samchain/econo-pairs-v1 huggingface dataset:
However, for financial systems to be stable, monetary policy must be consistent with the other aspects of economic policy, that is, fiscal policy and structural programmes. The policy mix must be well-balanced at the international as well as the domestic level. Placing too heavy a burden on monetary policy in terms of achieving the main economic and financial balances is detrimental to its effectiveness. In particular, it diminishes its ability to maintain and consolidate financial market stability. This concern underlies the implementation of the Growth and Stability Pact in Economic and Monetary Union. By obliging fiscal policies to commit to stability, the pact allows the fiscal buffers to fulfil their role as stabilisers. 5  BIS Review 85/2000  Lastly, one must also take into account the fact that, by their information and expectations, investors can penalise imbalances affecting the main world economies or diverging developments in different countries. To reduce this constraint, economic and monetary policies must be harmonised at the international level in order to achieve more balanced international financial relations. Second, prudential policies should try to reconcile efficiency and stability in financial markets I would like to insist on three objectives I feel are fundamental to promoting efficient and balanced financial systems. Supervisors’ first objective should be to monitor the soundness of financial institutions To do so, they must work at two levels. At the micro-prudential level, they must ensure that the restructuring of financial systems is well-balanced and that the merged institutions are healthy.

The standardisation of risk management methods and the resulting herd instinct on the part of market-dealers brings with it a number of disadvantages, such as liquidity shortages on certain market compartments, which lead to more volatile prices, credit rationing for certain borrowers and micro-financial contagion whereby “innocent victims” bear the brunt of imbalances stemming from other economies. Such risks have become greater with the development of over-the-counter derivatives markets, which are a potential source of instability for the overall financial system. Liabilities are generally financed with credit, they are based on asymmetric information and risks are concentrated on some of the largest global financial institutions. These institutions may also be tempted to take excessive risks when they come under pressure from heated competition and shareholders’ demands for value. Of course, the prudential authorities approve of high returns on equity, but systematically aiming for returns on equity of 15%, 20%, or more while world growth averages 3% to 5% could make institutions more vulnerable. Actually, the search for profitability should not induce institutions to resort to extreme gearing in which debt replaces capital, or distort portfolio structures by undue focus on high-yield financial assets which also entail a high degree of risk. Nor should it lead them to curtail operating costs excessively, thus reducing the resources devoted to internal control.
Maechler and Moser (2022) discuss the transition from Libor to SARON. We also remunerated reserves from January 2015 to September 2022. During this period, we paid negative interest on banks’ reserve holdings at the SNB. To reduce the burden for banks, we exempted reserves up to a bank-specific threshold from negative interest. Maechler and Moser (2020) discuss the SNB’s monetary policy implementation in the negative rate environment. Page 4/10  reserve requirement, so that the threshold generally does not match its reserve holdings. 9 As a result, there are two types of banks: those whose reserves exceed their thresholds, shown in the upper half, and those whose reserves are below their thresholds, shown in the lower half. The SNB now remunerates reserves up to the threshold, shown in dark blue, at the SNB policy rate, which is currently 0.5%. In contrast, the SNB remunerates reserve holdings that exceed the threshold, shown in light blue, at the SNB policy rate minus a discount. Currently, the interest rate on reserves above the threshold is 0%. For the remainder of this speech, we will refer to reserves above the threshold as ‘excess reserves’. Let us examine the banks with excess reserves more closely. As we just noted, part of their total reserves would be remunerated at 0%. These banks therefore have a strong incentive to lend some of their excess reserves to other banks, at an interest rate above 0%.

This is because our local currencies are generally correlated with each other. Also, there will be less reliance on currencies of advanced countries which last year account for over 85 percent of Thailand’s trade with Indonesia and Malaysia. 2  You may recall that earlier this year, Bank Negara Malaysia and the Bank of Thailand implemented a ringgitbaht arrangement in March as a pilot project. Since then, we have seen a noticeably narrower spread between the ringgit and the baht. Moreover, we have noted an increasing number of businesses applying this local currency scheme in their day-to-day business conduct. Today, I am very delighted that Bank Indonesia is carrying on this initiative by signing the MoUs with both Bank Negara Malaysia and the Bank of Thailand. I really hope that this scheme will continue to expand to other countries in the region. Ultimately, this would be one important step closer to having greater regional financial integration in ASEAN. On this note, may I invite Governor Agus to say a few words, and followed by Governor Muhammad Ibrahim. Thank you. 3
On the basis of the current level of oil prices and oil price futures, annual inflation rates  BIS Review 23/2007  1  are likely to fall during the spring and summer before rising again towards the end of the year and then most likely hovering again at around 2%. The new ECB staff macroeconomic projections foresee annual HICP inflation averaging between 1.5% and 2.1% in 2007 and between 1.4% and 2.6% in 2008. Compared with the December 2006 Eurosystem staff projections, the upper bound of the range projected for inflation in 2007 is somewhat lower, largely reflecting the fall in oil prices. By contrast, the projected range for inflation in 2008 is slightly higher, largely on account of the anticipated stronger economic growth, which could exert more intense pressure on factor utilisation and factor costs. In this context, let me remind you of the conditional nature of these projections, which are based on a series of technical assumptions, including market expectations for future short and long-term interest rates as well as for oil and nonenergy commodity prices. At the policy-relevant medium-term horizon, the outlook for price developments remains, in the Governing Council’s view, subject to upside risks. These relate to the possibility of renewed oil price increases and additional increases in administered prices and indirect taxes beyond those announced and decided thus far.

European Central Bank: Press conference – introductory statement Introductory statement by Mr Jean-Claude Trichet, President of the European Central Bank, Frankfurt am Main, 8 March 2007. *  *  *  Ladies and gentlemen, the Vice-President and I are very pleased to welcome you to today’s press conference. Let me report on the outcome of our meeting, which was also attended by Mr Steinbrück, President of the ECOFIN Council, and Commissioner Almunia. At today’s meeting, we decided to raise the key ECB interest rates by 25 basis points. This decision was taken in view of the upside risks to price stability over the medium term that we have identified through both our economic and monetary analyses. Today’s decision will contribute to ensuring that medium to longer-term inflation expectations in the euro area remain solidly anchored at levels consistent with price stability. Such anchoring is a prerequisite for monetary policy to make an ongoing contribution towards fostering sustainable economic growth and job creation in the euro area. After today’s increase, given the favourable economic environment, our monetary policy continues to be on the accommodative side, with the key ECB interest rates moderate, money and credit growth vigorous, and liquidity in the euro area ample by all plausible measures. Therefore, looking ahead, acting in a firm and timely manner to ensure price stability in the medium term is warranted. The Governing Council will monitor very closely all developments so that risks to price stability over the medium term do not materialise.
4. Conclusion  Above the central arch of this Court Room is a weather vane. Originally installed in 1805, it played a central role in the Bank’s management of a different type of uncertainty – meteorological. When the wind blew from the east, ships would be able to travel up the Thames, meaning London’s merchants would need credit to purchase the cargo. When it blew from the west, credit would need to be withdrawn. This Regency forecasting model helped the Bank of England to provide an anchor of stability. Today, while the economy is more complex and our models less reliable, the Bank has identified the clouds on the horizon and can see that the wind has now changed direction. 12  BIS central bankers’ speeches  Over the past few months, working closely with the Chancellor and with HM Treasury, we put in place contingency plans for the initial market shocks. They are working well. Over the coming weeks, the Bank will consider a host of other measures and policies to promote monetary and financial stability. In short, the Bank of England has a plan to achieve our objectives, and by doing so support growth, jobs and wages during a time of considerable uncertainty. Part of that plan is ruthless truth telling. And one uncomfortable truth is that there are limits to what the Bank of England can do. In particular, monetary policy cannot immediately or fully offset the economic implications of a large, negative shock.

There was over-investment in some sectors; much went into ambitious property development; and much went into financial assets, including short-term foreign currency claims, rather than into real assets. The hoped-for higher returns could not be maintained. Again with the benefit of hindsight, it is possible to identify a number of structural weaknesses in the mechanisms for financial resource allocation in the recipient countries. There was, for example, a general lack of reliable financial information, and a lack of transparency in relation to the financial position, of both public and private sectors. Complex and opaque links between government, financial institutions and non-financial companies made it difficult for outsiders to understand the real nature of their exposures. Financial markets were not well developed, leaving the system heavily dependent upon the banks. There was inadequate regulatory or supervisory oversight. BIS Review 49/1998  -2-  There was widespread, often informal, government influence over financial flows, which importantly also contributed to a perception that much of the borrowing was implicitly under-written by the government. The list could go on. The problem was compounded by the absence of any real perception of exchange rate risk. Borrowers were evidently confident that governments would maintain their exchange rate pegs against the dollar, even when the dollar itself began to strengthen, so that unhedged foreign currency debt, much of it at short-term, appeared to be a cheap alternative to domestic currency borrowing.
In the meantime, however, there are significant implications for emerging market economies, as global investors search for better returns – better than the near-zero rates they get on cash and treasury bills. With large amounts of liquidity now moving between markets, short-term shifts in investor sentiment leads to volatility in capital flows. We have seen how a shock in the European periphery can send money that was invested in emerging markets rushing back to the US or other safe havens. To be clear about it, there is a lot that is good about capital flows, including even short term flows. They add liquidity to markets, by bringing more buyers and sellers together. However, we know too that capital inflows can also be too much of a good thing. They can lead to asset prices, or exchange rates, becoming disconnected from fundamentals. And the sudden withdrawal of capital from emerging economies when investors switch from ‘risk on’ to ‘risk off’ in their portfolios can be destabilising. As I mentioned, the current global condition is unprecedented. The policy responses in the advanced countries too are without precedent. Globally therefore, we need some humility in understanding the benefits and costs of QE3 and easy monetary policies in the advanced countries. But it will be wise to strengthen our policy toolkits in Asia, so that we can deal with unpredictable and often excessive capital flows. There are some lessons that come out of our experiences in Asia and elsewhere, and policy responses that we can learn from each other.

More too is being done to boost linkages between our markets and economies. We have to pool liquidity across our markets, so as to add depth to the Asian capital market. An example is how the Malaysian stock exchange, Bursa Malaysia, the Singapore Exchange and the Stock Exchange of Thailand recently launched an ASEAN Trading Link. We are also cooperating to encourage financing for infrastructure projects in the region. The ASEAN Infrastructure Fund (AIF), an initiative that was led by Malaysia, is a good example. It will pool resources, knowledge and experience among ASEAN governments and the Asian Development Bank (ADB) for loans to sovereign or sovereign-guaranteed infrastructure projects. The Fund will also issue bonds, so as to bring in private sector and institutional investors. Another example of such cooperation in the region is the Credit Guarantee and Investment Facility (CGIF) amongst the ASEAN+3 countries, which aims to help companies in ASEAN+3 countries raise long term financing for infrastructure investment by providing the governments’ guarantees on their corporate bonds, thereby reducing risk for bond-holders. Projects such as Iskandar Malaysia are also a prime example of how intra-regional investments can be encouraged, and how countries in our region can develop competitive strengths jointly. •  Iskandar Malaysia’s performance has been impressive – poised to exceed its targeted RM100 billion investment mark by the end of this year.
Competition has been relatively tough, with decreasing margins on ordinary financial services and other foreign banks that have gradually tried to gain entry. It is likely that the banking system’s fast development has contributed to the continuous growth in the entire Baltic region during the current decade. Investment flows can also help strengthen the complementariness between industrial structures in different parts of Europe. Outsourcing of labour-intensive stages to low-wage countries has recently taken the blame for the weak jobs growth in the United States. In reality the data indicate something else: that the integration with the fast-growing countries in Latin America and the Pacific Rim have been a crucial factor for the United States’ capacity to raise its productivity and prosperity increasingly faster during the 1990s and the 2000s. One study carried out by independent researchers at the institutes NBER in the United States, CEPR in Europe and the IMF show that outsourcing to low-wage countries even strengthens employment growth in the long term. The consultancy firm McKinsey has estimated that each dollar invested in outsourcing to India gives the United States an economic gain of USD 1.12-1.14 and a gain of USD 0.33 in India. In this regard the enlargement affords a similar opportunity for the EU and Europe. There are innumerable examples of how investment in companies in the new member states results in sophisticated cooperation with Western firms.

Similar to what we have observed at the euro area level, the economic expansion in the Netherlands has also strengthened. GDP grew at 2.2% in 2016, driven by strong domestic demand on account of improving business and consumer confidence and positive wealth and real-income effects. In addition, unemployment has steadily decreased, registering at 5.1% in March 2017, and the Netherlands has more jobs than before the crisis. Supported by low interest rates and a strengthening recovery, the Dutch government ran a 2.9 billion euro surplus last year, its first surplus since 2008. And, as an export-oriented country, the Netherlands is currently benefiting from the recovery in other euro area countries, especially as growth in global trade remains tepid. The side effects of our policies I am aware that these very accommodative financing conditions have raised various concerns, also in this House. Monetary policy measures always have side effects. So far, the potential negative side effects have been limited. We are monitoring these various effects carefully, taking into account our price stability mandate. 2/5  BIS central bankers' speeches  To ascertain the overall impact of our measures on citizens, it is important to differentiate between the various ways in which they affect economic actors, such as households, pension funds and banks. Let me start with households. An accommodative monetary policy means households accrue fewer nominal returns on their savings. However, an accommodative policy supports the economic recovery, which in turn bolsters employment, income, returns on investment and tax revenues.
The Code of Practice provides guidance on a number of areas, including how the SRR objectives are to be achieved, factors guiding the choice between different tools, how to determine that it is not reasonably likely that action can be taken by or in respect of a bank to bring it into compliance with the FSA’s threshold conditions – ie how to determine that the SRR should be triggered, how to determine the basis for calculating compensation where applicable, and the principles by which the Bank of England should run a bridge bank. Beyond all of these provisions, the Banking Liaison Panel, whose members include industry bodies, lawyers and insolvency practitioners, in addition to HMT, the Bank and FSA is responsible for providing advice on the wider effects of the resolution regime. The resolution of the Dunfermline Building Society The first, and so far only, use of the resolution regime was for the Dunfermline Building Society at the end of March. Our tally of one is in sharp contrast to the US, where to date this year the FDIC has carried out 124 resolutions of failing banks. The US does, of course, have a much less concentrated banking industry. Dunfermline was, almost needless to say, a very instructive first case to handle. We achieved the key objective of a weekend transfer of depositors, branches and the head  4  BIS Review 157/2009  office, on this occasion to Nationwide Building Society.

It is possible to direct part or all of a failing bank’s business to a private sector purchaser after a sale process has been undertaken. Second, it is possible for the Bank of England to take control of part or all of a bank’s business through a bridge bank controlled and owned by the Bank. A special bank administration procedure can be used in combination with a partial property transfer or bridge bank. This administration procedure is broadly the same as a conventional administration save for the very important difference that the administrator has a statutory objective to support the transferred business with any infrastructure left in the insolvent rump. Finally, under the SRR provisions, it is possible to take a bank into temporary public ownership. For this approach, the Treasury would be in the lead, and there is a higher test of systemic importance to be passed (there must be a serious threat to financial stability) for this approach to be used. As I have indicated, the SRR contains important roles for all of the authorities. The FSA is responsible for triggering the SRR by determining, broadly, that a bank no longer meets its threshold conditions for authorisation, and there is no reasonable prospect of it taking actions to correct the situation within an acceptable timeframe. The FSA is also responsible for approving the transfer of business to another institution that it authorises.
Experience suggests that asset price cycles continue to be very substantial In the last two decades market forces have indeed tended to cause misalignments between equilibrium and actual asset prices. Stock markets in particular have experienced this phenomenon. But in foreign exchange markets as well, prices have also a tendency to diverge substantially from their “equilibrium level”, although those divergences have been contained through fruitful G7 co-operation during the last 15 years. In addition, some markets have seen an increase in volatility and frequent volatility peaks. Although cyclical moves should be clearly distinguished from volatility, the latter may in some circumstances exceed what can be considered optimal, making the price determination mechanism less efficient and thus contributing to misalignments. Moreover, as demonstrated by a number of financial crises during the last two decades, contagion among countries and across financial markets has been frequent. As a result, investors have faced asset price fluctuations that might be more synchronised than before. Lastly, the connections between credit, asset price and business cycles have tended to amplify cyclical swings. Credit, in particular, is playing an important role in asset price fluctuations. Observed in particular during the “speculative bubbles” of the 1980s and early 1990s, this trend has persisted. Another example is provided by boom-bust cycles in asset prices which have often been associated with sharp economic contractions. Several factors are in play when financial asset prices experience amplified moves I shall give a few examples.

Just in the last few years, global MNCs have set up more than 30 FinTech innovation labs or research centres in Singapore. The FinTech start-up space has become a lot more vibrant. More than 400 FinTech enterprises have set up base in Singapore. We have start-ups experimenting with new ways to pay, save, invest, buy insurance, and plan for retirement. No innovation ecosystem is complete without physical spaces to facilitate experimentation and collaboration. Last year, we saw the launch of LATTICE80, Singapore’s first FinTech innovation village, occupying two whole floors of 80 Robinson Road. Well, the entire building at 80 Robinson Road will now become a FinTech innovation hub. It will be named 80RR – that’s 100,000 square feet dedicated to housing FinTechs, right in the heart of the financial district! Open Architecture A Smart Nation needs an “open API economy.” APIs are the “connectors” that allow systems to talk to one another, enabling service providers to harness information from multiple sources and produce holistic solutions for customers. MAS has been encouraging financial institutions to develop and share their APIs openly, so that they can work with other service providers to give customers a richer and more seamless experience. We started the ball rolling last year. With the Finance-as-a-Service API Playbook, banks have a common guide to identify and develop APIs. And with the Financial Industry API Register, FinTech start-ups have a one-stop shop to explore the open APIs that have been made available.