samchain/econo-pairs-v1 huggingface dataset:
I have focused here on the reform efforts around LIBOR, which is only one reference rate, albeit one that is widely used and a core part of our financial system. But, the need for stronger governance and more accountability spreads much further within the set of benchmark rates, and further  10  Reforming Major Interest Rate Benchmarks, Financial Stability Board. 11  Reforming U.S. Dollar LIBOR: The Path Forward, Remarks by Jerome H. Powell at the Money Marketeers of New York University, September 4, 2014. 6  BIS central bankers’ speeches  to encompass a wide range of practices within the financial system. For example, accusations have recently surfaced related to business practices within foreign exchange markets. While the concerns are technically very different than the practices uncovered around LIBOR submissions, the common theme is the willingness of a small number of market participants to behave improperly and contribute to a decline in confidence in the integrity of benchmark rates specifically and of major financial institutions more generally. Next steps I have discussed some of the observed problems in major reference rates that reflect egregious personal behavior. Some individuals responded to poorly-designed incentives and weak controls at some of the largest financial institutions. The regulatory community has already taken important steps to mitigate those concerns and real progress has been made. While this has helped to restore some of the integrity of particular reference rates, such as LIBOR, more work needs to be done before confidence in these rates are put on a firmer foundation.

They play a critical role in making financial markets more efficient by reducing information frictions, lowering transactions costs and mitigating the moral hazard. At the same time, as recent enforcement actions and criminal investigations have made all too clear, some of these reference rates have been systematically manipulated by individuals at key financial institutions. The assumption that the design in how these rates are constructed would be resistant to attempts at manipulation has turned out to be wrong, and the belief in the integrity of these rates has turned out to be misplaced. What this means should be obvious to all of us. Reform is required if we are to restore confidence in the financial system. In my remarks today, I will discuss the outlines of such a reform including those important steps that are already underway, and those steps that still must be taken. As always, my remarks reflect my own views and not necessarily those of the Federal Reserve System. The most recognized and prevalent of the reference interest rates is the London Interbank Offered Rate, typically referred to as LIBOR, which measures the cost of unsecured, interbank borrowing across different currencies and tenors. The development of LIBOR goes back to the rapid expansion of the Eurodollar market in London beginning in the 1970s. This was a market that developed, in part, as a means of circumventing the Regulation Q deposit interest rate ceilings in the United States.
The weakness of the recovery has led some people to suggest that we could increase the effectiveness of quantitative easing by directing the money used to buy the gilts to buying private sector assets instead, or else to inject purchasing power more directly by passing it directly to households in the manner of Friedman’s famous helicopter. Such options can always be split into two legs: a fiscal leg, involving some bond-financed public expenditure and which ought to be subject to the control of the Chancellor and the Treasury; followed by a second monetary, or financing, leg in which the Bank buys the corresponding quantity of government debt on the secondary market and is just conventional quantitative easing. Viewing it this way is, I believe, helpful as it allows one to focus on the merits of the alternative use to which the funds are put. For instance, the easiest way to implement a “helicopter drop” would be to increase tax allowances temporarily. But the life cycle/permanent income model of consumption behaviour suggests that one should expect the vast majority of such a temporary windfall to be saved rather than spent. It certainly is not the obvious way to try to boost demand, unless one can direct the additional income to credit-constrained consumers who are more likely to spend it. In any case, the design of any fiscal intervention does not need to be tied to the question of how the financing is split between money and bonds.

Christian Noyer: Globalisation of capital markets Speech by Mr Christian Noyer, Governor of the Bank of France, at Paris Europlace, International Financial Forum, Tokyo, 27 November 2007. * * * Ladies and gentlemen, It is a great honour and a pleasure for me to speak before such a distinguished audience and I am delighted to be in Tokyo today. In the last decades, global economic growth, financial innovation and financial globalisation have progressed hand in hand. This does not exclude, of course, challenging episodes of stress, such as the current one. Financial globalisation is not a new phenomenon, but the scale and speed of the current phase of globalisation is unprecedented; cross-border and cross-market links are deeper than ever before. Events are still unfolding, but the dynamics of the current crisis has been a live experiment of how globalisation has modified the reaction of the financial system to shocks. The magnitude of possible losses is, in many respects, contained. Current estimates put the direct cost of subprime defaults at around 250 billions USD. It is significant but bearable, especially starting from a point of very favourable economic conditions and high profitability. Still, what began as a sound correction of the undervaluation of risks in the subprime market unravels as one of the major financial crisis of the past 10 years. Some scenarios considered as very remote crystallised on a large scale, while widely expected break-up points held up well. Hedge funds, once considered as a source of systemic risk, fared better than regulated institutions.
Many big European banking names might not still be with us had it not been for the USD swap lines granted to the European Central Bank (ECB), the Bank of England (BoE), and the Swiss National Bank (SNB). So the financial crisis revealed a major fault line in cross-border banking in the form of large foreign currency balance sheets featuring significant maturity mismatches, but with limited LOLR facilities in terms of foreign currency. Maturity mismatches are, of course, the bread and butter of banking, and we know how to deal with the risk in a domestic setting: with central bank LOLR operations and deposit insurance complemented by regulation and supervision, partly to deal with the moral hazard issues created by this safety net. This process is facilitated by two factors. First, and abstracting from leakages through the FX market, the funds withdrawn from banks during a domestic run flow in one form or  BIS central bankers’ speeches  1  another to the central bank, which can then redirect them back to the banks. Second, central banks have a very large short-run capacity to expand their balance sheets. In the current setting, it is far from guaranteed that this process can be replicated at the international level. In normal times, of course, managing liquidity across currencies from countries with free movement of capital and relatively developed capital markets is not much of an issue.

I have now described the fault lines in cross-border banking, both at the global and the EU/EEA level, and how they burst open in a particularly violent form in the case of Iceland. But what is and what should be done about this? The problem with giving a precise answer to this question is that what needs to be done at the national level will depend on what is ultimately done at the global level, and for countries that are part of the EU single market it also depends on what is done at that level. In turn, necessary reforms at the EU or global level are put in place partly to avoid national responses that would unduly fragment the international financial system or, in the case of the EU, undermine the single market and the eurozone. Bearing in mind that circularity, let me start at the national level. The key issue here is that, as long as global risks and EU flaws are not dealt with, individual countries are forced to take action to protect themselves: action that might contribute further to the retreat of cross-border banking and financial globalisation more generally. Such action might take the form of restricting international activities of home banks, placing much stricter prudential limits on foreign currency maturity mismatches, limiting FX lending to unhedged parties, and deciding that deposit insurance shall be paid only in the local currency.
The foreseeable expansion of pension funds suggests that they will gradually have to step up their outward investment, which means that returns on foreign portfolios will be crucial for their future. Clear long-term strategies are needed on which to base their investments. Ladies and Gentlemen: Earlier I mentioned the extensive international coverage of the Icelandic economy and the position of its banking sector. The depth of the analysis has varied. Among the best informed observers of the Icelandic economy are the three international rating agencies that assign Iceland’s sovereign credits ratings, and international organisations such as the OECD and IMF. All the rating agencies recently affirmed the sovereign rating, while one changed the outlook from stable to negative. The two agencies that have already assigned ratings to all the Icelandic commercial banks have also affirmed them, while the third agency recently awarded a first – and strong – rating to an Icelandic bank. Earlier this week, an IMF mission visiting Iceland published the concluding statement for its Article IV Consultation with the authorities. In it, the IMF says that the medium-term outlook for the Icelandic economy remains enviable and institutions and policy frameworks are strong. However, the current conditions require a tight fiscal and monetary stance to reduce macroeconomic imbalances. The Central Bank of Iceland will play its role in that effort. 4  BIS Review 46/2006

Zeti Akhtar Aziz: Growth and development of the world economy Welcoming remarks by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the official opening of the World Bank Group Knowledge and Research Hub in Malaysia, Sasana Kijang, Kuala Lumpur, 28 March 2016. *  *  *  It is my great honour to welcome the distinguished Senior leadership of the World Bank Group, Dr Axel van Trotsenburg, Vice President of Development Finance; and Dr Kaushik Basu, Chief Economist and Senior Vice President, to the Master Lecture on 'Shared Prosperity' by Dr Kaushik Basu. The Lecture is held in conjunction with the Official Opening of the World Bank Group Knowledge and Research Hub in Sasana Kijang later this afternoon. As we meet today, the global economy is confronted with an immensely challenging environment. A slower than anticipated growth in several major economies, the sharp decline in commodity and energy prices, the significant shifts in global liquidity, and the heightened geopolitical tensions are having far reaching and widespread implications. Going forward, the challenge for both the advanced and emerging economies is to lift growth trajectories and search for sustainable growth factors that can rebuild economic fundamentals, address structural vulnerabilities and forge new sources of growth. Key is the "sustainability" and strengthening of the growth and development of the world economy. An important aspect in this process is that economic growth and development, no matter how stellar, will begin to fade when inequality sets in and when income disparities widen.
Tanya Sirivedhin: New challenges for finance and capital markets  Speech by Ms Tanya Sirivedhin, Deputy Governor of the Bank of Thailand, at the Conference on “Thailand-Finance and Capital Markets”, held in Bangkok, on 28 September 2000. *  *  *  Today’s conference is very timely, in view of the increasing role that finance and capital markets are likely to play in the future Thai financial scene. I have identified several aspects of the challenges of “Finance and Capital Markets” which I would like to share with this audience. I hope that the open discussion of these challenges will be an important input into the work of the Thai authorities, and what we envisage to be the vision for our industry. I shall frame the challenges in three dimensions: First, the challenges from rebuilding and strengthening the business and financial industry. Second, the challenges from the adoption of best international practices. Third, the challenges from the race to catch up with the new technological frontier of e-commerce and electronic trading. Rebuilding and strengthening the financial industry The 1997 economic and financial crisis brought to light many weaknesses in Thailand’s macroeconomic and financial management. In its aftermath, measures were undertaken speedily to shore up the currency and to restore confidence in the viability and sustainability of firms and businesses, both in the financial and non-financial industry. Through the implementation of these measures, there were inevitably many casualties.

See John M. Hartwick (1977): “Intergenerational Equity and the Investment of Rents from Exhaustible Resources”, American Economic Review, 67, December, pp. 972–974. 8  NOU (Official Norwegian Report) 1983:27 “Petroleumsvirksomhetens framtid” [The future of petroleum activity], p. 90. 9  See Ministry of Finance calculations (Norwegian only): http://www.regjeringen.no/nb/dep/fin/tema/norsk_ okonomi/bruk-av-oljepenger-/hvor-mye-oljepenger-har-vi-brukt-sa-lang.html?id=450461  10  Torstein Bye, Ådne Cappelen, Torbjørn Eika, Eystein Gjelsvik and Øystein Olsen (1994): “Noen konsekvenser av petroleumsvirksomheten for norsk økonomi” [Some of the consequences of petroleum activity for the Norwegian economy], Statistics Norway Rapporter 94/1, p.36 (Norwegian only). BIS central bankers’ speeches  3  It may be that the oil fund has exceeded a critical value so that the ambition of a perpetual fund will be achieved. But history remains to be written. The story of John Collett might also have been written with a different pen when his wealth was at its peak. Within a few years, as much as 15–20 per cent of the welfare state could be financed by the return on the oil fund. But if we squander the capital in the fund, we will either have to match the shortfall with tax increases or make substantial cuts in government welfare. The gains – not only the costs – of building up an oil fund have thus been made visible. This also attracts its defenders. Large fortunes nevertheless give rise to concerns. As a minimum requirement, the management of oil wealth must not impair the productivity of labour and real capital.
Timothy F Geithner: Progress toward financial stability in emerging market economies Remarks by Mr Timothy F Geithner, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the W P Carey Global Leader Lecture, Paul H Nitze School of Advanced International Studies, Johns Hopkins University, Washington DC, 4 October 2006. I would like to thank Matthew Higgins of the Emerging Markets and International Affairs Group and Margaret McConnell of the Research and Statistics Group at the New York Fed for assistance and comments. *  *  *  We are approaching the 10-year anniversary of the financial crises of the late 1990s. These crises began in the emerging world and caused very substantial damage to the economies and financial systems of a large number of emerging market economies. They also provided the backdrop if not the catalyst to the crisis that hit the major financial centers in 1998. The world today looks considerably different than it did on the eve of those crises, but the episode still looms large in the minds of policymakers and financial market participants. The damage and fear of that time had a substantial impact on behavior, both in terms of the policies of governments and how market participants think about and manage risk. And those changes in behavior have been important contributors to the period of stable real growth and financial sector resilience that has characterized much of the world since.

When it comes to undertaking reform in the areas of financial system development, the exchange rate and monetary policy regime, and liberalization of the capital account, there is more consensus on the importance of the efforts than there is on the appropriate pace and sequencing of policy changes. These initiatives are all closely related, and designing sensible reforms in one of these areas requires careful consideration of how to proceed with the others. Progress in one requires progress in the others. And market participants and policymakers need to have the chance to adapt to change and learn as reforms are implemented. This is the classic and persuasive argument for care and for gradualism. But it is possible to move too gradually. There is risk in inertia as well as in change. The policy challenges in occupying the middle ground - the middle ground of trying to allow some but not too much variability in the exchange rate, some but not too much freedom for capital movements with the inevitable increase in leakages around the remaining controls, and some but not too much competition in a still fragile domestic financial system - may be harder during a protracted transition. The more protracted the process of agreeing on and initiating change, the greater the costs for the economy as a whole of the distortions left in place. By outlining a path for reform, governments can dispel uncertainty about the overall strategy and enable market participants to begin to adjust, mitigating some of the concern about moving too quickly.
It is thus important to try to find out to which degree an observed covariation in interest rates depends on restricted monetary policy autonomy in small countries according to this definition or on synchronised economic circumstances. Unfortunately, this is also difficult. 6 Weaker interest rate channel but stronger exchange rate channel? One interesting hypothesis in research into monetary policy and globalisation is that globalisation has not necessarily led to a weakening of the monetary policy transmission mechanism, as could spontaneously be suspected, but rather that the impact has changed character. More specifically, monetary policy’s interest rate channel can certainly be expected to become weaker as financial integration increases, as domestic actors find it easier to smooth their consumption over time by borrowing abroad. On the other hand, the exchange rate channel may become more effective. One reason for this is that the increased integration has also made it more common for domestic actors to hold foreign assets. When the exchange rate changes, the value of these assets also changes. The central bank can therefore also influence demand in the economy this way. An interest rate rise that strengthens the exchange rate leads to a decrease in the value of these foreign assets – a wealth effect that strengthens the normal exchange rate channel with reduced exports and increased imports. Some analysts claim that it cannot be ruled out that the net effect of a weaker interest rate channel and stronger exchange rate channel has been to make monetary policy more efficient, rather than less.

3 It also appears that the most important driving force behind the cycle is the monetary policy conducted in large countries, particularly the United States. Free capital movement makes it more difficult to isolate a country from the rest of the world – and indirectly thereby from monetary policy in large countries – even if it has a floating exchange rate. Some go so far as to say that developments on the financial markets have meant that the exchange rate is no longer a parameter for action in the trilemma. The trilemma has instead been reduced to a choice between only two alternatives – a dilemma: either one has free capital movement and accepts that it is then difficult or impossible to conduct a monetary policy of one’s own, or one conducts one's own monetary policy but counteracts the free movement of capital. 4 My main hypothesis: countries with floating exchange rates still have monetary policy autonomy However, this is probably going a bit too far as a general description of the actual situation in small open economies like Sweden. In a globalised world, developments abroad will always have great significance for what happens in your own country. Nevertheless, however, the situation seems to be that the choice of exchange rate regime plays an important part in how great the impact will be.
Norman T L Chan: Hong Kong’s positioning in the post-QE era Speech by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the Hong Kong Economic Summit 2016, Hong Kong, 7 December 2015. *  *  *  Accompanying charts can be found at the end of the speech. Distinguished Guests, 1. When central banks, such as the US Fed, cut short-term policy interest rates to near zero and created money on a massive scale to purchase bonds and other financial assets, we called it quantitative easing (QE). 2. It has been more than six years since the launch of QE in 2009. After spending a total of $ trillion to purchase bonds, the Fed wrapped up its asset purchase programme in October 2014. In 10 days’ time, the Fed will decide whether to lift interest rates. If it does, it will signal the beginning of the normalisation of US interest rates. “QE” Ineffectual? 3. At the end of 2009, I initiated a guessing game with several chief economists from major commercial and investment banks. The question I asked was when they expected the Fed to exit from QE. Most bet on the second quarter of 2010 or earlier. The most dovish of them said Q3 2010. As we all know now, these guesses were wildly off the mark. To be fair, I don’t think anyone expected the US recovery to be so slow and sluggish. 4.

Indeed, after the Global Financial Crisis, the US suffered its worst recession since the Great Depression of the 1930s. In a desperate bid to stave off the recession, the US literally moved mountains, including introducing the unprecedented QE policy and splashing out $ trillion between 2008 and 2010 to cut taxes and implement other fiscal policy measures to prop up the economy. However, as we can see from Chart 1, the current recovery has been the weakest of all the economic cycles in the past 55 years. The average growth rate is just 2.2%, half the average rate of 4.6% in the previous recovery cycles. (Chart 1) 5. As for employment, the US has lost a total of 8.7 million jobs during the financial crisis and recession, with the unemployment rate peaking at 10%. Although employment bottomed out in 2010, and some 13 million jobs have been created since then, this only represents 4.3 million more jobs compared with the peak eight years ago in early 2008, and way behind the 8.8 million people who have been added to the labour force over the same period. In other words, while the US unemployment rate has declined to 5% recently, it does not mean the labour market has fully recovered. One of the main reasons for the faster-thanexpected drop in the unemployment rate is the dwindling labour force participation rate, from an average of 66% in 2007 to the current 62.4%, the lowest since 1977.