samchain/econo-pairs-v1 huggingface dataset:
The low-income countries, many already under considerable social and economic strain, are facing daunting challenges because of the crisis and are falling further behind in income convergence. Their heavy debt burden, limited financing options, and little or no policy space make it almost impossible for them to meet the challenges on their own. We call on the international community to rise to the occasion in helping these countries generously through grants, concessional financing and debt relief. We support the extension of the G20 Debt Service Suspension Initiative, as well as the extension of the Catastrophic Containment and Relief Trust, and welcome the progress in securing additional resources for the Poverty Reduction and Growth Trust. We encourage all public and private creditors to participate in similar debt relief operations. The plight of fragile and conflict-affected states in the MENAP region, some facing refugee and humanitarian crises, calls for a timely and proportional international response. The role of international institutions—particularly the Fund—has been instrumental in helping 1/2  BIS central bankers' speeches  countries to alleviate their significant financing pressures arising from the pandemic. We laud the agile response of the IMF to support more than 80 members in the first few months of the crisis through its emergency and other financing facilities. The IMF moved swiftly to expand and adapt its lending toolkit to the needs of the members, including through temporary increases in access limits to its emergency facilities. Yet, requests by some other 20 members for emergency support are still pending for various reasons.

Rosthom Fadli: IMFC Statement Statement by Mr Rosthom Fadli, Governor of the Bank of Algeria, on behalf of the Islamic Republic of Afghanistan, Algeria, Ghana, Islamic Republic of Iran, Libya, Morocco, Pakistan and Tunisia, at the forty-second meeting of the International Monetary and Financial Committee, Virtual IMF Autumn Meetings, Washington DC, 15 October 2020. * * * The global economy is showing tentative signs of recovery, thanks to nimble, proportional, and synchronized global policy responses. The October 2020 W EO’s cautious optimism about the outlook, however, should not overshadow the fact that the Covid-19 pandemic is still evolving and the virus is spreading, with a serious possibility of new infection waves, including in areas where the pandemic was believed to have been contained. While the lockdowns continue to exert a heavy economic and social toll worldwide, containing the pandemic and saving lives are still top priorities. The path of the economic recovery is closely intertwined with the path of the pandemic, which is subject to significant uncertainty. An effective vaccine will be found—hopefully sooner than later—but the vaccine and medical treatments will only be effective if they are available worldwide and at affordable prices, especially for poorer countries. No country or region is safe as long as the virus is spreading somewhere else.
Vítor Constâncio: Reflections on financial integration and stability Speech by Mr Vítor Constâncio, Vice-President of the European Central Bank, at the Joint ECB-EC Conference on “Financial Integration and Stability in a New Financial Architecture”, Frankfurt am Main, 28 April 2014. *  *  *  Ladies and gentlemen, Dear colleagues and friends, It is indeed a pleasure to participate in this joint presentation of two important policy reports: the European Commission’s European financial stability and integration report 2013 and the ECB’s Financial integration in Europe 2014 report. Both studies illustrate that some steady, albeit uneven, progress is being made towards financial stabilisation. Banks are reducing their liquidity buffers, repaying our LTROs and regaining confidence from the markets. Money market integration is slowly improving, particularly in the secured segment. Quantity-based indicators confirm a stabilisation in bond markets and improved integration in equity markets. Given where we stood barely two years ago – on the edge of redenomination risks – such progress is encouraging. However, it does not mean we are entirely out of the danger zone. If we look at banking markets, there is still a large dispersion of borrowing costs for nonfinancial corporations across euro area countries. Thus, significant financial fragmentation still remains in the euro area. This is a concern for the recovery and also for monetary and macro-prudential policy. Under the pressure of the global financial crisis and the sovereign debt crisis in the euro area, several solutions – both global and European – have indeed been adopted.

Monetary and banking supervisory policies can have the same or contradicting objectives. Both policy areas, for example, have a strong interest in a sound banking system. Nevertheless, there may be future conflicts of interest, and in order to deal correctly with potential conflicts, we strictly follow the separation principle. Decision-making related to monetary policy is kept strictly separated from decision-making related to our supervisory tasks, right up to the level of the Governing Council, which will have the decision-making power in both areas. Additionally, the Governing Council will only be able to object to a draft decision proposed by the Supervisory Board. This new Board is the one steering and influencing supervisory policies and decisions. 2  BIS central bankers’ speeches  Supervision is starting, whereas the second pillar of the banking union, namely the rules applicable in case of risk of bank failure, is not yet ready. Is this not dangerous for the ECB? The Single Resolution Mechanism will be a major step forward in managing the restructuring or resolution of a distressed institution at the European level. And it is true that it will be operational only from January 2016 onwards. But this will not pose a great risk to the ECB as transitional procedures are in place. As of January 2015, all Member States need to have a national resolution authority: they will be our counterparts if a bank finds itself in difficulty. Similarly, the “bail-in” rules will already be partly applied as of January 2015.
Narrow or broad mandate for central banks? Political influence  Political independence Narrow target definition, few tools  Broad target definition, many tools  17 [20]  Figure 7. Yield spread between different types of bond and government bonds in Sweden Percentage points 2,5  2,5  Municipal bond, 5 year Corporate bond, 5 year Covered bond, 5 year  2,0  2,0  1,5  1,5  1,0  1,0  0,5  0,5  0,0 Jan-19  Jul-19  Jan-20  Jul-20  0,0  Jan-21  Note. Percentage points. Yields on covered bonds, corporate bonds and government bonds are zero coupon rates calculated using the Nelson-Siegel method. Corporate bonds refer to companies with a high credit rating. Municipal bonds are issued by Kommuninvest i Sverige AB. Broken line marks 11 March 2020, same day the WHO declared COVID-19 to be a pandemic. Sources: Bloomberg, Macrobond, Refinitiv and the Riksbank. Figure 8. Borrowing among non-financial corporates Percentage of GDP, quarterly data 80  80  60  60  40  40  20  20  0  0  95  00  05  10  Lending from MFI  15  20  Issued securities  Note. Includes securities borrowing in both Swedish kronor and foreign currency. Sources: Statistics Sweden and the Riksbank  18 [20]  Figure 9.

Every year we compile an account of monetary policy for the Committee, which in turn then provides its comments in a report or a statement on monetary policy, not just to “grade” us, but to provide feedback in advance of the next report with regard to questions that require further illumination (see Figure 2). Hearings in the Committee are also a part of their scrutiny of the Riksbank. Moreover, larger external evaluations are made around once every five years. 14 With regard to the analysis of monetary policy, the Riksbank chose to begin publishing its own forecasts for the repo rate in 2007. I think that the experiences of all of these measures have been good. 15 International rankings of central bank transparency usually place the Riksbank near the top. 16  12 See, for example, Dincer and Eichengreen (2014). 13 See Bergström (2001). So far three of these have been made: by Francesco Giavazzi and Frederic Mishkin with regard to the period 1995-2005, by Charles Goodhart and Jean-Charles Rochet regarding the period 2005-2010 and by Marvin Goodfriend and Mervyn King regarding the period 2010-2015. A new evaluation by Karnit Flug and Patrick Honohan regarding the period 2015-2020 has recently begun. 15 See Sveriges Riksbank (2017a). 16 See Dincer and Eichengreen (2014). 14  5 [20]  The framework functioned as intended In many ways, the inflation-targeting regime has functioned as intended.
My colleagues have essentially expressed similar views. Last week we therefore decided to contact the ECB to initiate discussions on an agreement that would make the Swedish krona available for settlement on TIPS. An absolute requirement that we have in these discussions is that the security surrounding TIPS must correspond to the expectations in Swedish legislation. It is still too early to say when TIPS could be available for the Swedish krona, but if it all works out, I am hoping it will be in 2021. When the Riksbank supplies a settlement service that is available 24/365 our expectation is that the RIX participants settling instant payments will use the platform offered by the Riksbank. But we will proceed with caution and support the private solution that is available, BiR, until TIPS is introduced and all conditions for using it are in place. During the implementation period the Riksbank will make sure to have a close dialogue with the market and be responsive to views and wishes on how TIPS can be made available to the Swedish krona. We will return to the exact forms for such a consultation later in the autumn. 8 [8]

Those dynamics obviously have a direct impact on financial stability. Financial fragility comes out of excessive leverage and maturity transformation, fueling asset price increases. And, conversely, liquidity shocks and deleveraging are the symptoms and channels behind financial crises. As importantly, and less recognized until recently, those dynamics also have a major impact on the transmission mechanism of monetary policy. The functioning of the credit channel, but also the interest rate channel depend on financial intermediaries being able to fund themselves and arbitrage across different market segments, instruments and maturities. Dysfunctional credit markets were a major reason why Central Banks embarked into exceptional liquidity provision, credit easing and asset purchases. One important point, here, is that the same dynamics affect both financial stability, on the one hand, and monetary transmission channels, on the other. Now, presumably, any macro prudential policy would try and influence the evolution of maturity transformation and leverage. By doing so, however, it would also have a monetary impact. And, conversely, changing the monetary stance, by moving policy rates, also may have an influence on financial stability. The relative strength of those influences is not empirically known. Those of us who would use monetary policy with a financial stability objective implicitly assume that leverage and maturity transformation are very sensitive to interest rates. I am not sure this is true.
This was not the case in Sweden. As there were expectations of continued high inflation and of the Swedish krona being devalued, in other words of the target for the exchange rate being abandoned sooner or later, the wage inflation trend in Sweden was stronger than it was abroad. As the exchange rate was fixed, the competitiveness of Swedish companies weakened and a cost crisis arose. To rectify this, no other solution than to devalue the krona was thought to be available, which meant that the expectations of the krona’s devaluation were met. This in turn meant that the inflation trend could continue, competitiveness gradually weakened again, the exchange rate was once more adjusted downwards, and so on. What is normally referred to as “the nominal anchor” – the benchmark for inflation expectations and thus for price-setting and wage formation – did not function as intended. It was far from obvious that inflation targeting, introduced in 1993, would succeed in achieving what the fixed exchange-rate policy had failed to – to re-establish the anchor for price-setting and wage formation. Today, we know that it did succeed and furthermore did so relatively quickly. If I was to pick out the most important contribution made by inflation targeting, it would be precisely this – providing a nominal anchor for the economy.

13 [17]  “Indeed it has been said that democracy is the worst form of government except for all those other forms that have been tried from time to time.” I think this is also an apt quotation for inflation targeting, so far at least. References Aftonbladet (2013), “Nya direktörer men samma gamla riksbank” [New directors but same old Riksbank], post on Ledarbloggen by Ingvar Persson. Boije, Robert (2019), “Riksbankens otydliga kommunikation riskerar att skada förtroendet” [The Riksbank’s unclear communication risks damaging confidence], debate article in Realtid, 11 November, https://www.realtid.se/debatt/riksbankens-otydliga-kommunikation-riskerar-att-skada-fortroendet Calmfors, Lars (2018) “Industrins lönenormering kan och bör reformeras” [Wage standardization in industry can and should be reformed], in Lönebildning för jämlikhet [Wage formation for equality], the 6F trade union partnership, 2018. Calmfors, Lars, Simon Ek, Ann-Sofie Kolm and Per Skedinger (2019), Kollektivavtal och lönebildning i en ny tid [Collective agreements and wage formation in a new age], Dialogos, Stockholm. Carlsson, Mikael, Iida Häkkinen Skans and Oskar Nordström Skans (2019), “Wage Flexibility in a Unionized Economy with Stable Wage Dispersion”, IZA Discussion Paper No. 12093, Institute of Labor Economics. Dagens Nyheter (2014), “Ta tillbaka makten över Riksbanken” [Take back control over the Riksbank], editorial by Peter Wolodarski, 15 June. Dennis, Bengt (2003), “Första året med flytande krona” [First year with a floating krona], in Jonung, Lars (red. ), På jakt efter ett nytt ankare [Looking for a new anchor], SNS Förlag. Ministry of Finance (2016), “Översyn av det penningpolitiska ramverket och riksbankslagen” [Review of the monetary policy framework and Sveriges Riksbank Act], Committee ToR 2016:114.
This is necessarily work-in-progress, as it will take several years of learning and adaptation by MAS, financial institutions, and market participants. But achieving this is an important part of ensuring that Singapore remains a resilient, competitive, and dynamic financial centre. Thank you very much. My colleagues and I will be pleased to take any questions that you may have. BIS Review 33/2003  3

As an example, for an instrument issued based on Ijarah principle using the property as its underlying asset, the actual rate of rental can be used to determine the rate of return on this instrument. The indicator of the rate of rental will fluctuate based on the demand and supply of the said property. By having its own indicator, it will give a true reflection of the price of the underlying property asset as opposed to being linked to the KLIBOR which has no direct correlation with the changes in the rental rate. Actively promote the role of the market players The Islamic financial services industry is expected to benefit from the recent increase in the number of players following the launching of Islamic subsidiaries, the issuance of foreign Islamic banking licences and the measures to issue additional takaful licences. The entrance of these players will contribute to an active participation in both the primary and secondary markets for Islamic financial instruments. Ladies and Gentlemen,  2  BIS Review 49/2005  I hope this seminar will crystallize positive ideas to pave the way and contribute towards the development of a more vibrant and dynamic Islamic financial system. I wish to take this opportunity to thank the speakers for accepting our invitation to share their invaluable knowledge and experiences in this Seminar. The participation by researchers and practitioners in the Islamic financial system is also important. On this note, I wish you all a successful seminar. BIS Review 49/2005  3
0  100  200  300  10 8 6 4 2 0 -2 -4 -6 -8 -10  400  Household debt to income in 2007, per cent Sources: Flodén, M (2014) and OECD National Accounts. (a) Change in consumption is adjusted for the pre-crisis change in total debt, the level of total debt and the current account balance. See Flodén, M (2014), ‘Did household debt matter in the Great Recession?’ available at www.martinfloden.net/files/hhdebt_supplement_2014.pdf. Our aim was to guard against an upside risk. In 2014 the Bank’s Monetary Policy Committee’s central forecast was that in the medium term house price inflation would fall back and rise broadly in line with  9  The 2014 stress test was based on a scenario, in which house prices fell by 35% and unemployment increased to 12%. Cumulative losses on mortgages over 2009 to 2013 were very small, at around 0.3% of outstanding balances – compared to around 25% for consumer credit. They were somewhat higher in the early 1990s, when unemployment rose higher than in the crisis. 11 Bunn and Rostom (2014). 10  6  All speeches are available online at www.bankofengland.co.uk/news/speeches  6  nominal incomes. If that were to happen, we expected the impact of the FPC’s borrower-based policies to be small. But while this was the central case, the FPC judged that there was a material upside risk of mortgage borrowing growing more rapidly and house prices increasing faster relative to earnings.

The FPC reviews its housing actions regularly and will publish the results of its 2019 review, including, as I have said, an updated cost-benefit analysis. The Bank of England work published today is, in the same way, intended to contribute to that necessary transparency and accountability. I began this talk today by recollecting how the Bank had learned, slowly, from the crisis of 1846 about the need to support credit to the economy in a crisis rather than restrict it. I hope likewise, we have learned one of the lessons of the 2008 crisis that higher household indebtedness increases macroeconomic and macrofinancial vulnerability in a crisis and needs to be considered within macroprudential policies. The Committee has discretion to decide which types of debt to include – the 2014 measures only acted on owner-occupier mortgage debt. 23  13  All speeches are available online at www.bankofengland.co.uk/news/speeches  13  References Andersen, Asger Lau, Charlotte Duus, and Thais Lærkholm Jensen (2016), Household debt and spending during the financial crisis: Evidence from Danish micro data, European Economic Review, 89, pp. 96-115. Anson, Mike, David Bholat, Miao Kang and Ryland Thomas (2017), The Bank of England as lender of last resort: new historical evidence from daily transactional data, Staff Working Paper No. 691, Bank of England. Anson, Mike, David Bholat, Miao Kang, Kilian Rieder and Ryland Thomas (2019), The Bank of England and central bank credit rationing during the crisis of 1847: frosted glass or raised eyebrows? Staff Working Paper No.794, Bank of England.
Take up of the IMF’s liquidity lines has been disappointing in large part because of stigma. As a country with a sound balance sheet, but concerned about potential liquidity problems arising from spillovers from shocks in the rest of the globe, what signal does requesting liquidity support from the IMF convey? Some members of the IMF have resisted more widespread use of these liquidity facilities because of concerns about moral hazard. Is there a way to address both the stigma and moral hazard issues? 6. Lessons from central bank liquidity insurance  These are precisely the issues the Bank of England has had to deal with in the context of central bank liquidity insurance facilities. The Winters Review 10 conducted into the Bank’s published liquidity facilities highlighted the risk of these facilities becoming stigmatised – usage being taken as a signal of fundamental solvency problems. If that led banks to self-insure against extreme “tail” liquidity risks, that would be inefficient for the financial system as a whole. The Bank has reduced the stigma associated with its liquidity facilities by offering greater predictability of access on more favourable terms. This improved access to liquidity has been enabled by the fact that supervision is tougher on capital and liquidity requirements, banks undergo regular stress testing, and credible resolution tools (including ring fencing to protect depositors and bail-in to protect taxpayers) are being put in place. These reforms are recent and not yet fully tested under the most difficult circumstances.

Moreover, much of this was funded by short term capital inflows. When the asset bubble collapsed the banks and the companies or individuals who had borrowed foreign currency to finance the investments were unable to repay. The problem was compounded by the depreciation of domestic currencies that increased the real burden of debt repayments. •  Second, banks in a number of economies were ordered or persuaded by governments to lend heavily to companies that were not commercially viable. This “policy” lending destroyed the banks’ incentive to exercise credit judgment and allowed the companies concerned to become overleveraged and thus vulnerable to economic downturn. 1  BIS Review 53/1999  •  Third, over-exposure to connected parties was endemic in some economies. Such lending is not usually made at arm’s length and will seldom satisfy normal credit criteria. •  Fourth, partly because much lending in the region was politically influenced or insider in nature, there was not much opportunity to develop a proper credit culture or adequate credit skills. Name lending and relationship lending were widespread. This went hand in hand with an over-reliance on collateral whose value of course diminishes sharply when asset values collapse - assuming of course that the security can be enforced in the first place, which has certainly not been the case in countries such as Thailand. •  Fifth, a feature of the lack of credit skills was a failure to recognize bad debts and to face up to the full scale of the bad debt problem.