samchain/econo-pairs-v1 huggingface dataset:
Along this positive trend, and with the number of Mainland enterprises eligible for the cross-border RMB trade settlement scheme increased substantially to 67,000 recently and with the refinements that we are going to introduce, I am confident that the offshore RMB market in Hong Kong will continue to develop progressively in the coming year, both in terms of the depth and breadth of the market and product development. Four Hong Kong banks have been approved to participate in the Mainland’s interbank bond market, and the applications by a number of banks are being processed by the Mainland authorities. This will provide a channel for the circulation and capital preservation for the RMB funds in Hong Kong. Meanwhile, we have just been informed that HKMA’s eligibility for investing in the Mainland’s interbank bond market has been approved by the PBoC. We are working closely with the PBoC on the implementation arrangements. Finally, to further promote the development of the RMB offshore business in Hong Kong, the HKMA is making preparations for overseas roadshows with the financial industry, focusing on locations which have growing trade and investment flows with the Mainland. We believe that with our joint efforts, Hong Kong will be able to play its role as an RMB offshore market to the fullest, thereby promoting and supporting the nation’s increasing cross-border trade and investment activities while enhancing and consolidating the status of Hong Kong as an international financial centre. BIS Review 175/2010  3

As a famous economist once said, monetary policy seems to operate with “long and variable” lags. More significantly, the MPC isn’t concerned solely with inflation. It is also asked to avoid “undesirable volatility in output”. And occasionally – in particular following shocks to costs or supply – there are trade-offs between the two. These can lengthen the optimal time over which to bring inflation back to target. I think this had real relevance at the time I joined the MPC, in mid-2011. At that time, the economy looked a bit like the starting point of these simulations. After a tepid recovery there was still plenty of spare capacity in the economy. Companies said they were operating well below capacity; unemployment was still high. But thanks to a series of cost shocks, including the big depreciation of sterling’s exchange rate 2-3 years earlier, inflation was nonetheless well above target. BIS central bankers’ speeches  3  In response, the MPC might have behaved like Committee A, ramming up interest rates to get inflation back to 2% as quickly as possible. But that would almost certainly have pushed the economy back into recession. Instead it took a more balanced approach. As I tried to explain in a speech I gave later that year, the MPC had arguably tolerated the (then) high rate of inflation for longer than it might have done because the real side of the economy was so weak. It signalled this choice more explicitly in early 2013.
2  BIS Review 10/2005  The Federal Reserve is now gradually increasing interest rates and the first measures aimed at reducing the US budget deficit have been announced. This may curb growth in domestic demand and imports of goods and services. However, the US authorities will probably not go as far as to bring economic growth to a halt, with an accompanying increase in unemployment. The US issues the world’s most important settlement and reserve currency. States and agencies in the US have access to dollar-denominated loans in major international capital markets. The exchange rate risk lies with foreign creditors. The US may have a long-term interest in maintaining a stable dollar that is used in international payments. But this may be weighed against short-term interests: If the dollar depreciates, the US trade deficit will be reduced with a limited impact on domestic production. The US is not the only source of trade imbalances. They also reflect very low growth in continental Europe and the largely export-based growth in Asian countries. Countries other than the US must therefore also contribute in order to prevent growth in the global economy from faltering. With limited domestic growth capacity and high unemployment, many industrial countries are poorly equipped to cope with a weaker dollar and lower US demand. The challenges are perhaps particularly demanding in Japan and some large European countries. The situation is not negative across the board. There is solid growth in a number of European countries such as Spain, Ireland and the Nordic countries.

As a life-long central banker, I’m sure Governor Glenn Stevens can give us the broader perspective on this issue. 4. I sincerely hope that the common lessons learned from our experiences within the region will help us, and indeed other central banks, better manage the complexities of the global economy. 5. Before we hear from Governor Stevens, I wish to take this opportunity to thank all guests for joining us at this Policy Forum to mark the 70th anniversary of the Bank of Thailand. Many of you here have been an integral part of our policy progress over the past many years. On this note, may I propose a toast of appreciation to all of you and of hope that many of you will continue to support a common vision toward building further policy progress for the well-being of all Thais in years to come. 6. Thank you. BIS central bankers’ speeches  1
As noted earlier, this tightening cycle, when it arrives, will be more complicated than past cycles, as there will be more decision points facing policymakers. With more decision points come more opportunities for the markets to be confused by our actions. The recent changes to the discount rate and the Treasury’s Supplementary Financing Program balances highlight this concern, as the amount of attention that those actions received was outsized relative to their significance for the economy or for the path of short-term interest rates. The burden is on the Fed to mitigate this risk by communicating clearly about its policy intentions and the purpose of any operational moves it might take. In this regard, the forwardlooking policy language that the FOMC is currently using in its statement is important. I would argue that this language contains much more direct and valuable information about the likely path of the short-term interest rate target than does any decision about draining reserves. Indeed, it will be difficult for market participants to make precise inferences about the timing of increases in the target interest rate from the patterns of reserve draining alone, in part  4  Some have discussed whether the draining of excess reserves has effects on the economy beyond the implications for short-term interest rates.

Here I am referring to those facilities that provided funding at maturities of up to three months to particular sets of firms, such as the primary dealers, money market mutual funds, commercial paper issuers, and depository institutions. 2 Just today, we conducted the last operation associated with those facilities,  1  The views expressed here are not necessarily shared by the Federal Open Market Committee or by other members of the staff of the Federal Reserve Bank of New York. 2  In discussing these facilities, I am not including any provision of credit intended to support specific institutions, including those associated with the Maiden Lane LLCs. I include the Term Securities Lending Facility in with short-term lending facilities, even though it provided the market with Treasury securities rather than reserves, because it was often used to find funding for positions in less liquid securities. BIS Review 39/2010  1  meaning that all of the short-term liquidity facilities that were introduced during the crisis have now effectively been retired. The only special liquidity program that remains active is the Term Asset-Backed Securities Loan Facility, which I consider to differ from the short-term liquidity programs because it provides funding for up to five years. With the wind-down of these short-term liquidity facilities, it is a good time to look back and assess their performance. The bottom line here is simple: these programs were an unquestionable success.
Many banks in the world also have a lot of work to do before their balance sheets are free of impaired assets. From a Swedish perspective, economic development in the Baltic states still constitutes a significant risk.

There were large savings deficits in both the private and public sectors and a high level of indebtedness in the private sector. The loans also gave rise to a growing currency crisis. In addition, increasing cost pressures gradually undermined the competitiveness of the three countries. When the global financial crisis broke out, economic growth in the Baltic states had already begun to decline. Declining growth and the large current account deficits led investors to begin reappraising the value of eastern European and central European assets. Capital inflows dried up, which made it more difficult to fund many projects and further reinforced the downturn in economic activity. The credit rating agencies downgraded the Baltic states, one after the other, which further aggrevated the shortage of capital. The lack of capital thus helped to reinforce the downturn in the same way that the surplus of capital once reinforced the dramatic upturn. There are some signs that the real economy in this part of the Baltic region has now begun to stabilise, but unfortunately the recovery may be a long, slow process. This is partly because external demand is still weak as a result of the global recession. Above all, however, it is because domestic demand is low due to the fact that the Baltic states are now carrying out so-called internal devaluations. This means that wages and other costs have been substantially reduced to restore competiveness and to counteract the serious weakening of public finances.
The latter orientation focuses attention beyond the current circumstances to the restoration of growth, access to capital, and normal market functioning, recognizing that workouts are but one of several means to that end, not an end in themselves. §  G  BIS Review 61/2002  We should not forget that a crisis is not over when capital outflows have been halted and prices stop falling. Emerging market economies depend on sustained and predictable access to international capital market and bank credit, and economic recovery and restoration of growth depend on confidence being reestablished, so that the necessary financing, beyond emergency lending, can be obtained. Secondly, we in the public sector would be well served to maximize the complementarity between efforts to prevent crises and efforts to contain and resolve crises when they do arise. §  The consensus on sound preventative policies includes precepts that public sectors should limit the scale of their involvement in the domestic economy, and that borrowers, public and private, should be encouraged to follow best practices in the management of their liquidity, foreign exchange, and credit risk. Indeed, as I discussed earlier, this is the essence of what we are trying to do under the revised Capital Accord. Moreover, countries are being encouraged to strengthen their legal and regulatory regimes for insolvency resolution to deal more effectively with cases when private sector borrowers and lenders get it wrong.

William J McDonough: Promoting financial resilience Remarks by Mr William J McDonough, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Cato Institute’s 20th Annual Monetary Conference on “International Financial Crises: What Role for Government?” cosponsored with The Economist, New York, 17 October 2002. *  *  *  •  Good morning. It is a pleasure to have the opportunity to join you on the occasion of this timely conference, and to share with you my thoughts on promoting financial resilience. •  Despite the fact that periodic surges in volatility are a fact of life in financial markets, I think there is general acknowledgment that recent years have been extraordinary in this regard. This has been a period of historic change and remarkable volatility in markets, going well beyond the emerging markets, and carrying with it important implications for political, social, and institutional stability in significant segments of the globe. •  The experiences of recent years have reinforced old lessons and brought home new insights about maintaining financial stability and sustained growth. In particular, a broad consensus continues to develop on ways of strengthening the institutional framework at the national and international level to create more robust, and thus more crisis-resistant, economies. There is general agreement that in order for countries to enjoy sustained and stable growth, the following are crucial: G  a sound and stable macroeconomic environment, and  G  well-functioning and robust financial systems in both capital-exporting and capitalimporting countries.
However when the acquisition of high yielding assets is funded from short term sources, the financial institution is not only exposed to losses on the asset side but also to adverse changes in funding costs. In such a situation, the Central Bank finds itself in a position where it is more exposed to losses on collateral. Whereas the Central Bank will be constantly prepared to provide the necessary liquidity to the banking system to perform its intermediation role, the Central Bank expects that credit institutions will be looking primarily to the market for their funding requirements. Among the many lessons that may be drawn from the experience of the international financial turmoil, one that stands out is the importance for each banking institution to keep a prudent mix of dependable sources of funding, to limit the level of financial leverage and to maintain a sound balance sheet. The merits of traditional banking practices are echoed in the recent remark by the German Finance Minister. He said, “I believe it is in the interest of the financial sector itself that it should concentrate more on its proper role of financing the real economy, and ensuring that  6  BIS central bankers’ speeches  capital is allocated in the most intelligent way, instead of banks conducting the bulk of their trading on their own account”. Such considerations provide the foundations for drawing the desired roadmap for the future evolution and growth of Malta’s domestic banking sector and the preservation of financial stability.

In this regard, the Eurosystem welcomed the ambitious Financial Services Action Plan (FSAP) launched by the European Council in Lisbon in 2000. This plan is aimed at harmonising and improving the conditions under which issuers, investors and intermediaries conduct their activities in the European Union. The European Council set a tight timetable so that this plan can be implemented by 2005, and even sooner, by 2003, as regards the measures relating to the securities markets. At present, 30 out the 42 FSAP objectives have already been brought to a successful conclusion, allowing significant breakthroughs in various crucial areas. All these objectives involve far-reaching reforms, such as, for instance, introducing a single passport for issuers, with the planned Prospectus Directive, setting up an adequate framework for the oversight of the activities of financial conglomerates or harmonising rules concerning the use of collateral in financial transactions, especially in a cross-border context. The Eurosystem also supports the strategic conclusions of the Committee chaired by A. Lamfalussy on the integration of the European securities markets, ratified by the European Council meeting in Stockholm in 2001 and approved by the European Parliament in early 2002. We are convinced that the implementation of these broad guidelines and the new cooperation structures at the European level will help make it possible to take full advantage of the introduction of the euro.
We may not yet have seen the full effects on the krone exchange rate of the interest rate reductions that have been implemented. At the same time, the krone can be influenced by fiscal policy and the outlook for wage growth. Norges Bank’s Executive Board sets the interest rate with a view to achieving the inflation target of 2½ per cent. The inflation target is also a vehicle for monetary policy’s contribution to stabilising output and employment. When setting the interest rate, the Executive Board seeks to achieve a balance. The objective of stimulating growth in the Norwegian economy and achieving the inflation target is weighed against the risk of new pressures building up in the economy over the long term. Since December 2002, we have judged that to achieve this balance it was appropriate to reduce the interest rate to a low level. At the last monetary policy meeting on 13 August, it was decided to reduce the interest rate to 3.0 per cent. With an interest rate of 3.0 per cent, the Executive Board’s assessment remained unchanged, i.e. that the probability that inflation two years ahead will be lower than 2½ per cent is greater than the probability that it will be higher. Thank you for your attention. BIS Review 38/2003  5

So these four accelerators are needed, but this does not mean they all have to be implemented at the same time. The latter two accelerators, fiscal and institutional, would indeed require Treaty changes, unless they were to be very limited. However, this must not stop us from taking steps straight away on the first two accelerators, macro and micro, on which I will insist today. I would like to share with you some personal reflections – useful for the proposals that the European Commission will make in December and for our debate today. To be more specific, I will focus on one part of each of these two accelerators, where progress can be made quickly: I will first dwell on the creation of a Stabilisation Lending Instrument (SLI) as part of the macro accelerator, and I will then elaborate on the completion of the Banking Union as part of the micro accelerator. **  I. A macro accelerator, including a Stabilisation Lending Instrument (SLI) and perhaps a European Monetary Fund The macro accelerator is premised on one simple fact: economic growth and employment would be stronger in the euro area if we combined more reforms in countries where they are needed, like France or Italy, and more stimulus in countries with leeway for it, like Germany or the Netherlands. To achieve this collective economic strategy, euro area Member States have to seal a deal, which could be prepared and adopted as early as 2018.
Chart 18. Average return in the US Rolling 10-year periods. Per cent 25  25 20  Equities  20  15  15  10  10  5  5  0  0  Fixed income instruments  -5  -5 1935  1945  1955  1965  1975  1985  1995  2005  Sources: Ibbotson Associates and Datastream  Since short-term fluctuations in equity prices are difficult to predict, it may be a sound strategy to keep the share of equities constant over time. This means buying a relatively large volume of equities when prices are low, and buying a smaller volume - or selling - when prices are high. This is the strategy applied by the Petroleum Fund. Optimism and pessimism, confidence and doubt influence equity prices. In periods when markets are characterised by optimism and confidence in the future, equity prices tend to be high. When markets are marked by pessimism and fear, prices tend to be low. The actual income flow from equities - the dividend - depends more on developments in the global economy over time. This is a far more stable variable than equity prices. Investing a large share of the capital in bonds diversifies risk even further. We are nevertheless left with the question of whether we are now entering a long period of very low or negative returns on investment in global business.

The industry has now not only achieved a market share beyond the target of 20 percent by the year 2010 as was envisioned in the Financial Sector Masterplan, but it has also met the increasing and differentiated demands of the economy through the range of financial product offerings in Islamic banking, takaful and Islamic capital market segments. The initiatives taken to develop the Islamic financial system has aimed to build a comprehensive financial sector that operates at the highest efficiency and with an outreach that would extend beyond domestic and regional markets and thus facilitate greater cross border economic linkages. In advancing to the next level of growth and development, the Islamic Financial Services Act 2013 (IFSA) now provides the industry with the foundation to transition into its next stage of development. The Act takes into account the specificities of Islamic finance while ensuring a robust governance of an end-to-end Shariah compliant regulatory framework. It also provides an enabling environment for Islamic banks to diversify their business through the offering of investment accounts as an alternative means of raising funds from the public. With this, Islamic banks are allowed to pursue their role as investment intermediaries in which the alternative modes of risk-sharing contracts can be applied for the investment account. This new categorisation of deposits under the new Act has now been fully observed since mid2015 with the effective reclassification of deposits to either being Islamic deposits or investment accounts.