samchain/econo-pairs-v1 huggingface dataset:
But global finance, however measured, has grown much, much faster. Stock market capitalisation and turnover surged by 153% and 282% respectively. Foreign exchange turnover more than doubled during this period, and has now grown to roughly 70 times of merchandise trade. You have seen the consequences of this disproportionate growth of international finance in many parts of the world, in Latin America, in Asia, in Russia, in Central Europe, and in South Africa, where the associated volatility of capital flows posed serious problems. Even in the US, where the largest markets in the world operate in what must be the most favourable economic environment seen for many decades, the destabilising potential of international finance was brought home by LTCM. Let me hasten to point out here that the rapid development of international finance is not necessarily a bad thing. Indeed, the phenomenon has been one important factor contributing to increasing global prosperity. Much of the Asian miracle as we know it, during the long period of prosperity before the financial turmoil broke out in July 1997, was brought about by financial liberalisation. The crucially important process of financial intermediation, in which savings are channelled into productive investment, has been made a lot more efficient. Money is no longer stored under mattresses, but is, through placements with banks, and investments in debt and equity and their ever-proliferating derivatives, put to productive use farming land, building homes, manufacturing goods and providing services.

There are also continued financial challenges for families here as indicated by the New York Fed’s measures of credit conditions. As of the end of 2013, average debt per person was about $ in Brooklyn – little changed over several years. At the same time, the Borough’s delinquency rate on that debt is now 11.6 percent, much higher than the state average and more than double the national average. What’s more, the mortgage crisis continues to take a toll on local homeowners. As of the end of 2013, more than 11 percent of mortgage debt in Brooklyn was 90-plus days delinquent, again significantly higher than the New York State and national delinquency rate. I also want to make a few comments about the impact of Superstorm Sandy. While areas of the New York City metropolitan region were hard hit by the storm, the devastation was particularly severe along the waterfronts of Brooklyn – and in particular in southern Brooklyn and neighborhoods like Red Hook. We saw and heard about the devastation of the storm from many of those affected, including a number of our own employees as well as other residents we met at a series of assistance clinics we organized in response to the storm. Those already living close to the edge financially were particularly vulnerable as were the City’s public housing residents. Still, Brooklyn’s economy showed resilience: while employment did drop in November 2012, it bounced back strongly the next month and accelerated during the spring of 2013, reaching new highs.
The main changes consisted in reducing banking credit risk associated with deposits in commercial banks maturing in or before one year. The reference composition for banking risk was reduced from 37% to 20%, while for sovereign risk it was raised from 63% to 80%. Furthermore, during this year the minimum risk rate for banks to be eligible was changed from A- to A, also restricting investments in banking institutions rated A and A+ to a maximum of 5% of the investment portfolio. In line with the new bank deposit policy, deposits maturing in the months of October and November will not be renewed, in order to comply with the newly defined ceilings before December. Regarding asset breakdown by maturity, 60% of resources in the internally managed portfolio are invested in short-term instruments, with average maturity of three months, and the remaining 40% is invested in long-term securities (mainly sovereign bonds) with a duration of 30 months. Thus, average duration for the overall portfolio is 13.9 months. The reference currency composition remains 59% in US dollars and 41% in euros. Despite turbulences in international financial markets, and considering that the biggest fraction of resources is invested in fixed-income sovereign instruments, the annualized return obtained from managing the Central Bank's international reserves in the first half of 2008 was 3.47% measured in foreign currency. 1 The differential return obtained with respect to the benchmark structure was 0.15%.

José De Gregorio: The international financial crisis and its impact on the Chilean economy Speech by Mr José De Gregorio, Governor of the Central Bank of Chile, presented before the Honorable Senate of the Republic, Santiago de Chile, 8 October 2008. *  *  *  Mr. President of the Senate, In response to your invitation to participate in this special session of the Honorable Senate, I would like to share with this audience our vision on the severe financial crisis the world economy is enduring, as well as its implications on our country. The world financial crisis and international growth The financial crisis being experienced by developed countries is the outcome of a period of stability, with abundant liquidity, fast economic growth and an asset price bubble. This combination of aggregate factors yields, as it frequently happens, to a cycle of high credit growth. The problem is that this occurred during an extremely accelerated process of financial innovation in market segments that were poorly or ambiguously regulated – mainly in the US. Low interest rates prompted an intense search for higher returns. Individuals with little or no ability to repay were lent for housing and, to reduce risks, credits were securitized and often taken out of the banks’ balance sheets (i.e. Structured Investment Vehicles and conduits). Money was lent on the assumption that housing prices would continue on the rise, so the mortgage was all that was needed to relax lending standards.
Charles Bean: The economic outlook Remarks by Mr Charles Bean, Deputy Governor of the Bank of England, at the National Farmers’ Union Conference, Birmingham, 16 February 2009. *  *  *  The weather is at the forefront of farmers’ minds but rarely crosses that of a central banker except when, as two weeks ago, a dump of snow brings London to a standstill. But economists’ lack of interest in the weather was not always the case. William Stanley Jevons, one of the great Victorian economists, thought sunspot activity was the key to understanding economic cycles. Sunspots affected the weather, which in turn determined crop yields, demand and output in what was still a largely rural economy. No one takes this theory of cycles literally. But it is a useful metaphor for the way unforeseen shocks can switch an economy from one path to another. Today, the global and British economies have suffered such a shock, though one that is man-made in origin rather than extra-terrestrial. The origins of the crisis lie in the balmy economic weather prevailing in the decade or so before mid-2007. Growth was steady and inflation low and stable in the United Kingdom and other advanced economies, while rapid development in China, India and other emerging market economies was lifting millions out of poverty. Economic stability boosted confidence and encouraged an expansion of credit. Moreover, high levels of savings in some Asian economies, coupled with loose US monetary policy, drove global real interest rates unusually low.

This mix of exaggerated confidence and low real interest rates encouraged investors into riskier assets and banks into riskier lending, epitomised by the US sub-prime housing market. That was compounded by a lack of incentive for care in extending loans, if they were then packaged up and sold on to others. In August 2007, the economic weather turned distinctly autumnal. Falling US house prices and rising sub-prime defaults led to nervousness about the value of assets backed by those mortgages. Moreover, losses associated with sub-prime loans began appearing in places noone had anticipated, revealing how opaque many financial instruments were. The markets for these assets closed and their prices plummeted, putting pressure on the balance sheets of the financial institutions holding them, while wholesale funding dried up. And the wide dispersal of the suspect assets meant these balance sheet pressures were quickly transmitted internationally. In the United Kingdom, banks became increasingly cautious in lending, adding to downward pressure on housing and commercial property prices, and slowing growth. But at that stage, it was still possible to envisage a relatively modest slowdown, with financial intermediaries making the necessary balance sheet adjustments in an orderly fashion. However, the turmoil in credit markets was not the only factor the Bank’s Monetary Policy Committee had to contend with. Oil prices, already high at the start of 2008, hit $ a barrel in July, while a broad range of other commodity prices rose sharply.
And indeed, inflation targeting would seem to have much to recommend it, provided that it is approached not as a panacea, but rather as a pragmatic organizing framework for policy. In other words, policy frameworks such as inflation targeting can be useful where they signal a disposition towards continuous and predictable communication, and a forward-looking, informative policy approach. But as I said, inflation targeting per se is not a sure-fire solution – for example, the costs of disinflation do not appear to be lower in inflation-targeting countries – nor is it a prerequisite for effective communication and ultimately effective policy. Role of fiscal policy Clearly, crisis prevention through promoting stable and sustainable conditions in the macro-economy is not solely the province of central banks. Sound fiscal policies are needed to complement the effectiveness of even the soundest monetary policies. Chronically loose fiscal policy is a persistent threat to macroeconomic stability, through the build-up of internal and/or external debts that can be devastating. For the countries of East Asia, the public sector’s generally low initial indebtedness provided important latitude for dealing with the recent crises. Governments had room to stimulate aggregate demand recovery through fiscal ease; moreover, extensions of public guarantees and capital helped to contain the banking crises. However, while initially strong fiscal positions provided flexibility to address financial sector problems and aid recovery, public debt has since risen to high levels in a number of countries, and contingent liabilities often remain significant, raising some concern about potential future debt growth.

Of course the three regulators, BoZ, PIA, and SEC have also done their bit by seconding personnel to the FSDP Secretariat and taking responsibility for the financial obligations entailed. I want to thank all of them for their commitment and dedication. It is now my singular honour and privilege to call upon the Deputy Minister of Finance, Honourable Miles Sampa, MP to formally launch the National Strategy on Financial Education for Zambia. Thank you. 2  BIS central bankers’ speeches
How climate risk is relevant to the fund What does this approach to managing the fund mean for the fund’s climate risk? With a wide spread of investments, we are protected against events that affect specific companies or sectors. But we cannot protect ourselves against events or trends that affect everyone. The fund is exposed to two kinds of climate risk: physical risk and transition risk. Transition risk is about how the companies we invest in handle the transition to a low-carbon economy. The size of this challenge differs widely between sectors and companies. Chart: Transition risk and the fund The fund’s equity investments can be categorised by transition risk as measured by analysis firm MSCI. The blue columns in the chart show each category’s share of the value of the portfolio. The white columns show their emissions. Companies in the “transition” category have high emissions and therefore need to make the biggest changes. These make up 14 percent of the equity portfolio. The remainder are companies considered either to have neutral exposure or to contribute positively to the transition. These last companies are therefore part of the solution.1 Physical risk is linked more directly to climate change. The most obvious example is acute events such as extreme weather, but more gradual changes such as higher temperatures, droughts and rising sea levels may also impact individual investments, both negatively and positively.

This reporting has been voluntary, but we believe it now needs to be made a requirement. Another cause we are supporting is a comprehensive standard for sustainability reporting in line with the new International Sustainability Standards Board (ISSB). We will also work towards good standards for reporting on indirect emissions in companies’ value chains, known as Scope 3 emissions. In many sectors, this is crucial for understanding a company’s climate risk. We will also work on other climate-related issues where we believe international standards may be useful. One example is the use of emission allowances. Our work with companies begins with setting clear expectations. We have formulated our expectations in a set of expectation documents. When it comes to climate change, we already expect companies to have a climate strategy, set emission targets, report on progress, and stress-test their business models against various climate scenarios. In future, it will be natural for us to emphasise towards a net zero emission horizon. This will give clearer direction to our ownership activities. Exercising ownership Active ownership will play a key part in work on addressing the fund’s climate risk. A dialogue with companies will be particularly important. Chart: Climate increasingly a dialogue topic Our dialogue with companies reflects our expectations. Last year, we held around 3,000 meetings with companies. As you can see from the chart, sustainability is increasingly on the agenda. 3/6  BIS central bankers' speeches  We plan to increase both the breadth and the depth of our climate-related ownership activities.
I have also argued that monetary policy was crucial in preventing the dual shock of the financial crisis and the sovereign debt crisis from having even more negative consequences for the euro area as a whole. The ECB’s extremely accommodative monetary policy stance sustained the ongoing economic recovery, while heading off the threat of deflation. I would like to stress, however, it is much harder to sustain economic activity and attain the price stability objective when interest rates reach the zero lower bound. Although the ECB has made ample and imaginative use of non-standard monetary policy measures, inflation in the euro area has not yet risen in a sustained way towards the inflation target. I would like to conclude with a few words about the Maltese economy. Malta weathered the global financial crisis and the euro area sovereign debt crisis well. Malta has been outpacing other members of the euro area since 2012. We are the fastest-growing economy in the euro area, registering extremely rapid growth rates over the past three years. In part, this was because we avoided the problems that dragged down some euro area member states: the banking system remained liquid and well-capitalised throughout, while fiscal discipline ensured that public debt never rose to unsustainable levels. Malta also benefited, of course, from the accommodative monetary policy stance that I have just described.

Lars E O Svensson: For a better monetary policy – focus on inflation and unemployment Speech by Mr Lars E O Svensson, Deputy Governor of the Sveriges Riksbank, at Luleå University of Technology, Luleå, 8 March 2011. *  *  *  The views expressed here are my own and are not necessarily shared by the other members of the Executive Board of the Riksbank or the Riksbank’s staff. I would like to thank Joanna Gerwin, Karolina Ekholm, Pernilla Meyersson, Marianne Nessén, Lars Nyberg, Stefan Palmqvist, Cecilia Roos-Isaksson, Ulf Söderström and Staffan Viotti for our discussions and their views. Hanna Armelius, Hans Dellmo, Lina Majtorp and Pernilla Wasén have contributed to this speech. Sweden’s economy has grown dramatically following a severe downturn (Figure 1). GDP is now more or less back to the level it was at three years ago (Figure 2). Since the summer of 2010, the majority on the Executive Board of the Riksbank has tightened monetary policy by raising the repo rate. According to the Riksbank’s forecasts for the years ahead, CPI inflation will be higher than the target of 2 per cent over the next few years (Figure 3). However, the fact that CPI inflation is higher than the target is due to the Riksbank’s own repo-rate increases. If we instead measure inflation using the CPIF index, which adjusts for the effects of these repo-rate increases, the forecast is on average lower than 2 per cent.
The size of the market-based financial sector may end up  BIS Review 118/2010  3  that trade-off is very unfavourable, in the sense that the impact of policy rates on financial stability is quite small and the impact on inflation and resource utilisation is significantly larger, so an optimal trade-off would still have little impact on financial stability. A good financial-stability policy framework is necessary to ensure financial stability. Monetary policy cannot serve as a substitute. The relation between monetary policy and financial-stability policy In general, it is helpful to conceptually distinguish financial-stability policy from monetary policy. Different economic policies and policy areas, such as fiscal policy, monetary policy, labour market policy, etc., can be distinguished according to their objectives, the policy instruments that are suitable for achieving the objectives, and the authority or authorities controlling the instruments and responsible for achieving the objectives. From this point of view, it is clear that monetary policy and financial-stability policy are very different, and understanding this distinction is important. Monetary policy, in the form of flexible inflation targeting, has the objective of stabilising inflation around the inflation target as well as resource utilisation around a normal level. Under normal circumstances, the suitable instruments are the policy rate and communication.

Or whether they mean that credit growth and asset prices should still be considered just indicators, and that they emphasise them merely because credit growth and asset prices may have potential negative effects on inflation and resource utilisation at a longer horizon. In the latter case, leaning against the wind is a way to improve the stability of inflation and resource utilisation in the longer run. Then it is completely consistent with my interpretation of flexible inflation targeting. More precisely, flexible inflation targeting aims at stabilising inflation around the inflation target and resource utilisation around a normal level. Monetary policy then boils down to “forecast targeting”, choosing a policy-rate path such that the corresponding forecasts of inflation and resource utilisation best stabilise inflation around the target and the resource utilisation around a normal level. If the central bank uses all relevant information in constructing these forecasts, including the impact of changes in financial conditions on inflation and resource utilisation at any horizon, monetary policy will automatically respond in the best possible way to changing financial conditions (Woodford 2007, 2010a). Taking financial conditions into account becomes a special case of the general rule of “filtering all information through the forecast”. Only information that affects the forecast should be responded to, whereas information that does not affect the forecast can be disregarded.
Already today, the Internet banks contain much more than merely the opportunity to make payments and check one’s account balance. One function on the Internet that will probably lead to increased competition within the finance sector is the existence of companies that offer price comparisons. There are, for instance, several independent companies on the Internet today which enable a simple comparison of mortgage costs or provide assistance in finding the most beneficial insurance policies. Competition will increase with regard to share trading, mutual funds, insurance and mortgages, even from abroad. One reason for this is that the Internet will cause a reduction in entry barriers, i.e. that the costs connected with starting a business and achieving critical mass with regard to customers will not be as high as before. New companies today do not need to establish far-reaching office networks, which is proved by companies such as Skandiabanken and companies known as Internet stockbrokers. Finally, it is perhaps worth pointing out that IT in the financial sector does not merely consist of the Internet. Many of the instruments that are currently traded in the markets, particularly derivative instruments such as options and swaps, are completely dependent on modern information technology to be priced and traded at all. As derivative instruments are mainly used to buy and sell financial risks in a cost-efficient manner, it is possible to say that IT comprises a base for modern financial risk management, as it is put into practice on dealers’ tables around the world.

Indeed, the bank can gainfully advance to venture abroad to explore new business opportunities in the regional markets. The growth prospects will also be further strengthened by the overall performance of the industry and the sound and mutually reinforcing inter-linkages of the various market components in the Islamic financial system. In closing, I would like to take this opportunity to congratulate BIMB Holdings Berhad, Bank Islam Malaysia Berhad, Dubai Financial LLC and Lembaga Tabung Haji for their contributions in the successful completion of the share subscription agreement for Bank Islam. I wish Bank Islam and its shareholders every success in taking the Bank to greater heights in its future endeavours. Thank you. 2  BIS Review 99/2006