samchain/econo-pairs-v1 huggingface dataset:
Norges Bank operates a flexible inflation targeting regime so that variability in inflation and variability in output and employment are given weight when we set the interest rate. Monetary policy influences the economy with long and variable lags. Norges Bank sets the interest rate with a view to stabilising inflation at the target within a reasonable time horizon, normally 1-3 years. The relevant horizon will depend on disturbances to which the economy is exposed and how they affect the path for inflation and the real economy ahead. We have increased the transparency surrounding the basis for monetary policy decisions in recent years. Norges Bank’s statements following its monetary policy meetings, press conferences, the Inflation Report and speeches provide an account of economic developments that are of importance to the Executive Board’s assessments and interest rate decisions. All publications are available on our website. Underlying each interest rate decision is a monetary policy strategy drawn up by the Executive Board every four months. The strategy is published directly after it has been approved and at the start of the relevant strategy period. Developments in inflation in 2004 and the first months of 2005 Between December 2002 and March 2004, the key rate was reduced by a total of 5.25 percentage points. The interest rate has since remained at 1.75 per cent. The interest rate decline can be ascribed to a number of factors. In late autumn 2002, inflation started to fall. The inflation projections were also revised down.

The recovery has been broad-based. The easing of monetary policy contributed to a sharp rise in private consumption and housing investment. Activity has picked up considerably in service industries and the construction sector. High petroleum investment, the global economic recovery, a weaker krone and lower wage growth contributed to boosting activity in manufacturing industry. Profitability has improved for mainland enterprises. Mainland fixed investment has also gradually increased. Thus, it may appear that growth in the Norwegian economy has become more self-driven. Even with a pronounced upswing in output, the increase in the number employed has been limited so far in this cyclical upturn. Measured in terms of the number of person-hours worked, however, employment growth was high last year. Registered unemployment has shown a small decline over the past year. Productivity probably increased more than normally in some industries in the early phase of the recovery. A marked fall in sickness absence may have reduced the need for new employees. Capacity utilisation in the Norwegian economy has increased, notwithstanding the decline in sickness absence and efficiency gains in the business sector. The output gap is a measure of capacity utilisation in the economy. We interpret a positive output gap to mean that output and capacity utilisation are higher than the level consistent with stable inflation over time. High domestic interest rates in 2002 and fiscal policy management contributed to substantially lower cost inflation in the private and public sectors over the past two years.
To ensure that this happens, CPSS and IOSCO are also developing disclosure and assessment regimes. The purpose is to facilitate a consistent set of disclosures by the different FMIs and a consistent set of assessment methodologies that can be used by the relevant international institutions, namely the International Money Fund and the World Bank, and by the relevant national authorities of the FMIs domiciled in their jurisdictions. When the Principles are published next month, CPSS and IOSCO will also issue a disclosure regime proposal and an assessment regime proposal. These will be put forward for a 60-day consultation period to give the market participants, FMIs, and regulators an opportunity to comment. Also, once the Principles are rolled out and countries start to implement the legal and regulatory changes necessary to put the Principles into practice, it is anticipated that CPSS and IOSCO will undertake a monitoring effort to see how it is going. The focus will be on evaluating how quickly and broadly the Principles are being embedded in national legal and regulatory frameworks. The Principles are important in supporting the G20 strategy of mandatory clearing of standardized OTC derivatives trades and in ensuring that the four safeguards discussed earlier for global CCPs and other FMIs are implemented. As I mentioned earlier, the new Principles lay out the responsibilities of authorities for cooperative oversight.

Fourth, a stronger and better system of FMI governance and oversight can help to ensure that those systems that support a global market are subject to consistent standards regardless of the jurisdiction where they operate. Relying solely on a patchwork of differing national standards in a global world would not work well. It would encourage business to migrate to the lowest standard. Without establishing a global floor, there would otherwise be a “race for the bottom.” These are the major reasons why CPSS and IOSCO took on the task of strengthening and broadening the standards for FMIs. There are two major goals of this effort. The first goal is to strengthen the current standards by: 1) raising the bar for existing standards such as for governance, credit risk, liquidity risk, collateral and margin requirements; 2) including requirements for new areas such as segregation and portability, general business risk, links, tiering and disclosure; and 3) extending coverage to include trade repositories. As proposed in the consultation document, the Principles will significantly strengthen existing requirements for an FMI’s governance and financial resources. One way the Principles do this is by requiring FMIs to take a more comprehensive and proactive view of the roles they play, the risks they face, and their potential to support the stability of the broader financial system.
Among these, we have witnessed the separation of the responsibilities for preserving the financial soundness of all financial institutions irrespective of their nature (banking, insurance, securities, etc.) and for overseeing the conduct of their relations with  9  customers, assigning such responsibilities to different authorities (to the Banco de España and to the CNMV, respectively). This is, in my view, an optimal institutional arrangement for managing potential clashes between both responsibilities and for enhancing the efficiency and effectiveness of the supervisory activity. As I said, it will be important to respond to the new risks that emerge, which include most notably climate change and digitalisation. In the case of climate change, we supervisors must ensure that banks correctly assess risks and incorporate them into their portfolio management. We must also fulfil a complementary role by developing databases and appropriate reporting requirements, and by including risks in financial stability analyses. Indeed, many supervisors are developing environmental stress tests. As to technological developments, there are prominent risks associated with cyber attacks or with dependence on external services providers. But there are also those arising from the growing competition with technological companies, which may become disruptive. The consequences for prudential authorities are significant. We must maintain proactive supervision, since the traditional regulatory framework may not be enough. And we will have to question the regulatory perimeter, so that the habitual mantra of “same activity, same risks, same rules” is genuinely operational. Finally, we must strengthen cooperation among authorities given the diversity of sectors affected.

Given what we have experienced in the last two years, it is my hope that the international community will see the wisdom of not waiting for the next crisis to learn how we can make the international financial system a more robust and safe one for all of us.” 3. Ladies and Gentlemen, I made the above remarks over 10 years ago, in June 1999. It was ten months after the Asian Financial Crisis hit Hong Kong, which was then followed by the turbulence of the global financial system as a result of the abrupt collapse of the LTCM. It was rather unfortunate that the fear I expressed in 1999 has come true ten years later. The international community has failed to learn the lessons from the Asian Financial Crisis and the LTCM debacle and to make the financial system more robust and safer. As a result, we have been punished, and punished very, very severely. The latest Financial Tsunami, dubbed as “Once in a Century”, has demonstrated that somehow all the key safety valves and gatekeepers have failed functioning properly to prevent excessive leverage and risktaking within the financial system, leading to very heavy fiscal and social costs in the subsequent bail-outs. 4. Now the international community, led by G20, is trying very hard to draw lessons from this latest financial crisis. I sense that there is a very strong resolve to do something this time round.
Last week, HKMA also announced jointly with Bank Negara Malaysia (BNM) the establishment of a private-sector led joint forum for advancing the development of Islamic finance in Hong Kong, and we are glad to have Assistant Governor Bakarudin Ishak of the BNM attending the panel discussion of the Summit this afternoon; (d) open-ended investment company (OEIC): the HKMA has intensively lobbied for a legislative framework and regulatory regime for OEIC in Hong Kong. We were very encouraged that this initiative was announced by the Financial Secretary in the 2013–14 Budget to provide more choices to market participants in terms of the legal form of funds. This would be a major step to attract more funds to domicile in Hong Kong; and (e) last but not least, the HKMA, in close collaboration with the Securities and Futures Commission (SFC) and the private banking industry, has undertaken a series of measures to promote the development of Hong Kong as the premier private wealth management hub in  2  BIS central bankers’ speeches  the region. The HKMA issued guidance to private banks in June 2012 to facilitate the adoption of a portfolio based approach in assessing the suitability of investment recommendations so that private banks can be more flexible in serving customer needs without compromising investor protection. 7.

Fifteen private banks have opened for business since 2009, bringing the total to 45 banks offering private banking services to their clients today. For the asset management business as a whole, the combined fund management assets hit a record high of $ trillion in 2012, with 65% of the funds sourced from non-Hong Kong investors, according to a recent SFC survey. It is, however, worth noting that the survey also showed that 74% of the practitioners in the asset management field were engaged in the sales and marketing functions. While the figure has already trended downward from 81% in 2008, it does reflect the fact that Hong Kong needs to further expand the other segments of the asset management “value added” chain, e.g. in structuring, research, investment and trading. To achieve this objective, the HKMA’s outreach work in the last two to three years has taken a new focus on asset owners, such as pension funds and sovereign wealth funds. 11. Since 2010, the Market Development Team of the HKMA attended hundreds of meetings with overseas asset managers and owners. I am pleased to report that these outreaching campaigns are generating positive results, with about one-third of the institutions that we have approached indicating a commitment to devote resources to Hong Kong. Specifically, 67 institutions have expressed interest in pursuing a Hong Kong presence and 48 institutions are planning to expand their existing operations in Hong Kong. 12. There are several reasons why the HKMA is uniquely well placed to undertake effective outreach programmes.
All branches must have the Senior Manager Function called Head of Overseas Branch (called SMF19): a. For systemic wholesale branches, the person exercising the function is expected to be a senior figure within the branch, who is credible and influential at the group executive level. This person should be in a position to ensure that the PRA receives the information it needs (where this information can be provided by the firm). b. In addition to the Head of the Branch, wholesale branches should consider whether they need to assign senior manager functions to a Chief Risk Officer, Chief Finance Officer, and Chief Operating Officer. The PRA may also expect or require the firm to have these positions in respect of the branch. c.  Finally it may be appropriate for the branch, especially systemic wholesale branches, to have a group senior manager or executive assigned with a senior manager function (this one is called SMF7). Such a group executive could be responsible for directing key parts of the branch’s business or for firm-wide systems or operations upon which the branch relies (for example, in custody which is often run as a globally integrated activity). Booking arrangements for trading activity  We published some high-level principles on booking arrangements in SS 1/18. We have now expanded on these to provide more guidance on our expectations. Our overall approach remains stable and consistent. We are open to global booking models, recognising that they underpin global business models, provided they are managed responsibly.

In the EU, many dealers are “investment firms” and so are already subject to the same Directives as banks on capital adequacy. That is not true of finance companies in many jurisdictions. Perhaps there should be a size threshold for applying bank-style capital and liquidity regulation to such non-bank banks. BIS central bankers’ speeches  3  Securities dealers and the “rehypothecation” of client assets That last set of points was about firms acting as principals. Major issues arise from the use of client assets – money and securities – to finance the principal risk-taking of some financial firms. This has become apparent from the Lehman and MFG bankruptcies. Quietly in the background, something extraordinary has happened over the past decade or so. Let me explain. You place £ of your securities portfolio with your broker/dealer in safekeeping (as a subcustodian in a way). You borrow a much smaller amount of money from your broker and, reasonably enough, they take some of your securities as collateral; in effect, they have financed your holding of that part of your securities portfolio. An observer might think the rest of your portfolio would sit in a segregated client account. Not a bit of it. Unless you have been very careful, the broker/dealer has repoed out your securities for cash, and used the proceeds to finance its own businesses. To make this simpler, imagine you have placed surplus cash with your broker-dealer. As likely as not, it is being used to finance the dealer’s business.
Since 2012, we have released two major reports and several shorter analyses—most of which appeared in our Liberty Street Economics blog— presenting ideas that, if implemented, might help to make the Island more competitive and reverse its economic decline. These ideas have ranged from the very narrow and technical to the very broad—from improving the quality of Commonwealth financial reporting to bolstering growth through education and job training to build the Island’s human capital. Since I’ve identified managing the ongoing economic transformation as a major component of a successful plan for Puerto Rico, let me summarize a few themes on that front. Most of these feature an important role for the Commonwealth’s government, underscoring the fundamental importance of getting public policy right as a means of restoring economic growth. First, it is important to reduce the cost of doing business on the Island as a way of encouraging business growth and increasing the demand for labor. We have put forward many ideas to consider here, ranging from ones targeted at hiring—such as giving Puerto Rico more autonomy over setting its minimum wage policy—to more general ideas like streamlining regulation. One thing that we’ve repeatedly emphasized is the need to find efficiencies in the Island’s energy industry. Commercial customers on the Island pay roughly 20 cents per kilowatt hour for electricity—nearly double the mainland average. Island residents and businesses, as you are well aware, are also burdened with exceptionally high water utility bills.

Managing cash flow is a top concern, ranking above concerns about rising business costs. There is significant demand for credit, with the most common reason being the need to meet operating expenses. For about half of all small firms, credit needs were under $ Lastly, about 80 percent of firms do not sell online or export their wares or services. Firms see this as a growth opportunity, ranking programs in support of increasing sales—to the federal government, via online commerce and through exports—as their top training need. We hope that the survey will provide useful insights into a key economic sector and help inform policy to support Puerto Rico’s recovery. Thank you for your kind attention. I would be happy to take a few questions. 4/4  BIS central bankers' speeches
Market discipline After effective management at the bank level, the second line of defense against financial instability is market discipline, which is an increasingly important ally of the official supervisor. When armed with timely and meaningful information on banks’ performance, market participants can, by way of their investment and credit decisions, encourage bank managers and boards of directors to manage their risk exposures soundly. Equally as important, market participants can penalize those institutions that do not. But, of course, effective market discipline is not possible without meaningful public disclosure. While significant progress has been made in recent years, it unfortunately remains the case that disclosure practices have not kept pace with the rapid changes in banks’ business activities and risk exposures, and with how these exposures are measured and managed. For this situation to be fully remedied, notions of what is proprietary information and what should be in the public domain must change. Knowing a company’s appetite for risk and its approach to, and methodologies for, managing risk is essential to understanding the risks of being a shareholder, a creditor or a counterparty. All financial market participants should approach the issue of disclosure as users of financial statements rather than as issuers. There should be little question about the urgency of achieving dramatic progress in this area. Clearly, a full appreciation of risk cannot be achieved without sufficient information.

WIBC Asia provides a valuable platform to bring together stakeholders in Islamic finance, from Asia and the Middle East, to foster stronger collaboration for sustained industry growth. I wish you fruitful discussions. Thank you. 2  BIS central bankers’ speeches
Geopolitical risks could also have a bearing on the EU’s foreign direct investment and portfolio exposures . The EU’s main investment partners are other advanced economies. However, certain factors make it difficult to identify the ultimate investors in the EU, given that a sizeable portion of incoming foreign direct investment comes from offshore centres or is intermediated by special purpose entities. Thus, the empirical analyses 6 that have sought to shed light on the origins of foreign direct investment into the EU on an ultimate investor basis find that exposures with respect to the US and China can be significantly understated. Regarding portfolio flows, research7 aiming at restating holdings from a residency-based approach to a nationality-based approach found that in 2017 the euro area holdings of Russian and Chinese debt tripled when issuance via tax havens was accounted for. 5  Euro pean Co mmission (2020). “Critical Raw Materials Resi lience: Charting a Path to wards greater Security and Sustainability”. COM (2020) 474. 6  Alcidi, C., Po stica, D. and Shamsfakhr, F. (2021). “Analysis o f Develo pments in EU Capital Flo ws in the Glo bal Co ntext”. Centre fo r Euro pean Po licy Studies. 7  Co ppo la, A., Maggio ri, M., Neiman, B. and Schreger, J. (2021). “Redrawing the Map o f Glo bal Capital Flo ws: The Role o f Cro ss-Bo rder Financing and Tax Havens”. The Quarterly Journal of Economics , Vo l. 136(3), pp 1499-1556.

First, it appears that for the time being there is no consistent trend towards “deglobalisation”, but rather a change in the nature of globalisation, leading to a rise in the regionalisation of trade and supply chains, a diversification of sourcing and a certain slowdown in global value chain fragmentation. 22 While the marked slowdown in firms’ decisions to relocate part of their production processes abroad (“offshoring”) or to repatriate previously offshored activities (“reshoring”) is compatible with a deglobalisation phase, other factors qualify this view. The flattening of trade in goods does indeed hint at a trend slowdown, but the continued growth of international trade in services seems to signal a continuation of globalisation trends in these sectors, driven by technological progress, including data trading and the expansion of artificial intelligence. Second, the impact of these new trends – as opposed to purely globalisation or deglobalisation trends – are far from obvious . As an illustration, while offshoring is usually related to job displacement, several recent studies highlight that it is also related to the upgrading of jobs, towards more competitive and innovative varieties, and to changes in employment composition in favour of high-skilled workers. 23 Third, the globalisation process lasted for several decades. The current location decisions and choice of providers are the result of long-run economic forces, which might work differently in a deglobalisation phase, especially if this is more abrupt and takes place in a short period of time, which could lead to non-linear effects on growth, inflation or monetary policy transmission.