samchain/econo-pairs-v1 huggingface dataset:
In the years running up to the Global Financial Crisis, a period known as the Great Moderation, these explanations were difficult to disentangle.8 Shocks to the economy were modest and unthreatening over this period, at least relative to earlier episodes. Governor Mervyn King called this the NICE era – Non Inflationary Continuous Expansion.9  But the macro-economic period since 2007 has been naughty, not NICE. The past 15 years have presented as many macro-economic challenges as any in recent history: first the collapse of the global economy associated with the Global Financial Crisis; then its localised after-shock, the Euro-area crisis; then the run-up to, and aftermath of, the Brexit referendum; and most recently, of course, the Covid crisis. We have gone from a NICE era to a VILE one – Volatile Inflation Limited Expansion. Yet despite those challenges, UK inflation expectations have remained anchored to the 2% inflation target. In the 1970s, 1980s and 1990s, volatility in near-term inflation and output was mirrored in medium-term inflation expectations, as credibility swung with the wind. Inflation-targeting has broken decisively that link. That nominal anchoring, courtesy of inflation-targeting, has in turn eliminated one crucial source of past macro-economic instability in the UK. 6  Based on data to the end of 2019. Haldane (2020). See Stock and Watson (2003) and Bernanke (2004). 9 King (2003). 7 8  6  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  6  And so to the present day.

Yet at that time, financial crises were a phenomenon felt to be confined to emerging markets. Advanced economies, it was thought, knew better. This, too, would come back to haunt us. Resolving emerging market crises was one thing, redesigning the international financial system to forestall them quite another. Working alongside HM Treasury colleagues (including Sir Jon Cunliffe – another whose path I have lost track of), an intensive programme of international reform began with the aim of preventing a  10  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  10  repetition of these emerging market crises. As part of the Bank’s contribution, under Eddie and Mervyn’s guidance, I worked with the Bank of Canada to produce a blueprint for international monetary reform.13 This blueprint proved controversial, as it proposed restrictions on the IMF’s ability to extend credit to countries in crisis. That jarred with IMF orthodoxy, including the then-Deputy Managing Director Stan Fischer, who at the time was proposing the IMF become an international lender of last resort.14 It also jarred with US orthodoxy. Under Larry Summers and Tim Geithner, the US Treasury had overseen the emerging market bailouts from Mexico in 1994 onwards. In 2002, I was asked by Tim Geithner (now at the IMF) to go to Washington to work on international financial system design, alongside two former US Treasury colleagues, Nouriel Roubini (now better known as Dr Doom) and Brad Setser. There were no prizes for spotting the odd one out.
I’ll then outline some of the changes that are already under way, before finally asking what more needs to be done and outlining some of the questions our Review will be asking. Why Fixed Income, Currency and Commodity markets matter I want to start on a personal note. I was born in Egypt but left at a very young age when my family lost everything as a result of nationalisations under the Nasser government. It was a time when many well-intentioned people thought that the state could do a better job of allocating resources and managing economic activity than the market. That view was proven wrong. Perhaps as a result of that experience, I have spent large parts of my professional life thinking about the relationship between the state and the market. The perspective I have  BIS central bankers’ speeches  1  reached is that well-functioning markets are the key to prosperity, but that they must operate in ways that are fair and effective to sustain public support and confidence. By “fair and effective” I mean markets should allow their ultimate end users to invest, fund themselves, and transfer risk in a resilient and predictable way, on the basis of competitive prices. They should offer appropriately open access and transparency. And they should operate according to clear standards of market practice and integrity. Why should you care about Fixed Income, Currency and Commodity (or FICC) markets? Firstly they are huge.

For participants to acknowledge that such actions are questionable would in fact require the activation of slower, more effortful “System 2” thinking. The initial transgression may be small, but the culmination of many small transgressions can result in a set of behaviours which would normally be unacceptable becoming the norm, and an undesirable culture becoming ingrained. This is a version of the old proverb that one bad apple spoils the whole barrel. But the initial argument that it is just the case of “a few bad apples” is no longer credible. Instead it seems that there were deep rooted problems in the nature of FICC markets that resulted in practices that would be unacceptable elsewhere. As the Archbishop of Canterbury put it at a recent panel on ethics and finance at the IMF: “bad business models can corrupt good people.” Perhaps there is something also wrong with the barrel? The characteristics of the Fixed Income Currency and Commodity markets So what are the distinctive characteristics of FICC markets, and how might they have contributed to these problems? First and foremost, the FICC markets are notable for their heterogeneity. That reflects a key role of many FICC markets in providing bespoke instruments, tailored to meet the needs of investors and issuers. For example, while there are just under 2,500 publicly listed equities in the UK, there are over 11,000 different UK corporate bonds. In the US the disparity is even starker, with more than 36,000 bonds compared with just over 5,000 listed stocks.
This is also reflected by the growth figures of the EU and single Member States. According to Eesti Pank's spring forecast, this year's economic downturn in Estonia will be around 12%. Estonian economy may start to recover towards the end of 2009, albeit the resumption of growth is very much dependent on the state of economies of our main trading partners. In 2011, Estonia's economic growth should recover to almost 5%. I would like to stress that Estonia has undergone considerable economic adjustment, which started already at the end of 2007 and several risk factors are withdrawing rapidly. Estonia's current account – the spread between savings and investment – is practically in balance. Thus, the financing of the economy's current expenditure is ensured by current income. Any external current financing needs will be covered by official EU funds. The correction of labour market and the rapid decline in inflation are just as important. The sharp increase in prices and wages following Estonia's accession to the EU is over. Price level in Estonia will decrease moderately both this and next year. This is an important factor supporting productivity growth in the economy. Let me now turn to euro adoption. The clear perspective of joining the euro area increases markedly Estonia's credibility and serves as the main factor supporting our economy in the near future.

Sources: the IMF and the Riksbank  Oil price, Brent crude USD per barrel 160  M PR 2008:2  160  140  140  120  120  100  100  80  80  60  60  40  40  20  20 0  0 00  01  02  03  04  05  06  07  08  Sources: Intercontinental Exchange and the Riksbank  10  BIS Review 100/2008  The Economist’s commodity price index for food Index 2000 = 100, USD 300  M PR 2008:2  300  250  250  200  200  150  150  100  100  50  50  0  0 00  01  02  03  04  05  06  07  08  Source: The Economist  Inflation in the USA, the euro area and the world Annual percentage change 6  6  5  5  4  4  3  3  2  2 USA Euro area World  1  1  0  0 00  01  02  03  04  05  06  07  08  Note. Broken lines represent the IM F’s forecast.
European countries, by contrast, had a full range of workable  BIS Review 53/1999  2  options and chose the euro only after a long and thorough process of analysis, deliberation and preparation. If adopting a fixed rate was going to succeed anywhere, Hong Kong was certainly a prime candidate, because of the proven flexibility of the economy - not least the labour market, in terms of both inter-sectoral mobility and wage-cost flexibility. What has been surprising to many outside observers about the road to the euro is that, while it has all along been acknowledged that greater internal flexibility within the member economies would be required as a substitute for adjustment of relative price levels via the exchange rate, progress in that direction has been extremely slow. Indeed, in the period since the euro proposal first acquired real momentum it is probably true to say that some of the internal adjustment mechanisms in participant countries have become more rigid rather than less so. It is perhaps not surprising, therefore, to hear of worries about possible tensions in policy-making which the persisting disparities of economic performance across Euroland may cause. I have even read - but from sources which are probably more gossip than anything else - of the possibility of Maastricht budget deficit criteria in parts of Euroland being breached in order to sustain or stimulate growth. Of course, you may argue that this - budgetary relaxation - is precisely what we are doing in Hong Kong.

17 When interest rates are below the natural rate at which desired investment and savings equilibrate, banks will continue to expand credit. When economic agents are determined to take risks, they will find ways to circumvent measures that central banks and regulators have put in place. Non-monetary tools like macroprudential policy will therefore not adequately address the root problem caused by interest rates that are too low. 18 Under these circumstances, only monetary policy can “get in all of the cracks” to plug the vulnerabilities. An increase in short-term interest rates will trigger a more realistic evaluation of asset and collateral values, income flows, and thus risks. This will curtail the extent of leverage created by banks and capital markets and keep asset managers from crowding into risky assets. The effects of monetary policy are all-pervasive, and cannot be easily circumvented. 19 This approach, if formalised, amounts to augmenting the Taylor rule with an additional term to capture deviations in financial variables from their equilibrium levels.3 If financial market imbalances are growing, ceteris paribus, monetary policy should be tightened, even if it causes further deviations in output from potential in the short term. This approach does not preclude the need for robust financial regulation and supervision. But the key is to get the price of money right, to encourage a more realistic perception and tolerance of risks. 20 While no central bank currently implements monetary policy in this way, the concept behind the approach may not be as abstract as it seems.
Dear CEO letter 'International banks active in the UK: 2022 priorities' 3. Critical third parties to the finance sector: policy statement 4. Climate capital − speech by Sam Woods | Bank of England 5. Climate-related financial risk management and the role of capital requirements 6. Enhancing banks' and insurers approaches to managing the financial risks from climate change

To achieve this, it is key that commercial banks are involved in the transmission of such funds. In addition, money transfer companies like Western Union and Money Gram have played a significant role in transferring remittances. Their wide geographical extension throughout the country covering many rural areas has complemented adequately the rather slow expansion of the banking sector in facilitating money transfers. The recent development of the payment  BIS Review 2/2010  1  system in Zambia has also played a key role in the movement of funds through official means. Nevertheless, unofficial flows still remain high signifying a business opportunity for banks. However, banks and other financial institutions, despite being safer, are perceived to be more expensive than the alternative unofficial means to the point of inducing many people in diaspora to stick to unofficial means. It is therefore important for banks to be mindful of their cost structures for such services. In this regard, the Bank of Zambia welcomes the introduction of the “Ecobank Rapid Transfer” and the “Non-Resident African Account which we have been informed will be lower cost products. This will no doubt increase the level of access to financial services in the country as well as enhance the level of competition by increasing the number of participants in the market. We hope that the introduction of these lower cost products will push the transfer commissions in this market downwards.
But I do not think that problems involving unwise exposure to HLIs can fairly be blamed on the fact that many of these entities are chartered offshore. To be sure, the due diligence review that banks make for every customer should encompass the customer’s place of incorporation and its ramifications. Currently, I know of no comprehensive direct regulation of hedge funds in any of the G-7 countries. There are, however, aspects of hedge fund activities, such as commodities and futures trading, that are subject to regulatory oversight. I do not believe that it would be easy to develop a workable approach to the direct oversight of hedge funds. The reality is that imposing direct regulation on hedge fund entities that are chartered in the major industrialized countries would likely result in the movement of all operations to sites offshore. Direct regulation of hedge funds would require a high level of coordination involving the political, legislative, and judicial bodies of many countries. This is clearly beyond the jurisdiction of most banking supervisors. As bank supervisors, we have opted for a strategy that will, I believe, bring substantial nearterm results. Our approach to improving the financial system’s interactions with HLIs is to focus quickly and aggressively on the decisions by banks that could create excessive leverage or imprudent credit exposure. Perhaps our strategy can be termed “indirect”, but I am reasonably confident that it will succeed.

Conclusion Chairman Roukema, I thank you and your colleagues for the opportunity to explain more about the international efforts that address financial institutions’ dealings with hedge funds. I promised quick and decisive action on the events that were so fresh in our minds when I testified before you and other members of the House Banking Committee last fall. I hope you agree that we have made real progress at the Basle Committee level and in the supervisory developments you will hear about in Governor Meyer’s and Deputy Comptroller Brosnan’s testimony. 5  BIS Review 37/1999
Rather, it encourages combining these new technologies with more traditional measures and advocates establishing a sound shared vision as a first step in the laying of the necessary foundations.10 This implies that to really achieve a profound transformation, an ambitious range of actions is required, beyond the mere operational or technical aspects, like the development of international guidelines, improvement of surveillance practices or the removal of obstacles to the exchange of data, just to name a few. Nevertheless, the importance of digital technology in this context should not be underplayed, even though its full potential may only be realised in the long run. Indeed, it is worth mentioning that a number of the enhancements foreseen as part of this action plan  7  “Enhancing Cross-border Payments: Stage 1 report to the G20”, Financial Stability Board, April 2020. [https://www.fsb.org/wp-content/uploads/P090420-1.pdf] 8  “Enhancing cross-border payments: building blocks of a global roadmap: Stage 2 report to the G20”, Committee on Payments and Market Infrastructures, CPMI Papers, No 193, July 2020. [https://www.bis.org/cpmi/publ/d193.pdf] 9  See footnote 8. 10  Indeed, one such measure is devoted to the potential issuance of a CBDC/stablecoins. This underlines my key message, i.e. that emerging technologies offer us an opportunity to address old problems in novel and, eventually, more effective ways. 5  are ultimately designed to help knock down some of the existing barriers to the emergence of new cross-border payment infrastructures and arrangements. Conclusion I would like to conclude by sharing some final thoughts with you.

Honoured guests: I have spent considerable time on economic developments and prospects, monetary policy, and the capital controls, as these are the topics of most importance to the Central Bank at present. But as the Minister of Economic Affairs said in his speech today, we are faced with formulating long-term policy concerning our currency, our monetary policy framework, our financial system structure, and the substance and institutional framework for our financial stability policy. Other opportunities to discuss the substance of these matters will present themselves in coming months. I would like to mention two points in the context, however. The first is that we must carry out these tasks very carefully and make good use of the time that we have. Some issues are more urgent than others, but in some areas the discourse is far from being fully developed, and the topics are in a state of flux in the international arena. This applies, for example, to the subject of how and to what extent separation is achieved between the financial system infrastructure and support systems that the Government will always try to keep functioning – such as payment intermediation and general depositors’ access to their bank accounts – and leveraged speculation on the part of the banks’ owners and customers. It also applies, but to a smaller degree, to the structure for monitoring and responses to risk in the financial system as a whole.
However, these challenges cannot be an excuse for inaction. Recent experience strongly suggests that asset bubbles exist and that their collapse can be very damaging to the financial system and the macroeconomy. In my view, a proactive approach is appropriate when three conditions are satisfied: First, circumstances should suggest that there is a meaningful risk of a future asset price crash that could threaten financial stability. Second, we have identified tools that might have a reasonable chance of success in averting such an outcome. Third, we are reasonably confident that the costs of using the tools are likely to be outweighed by the benefits from averting the prospective crash. When these three conditions are satisfied, we should be willing to act. Thank you for your kind attention. 12  Adrian, Tobias, Arturo Estrella, and Hyun Song Shin. 2010. Monetary Cycles, Financial Cycles, and the Business Cycle. Federal Reserve Bank of New York Staff Reports 421. 8  BIS Review 43/2010

These include the two episodes of bird flu that have affected production and exports of poultry, and the uncertainty linked to the situations in the south which has importantly affected consumer confidence and business sentiment. So, for the most part, the performance of the Thai economy this year is essentially a story of how the domestic economy has been adjusting to the risks that emerged. This includes adjustments in the domestic financial markets and the real economy, as well as the implications for economic and financial stability. Let me go through each of these points in turn. As for the domestic financial markets, the adjustment has been led by the repricing of financial assets that has been underway since the second quarter. Yields on long bonds have been rising. Equity prices have declined. There have been some outflows of short - term capital, and the Baht has weakened from last year. In all, the adjustment has been smooth and orderly, and has benefited from the flexible market mechanism that underpins the movements of the economy’s key prices. And for the real economy, the adjustment has been accompanied by a moderation in growth in the first quarter to 6.5 percent, led by the slowdown in agriculture because of drought and the bird flu. Output of manufacturing and services, however, has continued to expand robustly.
No other rules for convergence should apply to the new euro adopters than those that have applied to present euro area participants or that would have applied to Sweden if we had voted “yes” to adopting the euro. Indeed, early euro adoption may be entirely beneficial for those new member states that have sufficiently stable and flexible economies and that have followed a course of fiscal prudence for a long time, just as I personally would have considered it beneficial for Sweden had we joined in 2006. Rather, it is in the euro adopters’ own interests to independently consider the risks. Countries that have used exchange rate flexibility should not rush into a system of fixed exchange rates before the conditions are right. If you have not already achieved fiscal discipline, do not enter ERM II nor opt for early euro adoption as leverage on the politicians to bring about such discipline. It is not only a matter of meeting the 3 per cent convergence criterion but also of reaching a maturity in fiscal policy that includes a transparent and predictable fiscal framework with sufficient room for manoeuvre for stabilisation policy. The road to the euro may otherwise become very rocky, and if the euro is eventually adopted, the trade-off between fiscal rectitude and stabilisation needs may become a recurring problem. My advice would be to put your house in order first, and only after that enter ERM II and begin a quick process of euro adoption.

While striving for economic growth, we must not forget that inclusive growth is a prerequisite for sustainable development. I could not agree more with the United Nations’ 2030 agenda for sustainable development that “no one should be left behind”6. Thus, various measures to promote financial inclusion have been implemented and many more are in the pipeline, to ensure that everyone has access to financial services at fair prices. More importantly, empowering people with financial literacy and financial planning capability is an important element of inclusive growth. Ladies and gentlemen, Sustainable economic growth requires concerted effort from all parties involved. Initiatives from the banking sector alone will not be sufficient. The capital market and exchange can and should play an important role. I am very pleased to see that the agenda of this year’s WFE conference is well in line with the aforementioned three imperatives. It is encouraging that the exchange industry is working together to find meaningful ways to boost productivity through fostering growth and embracing new technology; build immunity from mitigating emerging risks and building resilience; and promote inclusivity via increasing retail investor participation. WFE has shown, once again, its commitment to support the development of fair and efficient markets, embracing the role of exchanges to facilitate the efficient allocation of resources and thus promote the real economy and the well-being of the people at large. Ladies and Gentlemen, Our world is rapidly changing.