samchain/econo-pairs-v1 huggingface dataset:
The pattern of risks differed somewhat from earlier periods with problems. Instead of the familiar difficulties with the banks’ loan portfolios, in large measure it was a matter of risks that certain highly leveraged players would generate problems through large positions in the repo market, for example. A drastic example—LTCM  5  BIS Review 23/1999  The problems in the U.S. hedge fund Long Term Capital Management can be seen as a drastic example of how systemic risks can arise if the banks’ counterparty risks and concentration risks become unduly large. A single player, seemingly far removed from the payment system, threatened to generate a systemic crisis in the U.S. financial system, with the risks of contagion that this might involve. LTCM, which had been operating since 1994, based its strategy on the use of statistical and mathematical models to identify temporary price differentials between similar financial market assets. This involved speculating, for example, in narrowing interest rate spreads in the U.S. bond market. In simple terms, a limited capital input was used to combine forward purchases of U.S. corporate bonds with forward sales of U.S. federal bonds. The combination of countervailing positions meant that the outcome would not be affected by the general development of interest rates. It was only the relative paths of the two asset categories that mattered—a narrowing interest rate spread would result in a profit. Similarly, the fund took large countervailing positions between different asset markets as well as between markets in different geographical regions.

The latest economic data on world trade, output and unemployment are unmistakeably grim, but we must continually challenge ourselves about how to interpret these and the economic data to come. They could be telling us something about the causes and size of the downturn, the impact of the policy measures taken so far, or how changes in economic structure are affecting the response of output and employment. Let me now say a little about the role the Monetary Policy Committee is playing in addressing the challenges posed by the global economic downturn. 2. Unconventional policy measures  The MPC responded to the marked deterioration in the economic outlook with an aggressive easing in monetary policy. We reduced Bank Rate from 5% to an historic low of just 0.5% in a matter of months. Moreover, at our policy meeting earlier this month, the Committee agreed to finance £ billion of asset purchases by the issuance of central bank reserves, in order to boost the supply of money and improve the functioning of corporate credit markets. The purchase (and sale) of assets by central banks is nothing new; central banks have always implemented monetary policy by changing the size and composition of their balance sheets. Nor, importantly, has the objective of monetary policy changed, which is to hit the Government’s 2% target for CPI inflation. What is different, however, is the range of assets being purchased by the Bank and the scale of those purchases.
Chart 13: Financial market development, ranking based on the Global Competiveness Report Financial market development (ranking based on 138 countries, 2016) 120.0 100.0  83.0  69.4  80.0  68.9  60.0  55.8  44.7  40.0  20.0 0.0 SEE  CEE  Baltics  Region  Venture capital availability (ranking based on 138 countries, 2016)  Financing through local equity market (ranking based on 138 countries, 2016) 120.0  EU-28  120.0 101.2  100.0  100.0  90.5  90.4  80.0  86.2  80.0  73.0 61.1  60.0  60.0  40.0  40.0  20.0  20.0  75.2  74.0 55.0  51.7  0.0  0.0 SEE  CEE  Baltics  Region  EU-28  SEE  CEE  Baltics  Region  EU-28  Source: World Economic Forum. Equity markets in the region are quite shallow, with a stock market capitalization averaging around 15% of GDP, compared to the EU-28 average of close to 70% in 2016. Positive outliers in this context are countries such as Croatia (43% of GDP) or Poland (close to 30% of GDP). Similar is the inference when it comes to private equity, which is considered an attractive source of financing for young firms, or companies not listed on the stock exchange. It is a model that enables risk-sharing, and fosters management and operational efficiency.

The solid growth in general, including the inflows of foreign capital and rising investments, was a combined effect of the reform processes in these countries, and the extremely conducive global environment. Low interest rates, liquidity glut, expansion of global trade and global value chains were global features that supported investment growth in the region. Hence, the share of investment in GDP was rising prior to crisis (close to 10 p.p. in 2008 compared to 2000), reaching around 30% of GDP in 2008, well above the rule of thumb benchmark of 25%. Yet, according to the IMF (2016), given the easy pre-crisis funding conditions and low initial capital-labor ratio, “CESEE would have been expected to have much higher rates of capital accumulation than what they actually had”. One reason for this might be that the financial flows fueled consumption as well, thus precluding stronger growth of saving and investment. Chart 1: Share of investments in GDP, in % in constant terms)  Chart 2.
This means that the positive impulse from fiscal stimulus will abate over the next year. The third, and perhaps most important factor, is that the banking system has still not fully recovered. Bank credit losses lag the business cycle and are still climbing. Thus, while banks’ access to the capital markets has sharply improved, banks are still capital constrained and hesitant to expand their lending. Most importantly, some significant classes of borrowers – namely commercial real estate and small business – are almost wholly dependent on the banking sector for funds, and those funds are not easily forthcoming. The commercial real estate sector is under particular pressure because the fundamentals of the sector have deteriorated sharply and because the sector is highly dependent upon bank lending. In terms of the fundamentals, there are two problems. First, the capitalization rate – the ratio of income to valuation – has climbed sharply. At the peak, capitalization rates for prime properties were in the range of 5 percent. That means that investors were willing to pay $ for a $ of income. Today, the capitalization rate appears to have risen to about 8 percent. That means that the same dollar of income is now capitalized as worth only $ In other words, if income were stable, the value of the properties would have fallen by 37.5 percent. Second, the income generated by commercial real estate has generally been falling.

In fact, to some extent, it has been replaced with a virtuous cycle. As financial markets have recovered, that has led to an improvement in business and consumer sentiment that, in turn, has helped to lift the economy, spurring further gains in financial asset prices. In the same way that the improvement in market conditions is helping to support a sustainable economic recovery, the fact that the recovery in economic activity is a world-wide phenomenon helps mitigate the risk of a so-called “double-dip.” The recovery in foreign demand should help to support the U.S. economy even if U.S. domestic demand grows more slowly than anticipated. Given these developments, the consensus forecast of about 3 percent annualized real GDP growth in the second half of the year appears reasonable. BIS Review 122/2009  1  However, I also suspect that the recovery will turn out to be moderate by historical standards. This is a disappointing outcome in that growth will likely not be strong enough to bring the unemployment rate – currently 9.8 percent – down quickly. I see three major forces restraining the pace of this recovery. First, households are unlikely to have fully adjusted to the net wealth shock that has been generated by the housing price decline and the weakness in share prices. Peak to trough, home prices nationwide have declined by 11.5 percent measured by the FHFA (Federal Housing Finance Agency) index and by 32 percent according to the 20-city Case-Shiller index.
The world is simply too complex to put monetary policy on autopilot. 18 Concerns over the FOMC’s degree of discretion in monetary policy likely reflect, in part, innovations in monetary policy enacted in recent years that added accommodation at a time  17  The Board of Governors plays an important role in the oversight of the Reserve Banks. The Board of Governors regularly evaluates Reserve Bank operations and each Bank’s budget The Reserve Banks conduct supervision under delegated authority from the Board of Governors. Reserve Bank directors continue to have no role in bank supervision. 18  See The Fed at a crossroads, Where to go next? Brookings Institution panel remarks, October 15, 2015. 6  BIS central bankers’ speeches  when short-term interest rates were stuck very close to the zero lower bound. In particular, the Federal Reserve’s balance sheet grew substantially as the Federal Reserve enacted a series of large-scale asset purchase programs designed to support economic activity. With respect to the argument that these programs have distorted financial markets, I would simply respond that monetary policy always affects financial markets and financial asset valuations. The expected path of the federal funds rate is an important factor influencing the level of bond yields, and the level of bond yields and bond term premia have implications for the valuations of other financial assets, such as equities, and influence the foreign exchange value of the dollar. Of course, the impact of monetary policy may have been greater this time.

As I have previously mentioned on several occasions, sustainability of the favorable labor market outlook in 2010 is contingent on implementation of the required reforms for enhancing productivity and flexibility in the market. These reforms would also contribute to Turkey’s social security system by promoting registered employment. 23. Real labor costs, which have gradually been increasing since the second quarter of 2010, remained flat in the final quarter. Unemployment rates hovering above pre-crisis levels continued to contain the rise in unit labor costs, becoming the primary factor restricting the run-up in services prices in 2010. BIS central bankers’ speeches  7  Esteemed Guests, 24. In 2010, the foreign trade deficit soared amid weak external demand and the rapid recovery in the domestic demand. In addition to the surge in the foreign trade deficit, the runup in services expenditures further aggravated the current account deficit. In this period, transportation costs also increased due to rise in imports. Thus, the current account deficit, which was down to USD 14.3 billion in 2009, reached USD 48.6 billion in 2010. 25. Recent data indicate that the surge in imports continued in the January-February period in line with the robust domestic demand, and exports continued to recover gradually owing to weak external demand. However, the political unrest in North Africa slows down the recovery in Turkey’s exports, and also pushes up our imports through oil price hikes.
At the same time, however, this situation is sub-optimal in terms of market-wide functioning: pricing may be inefficient, perhaps materially so, and other elements of the service offering fall short of best practice. Collective, market-wide action to improve competition and standards would benefit this firm and many others – raising all ships. But the firm itself feels powerless to drive that change by itself. It’s that missed opportunity that is ‘bad’, or perhaps better put, ‘sad’. The third and final stylised storyline is definitely ‘ugly’. It involves a large and regular buyside user of FX markets which chooses to operate through a single relationship bank, which also provides custodian services. It places all of its FX business with the bank to work through over an extended period. It has no 8  See for instance https://newsroom.nex.com/news/04092018/nex-markets-experiences-a-reduction-in-hold-times-and-reject-rates-as-aresult-of-the-fx-code-of-conduct, which shows that, for one of the platforms in Chart 4, hold times have fallen from 93 to 37 milliseconds since introduction of the Code, with 97% of trades with the top 10 liquidity providers now being filled at the original quote price. 9 https://codeforces.com/blog/entry/65002 8  All speeches are available online at www.bankofengland.co.uk/news/speeches  8  connections to other venues, does no material TCA, and receives no specific timestamping on its trades. Although it believes it makes no economic sense to vary its FX practices, in fact its trades are of a size, regularity and complexity that it would pay the client materially to shop around.

The Bank went 150 years without employing any women at all. When they did, it was to do the work of 15–18 year old boys, sorting and listing returned notes. On getting married, women at the Bank were required to resign their position. The Bank was “Old Lady” by name but “Young Lady” by nature. Cunliffe’s greatest achievement was his contribution to solving the financial panic of 1914. On Friday 24 July, the City woke to the threat of war as Austria made an ultimatum to Serbia. There was a worldwide scramble for the safety of cash. Mass-selling led to stock markets closing in Europe, then New York, then Australia. London was not exempt. By 31 July, the London Stock Exchange had closed for the first time in its near 150-year history. Panic soon spread to the money markets, sucking liquidity and  4  Roberts and Kynaston (1995). BIS central bankers’ speeches  3  life out of the financial system. Unable to finance themselves, lending by the banks began to drain away, starving the economy of credit and causing it too to crater. This was truly a credit crunch. Cunliffe’s plan, hatched with the Treasury, was to lift the liquidity burden on the banks by purchasing the IOUs they were holding from overseas borrowers which had become understandably illiquid on the outbreak of war.
It also has advantage over the rate of shorter maturities, such as 1-day or 7-day, in that it will not impose too much burden on the Bank of Thailand in taking care of the liquidity and maintaining the policy rate. Therefore, other repurchase rates such as 1-day or 7-day will be freely determined by market forces. In sum, the 14-day RP rate will leave room for the short-term rate with flexibility to adjust and move in line with money market liquidity conditions. The policy rate was initially set at 1.5 percent per annum and it was raised to 2.5 percent in June 2001 to realign the money market interest rates. Following the global economic slowdown, the policy rate had been cut twice in December 2001 and January 2002 to help stimulate the economy. The rate now stands at 2 percent per annum. Having the policy rate clearly announced, the Bank of Thailand is able to provide a transparent monetary policy signal to the market. This helps provide a framework for a more effective transmission mechanism. After the adjustment in the policy rate, other rates in the repurchase market will adjust in line with the policy rate. Banks will thereafter adjust their portfolio and change their rates for loans and deposits. The transmission mechanism will work itself out such that this will eventually lead to the desirable result in the real sector. The policy impact usually takes up to 8 quarters in the transmission process.

The answer lies in the current Bank of Thailand Act which does not spell out or lay down mechanism for the central bank to achieve its independence. Governor and Deputy Governor are political appointees. They are appointed by His Majesty the King upon the recommendation of the Minister of Finance and approved by the Cabinet. There is no definite term of office. There are no protective clauses in the Act which clearly spell out causes for removal. The most popular reason given by the government when firing governors was one of “suitability”. None of the nine governors had the chance to resign from the office in protest of the Government policies as advocated by Dr. Puey. In the past 7 years, we have 5 Governors including the present one who has been in office for just over 1 year. However, it is important to note as well that sometimes the relationship between Minister of Finance and Governor of a Central Bank turned sour not because of policy conflict but because of personality mismatch that led to eventual conflict. For instance, the current Minister of Finance and the present Governor work well together and have great respect for each other. What then is the solution? I think the best solution is to legalize Central Bank independence by spelling out clearly in the Central Bank legislation the power, duties, responsibility and accountability of a Central Bank.
Speeches  Published Date: 31 May 2022  "Gearing Up for Climate Action - The Road Ahead for the NGFS" - Opening Address by Mr Ravi Menon, Managing Director, Monetary Authority of Singapore, Chair, Network for Greening the Financial System, at the Green Swan Conference 2022 on 31 May 2022 Distinguished guests, ladies and gentlemen. It is an honour and a pleasure to address the Green Swan Conference again. As chair of the Network for Greening the Financial System (NGFS), I would also like to express my gratitude, on behalf of the NGFS, for the opportunity to co-host this conference with the Bank for International Settlements, the European Central Bank, and the People’s Bank of China. From a climate perspective, 2020 to 2030 is the “critical decade”. While everyone is busy making net zero commitments for 2050, let us not forget that the trajectory towards net zero will be substantially determined by 2030. Looking at where we are in our transition journey, the urgency to act is greater than it has ever been. Global greenhouse gas emissions are continuing to rise. In 2021, fossil fuel use and associated carbon emissions rebounded in tandem with the global economic recovery. The demand for coal has risen, not fallen. Fossil fuels continue to account for more than 80% of global primary energy consumption. Renewable energy generation capacity has grown significantly in recent years, but the current pace is not sufficient to reach net zero by 2050. Global temperatures have already risen by 1.1 degrees Celsius above pre-industrial levels.

In January 1817 it was the only bank in the country. It received deposits, but charged a fee for that service. Thus, today’s situation with depositors having to pay for keeping their money in the bank is not entirely a new phenomenon. In the 1870s Norway joined a currency union with Denmark and Sweden that lasted until the outbreak of the First World War. The Scandinavian countries enjoyed strong economic growth during this period. Large cross-border capital flows supported the industrialization of the Scandinavian countries, and financial integration driven by the gold standard and the currency union was probably a contributing factor to the favourable development. Both Sweden and Nor-way were relatively poor countries situated on the outskirts of Europe when Norges Bank was founded 200 years ago, but with the advent of industrialization in the late  BIS central bankers’ speeches  1  19th century both countries began their journeys to become two of the richest nations in the world. Economic and political developments in Norway and Sweden have also showed similar patterns in the period since the Second World War. The role of the central banks was very limited in both Sweden and Norway. The monetary policy decisions were made by the government and Norges Bank became more of a technical implementer of government policy. For much of the 1970s and 1980s, economic policy in both Norway and Sweden lacked a long term strategy and credibility. Inflation and wages soared, and lost competitiveness resulted in repeated devaluations.
Experience has also shown that financial crisis and economic recession entrenches the cycle of poverty. During a financial crisis, the poor lose their income by several times more compared with the average household. We saw this happen during the recent Global Financial Crisis, and we also saw how many that were displaced suffered "hysteresis" thus deeply affecting their income prospects. We also risk facing a severe setback in our fight against poverty. In the more recent years, the international community has accorded greater attention to addressing this agenda and to achieving more balanced and inclusive growth. Malaysia, while achieving growth and progress since the 1960s has always given attention for it to be a shared prosperity. Given the role of the financial system in facilitating this, Bank Negara Malaysia has always given priority to the financial inclusion agenda to not only bring the underserved segments of society into the financial mainstream but to promote a more effective participation in the financial system which will in turn strengthen the potential for enhancing economic well-being. Before I conclude my remarks, allow me to congratulate the World Bank Group on its many achievements realised in the Asian Region. Bank Negara Malaysia is pleased to partner the World Bank Group in its initiatives in the region.

By the response received, this initiative will inspire the many talents within the Malaysian research community to be more engaged to think and delve into greater research on Malaysian economic and development issues that have great importance to the country and the region that is expected to persist in our prevailing and future environment. With the official opening of the World Bank Group Knowledge and Research Hub, I believe the Hub is well-positioned to become a regional centre of excellence that promotes learning opportunities, thought leadership and innovation. Being located in Sasana Kijang, which in Sanskrit means a meeting place, it is hoped that the Hub would benefit from synergies with the institutional cluster of intellectual excellence that are also located right here in Sasana Kijang, including the Alliance for Financial Inclusion, the SEACEN Centre, and the Islamic Financial Services Board. On behalf of Bank Negara Malaysia, allow me to express our great optimism of this partnership in bringing knowledge, expertise and best practices to realise greater  BIS central bankers’ speeches  1  regional and international collaboration. Today, the winner of the Young Malaysian Researcher Prize 2016 will be announced. With this, let me conclude my remarks and invite Dr Axel Van Trotsenburg, to deliver his remarks. I also look forward to the address on 'Shared Prosperity' by Dr Kaushik Basu. 2  BIS central bankers’ speeches