samchain/econo-pairs-v1 huggingface dataset:
We have promised to keep the CP scheme under review and give 12 months notice before it is withdrawn. Corporate bonds A corporate bond scheme was also set up last year. In January 2009, the primary market was open for new bond issuance, but spreads over gilts were extremely wide, and were widening further as issuance increased (Chart 4). It was clear there was a substantial  4  BIS Review 23/2010  liquidity premium in the market. Secondary market liquidity was notoriously poor for sterling denominated bonds. The small size of the bond market, relative to euro- and dollardenominated markets, meant that many individual sterling-denominated bonds might not trade for months at a time. There was a risk that secondary market illiquidity might have restricted the strength of the primary market, so constraining the availability of credit. Most corporate bonds are bought by asset managers for long-term investment, but investors do need to actively manage their portfolios e.g. for duration and credit risk. The scheme was designed to meet this need by offering to buy small amounts of bonds in the secondary market on a regular basis. There were two immediate aims. First, by regularly posting traded prices, it was hoped to improve the process of price discovery and hence aid secondary market liquidity. Second, by offering a bid in the secondary market, the scheme should encourage further private sector demand in the primary market. That leaves open the question of whether we could or should have been trying to buy much larger quantities.

But such lending is well-collateralised, so low risk, and is always intended to be temporary: to overcome a one-off shock or to bridge to a more lasting solution. To discourage reliance on these operations, standard practice is to charge a penalty rate relative to market prices. These liquidity insurance operations are an integral part of the Sterling Monetary Framework which delivers our monetary policy objectives (See Fisher, 2009 for further details). The Bank of England does not have access to funds that could be used to sustain commercial lending operations. We do not have the power to raise tax, nor do we have significant retail deposits, nor the freedom to borrow in large scale in the wholesale markets for non-monetary purposes. 3 More generally, in a capitalist economy, it is private sector or, in some cases, national savings which ultimately fund the banking system. And it is the job of financial intermediaries to translate those savings efficiently into private sector spending. In contrast, the fiscal authorities (including national wealth funds where they exist) can access private sector funding via taxation or by borrowing in large scale. There are many instances throughout UK economic history where the government has intervened to support private markets, or indeed individual firms. There are well-known risks associated with such action, including the loss of public money and/or an inefficient allocation of capital in the economy. There are also substantial and well-known potential benefits if the intervention corrects a market failure or achieves a wider social objective.
The higher the debt-to-GDP ratio, the more difficult it becomes to take corrective action, especially during periods of slow economic growth. And the higher the debt ratio, the greater the risk of a situation where the debt dynamics become unsustainable, such as when the growth rate of the economy falls short of the interest rate paid on the debt. At the same time, structural reforms are not easy or popular to implement, especially during a slowdown or a recession. Structural measures include those that address the relative size and effectiveness of the public sector and those that promote competition in resource as well as in product markets. It takes time for these competitiveness-enhancing measures to reap the so-called macroeconomic dividends – including more rapid economic growth and faster employment growth. As a result, the rapid correction of the excessive debt ratio, as demanded by financial investors, often requires a sharp fiscal correction which leads to a slowdown in economic activity. In other words, the distress caused by austerity measures is relatively immediate, while the benefits need a longer period of time to materialize. One has to recognise that in the current circumstances, the pursuit of a lower deficit by financially stressed countries is inevitable and brings about a short term slowdown in the economy. The issue that arises is whether it would be possible to alleviate the negative effects on incomes and employment.

Once the decision is taken to publish accounts, it is natural to change the frequency of monetary policy meetings to six-week. This will give space for producing the accounts and yet not create confusion with regards to following meeting and any action that might be taken. BIS central bankers’ speeches  3  Conclusion While many uncertainties remain, actions taken during the last two months show that the Eurosystem is flexible, responsive, and, as we have said many times, ready to take any actions that may prove necessary should downside risks further materialise. 4  BIS central bankers’ speeches
A year and a half ago (in the March and June 1999 Inflation Reports) we forecast a period of slower growth in the mainland economy. We were uncertain as to how long it would take for the decline to be reversed. The basis for these projections was high cost increases peculiar to Norway following the 1998 wage settlement, together with low international demand in the wake of the Asian crisis, low oil prices, sluggish price trends for other Norwegian export goods, and major restructuring in key manufacturing sectors. 9  BIS Review 67/2000  We assumed that there was a relatively high risk of a major recession. The greatest uncertainty with regard to setting interest rates was linked to developments in the sheltered sector, where price and cost pressures remained strong. A relatively tight central government budget for 1999 laid the foundations for curbing growth in the sheltered sector. On the basis of these analyses and the approved government budget for 1999, Norges Bank announced that it would be easing its monetary policy stance. The key rates were lowered in five stages by a total of 2.5 percentage points in the course of the first nine months of 1999. This helped stabilise the Norwegian economy, and hence the krone. The outlook for the global economy and the Norwegian economy improved unexpectedly quickly. It now appears that the period of slower growth in the Norwegian economy was in fact over by summer 1999.

Final remarks on the current juncture We are currently enduring an international financial crisis that has no precedent in recent decades. How the world economic situation will unfold and for how long the recession will last is yet to be seen. Nonetheless, some reflections may be helpful at this point about the abilities of our economy to deal with the turbulences, in a scenario where our inflation rates are still very high and have to be brought down. One feature that stands out in solid economies is that they learn from their mistakes, and hopefully the world will come out of this episode as a strengthened international economy. In our country, we learned the lesson. The financial crisis of 1982 endowed us with a General Banking Act that has been perfected over time, and which establishes a framework that allows the existence of a dynamic banking industry together with good prudential regulation. The excesses of the US banking system could not have happened in Chile. Hence, the realestate bubble driven by fast and unhealthy credit expansion would hardly have formed in our country. In the first place, mortgage loans in Chile are different from those in the United States. There, these loans are issued “without recourse”, which allows the bank only to repossess the mortgaged property, but not other goods belonging to the debtor to recover the loan, as is the case in Chile.
Petroleum investment has increased considerably in recent years, but is projected to fall somewhat towards the end of 2009. According to the petroleum investment intentions survey from Statistics Norway, petroleum investment will remain high in 2010. Exploration and production spending appear to be increasing markedly, but the increase will to some extent be offset by reduced spending on goods and services for field development and fields in operation. The change in investment composition will contribute to reducing demand for goods and services from the Norwegian supplier industry. Several investment projects are planned on the Norwegian continental shelf for the coming years. There are indications that some of the planned investments will require an oil price of around USD 70 per barrel to be profitable. Our projections are based on a rise in the oil price in line with oil futures prices. These prices suggest that the oil price in 2010 and 2011 will be USD 5-10 above the current level. Petroleum investment is therefore projected to be high in the period 2010-2012. Should the global growth outlook deteriorate again, the price of oil may fall markedly. This might lead to a decline in oil investment and also have an adverse impact on the wider Norwegian economy. On the other hand, a fall in oil prices normally results in a depreciation of the krone. Should the krone depreciate for an extended period, inflation may become too high.

6  See, for instance, Giavazzi, F. and F.S. Mishkin (2006). 7  See, for instance, Giavazzi, F. and F.S. Mishkin (2006). 8  However, it is not possible to entirely rule out similar problems sometimes arising even when the central bank publishes its own forecast for the policy rate. If new information is received in connection with making a decision on the interest rate and this information changes the conditions for decision-making, the decision may be different from what might have been expected on the basis of the inflation forecasts (which have to be completed before the interest rate decision is made). 9  The advantages of the central banks publishing their own interest rate forecasts are discussed in more detail in, for instance, a number of essays presented at a conference organised by the Riksbank in June 2005. See in particular Archer, D. (2005), Faust, J. and E., Leeper (2005), Svensson, L.E.O., (2005) and Woodford, M., (2005). 10  See Goodhart, C., (2001) and Mishkin, F. S., (2004) for a detailed argument against central banks publishing their own interest rate forecasts. BIS Review 6/2007  3  this is not a simple matter. However, we Executive Board members have made the assessment that these problems are not in practice so great as to prevent us from agreeing on a path that a majority of the Executive Board members can support.
Second, decisions on interest rates are taken each month by the Monetary Policy Committee (MPC) comprised of nine individuals with expertise in monetary policy – five executive members of the Bank and four non-executives – who operate on the basis of one person, one vote. There is, therefore, an appropriate division between the objectives of monetary policy, which are set by the democratically elected government, and the implementation of those objectives, which is delegated to a group chosen for their expertise. The third, and crucial, component of the regime is that the monetary policy process is characterised by a high degree of transparency and openness. Minutes of the MPC meetings are published within two weeks and the Bank’s quarterly Inflation Reports contain the Committee’s views on the outlook for inflation and output. It is important that the Monetary Policy Committee explain its decisions, not least to make future decisions as predictable as possible in the light of the evolving economic data. Of course, it is always easier to explain policy when the decisions are popular. We have to redouble our efforts when decisions are less popular, and so I am delighted to have an opportunity this evening to explain and to listen. I shall leave plenty of time for questions because one of the purposes of visits such as these is to see things from your perspective.

V.  Safety nets: crisis resolution  In free market economy, no policy and no supervision can prevent the possibility of financial distress in any particular financial institution. What the public policy can do is to minimize the likelihood of systemic crisis. Crisis resolution is the key to avoid systemic disturbance. As we know, the ultimate policy choice for the authorities is to find the balance between the public sector and private sector solution from the one hand and between the pre-determined schedule and ad hoc approach from the other hand. Estonia's currency board regime sets for Bank of Estonia clear and strict limits that exclude several options available for the authorities in many other countries. By limiting the money supply to net foreign assets of the central bank, the room for emergency liquidity support is very limited. Therefore, in our case, the private sector solution is preferable and particular modalities of crisis resolution will depend very much on the circumstances. At this point, I would like to refer back to previous parts of my speech and underline that this particular approach rests upon a few strong fundamentals. Continuous analysis of financial system developments and early warning indicators, importance of strong owners and sound risk management in banks, high liquidity and capital requirements – these basic principles are a necessity for us. By combining the principles just mentioned, we can now describe a few hypothetical crisis resolution situations in Estonian financial system.
Sukhdave Singh: Global economic outlook and financial landscape – what has changed since the global financial crisis? Special address by Dr Sukhdave Singh, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the 18th Malaysian Banking Summit “Global Economic Outlook and Financial Landscape: What Has Changed Since the Global Financial Crisis?”, Kuala Lumpur, 20 June 2014. *  *  *  I would like to thank ASLI for the invitation to address you today. Given that I am speaking right before your lunch, I do realise that I have been cast into the role of an appetiser and therefore, that I should be brief so that you can quickly get on to the main course. I plan to briefly go over the state of the global economy and its implications for the Malaysian economy. The news here is largely good. However, there are a number of concerns that could impact the quality and sustainability of growth going forward, and I will also discuss these. Global economic outlook and the changing financial landscape The good news is that after five years of rather turbulent conditions and what has been a rather bumpy economic ride, the global economy seems to be finally on the verge of sustained growth. The key to this development is the improved growth conditions that have emerged in many of the advanced economies (AEs), economies that were at the heart of the crisis.

As those of you who have been in Hong Kong recently will know, this has been a very stormy summer from a meteorological point of view: we have just had the worst typhoon in sixteen years and the wettest typhoon since records began more than a hundred years ago. 1  BIS Review 103/1999  Economically, the most recent figures suggest that our wet and windy summer has brought with it a distinct turn for the better.
Rather, as JFK once said, “the time to repair the roof is when the sun is shining”. By setting the CCyB rate above zero now, we lock in existing excess capital at a time it is relatively cheap (in good times, retain earnings is the main driver of capital increase and the impact of a higher capital requirement on credit and the economy at large is limited is the current circumstances) to be able to absorb futures losses and loosen the regulatory requirement at a time capital is scarcer and the macroeconomic impact of a gap would be significant. 3/4  BIS central bankers' speeches  A number of European countries have taken similar steps to increase their room for manoeuver ahead of a possible future storm. In that context, macroprudential policy is often described as a complement to monetary policy: a policy necessary to remedy the financial stability consequences of very accommodative monetary policy. I would have a more encompassing perspective: macroprudential policy is a complement to monetary policy both today and in the future: by contributing addressing financial buoyancy, it enables monetary policy to be relatively more accommodative today – but the preventive reach of macroprudential policy should not be overestimated, especially while macroprudential authorities are still relatively young and the policy toolkit less sophisticated than that of other policies; more significantly, by building up (macro)prudential room for manoeuvre ahead of the next storm, it also helps restoring monetary room for manoeuvre to address adverse developments.

These are unintended consequences or, more precisely, side effects that are not completely unrelated with the medicine but should be monitored closely by central banks in their financial stability capacity and, more generally, by macroprudential authorities. The first one is an incentive given to corporates and households to take on more debt. The second one is a sustained slip toward greater risk taking in the markets that may not be recognized because “things look fine” or because “we should dance while the music is playing”. In this respect, I am not disputing the relevance of “alternative asset classes” (which the hotly debated CLO market is an emblematic yet tiny part) and the rising exposure of institutional investors toward “real assets”. Such developments are indeed useful and welcome. However, the large shift in allocations toward these assets classes and the more general increased risk appetite driven by the current macrofinancial environment are not without risks: On the equity market, valuations can be stretched and mainly responding to financial developments rather than macro or fundamental factors as we have seen over the past few months when the late 2018 correction “corrected” quickly in 2019; Similarly, after a (modest in a longer-term perspective) increase in late 2018, risk premia in the bond and credit market are compressed back to their historically low levels. Losing sight of fundamentals while your risk tolerance is at its highest and you have grown accustomed to suppressed volatility can foster difficulties ahead when adjustments would have to be made.
Cross-border bank lending and mutual fund asset data are from 2014; all other data is from 2013. Source: BIS, City UK, IMF’s GFSR, Bank calculations. Source: Radcliffe Report (1959), Wilson Report (1980), ECB, OECD, Swiss National Bank and Bank calculations. 10  BIS central bankers’ speeches  Chart 5: Foreign suppliers receive close to equal treatment to domestic firms in the UK(a)  Chart 6: UK administrative burden on startups second lowest in G7(a)  Source: OECD (2013), Product Market Regulation Database. Source: OECD (2013), Product Market Regulation Database. Chart 7: Incumbent firms least protected in UK(a)  Chart 8: UK product market least heavily regulated in G7(a)  Source: OECD (2013), Product Market Regulation Database. Source: OECD (2013), Product Market Regulation Database. BIS central bankers’ speeches  11  Chart 9: UK employment protection in middle of the G7 pack(a)…  Chart 10: … while securing favourable labouremployer relations compared to Japan and Germany(a)  Source: OECD Employment Protection Legislation. (a) Indicator based on responses to the following question in the WEF Executive Opinion Survey: “In your country, how would you characterize labour-employer relations? (1 = generally confrontational; 7 = generally cooperative)”. Source: WEF Global Competitiveness Report 2014. Chart 11: UK still has work to do to close the gap between its productivity level and world frontier, but growth since 1970 compares favourably(a)  Chart 12: Firms report FDI as a channel for technology transfer, particularly in the UK(a)  (a) Output per hour measured in 2014 $ with price levels converted using 2011 PPPs.

The economic convergence criteria ensure that the applicant countries have established economic conditions that are conducive to the maintenance of price stability and the  2  BIS Review 17/2008  coherence of the euro area. The framework of analysis comprises developments in prices, fiscal balances and debt ratios, exchange rates and long-term interest rates, together with other factors. A number of general rules are used in the application of these criteria. 1. The individual criteria are interpreted and applied in a strict manner. 2. The criteria constitute a coherent and integrated approach. They must all be satisfied. The Treaty lists the criteria on an equal footing and does not suggest a hierarchy. 3. The criteria must be met on the basis of actual data. 4. The application of the criteria should be consistent, transparent and simple. 5. Convergence must be achieved on a sustainable basis and not at a given point in time only. This approach is firmly based on economic arguments. It is generally recognised that a monetary union requires sustainable macro-economic convergence among the participating countries. Once a country joins a monetary union, it loses the possibility to use the nominal exchange rate as an instrument to correct a loss in competitiveness. As monetary policy decisions in the EMU are taken in the light of the economic conditions prevailing in the entire area, economic convergence is required to ensure that a country’s economy is sufficiently prepared for the monetary union.