samchain/econo-pairs-v1 huggingface dataset:
But liquidity has begun to develop in derivatives and cash markets. And, earlier this year Federal Reserve Board economists published research demonstrating how forward-looking term rates can be derived from SOFR futures and swaps markets. However, we are still some time off from a point at which a robust, IOSCO-compliant term rate can be created, and use of such a term rate should be limited to certain segments of the loan market and to fallbacks for new contracts. I want to emphasize that the industry must not wait for a SOFR term rate to transition away from LIBOR. In my view, the biggest challenge isn’t liquidity or the creation of a term rate, it’s a willingness on the part of the market to stop using LIBOR. We need a mindset shift where firms realize that every new U.S. dollar LIBOR contract written digs a deeper hole that will be harder to climb out of. If companies are going to use LIBOR, they need to start including robust fallback language in the contract, so that if LIBOR ceases to exist, chaos does not ensue. This is an area of recent progress I mentioned earlier. The International Swaps and Derivatives Association (ISDA) has led great work on the development of contingencies for some derivatives products for the scenario where U.S. dollar LIBOR ceases to exist. The public consultation on fallback language for some non-U.S. dollar derivatives contracts took place last year.

To complement the institutional framework, a Financial Intelligence Analysis Unit was established to strengthen the anti-money laundering regime and to combat the financing of terrorism. As part of the authorities’ efforts to create a reputable financial centre, in late 2002 the IMF / World Bank were requested to conduct a Financial Sector Assessment Programme (FSAP). The assessment concluded that Malta’s financial system appeared to be healthy and well supervised, with a comprehensive legal framework and strong adherence to most international standards and codes. At the same time, the report also noted that, mainly because of the predominance of two large banks, the system was highly concentrated and exposed to the country’s narrow economic base. Malta as an international financial centre EU membership in 2004 proved to be an important catalyst in the further development of the financial services industry. Malta now benefits from the greater credibility conferred by EUcompliant legislation and access to passporting rights in the vast European market, which allows licensed financial institutions to exploit previously unavailable avenues for growth. Malta has also capitalized on its other strengths. Its small size facilitates access to the single regulator, allowing for a swift licensing process and the possibility of custom-made solutions. The financial services industry is supported by a modern telecommunications infrastructure and a plentiful supply of experienced, English-speaking tax professionals, legal and accounting firms and other service providers. Labour and rental costs are competitive, while Malta’s geographical position enables it to serve as a finance hub in the Mediterranean region.
David Clementi: The Bank of England's roles in monetary and financial stability Speech by Mr David Clementi, Deputy Governor of the Bank of England, at the Association of Private Client Investment Managers and Stockbrokers (APCIMS) Annual Conference, London, 19 October 2001. *  *  *  Introduction Thank you for the kind invitation to address your conference today. APCIMS performs an important function, representing and informing the views of a wide range of private client investment managers, brokers and banks. Its voice is increasingly heard in a number of public debates. At one time, back in 1984, I worked very closely with a number of private client firms as we sought to sell shares to the retail market in British Telecom, the first of the large privatisation issues. It's good to see that a number of the firms involved then are represented here today. When Angela Knight asked me to speak, she said she wanted something which would allow us all, in the midst of our day-to-day preoccupations, to lift our eyes to the horizon. That reminded me of Harold Wilson's description of John F Kennedy: "he had his eyes on the horizon, but his feet on the ground." "Keep your eyes on the horizon and your feet on the ground" certainly ought to be written into every modern central banker's contract of employment. Looking to the future, assessing risks to our economic and financial systems, and - where necessary - acting on these assessments is absolutely core to what we do.

How governments deal with this income disparity will not only be reflected in social and political outcomes, but also economic ones as it is the low and middle income groups that have the highest marginal propensity to consume. Similarly, a lack of success in dealing with the high youth unemployment in the crisis affected economies could have lasting consequences and put these young people on a permanently lower earnings path, further contributing to both income inequality and weaker growth. 4  BIS central bankers’ speeches  To conclude, let me summarise my key message: Economically, things are looking better than they have been in a long time. However, the legacy of the crisis remains and will remain with us for some time yet. And this will continue to cloud the outlook and will be a concern and challenge to policymakers as they try to steer the global economy out of the crisis on to a more sustained and sustainable growth path. BIS central bankers’ speeches  5
Even before knowing these figures, what our monetary policy strategy suggests and allows us to do, is to avoid overreacting to short-term fluctuations. The conduct of monetary policy, especially in moments of uncertainty like the one we are currently experiencing, must anticipate longer-term tendencies. Thus, while in the first and second quarter output will not be as dynamic as it was through January, in the medium term the reconstruction efforts and the normalization of output and demand will provide a strong impulse to the economy. The marginal productivity of the capital stock that must be recovered is high, and all the activities associated with the production of non-tradable goods, such as construction, will face a large increase in demand. The main contribution that monetary policy can make is to ensure a stable environment for reconstruction works to proceed without straining our economy. Evidence found in the international literature indicates that natural disasters have permanent negative effects only in low-income economies. It also shows that, although these are essentially exogenous phenomena, the magnitude of their effects is endogenous to the  6  BIS Review 61/2010  scenario, with factors such as the quality of policies and institutions tending to mitigate the damages. Chile has solid institutions and an economic policy framework that allows for the implementation of any measures necessary for reconstruction. As a result, the catastrophe of last February 27 does not compromise our country’s prospects for progress and development.

Finally, there will be an additional effect associated with the public and private reconstruction efforts. The ultimate impact on growth and inflation will  BIS Review 61/2010  3  depend, among other factors, on the magnitude, composition and timing of those efforts, on the sources of funding that are used and on the focus of the related expenditures. As for the size of the loss in productive capital stock, the Board’s working assumption for this Report’s baseline scenario is that the catastrophe destroyed 3 percent of the economy’s net capital stock. Such an estimate, which is detailed in a box inside the Report, is based on the damage survey published by the government on March 23 and on the historical ratio between the gross value and the net value of the capital stock. To clarify this calculation, it is important to explain how this capital stock is measured. First, the gross capital stock equals the value of assets used in the productive process, valued “as new”. In other words, the nominal gross value of the capital stock can be proxied by the replacement cost. Second, the net value of the capital stock is the gross value of the capital stock minus the assets’ depreciation. This distinction between gross and net value of capital is important, because the latter – the net value – is what matters when measuring the economy’s productive capacity and, therefore, trend GDP, the output gap and inflationary pressures.
Globally, stable inflation expectations and the underutilisation of capacity suggest that there is no inflationary pressure. According to the SNB’s inflation forecast, price stability in Switzerland is not under threat for the next few years. As the crisis recedes, however, central banks will face the challenge of returning monetary policy to normal in a timely manner and reabsorbing liquidity. The SNB’s mandate is to ensure price stability while taking due account of economic developments. We will continue to take all action necessary to fulfil this mandate. 8  BIS central bankers’ speeches  BIS central bankers’ speeches  9  10  BIS central bankers’ speeches  BIS central bankers’ speeches  11  12  BIS central bankers’ speeches  References Alesina, Alberto and Lawrence H. Summers, 1993. Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence. Journal of Money, Credit and Banking 25(2): 151–62. Barro, Robert J. and David B. Gordon, 1983. Rules, discretion and reputation in a model of monetary policy. Journal of Monetary Economics 12(1): 101–121. Bernholz, Peter, 2003. Monetary Regimes and Inflation – History, Economics and Political Relationships. Edward Cheltenham: Elgar Publishing. Budina, Nina, Tidiane Kinda, Andrea Schaechter and Anke Weber, 2012. Fiscal Rules at a Glance: Country Details from a New Dataset. IMF Working Paper 12/273. FDF, 2012. Die Schuldenbremse – eine Erfolgsgeschichte. www.efd.admin.ch/ dokumentation/00737/00782/02006/index.html?lang=de (20 November 2012). Feld, Lars P. and Kirchgässner, Gebhard, 2008. On the Effectiveness of Debt Brakes: The Swiss Experience. In: Sturm, J. E. and R. Neck (eds. ): Sustainability of Public Debt.

The MPC has rightly stressed that the timing of the first Bank Rate increase is less important than the path thereafter – that is, the degree and pace of increases after they start. In particular, we expect that eventual increases in Bank Rate will be gradual and limited. That is because the economy will face the ongoing challenges of public and private balance sheet repair, a 10% appreciation of sterling over the past year or so, and muted growth in our main export markets. In addition, in the medium term, higher capital, liquidity and other prudential requirements can be expected to lead to higher spreads between borrowing rates and risk-free rates than before the crisis. Moreover, a highly indebted private sector is particularly sensitive to interest rates.4 Caution over the path of rate increases once they begin is also needed because we start at a point from which interest rates cannot easily be reduced. The effects of an excessive or an excessively rapid tightening of monetary policy could prove damaging and difficult to undo. Perhaps for these reasons, financial markets expect Bank Rate to rise to only 2¼% over the next three years and, on that basis, the MPC expects the economy to move towards internal balance – almost closing the output gap – in the same period. Just achieving internal balance will not be enough to guarantee a durable expansion. It matters how we do so.
As well as building collaborative ties across the world, we are also creating partnership closer to home. There is a huge upside in tapping the considerable potential in fintech development in the Guangdong-Hong Kong-Macao Bay Area. The Bay Area has a population of over 66 million and a GDP of over $ trillion. With the deepening of the financial sector and the expanding cluster of technology talents and industrial base, the Bay Area is going to become one of the main engines of growth for China and a very fertile ground for innovation in financial services and fintech. 9. Recognising the importance of cross-border collaboration in the Bay Area, the HKMA, as a start, has signed a Fintech MOU with the Office of Financial Development Service (“OFDS”) 2/4  BIS central bankers' speeches  of the Shenzhen Municipal Government. Now, I am pleased to announce that, in pursuing our commitment to collaboration, Hong Kong and Shenzhen will jointly launch three fintech initiatives: (i) A fintech competition; (ii) A soft-landing scheme; and (iii) A talent development programme. Fintech Competition 10. Together with the Shenzhen OFDS, we will organize a fintech competition that is open to participation by Shenzhen and Hong Kong financial institutions. It offers total prizes of more than $ million for the winning fintech products or solutions. I am sure the awards will provide a strong incentive for financial institutions to innovate, either by themselves or in partnership with fintech firms.

While each financial market has many idiosyncratic factors, fintech can offer solutions that cut through different geographical and market boundaries. For example, breakthrough in biometric authentication technology is helpful not only in the advanced markets but also in the developing markets. By the same token, cybersecurity threats can originate from anywhere in the world and is not bound by national boundaries. There is a high degree of commonality in the application of fintech, especially in the context of cross-border financial transactions and flows. So it is crucial for Hong Kong to enhance its collaboration with other financial centres to share experience and learn from each other. In this context, I am very pleased to announce that I have just signed a Cooperation Agreement on fintech with the Managing Director of the Monetary Authority of Singapore (MAS), Mr Ravi Menon. To mark the occasion, a simple ceremony will be held later this morning to exchange the signed Agreement. May I take this opportunity to thank my MAS colleagues for working very hard with us on this most meaningful collaboration. 4. Hong Kong and Singapore are the two leading international financial centres in Asia. Both the HKMA and MAS are actively promoting the use and development of fintech respectively. There is considerable scope for the two places to collaborate and achieve a win-win outcome. A priority area of collaboration is the use of fintech in advancing the hitherto paperbased trade finance system that has been in use for as long as trade existed.
And over the past month some of the key spending and activity indicators have been strong. The balance of risks to output growth and inflation has shifted towards the upside. As those risks began to materialise, the MPC acted. The Committee started to raise interest rates to deal with the changing balance of risks last August, and has now raised rates by 75bp in total to keep inflation on track to hit the target. But, by responding early to changes in the inflation outlook, the MPC ultimately needs to raise interest rates by less than would be the case if we delayed. Looking forward, some of the factors responsible for the pick up in inflation through 2006 are likely to unwind during 2007. Oil prices have fallen by around a third since August, and will feed through to petrol and utility prices. The rise in the exchange rate will dampen the impact of higher import prices. It is also important not to exaggerate the effect of stronger demand on inflation. As we pointed out in our November Inflation Report, the ability to recruit migrant labour continues to offer a safety-valve for demand pressures in the economy, and is, no doubt, in some part responsible for the continued muted level of wage pressures. That is a particular help in present circumstances, and has reduced the extent to which interest rates have needed to rise. But how quickly and by how much inflation will fall over the next year or so is difficult to judge.

But the belief that we could avoid the adjustment by pushing up our pay would lead to a self-defeating process of higher wages offset by higher prices. It is the task of the MPC to ensure that the process of adjustment does not lead to a persistent rise in inflation. Bank Rate was raised in order that inflation will come back to its 2% target, and future action will depend upon how those risks to the inflation outlook materialise. The month by month path of interest rates required to bring inflation back to target is a matter of judgment. There is certainly room for reasonable people to disagree about the level or timing of changes in interest rates. There is no absolute truth here, and it is vital that the MPC keeps an open mind at all times. That in essence is my letter to you and all the members of the Birmingham Chamber of Commerce. Achieving the inflation target is, I believe, in the long-run interest of manufacturing no less than the rest of the economy. I recognise that the burden of changes in interest rates often falls disproportionately on manufacturers and other exporters as increases in interest rates push up the sterling exchange rate. And that comes on top of a secular decline – fifty years ago almost 40% of GDP was produced  2  BIS Review 9/2007  by the manufacturing sector. Today that share is around 14%.
So equity-linked structured notes, for example, have been out of fashion. High yield (non-financial) corporate bonds and Exchange Traded Funds (ETFs) have both been in. But since the risks in some ETFs were highlighted – by the UK’s new Financial Policy Committee amongst others – some of the more complicated ETFs and those with opaque securities lending programmes, have faded somewhat. It is not that investors are avoiding all credit risk – where it can be properly assessed and a diversified portfolio is possible. For example, the end-investor demand for corporate credit ex-financials is generally very strong. The announcement of OMTs by the ECB and the other announcements by the US Fed and the Bank of Japan, appear to have led to a collective sigh of relief in recent weeks. Yields on Spanish and Italian debt have fallen since the announcement – by 100bps or so at 10 years – and equity markets are up. I hope that the ECB action lays the foundation for a successful resolution of the European debt crisis. The view of markets so far is positive in that regard. I would caution, however, that we have been here before. Along with every other market participant I hope that this time will be different. But central banks cannot solve fundamental problems in the real economy, even using unconventional measures – they can only give the time and space for governments and private sector agents to do so.

Despite their cost magnitude, we persist  BIS central bankers’ speeches  1  with these investments because we believe that once properly leveraged they will enable the organisation to do more with less by: (i) increasing staff efficiency and productivity; (ii) strengthening relationships with the organisation’s customers; and (iii) fostering more effective collaboration with various business partners to quicken the speed at which data that is required for decision-making can be provided. In striving to achieve these goals, we are exposed to the likelihood of being affected by the major risks that are attendant with information technology use. Consequently, the institution continues to allocate resources to: (a) make its information systems and the supporting technical infrastructure more reliable and resilient; and (b) protect the integrity of the institution’s data assets. Achievement of the foregoing objectives is heavily dependent on all information technologyrelated activities and investments being channelled in a manner that is consistent with the organisation’s goals and needs – the so called IT/business alignment challenge that appears to be so elusive in many cases. Here, from a management oversight perspective, one cannot overemphasise the necessity of embracing governance mechanisms that are fit for purpose. To remain relevant, the information technology function must continually evaluate and if necessary enhance its existing capability to ensure that it can meet the requirements of core business processes while being in tune with the current and envisaged directions of the organisation.
This often results in structural defects in the financial systems that are not conducive to the maintenance of monetary and financial stability; for example, regulatory gaps, low transparency and market concentration. These defects also breed unethical behaviour. Indeed, free and open emerging markets are considered by some as markets that can be rather freely manipulated. They also call them ATMs. But I still believe that financial openness outweighs the risks of financial instability, and that the risks I mentioned just need to be, and can be, managed, simply by being sensible in the development of the financial system, reminding ourselves always that the primary purpose of the financial system is financial intermediation that supports the economy. Although it provides employment for quite a number of people, including us, and profits for a lot of capital, the financial system does not and should not have a life of its own. Gradualism is perhaps a prudent attitude, even if this means taking a little more time or appearing for a time to be not as welcoming as the top players in international finance would like. "Because others have it" is definitely a risky attitude to take in financial development. And as developed markets are going back to basics, a no-frills approach to financial development may not be a bad idea. Financial openness does not mean getting all the top brand names to set up shop in your backyard and importing innovative financial instruments and practices. Indeed, some of those innovative financial instruments may be toxic.

Opening the capital account exposes countries to increased financial volatility. The impact, however, is different for capital importers and exporters. Capital importers face the possibility that flows would abruptly dry up, thus inflicting damaging shocks to their financial systems and national economies. Capital exporters accumulate claims on the outside world and, therefore, run the risk of valuation losses (through exposure to country and exchange rate risk). Ideally, an international open capital account regime would protect both capital importers towards sudden liquidity shocks and capital exporters toward abrupt changes in the value of their assets. These are potential avenues for progress and debate. International liquidity The crisis is a powerful reminder that liquidity – both domestic and international – can never be taken for granted. The provision of international liquidity has been severely disrupted. How will it be provided in the future, and by whom? These are not new questions. In the recent period, Governor Zhu, from the People Bank of China has raised the issue of reserve currencies. According to Governor Zhu, current arrangements for liquidity provision are a source of instability and have played a role in causing the crisis. Governor Zhu has mentioned, in particular, the intrinsic contradiction embodied in the famous “Triffin dilemma”. Because the dollar is the major reserve currency, international liquidity supply depends on the US running a sufficiently large current account deficit which, by itself, aggravates global imbalances and creates instability.