samchain/econo-pairs-v1 huggingface dataset:
As an illustration, investigations discovered that one “Senior Yen Trader” directly or indirectly made at least 800 requests in writing on UBS’s email and chat systems to their submitter.5 Requests often had a casual matter of fact nature to them. To illustrate, an exchange in September 2007 from a trader at UBS to the submitter went as follows.6 “Hi … could really do with a low 1M [one month] over the next few days as have 17.5m [million] fixings if ok with you?” Submitting banks often facilitated this type of behavior – in some cases derivatives traders and submitters sat on the same desk, while in others the submitters were themselves traders, both circumstances obviously representing conflicts of interest. Other investigations documented that traders at one bank would often shout across the trading desk to fellow traders to confirm that there were no conflicting requests before they sent their requests to their submitter.7 The investigations also found that not only were there conflicts within the submitting banks, but there were also active efforts by traders to collude across banks to affect the posted rates. At times, the traders at the different banks might have similar positions and therefore a common interest to push the posted rate in particular direction. In other times, cooperation could be incentivized through the use of “wash” trades that generated no profit or loss, but allowed the trader to generate commissions. Why did this go so wrong? As I discussed earlier, LIBOR setting involves a group of banks answering a hypothetical question.

Prior to the recent reforms, all submissions were immediately made public. The aim of the LIBOR-setting process has been to create a set of reference rates that would be credible and would generate robust measures of bank funding costs across a wide range of market conditions. The credibility was based on the borrowing experience from the submitting banks represented through their submitters – those individuals responsible for actually submitting an answer each day to the administrator. The potential conflicts of interest between the submitters and traders within the bank were typically handled through internal policies such as the presence of information barriers that were intended to prevent sensitive information from flowing between the traders and LIBOR submitters. The robustness to market conditions would be maintained even in periods of market stress or a lack of transactions by the reliance on the hypothetical question instead of the use of actual transaction data. That is, even if during stressed times when trading became sporadic in a particular currency-maturity pair, all submitters could still answer the question even if their bank did not happen to engage in any trades on that particular day in that particular pairing. This ensured a large sample size even during stressed market conditions. The trimming of the sample helped to minimize the influence of any outlier submission, but also limited the ability for any one submitting bank to influence the posted rate. 3  See McConnell, “Systemic Operational Risk: The LIBOR Manipulation Scandal.” Journal of Operational Risk, 8(3):59–99.
We are in the midst of an unusual dynamic in financial markets, in which low realized volatility in macroeconomic outcomes, low realized credit losses, greater confidence in the near term path of monetary policy, low uncertainty about future inflation and interest rates, rapid changes in the nature of financial intermediation (role of hedge funds and the change in how credit risk is bought and managed), and a large increase in the share of global savings that is willing to move across borders, have worked together to bring risk premia down across many asset prices. There is no reliable analytical framework one can use to determine whether we are experiencing an unwelcome or unjustified decline in expected volatility, or whether investors are giving too much weight to the relative stability of the recent past and too little to the uncertainty posed by the challenges ahead. And analysts can point to good fundamental reasons and some plausible theories to support this collective judgment of market participants about low future risk and volatility. But there is much we do not understand about how these transitions ahead will unfold - in fiscal positions, the U.S. external imbalance, and in the exchange rate system and portfolio preferences. The recognition that things that are not sustainable will eventually come to an end does not give us much of a guide to whether the transition will be calm or exciting.

These dimensions of the broader context in which we will be making monetary policy in the years ahead put a very important premium on keeping U.S. monetary policy as close to the frontier of credibility as possible. And this suggests we need to continue to examine the case for a measured further evolution in the U.S. monetary policy framework - evolution in the direction of finding ways to provide more clarity about our long term inflation objective, about the underlying forces shaping the Federal Open Market Committee's forecast, the dimensions of uncertainty that surround that forecast, and the likely implications for monetary policy, to the extent we are aware of them. We have moved a long way in this direction, even in the past 18 months. The FOMC's record over the past 25 years suggests that the state of monetary policy and the state of the Fed is strong. The challenge in thinking about what's next in any further evolution in our regime is about how to ensure that U.S. long-term inflation expectations remain stable at a level close to reasonable definitions of price stability, while retaining the flexibility to act wisely, but with speed and force and creativity in response to changing circumstances. Thank you.
As it is, fixed income funds are now being managed in Singapore, in addition to the traditional equity market funds. Fund managers are expanding beyond regional mandates to global markets. Most recently, we liberalised the insurance industry which has, since 1990, been closed to new direct insurers. Insurance brokers who meet our requirements can now enter the market. We have also removed the foreign shareholder limit in local insurance companies. 1  BIS Review 30/2000  3. Looking ahead  Looking ahead, our financial sector faces many more challenges. The global financial industry continues to evolve rapidly. The internet promises to reshape the industry. Trade liberalisation is steadily opening up national financial markets, both through WTO, and as a result of bilateral free trade agreements. Global industry trends In the developed countries, deregulation and increasing emphasis on shareholder value has contributed to continuing consolidation, both across financial industries and within specialised areas. Financial institutions are continuing to merge, as players seek global reach and economies of scale. This is happening not just to banks, but also to insurance companies and securities houses, plus exchanges which are being demutualised and turned into for-profit corporations. Mega-mergers used to be a largely American phenomenon, but they are now happening in Europe and even Japan, where rationalisation is long overdue. In the rest of Asia too, banks and supervisors are grappling with the issue.

In banking, we have increased competition by introducing Qualifying Full Bank privileges, issuing more restricted banking licences and providing greater flexibility for offshore banks. Local banks have greater strategic autonomy and operational flexibility now that the limit on foreign shareholdings has been removed and several regulations revised. We have also opened up the stock market. The Singapore Exchange was the first in the Asia-Pacific to both demutualise and merge the cash and derivatives activities. SGX has made its listing requirements more flexible to cater to growth enterprises. We have loosened up rules on foreign listings in Singapore dollars, reduced capital requirements for securities firms, and eased other onerous restrictions. By 1 January 2001, commissions will be completely freed up. Access to trade on SGX, which is already being opened, will be fully liberalised a year later. In the debt market, we relaxed restrictions on borrowing $ to enable foreign players to issue $ bonds. We set up the Approved Bond Intermediary scheme to encourage the origination, placement and management of debt issues in Singapore. We also increased the issuance of Singapore Government Securities and extended the maturity profile to ten years so as to create a more liquid government bond market. The fund management industry now has access to a larger pool of CPF funds as well as government funds farmed out by MAS and GIC. New tax incentives and more flexible licensing requirements should also attract more fund managers here.
Following these developments, consumers have become more discerning and demand for better product choices, more efficient delivery channels and more customer centric practices from financial institutions. These trends have also become important in reinforcing an increasingly more competitive environment in the financial services sector. A comprehensive approach thus needs to be adopted to address all the key elements of the financial system so as to form a solid foundation on which the soundness and stability of the system can be achieved. A major strategy that has been adopted has been the strengthening of the prudential regulatory and supervisory framework. The safety and soundness of the banking system however has to extend beyond prudential regulation and supervision. Maintaining financial stability of the financial system also requires the development of the financial infrastructure, in particular, the financial markets; building the capacity of financial institutions and finally to have in place an adequate consumer protection framework. My remarks this morning will focus on the consumer protection and education from the perspective of maintaining financial stability and the development of a progressive and sustainable financial system. Consumer protection and education initiatives empower consumers to be better positioned to take responsibility for their own well-being. It allows consumers to assume a more important role in exerting market discipline on service providers to drive greater efficiency, competition and innovation in the market place. In the design of a consumer protection framework, it needs to be recognised that financial products and services differ significantly from most other goods and services.

Lars Nyberg: The Swedish card payment market - current challenges and future developments Speech by Mr Lars Nyberg, Deputy Governor of Sveriges Riksbank, at Scandinavian Card Markets, Stockholm, on 3 February 2003. *  *  *  To begin with, I would like to thank you for the invitation to participate in this conference. Given the short time at my disposal, I will confine myself to discussing a few of the salient features of the evolution of the card payment market in Sweden, identifying also the forces that appear to have driven this evolution. Judging from the latest innovations in this area, I will touch upon possible future developments. Lastly, in my capacity as central banker, I will talk about some relevant policy issues. The evolution of the card payment market in Sweden Let me start by making a few observations concerning the market development in Sweden. 1. Card payments have grown rapidly, but the use of cards is still far behind that of the other Nordic countries (fig.1). Between 1990 and 1997, the number of card payments per capita in Sweden grew at a steady pace, picking up speed quickly at the end of the decade. Still, when the new millennium started, the number was no more than half of what can be observed in the other Nordic countries. This is somewhat surprising, considering that payments systems and payment patterns are otherwise quite similar in these countries.
But with hindsight, seen across the world as a whole, there was a case for somewhat tighter monetary policy to prevent the demand for resources outstripping supply (although I would note that our interest rates have been consistently higher in recent years than those elsewhere in the advanced economies). The rise in oil and food prices has appeared as an external pressure on each country on its own but it is not external to us all collectively. A particular problem here – that has yet to be resolved – is the expansion of the dollar bloc. The emerging economies were importing loose monetary policy, which scarcely seemed appropriate to their domestic conditions. However it is hard to believe that a somewhat tighter monetary policy would have been guaranteed to head off the credit boom and subsequent crunch altogether. Put another way, monetary policy is a blunt instrument. To prevent excesses in financial markets, we might have had to generate an unnecessary slowdown in the real economy. I share the view therefore that we have to look for new regulatory measures to complement interest rates. There are a number of specific lessons on regulation which have already been identified. The FSA, for example, is already strengthening its prudential supervision. And internationally, we need to fill gaps in the current framework – for example on mortgage origination in the US, increasing the capital requirements for some credit products and loan commitments, and ensuring that investors and rating agencies assess new products more diligently.

But the same arithmetic applies: such price level shocks need have no long-term impact on the inflation rate. In the medium term the real upside risks to inflation lie at home – in whether we see “second round” rises in wages and prices in the domestic economy. It is to counter those pressures that the MPC have judged it necessary over the last year for growth to slow and create a margin of spare capacity in our economy. That makes it more difficult for companies to raise prices and puts more pressure on them to restrain their costs. It also re-emphasises our determination to get inflation back to the 2% target and thus influences the expectations of financial markets, price setters, wage negotiators and households generally. And expectations themselves have an important impact on inflation. Broadly, the higher households’ expect inflation to be, the less they are likely to save today. Inflation expectations also shape workers’ wage demands as they try to protect their standard of living. And companies’ expectations will shape the prices they set as well as their willingness to concede cost increases. We know from the inflations of the 70s, 80s, and early 90s that raising interest rates will in time bring inflation down, even when expectations of future inflation are high. But we also know how painful that process is. It works through the increased threat of bankruptcy and unemployment. That forces a change in peoples’ behaviour and their hearts and minds and expectations follow.
The reason we focus on inflation 1-2 years ahead is because monetary policy affects the economy and inflation with a certain time lag. This approach has served us well over the decade during which we have conducted monetary policy with an inflation target. Since the target was adopted, inflation has by and large averaged 2 per cent. At the same time, we have experienced better general economic progress than during the two preceding decades. The clear target coupled with our mode of action has also helped to make the Riksbank’s policy accessible to both the public and the financial markets. Inflation expectations have been anchored fairly stably around our target and it has been possible to predict our actions rather well. Nevertheless, there is cause to underline that we do not run on autopilot and mechanically change the repo rate in relation to our inflation forecasts. There may be reasons for us to wait before taking a decision in order to be able to perform more in-depth analysis or obtain more information. There may also be reason to take into account additional aspects in our decision rather than just inflation 1-2 years ahead. Such aspects could include how the economy in general would be affected, inflation in both a longer- and shorter-term perspective and the impact on financial stability. But it is important to have a framework that is as explicit as possible, with clearly defined and stated objectives. In this way, everyone can follow our line of reasoning, question it and comment on it.

I just quoted the seminal opus of Karl Polany1 in 1944, but I should also mention another famous economist of the last century, Joseph Schumpeter. They diverged in their prescriptions, but they were both born in Europe (Austria-Hungary, to be more specific) and then lived and died in North America. We will need their vision to succeed in the Great transformations of our demanding 21st century. 1/ Climate change is accelerating. Natural catastrophes such as droughts, heat waves, storms, etc. cost USD 250 billion in 2021, a steep increase of 24% compared with 2020 – which was already well above the 10-year average2. We are hopefully all concerned about the delays in implementing the Paris agreement. The Banque de France has conducted simulations on the basis of macro-financial scenarios developed by the NGFS, the Network for Greening the Financial System: a late and disorderly transition would have far more adverse effects, ranging between 10% and 20% of world GDP by the end of the century (compared with up to 7% of GDP for an orderly transition). Beyond COP26, globally coordinated governmental forward-looking guidance is therefore necessary to anchor concrete and credible commitments, such as the one taken by the European Union in its Fit for 55 programme. And yes, policies to fight climate change should imperatively include an appropriate carbon price. Be assured that central banks will do everything they can do. The ECB monetary policy strategy review, concluded last summer under President Lagarde’s leadership, sets out an ambitious action plan leading up to 2024.
The TARGET system, developed by the Eurosystem, links all the real-time gross settlement payment systems in the European Union. The payment volumes processed daily in the TARGET system far  BIS Review 59/2004  1  exceed our initial expectations and the system had a market share of almost 70% of the total volume of large-value payment transactions in the euro area already in the first months of 1999. This percentage has been increasing in the following years to reach almost 90% in July 2004.1  The euro cash changeover Three years after the birth of the euro, the exchange of the legacy national banknotes and coins of the 12 countries of the euro area for the new euro notes and coins was a huge organisational, logistical and technical undertaking. A number of observers rightly called it the most important logistical endeavour in time of peace. This euro cash changeover progressed well to the benefit of more than 300 million European citizens. If banknotes and coins are to be put into circulation, they first have to be produced, which in itself was an unprecedented challenge. For banknotes alone, we assembled and co-ordinated a total production capacity of some one billion banknotes per month. The banknotes incorporate state-of-the-art security features, had to be available within a fixed timeframe and be identical both in the eyes of the public and when read by machine sensors, given that they are legal tender throughout the euro area irrespective of where they were originally issued.

There will be no additional criteria but neither will there be a relaxation of the criteria that proved effective in steering the process of convergence across the founding members of the euro area. Conclusion Let me underline four points which, I trust, are of the essence in the present situation : First, I would like to stress the remarkable credibility of the euro and of the Central Bank that issues this currency, the European Central Bank. Neither the ECB nor the Euro existed six and a half years ago! Today we have a currency which is as stable as were the best national currencies in Europe, and a Central Bank which is as credible as were the most credible Central Banks in Europe and in the world. Our duty is to fully preserve and enhance this exceptional level of credibility and I am, as President, fully committed to this task. Let me in this respect pay homage today to Finn Kydland and to Edward Prescott, who were awarded yesterday the Nobel Prize in Economics. Their seminal work - as regards central banking - on the importance of time consistency, commitment in advance, and full independence and credibility in the delivery of price stability over time has been very important for institutional developments around the world, including the ECB and the Eurosystem, and instrumental in our success. We owe them a particular debt of gratitude. Second, price stability is a necessary condition to obtain sustainable growth and job creation. It is not, alone, a sufficient condition.
One example is that we have clearly communicated that we assume that the repo rate will remain at 0.25 per cent for a fairly long period of time. In our most recent forecast the repo rate remains around this level until autumn 2010. Another measure is that the Riksbank lends money to the banks at longer maturities than normal. The purpose is to contribute to continued lower interest rates on loans to companies and households. As I mentioned when I described the economic situation, we decided at our monetary policy meeting two weeks ago to supplement the low repo rate with such a loan. …and to safeguard financial stability. The measures implemented to safeguard financial stability have similar effects, but the fundamental aim is different. The intention has mainly been to make it easier for the Swedish banks to manage their short-term and medium-term funding. Particularly during the most intense phase of the crisis it was difficult for the banks to borrow other than at very short maturities. It may also be necessary to help financial markets that have suffered serious disruptions to function more smoothly. One can say that the Riksbank has functioned as an intermediary in the bank system – a function that the market does not normally require. One  BIS Review 138/2009  7  example in this area, too, is the loans offered to the banks at longer maturities, in both Swedish kronor and US dollars.

One factor that could become important is that the stimulation from fiscal policy has put a lot of pressure on government finances in many countries. It might well be that countries with a high national debt will be forced for budget reasons to change their fiscal policy sooner than they desire. This could be a risk that hampers the economic recovery, in the worst case for the world economy as a whole. There are also individual differences to take into account when coordinating the phasing out of the extraordinary measures taken to safeguard financial stability. The situation looks different in different countries and it is not certain that everyone is prepared to throw away their crutches at the same time. When it comes to phasing out the support to the bank sector, however, there is reason to coordinate the measures as far as possible. Otherwise the competition between banks in different countries may be distorted, which was an issue discussed when some countries introduced support measures at an early stage. Phasing out measures not so complicated for the Riksbank So how does the Riksbank intend to phase out its extraordinary measures in the cases where the changes should not become permanent solutions? Some measures will in principle phase themselves out. The loans in US dollars from the Riksbank to the Swedish banks have actually already phased themselves out to some extent. The demand for dollar loans from the Riksbank has disappeared as the market has begun to function better.