samchain/econo-pairs-v1 huggingface dataset:
Svensson (2003) has proposed that each MPC member declares a preferred path for Bank Rate. The collective path is formed by taking the median value of Bank Rate at each date in the future. In general this collective path is not the path preferred by any single MPC member and does not reflect an internally consistent set of views, posing a considerable communications challenge. The least bad idea my staff in the Bank have been able to come up with is one that aims to balance the preferences of all committee members – that is to maximise the Committee’s overall satisfaction with the outcome. To operationalise this, there could be two rounds of voting. In the first, each Committee member would propose a preferred path for interest rates. In the second round, Committee members would vote on the paths proposed by the other members. This vote could be structured in a number of ways, for example: a simple ranking (with transferable votes to break ties); allocating a fixed number of points over the alternative paths (again with transferable votes to resolve ties); or an arrangement like the current one where, after discussion, the Governor proposes a motion which is likely to command a majority. How all this would be communicated to the public I leave as an exercise for the interested reader. 10  BIS Review 43/2007  How successful are the MPC’s communications to financial markets and business more generally, and should the Committee be considering other changes?

Rising importance of this topic is clearly demonstrated by the adoption of the Bali Fintech Agenda of the IMF that provides guidance for national authorities on how to cope with new and evolving financial landscape, and underlines the need for stronger international cooperation as financial services are blurring boundaries, both institutionally and geographically. In what follows, I would like to briefly focus on the challenges of fintech developments for the banking industry and policy makers. We do have to take into account that digitalization of banking is not a new phenomenon; it has been present for more than 3 decades (in the form of automated teller machines, electronic payments, e-banking). The emergence of fintech is only the latest wave of innovation to affect the banking industry. Still, in the last decade, a significant change has occurred in the way of using technology, thus creating environment in which disruption can happen more quickly, and urging traditional banks to adjust faster to maintain market share. Besides the advancement in technology, a few other factors have also contributed to proliferation of financial innovation. The fact that banking industry was dealing with the legacy issues of the global financial crisis-impaired balance sheets, perhaps was important factor that provided space for non-banks to penetrate in financial business. Also, banks’ resources to a great extent were tilted towards implementation of the new Basel 3 requirements aimed at increasing the resilience of the banking system.
But there is scope and attraction for experimenting with greater flexibility in the fullness of time and that is indeed the declared intention of the Mainland authorities. However, with ongoing macro-economic adjustment, I doubt if this is the right time for experimenting. Conclusion In this speech I have surveyed the characteristics of Asian finance and concluded that it is, at least to me, in a rather unhappy, and possibly unsustainable, state. We have to seek a long-term solution through Asian monetary co-operation, or continue to be vulnerable to financial instability and defend ourselves through ad hoc retreats from financial openness. The Mainland of China, itself facing a most difficult task of financial reform, is an increasingly important factor in all this, as trade and economic integration of the region continues apace. Thank you. 8  BIS Review 66/2004

These price control schemes coupled with the price support projects outlined above mean that the market mechanism is not well-functioning. Distorted prices in the spot market may have also discouraged foreign players from participating actively in our futures markets. A freely traded spot market is a necessary condition for a successful futures market. Ladies and Gentlemen, I would urge the board of directors of AFET and AFTC, the Ministry of Commerce, the government, all members of AFET and key players in our main agricultural products to be totally committed to making AFET a highly successful futures market - an exemplar to our neighbours and one where global trading is benchmarked. We need to be strategic, prioritising our products and evaluating needs of different participating groups. I pledge my full support to this cause. I have spent a great deal of time talking about the AFET, I would now like to briefly touch on its siblingTFEX. TFEX is launching its very first product SET50 futures in the next few months and from the road shows to date, I hear that it has been very well-received. As the next step, the Stock Exchange Commissioner and the Bank of Thailand are currently working on launching the much-anticipated bond futures or interest rate futures. I hope that once Thai financial market has been complemented by these interest rate futures, our players will be able to make much progress in the area of risk management, financial product innovation and trading.
In my introduction, I posed a question: do reformed banking regulation and the new macroprudential instruments relieve monetary policy of any responsibility for financial stability? So let me conclude. While increased capital requirements and macroprudential policy can strengthen banks’ solidity and mitigate the build-up of imbalances, we cannot proceed under the assumption that new regulations alone will eliminate the risk of financial instability. A robust monetary policy should therefore take into account the risk of a build-up of financial imbalances. Monetary policy could then contribute to more stable economic developments over time. BIS central bankers’ speeches  5  At the same time, monetary policy must not be overburdened. Banking regulation and supervision must be the first line of defence against shocks to the financial system. When assessing the monetary policy trade-offs, central banks must pursue the primary objective of monetary policy – low and stable inflation. 6  BIS central bankers’ speeches  BIS central bankers’ speeches  7  8  BIS central bankers’ speeches  BIS central bankers’ speeches  9

There have been comments that the Riksbank has been too silent and not prepared market agents and others for a raise. We must, of course, consider this criticism. A natural part of monetary policy is to consider whether there are things we could do better. This is the way we always try to work. There is one aspect of this of which it is important to be aware. This is that we quite simply cannot send clear signals as to how the interest rate will be set two to three weeks ahead of a monetary policy meeting. This would require us to be fairly certain about the majority opinion and that it will not change. The decision-making situation is often unclear to the very last. And, I would say that this was definitely the case this time. Now, I do believe that there is widespread understanding that we cannot in advance state how the interest rate will be set. It may be the case that as a result of the recent turmoil there has been more of a need than usual that the Riksbank comments on the course of events, without anticipating the interest rate decision. Assessing monetary policy Now let us look back and discuss the material for assessing monetary policy, which came about on the initiative of the Committee on Finance. It is for me quite special this time. This is the first occasion on which the material for assessing monetary policy actually covers decisions that I have been party to.
His second goal, however, was an example of the power of expectations in the modern theory of interest rates. Maradona ran 60 yards from inside his own half beating five players before placing the ball in the English goal. The truly remarkable thing, however, is that, Maradona ran virtually in a straight line. How can you beat five players by running in a straight line? The answer is that the English defenders reacted to what they expected Maradona to do. Because they expected Maradona to move either left or right, he was able to go straight on. Monetary policy works in a similar way. Market interest rates react to what the central bank is expected to do. In recent years the Bank of England and other central banks have experienced periods in which they have been able to influence the path of the economy without making large moves in official interest rates. They headed in a straight line for their goals. How was that possible? Because financial markets did not expect interest rates to remain constant. They expected that rates would move either up or down. Those expectations were sufficient – at times – to stabilise private spending while official interest rates in fact moved very little. An example of the Maradona theory of interest rates in action is shown in Chart 1.

When Bank Negara Malaysia and the Bank of Thailand first operationalized this arrangement between our central banks in March 2016, we saw the potential and benefits for local currencies to play a more important role in enhancing regional trade linkages. The expansion of the arrangement today to include our close trade partner, Indonesia, underscores this potential. The signing of this MoU between Bank Indonesia and Bank Negara Malaysia represents another important milestone in the move to strengthen the relationship between Malaysia and Indonesia. Following the conclusion of the ASEAN Banking Integration Framework, we are confident financial institutions in both countries will be able to collaborate towards realizing the objective of facilitating greater cross-border trade and investments. Both Thailand and Indonesia share important links with Malaysia, forged through a long history of trade and investment activities, and close cooperation between our central banks. This occasion reflects how far we have come in this process. The cooperation arrangements between our central banks have now expanded to include clearly defined protocols and operational frameworks in a broad range of areas, including financial market development, supervision, surveillance, payment arrangements and crisis management. Bank Negara Malaysia has long been a strong supporter of financial and economic integration in both ASEAN and broader Asia – to unlock the region’s growth potential and support a stronger, more resilient economic community.
The effect has been particularly significant in countries such as Spain, whose initial fiscal space was less than that of other countries, given its high starting level of public debt and structural budget deficit. 2  This amount – around € billion – could cover a volume of losses equivalent to almost twice the current volume of bad loans in the system, i.e. approximately 8.2% of total lending to the resident private sector. 2  The ECB’s targeted long-term refinancing operations (TLTROs) during the crisis have also managed to prevent liquidity problems in the banking sector and have smoothed and encouraged lending by the sector to the economy. For example, in the June TLTRO III operation, the participating banks received a total of € trillion, a record amount in the Eurosystem’s refinancing operations. These operations continue to be significant and, at the last TLTRO auction, TLTRO III.7, settled on 18 March, € billion were allotted to the participating group of Eurosystem credit institutions. The European authorities with prudential powers adopted, in coordination with the national and international authorities, numerous decisions so that the financial system could contribute to overcoming the crisis. Supervisors thus reviewed their guidelines on capital and liquidity buffers, allowing banks temporarily to operate below the regulatory level set for some of these buffers. Various recommendations on limiting the distribution of dividends were also approved.

In 2007, Professor Mak Yuen Teen of the National University of Singapore was commissioned by MAS to undertake a study aimed at assessing the current state of corporate governance practices in Singapore, identifying gaps and proposing measures for improvement. Professor Mak highlighted, among others, the need to enhance the effectiveness of Audit Committees through training, practical guidance and sharing of experience among Audit Committee members. Arising from this, the MAS, the Accounting and Corporate Regulatory Authority ["ACRA"] and the Singapore Exchange established a private sector committee to develop practical guidance to assist Audit Committees to better appreciate their responsibilities and enhance their effectiveness in performing their role. The Committee, led by Mr. Bobby Chin, worked intensely over 9 months and completed its work in October 2008. The Committee's output, "Guidebook for Audit Committees in Singapore", has become a practical and valuable reference for directors who serve on the Audit Committees. We have also been supportive of efforts by the Singapore Institute of Directors to review its structure and strengthen the delivery of its director training program, so that it may better meet the increased demands placed on directors in this current environment. The continual efforts by industry practitioners, investors and regulators to improve corporate governance have enabled Singapore to stay ahead of the field. The World Economic Forum's  BIS Review 147/2009  1  Global Competitiveness Report 2009, for instance, ranked Singapore first in corporate governance standards in Asia.
Secondly, there are certain features of the prevailing financial and economic environment that give us pause for thought. Market prices are at historically unusual levels: real and nominal returns on risk free assets are low and credit spreads are tight, both in traditional and structured products. It is of course hard to say definitively the extent to which today’s markets are merely reflecting changed fundamentals. But it is quite possible that some investors have unwittingly taken on higher levels of risk in pursuit of what they would consider to be “normal” levels of return. And it is certainly prudent to plan for the possibility of a sharp reversion of prices to historically more normal levels (or even beyond them, given the tendency of markets to overshoot). There could be a period of impaired market liquidity during any such correction. One could imagine a number of potential catalysts for such a correction, ranging from a geo-political event to some form of major operational disruption. The Bank concurs with the widely held view that the growth of markets in risk transfer should contribute to greater financial stability, by allowing a more efficient dispersion of risks. But the depth and reliability of the more recently developed markets in risk under stressed conditions has not yet been fully tested. Moreover, risk transfer markets can, and probably at present do make the ultimate destination of risks more opaque. This hampers our ability to assess the overall stability of the financial system, and, potentially, to react effectively in a crisis.

First, I can’t help feeling that it is at times such as this, when we have a relatively benign environment, that we should seek to address difficult and contentious issues of the kind I have been discussing. It is certainly true that the risk transfer markets and the financial system have coped, with remarkable success, and with few signs of instability, with the various events and shocks in recent years. But we need to be sure that we are not complacent in placing trust in the ability of the financial system to continue to absorb shocks smoothly. Second, policy makers have found it hard to discuss lender of last resort issues because they can so quickly raise the spectre of moral hazard: by giving too many clues to their likely response to instability, policy makers fear undermining market discipline and so making crises more likely. Equally, public policy makers should recognise the distinction between clarity about processes—where transparency to my mind can only be positive for confidence—and transparency about how decisions might be reached in a particular case, where constructive ambiguity remains important as a mechanism to reinforce market discipline. On the other side of the fence, banks and financial institutions have made impressive strides in coping with these realities, but may be reluctant to move explicitly to transparent best practice standards. Maybe this is for fear of giving up competitive advantage, or maybe it is a fear that regulators might seek to impose unwelcome prescription in how they manage liquidity risks.
In Norway, as in most other countries, this was particularly distinct for credit to enterprises. Both higher spreads and tighter credit standards can have potentially strong contractionary effects on the economy and needed to be counteracted. BIS Review 113/2010  1  Liquidity and capital support was necessary to restore credit flows  The contractionary forces from the financial sector were addressed by providing liquidity and capital to banks, through both regular and unconventional instruments in many countries. Government actions enabled banks to continue to provide credit to households and enterprises. The crisis demonstrated that the transmission mechanism is important for the effectiveness of monetary policy. It also demonstrated that the relationship between price stability and financial stability must be given due attention. In Norges Bank there is close integration between the two areas Norges Bank Monetary Policy and Norges Bank Financial Stability. Norges Bank Financial Stability participates at all meetings in the monetary policy process. This ensures that sufficient attention is given to developments in the financial system. It also provided the necessary insight to make wellinformed assessments of the transmission mechanism during the crisis. Considerable revision of the interest rate forecast during the crisis  The second lesson is that inflation targeting seems to have survived the test. In my view, increased transparency and the efforts made to improve the communication of monetary policy to the general public have been very valuable.

Transparency eased communication: an account of the factors behind the revision  In our Monetary Policy Report, the interest rate forecast is accompanied by a separate chart, shown here, that shows the revision since the previous report due to changes in exogenous factors. By carefully explaining the reasoning behind the revisions of our interest rate forecasts, financial market participants and other interested parties can make their own judgment as to whether the revisions seem justifiable. In general, interest rate forecasting has worked well. As market expectations tend to react to economic news largely in line with the Bank’s response pattern, there is little doubt that the contingency of the forecasts is well understood. BIS Review 113/2010  3  Interest rate forecast and exit strategy  Another advantage of publishing our own forecast for interest rates is that the exit strategy is an inherent part of the Bank’s communication. A key element of any exit strategy is that policymakers must guide expectations. An exit that takes markets by surprise can lead to major reassessments of the yield curve. Publishing explicit interest rate forecasts is a very direct way of guiding financial market participants’ expectations. Historical perspective I The decline in world trade during the crises of 1929–1933 and 2008–2010  The third lesson is the need for multilateral cooperation and collective action. As the global economic and financial crises unfolded, joint, massive and unprecedented policy responses were put in place around the world so as to avoid another Great Depression.
Percent 15  15  Actual Holden III  10  10  5  5  0 1970  1980  1990  2000  2010  2020  2030  0 2040  1) Sum of investment, intermediate consumption and labour costs in crude oil and natural gas production. Sources: Ministry of Finance and Statistics Norway  In the course of a few years after the oil price fall, oil industry demand6, measured as a share of mainland GDP, declined by 40 percent. A comparable fall in global oil-related demand amplified the downswing in the Norwegian oil service industry. Despite the shock to the oil industry, the downturn in the Norwegian economy proved fairly mild. Employment growth slowed, but unlike during the financial crisis and the downturn in the early 2000s, growth remained positive and registered unemployment did not exceed 3 percent. The mildness of the downturn following the oil price fall shows that the Norwegian economy has effective shock absorbers, such as flexible wage formation, a floating exchange rate and solid government finances. We also had monetary policy space, which we used (Chart 13). 5 See, inter alia, Official Norwegian Reports NOU 2013:13: Lønnsdannelsen og utfordringer for norsk økonomi [Wage formation and challenges facing the Norwegian economy] (Norwegian only). 6 Measured as the sum of investment, intermediate consumption and labour costs in oil and gas production. 12  NORGES BANK  Chart 13 Monetary policy is the first line of defence. Policy rate and capacity utilisation.

Percent 88  88  2001  86  ECONOMIC PERSPECTIVES 13 FEBRUARY 2020  86  84  84  82  82  80  80  78  78 76  76  an  p  Ja  da  UK  na  Ca  US  nd  la  Fin  p.  ds  ark  e n nm h R herla De t Ne  c ze  C  ed  en  Sw  ay  rw  No  Source: OECD  Chart 17b No longer at the top of the employment chart. Employment. Share of population aged 25-54.1) Percent 88  88  Now  86  86  84  84  82  82  80  80  78  78 76  76  US De  nm  ark  Fin  d lan  Ca  n  a ad  No  r  y wa  UK  rla  the  Ne  s nd  Ja  n pa  en Rep. ed h w S ec Cz  1) Latest observations. Source: OECD  Those outside the labour market share a number of characteristics.8 One is weak formal qualifications. Among them, we find recently arrived immigrants and young persons who have dropped out of school. Another is poor language skills. Moreover, it is worrying that disability rates are rising, particularly among young people (Chart 18).