samchain/econo-pairs-v1 huggingface dataset:
Accordingly, these structural impediments have caused the natural rate of unemployment to increase. The structural impediments scenario sounds plausible to many, but I do not find it compelling. As best I can tell, it rests on lots of conjecture about economic forces and outcomes that are not confirmed by the evidence at hand. As an economist seeking firm quantitative explanations, I am not aware of any rigorously studied economic models1 that both match critically important time-series properties of the data and support the notion that today’s high unemployment rate arises from special structural impediments.2 Even generous estimates of the impact of structural reallocation and other factors on today’s equilibrium, or the so-called natural rate of unemployment, do not come anywhere near the current 9 percent rate of unemployment. Nevertheless suppose this scenario were true. In this case the role for additional monetary accommodation is modest at best: the economy faces a supply constraint that monetary policy simply cannot address. Accordingly, those subscribing to this view think that additional easing would likely raise inflation without having a sizable impact on unemployment. In this scenario, our running a more accommodative monetary policy potentially risks repeating the stagflation of the 1970s. At that time, the Fed did not understand that the changing structure of the economy had caused the natural rate of unemployment to rise. In an effort to reduce the unemployment rate, it provided too much accommodation that only served to raise inflation and inflation expectations.

Dear Brothers, A review of the topics addressed on the first day of this conference by the distinguished speakers shows that they touched upon important issues and gave a future vision of housing in the Kingdom, and how to benefit from the experiences of different countries in this area. Today will be an extension of those topics that are directly related to housing finance. In general, I find that the conference broadly covers all aspects of housing finance in the Kingdom. In conclusion, I thank the audience and the organizers of this conference, and wish you all success in your deliberations. 2  BIS Review 14/2007
Furthermore, most banks will have to meet the next challenge of fine-tuning their risk management and calculating their economic capital in the coming months, pursuant to Pillar 2. In sum, these regulatory, economic and financial factors are prompting banks to change the way they manage their risks, meaning that supervisors must be more flexible and more watchful. To clarify these considerations, I would like briefly to address two issues: 1. The results posted by French banks in 2006 are good, but they are not without vulnerabilities. 2. French banks are currently in the final straight as regards the implementation of the new regulation. As the banking supervisor, our role is to support them during this transitional period and to ensure together that the reforms are carried out properly. French banks’ 2006 results are good, but not without vulnerabilities Like the majority of leading European banks, French credit institutions reported good results for 2006, in line with the previous three years. For the three main banking groups under IFRS, the net banking income grew nearly 19 per cent, more than in 2005. In all, the aggregate net income of the French  BIS Review 75/2007  1  banking system, under French GAAPS, amounts to nearly € billion. This reflects a substantial contribution from foreign subsidiaries and from non-banking business, especially insurance. Moreover, most large French banks made major acquisitions outside their home market in 2006, particularly in regions with strong growth potential.

Under section 24(1) read together with section 25 of the Central Bank of Malaysia Act 1958 (Part III of this Act is still in force), such defaced or stained currency notes are no longer legal tender and therefore should be rejected by members of the public. Bank Negara has issued a clear guideline on how financial institutions and the general public should treat and handle ink stained currency notes. Read together with the Panel Code (S411) it is an offence to dishonestly receive or retain any stolen property with knowledge or reasons to believe that it is a stolen. Therefore, it is an offence to retain or hold dye-stained currency notes which mostly are involved in a robbery. To help the public, in  2  BIS central bankers’ speeches  identifying stained banknotes, we shall conduct awareness program to educate the public on this matter. It is with great pleasure that I launch the My Ringgit apps and the use of the ink staining technology for our ATMS. See also: Frequently Asked Questions. BIS central bankers’ speeches  3
The fact that monetary policy decisions are often taken by a committee is a complicating circumstance in this context. 15 See for instance Alsterlind et al. (2015) for a more detailed description. 16 See, for instance, Weale and Wiedalek (2016) and De Rezende (2017). 17 See the article “The Riksbank’s strategy for a gradual normalisation of monetary policy” in Sveriges Riksbank (2017b). 8 [24]  also tries to affect credit risk-free interest rates, via the premium channel, although these are interest rates with both short and long maturities. 18 Despite the measure being termed “unconventional”, one can say that this type of monetary policy intervention followed a standard way of thinking in that one limits oneself to trying to have an effect on risk-free interest rates, the “ground plate” for interest rate setting in the economy. The idea is, as when adjusting the repo rate, that the effects will spread to other, higher risk interest rates. However, it is of course also possible, although the Riksbank has not yet done so, to buy other financial assets than government bonds. The Federal Reserve, the European Central Bank, the Bank of England and the Bank of Japan, for instance, have also purchased different types of commercial securities, including mortgage bonds and corporate bonds. Unlike purchases of government securities, this often entails a direct intervention in higher-risk assets.

Three types of factors lie behind this increase in expenditure. The first is demographic. An increase in the retired population as a proportion of the working age population — which is known as the dependency ratio – automatically generates an increase in spending on pensions relative to GDP. So, in the 2007-2015 period, the dependency ratio rose by 3.8 pp to 31% of the working age population at the end of 2015. The second factor is related to labour market developments: the lower the rate of employment in the economy, the higher the pension spending as a proportion of GDP, and vice versa. The economic crisis led to a most significant rise in unemployment which has only been reversed, in part, in the past three years: over the 2007-2015 period as a whole, the employment rate declined by 8.9 pp. Finally, the third factor pertains to the ratio of the average pension to the average wage in the economy, which is known as the replacement rate. This rate increased by 4.8 pp from 2007 to 2015, as average pensions outpaced wages, as a result of which, in 2015, the average pension was equivalent to almost 44% of the average wage. Behind this result are aspects such as pension indexation decisions or the so-called substitution effect which arises from the fact that new entrants into the system have pensions which, on average, are higher than the pensions of those leaving the system.
Some incidents during the recent market turbulence revealed issues around members’ processing capacity, underlining the value in member-level testing to ensure that participants can always support the delivery of the network benefits from the smooth operation of the infrastructure. 6  BIS Review 130/2007  (ii)  Ensure effective international cooperation in oversight and operations, and coordination in risk assessment activities  44 The second main challenge is to allow market participants to reap the benefits of globalisation, while ensuring that the risks are adequately controlled. An extended and highly connected network can simultaneously be both robust and fragile: robust, because risks may be more effectively shared and dispersed across the system; fragile in that major risks can flow more rapidly through the system. 45 Naturally, market participants have been pushing hard for the removal of obstacles to efficient cross-border settlement and barriers to the seamless cross-currency management of liquidity. Central banks have been urged to consider accepting foreign collateral or implementing other arrangements to facilitate cross-currency liquidity management. Some already do so – the Bank of England, for instance, routinely accepts euro-denominated collateral in its operations – and a recent report from the CPSS encouraged other central banks to consider accepting foreign collateral, at least in emergency circumstances. The Eurosystem has recently begun to explore new options. 46 Provision of cross-border collateral arrangements may entail a high degree of coordination and cooperation between central banks internationally, for instance in opening custody and correspondent accounts, and sharing information on local infrastructures and market practices.

These changes present several challenges for central banks and regulators: •  We need to establish and apply consistent criteria for the scope of oversight, in order to maintain a level regulatory playing field;  •  We need to take full account of new interdependencies between systems when assessing financial stability risks at a national and international level;  •  We need to work more closely together in risk assessment and oversight and ensure that cross-border operational arrangements are robust ;  •  We need to ensure that financial stability risks posed by financial firms operating key infrastructure functions are adequately captured in their regulation. 49 Meeting these challenges will deliver a robust, resilient financial infrastructure, which the global financial system and the global economy depend upon. BIS Review 130/2007  7
Risks from leverage: how did a small corner of the pensions industry threaten financial stability? − speech by Sarah Breeden Given at ISDA & AIMA  Published on 07 November 2022  Sarah Breeden explains how leverage in non-banks can pose risks to financial stability and so to the economy as a whole. She sets what needs to be done by participants, by regulators and by financial stability authorities - to ensure those risks to financial stability are reduced. Speech On the afternoon of 28 September, I found myself in a rather unusual position: having to explain to journalists why a part of the pensions industry, unheard of to most of their readers, had posed such a large threat to financial stability that it warranted intervention in the gilt market from the Bank of England. Financial markets globally had been volatile for months. But in the days leading up to that fateful Wednesday and following the announcement of the Government’s growth plan on 23 September, long-dated gilt yields in particular had moved with extraordinary and unprecedented scale and speed. Now volatility itself does not warrant Bank of England intervention. Indeed, it’s essential that market prices are allowed to adjust to changes in their fundamental determinants efficiently and without distortion. However, some liability-driven investment (LDI) funds were creating an amplification mechanism in the long-end of the gilt market through which price falls had the potential to trigger forced selling and thereby become self-reinforcing.

In the case of Archegos, for example, individual counterparties were not sighted on the total size of the firms’ sizeable and concentrated swap positions, meaning they had imperfect information on which to manage counterparty credit risk. In fact, when margin was called as prices moved against Archegos in March 2021, the firm was forced to liquidate its concentrated positions, further amplifying adverse price movements, through the market channel I just described. The end result was that Archegos could not meet all of its margin calls, and its default left its bank-affiliated prime brokers sharing around $ billion in counterparty credit losses. Just as with LTCM in the late-1990s, the Archegos case highlights how financial strains on leveraged non-bank investors can transmit directly to the large banks at the core of the financial system. And it highlights again that if leveraged investors use several counterparties, overall leverage is hidden from each of them. Banks and CCPs may therefore need to have access to more information on the risk positions and balance sheets of their leveraged counterparties if they to understand fully concentrated and hidden exposures. A second lesson for banks’ and CCPs’ counterparty credit risk management from recent extraordinary events is that the past is not always a good guide for the future. And so they need to be creative in identifying stress scenarios that best illustrate their counterparties’ credit risk and so the conditions under which margin calls might not be met.
Just know that our task - analyzing the results of the exercise with data from nearly 50 countries and over 250 institutions - is quite a challenge as well. I expect that Patricia Jackson of the Bank of England, who has led that effort, will comment on the QIS results later on today. In his remarks, Sir Andrew shared some observations on the objectives of the New Basel Accord. My focus will be on how we expect to achieve some of those goals, through addressing various challenges that lie ahead to implementing the New Accord. First, I will offer some broad observations on implementation issues, including some thoughts on the challenges of applying it across jurisdictions. Then, I will get into more specific detail on the preparations banks and supervisors are making to implement the new framework. I will be drawing on the United States’ experience to highlight the kinds of preparations that will be needed generally. Implementation of the New Accord Overview As you know, the Basel Committee is quite close to finalizing the new capital framework after a number of years of work. Issuance of the next consultative paper will be a tremendously important step in getting a new approach in place. But as that step is taken, other critical actions must then occur - in particular rulemaking processes, and preparations by the supervisors and the industry for the New Accord.

I would first like to accentuate the widespread and laborious work carried out for many years, on both a national and international basis, to promote stability and prevent crises from arising, but without impairing the functioning of the markets. Experience shows that a necessary condition for avoiding crises is to pursue a fiscal and monetary policy that is aimed at creating stability and that inspires confidence. The common denominator for countries that have experienced financial crises is that the problems were based on mistakes in economic policy and deficiencies in regulatory frameworks. The financial market is often merely the messenger illustrating the fundamental problems. It is important that the choice of exchange rate regime is in line with the economic policy pursued and with the capacity of the economy to adapt. Countries that have experienced currency crises during the 1990s have had fixed, but adjustable, exchange rates. Today, therefore, an increasing number of countries choose to have either floating exchange rates with inflation targets, or completely fixed exchange rate regimes, such as currency boards. Experience also shows that it is necessary to have a general regulatory framework that is applied properly, and that contains norms and institutions, in order for both national and international financial markets to function well. Countries therefore cooperate in international organisations, such as the BIS, the central banks' organisation in Basel, to work together on producing norms for suitable regulations and norms in various fields important to financial stability.
In that respect, we need to look at what drove the demand for liquidity in the 2020 episode, whether there were unnecessary constraints in the supply of liquidity, and crucially whether there were amplification mechanisms that turned the flight for safety into the dash for cash. And to take action, where necessary, to avoid similar dynamics in future. This is the context in which to see the Financial Stability Board’s (FSB’s) programme of work on the March 2020 market turmoil. The first stage of this work, the ‘holistic review’ of the March market turmoil, was published in November 2020. The review analysed the dynamics at play in the non-bank financial intermediation (NBFI) sector and set in train further international work, on various vulnerabilities that were exposed. This work covers: money market funds, on which policy recommendations have been published; the liquidity demand on open-ended investment funds; the structure and drivers of liquidity in core bond markets during stress; USD cross-border funding and its interaction with emerging market economies; and the impact of margining practices, on which I will now focus. In order to assess the role played by margin, a group of senior representatives from central banks and market regulators was established, which I co-chair with Russ Behnam of the Commodity Futures Trading Commission (CFTC).

The rapid spread of the pandemic in March 2020 also led to wide, abrupt swings in financial markets. The global composite equity index fell by 20 percent in 22 days. However, markets recovered rapidly, and by the second quarter the GPFG had posted one of its best ever quarterly results. For the year as a whole, the GPFG’s investments posted an overall return of 10.9 percent before management costs. The return was 0.27 percentage point higher than the return on the benchmark index the GPFG’s performance is measured against. The Executive Board is pleased that a solid excess return was achieved in a turbulent year. The positive trend has continued, and the return on the GPFG in the first quarter of 2021 was 4 percent. The GPFG’s performance must be assessed over time. The Executive Board is satisfied that the return over time has also been good. The substantial market fluctuations in 2020 nevertheless serve as a reminder that the return on the GPFG may vary considerably. The GPFG’s equity allocation is the decision that has the greatest impact on the volatility of the fund’s return. The equity allocation is not specifically assessed in this year’s report to the Storting, but the Ministry has proposed a number of changes in the equities selected to be included in the benchmark index. Norges Bank has provided analyses and advice when requested by the Ministry.
This sounds like a difficult task to achieve but it is my conviction that it is better to begin a step towards this direction rather than waiting for it to happen in future. 2  BIS Review 9/2010  Mr Chairman, as I conclude, let me take this opportunity to guide the participants that discipline is key in accessing venture capital funds. It is common practice in Zambia for entrepreneurs to mis-apply funds obtained for capital purposes. Instead of growing businesses, we tend to use funds obtained as loans, for luxurious goods such as latest cars, suits etc. This results in business failures and thus non-performing loans for banks and thereby higher interest rates. It is also important to realise that not all projects can access venture capital funds. Only innovative, high quality and highly profitable projects may qualify for these funds. Therefore applicants of these funds should think outside the box and provide well researched project plans that meet international standards. In this regard it is key for project promoters to collaborate and pool resources as a team instead of the usual norm of going it alone. In addition, as we are all aware, small and medium sized enterprises form the engine of economic and social development as they generate employment, and are an ingredient to growth and international competitiveness. It is therefore imperative that this key sector rises to the challenge and creates wealth through innovative entrepreneurship.

Asset markets supported by an artificially low interest rate environment rather than economic fundamentals will skew resources allocation in society from expanding the productive sectors to pursuit of asset price appreciation. Such a shift will easily lead to investment mismatch, thereby eroding medium to long term productivity growth as well as growth potential of the economy. In addition, the more sizable and prolonged quantitative easing becomes, the more difficult and riskier will be the exit plan. Central banks should realise that there is not much they can do. In order to solve the structural imbalances built up in the past two decades, we must get to the bottom of the problem. Ladies and Gentlemen, up until 2008, the industrialised countries and various emerging economies had been enjoying a golden period of development which lasted for two to three decades. Income levels and living standards continued to rise. Some academics call this a period of “Great Moderation”. However, no one is sure why life during this period was so easy. Some say that this is due to technological and financial innovation of modern society, the so-called “paradigm shift”. We should now be awakened to the reality that this golden period was probably underpinned by little more than excessive debts, and is in fact unsustainable. If the major industrialised countries will have to undergo deleveraging in the foreseeable future, how will the global economy evolve?