samchain/econo-pairs-v1 huggingface dataset:
Finally, I will spend some time discussing particular areas where the market is evolving and where the GFXC is currently soliciting additional input, including on “last look.”  Development of the Code and its principles The Foreign Exchange Working Group (FXWG), led by Guy Debelle of the Reserve Bank of Australia, was established under the auspices of the Bank for International Settlements (BIS) Markets Committee in July 2015.2 It was tasked with facilitating the development of a single, global set of principles for the FX market and accompanying tools to promote adherence to those principles. I had the pleasure of leading the work stream to write the Code, while Chris Salmon of the Bank of England led the effort to create tools to promote adherence. The work of the FXWG was supported by the Market Participants Group (MPG), led by David Puth of CLS, which included members from all corners of the FX industry. 1/6  BIS central bankers' speeches  As made clear in the foreword, the Code is not regulation—it is a set of voluntary, global best practices. The development of successful best practices requires active engagement from a diverse spectrum of market participants, which we were fortunate to have throughout this effort. The FX Global Code is intended for all FX market participants engaged in the global wholesale market. This includes sell-side institutions, certain market infrastructures, and buyside institutions as well.

As you might suspect, Principle 17 on last look likely consumed the most time and energy of any of the principles in the Code. In many areas within the last look principle there was broad consensus as to what constitutes good practice. What was clear from this process was that market participants seemed to define last look in different ways and apply it in different ways as well. Last look is described in the Code as a practice in which a market participant receives a trade request and has the opportunity to accept or reject that trade request against its quoted price. The Code notes that if utilized, last look should be used as a risk mechanism to verify validity and/or price. The principle focuses on the importance of transparency and fairness. Market participants should be clear about whether and, if so, how last look might apply to their client trade requests to allow clients to make an informed choice regarding their execution. In one particular area—that of trading during the last look “window”—there was a definite diversity of views. On the one hand, some market participants argued that such trading activity would always be detrimental to the client as it could move the market in a direction that is not to the client’s advantage. On the other hand, some market participants felt that such trading activity could increase their ability and willingness to conduct client trades presented by clients without necessarily placing the clients at a disadvantage.
If the exchange rate is actually misaligned from its fundamentals, the intervention will have a better chance to amend the situation, while it will also bring financial benefits. Conversely, if these are fundamental trends, the intervention will have transitory effects at best, at a substantial cost. Since the implementation of the floating regime at the end of the last decade, we have intervened in the foreign exchange market on three occasions. In the current circumstances we have not ruled it out. It is an option we are permanently evaluating. I want to go deeper into the elements that are weighed for this decision. It is always possible to design an intervention of such magnitude that it can affect the evolution of the nominal exchange rate. But this has other consequences on the economy that need consideration. One such consequence is the need to sterilize the monetary effects of the intervention. The money that is issued to buy the dollars must be taken out; otherwise monetary policy would be subordinated to the exchange rate objective, jeopardizing the stability of growth and inflation. This sterilization pressures long-term interest rates upward, which has an impact on activity, while inducing capital inflows that render the intervention ineffective. In turn, the intervention entails high financial costs, because financing the intervention via debt costs more than the returns on the international reserves, except, as I said before, when it is grounded on the expectation of an important correction of the exchange rate misalignment.

In emerging Asia, the acceleration of spending and increased inflationary pressures appreciate the real exchange rate. Eventually, the foreign exchange regime affects the real exchange rate’s behavior only temporarily, and the adjustment arrives sooner or later by other ways, some times at a greater cost. Improved terms of trade Another factor influencing the exchange rate’s behavior has been the improvement of our terms of trade. Along the past ten years, the ratio between the price of our exports and imports, i.e., the terms of trade, has almost doubled. As of the third quarter of 2010, the terms of trade exceeded the average for the last two decades by more than 60%. Underlying this increment are the higher prices of copper, iron, wood pulp and other commodities relative to manufactured goods, partly attenuated by the oil price increases (figure 3). Improved of trade lead to an increase in the real national income – the sum of wages, profits and taxes – faster than the expansion of our productive capacity. To the extent that this higher national income is perceived as permanent by policy-makers and private agents, it stimulates expenditure and puts pressure on the installed capacity, the domestic interest rate and, ultimately, the real exchange rate. 2  In the case of fiscal earnings, for over twenty years our country has implemented a responsible, prudential fiscal policy, generating fiscal surpluses for most of the period.
Given current economic conditions, all the usual transmission channels have been clogged up. What happens when interest rates cannot be lowered any further? This is the challenge already faced in the US and the UK, and this challenge may need to be addressed by other countries in the near future. The US and the UK have begun to explore “unconventional measures” now that the traditional ammunition of lowering interest rates has been exhausted. This has included tackling the spread between commercial and government rates directly. The “unconventional” approach taken by Japan in earlier decades – namely purchasing of medium- and longer-term government bonds, is also an option, although the Japanese experience has shown that this has led to an increase in base money but did little to stimulate lending, as commercial banks have increased short-term liabilities and too many illiquid and undervalued long-term assets on their balance sheets. On the other hand, recent easing, as in the case of the US, has resulted in a more targeted, direct lending to businesses through purchases of commercial paper, and indirectly to households through purchases of mortgage-backed securities. 5. Lessons from the current crisis: where do we go from here? So what are we to do going forward on this issue of monetary policy in a globalized world? I believe that there are a few issues that need our immediate attention amid the unprecedented crisis that we are in.

Likewise, exports from EMEs to EMEs increased from $ trillion to $ trillion during the same period. The increase in the volume of trade among EMEs has, to some extent, reduced the adverse effects of the weak course of external demand from advanced economies. Thereby, production and employment levels in EMEs have achieved a rapid pace of recovery after the 2008 global crisis. In line with the increased importance of these economies, we also witness significant changes in decision-making mechanisms worldwide. A wide range of important decisions on issues ranging from food and energy security to strengthening the global financial system are made at the Group of Twenty (G20). In line with the recent increase in their role in the G-20, the voice and representation of EMEs among international institutions such as the IMF, the World Bank, the Basel Committee and the Financial Stability Board is increasing as well. Distinguished Guests, EMEs withstood the global turmoil better than expected. A certain degree of decoupling has been observed between emerging and advanced economies in this regard. Underlying this resilience were several distinct factors, including sound fiscal fundamentals, a relatively low degree of leverage in the private sector, a lower reliance on wholesale funding as part of a more traditional banking business model and minimal exposure to toxic financial products. Improvements in the financial sector regulation and supervision frameworks have also added to this resilience. Although EMEs proved resilient during the global financial crisis, they have experienced new challenges in the aftermath of the crisis.
300  10000  Free floating  5000  200  0 90  92  94  96  98  00  02  04  06  08  10  12  14  16  18  82  85  88  91  94  97  00  03  06  09  12  15  18  (*) Foreign exchange rate defined as CLP per USD. Sources: Central Bank of Chile and De Gregorio, J., S. Edwards, and R. Valdés (2001), “Controls on Capital Inflows: Do they Work?” NBER WP 7645. All these elements allow monetary policy to operate as a first defense mechanism against external shocks in normal times. Besides monetary policy, the CBC has a financial stability mandate. Such mandate should be pursued by a combination of regulation, information, and macroprudential management. In particular, monetary policy tools should be used primarily to achieve the price stability mandate, and only as a last resort to deal with financial instability. The free-floating FX regime is perfectly consistent with achieving both mandates (price and financial stability), as (i) the inflation targeting regime is highly credible, and (ii) the corporate sector is well hedged against exchange rate volatility. High-level Policy Seminar on Integration or Fragmentation?

Central Bank of Chile September 2019  Integration or Fragmentation? International Capital Flows in the Post-crisis World How the Revised OECD Codes Can Improve Transparency, Accountability, Credibility, and Trust Session : “Next Vulnerabilities: Capital Flows and the Migration of Risks to New Corners of the Financial System” September 11, 2019 – OECD Conference Centre, Paris, France “Capital Flows and the Migration of Risks: The Recent Chilean Experience” Remarks by Mario Marcel, Governor of the Central Bank of Chile 1. Issues for discussion a. Which new sources of vulnerabilities are building up a decade after the 2008 crisis? - Risks associated with the growing importance of non-bank lenders. In some EMEs, this may result in credit lending going informal due to a relatively higher cost in credit provision due to regulation. - Risks that can emerge from a less developed financial infrastructures outside the regulatory perimeter. - Risks attributed to disruptive FinTech activities, such as the development of crypto-assets markets, as well as cybersecurity issues. - Risks and challenges associated with the changing nature of banks’ business model. In particular, those coming from the internationalization of banks’ activities. b. How to better consider a cost-benefit framework for financial regulation, such as currency-based measures (CBM)? - While the banking regulation and supervision arising from the 80s-banking crisis was restrictive in several ways, it was supported by sound monetary and fiscal policies.
Your presence here is ample evidence that there remains plenty of opportunities even in circumstances like these and that a forward-looking view is more important than ever. Today, I’m particularly honoured to join you in the discussion of a topic that has been recognised as a source of sustainability and growth – Islamic finance. There are two main issues that I would like to talk about today. First, despite the current financial turmoil, we continue to see the long term potential in Islamic finance. There are two good reasons for this. One is that the Islamic finance industry is in many ways fortunate to be at an early stage of development during this turmoil. Despite the effects of a temporary shortage of liquidity, which has been a worldwide phenomenon,  1  Source: Bloomberg. BIS Review 146/2008  1  the degree of damage has been far lower than that to the much wider network of international finance, primarily because of the more restricted spread of Islamic financial instruments across regions and the generally lower level of leverage allowed in Islamic financial transactions. Although Islamic finance has grown by leaps and bounds in recent years, assets held by Islamic financial institutions and insurance operators known as takaful providers are estimated to be $ trillion, accounting for only about 1% of the financial assets in the overall banking and insurance sectors. 2 The industry’s remarkable annual growth rate of 15% to 20% has to be viewed in perspective: after all it began from a small base.

The cost to income ratio of the Cyprus Banking Sector, which amounts to 76 percent as at June 2022, is significantly higher than the respective EU average of 63 percent. Investment in technology can become the catalyst in the effort to strengthen efficiency and build sustained profitability, which will ultimately bridge the gap with the rest of the EU area banks. The second challenge relates to the risks of climate change. The ongoing effort to reduce the dependence on Russian energy may increase the transition risks and as such banks must enhance and adapt their climate risk mitigation strategies. The fact that certain banks have started making tangible steps in this regard is a positive development, but they are still early on the learning curve and behind their European peers. They must act faster and more decisively to meet our expectations of incorporating climate-related risks into their overall risk management frameworks, which will ultimately also target their clientele and the submission of detailed climate related information in order to feed the banks' risk management processes. Professional accountants also have an important role to play in this overall transformation of the economy by providing relevant advice to their customers to set up the appropriate management information systems that could enhance the relevant disclosures. And this takes me to the third challenge which is the overall interaction of credit institutions with their clientele. It is in the interest of both clients and banks to cultivate a relationship of mutual respect and trust.
Indeed, the SNB’s position is particularly challenging as the Swiss economy is small and open, which potentially makes it more vulnerable to any negative fall-out which may stem from the trade-off associated with policies which “leanagainst-the wind”. As the current situation of the Swiss economy makes all too clear, the impact of a high interest rate policy on the exchange rate would surely increase the associated output loss. It is therefore crucial that the Swiss authorities implement the most cost-effective measures to counter the financial excesses which may lead to a crisis. Indeed, the Swiss authorities are currently pursuing a comprehensive agenda of macroprudential measures. From a structural perspective, in 2011 the Swiss Parliament passed a package of measures aimed at reducing the systemic impact of potential failure of those institutions classed as “too big to fail”. These banks will now be asked to retain extra capital reserves. They will also be required to improve their liquidity positions, diversify their risks and propose a scheme by which they will ensure the continuation of their systemically important functions, should they find themselves in financial difficulty. This new regulatory regime will come into force on 1st January 2013, pending approval of the associated directives by Parliament. Second, after a round of consultations that just ended, the Federal Council is soon expected to decide upon a proposal to introduce a new risk-weighting system for mortgage-related assets.

Every one of them suggests that, while low interest rates might be the natural consequence of price stability, they may ultimately compromise financial stability. The first hypothesis, is that hedge-fund and wealth managers, who tend to be paid according to the nominal returns on their investments, might be prone to taking additional, possibly excessive, risks when interest rates are low and, as a result, they might receive lower levels of compensation.11 To the best of my knowledge, empirical studies which support or dismiss this claim have been yet to be carried out. The second hypothesis12 is that low interest rates increase the value of the collateral backing up loans. Banks thus have less incentive to monitor their clients’ loans.13 This view is empirically better documented, but the supporting evidence is ambiguous.14  8  Bean (2006). 9  Borio and Zhu (2008). 10  See, for example, Altunbas, Gambacorta and Marqués-Ibáñez (2010). 11  Rajan (2005)  12  Dell’Ariccia, Laeven and Marquez (2010)  13  Note that this theory closely resembles Ben Bernanke and Mark Gertler’s “financial accelerator” model. However, in this model the increase in collateral value prompts investors to borrow more whereas in the model of the “risk-taking channel”, increased collateral value induces banks to monitor their existing loans less. BIS central bankers’ speeches  3  Finally, the third hypothesis is that banks with access to cheaper external funding increase their leverage to achieve higher returns on equity.
Philipp M Hildebrand: Europe’s fiscal challenges Speech by Mr Philipp M Hildebrand, Chairman of the Governing Board of the Swiss National Bank, at the Annual General Meeting of the Swiss-American Chamber of Commerce, Rüschlikon, Switzerland, 21 June 2010. *  *  *  I would like to thank Rita Kobel Rohr for her valuable support in drafting this speech. I also want to thank Matthias Lutz for helpful comments. I want to thank the Swiss American Chamber of Commerce for the kind invitation. It is a privilege to speak to you this evening at your Annual General Meeting. The last time I was with you – it is now nearly two years ago –, I paid homage to Albert Gallatin, the legendary Swiss-American Secretary of the Treasury of the United States at the beginning of the 19th century. On that occasion, I chose to honour Gallatin because I felt he incorporates fundamental values long shared by Swiss and Americans alike. As it turns out, recent developments in Europe and elsewhere demonstrate compellingly that one of the important lessons of Gallatin’s outstanding career remains particularly relevant today. He teaches us that public debt reduction requires unwavering political commitment to fiscal discipline. In my remarks this evening, I will attempt to put the fiscal challenges Europe is currently facing in a broader context. The handling of these challenges by Europe’s governments and its citizens will have implications for Switzerland, but also for the United States and ultimately for the world.

Under pressure from the market, a number of countries have therefore initiated far reaching multi-year programs, which at least partly address structural problems. Moreover, the way the EU as an institution deals with public finances will change. As many European officials have pointed out, in 2004, it was not Greece or Portugal but Germany – together with France – that undermined fiscal discipline by successfully averting sanctions foreseen under the Stability and Growth Pact. Now, the EU and in particular the big countries are openly advocating measures to amend and significantly strengthen the institutional mechanism in order to enforce fiscal discipline. 5 In this context, the member states of the EU are faced with a fundamental issue. The public debt crisis has shown that interdependence between member states of a monetary union is strong. 6 Going forward in reforming the institutional set up of the EU, the core question is to what degree EU member states are ready to further relinquish sovereignty. How centralised or federal should the EU be? This discussion bears remarkable resemblance to the early years of the United States. At the time, an intense debate took place around the full assumption of the Revolutionary War debt of the states by the national government. The debate pitted the Treasury Secretary Alexander Hamilton against James Madison and Thomas Jefferson.
10-15  16  17  18  90  90 13  14  15  16  17  18  (*) For comparison effects with the new 2013 Benchmark Compilation, the ToT of previous Reports are adjusted to 100 for 2013. Source: Central Bank of Chile. 4. On the domestic front, inflation has been consistent with what was expected in December. The annual variation of the CPI fell to 2.7% in March, a significant drop compared to the 4.5% figure of a year ago. The behavior of the nominal exchange rate, which has appreciated relative to its level one year ago, has been a fundamental driver of these dynamics. The appreciation has had a greater impact in the decline of the goods component of the CPIEFE index (our core inflation measure). In fact, the goods component of core inflation dropped from nearly 5% at the beginning of 2016 to 0.3% in March. The services component has been stickier, and has dropped from the same levels the first few month of last year to 3.3% in March. Approximately ¾ of the prices included in this component are managed or indexed prices, which enhances their inertia and, as such, makes them less sensitive to exchange rate fluctuations (Figure 2).

As Chile’s concern for growth has intensified, many ideas about public policies have emerged that could help enhance productivity, with proposals coming from the government, private agents and the National Productivity Commission. In particular, policies have been developed that have permitted to diversify the energy matrix, increase supply reliability and reduce costs. There have been other factors, however, that pose a risk to productivity, including initiatives that may overburden corporate costs, generate new trading costs or reduce savings. Last, but not least, any discussion about productivity must necessarily cover technological development and innovation, which in Chile is limited by low private and public investment in R&D and by discontinuity in long-term policies aiming at economic diversification. 27. A third key challenge for the Chilean economy is to strengthen its institutions and making them more trustworthy. Even though Chile enjoys a substantial advantage in this respect over other emerging countries, trust in public and private institutions has suffered from a series of scandals in recent times and rebuilding such trust would require consistent action over a number of years. Such effort, however, would be well justified since a low-trust economy is likely to suffer from high transaction costs, free-riding behavior and low policy effectiveness. 10  28. The former three elements—investor expectations, potential growth and institutional trust—are certainly not part of the conventional agenda of central banks. However, even a narrow focus on stable and low inflation requires monitoring the key developments affecting the future path of the economy.