samchain/econo-pairs-v1 huggingface dataset:
4  BIS central bankers’ speeches  deploy their balance sheets for holding Treasury securities and other fixed-income assets allows them to serve as shock absorbers, particularly during times of volatility. Automated trading firms, on the other hand, typically do not end the day with significant long or short net exposure, despite the fact that they often conduct a substantial volume of gross transactions.9 As a result, automated trading firms do not face the same level of capital constraints under the traditional way of thinking about capital requirements.10 However, for the same reason, they also may not be capable of serving as shock absorbers during periods of heightened volatility, as traditional market makers are thought to do. Thus, while the market may have come to rely on automated trading firms as suppliers of very-short-term intraday liquidity, market participants still rely on traditional market makers with balance sheet capacity to supply liquidity over longer-term horizons. Electronic trading, including automated and high-frequency trading, has likely had a number of benefits. For one, technological advances have supported market efficiency by increasing the pace at which price discovery is disseminated across financial markets. It may also have reduced transaction costs, both through the economies of scale that large technology investments produce, and perhaps through the maintenance of narrow bid-offer spreads that automated market-making arguably makes more likely.

Traditional broker-dealers generally carry net long or short positions in Treasury securities from one day to another, an activity that requires capital. Dealers hold Treasuries for a variety of reasons, including to support the liquidity needs of their customers, to hedge exposure in other fixed-income products, and to meet their obligations as primary dealers to participate in U.S. Treasury auctions and the Federal Reserve’s open market operations. Many argue that the ability and willingness of dealers to  7  A CLOB protocol aggregates all executable bids and offers across participating liquidity providers in a single order book that is available to all market participants. In a liquid market, the continuous visibility of quotes and the interaction of multiple bids and offers are likely to enhance the price discovery process and market transparency. In contrast, a request-for-quote protocol, where a request for liquidity typically is submitted to only a limited set of providers, by its nature imposes a degree of market segmentation that may impede the price discovery process as compared with a CLOB protocol, but is arguably better suited to handle large block trades and illiquid securities. 8  Momentum detection is a strategy that attempts to predict short-run price changes based on patterns in realtime market data. Statistical arbitrage is a trading strategy that typically relies on identifying mean reversion from historical relative pricing relationships between correlated assets. Spread trading seeks to profit from a simultaneous purchase and sale of two closely related fixed-income assets.
The quality of the indicators and the assessment of investments will further improve as more and better data sources become available. 5  See ESMA (2023). Progress Report on Greenwashing. May. 5  Several regulatory initiatives in the European Union will make new data available as a result of new climate and sustainability reporting requirements for financial and non-financial institutions. Currently we have the Sustainable Finance Disclosure Regulation (SFDR), that sets mandatory environmental, social and governance (ESG) disclosure obligations for financial markets participants, and the Corporate Sustainability Reporting Directive (CSRD). With regard to the latter, the European Financial Reporting Advisory Group (EFRAG) is working on the details of the thematic standards for collecting information on ESG aspects, trying to reconcile CSRD with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and the work of the International Sustainability Standards Board (ISSB). As you know the TCFD issued a set of recommendations to disclose climate-related risks and opportunities, grouped into four categories: i) governance, ii) strategy, iii) risk management and iv) metrics and targets, but again they are voluntary. The ISSB is working on a global framework for sustainability but it has a different approach from EFRAG. For example, the ISSB considers single materiality while EFRAG considers double materiality. As you can see we have an alphabet soup to negotiate in the drive for transparency. In reality, there is as yet no global standard for disclosure, and it will take several years to achieve a complete framework.

The main characteristics proposed by the European Commission are: - Taxonomy alignment: meaning that the funds raised by the bond should be allocated to projects that are aligned with the EU taxonomy. - Transparency as to how bond proceeds are allocated, through detailed reporting requirements. - External review: all European green bonds must be checked by an external reviewer to ensure compliance with regulations and taxonomy alignment of the funded projects, and,  2  See ECB (2023). Towards climate-related statistical indicators. Statistics Committee of the European System of Central Banks. January. 3  - Supervision by the European Securities Markets Authority (ESMA) of the reviewers. This means that external reviewers providing services to issuers of European green bonds must be registered with and supervised by ESMA. The European Council and the European Parliament have this year reached a provisional agreement on the creation of this European Green Bonds Standard. Pending the final text, a very important element of the proposal is that the standard will be voluntary. The European Central Bank issued an opinion in 2021 on the proposal for a regulation on European green bonds,3 which it welcomed. Regarding its voluntary nature, the ECB considered that, in the short term, a strictly mandatory standard might lead to divestment from non-taxonomy-aligned green bonds and a sudden drop in Union-based green bond issuance.
It has come to symbolize our commitment to collaboration and consultation within the SADC Committee of Central Bank Governors (CCBG) and annually marks our contribution to the process of regional economic co-operation and integration. It is in this light that the Bank of Zambia applauds the favourable response from all central banks, individuals and other institutions represented here for allowing their members of staff to attend this event. As Bank of Zambia, we believe this event provides an excellent opportunity for exchanging views and sharing ideas in improving our national payment arrangements to foster economic growth and integration. Ladies and Gentlemen, lessons from the development of payment systems in the European Union and the United States of America provide a useful guide for emerging market economies such as ours. That be as it may, recent technological advancements and developments in China and India are also instructive as they glaringly indicate that it is possible to leap frog some of the historical development experiences of these major industrialized economies. However, it is without a doubt that this will require the concerted efforts and commitment of all those involved in the transformation of national payment systems to stay the course as challenges are abound. For instance, it is quite clear that consumer demand for payment services largely outstrip supply and more work needs to go into improving the outreach, efficiency and pricing of existing payment arrangements.

These investments were, of course, driven by a series of important changes in law and regulation, but they also reflect a rational response by the institutions themselves to the financial and reputational damage associated with some of the earlier weaknesses. The progress achieved in internal control regimes has of course come with some costs. Many of these costs can be measured in dollars, but others, such as management attention and the uncertainty induced by greater vulnerability to enforcement action and litigation, are more difficult to measure. Despite the difficulty of adding up all these costs, it is hard to challenge the widespread view that they have been quite substantial. But the relevant metric is not merely their magnitude, but how they compare to the magnitude of the resulting gains. There is no straightforward way to make this assessment, but today I want to offer some perspectives on our continued efforts to balance critical financial stability objectives with the need to foster and encourage the innovation and dynamism that is such a central part of the U.S. financial system. I’ll begin with the observation that profitability measures suggest that the business of financial intermediation is reasonably healthy, despite the costs induced by changes in the regulatory environment. Part of this reflects the reduction in credit costs and increased macroeconomic stability of the past several years. The financial performance of the well-run U.S. financial institutions seems to compare favorably to that of their peers in other markets.
Mr Latter gives an overview of the current monetary policy stance of Hong Kong Address by Mr Tony Latter, a Deputy Chief Executive of the Hong Kong Monetary Authority, at the CLSA Investors’ Forum in Hong Kong on 17 May 1999. I should like to say a few words about the present stance of monetary policy in Hong Kong and its relation to the broader state of the economy. Hong Kong has a fixed exchange rate against the US dollar. The pros and cons continue to be a focus of debate in some quarters, but I don’t intend to dig over that ground yet again today. Suffice it to say that over the past fifteen years Hong Kong has enjoyed, on balance, remarkable prosperity. I happen to think that the visible and trusted monetary discipline of the exchange rate link has been a decisive contributory factor to that prosperity. Of course, one cannot deny that there is some association between the strength of the exchange rate and the level of interest rates on the one hand, and the current recession on the other, but I would caution against adopting too short-term a horizon when drawing conclusions, and I would also suggest that some of the adjustment which we have experienced - for example in property prices - was both necessary and somewhat overdue.

However, I suspect that, while that may well have been the case a little while ago, we are now in a period where decisions are being more influenced by confidence factors relating to the broader economic situation than by interest rates per se, although interest rates do of course remain important. 3  BIS Review 54/1999  I have pointed to elements of the present economic conjuncture - namely, competitiveness and interest rates - where the position may not be so bleak as painted by some. But I do not deny that we face tough challenges and I note that the consensus for the immediate outlook is for no more than an unspectacular recovery. I have no brief today to try to talk up our economic prospects. My wish is rather to contribute analytically to the discussion of those prospects. The only certainty is that the future is always uncertain. BIS Review 54/1999  4
Uncertainty prevails over exactly when and how Brexit will take place; we can expect recurrent bouts of market volatility in the months ahead. Central banks across the world have said they will do what it takes to safeguard financial stability and maintain smooth functioning of their markets. We expect the global financial system to stay resilient, given ample liquidity and the generally stronger balance sheets of banks. But the UK economy is expected to take a hit and there will be some fallout on the EU. Uncertainty, especially over the terms of the UK’s exit from the EU and its future access to EU markets, will weigh on business confidence and investment spending. Growth in the EU will be weighed down by Brexit, on account of its significant trade and financial linkages with the UK. This in turn is likely to have a small dampening effect on global growth. The political and social implications of Brexit could have more significant economic consequences over the medium to long term. But it is too early to tell what these implications might be. There are several key elections taking place in Europe next year. They will determine the ability of governments to maintain support for structural reforms as well as for the European project. Destabilisation of politics in Europe could impact global markets and global growth. The US is expected to stay on a moderate expansion path. The consensus growth forecast for 2016 is 1.9%.

The asset management industry continued to grow well last year, with assets under management posting a 9% increase to reach $ trillion. Singapore will introduce a new corporate and regulatory framework to encourage fund domiciliation in Singapore and build up fund administration capabilities. MAS is working closely with the private equity/venture capital (PE/VC) industry to see how we can enhance financing for growth-stage companies, both local and from around the region. PE/VC financing has been increasing at a compound annual growth rate of 30% over the last 5 years. In the Renminbi (RMB) market, we are expanding two-way flows between China and Singapore. Besides Suzhou and Tianjin, Singapore has established cross-border RMB initiatives with the rapidly growing city of Chongqing. Corporates in Chongqing that issue RMB bonds in Singapore can fully repatriate the proceeds raised for infrastructure and other development projects in western China. We are witnessing a healthy volume of transactions now. In foreign exchange trading, we are working on electronification of the market. Digitisation, competition, and consolidation are rapidly transforming the global foreign  BIS central bankers’ speeches  7  exchange (FX) landscape. MAS’ focus is to position Singapore as Asia’s e-trading hub to build on our FX centre, which is already the largest in Asia. We are working with FIs and FX trading platforms to build relevant infrastructure such as matching and pricing engines that will anchor liquidity in our marketplace. In infrastructure finance, the focus now is on enabling capital recycling.
We can choose to store our savings in the form of cash or in a current account. The price we pay is the return other alternatives would have provided. Bank deposits and bonds are examples of investments that provide a reliable return – interest income. If we choose to store money, we lose this income. But in contrast to bonds, money can be used directly to purchase goods and services. Interest is therefore also the price we pay in order to have liquid holdings. The interest rate is also used as an instrument in economic policy. Setting the interest rate to achieve a monetary policy objective, often price stability or low and stable inflation, is usually the responsibility of the central bank. The central bank sets a very short-term nominal interest rate. In Norway, this is the interest rate on banks’ overnight deposits in Norges Bank, the sight deposit rate. This rate determines the very short interest rates in the money market with maturities from one day upwards, normally up to Norges Bank’s next monetary policy meeting. Longer-term rates are determined by expectations concerning Norges Bank’s use of instruments in the future and by the degree of confidence in monetary policy. The real interest rate, that is the nominal interest rate minus expected inflation, is the rate that influences decisions concerning saving and investment. BIS Review 46/2003  1  The interest rate influences inflation indirectly via domestic demand for goods and services and via its effect on the exchange rate.

First, I would underscore the importance of good corporate governance, the basic elements of which include: •  independent and competent outside directors;  •  capable and experienced management;  •  a coherent corporate strategy and business plan; and  •  clear lines of responsibility and accountability. Together, these elements contribute to an overall operating process conducive to long-term health and prosperity. A tightly run ship with a disciplined crew led by an experienced and competent cadre of officers is far better able to survive a long journey that will inevitably confront sudden storms. Closely related to good corporate governance and critical to any banking institution’s well-being is a rigorous internal control apparatus. Of course, effective internal control systems have always been centrally important to sound banking. This point becomes clear if we consider for a moment their basic purposes: •  to provide reasonable assurance that the bank’s and its customers’ assets are safeguarded, that its information is timely and reliable, and that errors and irregularities are discovered and corrected promptly;  •  to promote the bank’s operational efficiency; and  •  to ensure compliance with managerial policies, laws, regulations and sound fiduciary principles. With these purposes in mind, it is clear that the success of any banking organization depends on the effectiveness of its internal control apparatus. And never has this been more true than today.
The Governing Council of the ECB has decided to support, in principle, the activities pertaining to the introduction of a STEP label, which would acknowledge adoption of the standards, for the first two years after its launch. It has also decided to produce and publish STEP yield indices as well as statistics on volumes on an ongoing basis. The ECB would like to strongly encourage similar initiatives to promote financial integration in Europe. Continuing my assessment of the wholesale markets, I will briefly discuss the equity market. Recent empirical evidence shows that the degree of integration has increased here. For example, the so-called “home bias” in the equity holdings of investment and pension funds has decreased substantially over the time. Overall, however, this market segment is still one of the least integrated. As a final comment on the wholesale markets, I would like to say a few words on the development of new credit markets. Sometimes, these markets are set up in a pan-European context right from the start – we might say they are “born integrated”. One example of this is the European market for synthetic collateralised debt obligations. This development is encouraging. However, the existence of cross-border activity, with its impact on prices and volumes, does not always signal the absence of hurdles and the achievement of full integration. Factors of segmentation may still exist, but can be overcome by innovative instruments.

The first is that, five years on, very limited progress has been made in resolving one of the fundamental problems that helped make the crisis so devastating for so many economies: a deficient global financial architecture, which has been outgrown by the markets that use it. There have indeed been some reforms both internationally and in individual economies, and there is a much greater alertness to the threats to stability posed by volatile, high-velocity international capital flows. But much still remains to be done, and as capital flows get bigger, the risk of further crisis remains. Paradoxically, the risks are increased by a false sense of security brought on by two or three years’ absence of the kind of contagion that shook so many parts of the world in the nineties. The second observation is that, in the absence of international solutions, a number of economies in the region have adopted local approaches to the problem. Some have chosen to go slow or even step back from financial liberalisation through introducing or tightening restrictions and controls. While understandable - and in some cases effective as short-term measures - such an approach is regrettable because it shuts off many of the benefits, as well as the dangers, of globalisation. In Hong Kong, where controls of this kind are not practical because of the realisation that global links supply our lifeblood, we have taken a different approach. We have chosen to enhance policy credibility through greater transparency and through strengthening and tightening up our rule-based monetary system.
These include reverse repo transactions with dealers and other counterparties, auctions of term deposits for banks, or securities sales from the Fed’s portfolio. A related concern is whether the Federal Reserve will be able to act sufficiently fast once it determines that it is time to raise the IOER. This concern reflects the view that the excess reserves sitting on banks’ balance sheets are essentially “dry tinder” that could quickly fuel excessive credit creation and put the Fed behind the curve in tightening monetary policy. In terms of imagery, this concern seems compelling – the banks sitting on piles of money that could be used to extend credit on a moment’s notice. However, this reasoning ignores a very important point. Banks have always had the ability to expand credit whenever they like. They didn’t need a pile of “dry tinder” in the form of excess reserves to do so. That is because the Federal Reserve’s standard operating procedure for several decades has been a commitment to supply sufficient reserves to keep the fed funds rate at its target. If banks wanted to expand credit that would drive up the demand for reserves, the Fed would automatically meet that demand by supplying additional reserves as needed to maintain the fed funds rate at its target rate.

Similarly, the current unemployment rate of 9 percent is well above most estimates of the nonaccelerating inflation rate of unemployment (NAIRU) – the lowest rate of unemployment consistent with sustained price stability. In the pre-crisis period, the NAIRU was likely in the region of 4.5 percent to 5 percent. There are several reasons why the NAIRU may now be higher. First, extended unemployment compensation benefits create incentives for prospective workers to keep looking for better jobs rather than accept less attractive positions. Empirical work on this subject suggests that the NAIRU might currently be roughly 1 percentage point higher because of this factor. However, this effect will only persist for as long as the extended benefits are in place. Second, the rise in unemployment has been associated with an increase in the degree of mismatch between unemployed workers’ job skills and available job vacancies. Some cite the upward shift in the Beveridge curve, which illustrates the relationship between unemployment and job vacancies (Chart 22), as evidence of this effect. Third, the longer that people are unemployed, the more their skills tend to atrophy, which makes it harder for them to become employed in the future. For unemployed workers, the median duration of unemployment has climbed and a growing proportion of the unemployed has been jobless for long periods (Chart 23).