10 William C. Dudley, Remarks at the Culture Imperative – An Interbank Symposium, Jan. 11, 2017, (“My second  message is to reject the idea that a separate regime of ethics or morality applies in banking. I’m sure you have heard this, or perhaps even thought this, at some point in your career. Let it end there. We often teach our children by asking them if they would engage in that type of behavior at home.
The exchange rate remains operative as a shock absorber due to the low FX exposure of households, government, financial institutions and the non-financial corporate sector. c. Foreign liabilities are appropriately matched by sound and liquid foreign assets. The latter include not only Central Bank reserves, but also sovereign wealth funds and foreign assets of domestic institutional investors. This has been recently enhanced by access to a USD 24 bn FCL from the IMF, membership of the Fed’s Temporary Foreign and International Monetary Authorities (FIMA) Repo Facility and a swap facility with the People’s Bank of China. d. Policy space is broader, thanks to sound management of fiscal, monetary and financial policy over many years. e. Institutions are stronger, including high credibility of the Central Bank and a stronger social safety net. 14. These favorable factors outweigh some shortcomings, most notably the effect of social unrest in the last quarter of 2019. In fact, in the last three months markets have fully reversed the relative erosion of Chilean asset prices at the end of last year. 15. So, how has the Central Bank used policy space? What challenges have emerged and how are these being resolved? a. The Central Bank has been largely proactive since November 2019. Over the last eight months we have cut the policy rate by 125 bp to its effective zero lower bound at 0.5% and have implemented a dozen measures to provide liquidity to markets and to foster lending to firms most affected by the lockdown. b.

Central Bank of Chile June 2020  “Monetary Policy Challenges Facing Emerging Countries Amid the Covid-19 Pandemic” Mario Marcel, Governor of the Central Bank of Chile Itaú Webinar, June 24, 2020 1. The Covid-19 pandemic has unfolded into a global crisis that has left no country unscathed. The economic effects are unprecedented in their origin, size, speed, and simultaneity across the world. 2. While non-pharmacological containment strategies vary across countries given the unknown nature of the virus, almost all of them have included social distancing and lockdown measures that have hit hard on economic activity. Global GDP is likely to lose some 8% to the crisis this year, which will take long to recover– if ever. 3. Economic policy has focused on limiting widening gaps in operational balances of firms and in disposable income of households, with credit called in to cover part of the remaining gap. This would prevent a liquidity problem turning into a solvency one, with the attached string of bankruptcies and long-term unemployment, which would make it much more difficult. 4. Such policy response has taken an unprecedented scale. In contrast with the prior notion of limited policy space, the fiscal, monetary and financial policy response has exceeded that of the Global Financial Crisis in many countries, most notably in advanced economies. 5. Major central banks have been particularly active in this juncture, providing unlimited liquidity through asset purchase programs. This contained the global selloff of mid-March and financial conditions have improved over the last month.
Today, the Fund can only invest in equities that are listed on a recognised stock exchange. Unlisted shares, so-called private equity, could be included in the investment universe. The Fund could invest in companies with plans for an imminent listing on the stock exchange. Successful private equity firms can provide an excess return, but I doubt that the Fund will become a big investor in private equity firms in the near future. Selecting good companies is demanding and management fees are high. Many are highly leveraged and the sector’s behaviour is procyclical. The second class is nominal fixed income securities. Over time these securities are expected to provide a lower return than equities. They are also less exposed to risk and are often easier to sell at short notice. The third – and new – class is real assets excluding equities. Real assets will provide a cash flow that is assumed to track inflation. Such investments thus deliver a long-term and fairly secure return in line with the Fund’s objective. Real estate purchases, an example of assets in this class, will commence in the near future. The dividing line between real estate and infrastructure is not very clear, and looking further ahead, it may be natural to invest in assets that can be classified as infrastructure. In addition, the Fund’s investments in inflation-linked bonds could be included in this class. The two latter classes combined will make up 40 per cent of the Fund. Many real assets are fairly illiquid.

It should prompt them to make adequate planning, to retain sufficient own funds and to issue MREL-eligible debt, and to take any opportunity that may present itself to comply with the requirements within the period established for the purpose. 5/7  Challenges remaining on the resolution front in Europe Despite the tremendous efforts made on the resolution front in Europe, there are clearly important challenges remaining. First, the details of the backstop for the Single Resolution Fund (SRF) must be outlined. Recently it was agreed that the European Stability Mechanism (ESM) would assume this financial backstop, which would take the form of a credit line, to be used to address exceptional situations where the SRF’s own resources prove insufficient for resolution of certain credit institutions. The backstop will have a limit of 1% of the deposits guaranteed in the banking union. It will come into force in 2024 at the latest and must be fiscally neutral in the medium term, so the resources committed will subsequently be recovered through banking sector contributions. In addition, the introduction of the financial backstop will eliminate the ESM’s tool for direct recapitalisation of banks. In this setting, it is vital to ensure that the backstop is sufficient to meet all the potential challenges that the SRF may have to face. Second, the question of provision of liquidity in bank resolution has to be addressed. If a bank under resolution is sold, the purchaser assumes any liquidity commitments that may arise when the bank opens its doors the next day.