samchain/econo-pairs-v1 huggingface dataset:
And many market participants were also expecting a correction at some point; but they generally felt they were well placed to handle it. In fact the severity and breadth of the downswing has surprised markets, commentators, and policymakers alike. In the light of subsequent developments, a number of commentators have concluded that the problem was simply a lack of attention and short memories. I don’t think it was quite as simple as that. I am with Mark Twain who said "History doesn't repeat itself, but it does rhyme." While the current crisis has some similarities to previous downswings – in the early 90s or of the 70s for example – there are some significant differences too. For example the last three recessions in the UK (in the 70s, 80s and early 90s) were preceded by sharp rises in consumption and activity and earnings to well above sustainable rates. As Chart 2 shows that was not true of the last few years when consumption, output and earnings all seemed unusually stable. Again in previous recessions, stress in the banking sector has tended to follow on from defaults and losses on domestic loans as interest rates rise and the economy slows down. But this time the downturn started in the banking sector – last summer when losses in the US property market not only led to losses in UK banks trading and treasury books but closed important sources of finance to them. The downturn in the housing market and then the wider economy followed.

The study focuses its analysis through another form of ‘turning point’ – 1  BIS Review 114/2000  the ‘hub’ – in positioning Hong Kong as a logistical, financial and digital centre of intermediation between the Mainland and the rest of the world. Indeed, China’s entry into the WTO, along with globalisation and technological advance are the three processes that I believe will shape Hong Kong’s role as such a hub over the coming years. 5. I have recently spoken in some detail elsewhere on the economic implications, and, in particular, the implications for Hong Kong’s banking and financial sectors of China’s entry into WTO. So I shall deal with these only briefly here, before turning to the other two processes of globalisation and technological advance. To summarise the research by the World Bank, the HKMA and other organisations: China’s share in the world’s external trade is predicted to double in the space of five years as a result of WTO entry – from around three-and-a-half per cent to more than seven per cent. This rapid growth in the Mainland’s share of world trade, coupled with a projected growth in trade volume at the rate of 7% per annum, is likely to mean yet more Mainland-related business for Hong Kong, just as it will undoubtedly also mean a great deal more business for Shanghai and other Mainland cities as well.
These instruments will initially bear an interest rate of 0.5%, which will be reviewed annually. This mapping into the Central Bank is part of the mechanism that is intended to keep the remaining offshore krónur segregated in the face of domestic liberalisation. But why 0.5%, you might ask? You see this if you look at the Central Bank balance sheet and take into account that we are accumulating reserves. Basically, this rate reflects the rate at which the Bank is, at the margin, investing these funds, and no one can expect us to incur a significant cost of carry because of these positions. And this rate should not be confused with our key Central Bank rate, which is 5.75% on seven-day deposits. This rate is as high as it is for monetary policy reasons; it is intended to affect the spending and saving decisions of domestic residents and has nothing to do with these positions. I know that there are more questions, and Sturla Pálsson, Director of Market Operations and Treasury at the Central Bank of Iceland, and I are willing to answer them during the Q&A session. But let me take two before I conclude. First, why 220–190 krónur per euro? Why not the onshore rate? First of all, this is a different asset class from onshore krónur and has been trading at very different exchange rates.

Joseph Yam: The ADB challenge to help Asia return to stable and sustainable growth Statement by Mr Joseph Yam, Alternate Governor of the Hong Kong Monetary Authority, at the 35th Asian Development Bank Annual Meeting, Shanghai, 10-12 May 2002. *  *  *  Mr President, I would like to first congratulate you on your re-election as the President of the Bank. I would also like to thank the Government and the people of the People’s Republic of China for their hospitality in hosting this year’s Annual Meeting in this magnificent city of Shanghai, itself a powerful symbol of tradition and modernisation. I also express my sincere appreciation to the Bank’s management and staff for the excellent arrangements made for this meeting. I join others in adding our special welcome to our new member of the Bank – Portugal. Poverty is reduced more extensively at times of fast economic growth but less so when growth slows. The past year has been a difficult one for the poor. Amid the synchronised slowdown of major industrial economies, economic growth has been slow and uneven in Asia. The terrorist attacks on the US on 11 September shocked the world. The Enron debacle and the Argentine economic crisis cast long shadows on the equity and financial markets worldwide. Against this background, the task of poverty reduction is made more daunting and pressing. However, I must commend the Bank for meeting the challenges of last year by mapping out and implementing the Long-term Strategic Framework.
The alarm bells ring for us when we are told that the CEO or other Senior Executives are very sensitive to challenge;  3.  so we as supervisors depend on Non-Executives, under the leadership of the Chair, to challenge the Executive in all aspects of the firm’s strategy, which includes the viability and sustainability of the business model and the establishment, maintenance and use of the risk appetite and management framework. We also of course rely on the Non-Executives to mentor and coach the Executives and balancing this with the essential ability to challenge is a vital component of an effective Board. In the terms of the Senior Managers Regime, this frames the responsibility of Boards. But, as many Board members have said to me, if only it was that simple, but you have made it so fiendishly complicated. Well, actually we didn’t make it fiendishly complicated, finance has become that way itself – we didn’t invent exotic derivatives. There are those who think the answer is to make finance less complicated, but in the real world there are benefits to innovation if risk management is effective. So, how do we square the responsibilities with the complexity? Not by drowning in complexity, or by doing a Canute and trying to tell it to go away. For Boards it means having a certain level of understanding, not at the level of the maths of a Copula.

The key challenge for all of us is to be able to boil the complexity down to understand what are the key drivers – which judgements are likely to matter when bad things happen in the tail of the distribution of risks. This is a description of one of the hardest things in many walks of life – how to explain complex things in simple terms. In the Bank of England, it is a challenge we face regularly in terms of  2  BIS central bankers’ speeches  explaining complex areas of public policy – it’s the same issue for our judgements on monetary policy. So, let me put forward a proposition for Boards. It is the job of the Executive to be able to explain in simple and transparent terms these complex matters to Non-Executives. In doing so, you should understand the uncertainty around judgements, in what circumstances they could be wrong, and how there can reasonably be different ways to measure things like liquidity. Non-Executives should not be left to find the answers for themselves, and they should not feel that they have to do so out of a lack of sufficient confidence in what they are being told. In other words, they should not be pointed towards the haystack with warm wishes for the search ahead. Let me give an illustration of this in a highly topical area for banks and insurers, internal risk models. What does a Board need to understand?
There are really three key areas: •  First, there is uncertainty about what in fact is happening on the supply-side of the economy, that’s to say how rapidly can aggregate demand be allowed to increase before it begins to run ahead of supply and put upward pressure on inflation or, alternatively how rapidly must demand increase in order not to run below supply-side capacity and cause inflation to fall significantly short of the inflation target. The target is, of course, symmetrical;  •  Secondly, and specifically in relation to the labour market, at what point does the growth of employment or the fall in unemployment lead to a rate of increase in pay settlements, or earnings growth, which would subsequently lead to accelerating inflation in goods and services markets; and  •  Thirdly, what is happening or is likely to happen to the rate of growth of aggregate demand in the economy anyway. Now, as I said earlier, there is not a great deal that we – through monetary policy – can do directly to affect the first two of these areas of uncertainty, which relate to the supply-side of the economy. The major challenge for us in these areas is in assessing – or quantifying – their impact. And that’s not at all easy because, while the effects gradually become apparent over time, many of the relevant developments cannot be directly observed or measured; nor therefore can they be predicted with any great confidence.

On this view, the slowdown in prospect would have relatively benign effects in terms of the longer term sustainability of the global economic expansion; and developments so far have already had positive effects both in terms of their impact on the world oil price, and in terms of their impact on the pattern of exchange rates, notably by reducing the exaggerated weakness of the euro. On that basis the global economic environment should provide a reasonable background for our own economy. We – and our partners in the European Union – would be relatively little affected by the US economic slowdown. The world economy as a whole would certainly be helped by the somewhat softer oil price. And the recovery of the euro – including its recovery against sterling – will help to ease the severe imbalance within our own economy between the domestically-orientated sectors which have typically been doing relatively well and those businesses and sectors that are most exposed to competition from the Eurozone and which have been having a rough time. That imbalance is, I know, a real concern to many up here in Yorkshire, including many of you here in Sheffield. It has, for some time, been one of the most difficult issues confronting us in conducting monetary policy. What then are the major domestic uncertainties?
Unlike the trading of bonds and derivatives, the trading of stocks is mostly confined to their home markets. But since there are only a limited number of large Singapore companies who have not yet been listed, Singapore will have to try harder to bring in foreign listings, particularly from India and China. One approach may be for SGX to leverage off Singapore agencies with presence in these countries, like EDB and IE Singapore. 1  DBS, OCBC, OUB, UOB, Keppel Bank and Tat Lee Bank. We excluded POSBank as it was technically not a bank. 2  The Banker, Jul 2002. 4  BIS Review 62/2002  Strategic and proactive approach to development In developing the financial sector, we sought to target key activities that would help to make us a world-class financial centre. Our pro-active approach has yielded results, both in expanding specific activities, and more generally in sensitising MAS to the needs of the industry. Debt market While the equity market has found it hard to grow, we have made some progress with our debt market, albeit starting from a very low base. The relaxation of the $ non-internationalisation restrictions 3 helped. We have issued more SGS to increase market liquidity and create a benchmark yield curve . 4 The corporate bond market has also seen significant growth . Issuers include supra-nationals such as the International Finance Corporation and the African Development Bank, well-regarded corporates such as GE Capital, and this year Freddie Mac.

Malaysia’s supportive framework and process for sukuk origination and sukuk listing also facilitates the issuance process of ringgit or nonringgit denominated sukuk in our market. Efforts to deepen the sukuk market have provided significant opportunities for participation in this market, with the size of the Malaysian sovereign and corporate sukuk outstanding growing threefold from a total of RM120 billion in 2005 to RM353 billion as at end-2011. The market has also drawn the interest of foreign participation for their financing and investment activities. Key in the development of Islamic finance in Malaysia has been its progressive internationalisation and the introduction of more innovative Shariah-compliant financial solutions that meet the increasingly more complex and diverse international business requirements. BIS central bankers’ speeches  3  Let me conclude my remarks. In serving the needs of the real economy, Islamic finance offers a comprehensive and competitive solution in meeting funding and investment requirements of businesses. Given its international outreach and dimension, and ability to provide a total financial solution, Islamic finance is now at the frontier in which it presents new opportunities to support the economy and overall financial stability. Today’s dialogue session would serve to provide a greater understanding and appreciation on Islamic finance and its potential for the intermediation of finances for international businesses. 4  BIS central bankers’ speeches
With the changes that are reshaping the financial system, skills requirements in the financial industry will also change. Today new careers are also being created in more diverse areas including in areas of finance that have leveraged on technology such as in internet based services. Further challenges will arise from the intensification of competition for talent in a more borderless workplace. Given the importance of talent to performance greater attention needs to be accorded to talent development. There also continues to be an acute talent shortage of such skilled talent in our financial services industry. If left unresolved it will impede future growth and performance of the industry. This existing significant skills gap is already becoming a constraint on industry growth. Indicators from the AIF Skills Gap Index, which measures skills gaps within the workforce, point to a significant deficit in several skill sets that are considered important in the financial services industry. The creation of ACE represents an important step in efforts to provide a comprehensive and integrated solution for such skills and talent development for the industry. At the executive level, leadership, corporate governance and ethics are issues that have dominated attention in global finance given the need to recognise the importance of sustainable outcomes. There are high expectations of the financial industry to demonstrate responsible leadership that will also embrace a strong moral compass in its operations. Education and professional development have a key role in bringing to the forefront these important issues for the industry.

Thus, to keep things manageable, one needs to be selective. Specific standards and codes included in the FSAP therefore differ from country to country depending on their relevance and significance to its financial system. In the case of Thailand, I suppose the scope of the FSAP would likely include most, if not all, of the following core modules: •  Banking supervision  •  Securities market regulation  •  Insurance sector regulation  •  Payment system  •  Monetary and financial policy transparency, and  •  Anti-money laundering and combating the financing of terrorism. In order to attest to the efficacy of each of these regulatory mandates, the FSAP assessment process also involves face-to-face interviews and discussions with a number of private sector institutions. BIS Review 61/2004  1  The third aspect of the FSAP involves identification of follow-up measures for the authorities to address any gaps in the country’s regulatory framework; which also provides a foundation for future technical assistance programmes, if necessary. In the course of today’s workshop, our experts from the IMF will no doubt enlighten us on what the FSAP process would entail in practice. So please feel free to ask any question you may have, especially those who have already embarked on the self-assessment exercise for the relevant modules.
Some households and corporates could face pressures on their cash flows and hence debt servicing ability if the economy slows more than expected. PROPERTY MARKET AND MACROPRUDENTIAL POLICY Last July, the government took macroprudential measures to cool a property market that was showing early signs of potential over-heating. In less than one year, between Q3 2017 and Q2 2018, private residential prices had surged by 9%, offsetting most of the gradual decline of 12% over the preceding four years since Q3 2013. There was a real possibility that property price increases would once again run ahead of economic fundamentals – as they did in the lead-up to 2013. If a renewed property bubble were to form, it would risk a destabilising correction later that would hurt households, businesses, and the banks. This risk was especially pertinent, given the strong pipeline of private housing supply coming on stream over the next few years. This is why, MND, MOF and MAS decided to act early and decisively to restrain the property market. We have learnt from experience that preventing a bubble from forming is less painful than deflating one that has fully formed. The measures implemented last year have helped to moderate the property market cycle. Since end-Q2 last year, private residential price increases have eased significantly and average transaction volumes have fallen by 30%. Bids for land tenders, in both the en-bloc sale and Government Land Sale markets, have become sober.

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Even in a crisis situation – in conditions of collapsing confidence and very low interest rates – monetary theory assumes that a central bank will always be in a position to influence inflation and demand by steering expectations of the future path of its interest-rate instrument in the future. These theoretical prescriptions are based on the assumption of perfect market arbitrage. Intertemporal arbitrage is indeed what makes monetary policy effective in normal times. It ensures that the return on a long-term security is equalised with the return on a strategy of holding a very short-term security – paying the policy rate – and rolling it over until the end of the policy commitment. In this crisis, however, market arbitrage was simply unavailable. The disappearance of market arbitrage was a challenge for monetary policy. But by no means did it imply policy ineffectiveness. It called for central banks to engage in non-standard measures and play an intermediation role that the market was unwilling or unable to perform. The ECB fulfilled its role of market-maker in particular by providing liquidity to banks without limit, for “as long as was needed”, to restore normal market functioning. Note here a difference between the ECB and the Federal Reserve. Even in normal times the ECB conducts monetary policy through loans, rather than via direct purchases and sales of securities. Unlike Fed discount-window lending, however, our loans are untargeted. They are an instrument for the routine provision of monetary policy liquidity, rather than part of selective assistance to distressed banks.

He argued that debt forgiveness would shake the foundations of the Roman Republic and destroy one of its most important values: fides. Fides is trust, confidence, good faith. 8 In modern terms, Cicero was hinting at the moral hazard that can – but need not – be created by intervention in a crisis. The “lender of last resort” responsibility of central banks –  6  Data taken from the Annual Report of the Federal Deposit Insurance Corporation (1940). 7  See Wesley Lindow, “Bank Capital and Risk Assets”, The National Banking Review, Comptroller of the Currency, US Treasury Department, September 1963, pp. 29–46. 8  Cicero, De Officiis II, 73 ff. BIS Review 29/2010  7  that Walter Bagehot advocated 1800 years after Cicero and Tacitus – should always be a dual responsibility. It should be crisis management and future crisis prevention at the same time. When these go hand in hand, the result is confidence in the medium and long term (fides) which, ultimately, helps getting out of the short term crisis as well as contributes significantly to long-term growth and prosperity. Thank you very much for your attention. 8  BIS Review 29/2010
This past Friday we announced a plan of continued daily overnight repo operations through October 10, accompanied by three twoweek term repo operations that span the month end.1 The goal of these actions is the same as for recent open market operations: foster conditions in money markets to keep the federal funds rate within the target range. This episode reminds us all of the importance of having well- functioning markets and the vital role that the Federal Reserve plays in supplying liquidity to the system when markets are under stress. We were prepared for such an event, acted quickly and appropriately, and our actions were successful. Friday’s announcement on open market operations to address potential quarter-end funding pressures on interest rates followed this same approach: quickly diagnose the problem, develop the right action plan, and execute that plan. At the same time, it is equally important that we examine these recent market dynamics and their implications for the liquidity needs in relation to the overall amount of reserves held at the Federal Reserve. We will continue to monitor and analyze developments closely. As Federal Reserve Chair Powell stated in his most recent press conference, the FOMC will assess the implications for the appropriate level of reserves and time to resume organic growth of the Federal Reserve’s balance sheet consistent with the successful execution of the FOMC’s ample reserves framework.2 That’s enough on recent events for now. I’ll turn to another very important issue, reference rate reform.

A common view is that monetary policy is in the driver’s seat The practical application of macroeconomic policy under this policy regime is often described as a situation in which monetary policy is sitting in the driver’s seat and is expected to play the active part in stabilisation policy. It is monetary policy that is expected to keep the economy in balance and inflation stable. Fiscal policy is perceived to have a more passive role, which in principle is restricted to adjusting taxes and expenditure when this is necessary to keep public debt stable over the long term.9 It is not considered to have any explicit stabilisation policy task, other than that which follows from the automatic stabilisers, except possibly in the event of deep recessions or crises. This view has had a major impact throughout the world, both in academic research and in policy departments at finance ministries and central banks. Conducting macroeconomic policy with this division of roles has also worked relatively well in most places, not least in Sweden. It has thus been an arrangement with which most people have been pretty content. The division of roles may no longer be so obvious But perhaps it is time for us to begin to ask ourselves whether this division into an active monetary policy and a more passive fiscal policy really is the best way to achieve a favourable macroeconomic development in all situations. Perhaps the division has been taken a step too far after all, given that certain circumstances have changed.