samchain/econo-pairs-v1 huggingface dataset:
One being a reputed investor used his endowment to build a substantially large portfolio of investments. The other was a drunkard and used the entire amount for drinking. Thus, he ended up with a houseful of empty bottles. The story goes on saying that Germany was hit by hyper-inflation reducing the value of the entire investment of the son who adopted prudential policies to zero. But, the drunkard became a millionaire overnight, because his empty bottles now became money. A similar amusing story relating to Bolivian inflation in mid 1980s takes a different form. Since prices are rising at such a high rate, it became necessary to negotiate and agree on a price before undertaking even a very simple transaction. The story says that before a person takes a haircut, he would agree a price with the barber. But, halfway through, the barber would stop cutting the hair and renegotiate the price. That was because by that time, hyper inflation has raised the prices to a still higher level. As a result, the original contract price no longer becomes valid. BIS Review 55/2007  1  Economic costs of inflation The above stories, though invented to amuse people, teach us some very valuable lessons. First, uncontrolled inflations erode the confidence of people in the domestic currency. As a result, governments lose the control over money and fail to use monetary policy to curb inflation. Second, people move away from long term contracts and would be concerned only about the passing moment.

When one compares it with other public enemies like drug abuse or terrorism, one would still find that those issues would also affect only a segment of the society at any given time. Since inflation affects everyone and people have limited prospects of escaping it, it is considered as the public enemy number one. Some amusing stories about inflation In the recent history, there have been many countries which have been hit by hyper inflation. Of them, the most prominent case has been the hyper-inflation in Germany after the First World War, where inflation accelerated to 1,000,000 % per annum. Other noteworthy examples are Bolivia (25000 % p.a. ); Russia (2000 %); Israel (1500 %); Turkey (again 1500 %) and currently Zimbabwe (3700 % and still rising). When prices rise at these high rates, the first casualty would be the currency of the country. No one would like to accept the domestic currency, because its value would fall by the minute. Instead, people would start to accept other types of hard currencies like the US Dollar. If there is a shortage of those hard currencies, people would invent their own currencies. In Germany, with that hyper-inflation in which prices rose by 2 % every minute, German Mark ceased to function as money. Instead, people started to use cigarettes, chocolate bars or empty bottles as the medium of exchange. Then, there is the story of those two brothers who inherited a sizeable wealth from their father.
The second goal is to achieve universal primary education. Sri Lanka has already made much progress in this regard. Promoting gender equality and empowering women is the third MDG. Sri Lanka has already eliminated gender disparity in both primary and junior secondary education, with the parity index being nearly 100 per cent in 2002. Goals 4 and 5 are to reduce child mortality and maternal mortality. The current trends indicate that Sri Lanka is on track to achieving child and maternal mortality goals. Other goals such as combating HIV/AIDS, malaria and other diseases, and ensuring environmental sustainability are also amongst our priorities. The final goal, developing a global partnership for development is also being pursued diligently. We are aware that, our country is, by and large, on track on the achievement of most of the goals. However, there remain considerable challenges. The critical challenge is that one-fifth of Sri Lanka's population is still living below the national poverty line and we need to take proactive and practical measures in that regard. Mr. Chairman, at this stage, as a precursor to the wider discussion that will take place on tomorrow, I would like to share some thoughts on the subject in the Sri Lankan context. Where do we stand? Sri Lanka is now a lower middle income country with a per capita income of around US dollars 1,355.

While each individual is responsible for maintaining high standards of integrity in their personal conduct and everyday work, the institution's management has a duty to ensure that the systems in place do not become an impediment to individual acts of honesty, transparency and integrity. Encouraging staff at all levels to voice their concerns, fostering an environment of healthy debate, and championing individual examples of personal integrity in the workplace are all important steps towards a robust check and balance system within the institution. A strong governance framework would promote these ideals, while mitigating the worst effects of their absence. This includes, among others, clear roles and accountabilities across all key actors or leaders within the institution, strong whistleblowing policies, transparent procurement procedures and a continuous commitment towards awareness training on best practices in these. In this regard, leaders have an important role to play; from setting the right tone from the top to exhibiting the right values and behaviours, that is walk the talk. Within Islamic finance, these are practices that are in line with the principle of Maqasid Al-Shariah. The consideration of wider social welfare and the greater good should form the basis of all personal conduct, and on a higher level, institutional decisions. Valuebased intermediation, or VBI, similarly calls for Islamic financial institutions to deliver the highest ethical standards in all aspects of businesses by embedding self-discipline and continuous improvement within their operations and practices. This is in line with Shariah principles of righteousness (or what we call ihsan) and consultation (or istisharah).
During this time, Rochester has been going through a prolonged period of economic transformation and reinvention. While this process has been a painful one in many respects, I believe that it is well-advanced and the area is well-positioned for the years ahead. Rochester possesses a unique set of assets that are key to a successful economic reinvention, including a highly skilled workforce, world class higher education institutions, a diverse economic base, and a forward-looking cooperative engagement between the public and private sector. There is strong evidence that Rochester is already tapping into these assets to great success. To prove my point, I would note that my colleague, Narayana Kocherlakota, is leaving the Federal Reserve Bank of Minneapolis at the end of the year to become a professor at the University of Rochester. Our loss is your gain! Consider how we got to where we are today. Early in the 20th century, with the explosive growth of the “Big 3” – Kodak, Xerox and Bausch & Lomb – came a great demand for innovative and skilled workers, especially engineers, who helped make these companies highly successful. At their peak, these three companies alone employed roughly 20 percent of the Rochester workforce. These workers developed innovative new products and processes, which often resulted in patents that remain valuable to this day. In many ways, Rochester, and its skilled workforce, was ahead of its time. These companies, though, came under pressure in the 1980s as a result of rapid technological changes and increased global competition.

At the beginning of the new monetary policy regime, when the fixed exchange rate was abandoned in 1992, there was a certain amount of criticism of the inflation target; many people feared that the unconditional attachment to an inflation norm would have a negative effect on growth and employment. A monetary policy aimed at price stability could lead to a prolonged period of low growth and, in extreme cases, to declining production. It may appear as though this objective forced the Riksbank to give a lower priority to the development of the real economy, i.e. production and employment. We have only one objective for monetary policy, unlike, for instance, the US central bank that also has the task of taking into consideration the effects of interest rate decisions on growth and employment. However, in actual fact, the difference is probably not so great - indirectly the assessments of the future path of the real economy also play an important role in our decisions. Moreover, we also have the task "without neglecting the price stability objective, of supporting the objectives for general economic policy with the aim of attaining sustainable growth and a high level of employment." This is expressed in the proposal for the Sveriges Riksbank Act from 1999. However, even more importantly, there is no opposition between good growth and price stability, quite the reverse.
To meet this expectation, an FSB steering group has coordinated working groups for each of the major IBOR benchmarks. The mandates of these groups are to identify alternative rates and to begin transitioning to them. In 2014 the Federal Reserve convened the Alternative Reference Rates Committee (ARRC) to plan the transition away from U.S. dollar LIBOR.8 The ARRC conducted two public roundtables, published a written consultation, and created an advisory group of end users across market sectors. The ARRC’s criteria for U.S. dollar LIBOR’s replacement included methodological quality, accountability, governance, and ease of implementation. In the end, the ARRC recommended a new rate that the New York Fed had proposed in cooperation with the Treasury Department’s Office of Financial Research.9 The new rate is called the Secured Overnight Financing Rate (SOFR). The New York Fed has published SOFR every day since early April of last year. 10 SOFR measures the cost of overnight borrowings through repo transactions collateralized with U.S. Treasury securities, which is the deepest and most liquid money market in the U.S. It is based on actual transactions and takes in more transactions than any other Treasury repo rate available, recently around a trillion dollars each day. SOFR is relevant to the cost of borrowing for a wide array of market participants, was constructed to meet the best practices for benchmarks set out by IOSCO, and is built to accommodate future market evolution.

The solution is not a simple substitution. There are inherent differences between SOFR and LIBOR that will need to be adjusted for in the transition. For one thing, most contracts that reference LIBOR key off of three-month or six-month LIBOR. Mortgages often use one-year LIBOR. But SOFR is an overnight rate—there’s no such thing as three-month or six-month SOFR. One solution to this difference is to use the daily SOFR for each day during the term, either averaged or compounded each day until the end of the period. ISDA has indicated that derivatives will fall back to this kind of average, and the SOFR floating rate notes issued recently use a similar approach. To facilitate this method, the New York Fed is preparing to produce a backward-looking compounded average alongside the daily SOFR. Some market participants may need to use a forward-looking “term SOFR” created by constructing a yield curve off of trading in forward-looking SOFR derivatives, particularly for legacy contracts that already reference a term LIBOR rate. Creating a new rate like that is part of the ARRC’s transition plan, although it’s more concept than reality at this point. But under all of the cash product consultations put out to date, the first preferred fallback is to that kind of term rate, if such a rate were to be created that was up to IOSCO standards and endorsed by the ARRC.
To this end, the functions of the Asian office have evolved and expanded over time – from organisation of meetings and seminars to conducting research, to providing dealing and banking services. And the office has grown from a start-up staff of six to its current 33. We are celebrating this occasion in this lovely restaurant above the Star Ferry – which is an icon in Hong Kong and a symbol of quality and value-for-money service. The BIS Asian office is also a "STAR" entity. The word "STAR" has been chosen carefully and with good reason – each letter of the word symbolises and embodies the excellence of BIS' activities: S:  Surveillance – The Asian office is clearly a star performer in its surveillance work on regional economic and financial developments. This is self-evident from reading the background notes prepared on the region for various BIS and regional central bank meetings. T:  Topical studies and research – The Asian office, with its pool of economists and financial experts, is well placed to conduct research. Under the auspices of the Asian research programme initiated in 2006, many topics that are of interest and relevance to Asian central banks have been, and continue to be, explored and developed. The BIS has made important contributions in this area, with its research providing useful information and insight for policymakers in the region.

Timothy F Geithner: Restoring market liquidity in a financial crisis Welcoming remarks by Mr Timothy F Geithner, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Second New York Fed-Princeton University Liquidity Conference, New York, 13 December 2007. *  *  *  Welcome to the New York Fed and to this conference on liquidity. You are addressing some of the most important issues affecting financial markets today. Your timing is good, perhaps too good. We are all going to need some time and perspective before we will know enough to draw conclusions and recommendations from the events of the past six months. The conditions that led to this crisis took a long time to develop and they will take some time to resolve. I think it is appropriate, though, that as central banks act to address the challenges in markets today, we also begin to define the agenda for future research and policy. On December 12, the Federal Reserve and several other major central banks, announced a series of actions in response to the elevated pressures in funding markets. Together, these actions provide a more flexible and potentially more effective set of instruments, alongside our conventional monetary policy instruments, to help mitigate the risks that liquidity pressures in markets going forward could pose to the broader economy. With this framework of tools, we have the capacity to calibrate our response as market conditions change.
New sources of risk are emerging, presenting new challenges for central banks in their pursuit of monetary and financial stability. Financial innovation and technological advancement 21 The way technology is transforming markets and therefore payment systems is illustrated in the rapid growth in OTC derivatives markets; and the increased penetration of electronic trading platforms – and automated trading strategies – across a range of markets. 22 According to data released by the Bank for International Settlements, notional amounts outstanding in global OTC derivatives markets rose by almost 40% in 2006 – up more than 260% over the past five years. The outstanding value of the credit segment of the market doubled in value in 2006 alone and trading activity has remained high through 2007, especially during the recent market turmoil. 23 These markets have traditionally been cleared and settled via bilateral arrangements between the counterparties to the trade, but new automated infrastructure services have emerged, partly in response to an international regulatory initiative led by the Federal Reserve Bank of New York (FRBNY). Major dealers now confirm almost 90% of credit derivatives trades electronically, as against less than 50% two years ago. 24 An important recent addition to the landscape is DTCC Deriv/SERV’s Trade Information Warehouse, which maintains a so-called “golden copy” of each credit derivatives trade. With appropriate interoperability between systems, these data can support a range of ancillary services: calculating and settling payment obligations, managing collateral, terminating trades and reconciling portfolios. The Warehouse is likely ultimately to be rolled out for other products.

For example, by the 1770s, London bankers had begun to settle in notes issued by the Bank of England, a highly-regarded, but at that time, private bank. BIS Review 130/2007  1  10 A low-risk settlement asset was particularly important in the unregulated world of the goldsmiths, in which credit risk was acute and liquidity shocks – like the one we have experienced of late − were common and dangerous. In a sorry letter to an associate 1 , one goldsmith wrote to another in the 1660s: “I have beene by many accidents much postpon’d…ye money due to mee is soe farre off that I can not make it useful to mee. All Credit in London is much Shortened of late.” 11 Showing all the optimism which continues to characterise bankers today, he added: “ I am attempting a way to enlarge my owne (credit) and doubt not to effect it to his Maties. [Majesties] advantage as well as my owne, if I am (like ye lame dogg) but helpt over this style.” 12 Further efficiency gains were then obtained by settling interbank obligations over the accounts of a single institution. This innovation was sometimes put in place by the public authorities; in other cases it developed naturally, such as when the London bankers adopted Bank of England deposits as the ultimate settlement asset in 1854. 3.
If a regional currency is chosen as the anchor, in the same way that the deutschmark was effectively the anchor for exchange rate arrangements leading up to European monetary union, would this be the yen or the renminbi? Alternatively, could Asia move straight to a single currency? It is increasingly argued that, in a world of liberalised markets, the only viable exchange rate system is either a hard peg (like Hong Kong's Currency Board) or a free float. Soft pegs by their nature are vulnerable to self-fulfilling speculative attacks, as was demonstrated in Europe in 1992, Mexico in 1994-5, and Asia in 1997-8. Europe was able to move gradually to a system of fixed exchange rates with capital controls prior to the introduction of a single currency. But the high degree of capital mobility in a number of key Asian economies would make gradual transition in this way more difficult. A further set of technical issues concerns the setting up of, and mandate for, an Asian central bank. This would require agreement on the monetary policy objective, country representation, and decisionmaking process of the central bank. Most important, the institution would need to be designed so that national interests are kept in check in order to deliver efficient monetary policy making at the regional level. The lesson from Europe is that agreement can be reached, but I have to say that the issues are quite daunting.

So it should not come as a surprise to see continued outflows from low-yielding euro area bond markets. But not all investors are willing or able to assume large amounts of foreign exchange risk on their balance sheets, particularly when the direction of exchange rate movements might be less predictable than during the run-up to the launch of a major monetary policy measure, such as asset purchases. Returns on US Treasuries adjusted for foreign exchange risk, however, have fallen steadily as the government bond yield curve in the United States has flattened. You can see this on the righthand side. Since about mid-2017 the yield of a hedged ten-year US Treasury has been below that of its German equivalent. There are two factors, in my view, that might help explain the observed persistence of capital 4/7  BIS central bankers' speeches  flows. The first has to do with the “traditional” stock effect of asset purchases.5 Central bank asset purchase programmes effectively constrain the supply of bonds available to private price-sensitive investors. So, the share of outstanding central government bonds held by the private sector – the so-called “free float” – has declined measurably as a result of our cumulative purchases, also when taking into account the considerable amount of buy-and-hold investors. The implication is that some euro area fixed income securities are increasingly hard to come by, or come with a price tag unattractive for more short-term orientated investors. This may incentivise some market participants to roll over their international asset allocations instead.
To date, over 4,000 students had participated in such activities. 13. Today, I'm pleased to announce a new programme to encourage students who have attended MoneySENSE activities arranged by their schools to be "MoneySENSE Ambassadors". This includes the many students here today for the inter-school MoneySENSE games competition. 14. Having learnt some basic money management skills through the workshops, I hope you will use these skills and pass them on to your friends. An important step towards good money management is to plan your expenditure and savings. As "MoneySENSE Ambassadors", you will first draw up your own pocket money budget. You can do so with the MoneySENSE pocket money budget available on the MoneySENSE website. Encourage your friends to also take the first step in managing their money and draw up their own pocket money budgets. 15. Of course, it is not only about drawing up a budget. After you have drawn up your budgets, remember to monitor your expenses and spend within your means. It is a simple discipline that's really worth putting into practice from young. The MoneySENSible Awards 16. Some may think that financial planning is only for the rich. This is a big misperception. Regardless of our backgrounds and jobs, it is important to set our financial goals and map out how we intend to achieve them. The earlier we start, as individuals and as families, the easier it is to achieve our financial goals. 17.

When credit was no longer available, many business models collapsed. Heavy losses were passed on to owners and investors. The situation for savings in the Fund is different. We have had to record losses on equity investments and active credit investments. However, the Fund has no traditional liability side and liquidity risk is low. The growing risks in the market did not force us to make changes that would have resulted in huge realised losses for our owners. The final results of our strategies through the troubled waters of the financial crisis cannot be deduced from the quarterly results at the peak of the crisis. Actually, the Fund has spent the last few quarters increasing its ownership in companies worldwide. As for credit, values are not lost as long as borrowers fulfil their obligations. The Fund is prepared to retain ownership of its illiquid investments until they mature in a few years time. Moreover, unless the economic outlook goes from bad to considerably worse, the Fund will record a substantial excess return in years ahead from holding on to assets that the market has priced down due to a collapse in liquidity and fear. In fact, as the global economy seems to be stabilising, this effect is already evident. Let me conclude by underlining the topic of this conference: “Investing for the long run”. The Fund is a long-term savings plan and capable of riding out large swings in the markets. This is the very foundation of the investment strategy.