samchain/econo-pairs-v1 huggingface dataset:
This was because the ASEAN economies did not have the preconditions to achieve such a monetary union and that the effort to achieve such preconditions would involve immense costs to the economies. It was therefore concluded that the region would instead be better served by greater regional financial integration to achieve the very same objectives of a greater shared economic prosperity for the region. Additionally, in Europe, the integration process is facilitated by a more centralised governance structure led by supra-national institutions while ASEAN has built on institutional arrangements and mechanisms that would facilitate financial integration that leverages on a network of committees for the governance process. ASEAN has also adopted a more flexible path that allows member countries to participate in the financial integration process based on the state of readiness. Of particular focus is the harmonisation of regulatory standards and supervisory practices, which is reinforced by capacity building initiatives and technical assistance to bring all member states to a similar level. This inclusive approach ensures that all member states mutually benefit from the integration process. Additionally, regional cooperation in the areas of surveillance arrangements, financial safety nets, and crisis management has been intensified to secure financial stability during the integration process. While much remains to be done, significant achievements in regional financial integration have already been met in recent years.

Paul Tucker: Clearing houses as system risk managers Speech given by Mr Paul Tucker, Deputy Governor for Financial Stability at the Bank of England, at the Depository Trust & Clearing Corporation (DTCC)-Centre for the Study of Financial Innovation (CSFI) Post Trade Fellowship Launch, London, 1 June 2011. *  *  *  It is a real pleasure to be here this evening. The new “Post-Trade Fellowship” is an excellent idea, and I am delighted Peter Norman is the first incumbent. Like CSFI, Peter has made a very considerable contribution to thinking about the financial system – and no more so than in his latest book, The Risk Controllers. There is hardly a more important topic right now. The community has rediscovered the importance of the financial system’s plumbing. Your new Fellowship will help to sustain that interest as the years pass. And that is of special interest to the Bank of England given the government’s plan to transfer to us responsibility for supervising critical financial infrastructure – settlement systems and clearing houses. CCPs and the financial network Right now, the biggest “plumbing” issues follow from the decision of the G20 that more of the over-the-counter derivatives market should be cleared via central counterparties. But this is not just about derivatives markets. Compared to their origins in clearing commodity futures and then exchange-traded financial derivatives, CCPs have increasingly been clearing cash instruments – notably equities and, in recent years, government bond repos.
Put simply, the mechanism according to which losses go into the profit and loss account applies to both the ECB and the national central banks. If a net loss remains even after taking into account all provisions and reserves, it could be recorded on the balance sheet as losses carried forward and be offset by any net income in the following years. It is important that it is understood from the principle of financial independence that a central bank needs to be adequately capitalised in the long term. But in no way does it follow from this that all losses carried forward would have to be offset immediately and in full by the capital holders or Member States. Conclusion To conclude, I would like to summarise my arguments. The announcement of OMTs was and is the necessary and appropriate step to eliminate the disruption in the transmission of monetary policy caused by concerns that there would be an unwanted break-up of the euro. The risks of not acting would have been greater. The ECB and its decision-makers are aware of the limits of its monetary policy mandate. Our measures are aimed at maintaining monetary policy transmission and preventing an unwanted break-up of the euro. It is not allowed to, is not able to and does not want to replace the actions of democratically elected governments. Quite the opposite. The OMT programme is therefore aimed at protecting the market mechanism so as to urge the Member States to make the necessary reforms.

I am pleased to see that the recent euro barometer showed a steady progression in the satisfaction of the Maltese with the adoption of the euro (from 40% in September 2005 to 64% in June 2007). Let me hand over the euro star to Governor Bonello to symbolically flag that the Central Bank of Malta will join the Eurosystem on 1 January 2008. We look forward to welcoming you wholeheartedly into the euro area. Thank you very much for your attention. BIS Review 110/2007  1
In consequence, taking as reference the analyses performed by the Banco de España, the risk for the public revenue forecast for next year would be on the downside, essentially as a consequence of possible deviations from the GDP growth forecast contained in the macroeconomic forecast for 2021, which I mentioned earlier, as shown in scenario 2 in Chart 13, and which, as I have indicated, is the lower growth scenario for 2021 of the two scenarios published in September by the Banco de España. 23  2.3  The general government deficit target and the fiscal policy stance  Having discussed the spending and revenue policies of the Draft Budget, I shall now move on to consider the budget as a whole. This will allow me to assess the uncertainty surrounding the possibility that the budget deficit will reach the reference level of 7.7% of GDP in 2021 and the fiscal policy stance in 2021. The budget deficit will need to be reduced by 3.6 pp to attain the level established for 2021. According to general government Budget Plan projections, this reduction would be the result of a 7.3% revenue increase, in National Accounts terms, and practically no change in spending; the effect of the European NGEU programme funds, which have a neutral impact on the budget deficit in 2021, is excluded in both cases.

Thus, insofar as the proportion of young workers and low wage earners in the sectors most affected by the pandemic has  1  By way of illustration, according to the Labour Force Survey the sharpest declines in terms of employment to Q3 were in hotels and restaurants (-19.3%) and artistic activities (-9.1%), while in other market services sectors, such as financial activities (4.4%), real estate activities (2.3%) and information and communications (1.8%), there were year-on-year increases in employment in that period. In industry, employment fell by a year-on-year rate of 4.5%, while in the nonmarket services sectors it increased by 1.9%. By region, employment posted the biggest year-on-year declines in the Canary Islands (-8.1%) and the Balearic Islands (-7,4%), while there was a less marked fall in the Basque Country (-1%) and Asturias (-1.3%), and a slight year-on-year increase in Murcia (0.1%). 5  been relatively high,2 the crisis has borne down particularly sharply on those workers showing a greater initial degree of vulnerability and with more limited resources to sustain their spending. This might influence the future path of inequality in Spain.3 As regards business dynamics, since the onset of the crisis the number of firms registered for social security purposes has fallen most appreciably, by almost 84,000 firms from endFebruary to end-September. That marks a year-on-year decline of 6.1%, which is down on the peak in spring (10.5% in April), but still very high. This evidence is consistent with the analyses conducted by the Banco de España.
Our assessment was that there is a need to continue to raise the repo rate in order to stabilise inflation at a level close to the inflation target of 2 per cent and to avoid too high a level of resource utilisation in the future (see Figure 11). However, as usual, we would like to add that uncertainty concerning the future is great and the interest rate path we have calculated is a forecast, not a promise. Wage formation will probably continue to work well in the years ahead The conditions are good for wage formation to continue to work well in the years ahead, just as it has since the mid-1990s. This is also the assumption made in the Riksbank’s forecasts from April. The rapid improvement of the labour market means that the central agreements concluded in the autumn and next year are expected to reach higher levels than the agreements concluded last year. Wage increases over and above the central agreements (“wage drift”) are also expected to contribute towards slightly faster wage increases. The Riksbank’s assessment is that overall hourly wages will increase by about 3.5 per cent per year in 2012–2013, which is compatible with a CPIF inflation rate (inflation excluding interest rate changes) of close to 2 per cent at the end of the forecast period.3 But all forecasts are uncertain. This also applies to wage forecasts. It is normally easier to make good forecasts for the development of wages than it is for inflation.

The economic conditions for wage formation in the years ahead I will now briefly present the Riksbank’s assessment of economic development in recent years. I will refer to the most recently published forecast from April. Of course, quite a lot has happened since then, but, at the same time, two months later you don’t normally know a great deal more about developments two to three years ahead. In any event, we will be publishing an updated assessment in the Monetary Policy Report in July. The international recovery is proceeding at a good rate For the world as a whole, we expect to see a GDP growth of over 4 per cent per year for the next three years. This is a high growth rate from an historical perspective (see Figure 4). But  4  BIS central bankers’ speeches  developments across the world are divided, with weaker growth taking place in the developed economies and stronger growth in emerging economies. The recovery of the United States and Europe is continuing at a fairly moderate pace. In the United States, GDP is now back to the level it was at before the crisis (see Figure 5). But the labour market has yet to recover. In the euro area, it seems likely to take a couple more years until GDP has returned to the same level as before the crisis. Growth in Europe is being restrained by the fiscal problems in several countries and the tightening of fiscal policies (see Figure 5).
It is currently about 70 bp above the repo rate of the ECB; this spread is now more than twice as large as it was in the first week of August. The Bank of England also held the official rate constant throughout the market turbulence. As you can see from Graph 1b, the initial increase of the 3-month sterling LIBOR was slightly more pronounced than the one for the euro. Currently, the difference between the 3-month LIBOR and the official target rate is roughly equivalent for the two currencies. In the case of Switzerland, where the official target rate is the 3-month LIBOR rate, the emerging risk premium meant that the official target rate was driven higher immediately after the turmoil began in early August. You can see this is Graph 1c. Due to a significant reduction in the short-term repo rate of the SNB, the 3-month LIBOR has since receded to about the level of the first week of August. As you know, the Federal Reserve has lowered the Fed Funds rate in two steps by 75 basis points to a target level of 4.5%. As a result and as you can see in Graph 1d, after the first cut in the Fed Funds, the 3-month LIBOR fell somewhat below the level of August 9. After the second rate cut the 3-month LIBOR declined further. Nonetheless, the spread between the Fed Funds rate and the 3-month LIBOR remains significantly larger than in July.

20 Sorting out these unusual risk premia effects is crucial for conducting appropriate monetary policy and for communicating the monetary policy stance to the public and to market participants. 18  John B. Taylor, 1993, “Discretion versus Policy Rules in Practice”, Carnegie Rochester Conference Series on Public Policy 39, December, 195-214. 19  For a discussion of various types of the Taylor rule see Athanasios Orphanides, 2007, “Taylor Rules”, Finance and Economics Discussion Series 18. Federal Reserve Board. 20  Taylor, 1993, p. 198. 6  BIS Review 141/2007  3. Conclusion  Let me conclude by reiterating that much of the central banks' motivation for their involvement in financial stability is rooted in their role as providers of liquidity in general, and of emergency liquidity in particular. At the same time, it has to be recognized that central banks have a very limited arsenal of instruments to deal with crises situations. A change in the level of official target interest rate is in many ways a crude instrument that, in my view, is best deployed with a firm focus on trying to keep the economy where our statutory mandate tells us to keep it. This does not, of course, preclude a change in interest rates in the event of a crisis, but only to the extent that the risks from the crisis to the economy justify a change in policy. The current market turmoil is providing countless lessons to the industry as well as to the official sector.
Unemployment has increased sharply in countries not far from our own. Given the high levels of available resources, there are prospects of lower than normal interest rates among our main trading partners for some time ahead. There are now signs that the stimulus measures are reviving growth, but production is still lower than it was prior to the crisis. The challenge going forward will be to address the problem of rising unemployment and high government debt in many countries. Why did it happen? When the Queen of England visited the London School of Economics in November last year, she asked her host why no one had foreseen the financial crisis. In July this year, her question was answered by a panel of 33 prominent economists from British universities, government institutions and the business sector. The panel did not cite only a single cause, but a web of causation. An important factor behind the crisis can be found in global macroeconomic developments in the years preceding the crisis. In the 2000s, China made its grand entry into global trade with an attendant surge in production and income. This led to higher demand for inputs, and the prices of oil and other raw materials increased. On the other hand, global consumer price growth was pulled down by exports of cheap goods from China and other countries with low production costs. Interest rates were lowered in many countries to prevent very low inflation or deflation.

In China, a large share of income was saved, either in the form of investment in new production equipment or financial assets. The increased supply of financial savings pushed down global long-term interest rates. Lower interest rates encouraged consumers and businesses in other countries to borrow capital from China and other surplus countries. The foreign debt of countries such as the US and UK accumulated rapidly in the years leading up to the crisis. BIS Review 163/2009  1  Historically low interest rates prompted fund managers in Western countries to seek out new alternatives in their search for high yields. New financial savings products were developed and spread to investors around the world. It was often difficult, or even impossible, for investors to value the risk underlying the products. Yield potentials can also be increased by leveraging securities purchases. As long as prices rise, the return on equity will increase with the degree of leveraging. On the other hand, the risk of being left with debt, and little or no equity capital, increases when prices fall. In the years ahead of the crisis, high debt leveraging still appeared to be an attractive proposition in an environment of low credit risk and a glut of cheap credit. The result was a surge in debt accumulation in the years preceding the crisis. Prices in securities and property markets soared. The build-up of macroeconomic imbalances in the years prior to the crisis increased vulnerabilities and the potential amplitude of a downswing.
The growth potential of green technology is boundless with prospects and expectations to contribute significantly to the country’s transformation into a high value-added economy. The financial system plays a pivotal role in this transformation and today’s conference offers an important platform to encourage new paradigms and to develop concrete, transformative solutions moving forward. On that note, I wish you a productive and engaging conference. 4  BIS central bankers’ speeches

The proposed measures are a step in the right direction, although we would like, in line with the recent US decisions, to exclude state-guaranteed loans from the leverage ratio. Together, they will enable banks to continue playing their full role in financing the economy, which is a prerequisite for a rapid economic recovery. The preliminary assessment published by the EBA this week needs, of course, to be interpreted with caution. But it expects that the majority of European banks have sufficient capital buffers to absorb the severe shock of the Covid-19 crisis. The EBA estimates the impact at between 230 and 380 basis points of CET1 capital. And with the aforementioned prudential easing measures, the banks have additional leeway. However, the earnings figures for the first quarter of 2020 already bear the scars of the economic difficulties and the shock to the financial markets. The earnings reports for the four main French banking groups (BNP Paribas, Société Générale, Groupe Crédit Agricole and Groupe BPCE) showed a decline of 4.8% in net banking income and a rise of 130% in the cost of risk, and, consequently, a drop of nearly 50% in net earnings compared with the first quarter of 2019. As a result, financial entities and institutions need to be actively monitored, to ensure that they remain sufficiently financially sound. The ACPR, alongside the Single Supervisory Mechanism, is remaining extremely vigilant in all its areas of competence, including with regard to the protection of customers and climate-related risks.
Indeed, the development of SWFs can in some cases to be related to the increasing reliance on fully-funded government pension schemes, which often share a similar approach to asset allocation. For instance, Norway’s Government Pension Fund – Global, the continuation of its Petroleum Fund, is managed with respect to a strategic benchmark that holds 40% of its assets in equities, 50% of which are outside Europe. In the case of several East Asian economies, the transfers from official reserves to SWFs therefore entail a loss of the liquidity services from holding reserve assets. But to the extent that expected returns are higher, one benefit of investing in riskier assets is a reduction in the fiscal cost of sterilisation. The strategic asset allocation of SWFs could in principle be designed in relation to the specific risk exposures of the country. Emerging market economies are characterised by a range of vulnerabilities to global macroeconomic shocks such as sharp changes in oil, metals or agricultural commodities prices, as well as the business cycles fluctuations of developed economies. For instance, it seems intuitive that the optimal asset allocation of oil-producing countries should be diversified into assets uncorrelated with oil prices. By contrast, most Asian countries are commodity importers and could hedge their risks with long positions on commodities futures and other assets that are highly correlated with commodities prices. SWFs can thus potentially provide macro-hedging services to their countries.

In oilproducing economies, foreign asset accumulation stems from oil royalties reflected in large government budget surpluses, so that their management by public entities is a natural outcome. The funding of commodity SWFs stems from a domestic resource that is most of the time owned, exploited or taxed by the government: in this respect it is genuine sovereign wealth, and the result of public savings. By contrast, foreign reserves and SWF accumulation that is not commodity related might be seen as primarily a diversion of excess private savings. Commodity funds The set-up of stabilisation funds by oil-exporting countries was first motivated by the desire to smooth oil revenues, which are highly volatile, with a view to maximizing the overall rent from oil extraction. To the extent that commodities are non-renewable resources, standard economic theory suggests that part of extraction revenues should be saved in order to smooth the nation’s inter-temporal consumption, very much like an individual saves over the lifecycle for his retirement, but also possibly in order to leave a bequest to his offspring. Commodity SWFs were indeed equally motivated by an attempt to optimise the intertemporal benefits of natural resources beyond the exhaustion horizon, as well as on the grounds of fairness to future generations. As such, oil funds are far from being a new phenomenon: the earliest funds were thus created in the aftermath of the first two oil shocks.