samchain/econo-pairs-v1 huggingface dataset:
Asset markets supported by an artificially low interest rate environment rather than economic fundamentals will skew resources allocation in society from expanding the productive sectors to pursuit of asset price appreciation. Such a shift will easily lead to investment mismatch, thereby eroding medium to long term productivity growth as well as growth potential of the economy. In addition, the more sizable and prolonged quantitative easing becomes, the more difficult and riskier will be the exit plan. Central banks should realise that there is not much they can do. In order to solve the structural imbalances built up in the past two decades, we must get to the bottom of the problem. Ladies and Gentlemen, up until 2008, the industrialised countries and various emerging economies had been enjoying a golden period of development which lasted for two to three decades. Income levels and living standards continued to rise. Some academics call this a period of “Great Moderation”. However, no one is sure why life during this period was so easy. Some say that this is due to technological and financial innovation of modern society, the so-called “paradigm shift”. We should now be awakened to the reality that this golden period was probably underpinned by little more than excessive debts, and is in fact unsustainable. If the major industrialised countries will have to undergo deleveraging in the foreseeable future, how will the global economy evolve?

I am not sure which of these three scenarios will happen or whether a fourth scenario will emerge, as the current situation is something we have never experienced before. However, what I am certain is that since the outlook for macro economic and financial environment is very uncertain, it is highly possible that we will continue to see large fund inflows and outflows as well as sharp fluctuations in the financial markets. Therefore, I would like to take this opportunity to ask everyone to stay alert to the risks ahead and be aware that the current environment is highly abnormal and uncertain. We should all take precautionary measures and get to the bottom of the problem, learn from others’ experiences and avoid overstretching ourselves. Otherwise, we may find ourselves being trapped in the debt abyss with no way out. Thank you. BIS central bankers’ speeches  5
This hyper-connectedness between citizens, corporations and the cities they live in will give rise to new disruptions. The Arab Spring protests for example, were facilitated by the widespread access to mobile technologies. Citizenry today are able to quickly organise themselves around special interests and put pressure on governments and businesses. BIS central bankers’ speeches  3  But the digital revolution cuts both ways. Always-connected users leave data trails that make them easier to track and to be analysed, and many corporations now have more access to citizens’ personal data than do the governments. Last year, Facebook worked with the FBI to bring down an international cybercrime gang responsible for more than $ million in damages to computer networks. Power dynamics are changing and traditional state institutions will need to share power and evolve new modes of cooperation with such companies. Even so, the trend of more data and greater openness will continue. There are good examples of how governments are leveraging technology in Asia. The Korean government is working with networking giant Cisco to build the world’s first smart city by 2015. New Songdo City will occupy a manmade island and will incorporate millions of sensors and computers to monitor every aspect of the city’s operation. Recognising the enormous potential, Singapore tapped into the data revolution quite early in the game. As an example, the Data.gov.sg initiative, brings together 5,000 data sets from over 50 government agencies, and makes that data stats available to the public.

More precisely, the Eurosystem’s operational framework is characterised, first, by a large number of counterparties eligible for refinancing operations and marginal lending facility. This facilitates the direct provision of liquidity to a large number of banks in need of it, at a time when the money market is working imperfectly. Second, the Eurosystem accepts a wide range of collateral eligible for its refinancing operations. This has facilitated the raising of liquidity via the Eurosystem for banks with reduced access to the interbank market, at the same time economising through their operations with the Eurosystem on those few types of assets that have continued to be tradable throughout the turbulence, such as government bonds. In this respect, the framework may have also supported the continued functioning of capital markets. Third, the large size of its refinancing operations (around one third of total assets in the Eurosystem balance sheet – or € billion) has allowed the Eurosystem to provide longer term refinancing to banks at a large scale, and at the same time to continue to adequately steer liquidity in the course of the maintenance period. BIS Review 123/2008  3  2. Implications for central banks, financial regulators and supervisors  At the level of the international community, we have adopted a methodology for responding to the present turmoil and working out what lessons can be drawn from the crisis: the FSF, created after the Asian crisis, coordinates global efforts towards creating a more resilient financial system.
The Swiss franc’s safe haven properties and financial market participants’ perceptions that the risks to the global economy were extreme in size and uncommon in nature (and thus hard to evaluate) offer a far more complete explanation. The unique safe haven properties of the Swiss franc are well recognised. They have rarely been as clearly demonstrated as in recent history. It is striking, for instance, that the price of gold in Swiss francs depreciated by approximately 5% between early 2011 and 2 August, while, in the meantime, the US dollar price of gold kept breaking one record after another. The Swiss franc’s safe haven properties are also illustrated by the negative correlation between its movements and the price of risky assets, such as equity shares. Additionally, these movements are positively correlated with risk indicators, such as the VIX index. The Swiss franc’s significant appreciation within a few hours of the first plane crash into Manhattan’s twin towers on 11 September 2001 constitutes another vivid example of the strength of its safe haven properties. While the Swiss franc’s status as a so-called safe haven currency may be a testimony to the country’s long history of stability, in times of global uncertainty on the financial markets, it is an essentially financial phenomenon which may inflict significant and potentially permanent damage upon the real economy. When financial forces push a currency so far away from its fundamental value so quickly, the consequences are very real.

Most notably, as the SVC integrates several processes, it is fast, efficient and safe. In equity trading, “straight-through processing” has technically reduced “time to settlement” to as little as four seconds, though in market practice the settlement cycle for equities is three days. Domestically, the system is inexpensive and the price of trading has decreased significantly in recent years. “Straight-through processing” has also been applied to and strengthened the Swiss repo market, where not a single “fail”, i.e. a settlement that is one or more days late, has occurred in the interbank repo transactions since May 2009. In terms of automation, the integrated Swiss approach compares favourably to other systems of its kind. Despite the omnipresence of electronic systems worldwide, only one third of all repo transactions in Europe are in fact handled by automatic trading systems such as BrokerTec, Eurex Repo or MTS. In several national markets, most steps are still performed manually.8 As the Swiss value chain was built in the mid-1990s, it was a frontrunner in the move towards straight-through processing. It is still a “state-of-the-art” set-up, but this is no time to be complacent in view of the ever-increasing strengths of competing systems. Given its high level of performance, it is interesting to observe that the Swiss value chain is the result of a typically Swiss form of collaboration, known as “Gemeinschaftswerk”. The principle of “Gemeinschaftswerk” has been vital in shaping and maintaining Switzerland’s FMI.
But two stand out. First, price stability does not guarantee stability of the economy as a whole. Second, the instruments used to pursue financial stability are in need of sharpening and refining. Setting Bank Rate to maintain price stability was successful in itself, but did not prevent a recession induced by a financial crisis. But let’s not throw out the baby with the bathwater. The period prior to the crisis was the most stable economic environment for generations. And, unlike most previous recessions, this crisis wasn’t preceded by an unsustainable boom in output. In the five years leading up to the crisis, overall GDP growth remained close to its long-run average and inflation differed from the 2% target on average by only 0.2 percentage  2  BIS Review 76/2009  points. Diverting monetary policy from its goal of price stability risks making the economy less stable and the financial system no more so. To argue that monetary policy should be directed to counter inadequately priced risk is to argue that unemployment is a price worth paying to tame the banking system. Inflation targeting is a necessary but not sufficient condition for stability in the economy as a whole. When a policy is necessary but not sufficient, the answer is not to abandon, but to augment, it. Indeed, the overarching lesson from this crisis is that the authorities lacked sufficient policy instruments to take effective actions. Nowhere was this more evident than in dealing with Northern Rock in the absence of proper resolution powers.

Leigh-Pemberton, R. (1989), Speech given at the Ernest Sykes Memorial, 24 May 1989 available from Bank of England Archive, ref. 7A320/10. Mahate, A A (1994), “Contagion Effects of Three Late Nineteenth Century British Bank Failures”, Business and Economic History available at http://www.thebhc.org/publications/ BEHprint/v023n1/p0102-p0115.pdf Norman, B, Shaw, R and Speight, G (2001), “The history of interbank settlement arrangements: exploring central banks’ role in the payment system”, Bank of England Working Paper No. 412. Orbell, J (1985), “Baring Brothers & Co., Limited. A History to 1939”, Butler & Tanner Ltd. Roberts, R and Kynaston, D (1995), “The Bank of England: Money, Power and Influence 1694–1994”, Oxford, Clarendon Press. Roberts, R, Reading, B and Skene, L (2009), “Sovereign Rescues: How the forgotten financial crisis of 1914 compares with 2008–2009”, Lombard Street Research, Special Report. Saw, R (1944), “The Bank of England, 1694–1944”, George G Harrap & Co Ltd. Sayers, R S (1976), “The Bank of England 1891–1944 (Volumes I–III)”, Cambridge University Press. Wood, G (1999), “Great Crashes in History, Have they lessons for today?” Oxford Review of Economic Policy, 15 (3), pp 98–109. BIS central bankers’ speeches  9
In the first place, inflation was fuelled by severe supply chain disruptions due to Covid and then by the shock to commodity prices as vaccines paved the way for the world’s economies to reopen simultaneously. As these factors began to recede, Russia’s invasion of Ukraine caused a rapid run-up in the prices of energy and commodities, including agricultural commodities. Today, the effects of these shocks on inflation have begun to fade. This winter, energy prices fell sharply, and global grain prices have headed downwards since February. But the nature of inflation has changed. In spreading to the wider economy, these shocks stoked internal inflation, as higher production costs prompted companies to pass the increases on to their selling prices. The effects of inflation also widened to include all goods and services. Accordingly, “underlying” inflation, i.e. excluding food and energy, has climbed to 4.6% in France and could prove more persistent than the headline number. Monetary policy can and must curb this more “domestic” and broad-based inflation. To do this, the Eurosystem has responded quickly and forcefully over the last year, hiking policy rates by 350 basis points to take the deposit facility rate from -0.5% to 3% between July 2022 and March 2023. Monetary policy has now entered into a “restrictive” territory, after reaching a neutral position at the end of last year, and has shifted to an “instrumentpiloting” approach based on three economic instrument dials: the outlook for headline inflation, underlying inflation and the proper transmission of monetary policy.

According to the forecasts and commitment made by the ECB Governing Council, inflation is expected to ease towards 2% in 2025 as current drivers weaken and the effects of monetary policy operate on the economy. Yet the impact of monetary policy on inflation raises two questions: with what delay does it take effect, and through which channels does it operate? As we know, monetary policy transmission is not immediate. The effects of rate hikes take time to affect supply and demand and hence price-setting decisions, with economic research suggesting that transmission takes place on average over one to two years. In the present case, the time taken will ultimately depend on the decisions by consumers and businesses, which are influenced by two policy transmission channels: 6  First, inflation expectations. Economic decisions depend both on current economic conditions and expectations on the future state of the economy, and in particular the future level of inflation. If expectations on future inflation go up, investment and consumption decisions, and hence prices and wages, will be modified. By enabling economic participants to coordinate their decisions around a shared and credible inflation target (2% over the medium term), central banks contribute directly to ensuring price stability; Second, financial conditions and demand. Monetary policy acts directly on interest rates and therefore on financing for supply and demand. Through monetary tightening, the Eurosystem allows real interest rates to rise at different time horizons.
Banking liberalisation The second example of our measured liberalisation approach is the opening of our retail banking sector, with simultaneous steps to help strengthen local Singapore banks. Our starting position was different from most countries. Foreign banks (mostly British) dominated the Singapore banking system when we gained independence. For three decades, the Government has protected the local banks, especially in the retail business, to enable them to expand their market share. We believed that strong and well-managed local banks, with a significant share of the home market, were critical to the resilience and stability of our financial system. We wanted to be sure that in a crisis, we could count on major institutions whose long term interests were aligned with the Singapore economy. We still hold this view. Like banks in other Asian countries, most of our local banks started as family banks, and are still run by their controlling shareholders. But strict supervision enabled them to grow into sound, wellcapitalised institutions, free of the problems of improper and imprudent lending to related companies. By Asian standards, the local banks were exceptionally well run. But compared to the best international banks, they lagged in many areas: size, technology, expertise, range and quality of service, and shareholders’ returns. We could not afford to let Singapore banks fall behind, or deprive the rest of our economy of worldclass financial services. In any case, because of globalisation and cross-border competition, a protectionist policy was becoming less and less tenable.

In Scandinavia and the Benelux countries, the pressing need for economies of scale has forced major banks to look beyond their domestic markets for partnerships, and cross-border mergers have been common. In Singapore, the same thing is already happening in the telecommunications industry. The Government has decided to allow, and indeed to encourage, dominant local players like Singapore Telecom to go beyond foreign acquisitions, to seek foreign mergers. As Singapore banks increasingly confront the same imperative, we will have to consider exactly how far we are willing to trade off retaining a few Singaporean-controlled banks against the logic of globalisation. Conclusion The Asian crisis has led to a rethink of the consensus in favour of globalisation and free capital flows. The result has been to reaffirm the logic of globalisation, and the value of free markets and free trade. But it has also caused a more sober appreciation of the risks of international flows of capital, and clarified the necessary preconditions for countries to minimise the difficulties and reap the benefits from freer capital flows. Singapore’s experience in bringing our financial sector up to best practices during and after the crisis shows how complex and delicate a task it is, despite Singapore’s relatively strong starting point. It will be even more challenging for countries in less favourable circumstances, to find their way forward in post crisis Asia. In this quest, these countries deserve the full support of the international community. 9  BIS Review 76/2000
As you can imagine, the panel has been a great resource, accessible by staff at all Federal Reserve banks through a fast and easy-to-use interface. It has already been used in several 2  BIS central bankers’ speeches  Federal Reserve Board and Treasury reports, Federal Open Market Committee presentations, speeches, and congressional testimonies, and in about 100 research papers and policy analyses. It also has value for our community outreach, as we can profile specific geographical regions. Particularly impactful have been our releases of the Quarterly Report on Household Debt and Credit, containing a comprehensive summary of households’ access to and use of credit. Several of our research findings have influenced policy debates. For example, an important question regarding recent household deleveraging has been to what extent the decline in aggregate household debt was attributable to delinquent debt charge-offs as opposed to active debt paydowns by consumers. Our research found that while charge-offs played an important role, a huge change in consumer behavior had taken place. While consumers extracted home equity and took on more debt during 2007, they reverted to actively paying down debt during 2009, creating a remarkable $ billion reversal in cash flow available for consumption in just two years. In our most recent report we are seeing signs suggesting that the deleveraging period has reached its end. The availability of borrower-level data has been key to our ability to analyze consumer behavior.

Many jurisdictions have implemented macroprudential measures similar to those in Hong Kong, including loan-to-value ratio (LTV) caps and stress testing on the mortgagor’s ability to cope with interest rate rises in terms of their repayment ability. Challenges and mitigation: calibration of macroprudential policies 4. I would like to take this opportunity to share our experience gained since the GFC in operating our macroprudential measures on mortgage lending. My remarks would focus on what I call the “4Cs”. 5. Calibration: Driven by the low interest rate environment and limited housing supply, residential property prices in Hong Kong continue to grow since the GFC. This has posed increasing risks to financial stability in Hong Kong. In response, the HKMA implemented 8 rounds of tightening of the macroprudential measures from 2009 to 2017. Unlike monetary policies, there has been far limited literature on how macroprudential measures should be calibrated with respect to changes in asset price levels. The complex dynamics underlying the property market in Hong Kong has made it very difficult, if at all possible, to develop an ex ante framework governing how the HKMA should operate its macroprudential policies. So, what we have done is to tread extremely carefully in each round of adjustment. The HKMA has established a cross-departmental committee to regularly review whether the prevailing macroprudential measures would need to be adjusted, taking into account a host of factors including the property price trend, transaction volumes, domestic economic fundamentals and the external environment.
William C Dudley: Regional economy and manufacturing update Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Quarterly Regional Economic Press Briefing, New York City, 22 July 2010. *  *  *  Good morning and welcome to the New York Fed’s July 2010 Regional Economic Press Briefing. I value this opportunity to talk with the journalists covering our region – and through you, to the people in our District. My goal this morning is to share how I see regional economic conditions, with particular focus on the manufacturing sector in the Second Federal Reserve District. My colleagues will follow me and provide more detail on the patterns that I’ll describe. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System. I. National economic conditions  To provide some context, I’ll begin with a few words about national economic conditions. U.S. economic activity has expanded for four consecutive quarters, but at rates that can only be described as modest when compared with early stages of past recoveries. The June payroll numbers tell the story of this sluggish recovery in employment. The economy gained only 83,000 private-sector jobs, following a downwardly revised gain of only 33,000 in May.

We want to assess to what extent and under what conditions it could improve the efficiency and security of settlement of financial assets transactions, while preserving the fundamental role of central bank money in the smooth and safe execution of these transactions. The Banque de France also takes an active part in the work conducted by the Eurosystem under the aegis of the ECB in relation to a digital retail euro. The challenge is to assess whether and how a digital central bank euro is needed. As we do when analysing market developments, our analysis encompasses all the potential impacts of such innovation. We need to ensure that we 2/3  BIS central bankers' speeches  do not compromise more general public objectives such as monetary and financial stability, organise coexistence with other forms of public money and commercial banks, and promote innovation and efficiency in the financial system. Naturally, our experiment is not limited to questions of digital central bank money. As part of our observation on the development of crypto-assets, we plan to participate in market experiments to help define the role of supervisors in this ecosystem. I’ll stop there to give way to the two round tables of this webinar. The two themes chosen are: “Crypto-assets, risks and regulation” and “Crypto-assets, what will become a standard?”. They seem to me to be two very complementary ways of addressing the issues that I have highlighted. I am sure that the cross-section of American and European views will add to the debate.