samchain/econo-pairs-v1 huggingface dataset:
Starting in its December 2015 statement, the FOMC also indicated that it anticipated continuing reinvestment until normalization of the level of the federal funds rate was well under way. The FOMC also indicated, starting in its September 2014 Policy Normalization Principles and Plans, that it intended to reduce the Federal Reserve's securities holdings in a gradual and predictable manner primarily by ceasing to reinvest repayments of principal on its securities holdings. The FOMC’s strategy of waiting to begin normalizing the balance sheet until normalization of the federal funds rate was well under way had several advantages. Most importantly, it reduced the likelihood that an unexpected adverse shock to the economy not long after the start of policy tightening would have necessitated a return to the zero lower bound on the federal funds rate and potentially a reversal in balance sheet normalization. Instead, the FOMC’s approach promotes the use of the federal funds rate as the active monetary policy instrument, an instrument with which the FOMC has much greater experience. In addition, delaying balance sheet normalization allowed the FOMC to meaningfully assess the efficacy of its tools to control shortterm interest rates with a large balance sheet, and thereby judge how patient it could afford to be in reducing the balance sheet to its longer-run level.6 From an accounting perspective, the decline in the balance sheet will, at a high level, resemble a mirror image of its earlier increase.

Although this led to an increase in the productivity growth measured during a transitional period, this was at substantial cost to those who lost their jobs and the economy as a whole, as a large part of the economy’s available resources were not utilised. During and directly after the crisis there were also a number of structural changes in the economy that are likely to have affected developments. Fiscal policy was tightened, with an expenditure ceiling and surplus target, while monetary policy was targeted at achieving a low, stable inflation rate. Such a stabilisation of the macroeconomy means that uncertainty about issues such as future tax rates and price developments decrease, which in turn makes it easier for households and firms to plan. Comparative studies of different countries have shown that this can have longer-term effects, partly through a rise in productivity. Furthermore, several markets were opened to both domestic and international competition through deregulation. Greater competition increases the pressure on profitability, which raises motivation for making production and organisations more efficient, for instance with the aid of more modern technology. There were also other types of structural changes in the Swedish economy during the 1990s. Up to the beginning of the 1990s, the number of people employed in the public sector increased, with a corresponding decline in the private sector. After the crisis there was a turnaround, and the private sector’s share began to increase again.
The first thing to be said is that much more was involved than the imprudent extension of loans to a few poor US households. Rather, the unexpected losses on sub-prime mortgages and assets backed by them acted as a trigger for generalised doubts about the viability of a whole class of assets and a general reappraisal of risk premia, which had become unduly compressed at the tail end of the Great Moderation period. So the fundamental shock was a much larger one. But a number of amplification and propagation mechanisms also appear to have kicked in. Some of these positive feedback loops 8 have operated entirely within the financial sector. The most obvious is that the withdrawal of funding and/or the need to maintain adequate  7  Testimony by Ben Bernanke to the US Senate Banking Committee, 19 July 2007. 8  Numerous official-sector papers have insisted on referring to such mechanisms as negative feedback loops, because they generate a larger adverse impact on asset prices or the real economy from the original negative shock. But since they are amplifying, rather than stabilising, feedback loops, they should obviously be referred to as positive feedback loops. 10  BIS Review 101/2009  capital ratios prompted fire sales of assets.

BIS Review 101/2009  9  Asset Relief Program (see Taylor, 2009), raised the possibility in investors’ minds of the failure of a whole range of institutions that had previously been considered safe. That is evidenced in the simultaneous sharp spike upwards in the CDS spreads of a number of financial institutions after the collapse of Lehman’s (see Fig. 12). Moreover, the prospect of having to make significant default pay outs called into question the solvency of a key provider of that insurance, AIG. The bottom line of all this is that the information requirements for managing risk escalated rapidly at the same time as investors were waking up to the realisation that the distribution of prospective returns on a range of asset-backed securities was a great deal worse than they thought. Not surprisingly, there was a rush for the exits and a drying up of wholesale funding to institutions that were thought to be at all vulnerable. Moreover, attempts to cope with that by selling off assets ran into an adverse selection problem: if someone is selling an asset, then perhaps that indicates that they know it’s a “lemon”. And even the revelation of central bank support in its role as Lender of Last Resort, far from solving the problem, could be interpreted as a negative signal about an institution, as was so in the case of Northern Rock, for example.
I believe that this threshold could be raised significantly without unduly increasing the risk to the broader financial system. Second, policymakers might reexamine the implementation of the Volcker Rule to ensure that it is efficiently achieving its policy objectives. The fact is that most market-making activity has an element of proprietary trading. The market maker that bids successfully often does so based on a view on which way the market might be headed in the near term. Thus, the line between market-making and proprietary trading is not always clear-cut, which makes regulation in this space difficult. Some market participants have argued that the Volcker Rule has contributed to the decline in market liquidity of corporate bonds. Although I view the evidence on this point as inconclusive, it may be worth considering giving greater discretion to trading desks that facilitate client business to intervene when markets are illiquid and volatile. Also, community banks are subject to the Volcker Rule even though they typically do not engage in proprietary trading, or sponsor or retain ownership interests in hedge funds or private equity funds. This seems like an unnecessary burden that drives up compliance costs without a significant corresponding public benefit, so we also should exempt community banks from the Volcker Rule. Third, although CCAR is a vital part of our bank regulatory toolkit, I believe that we should consider changes that might lessen the burden it places on banks. In this vein, the Federal Reserve recently removed the CCAR qualitative assessment for large, non-complex firms.

Svein Gjedrem: Asset prices and economic policy Address by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at the Centre for Monetary Economics (CME)/BI Norwegian School of Management, Oslo, 12 September 2008. The text below may differ slightly from the actual presentation. *  *  *  Inflation targeting Inflation targeting was introduced in Norway by Royal Decree in March 2001, after it had been applied for a period in many other countries. Our experience so far has been that inflation targeting has provided a sound basis for stabilising inflation and inflation expectations. In the period from 2003 to the beginning of 2008, inflation was below target. Ever-cheaper goods flowed into Norway from Asia, and with solid productivity growth in Norwegian enterprises, the rise in prices for domestically produced goods and services was also subdued. In an environment of low inflation, the interest rate was also low. At the same time, it was stated that when inflation picked up, the interest rate level would again return to a normal level. Solid growth in output and demand for goods and services gradually led to prospects for higher inflation. Since summer 2005, the interest rate has gradually been raised again to prevent inflation from becoming too high. The interest rate was raised well before inflation moved close to 2.5 per cent. In 2007, the key policy rate reached what we consider to be a normal level.
A study by the Carbon Tracker Initiative estimates that as much as $ billion of coal assets across Southeast Asia can no longer yield the expected economic return in the next decade due to tighter environmental policies and competition from cheaper renewable energy. Conversely, as climate change mitigation efforts intensify globally, environmentally responsible companies can be expected to outperform their benchmarks. Besides technological advances and policy changes, growing consumer awareness of environmental issues will also affect companies’ bottom lines and thereby the risk-return calculations of investors in these companies. Finally, as I mentioned earlier, beyond the cold calculation of climate-related risks and returns, many investors want to invest in a way that contributes to leaving behind for future generations a planet that is habitable, green, and pleasant. Sustainable investing is becoming a live issue in Asia. The story of Asia’s huge infrastructure needs is well-known. The Asian Development Bank has estimated that developing Asia needs to spend $ trillion annually on infrastructure up to 2030. What is less well known is that climate mitigation and adaptation costs will add another $ billion to the region’s annual investment needs. This is a significant load. It will require a radical change in the way public sector policies, private sector financing, and investment decisions are made. Ensuring sustainability is very much a part of Singapore's ethos. Making the best use of limited resources has, for a long time, been a key part of our nation-building process.

However, towards the end of the upturn the economy was facing labour shortages, higher wage growth and a sharp increase in household consumption and debt. Interest rates had to be kept at a high level in Norway. The turnaround abroad took place two years ago, but the Norwegian economy continued to show a high level of activity. This led to a widening of the interest rate differential against other countries. The main explanation for the wide interest rate differential is not that interest rates are high in Norway, but that interest rates are at a historic low abroad. Interest rates in the US have not been at such a low level since the 1960s. A further jump in wages in 2002 amplified the imbalances in the economy and fuelled the rise in prices for goods and services produced in Norway. This is why monetary policy has been tight. The real interest rate, i.e. the interest rate adjusted for inflation, rose in 2000 and was thereafter somewhat higher than the average for the past 30 years. With the reductions in the key rate this winter, the real interest rate is no longer particularly high. The tight monetary stance is reflected in the strong krone. 2  BIS Review 14/2003  Over the autumn and winter, it has become clear that global growth is weaker than we and other observers had expected. Several central banks have responded by reducing interest rates further. Interest rates in the US and Europe are unusually low.
Foreign demand The current account, which was USD 15.6 billion in 2004, reached USD 23.1 billion in 2005, realizing 6.4 percent of the GNP (Graph 14). The upward trend in the current account deficit continued in the first two months of 2006. BIS Review 67/2006  9  Graph 14. Current Account Balance/ GNP (Annualized, Percentage)  3 2 1 0 -1 -2 -3 -4 -5 -6 05-II  04-III  03-IV  03-I  02-II  01-III  00-IV  00-I  99-II  98-III  -7  Source: CBRT. In 2005, while the rates of increase of both exports and imports weakened compared to 2004, the rate of increase in exports remained well below the rate of increase in imports in the second half of the year. The said tendency continued in the first two months of 2006 as well (Graph 15). The decline in textiles and apparels exports on an annual basis since November 2005 has had an unfavorable impact on general export performance. While rapid economic growth leads to an increase in the imports of intermediary goods, the rises in oil prices boost the amount of imports infused terms. Graph 15. Imports and Exports (*) (Billion USD, Annual Percentage Change) 60 50 40 30 20 10  Imports  Exports  Jan-06  Nov-05  Jul-05  Sep-05  May-05  Mar-05  Jan-05  Nov-04  Sep-04  Jul-04  May-04  Mar-04  Jan-04  Nov-03  Sep-03  Jul-03  May-03  Mar-03  0  Exports (exc.

Therefore the developments in these expectations play an important role in Central Bank analyses and evaluations. In this framework, analyzing the inflation expectations for the next 12 months and 24 months as of April, the following points emerge: Though consumer inflation expectations for the next twelve months have declined, the rate of decline has been slowing down significantly since February and expectations have to some extent been  6  BIS Review 67/2006  following a horizontal course. The fact that long-term consumer expectations relating to the next 12 and 24 months are slightly above the targets is interpreted as a development that requires prudence with respect to the falling inflation process. Nevertheless, the course of longer-term expectations at low levels is an encouraging development as regards the success of inflation targeting (Graph 9). Graph 9. CPI Expectations Regarding Next 12 and 24 Month Periods (Annual Percentage Change)  9 Next 12-Month  8  Next 24-Month  7 6 5 4 Apr-06  Feb-06  Dec-05  Oct-05  Aug-05  Jun-05  Apr-05  Feb-05  Dec-04  3  Source: CBRT. Supply and demand developments Supply-demand balance Distinguished Guests, At this point, I would like to touch on our evaluations relating to supply and demand developments in the light of national income data released at the end of March. In the last quarter of 2005, Gross Domestic Product (GDP) increased by 9.5 percent compared to the same period of the previous year. Hence, GDP growth was realized as 7.4 percent throughout 2005.
Miguel Fernández Ordóñez: The crisis and financial markets Speech by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, at the Annual Financial Conference of the Asociación de Mercados Financieros, Madrid, 13 December 2010. *  *  *  Good afternoon, and my thanks to the Asociación de Mercados Financieros for their kind invitation to participate in this lunch colloquium. Since the Great Depression last century, the world has not seen a financial crisis as deep as the present one. And, like then, many years of intense study and a sufficient time perspective will probably be needed to accurately assess the factors that caused the crisis and the mechanisms contributing to its spread. In particular, there is still much to be learned of the relationship between the development of the crisis and the behaviour of financial markets. Nonetheless, I shall take this opportunity today to offer some brief reflections on the conduct of markets during the crisis, with a perspective that in no way claims to be all-encompassing since I shall concern myself exclusively with its impact on the Spanish economy. To this end I’ll discuss two clearly differentiated episodes of the financial crisis of the past three years: the first, which we might call the “banking crisis”, affected Spain less than other countries; and the second, associated with the rapid deterioration of public finances in the euro area, has had significant effects on our country.

Foreigners investing in Malaysia are also free to hedge with onshore banks their committed flow of funds such as the repatriation of investment proceeds, dividends and profits from Malaysia as well as the purchase of ringgit assets in Malaysia. There is free mobility of inward and outward movement of funds relating to both foreign direct investment and portfolio capital investments. Multilateral development banks and multinational corporations may also issue ringgit or non-ringgit denominated instruments in the domestic bond market. To enhance the delivery system, an executive committee of key government officials, financial regulators and industry players has been has been set up for the implementation of the initiatives to support the operations in the Islamic financial system. Among others, an "executive green lane" has been accorded to expedite applications by expatriates for long-term employment passes with multiple entry visas. The Foreign Investment Committee rules will also be relaxed further to allow 100 percent foreign equity ownership in these financial institutions. Moreover, the Islamic financial system will also adopt a conducive stance on Shariah interpretations and practices, consistent with its international dimensions. It will mutually recognise and accommodate the various juristic reasoning that has been approved by recognised Shariah advisers. In conclusion, I wish the Malaysia Country showcase a success. I invite the business and financial communities from this region and the Malaysian delegation to capitalise on this event to arrange for business meetings on the sideline of this Summit. Thank you. 2  BIS Review 48/2007
34  Senior Supervisors Group (2010). 35  Jenner and Block (2011). BIS central bankers’ speeches  11  common tongue. That is one of the key messages of the 2010 Senior Supervisors Group report. The experience of global supply chains and the web tell us there is no technological constraint on real-time measurement and management of financial inventories by even the largest firms. Where Wal-Mart has led, Wall Street could follow. Common data standards could similarly transform consolidated risk management. There is no technological reason why slicing and dicing of the aggregate balance sheet could not be done with the same simplicity as searching the web. Determining aggregate exposures to a given counterparty or a risk factor is a single cut of the financial web. It ought to be as straightforward as Googling Aung San Suu Kyi or Britney Spears. (b)  Improving risk management across firms  Measuring and managing risks across firms was perhaps the single most important cause of the seizure of financial markets during the crisis. Counterparty risk reigned supreme. In as densely-connected a web as global finance had become, this was hardly surprising. Network risk, the risk of cascading dominos, was several orders of magnitude larger than at any time in human history. To see that, compare the failure of two financial leviathans only a decade apart. When LTCM collapsed in 1998, it had exposures of $ billion in OTC derivatives with a handful of Wall Street’s finest.

Paulo Sergio Cavalheiro: Regulation of capital and financial stability Speech by Mr Paulo Sergio Cavalheiro, Deputy Governor for Supervision of the Central Bank of Brazil, at the International Seminar “The New Basel Capital Accord: Challenges and Opportunities for the Americas”, held jointly by “Centro de Estudios Monetarios Latinoamericanos - CEMLA”, “Association of Supervisors of Banks of the Americas - ASBA” and “Federación Latinoamericana de Bancos FELABAN”, in Mexico City, Mexico, 12-13 July 2004. *  *  *  The final version of the Capital Accord, also known as Basel II, has just been released. The document maintains the basic framework initially proposed, that is, three pillars, the first one dealing with the calculations of the capital requirements per se, comprising market, credit and operational risks (this last being the real novelty), the second describing the supervisory review process and the third detailing the market discipline to be achieved via disclosure. In Brazil, capital requirements were introduced by Resolution 2099, in August 94, which specified 8% of risk weighted assets as the minimum capital required. Following Resolution 2099, in October 94, Circular 2500 modified some values for minimum capital and net worth required for the establishment of banks, in accordance with the location and size of institution. The supervisory authority raised the minimum capital required to 10% of risk-weighted assets in June 97. In November 97, Circular 2784 again raised this value, this time to 11%, which is still the minimum ratio.
Adjusted balance for the cycle is a measure, albeit an imperfect one, of budget policy’s “discretionary” component.0  BIS Review 135/2008  13

Norman T L Chan: How to get rid of banking supervisors Keynote speech by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the Lion Rock Institute Freedom Dinner, Hong Kong, 22 November 2017. * * * Nick (Sallnow-Smith), founders, directors and members of the Lion Rock Institute, Daniel (Hannan), ladies and gentlemen, 1. It gives me great pleasure in joining you today. 2. After accepting the Institute’s invitation conveyed by Peter Wong, I thought hard about what to talk about in front of such a learned and distinguished audience that support and cherish economic freedom. I was also mindful that I should come up with an inviting title that helps sell the tables. I hope I have achieved this, at least by attracting a few more senior bankers to help foot the dinner bill. 3. Nowadays a common theme that bankers often talk about when they meet each other is how their lives have become so much tougher, thanks to ever more stringent standards demanded by regulators and supervisors. Not only are banks required to hold a lot more capital as well as liquidity to meet unexpected contingencies, there is constantly increasing demand by the supervisors to deal with conduct risks. Everyone is familiar with the escalating compliance burden and pressure on banks in tackling anti-money laundering, counter-terrorist financing, international sanctions, mis-selling, etc., not to mention the hefty financial penalties slapped on banks for violations or breaches.