samchain/econo-pairs-v1 huggingface dataset:
First, appropriate intervention by supervisors vis-à-vis prime brokers to make sure that they ask for and get broad information from hedge funds and that they put in  12  Angeloni, Kashyap and Mojon, 2003  13  Noyer, 2006a  14  Noyer, 2007  4  BIS Review 42/2007  place comprehensive risk management of all hedge funds-related exposures is essential. Second, there may be scope for policy-makers to encourage appropriate organisation of infrastructure in order to improve the information available on the markets in which hedge funds operate. Third, a specific information system to be triggered in the event of a crisis could be established ex ante in order to ensure that relevant information on exposures and positions could be quickly gathered if necessary. -  At the macroeconomic level •  Increased financial asset holding resulting from financial innovation is likely to result in higher sensitivity of households to asset price booms and busts 15 . On the liabilities side of non-financial agents’ balance sheets, by facilitating the management of risk and easing liquidity constraints, financial innovation stimulates both the supply of and demand for credit, which may lead to higher leveraging and financial fragility. Note that both effects run counter to the result I mentioned at the start, i.e. that financial innovation tends to reduce growth volatility. Although this result may still hold true in normal circumstances, it may thus be reversed in specific ones, especially in stress situations.

One of the many official reports on the lessons took a mandate about capital flows and turned it into a series of prescriptions on national balance sheets, including being attentive to vulnerabilities and to perverse incentives.1 The emphasis of the Draghi Report was hardly surprising. Brazil, Mexico, and Russia had suffered from mismatches in the maturity and interest-rate structure of their public debt. For Korea, it had been mismatches in the external funding of the banking sector. In Indonesia, the non-financial corporate sector had been overly reliant on short term, foreign-currency-denominated external debt. In each case, the country’s economy was eventually brought to heel by a run. It might have been easy for “developed” economies to ignore the Draghi Report. But efforts were made to draw wider lessons amongst advanced economies. Thus, in late 2000, the Bank of England ran the first of a short series of annual articles that tried to draw out the implications of the UK’s balance sheet for financial stability. It is worth quoting fairly extensively from that first article:2 “It is advisable for authorities to monitor a range of balance sheet indicators, focusing on variables and relationships that have in the past indicated financial fragility.....the size and structure of the economy’s foreign currency debt are particularly relevant, especially for countries on a fixed exchange rate regime. Sound risk management by the public sector warrants particularly high priority. National authorities need to adopt prudent strategies and practices in managing their own debt liabilities and financial and other assets.
The traditional answer provided by economic theory to this type of market failure is none other than “Pigouvian taxes” which equalise marginal private and social costs and cause emissions to be reduced to their socially optimal level.4 However, as we all know there is a big gap between theory and practice and, moreover, the “devil is in the detail”. This is true not only of the most technical matters, but also of the political ones. Deciding, for example, how to use the revenues raised is of crucial importance to the success of the transition to a more sustainable economy. This is so both from an economic perspective, promoting technological innovation and the adoption of clean technologies, and also from a social perspective, compensating the losers in the transition process. I will be referring to this issue later on. In my opinion, fiscal policy should play a leading role in the management of climate change, to deter the most environmentally damaging activities and to stimulate the investment needed to develop cleaner technologies and, also, to alleviate the social costs of the transition. This is the thrust of various initiatives currently under discussion. For example, those that seek to reconsider or supplement the EU emissions trading system (EU ETS) so that the price of carbon approaches that consistent with the Paris agreements. And, likewise, those designed to reduce environmentally harmful subsidies (EHS). At the same time, we should not forget the truly global dimension of the climate change challenge.

That in turn will largely determine how successfully we can achieve an orderly unwinding of the present imbalances. This wider international context is, inevitably, having a profound – and continuing – effect on the pattern of interest rates and exchange rates, and on economic developments, both within the Eurozone and here in the United Kingdom, to an extent that is still perhaps not fully appreciated. A year ago, when the historic decision to go ahead with a broadly-based euro was taken in Brussels, the prospect was for a steady pick-up in overall demand and output across the Eurozone. It was a helpful environment for the introduction of the new currency. And the constituent currencies of the euro strengthened in the second half of last year on the back of that. The introduction of the euro at the beginning of this year was a technical triumph – within the Eurozone, but also notably here in the City, which has clearly established itself from the outset as a vital contributor to the development of broad and liquid euro-denominated wholesale financial markets. 1  BIS Review 68/1999  But the growing impact of the global economic setback last autumn was to dampen external demand and business confidence in the Eurozone – as it did elsewhere – apparently affecting some of the participating countries more than others.
I must admit here that initially this seemed to cause more harm than good – a little knowledge truly did seem a dangerous thing now that we had opened ourselves up to the media. The greater access to central bank officials and information, e.g. through our website, without the full understanding of issues on the part of journalists seemed to fuel erroneous stories. However, our perseverance over time has meant that the level of understanding and quality of questions has improved significantly. As a result, the level of reporting has also improved – although much work still needs to be done. Today issues surrounding the causes and likely impact of the global financial and economic crisis have been covered in a more balanced way with a greater thoughtfulness on the economic linkages and Government policy – as well as with increased reference to related developments around the world. Mr. Chairman, following on from the media seminars, six years ago the Bank of Zambia began conducting seminars for members of Parliament – particularly members of oversight committees such as the Committee of Economic and Labour Affairs and the Public Accounts Committee. Again, what we have seen is a greater appreciation by members of Parliament of the challenges facing the central bank in the implementation of monetary policy in particular and economic policy in general because the central bank is often called upon to comment on the Government’s economic policies as well.

Given that the outstanding balances of lending in the short and medium term are not expected to grow in a similar way to how they did in the expansion prior to the crisis and such that they may offset the reduction in net interest income, the recovery in bank profitability will have to be based on the continuing adjustment of expenses, on the search for alternative sources of income and on improved efficiency. 5/8  In any event, in the search for profitable business, banks cannot ease off in their vigilance regarding lending standards. In the current setting, very high rates of credit expansion, as is occurring in the household bank lending segment for the purchase of consumer durables, might be indicative of an easing of risk acceptance and selection standards which, as past experience shows time and time again, ultimately translates into notable increases in nonperforming loans. Despite the limited weight of this business segment in Spanish banks’ overall credit portfolio, the rise in the volume of non-performing assets in this activity as a result of overly rapid credit growth should strike a note of caution: from being an alternative source of income it should not become a potential source of losses.
Fifty years ago, there were almost half a million suspected cases annually of measles in England and Wales. In the following year, a vaccination for Measles, Mumps and Rubella (MMR) was introduced in the UK. Cases of measles fell dramatically, by the mid-1990s reaching fewer than 10,000 per year. In 1998, a widely-publicised article appeared in The Lancet linking the MMR vaccine to autism and bowel disease. 24  News of these findings spread as contagiously as measles itself. In response, rates of MMR  vaccination, which had peaked at over 90%, fell to 80% by 2004. 25  The scare had socially, as well as  clinically, contagious consequences for public health, causing lower rates of vaccination against un-related diseases. Only recently have rates of MMR vaccination returned to their late-1990s highs. The 1998 MMR study has since been comprehensively discredited and the lead author struck off as a doctor. Yet the costs of this episode are still being felt. Rates of measles infection began rising in the UK from the  21  ING-Economics Network Survey of the Public’s Understanding of Economics (2017). YouGov / Post Crash Economics Society Survey (2015). 23 ING-Economics Network Survey of the Public’s Understanding of Economics (2017). 24 Wakefield et al (1998). The article has since been retracted. 25 Public Health England, The National Archives. 22  5  All speeches are available online at www.bankofengland.co.uk/speeches  5  early 2000s and only recently have cases peaked.

These are the Top Islamic Bank and Top Development Financial Institution awards to recognize these two categories of institutions for their contribution towards the overall business growth of CGC and the SME sector. These new categories illustrate our sincere acknowledgment of the financial institutions that have made significant contribution to SME development. We believe 2008 is an important year for CGC. Foremost is that it marks the 36th year of the Corporation's involvement in SME development. It is also the year which will see the implementation of the third phase of our three-year business transformation plan and the successful completion of the three-year strategy. The necessary preparatory work under the transformation plan has largely being completed and we hope to take the first step towards achieving financial sustainability. Another significant milestone in 2008 is the establishment of the SME Credit Bureau, a watershed event in CGC's evolution. The Bureau is a source of credible and reliable credit information that serves the needs of both the SMEs and the potential financiers. This reflects the natural progression for the CGC in its continuous efforts to enhance access to financing by SMEs. The establishment of a SME Credit Bureau, by CGC in strategic collaboration with Dun & Bradstreet, would no doubt complement the other initiatives of the Government and the financial sector in promoting growth and development of SMEs. We have seen how CCRIS, where real-time and comprehensive information on consumers' credit exposures and history is readily available.
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.

Indeed, even among the most critical of respondents we had support for the Committee’s three pillars and its intent to align capital more closely to risk; to introduce greater consistency in the supervisory review of capital adequacy; and to promote effective market discipline by enhancing transparency. It  BIS Review 42/2003  1  was, moreover, satisfying for us that most commentators acknowledged substantial improvements in the proposals since the release of the second consultative paper in early 2001. Respondents have raised a large number of issues for consideration, including several that address some very fundamental concepts and many that have been debated throughout the entire process. In addition, some member jurisdictions will continue to receive responses through their national rulemaking processes up until late autumn of this year, during which time we can expect to hear additional views on the proposals. For those of you who have not yet managed to make it through all of the responses posted on the BIS website, I would like to mention some of the most common issues which have been raised. First of all, the complexity of the proposals. This has also been raised in the past, and is, I think, a valid concern. At the same time, we mustn’t forget that many of the areas of the new Accord have expanded in size and complexity precisely as a response to calls from the industry for different types of business to be more finely reflected.
The analyses made of why inflation has been so low in recent years indicate that it is primarily unexpectedly high and lasting growth in productivity that is the explanation and not contractionary monetary policy. 2 One factor that supports this conclusion is that inflation has been low despite demand and growth in the economy being relatively high. But the higher labour productivity has meant that companies have been able to increase their production without needing to raise their prices so much. It would also appear that it has contributed to companies being able to increase production without needing to recruit new staff to a great extent. This may be an explanation to what is referred to in the debate as “jobless growth”. The high productivity growth has also contributed to the Riksbank being able to cut the interest rate to a historically low level. My conclusion is therefore that we have first and foremost overestimated inflation because we have underestimated the strength of productivity growth. Giavazzi and Mishkin observed in their evaluation of monetary policy that this has also applied to most other forecasters. We have therefore not overestimated inflation because we have failed to take into account developments in the labour market. Nor is it because our monetary policy decisions have been unreasonable. This was also noted by Giavazzi and Mishkin in their evaluation. Nevertheless, there is of course reason for the Riksbank to be self-critical. We must become better at understanding the driving forces behind productivity growth.

It also contributed to a growing central government debt. The economy was fuelled during economic upturns, which led to overheating and inflation. The Riksbank’s task was to try to defend the fixed exchange rate. The social partners were instead to contribute to low inflation by ensuring that wage increases were not too high. Soaring wage costs and poorer international competitiveness meant that the system broke down in the mid-1970s. To safeguard the objective of full employment, the krona was devalued by a total of around 40 per cent on five different occasions between 1976 and 1982. Each devaluation held unemployment down temporarily, but instead contributed to kindle the inflation fire until it was time for the next devaluation. Unemployment was also held down in that the number of employees in the public sector increased substantially. The number of persons employed in the public sector increased from 15 to 30 per cent between 1960 and 1980. In my opinion, unemployment was held down during this period using methods that were not sustainable in the long term. I consider this to be the first important aspect to bear in mind when discussing why unemployment is now much higher than it was in the 1970s and 1980s. Towards the end of the 1980s the situation became untenable. Everyone was then counting on the krona being devalued if the rate of increase in prices and wages rose too high. The driving forces for holding down prices and wages had thus disappeared.
The global economy is also being supported by accommodative macroeconomic policies. Monetary policy remains highly accommodative in the Eurozone and Japan. Fiscal stimulus in the US will more than offset the gradual unwinding of monetary accommodation. Across the major economies, labour markets are strengthening and wages are rising, underpinning consumer demand. The global growth cycle has matured and is probably past its peak. While growth remains healthy, it has ceased to accelerate, particularly in the Eurozone and Japan. In the Eurozone, the initial spurt in domestic spending last year has stepped down to a more sustainable pace. In Japan, the fiscal boost is over. 1 / 11  BIS central bankers' speeches  The US economy, albeit still growing strongly, is already at full employment. At least part of the fiscal stimulus is likely to be dissipated through higher inflation. In China, investment growth has slowed, with the shift in policy focus to addressing the country’s vulnerabilities, such as high levels of indebtedness and excess capacity. From a sectoral perspective, the global tech cycle has moved into a consolidation stage, with inventory build-up fading. The Global Manufacturing PMI has eased in recent months to 53.1 in May, although it remains in the expansionary zone. Tail risks to global growth have grown significantly over the last six months. Earlier this year, I described the “Goldilocks” state of the global economy—healthy growth, low inflation, and easy financial conditions.

From the perspective of developed countries, the main risk arises from the possibility the prolonged very low inflation, or the occurrence of deflation, to produce  BIS central bankers’ speeches  3  significant negative effects on the economic activity and public debt sustainability. This risk is particularly pronounced in the euro zone, where the longer underperformance of inflation in comparison with the target would cause a decline in longer-term inflation expectations, which in the absence of room for loosening the monetary policy would lead to higher real interest rates and consequently, to lower economic activity. In the medium run, the risks to the global economy arise from the possibility of lower potential growth of developed economies and developing countries, as well as the possibility of prolonged economic stagnation of the developed countries (the so-called secular stagnation). The risk of secular stagnation is particularly pronounced for the countries of the euro zone, where the constantly low domestic demand due to lower investment and higher private savings would have negative effects on economic growth and productivity in the long run. Yet, the challenges for growth in the forthcoming period are not related only to the external environment. Namely, this is a period in which it appears that the room provided by the macroeconomic policies for supporting further growth is largely exhausted. Macroeconomic policies have played a key role in the post-crisis economic recovery, but they require gradual consolidation in order to prevent the emergence of imbalances in the economy.
The idea for building up the reserves was aired at the Central Bank’s annual meeting in March this year, so it should not come as a surprise. Given the scenario I have been describing, the Board of Governors seems to have ample justification for taking this pause to consider the position carefully and decide the next steps, not only with reference to the more positive assumptions that have now emerged since the July forecast, but also by examining the risks I have mentioned. If the current outlook holds and everyone stays alert and strong, inflation will be brought down over a relatively short period. The most important consideration is to achieve a satisfactory course for the exchange rate, whereby the current account deficit will primarily be reduced by increased exports, decreased imports of capital goods and a sufficiently tight stance to deter consumers from spending on other imports. The other and much less favourable way to adjust the current account would be through a sharp currency depreciation. Such action would have many uncomfortable side-effects which are well known. As yet, the former option is much more likely namely a soft landing.

Interestingly, I find evidence in the early (pre-1988) sample that suggests that inflation was, if anything, more sensitive to the unemployment gap when unemployment was high, rather than low. Although these estimates are imprecise, this pattern is the opposite of the claim by HMS, which relies on full-sample estimates to draw conclusions. This also runs counter to HMS’s historical narrative about the 1960s and the dangers of a red-hot labor market. I will not dwell on this further, but it is a reminder that findings of nonlinearities in Phillips curves are often not robust. The apparent breakdown in this simple price Phillips curve in the past 30 years reflects a number of structural changes in the U.S. economy. The Federal Reserve’s success in re-anchoring inflation expectations at a low level can explain the decline in inflation persistence seen in the data.1 However, the role of well-anchored expectations in flattening the Phillips curve is not obvious, and as HMS note, this flattening is not as clear in the wage inflation equations. This suggests other forces are at work. Several usual suspects come to mind, including the effects of supply shocks, increased globalization of goods markets and supply chains, and changes in the market structure for consumer goods.