samchain/econo-pairs-v1 huggingface dataset:
Some high-yield primary debt markets effectively closed: sterling issuance stopped on 13 February and US dollar issuance stopped on 4 March – and remained closed for longer than seen in the financial crisis. Even short-term funding markets for corporates, such as the commercial paper markets, became strained. Initially, yields on risk-free assets fell rapidly at the end of February and early March due to the flight to safety. However, this became an abrupt and disruptive “dash for cash” in mid-March as investors demand for cash and near-cash assets rose sharply, resulting in selling pressure on usually safe and liquid assets such as government bonds. Risk free yields began to rise sharply and the financial conditions facing major economies tightened. The “dash for cash” also spread to foreign exchange markets, given the dollar’s pivotal role in global trade and investment. US dollar funding became particularly difficult to raise in global capital markets; the dollar  2  All speeches are available online at www.bankofengland.co.uk/news/speeches  2  appreciated sharply; and FX liquidity deteriorated across all currency pairs as the near one-way demand for dollars drove bid-offer spreads up to three times their normal levels. Central banks had to take extraordinary action to stabilise markets. In the UK, the MPC increased the stock of asset purchases by £ billion to a total of £ billion, and bought gilts at the fastest rate operationally possible.

Fritz Zurbrügg: Review of financial market developments, and various interest rate and foreign exchange benchmark reforms Introductory remarks by Mr Fritz Zurbrügg, Member of the Governing Board of the Swiss National Bank, at the Media News Conference of the Swiss National Bank, Berne, 1 December 2014. *  *  *  In my remarks, I will begin by talking about developments on financial markets since the middle of the year. Then I will speak about the various reform efforts in the area of interest rate and foreign exchange benchmarks. Developments on the financial markets After a lengthy period of calm, volatility has increased slightly on the financial markets since the middle of the year. In addition, investors’ appetite for risk has dipped at times, and the risk markets have suffered temporary setbacks. Thus we have observed two waves of selling on the stock markets over the past few months (cf. chart 1). At the end of July, the European stock markets, in particular, were affected, while those in the US and the emerging economies proved more resilient. The second, more serious wave of selling set in at the end of September, making a significant impact on the major non-European markets as well. The main trigger for both waves was unexpectedly weak economic data in the core economies of the euro area and Japan. To some extent, this negative effect was aggravated by geopolitical tensions. However, chart 1 also shows that these waves of selling were relatively short-lived.
In the current environment, the assumption of a given interest rate remaining unchanged results in an identical forecast, irrespective of whether it is the SNB policy rate or the three-month Libor that is being kept constant. This also applies to the conditions on the money market. The three-month Libor and SARON are virtually on a par at present. Setting the SNB policy rate at −0.75% therefore means that conditions on the money market remain unchanged. In my remarks, I have looked at the changeover to the SNB policy rate from the perspective of monetary policy. My colleague Andréa Maechler will talk about the market’s transitioning from the Libor to SARON in more detail. We are supporting the work on this transition since representative and reliable reference rates are of pivotal importance for monetary policy and the financial markets alike. I would now like to return to my explanation of our monetary policy. An expansionary monetary policy remains necessary against the backdrop of the current price and economic developments. On a trade-weighted basis, the Swiss franc is somewhat stronger than in March and is still highly valued. The situation on the foreign exchange market continues to be fragile. The negative interest rate and our willingness to intervene in the foreign exchange market as necessary remain essential in order to keep the attractiveness of Swiss franc investments low and thus ease pressure on the currency. Looking at the short term, the new conditional inflation forecast is slightly higher than in March.

In fact, I see fintech as the nexus between finance and entrepreneurship. Finance is essential in helping startups and entrepreneurs get off the ground and scale up. Likewise, entrepreneurs can help to reinvent finance by providing ideas to develop innovative financial solutions. This morning, I would like to share some of my thoughts on fintech and on how the finance industry, especially Islamic finance can gain from technology-driven solutions. I will also elaborate on how multisided platforms are facilitating the interaction between investors and ventures. I will then briefly touch on the efforts that Bank Negara Malaysia is taking in promoting fintech. While Islamic finance has made significant progress domestically and globally, the next growth phase requires the industry to ride the fintech wave. At present, Islamic finance fintech is still in its infancy and growing. Encouragingly, we are seeing increasing number of fintech start-ups, innovation labs and incubators that are based on the values and principles of Islamic finance. However, they are not as visible and omnipresent as their conventional peers. The case is compelling for Islamic finance to take on a more prominent role in the fintech ecosystem. The technology is ripe, with higher penetration of mobile and internet across markets. Consumers are also becoming more and more tech-savvy. Digital-banking consumers stand at an estimated 670 million in Asia alone and are expected to reach 1.7 billion by 2020. In Malaysia, within a population of 31 million, there is high mobile and internet penetration rate at about 141% and 81% respectively.
For example, amendments were introduced to the Exchange Fund Ordinance and the Bank Notes Issue Ordinance in 1995. The Coinage Order was revoked and the Coinage Ordinance was promulgated in 1994. One significant amendment common to this exercise was the removal of the need to refer matters to the Secretary of State. Let me give a few examples: (a) the investment of the Exchange Fund in securities; (b) the determination of the limit for borrowing using the assets of the Exchange Fund or fiscal revenue as security; (c) the transfer of assets from the Exchange Fund to the fiscal and other government accounts; (d) the authority to appoint note issuing banks; and (e) the authority to proclaim coins as legal tender, mint coins and appoint minting agencies were all subject to the prior approval of the Secretary of State before amendment of the relevant ordinances. 6. After amendment, these powers formerly rested in the Secretary of State are now rested in the Chief Executive in Council or the Financial Secretary. This means that, in terms of the management of monetary and financial affairs, Hong Kong enjoys even greater autonomy after the transfer of sovereignty. 7. The high level of monetary autonomy enjoyed by Hong Kong, as provided in the Basic Law and the monetary legislation, is not just something written into laws: it is also realised in our actual implementation of monetary policies. The financial turmoil that erupted just after the transfer of sovereignty has subjected Hong Kong’s monetary autonomy to a rigorous testing.

The Hong Kong dollar and the Renminbi continue to circulate as legal tender in Hong Kong and the mainland respectively. The Hong Kong dollar is treated as a foreign currency in the mainland. Likewise, the Renminbi is treated as a foreign currency in Hong Kong. 15. The Basic Law has provided for the legal status of the Hong Kong dollar. The Renminbi is still not yet freely convertible. However, even if it becomes freely convertible, it will only be one of the many foreign currencies traded in Hong Kong’s forex market. As for the cross-border circulation of the banknotes of the Hong Kong dollar and the Renminbi, this is a natural consequences of the close relationship between the two places. This phenomenon was in existence long before the handover. The legal status of the Hong Kong dollar will not be affected and the Hong Kong dollar will not be replaced as a result. 16. The issuance arrangements for the Hong Kong dollar remain independent. Hong Kong dollar bank notes continue to be issued by the three note-issuing banks under the authorisation of the HKSAR government. Under the linked exchange rate system, the note-issuing banks provide 100% backing in US dollar according to the fixed rate of $ to $ In order to ensure that all the Hong Kong dollar notes and coins in circulation comply with the monetary rule of the Currency Board System, we have improved our coins issuance mechanism so that it operates in exactly the same way as the notes issuance mechanism.
There were many features of the scheme for which we made different choices because of that over-riding objective – full, quarterly disclosure of usage, bank by bank, being the most obvious. Let me summarise the key features of the FLS for those who have not followed the details. We will reduce the funding costs for banks and building societies by providing them with relatively cheap liquidity. In practice by lending them Treasury Bills for up to four years in exchange for the widest possible range of collateral that the Bank can accept – including pre-positioned portfolios of loans. Those Treasury Bills can be used as liquid assets to support an expansion of lending or turned into cash if necessary. We will charge a fee of just 25 basis points per annum as long as a bank’s stock of lending does not contract over the period to end 2013. The firms will have that 18 months to draw down the bills. This is essentially a swap of highly liquid assets for illiquid ones and part of a wider programme where the Bank has been extending the range of collateral that it can take in such operations. So portfolios of loans are now eligible collateral for the first time in our market-wide facilities. One of the benefits of this expansion is that our operations are now much more accessible to smaller banks and building societies that don’t have large portfolios of tradable securities.

Such action would be in line with the recommendations recently made by the European Council for all European countries in the framework of the review of governance in Europe. 4  BIS Review 129/2010  A key element of the Budgetary Stability Law for achieving fiscal discipline is transparency. The dissemination of data relating to the non-financial activity of the State is abundant, detailed and released with a relatively small lag. This is regrettably not the case for regional or local governments, which curtails the ability to control their activity in time and accountability. In my view, these shortcomings must urgently be redressed. At a time such as the present, a lack of transparency may lead to a lack of market confidence that takes the form of a further premium on the cost of financing. Given the circumstances, all available instruments should be used to ensure compliance with the targets set. In particular, authorisation for regional and local governments to issue new debt should be conditional upon compliance with consolidation plans. A spending ceiling might even be considered for these governments, an instrument which has proven enormously useful in strengthening budgetary discipline in the case of the State. Along the same lines, medium-term planning necessitating analysis of the structural dynamics of the various public revenue and spending items and enabling those areas where the scope for rationalisation and adjustment are greater to be detected may prove appropriate, especially when adjustment measures going beyond a temporary correction of imbalances are required.
Just last November I visited OnForce Solar, an installer of solar heating systems located in the Port Morris section of the South Bronx. There has also been a great deal of retail development over the past decade – most notably, perhaps, the Bronx Terminal Market just south of Yankee Stadium. A little known fact is that, on average, jobs pay more in the Bronx than in any other of the five boroughs, except for Manhattan. And my regional economists assure me that it’s not just the Yankees that bring up the average, although they do make a difference. This, of course, is not to say that all is well in the Bronx. Its poverty rate and unemployment rate are both roughly twice the national average, and higher than in any of the other boroughs. While crime has fallen dramatically over the past two decades, it also remains higher than in the rest of the city. Debt is also burdensome for many Bronx residents. Delinquency rates on household debt are relatively high, suggesting that many people are financially “distressed.” All this makes it especially important to maintain the economic momentum that is improving the quality of life in the Bronx. Community banks have an important role to play in this process. Bank lending can help businesses – especially new and small businesses – expand and grow jobs, and help residents invest in improving their homes, neighborhoods and communities.

Zdeněk Tůma: The interrelationship between monetary policy, price stability and financial stability Speech by Mr Zdeněk Tůma, Governor of the Czech National Bank, at the European banking and financial forum 2005, Prague, 22 March 2005. *  *  *  Mr. President, Excellencies, Governors, distinguished guests, It is an honour to be opening the central bankers' forum. As the main part of the conference program concerns the financial sector challenges and opportunities in the “New Europe”, the central bankers' panel has to necessarily reflect the close, particularly topical, issue of the financial stability and its relationship to a reasonable monetary policy conduct. While my colleagues will discuss mainly the particular issues of financial stability, I, having the privilege to be the chairman of the panel, would like to frame the discussion using a more general and historical context. Bearing this perspective in mind, I would like to point to the interrelation between the ultimate goal of monetary policy, the price stability, and the financial stability. First of all, let me start with the definition of financial stability, simply assuming that price stability does not need any further explanation. To be as brief as possible, financial stability can be defined as the soundness of the financial system, that is, its resilience against various shocks.
Part-time workers now make up about a third of the US work force, and many of them want to transit to full-time jobs. The labour force participation rate in the US remains near a cyclical low, at 63%. Even after accounting for the retirement of baby boomers, a meaningful segment of the population could re-join the workforce. If the labour market in reality is not as tight as the unemployment number suggests, then it is not surprising that wage growth has been weak. A second reason for low inflation has to do with the effects of globalisation. The integration into global production chains of workers from China, India, and the ex-Soviet republics during the 1990s and 2000s is estimated to have nearly doubled the size of global labour supply. This labour supply shock, facilitated by expanding global value chains, has exerted significant downward pressure on tradable goods prices. And the international outsourcing of production appears to have dampened the “pricing power” of labour and hence wage growth. A third explanation is technology. Industrial automation has exerted downward pressure on manufacturing wages. Likewise, advances in software programming and artificial intelligence are automating knowledge work and dampening wage increases in the services sector. More broadly, the spread of e-commerce has been eroding the monopolistic pricing power of traditional retailers and wholesalers of goods and services – the so-called “Amazon Effect”. I think it is premature to declare the Phillips Curve dead. Inflation will return when tightening cyclical factors outweigh the structural disinflationary forces.

The government is expected to rein in local government spending, tighten curbs on residential property purchases, and seek to reduce excess industrial capacity. But the slowdown is likely to be measured and the risk of a “hard landing” has narrowed. A Goldilocks economy but three grumpy bears may not be far away A striking feature of the global economy is how subdued inflation has been despite broad-based economic expansion and highly accommodative monetary policies. This benign inflation environment provides the runway for very gradual monetary policy tightening and credit conditions remaining accommodative for longer. Many analysts have characterised the current configuration of healthy growth, low inflation, and easy financial conditions as a Goldilocks scenario: a global economy that is chugging along, not too hot, not too cold. And financial markets see this happy scenario as self-reinforcing, sustained, and accommodated over multiple years. This has supported high equity valuations, low bond yields and narrow credit spreads. But as David Skilling reminded us recently, the Goldilocks story is not complete without the three bears. The absence of the bears does not mean they do not exist. They could return any time. There are unseen risks out there – that we ignore at our peril. Each of us will have our own list of three bears. Let me share with you what I see as the three bears that might return to spoil Goldilocks’ happy stupor. My “papa bear” is inflation; “mama bear” protectionism; and “baby bear” financial instability.
As a consequence, the firm’s liquidity pool dropped by 83 percent in a two-day span.1 These liquidity dynamics were driven by two main factors. The first factor was the underlying stress on dealer balance sheets as the prices on complex collateralized debt obligations (CDOs), private label residential mortgage-backed securities (RMBS), and commercial real estate-related assets fell sharply and uncertainty about underlying asset values rose sharply. The uncertainty stemmed, in part, from the lack of transparency about what prices these assets could be sold for, which, in turn stemmed from the difficulty of valuing these extremely complex and heterogeneous securities. The stress on underlying asset prices and the uncertainty about the valuations of pools of illiquid assets caused investors to become concerned about the solvency of some of the weaker dealers.2 These concerns contributed to liquidity pressures, which, in turn, led to forced asset sales by dealers and others. These sales both further depressed asset prices and increased asset price volatility. The second factor contributing to the liquidity crisis was the dependence of dealers on shortterm funding to finance illiquid assets. This short-term funding came mainly from two sources, the tri-party repo system and customer balances in prime brokerage accounts. By relying on these sources of funding, dealers were much more vulnerable to runs than was generally appreciated. Consider first tri-party repo, a market in which money market funds, securities lending operations, and other institutions finance assets mainly on an overnight basis.

Even if the borrowing firm ultimately turns out to be solvent, there may be a delay in a lender getting its funds back, and this delay may prove to be unacceptably costly to the lender. This second cause of liquidity runs – the risk of untimely repayment – is significant because it means that expectations about the behavior of others, or their “psychology”, can be important. This is a classic coordination problem. Even if a particular lender judges a firm to be solvent, it might decide not to lend to that firm for fear that others might not share the same assessment. The less certain any one lender is about the willingness of other lenders to provide liquidity to a firm, the greater the risk that too few loans will be extended to prevent liquidation. In that case, even if the lender turns out to be correct in its judgment of the firm’s solvency, there still will be a cost in terms of delay in receiving repayment. A few pictures can help to illustrate these concepts. Figure 1 illustrates what a creditor’s assessment of the net worth of a financial firm might look like in normal times. Creditors have uncertainty about what that value is, thus, the valuation is represented by a probability distribution. The higher the degree of uncertainty, the greater is the degree of dispersion in the probability distribution.
European banks have relinquished their influence in this area, possibly because of short-term profit considerations. Indeed, large non-European companies now play a significant role in the provision of payment services in Europe, while European banks are focused solely on serving their national markets. Let’s face it: the foundations laid by European institutions have not been leveraged by European providers in order to offer pan European services. Instead, those foundations are often exploited by multinationals from outside Europe offering innovative, consumer-friendly solutions. Indeed, European banks seem to have surrendered much of the pan European payment business. PayPal now dominates the market for online payments in Europe, using the pan-European SEPA credit transfer and SEPA direct debit schemes to provide harmonised services. Meanwhile, 2/4  BIS central bankers' speeches  Google, Apple, Facebook and Amazon – often referred to collectively as “GAFA” – are also offering significant payment services with pan-European reach, some of which involve joint ventures with individual banks at national level. At the same time, Chinese giants like Alibaba and Tencent are advancing. While these companies are to be admired for their ability to expand and provide innovative services that consumers want, I would ask why there are no European companies competing in that arena. There is a risk that our dependence on foreign providers will increase further as regards the development of innovative payment services, since banks are resisting the objectives of PSD2 on this front.

Gent Sejko: Intensifying mutual cooperation between Albania and Turkey Speech by Mr Gent Sejko, Governor of the Bank of Albania, at the signing of the Memorandum of Cooperation between the Bank of Albania and the Central Bank of the Republic of Turkey, Tirana, 6 November 2017. * * * Honourable Governor Çetinkaya, Your Excellency Ambassador Bayraktar, Dear members of the delegation from the Central Bank of the Republic of Turkey, Dear guests, Ladies and Gentlemen, I have the pleasure to have the Governor of the Central Bank of the Republic of Turkey, Mr Murat Çetinkaya, as our guest on a one-day visit to the Bank of Albania, on the occasion of the signing of a Memorandum of Cooperation. This memorandum is an expression of our common will and desire to continue and intensify the mutual cooperation that has been already in place for years. Opening addresses are supposed to be brief and I would rather not break with such tradition. However, I find it appropriate to share with you some thoughts on: (i) the international context surrounding the signing of this memorandum; (ii) the current level of the bilateral relations between Albania and Turkey; and, (iii) the main aspects of future cooperation. 1. International context Our institutions – the respective central banks – play a significant role in promoting and guaranteeing monetary and financial stability, supporting the sustainable development of our countries and the welfare of our citizens.