samchain/econo-pairs-v1 huggingface dataset:
4  Including from a new independent evaluation office that reports directly to the non-executive Chairman. 6  BIS central bankers’ speeches  market participants take liquidity for granted and crowd into trades in anticipation of central bank action. The Bank is keenly alert to such risks. The FPC and the FSB are currently analysing these issues and welcome perspectives on whether the market, regulation or both should adjust for the good of the system. Conclusion With the main building blocks of reform in place, now is the time to take stock. It’s vital that we – public authorities and private market participants – work together to reverse the tide of ethical drift. This cannot be a one-off exercise. We need continuous engagement so that market infrastructure keeps pace with market innovation. That’s why the Bank is announcing that it will hold an Open Forum this Autumn which will bring together all stakeholders in FICC markets. Our goal is to discuss the prospects for market functioning, where regulations might overlap or conflict, and whether enough has been done to build the real markets the UK deserves. To prompt an open discussion, we are publishing a detailed paper which reviews these issues and draws out such questions. 5 Everyone has an interest in the future of financial markets, so I would strongly encourage you to engage with our Open Forum process online and at the conference itself. An Open and Accountable Bank welcomes your input.

Mark Carney: Building real markets for the good of the people Speech by Mr Mark Carney, Governor of the Bank of England and Chairman of the Financial Stability Board, at the Lord Mayor’s Banquet for Bankers and Merchants of the City of London at the Mansion House, London, 10 June 2015. *  *  *  I am grateful to Ben Nelson, Iain de Weymarn, Nicola Anderson, Alex Brazier, Andrew Hauser, Chris Salmon and Tim Taylor for their assistance in preparing this speech and accompanying Open Forum document. My Lord Mayor, Lady Mayoress, Chancellor, Ladies and Gentlemen. Almost 350 years ago, the Great Fire destroyed the City of London and rendered 100,000 people homeless. It took half a century to rebuild. The legacy of the Great Fire endures, including such Wren masterpieces as St Paul’s and his twenty-five other steeples that survive today within the City’s precincts. But the Fire’s legacy is not limited to how the City looks, it extends to what the City does. The blaze led Nicholas Barbon to establish the first insurance company, an innovation to fulfil a social need: the sharing of risk. Public authorities complemented private initiative. There was a Royal Proclamation that set standards for wider roads and houses built from brick and stone instead of timber. And Parliament passed the Parish Pump Act to prevent “mischiefs that may happen by fire” by establishing fire brigades and improving water supply.
Amendments to the trading book are due to be implemented no later than the end of 2011 to address the problem of excessively low capital charges for trading activities in the pre-crisis period. In the EU, the appropriate measures are included in amendments to the Capital Requirements Directive, the so-called CRD3 package. The FSB just finished its peer review on how its members implemented the agreed principles for sound compensation practices. In the EU, the CRD3 has specifically included banks’ remuneration policies in the supervisory review. An EU regulation on credit rating agencies – which will come into effect at the end of 2010 – was adopted last year. The European Commission has recently proposed amendments to the regulation which aim to introduce a centralised framework for supervision of the agencies at the EU level. Under the new supervisory framework, an European Securities and Markets Authority with oversight and supervisory powers over credit rating agencies will be established. Efforts in this field aim to address some shortcomings of the credit rating sector revealed by the crisis, such as conflicts of interest, poor rating quality and insufficient transparency about the methods used for their evaluations and the procedures for rating decisions. A legislative proposal that establishes regulatory and supervisory standards for hedge funds is also under consideration in the EU. Finally the two major accounting standard setters, IASB and FASB, are continuing their efforts to achieve convergence of accounting standards, though it might not be possible to keep to the initially agreed time table.

Then I will turn to four eye-catching initiatives:   first, the establishment of the European Systemic Risk Board or ESRB, a new body that will for the first time become responsible for macro-prudential supervision in the EU;    second, how policy makers are dealing with systemically important institutions;    third, the issue of procyclicality or the dynamic interplay between the financial sector and the real economy;    fourth and last topic to which I will pay some more attention is the mandate of central banks in the area of financial stability. Let us now embark on our architectural walk! II. Causes of the current crisis  Much has been said about the root causes of the current crisis over the past three years. I will not expand on this topic but I will just mention specific factors – some of them of a macroand others of a micro-economic nature – which in my view were key in the run up to the crisis. In the two or three years before the crisis erupted, a constellation of factors, including very favourable macro-financial conditions combined with strong growth, low inflation, ample liquidity, exceptionally low volatility across virtually all financial markets and extraordinarily low risk premia, had the effect of covering up the building up of significant imbalances. Significant financial imbalances were in the making, at various levels of the global economy and financial system.
In four cases out of six, expectations were already in line with the Riksbank’s reporate path before publication, which can be interpreted as indicating that the market’s ability to predict and understand monetary policy was strong. When there were significant deviations, the market in most cases adjusted its expectations towards the repo-rate path after publication, which also indicates that in general it has not been so difficult to understand the Riksbank’s reasoning. Despite the fact that the economic situation was highly uncertain in February 2009 and that the repo-rate path was significantly lowered, the new repo-rate path was predicted relatively well by the market and the market’s expectations also shifted closer to the new repo-rate path after publication (see Figure 15). From April 2009, however, relatively large differences between the market’s expectations and the Riksbank’s repo-rate path appeared. In advance of the monetary policy meeting in April, the market expected that the forecast for the repo rate over the next year would be lowered again. However, the Riksbank’s new forecast entailed a considerably lower repo rate in 2010 and 2011 than the market had expected. Even so, the Riksbank’s new forecast did not significantly affect market expectations (see Figure 16). BIS Review 32/2010  19  In the period leading up to December, market expectations of the development of the repo rate changed relatively little, even though the Riksbank cut its repo rate forecast further in July and then held to this forecast during the entire autumn.

It is a question of choosing a repo-rate path so that the forecast for inflation and resource utilisation entails the best possible stabilisation of inflation and resource utilisation. As the forecasts play such a central role in the monetary policy decisions, it is of course important that the Riksbank employs good forecasting methods and uses all the relevant information available when the forecasts are produced so that they are as accurate as possible. An important step in the assessment of monetary policy is therefore to investigate whether the forecasts are reasonably accurate. One way to do this is to compare the Riksbank’s forecasts with those of other forecasters. The Riksbank makes such comparisons every year. Another component of the assessment of monetary policy is to analyse how predictable monetary policy is and what impact it has on market rates. Monetary policy mainly acts by influencing expectations regarding interest rates, inflation and the real economy in the future. Expectations regarding the repo rate in the years immediately ahead affect interest rates with  2  BIS Review 32/2010  longer maturities, and therefore inflation and the real economy, more than the repo rate in the period up to the next monetary policy decision. The predictability of monetary policy can be measured in terms of how well the market predicts the next repo-rate path. How effectively monetary policy steers market expectations and market rates can be measured in terms of how closely the market expectations regarding future repo rates correspond to the repo-rate path after it is published.
Standing back from the Covid crisis, and looking at the UK case, there indeed is some evidence that the impact of QE over the past decade has been largest at times of market dysfunction and illiquidity. Of course the available event studies are very few in number. But, if this result proves robust, it suggests that “going big and fast” with QE is particularly effective in these conditions. I should stress that while the liquidity channel of QE appears to have been particularly relevant in terms of impact at a time of market dysfunction, such as that observed in March, the different channels of QE impact are by no means mutually exclusive. It seems likely that each channel operates to at least some extent most of the time, with all of them affecting long-term interest rates and thus economic activity and inflation. But this need not suggest that all the channels are equally powerful and persistent in all states of the world. Implications for the future  What does this mean for central bank balance sheets looking forwards? Again, two points stand out, though I should emphasise their tentative nature. First, a balance sheet intervention aimed solely at market functioning is likely to be more temporary, in terms of the duration of its need to be in place. To be clear, the asset purchases announced by the MPC in March were a response to much more than just market functioning, in terms of the effects of Covid on the outlook for the economy and inflation.

Measuring this effect precisely is of course hard, since we cannot easily identify what the counterfactual would have been in the absence of QE. But QE clearly acted to break a dangerous risk of transmission from severe market stress to the macro-economy, by avoiding a sharp tightening in financial conditions and thus an increase in effective interest rates. 3  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  3  QE is normally thought to work through a number of channels: including signalling of future central bank intentions and thus interest rates; so called ‘portfolio balance’ effects (i.e. by changing the composition of assets held by the private sector); and improving impaired market liquidity. The Monetary Policy Committee’s decision on QE in March differed somewhat from previous rounds of purchases. A larger amount of purchases, £ was announced as this was judged as necessary to support economic activity and ensure a sustainable return of inflation to target. And the purchases were to “be completed as soon as is operationally possible” to address the emerging financial market dysfunction. In the paper we draw two lessons from the experience. First, it reminds us that the effect of QE can be state contingent. Consistent with that, second, the pace of QE purchases may be more important during a period of market dysfunction associated with a widespread shock to liquidity demand. Indeed, when the MPC voted to expand QE further in June, in more normal market conditions, the pace of purchases was reduced.
After massive investments over a period of years, American companies are now having to cut back plans for expansion. With the abrupt weakening of demand, stocks have become somewhat too large. Share prices, above all in the IT and telecom sector, have fallen sharply during the past year, in keeping with declining profit expectations. American households have had strong expectations about future income and wealth, as indicated by high consumption and rising debt in recent years; these expectations have now been scaled down and consumption has been affected. The U.S. Federal Reserve cut its instrumental rate six times during the spring, bringing it down to 3.75 per cent. But even with this monetary stimulus, the slowdown still seems to be holding its grip on the American economy. As we know, however, it takes time for interest rate cuts to exert their full effect on economic activity. In order to form a picture of what lies ahead, one can start from three alternative explanatory models. The first concerns the notion of the new economy and stresses the U.S. economy’s higher growth potential, with a rising underlying rate of productivity growth and increased corporate profits that in turn underpin a higher future return on assets, including listed shares. A more rapid expansion of production capacity and better facilities for managing fluctuations in stocks pave the way for higher demand and smaller cyclical fluctuations in the future. This is the view that favours a rapid recovery or a V-shaped decline and upswing.

BIS Review 72/2001  3  Looking ahead Before I take a look at future tendencies, it may be in place to emphasise that the Swedish economy is fundamentally sound, with a good potential for growth and employment, accompanied by surpluses on the current account as well as the public finances. The recent temporary increase in inflation at a time of slowing activity is a problem that Sweden has in common with other countries around the world. Global economic growth has slowed, as I mentioned, during the spring. The fall-off has been deeper and more protracted than many observers counted on at the beginning of the year. Information received during the summer confirms the impression of a somewhat more drawn-out course, with an upturn that looks like being delayed, in many respects because the key player in the global economy - the United States - is still limping. The imminent recovery presaged by signals early this summer, above all from the financial markets, now seems somewhat more doubtful. The outlook for the Japanese economy is still highly uncertain. And in Europe the growth forecasts for the leading economies have had to be revised downwards. It is perhaps not surprising that after a series of years of strong growth it is taking time to overcome the tensions that arose in the wake of the economic euphoria in the United States. Neither is it odd that with an increasingly integrated global economy, the American slowdown is affecting many other countries, too.
The papers to be presented by Luca Dedola from the European Central Bank and Óscar Jordá from the University of California-Davis are part of a very active literature that studies the determination of nominal exchange rates incorporating insights from recent developments in the theory of financial markets. On line with developments on financial markets theory, the paper to be presented by Craig Burnside shed lights on a central discussion on the exchange rate dynamics theory. Along with his coauthors they offer an explanation for the forward premium puzzle in foreign exchange markets, their analysis is also consistent with opportunities of profitable carry trade strategies. Given the importance of the nominal exchange rate for an open economy like Chile, these papers are also a very important and relevant contribution. As you can see this promise to be a very interesting conference and I invite you to engage in the discussion and seize the opportunity to learn from this very excellent group of researchers. BIS Review 104/2010  1  Finally I would like to thank Miguel Fuentes, Diego Saravia and Felipe Labbé for organizing what promises to be a very interesting workshop. Thank you. 2  BIS Review 104/2010

Such investments can be found in the emerging markets of Asia, especially in China. Although the dynamics are somewhat different in China, its tale of economic growth is as legendary as that of the Middle East. China has experienced a huge inflow of funds in search of growth opportunities and at the same time the Mainland authorities have been gradually opening up the country’s outward investment. As a Special Administrative Region of China, Hong Kong plays a pivotal role as the IFC of China in the course of financial liberalisation. Not only has it acted as a conduit for Mainland companies accessing international markets through IPOs, but also one of the largest sources of foreign direct investments for Mainland China. With the continuing financial liberalisation on the Mainland, Hong Kong is positioned as the most attractive destination both for investing into China and tapping China's funds. What are the challenges for us? Opportunities aside, we are of course aware that Hong Kong also faces challenges in developing Islamic finance. It is a fact that Hong Kong’s Islamic community is not big, but we are confident that the development of Shariah-compliant financial markets can take off even in environments in which the domestic Islamic community is relatively small, simply for the fact that investors nowadays are looking beyond domestic boundaries and traditional finances as financial activities gravitate towards the Middle East and China. Indeed Hong Kong’s relatively small population does not seem to undermine in any way our performance in the conventional financial and capital markets.
It is a symbol to which people are attached in meta-economical - if not religious - terms. The Archbishop of Canterbury, George Carey, once stated: “I want the Queen’s head on the bank notes. The point about national identity is very important. I don’t want to become French or German.” Personally, I do not feel less German, only because I share a currency with fellow Europeans, just as presumably the Welsh, for example, can retain a strong sense of identity despite sharing the same money with the English. I also believe that a European identity - with its own shared symbols and characteristics - can happily co-exist with, and even re-enforce, national, regional and local identities. Nevertheless, symbols matter. The euro reflects the economic reality that now binds together those countries which have adopted it as their currency. It will also inevitably be regarded as a broader symbol of a shared future and destiny. Whatever the wider goals and ambitions of European integration may be, one thing is clear. The first and foremost objective of European Monetary Union was not simply to create a common currency but a stable currency. This is the promise that Europe needs to fulfil on a lasting basis. A stable money is too important to just be regarded as an instrument for other political ambitions. The reverse is true: without stable money all further ambition will come to nothing. Jaques Rueff in the 1950s famously claimed that “Europe will be built on money or it will not be built”.

debasing of the currency. His punishment in one of the darkest - or rather hottest - corners of hell is a horribly inflated belly. Central bankers beware! 9  BIS Review 96/2000
Like the 70% guideline, the Link is maintained over the longer term for the greater economic well-being of our community, even though it might seem tempting from time to time to try to use monetary policy for short-term tactical gains. In fact, although the spotlight tends, quite understandably, to be on newsworthy issues - bank rescues, intervention in the stock market, the latest Exchange Fund results, the "alarming" strengthening of the Hong Kong dollar - much of the work of any central bank has to be focused on the longer term, on the implementation of sustainable, consistent, dependable policies on a horizon that lies well beyond the daily concerns of most of us. For this reason the general consensus is that a central banking institution must be somewhat set apart from the daily workings of government and politics. The HKMA, as Hong Kong's central banking institution, has, throughout the 10 years of its existence so far, always had a special position as an organisation that is a part of the Government and yet operates at some distance from the Government proper. This relationship between the HKMA and the Government has recently been set out in a series of documents produced in response to suggestions from within Hong Kong and recommendations by the IMF that the roles of various senior officials involved in monetary and financial affairs should be set out more clearly.

On top of this, a substantial part of the growth in one of our best-performing sectors - exports - is generated by offshore trade, which by its nature creates fewer jobs domestically than does the more traditional entrepot trade, not to mention domestic exports. What this means is that, however quickly the recovery penetrates society as a whole, and whatever the efforts made to open up new areas of economic activity, a large pool of unemployed may still be left behind. These fellowcitizens will have a legitimate claim on the community for assistance in one form or another, and how to tackle this issue without further compromising fiscal discipline will be a great challenge. It is a challenge that many developed - and not-so-developed - economies have been grappling with for many years. But it is a fairly new and unfamiliar challenge for Hong Kong. A related issue is the question of property values, although how far this should be classified as a structural or a cyclical issue is uncertain. Hong Kong's property market is a complex and volatile creature: it is not at all clear how the various factors on the demand and supply sides have contributed to the extraordinary collapse we have seen in the market over the past five years. How the market will behave in the future is even less clear, though it does seem that there has been some stabilisation in prices recently.