samchain/econo-pairs-v1 huggingface dataset:
This would be an important step towards breaking the vicious circle between banks and sovereigns; and it would be a further step towards reinforcing the foundations of monetary union. Private risk-sharing does not have to be exclusively via the credit markets and not solely in relation to the public sector. Investors can also help to share risks via the equity markets. Take a German company as an example. If the German economy is hit by a shock, this company will probably be affected too. If its owners, the shareholders, are spread across many countries, the company’s losses will be spread likewise. The more cross-border financing companies have, the less the national economy is affected by any shock and the faster it can recover. In the United States, for instance, this kind of risk-sharing works: studies show that integrated capital markets in the United States absorb 40% of the cyclical variations between the states. 4 This speaks in favour of the European capital markets union project. And also for, as part of this project, a greater harmonisation of equity markets in particular. I admit that this is an ambitious goal as insolvency law and company law, for example, would need to be further harmonised. This step would remove a few barriers to a single European capital market. Closing remarks Ladies and gentlemen, At the beginning of my speech I mentioned the Eurobarometer survey which indicated that 70% of people in the euro area want the euro as the single currency.

AIG (American International Group), one of the world's largest insurers and the biggest in the United States, was rescued and, to all intents and purposes, acquired by the Federal Reserve, in an operation without precedent in the United States or the rest of the world. -  The collapse of Lehman Brothers led to loss of confidence and a standstill in numerous markets, including some that had until then been functioning reasonably well and that are fundamental to financing in the United States. Among these, the deterioration in the commercial paper market was particularly serious. After the Lehman Brothers bankruptcy, some money market funds with exposure to its debt recorded losses, causing investors to redeem their holdings. The funds were forced to sell large amounts of securities to pay investors, causing the market for the commercial paper of non-financial firms to be seriously damaged too. -  In Europe, investors were sceptical about the liquidity position of entities reliant on very short-term financing, subjecting them to fierce selling pressure on the securities markets. In the United Kingdom, what started as a problem for the largest mortgage lender (HBOS), which had to be bailed out by Lloyds TSB, spread to the whole banking sector, prompting the British government to launch an unprecedented intervention plan. -  The Belgian, Netherlands and Luxembourg authorities intervened in response to the problems at Fortis, a bank whose share price had collapsed, and the Belgian, Luxembourg and French authorities had to take action to deal with the problems at Dexia.
Evidently, one fundamental challenge we face is the need to correct the strong deterioration of the budgetary position and ensure a rapid return to stability; otherwise, the expansionary momentum of public finances would become an obstacle to recovery. The challenge is an exceptional one since the budget deficit stood at 11.2% of GDP in 2009, up more than 13 pp of GDP in only two years, and there was a substantial increase in the public debt/GDP ratio, which stood at 53.2% in 2009, a level nevertheless below the European average. This marked fiscal deterioration is partly due to the functioning of the automatic stabilisers, the discretionary measures adopted, the strong inertia of public spending and, above all, the decline in revenue linked to the end of the real estate boom, which will be difficult to turn around in the future. This means that much of the fiscal imbalance is structural, and it must be checked urgently with highly ambitious consolidation measures that manage to reverse the trend of spending and build revenue back up. In other circumstances it would probably have been feasible to reduce the budget deficit more gradually. But at present it is impossible to pursue such a strategy, in a setting in which investors are demanding a speedier return to a credible path of budgetary stability.

Making market discipline work We have embarked over the last three years on a shift in our approach to regulating the markets from what is loosely called a merit-based regime, under which the regulator judged the appropriateness of securities being made available to the public, toward to a market-driven, disclosure-based regime of regulation. It is aimed at allowing market participants greater choice and the free play to take calculated risks. We have made it clear that the shift in approach will not compromise our reputation internationally as one of the most open, transparent and well-regulated markets in Asia. Market-based regulation will indeed raise standards of business conduct, as is necessary for a more open, competitive and innovative market environment. Market discipline will not simply be a matter of 'caveat emptor'. The buyer cannot be expected to beware if he is not provided with accurate and accessible information so as to make a reasonable judgement of prospective risks and returns. Neither can he do so if the market is rigged without his knowledge. It follows that market discipline requires a system of laws, rules and standards to discriminate in favour of companies with high standards of corporate governance and disclosure, and to exact penalties on those who manipulate the market. Making market discipline work is therefore the responsibility of all participants in the system.
Fiscal policy is undoubtedly the most appropriate tool to act as the first line of defence in this setting, since it has the instruments to achieve this objective with immediate and targeted actions that are suited to a shock whose duration is uncertain and heterogeneous. 1  The response of European governments has generally been commensurate with the challenges posed by this crisis. Their response has also been resolutely backed by the European Union (EU), especially following the approval of the European Recovery Fund by the European Council. For its part, monetary policy should act, and has acted, very forcefully too. Indeed, the economic shock triggered by the pandemic was accompanied by aa strong tightening of financial conditions in the euro area. As various governments, including Spain’s, announced plans to contain the virus, financial markets began to discount heavy declines in economic activity and increases in public and private debt. This drove risk premia (i.e. the compensation demanded by bond investors for the probability of borrowers defaulting) higher. That resulted in an increase in the interest rate that governments, households and firms pay on their rising debts, which will necessarily amplify the fall in aggregate demand and, therefore, in inflation, owing to the direct impact of the pandemic and the measures adopted to limit its spread. Faced with this situation, on the ECB Governing Council we had to act swiftly to reverse the upswing in the borrowing costs for the various economic agents.

At the end of last year, however, resource utilisation in the Swedish economy was beginning to be strained and inflation was estimated to rise to the extent that it would exceed the target level two years’ ahead. The Riksbank therefore raised the repo rate by a quarter of a percentage point to 4.25 per cent. The assessment of the risk spectrum indicated at the same time that a weaker economy in the USA could dampen growth in Sweden. As we now know, this is what happened. Developments during the spring During the first half of the year, the economic climate continued to weaken both in Sweden and other countries, but the signals regarding the strength of the downturn were mixed. The weakening in the economic climate was concentrated to the manufacturing industry, while household confidence remained strong, despite an undermining of household wealth in the form of falling share prices. Property prices were not affected in the same way as share prices, which probably contributed to keeping household’s confidence in the future strong. This applied both to the Swedish economy and the US economy. In the USA the Federal Reserve lowered interest rates gradually by 2.75 percentage points during the first half of the year, while tax reductions provided stimulation for households. For the Riksbank the picture was complicated by the fact that import prices rose unexpectedly rapidly in May. Later, the statistics showed that consumer prices had also risen more rapidly than expected.
I want to emphasise that in all these key positions Andrew has shown a remarkable capacity to generate new ideas, foster consensus, fuse different views and encourage dialogue, and all this with a subtle sense of humour and extraordinary attention for the human touch. Let me add that during his term at the helm of both the BIS and the Financial Stability Forum, his steady hand has been behind the international financial system’s success in confronting the serious shocks arising in recent years. In the case of Otmar Issing, I have the pleasure of meeting him regularly in the Governing Council of the European Central Bank, where his illuminating presentations on economic developments in the euro area are pivotal in guiding our monetary policy decisions. You should know that Otmar, an academic of outstanding personal and professional integrity, is a truly remarkable and experienced central banker. For many years as Chief Economist of the Bundesbank and a Member of its Board, he contributed to enhancing the reputation of this institution as one of the most successful central banks in the world. When the European Central Bank was created in June 1998 he became its Chief Economist and a member of the Executive Board. Over what has been nearly five years he has been deeply involved in the fascinating tasks of putting in place and managing the single monetary policy. Otmar Issing’s contribution to these tasks has, in my view, been outstanding.

19 Source: https://www.investing.com/crypto/currencies 20 Application of FinCEN Regulations to Persons Administering, Exchanging, or  Using Virtual Currency 21 31 CFR § 1022.10. 22 Chairman Jay Clayton, Securities and Exchange Commission, Statement on  Cryptocurrencies and Initial Coin Offerings (Dec. 2017). Clayton is applying the “Howey” test, a product of the court case SEC v. W.J. Howey Co.,which sets out the criteria for determining whether an instrument qualifies as an “investment contract” (and thus a security) for the purposes of the Securities Act of 1933. 328 U.S. § 293 (1946). An investment contract is “a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party.” Id. 23 Securities and Exchange Commission, Statement on Digital Asset Securities  Issuance and Trading (Nov. 2018). 24 Marine Bank v. Weaver, 452 U.S. 551, ___ (1982). 25 The Commodity Exchange Act defines commodity to include, among other things,  “all services, rights, and interests in which contracts for future delivery are presently or in the future dealt in.” 7 U.S.C. § 1a(9). At least to district courts have interpreted this to cover virtual currencies. E.g., CFTC v. My Big Coin Pay, 334 F.Supp.3d 492, 498 (D. Mass., Sept. 26, 2018) 26 CFTC Release Number 7678-18, CFTC Charges Randall Crater, Mark Gillespie,  and My Big Coin Pay, Inc. with Fraud and Misappropriation in Ongoing Virtual Currency Scam (Jan. 24, 2018).
4  BIS Review 124/2006  So while there are some good reasons for the reduction in financial risk premia significant risks do remain. The question is how well are they priced? Are there any reasons for thinking that markets may be underpricing risk? I think there may be. Low risk premia and low volatility Sustained low economic and financial market volatility is bound to have implications for the level of compensation for risk that investors require in asset prices. In theory if assets become fundamentally less risky, then investors should receive a capital gain but should accept a lower future rate of return. If there have been signs of the capital gains, it is less clear that investors have revised down their expectations of rates of return on their portfolios. Indeed the pressure is to go beyond performing relatively well against your peers and to produce absolute returns. This has been fuelling a fierce search for yield and for ‘excess returns’ by asset managers who have to respond to this demand. Delivering on such a commitment in a world of low volatility takes impressive stock picking skills; buying or selling mis-priced assets and spotting emerging trends before the rest of the market. Clearly not everyone can beat the market. Some asset managers will be able to do so for a while either through luck or good judgement and their challenge is to keep ahead – often with the extra funds that their performance has attracted. Their competitors face added pressure to catch up.

In this case, low implied volatilities on interest rates and exchange rates can support cross-border carry trades because the yield pick up looks attractive when you can hedge the worst risks quite cheaply [Chart 11]. The continued smooth financing of global imbalances through these carry-trades in turn leads to low volatility. But this can of course work in reverse. Foreign exchange volatility has jumped up since the US Thanksgiving Day holiday. If this volatility were to persist the perceived risks in the carry trade would increase. The common characteristic of these examples is that low implied volatilities reduce the apparent riskiness of portfolios and can encourage investors to take on more risk. And if implied volatilities are not a good measure of future volatility, they will end up bearing more risk than they expected. Avoiding this pitfall requires diligent risk assessment by investors and other counterparties. That is what is needed for market discipline to do its work. It requires both adequate disclosure of risk-relevant information and its effective use in investment decisions. In the case of the hedge fund sector, for example, it seems likely that greater institutional investor interest will continue to raise the bar on disclosure requirements, particularly for those generating returns using complex products where traditional measures like value-at-risk (VaR) may fail to capture fully the underlying risks. Conclusions To conclude, our overall assessment remains benign. The financial sector is strongly capitalised and well placed to handle even large shocks like Amaranth.
To facilitate this and to promote the cost competitiveness in Labuan, it is supported by a balanced regulatory regime that effectively regulates the market while facilitating market development. LOFSA, the Labuan Offshore Financial Services Authority was established ten years ago not only to put in place an effective regulatory regime and to provide the supervisory oversight, but also to focus on market development and facilitation. To further ensure a conducive business environment, it is also supported by a robust legal framework including trust laws. While Labuan has in place a business friendly tax regime it also has never been positioned as a low tax finance repository. On the contrary it has leveraged on its strengths and unique advantages to meet the market's need. In going forward, a number of programs will be initiated. The Labuan International Business and Financial Centre (IBFC) aspires to achieve the status of being the "gold standard for holding company jurisdiction". This market has been identified as a further business driver for Labuan IBFC. Malaysia's extensive tax treaty network with over 63 countries in addition to the introduction of a more flexible tax framework supports this initiative. It was announced in the 2008 Budget that Registered Labuan offshore companies now have the option to be taxed under the Malaysian Income Tax Act 1967 or the Labuan Offshore Business Activity Tax Act (LOBATA) 1990, thus enabling businesses to structure their transactions more efficiently.

Zeti Akhtar Aziz: The transformation of Labuan as an International Business and Financial Centre Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the launch of Labuan International Business and Financial Centre, Kuala Lumpur, 28 January 2008. *  *  *  Distinguished Guests, Ladies and Gentlemen, It is with great pleasure that I welcome you to the launch of Labuan International Business and Financial Centre. This decade has seen the Labuan Offshore Financial Centre demonstrate its ability to adjust and reinvent itself in a rapidly changing international and regional environment. This decade has also witnessed the robustness and resilience of the Labuan Offshore Financial Centre as evidenced by its ability to continue to expand and mature even during the most challenging of periods. The global and regional market place however, continues to transform, bringing with it new opportunities and challenges. To have the flexibility to benefit from the new opportunities and to have the capacity to rise to the new emerging demands and challenges, continued reassessments need to take place to rediscover new directions, build new strengths, new comparative advantages and to define our new role in this ever changing and more competitive market place. Today we are defining a new beginning for the Labuan Offshore Financial Centre as it positions itself for a much larger role. Your presence here today to share in this auspicious occasion is indeed appreciated.
•  Can direct regulation over a limited set of institutions effectively protect the system from distress among the unregulated? •  How should responsibility for different dimensions of financial regulation be allocated, and how centralized or decentralized? •  What institutions should have access to central bank liquidity under what conditions? The role of the Federal Reserve The Congress gave the Federal Reserve broad authority to address risks to financial stability. Because the financial landscape has changed so substantially, many observers have pointed out the need to revisit the scope and nature of Federal Reserve’s authority. Secretary Paulson has outlined a number of important proposals for reform, many of which would broaden the responsibility and the authority of the Federal Reserve. I want to identify some issues that are critical to our current responsibilities and will be important in defining an appropriate role in the future, with the most effective mix of responsibility and authority. There is more continuity than change in these suggestions, and they assume, as is the case today, that we will have to work closely with other functional supervisors to make the system work. First, the Fed has a very important role today, working in cooperation with bank supervisors and the SEC, in establishing the capital and other prudential safeguards that are applied on a consolidated basis to the institutions that are critical to the proper functioning of financial markets.

Given the changes in the structure of the financial system, maintaining financial stability requires us to look beyond just the stability of individual banks. It requires us to look at market developments more broadly, at the infrastructure that is critical to market functioning, and at the role played by other leveraged financial institutions. Over the past four years, the Federal Reserve has led a number of initiatives with our supervisory colleagues in the United States and in the other major financial centers to improve the OTC derivatives infrastructure, to strengthen the systemically important payment and settlement systems, to improve counterparty risk-management practices with respect to hedge funds, and to place greater emphasis on ensuring robustness to low probability, high severity instances of stress. This forward-looking, cross-institution approach, integrating prudential supervision with market oversight and payment system expertise, offers the best model of broad financial oversight focused on systemic risk. I want to emphasize in conclusion that we are working now, in close cooperation with the SEC, other U.S. bank supervisors, our international counterparts and market participants to improve the capacity of the financial system to withstand stress. These initiatives include joint efforts with the SEC to bolster consolidated oversight of the investment banks, formalized in our recent Memorandum of Understanding. These institutions have made substantial changes over the past several months to bring down overall leverage and risk-weighted assets and to reduce liquidity risk.
Further details on the discussion at the meeting will be available when the minutes are published in three weeks time. I will not comment on monetary policy any further today. Following the release of the FOMC’s statement, market interest rates generally moved lower, which should help provide some additional support for economic activity and jobs. I would note, however, that conditions remain unsettled and the equity market in particular remains very volatile. BIS central bankers’ speeches  1  Regional economic conditions Turning to our region, the economic recovery continues to be slow, although much of the region is performing reasonably well compared with the nation as a whole. To frame our current situation, let me put this recession and recovery in the context of previous cycles. While this recession lasted longest, caused the deepest job losses, and has shown the slowest employment recovery of any post-war recession for the United States, it has not been the worst on record for the region. New York State sustained fewer severe job losses than the nation during the recent recession – a reversal of historical patterns. Upstate New York, which has struggled with sluggish economic growth in recent decades, has proven particularly stable. In fact, while job losses were quite severe during previous recessions, that was not the case this time around. Similarly, New York City’s job losses were more moderate than in previous recessions. New Jersey, on the other hand, saw steeper jobs losses than New York and a more tepid recovery.

If you have debt approaching 100% of GDP, you have to reduce it to be less vulnerable. Are you worried by the political uncertainty? Political uncertainty is an important factor because we always need stable governments capable of taking action. And this is of course quite obvious: we don’t have the political stability necessary to put into place the necessary measures and policies, including a budget. What do they think here in Frankfurt about the fact that the budget has been deferred since the time when you were still a minister? Spain has continued to reduce its public debt. It could have been reduced more, but it could also have been reduced less. In any case there is one fundamental factor: the growth differential. In the Spanish economy, this now comes from a financial sector that doesn’t have the same doubts hanging over it as it did five to seven years ago. And it is competitive. The most important thing, in contrast to the previous and other growth cycles, is that it is growing without an increase in loans and without a real estate bubble. With lending growth that is below nominal GDP and a current account surplus in the balance of payments. As long as these two things continue, the Spanish economy will keep growing faster than the rest. The recommendation, which is also valid for Portugal, Greece and Ireland, and even for Italy, is this: stabilise the banking sector and the credit markets. And maintain competitiveness. Then you will do better than average.