samchain/econo-pairs-v1 huggingface dataset:
The Corporation should not have any difficulty in raising long term fixed rate funds from the market, particularly with the forthcoming institutionalization of savings through the establishment of a Mandatory Provident Fund scheme. Second, the HKMA will continue to reinforce successful efforts in the past to ensure that the banks in Hong Kong are in a position to manage prudently their risks, having regard to the special circumstances of Hong Kong’s currency board system, and pay special attention to the quality of their assets so as not to be overly exposed to those which are vulnerable to interest rate volatility. A consultant study on the future development of the banking system of Hong Kong covering this aspect, amongst others, is to be conducted in the near future. Support for the Link 30. There is wide support amongst the community of Hong Kong on the exchange rate link. In early December last year an opinion poll carried out by one of our leading newspapers reported that only seven percent of the people of Hong Kong think that our link with the US dollar should be broken. SeventyBIS Review 19/1998  -9one percent think that it should be kept and twenty-two percent express no opinion20. This degree of public support - support from those having Hong Kong dollar assets - is crucial to our success in maintaining the exchange rate link, whereas the sceptical views of those without Hong Kong dollar assets are rather irrelevant. 31.

Most have accumulated massive international reserves, well in excess of what would be needed for precautionary reasons. All in all, this paints a very different picture as compared to past episodes of global turbulence, when these economies used to be not only “influenced” by the ups and downs of the changing risk preferences in global financial markets, but simply “driven” – even “drowned” – by them, sometimes regardless of their economic fundamentals. In my view, this separation from the main stream of the turbulence constitutes an achievement in itself. From other stand point, it is certainly striking that in this period of global financial turbulence inflation is identified as the key economic challenge for emerging economies. Indeed, the rise of inflationary pressures on food prices derived from the commodity boom, is becoming a very worrying concern. The large change in relative prices that underlies this prolonged boom is having a stronger impact on developing economies, with very negative and substantial effects on the well being of the poorest portions of their populations. Therefore, as inflation creeps up the concern of policymakers deepens, not only in the sphere of macroeconomic stability, but beyond. In connection with this, the fact that monetary policies have remained focused on inflation stability in most emerging market economies is an additional novelty to mention in the context of the present turmoil.
It also becomes easier to work on prevention and in various ways to counteract a serious crisis from arising. The developments include methods regarding what are known as stress tests, which analyse what happens to the banks during various sequences of events and crisis scenarios. Such models are of course important tools when it comes to crisis exercises and to adapting our preparedness for managing real crisis situations efficiently. Challenges along the way A lot has changed, both compared with when I first began at the Riksbank and over the past six years. We have better conditions for managing various challenges so that we can attain our inflation target and safeguard financial stability in the best possible manner. It is also largely a case of learning by doing. I would therefore like to take up some of the challenges  BIS Review 155/2008  3  that we and other central banks have had to deal with in recent years. These are challenges we have learnt from when we were forced to deal with them. They are also challenges that in one way or another will stimulate future developments. Rising commodity prices,… In May of this year I held a speech on the upward pressure on international commodity prices that had been exerted for some time. This applied to both traditional commodities, such as oil and metals, and to foodstuffs, such as grain. The boom in commodity prices had pushed up inflation both here and abroad, and inflation was clearly overshooting our target.

This, together with the changes that have been made, both with regard to the framework for economic policy and our means of working, convinces me that the Riksbank will be perfectly able to manage the challenges that await us in the future. BIS Review 155/2008  7
If the Governing Council judges that the “coronavirus crisis phase is over”, then net purchases under PEPP will end by March 2022. As things stand today, this is likely to happen. It is important, therefore, to stress that exiting from PEPP would not signal the end of our very accommodative monetary policy. Monetary policy will continue to provide accommodation through our quartet of tools, namely asset purchases and stocks, long-term liquidity provision, negative interest rates, and forward guidance. These tools have been durably established by the new strategyiii and we should probably start calling them the “new conventional” instruments rather than “non conventional” ones. Let me now share some more specific thoughts on the successes of our two crisis instruments, PEPP and TLTROs, and how these lessons might influence our future reflections on our quartet. 2. The lessons from the PEPP The PEPP has been instrumental in the euro area since the start of the Covid crisis, thanks to its dual role regarding stance and transmission. It put an end to the turmoil in the financial markets during spring last year, and since then has ensured favourable financing conditions for both public and private borrowers. We can draw two main lessons from the PEPP’s achievements: with respect to asset purchases, stock matters, and flexibility matters. First, the financial literature suggests that it is changes in the anticipated stock of assets that exert a downward pressure on longterm interest rates through a decrease in term premia.

Nor can it mean that we set interest rates simply by reference to those prevailing elsewhere. It is naïve to complain that our interest rates are twice those in Europe without recognising that we are operating closer to capacity than is the case in the Eurozone as a whole – or that unemployment there is running at twice the rate in this country even if – and I agree – much of that difference is to be explained by structural, supply-side, rigidities rather than simply cyclical divergence. No-one, Mr Chairman, is more conscious of the limits to what we can hope to achieve through monetary policy than I am. But operating within those limits, we have been able to achieve greater macro-economic stability, reflected in the rate of inflation, than we have seen for a generation. And that stability, together with the improved supply-side flexibility of the economy, has delivered a rate of unemployment in the economy as a whole that, despite the recent modest upturn, is still close to the lowest rate we have seen in almost 20 years. And what is true for the UK as a whole is true for most of the individual regions of the economy. That includes the West Midlands, where, on a claimant count basis, unemployment at 4.8% is actually only marginally above the national average and still just about the lowest it has been since 1980. Macro-economic stability cannot solve all our problems.
This monitoring and research on household debt and credit conditions helps us better understand the connections between financial market developments, the broader economy and families’ well-being. We follow a variety of metrics, including lending activity, the level of interest rates and of interest rate spreads, survey data on lending standards, delinquency rates on loans, and home and other asset price changes. One new, key source of information on household debt and credit conditions is the New York Fed’s Consumer Credit Panel. As you heard a few moments ago, these data are now available for all of 2010. They come from a nationwide sample covering all households where at least one member has a credit report. The records tell us about five major categories of household debt – mortgages, home equity lines of credit, and credit card, auto and student loans. To set the stage, one can think about the recent path of household debt in three phases.   During the run-up to the recession – the years leading up the crisis – households borrowed a lot of money. They took on higher credit cards balances, auto loans, student loans and, especially, mortgages. BIS central bankers’ speeches  3    As the crisis unfolded in 2008, many families’ debt burdens proved unsustainable: delinquencies rose dramatically and household debt began to fall sharply.   Now, we appear to be entering a process of gradual convalescence, as delinquencies begin to subside and some households begin to expand their borrowing again.

After all, NKM itself recommends focusing on the narrower price indices of so-called core or super-core inflation, which consist mainly of items whose prices are rigid. But there is no doubt that targeting a specific and narrow price index would not be very comprehensible to the markets and the public. For this reason, central banks tend to choose pragmatically to target a broad index close to the CPI and  3/5  BIS - Central bankers' speeches  explain sophisticatedly in their communications why they sometimes react less or more strongly than the observed or forecasted CPI inflation would imply. Under inflation targeting as practised in reality, central banks then set their rates to meet the CPI inflation forecast in the relatively short term. The problem is that we cannot reliably forecast CPI inflation and its twists and turns. Virtually every major shock to inflation, in one direction or the other, has more or less surprised central banks this century. On the other hand, we are undoubtedly quite capable of understanding that inflationary potential is being generated in the economy. But again, we cannot reliably predict how this potential will manifest itself over time, through what channels it will enter the economy and whether or not it will show up as overt inflation at some point in time.
In spite of a limited rebound in credits recently, we believe there is little chance for this move to become a permanent recovery as long as the global economy is not stabilized (Figure 19). Figure 19: Commercial and Consumer Loans (4 Week Moving Average, Percent) 1.5 1 0.5 0 -0.5 -1 Commercial Credits -1.5  01 08  02 08  03 08  04 08  05 08  06 08  07 08  Consumer Credits 08 08  09 08  10 08  11 08  12 08  01 09  02 09  03 09  Source: CBT. Distinguished Members of the Press, In the first quarter of 2009, the sharp contraction in global economic activity and its larger than anticipated impact on domestic activity called for a downward revision of the outlook for aggregate demand developments from the previous reporting period. In the January Inflation Report, economic activity was expected to display a significant decline in the last quarter of 2008, while it was anticipated that the speed of contraction would start to lose pace during the first quarter of 2009. In line with expectations, the Gross Domestic Product (GDP) displayed a sizeable drop in the last quarter of 2008 on a quarterly and on an annual basis (Figures 20 and 21). Recent readings suggest that economic activity will display a sharperthan-envisaged slowdown and that the contraction in the economy in the first quarter of the year will register double-digit figures.

To this end, we believe that it will be useful to exclude the quarterly additional contribution of public expenditures in the last quarter of 2008 and focus on other components. Firstly, excluding public sector demand, the difference in growth in the two periods compared exhibits a fairly unfavorable outlook for the last quarter of 2008. The relatively high depletion in inventories in this period compared to that in 2001 reveals the relative strength of the aggregate demand shock and the sharpness of the downturn in capacity utilization rates. Moreover, the differentiation in private consumption demand and net exports performance indicates a rather lower contraction of domestic demand besides the adverse effect of the global shock on net foreign demand in the current period (Figure 23). BIS Review 67/2009  13  Figure 22: Contribution to Growth by Figure 23: Contribution to Growth by Output Expenditures (Percentage Points) 1  (Percentage Points) 10  0,4  9,1  8  0  2001-2  -0,2 -1  -0,6  -0,7 -0,9  5,0  6 2008-4  -0,8 4  -2 -2,4 -2,6  -3  -2,5  2  -2,3  0,7  0,7  0  -4  -0,1  -2  -5  -2,1  2001-2  -4  2008-4  -6  -2,1  -3,2 -4,0  -6 -7  -6,3  -6,3 -6,2 GDP  -6,2  -5,7  -5,5  -5,4  -8  Agriculture  Source: TURKSTAT.
Changes in the exchange rate should only be resorted to when everything else has failed. They should be a measure of last resort. Besides, they only produce the desired results if they are accompanied by a comprehensive set of complementary policies implemented in a controlled environment. Speculating about the exchange rate without producing conclusive proof that it is the root cause of the economy’s difficulties is, therefore, inappropriate and can have serious repercussions. The national interest requires all of us to concentrate rather on the more immediate, and well documented, reasons for the economy’s slow growth. I have elaborated on this aspect in a recent interview carried by another local newspaper. 1/1

Recent examples include the USD500 million Islamic Infrastructure Fund established in 2009 by the Asian Development Bank (ADB) and Islamic Development Bank (IDB) to meet the Shariah-compliant financing needs in the member countries. In addition, the advancements achieved in the sukuk market also provide evidence on the ability of Islamic finance in meeting the requirements of the differentiated demands of the modern economy. The recent issuance of the world’s first offshore RMB sukuk by Khazanah Nasional in Malaysia reflects the growing trend of multi currency sukuk issuances in Asia. Growing at an average annual rate of 40 percent, the global sukuk market has demonstrated its ability to effectively intermediate funds across borders, allocating funds efficiently in the international financial system and fast becoming an important financing and capital raising option. Islamic finance and financial stability An important aspect of the new financial landscape is the increased focus on financial stability. The more market oriented systems with market-based finance activities, the creation of new financial instruments and an increasing number of market participants with global reach, and more interconnected financial systems has expanded the potential for, and channels through which, financial shocks are transmitted to the economy and across borders. Indeed, recent experiences with crises have also shed new insights into the complex web of relationships that exist between sovereign, financial and economic risks, and underscored the critical importance of strengthening the pillars of financial stability that can serve to contain the impact of a crisis.
Moreover, however, unemployment in Spain has historically shown very marked cyclical changes: in episodes of crisis, the unemployment rate has easily exceeded 20%. This means that each recession expulses extensive groups of workers from the market, particularly those with less work experience, low skills and, generally, those on temporary contracts and, therefore, with a lower degree of protection. True, the marked temporary employment ratio in the Spanish labour market shows its most damaging effects in periods of crisis. But it also has adverse economic effects in expansionary phases (e.g. in terms of firms’ and workers’ human capital investment decisions). In addition, insofar as the temporary employment ratio is essentially affecting the young, whose unemployment rate is very high, this Spanish labour market shortcoming also influences key decisions in people’s life cycle such as those relating to household formation. For all these reasons, reducing the high duality of our labour market is, in my view, an inescapable objective. Thus, employment protection mechanisms should be reviewed under the prism of squaring employee protection with flexibility needs, but, above all, with the aim of achieving a fairer distribution of protection among workers with a different contract status. We should also recall how, before the current crisis, almost 43% of the unemployed had been seeking a job for more than a year and that around 30% had been looking for more than two years.

That includes ensuring that the common monetary policy is properly transmitted to all sectors of the economy and to all countries, and to prevent the financial fragmentation of the area. We also stand ready to adapt all our instruments should it be necessary. Naturally, we must also remain vigilant regarding the risks to financial stability. Evidently, the banking sector is facing this crisis from a healthier position than in the previous recession, which highlights the importance of the far-reaching changes made in this sector over the past decade. The ECB has also taken resolute action here. Among other measures, it has allowed banks to use the capital buffers available, which were created precisely for situations such as the present one. But, undoubtedly, the crisis will significantly impact the quality of banks’ credit portfolios, on a scale that will depend on its ultimate severity and which will be uneven across banks. The outcome will depend on banks’ starting position, on their business model and on the distribution of their exposures to the sectors and regions most affected by the pandemic. Accordingly, we supervisors must continue to closely monitor the risks to financial stability and we must be ready to provide a forceful, panEuropean response should such risks materialise. In short, European and national economic authorities must share the objective of preventing the current crisis from being accompanied by an across-the-board tightening of financing conditions or from seriously harming the stability of the financial system.
Lots of companies are doing it, but the success of M&A in achieving its stated objectives of cost and revenue synergies is not clear-cut. Does M&A work? The G10 Report to which I referred concluded, for example, that there was only weak evidence of cost reduction arising from increased size, except perhaps in the case of smaller banks. While there was stronger evidence for improvement on the revenue side, the gains were probably not as large as those anticipated by the practitioners. Not surprisingly therefore, there was not much to show that, on average, M&A generated significant shareholder value. Rather, what tended to happen was that there was a transfer of wealth from the shareholders of the acquirer to those of the target. Other studies, and some well-publicised mergers that have failed to deliver the promised benefits, support this somewhat sceptical view. It is however equally possible to point to cases where mergers have been successful. Indeed, most, if not all, of the market leaders in the industry have got to where they are today through a series of mergers that have taken place over the years. The risk, however, is that banks may sometimes embark on a "merger too far". In other words, at some point the complexity of a merger may outstrip the ability of management to handle it, and diseconomies of scale set in. This means that we cannot really generalise about the success of bank mergers.

Local banks recorded average growth in pre-tax profits of 15% per annum in the six years prior to the Asian crisis. Moreover, most banks remained profitable during the crisis itself and all continued to maintain high capital ratios. Financial distress was therefore not a driving force for merger, as it has been in other Asian countries. But there are signs that the consolidation process is gathering pace in Hong Kong. The reasons for this are to some extent the same as those elsewhere. These include increased competition from both domestic and global players, deregulation, the need to invest in new technology and the increased focus, even for family-owned businesses, on generating shareholder value. All this means that the life of a banker in Hong Kong is not an easy one at present. Some of the old certainties are breaking down. The removal of the remaining interest rate controls in a month's time will usher in a new era of full competition on the liabilities side of the balance sheet. While the surplus liquidity in the system may mitigate the immediate impact to some extent, banks will face new challenges on products, pricing, fees and charges, and asset and liability management. This comes on top of the challenges that the banks are already facing to generate new lending business. The residential property market, which has been the mainstay of most of the local banks' business, is currently drifting without clear direction, and mortgage business is still sluggish, as the latest figures for April demonstrated.