samchain/econo-pairs-v1 huggingface dataset:
And despite robust surveys, there is still some chance of a sharper than expected slowing in the economy. Both are reasons for monetary policy not to rush its fences. Nor does it need to do so, given the slow build of nominal pressures in the economy. Second, there is the election. This has thrown up a dust-cloud of uncertainty. Financial markets-wise, that is manifesting itself in a weaker exchange rate. It is unclear what twists and turns lie ahead, with potentially important implications for asset prices and, at least potentially, confidence among businesses and consumers. I do not think adding a twist or a turn from monetary policy would, in this environment, be especially helpful in building confidence, at least until the dust-cloud has started to settle. 25  Monetary Policy Committee (2017). 15  All speeches are available online at www.bankofengland.co.uk/speeches  15  Provided the data are still on track, I do think that beginning the process of withdrawing some of the incremental stimulus provided last August would be prudent moving into the second half of the year. As and when the MPC begins this process of normalising monetary policy, it will be a sign of the economy itself having begun to normalise. Far from being a cause for concern, starting the process of withdrawing some monetary policy insurance should serve as a signal of the MPC’s confidence in the UK economy’s resilience and in inflation returning sustainably to its 2% target.

Hence, regulation and supervision in order to minimize systemic risk should concentrate on the leading global investment banks to make sure that adequate counterparty and liquidity risk management systems and processes are implemented. Against the backdrop of scarce resources, we should refrain from opening new regulatory fields which are not relevant for systemic risks. 1/1
Perhaps the defining feature of the sector is the long-term nature of its liabilities, especially for institutional investors like ICPFs. This makes the sector a potentially important source of long-term financing to households, companies and governments – for example, in the form of equity and long-term debt. Yet the data tell a different tale. Chart 7 plots the portfolio allocation of UK ICPFs over the past quarter-century. The most striking trend is the erosion in ICPFs’ direct holdings of UK equities, where the portfolio share has fallen from around 50% in the late 1980s to less than 10% today. Their shares of the UK stock market have mimicked this path. There has been a huge “de-equitisation” of portfolios. Although this pattern is not found universally across countries, it is also evident in, for example, Japan and France. 7 There is no single cause of these portfolio trends in the ICPF sector. Some explanations are benign. For example, as the population ages and a larger chunk near or reach retirement, pension liabilities mature. We would then expect to see pension funds switching into lowerrisk, shorter-duration assets, such as fixed income securities. And this is indeed what has occurred. But this seems unlikely to have been the sole explanation for de-equitisation. In particular, regulation and accounting appear to have played a significant role. Take the UK. In 1995, the Pensions Act introduced a Minimum Funding Requirement (MFR) – the ratio of assets to liabilities – of 90%.

Thus, despite our vulnerability to setbacks, these factors prepared the ground for Asia to be positioned for a rebound to a more sustainable growth. Allow me to take this opportunity to also say something about China, the host country for our meetings. Let me first of all thank the PBC and in particular, Governor Zhou for the very warm hospitality that has been extended to us. China has always recognised its important role in the region. With its ascension to the WTO in 2001, the increase in intra-regional trade has been an important catalyst in driving growth in the Asian region. For many of us, China has become our largest trading partner. This trend is reinforced by the two-way foreign direct investment flows in the region. The use of the Renminbi to settle these trade and investment flows is a further factor that facilitates and strengthens these trade and investment flows. In the area of Central Bank cooperation, the PBC has actively participated in all our regional groupings including that for the ASEAN economies. For Malaysia, this cooperation has manifested itself in many ways. The one event that I will always vividly remember is the one on 21st July 2005 at 7 o’clock in the evening when both China and Malaysia transitioned to a flexible exchange rate regime. For Malaysia, we had seven years earlier fixed our exchange rate during the height of the Asian financial crisis.
Figure 14: Decisions on Interest Rates and Changes in Risk Premia (as of 16 April 2009) 300 Hungary  250  Change in CDS  Indonesia 200 S. Korea 150  Colombia  100 50  Chile  Mexico Poland Brazil Czech rep. S. Africa  Turkey  0 -7.5  -6.5  -5.5  -4.5  -3.5  -2.5  -1.5  -0.5  0.5  1.5  Change in Policy Rates (%)  Source: Bloomberg, CBT. Distinguished Guests, The measures taken against the global financial crisis were not limited to policy rate cuts. In this period, a lot of countries not only take measures to regulate the functioning of the markets, but also exercise non-traditional monetary policy implementations. In this period, the Central Bank of Turkey also took measures against the potential adverse effects on financial stability, a prerequisite for price stability. In the first quarter of 2009, a countercyclical monetary policy was adopted in the money market on the one hand and a number of decisions were made to regulate the Foreign Exchange and Banknotes Markets-Foreign Exchange Deposit Market on the other hand. In this framework, the maturity of foreign exchange deposit borrowed by the Banks from the Central Bank was extended; the lending rate for transactions, which the Central Bank is a party to, was reduced and the maturity of interbank transactions in the said market was extended. Besides, foreign exchange selling auctions were held at the times of ailing price movements in the foreign exchange market.

6  BIS Review 67/2009  Table 2: Monetary Policy Committee (MPC) Decisions in 2008 and 2009 MPC Meeting Dates  Decision on Interest Interest Rate Rates (Percentage points)  17 January 2008 14 February 2008 19 March 2008 17 April 2008 15 May 2008 16 June 2008 17 July 2008 14 August 2008 18 September 2008 22 October 2008 19 November 2008 18 December 2008 15 January 2009 19 February 2009 16 April 2009  -0.25 -0.25 No change No change +0.50 +0.50 +0.50 No change No change No change -0.50 -1.25 -2.00 -1.50 -0.75  15.50 15.25 15.25 15.25 15.75 16.25 16.75 16.75 16.75 16.75 16.25 15.00 13.00 11.50 9.75  Source: CBT. Benchmark bond rates came down significantly driven by the policy rate cuts and the partially easing tensions in global financial markets (Figure 10). Moreover, the signal given by the Central Bank for possible necessity of maintaining downward flexibility for a long period of time coupled with moderate recovery in risk perceptions contributed to the decline in market interest rates. Figure 10: Interest Rate Developments (Percent) 27  ISE Bills and Bonds Market Interest Rate (Benchmark, Compounded)  25 CBRT Overnight Interest Rate (Compounded) 23 21 19 17 15 13 11 9 05 07  07 07  09 07  11 07  01 08  03 08  05 08  07 08  09 08  11 08  01 09  03 09  Source: ISE, CBT.
Indeed, the events of recent weeks offer grounds for some optimism: after a virtual drought for seven months, in only three weeks a notable group of banks have obtained over 13,550 million euro on the international market. "Homework" The starting position of Spanish banks at the outset of the turbulence was, as I have already said, very sound, and this has allowed them to avoid its more immediate and direct effects. The reporting of results both for the fourth quarter of 2007, and those being released for the first quarter of 2008, show the notable differences in comparison with other international banks. However, the dysfunctions continue affecting international financial markets, and that does not leave the Spanish financial system immune to what we might call second-round effects. Accordingly, financial market participants - each in their own area of responsibility – must act in such a way as to ensure these effects are minimised. 6  BIS Review 62/2008  Indeed, the tasks to be performed pose an even more demanding challenge, considering that the turbulence is coinciding with a period of internal adjustment and deceleration in the world economy. The deterioration in macroeconomic conditions is most patent in the United States, with most analysts forecasting a sharp slowdown in the opening quarters of 2008. But slacker growth is also expected in Europe in the coming months. The Spanish economy, after an upturn lasting more than ten years, has also begun its adjustment.

For its part, the Banco de España, in keeping with its remit, considers that this review must not succumb to the temptation of indiscriminately stepping up the level of regulation of the sector. The initiatives along these lines have to be thought out in depth and have to be justified by the existence of a market failure the resolution of which, through public intervention, gives rise to greater benefits than costs. Lastly, in regard to the direct powers of the Banco de España, I would remind you of something that often seems to be overlooked: the institution I represent is part of the Eurosystem. In view of that fact it will continue working to ensure that monetary policy implementation is compatible with holding inflation within the bounds set by the central bank and, at the same time, will help guarantee that adequate liquidity is provided so that money markets function properly. The social partners also have an important task: to co-operate so that, while the inevitable adjustment is taking place in the residential construction sector and in related activities, the rest of the economy, i.e. industry and services, becomes more dynamic. And for this to happen a moderation in private sector margins and in unit labour costs through wage moderation and/or productivity increases is fundamental. It should be quite clear for all that if the inevitable rise in unemployment in construction is not offset by greater dynamism in the rest of the private sector of the economy, employment may perform more negatively than expected.
I will take up a number of these measures a little later on. It is also fairly simple to see how inflation relates to the set target, but it is much more difficult to gain an impression of what the target for resource utilisation should be. We express the inflation target as being that the annual change in the CPI should be two per cent, but we do not have an equally well-defined target for resource utilisation. Instead, we usually say that we endeavour to reduce the fluctuations in the real economy. BIS Review 66/2009  1  Resource utilisation is important in a monetary policy context for two reasons. Firstly, it is related to important targets in economic policy, such as a high GDP, a high level of employment and low unemployment. The economic recession we are now experiencing means that GDP will fall by around 4.5 per cent this year, that employment will fall by almost 300,000 persons in three years, and that unemployment will reach approximately 11 per cent in two years’ time, all according to our most recent forecasts in April. The expansionary monetary policy we are now conducting is thus partly motivated by an aim to limit the depth of the recession. Secondly, resource utilisation is important because it is an indicator of future inflationary pressures. But a difficult question is how resource utilisation co-varies with inflation. My impression is that the connection between resource utilisation and inflation has been weaker over the past two decades than it was before.

But in a monetary policy perspective it may be a problem if resource utilisation is so high that inflation risks overshooting the target. If resource utilisation is so low that inflation risks undershooting the target, the general political and monetary policy implications coincide. An estimate of what level of employment can be regarded as normal can be obtained by calculating an HP-based trend similar to that used for calculating the GDP gap. This can be considered to represent a normal situation in the labour market, without temporary disruptions that affect the supply of or demand for labour. Gaps that measure the actual deviation in employment from the normal level, either in the number of persons or in the number of hours worked, are called labour market gaps. Figure 4 shows two such labour market-based gaps. Capacity utilisation But neither the number of persons employed nor the number of hours worked provides a really good picture of resource utilisation. During a severe cutback in output such as in the current economic situation, companies tend to a large extent to retain their employees, although they have less work for them to do. To obtain a better picture of resource utilisation the labour market statistics need to be supplemented with data from, for instance, Statistics  2  For a discussion of the flexprice gap and monetary policy, see Jonsson, M., C. Nilsson and S. Palmqvist (2008), “Should monetary policy stabilise resource utilisation?" Economic Commentaries 1, Sveriges Riksbank. http://www.riksbank.com/upload/Dokument_riksbank/Kat_publicerat/Ekonomiska%20kommentarer/2008/0803 06e.pdf.
Charles Bean: Quantitative Easing – an interim report Speech by Mr Charles Bean, Deputy Governor for Monetary Policy at the Bank of England, to the London Society of Chartered Accountants, London, 13 October 2009. *  *  *  It’s a great pleasure to be invited to speak to you this afternoon. It is almost exactly a year since Lehman Brothers collapsed, precipitating a near-fatal heart attack for the global financial system. And in its wake came an unprecedentedly sharp and synchronised contraction in global economic activity, from which we are only just starting to emerge. In part, that stabilisation reflects the intensity of the countervailing policy actions by governments and central banks around the world. Injections of capital, funding guarantees, ring-fencing of toxic assets and abundant liquidity support have helped to return the banking system towards normality, though the process of balance-sheet repair still has some way to go. And substantial increases in fiscal deficits and aggressively expansionary monetary policies have helped to arrest the fall in spending, output and employment. For its part, the Bank of England’s Monetary Policy Committee not only cut Bank Rate from 5% in September last year to just 0.5% in February, but also embarked on a programme of large scale asset purchases financed by the issuance of extra reserves – so-called “Quantitative Easing”. This unlovely phrase was originally coined to describe a related policy conducted by the Bank of Japan in the early part of this decade and has perhaps lost something in the translation.

This correction has also affected the establishment of more steady balances of the demand and supply for foreign currency in this period. Notwithstanding these encouraging developments, lending activity at home remains far from its potentiality, responding to the lower demand for banking loans and the tightened lending conditions as applied from banks. Lending to private sector marked an annual growth of 4% in real terms, providing an annual growth of 7.8 percent of monetary supply in January. All denominated credit continues to rule the lending activity, which mainly covers the businesses’ needs for circulating capital. January 2010 embodied a particularity, that is the improved state of the banking system assets denominated in foreign currency, has started to be mirrored on the growth of credit denominated in foreign currency. Notwithstanding, the stable increase of lending should be assisted by the re-activation of the demand for loans and the parallel easing of lending conditions as applied from the banking system. Bank of Albania deems that banking system should reveal more visionary in assessing potential sectors of economic growth and to take a more active role in encouraging the economic activity. Annual inflation in February 2010 pointed to 4.4%, exceeding by 0.4 percentage points the upper limit of the Bank of Albania target’s tolerance. The annual average inflation pointed to 2.6%.
Published Date: 08 June 2022  "Towards Net Zero in Asia" - Opening Remarks by Mr Ravi Menon, Managing Director, Monetary Authority of Singapore, at the Launch of GFANZ’s Asia Pacific Network Central Oﬀice on 8 June 2022 Friends and colleagues Ladies and gentlemen, good morning. There are four key enablers for the journey to net zero: carbon pricing in some form; emissions standards, across various activities; technological advances, in renewables as well as energy efficiency; green finance This fourth enabler is where the financial sector can play a critical role – both the financial industry and those who regulate it – in getting us to net zero. The starting point for climate action in the financial sector is through the gateway of risk management. Before the financial sector can do good, it must first ensure that it comes to no harm. Hence the importance of ensuring that the financial system is climate resilient – that it can identify and manage the risks associated with both climate change and mitigating actions. Seven years ago, Mark Carney – when he was chairman of the Financial Stability Board, and I had the great pleasure of working with him – socialised the importance of managing climate-related financial risks. The work that Mark initiated through the Task Force on Climate Related Financial Disclosures (“TCFD”) has led to a broad consensus today on the relevance of climate-related risks to financial decisions.

After the global crisis in the 1930s, the path that was chosen up to around the 1970s (its duration varied from country to country) was regulation. Credit and exchange controls were reintroduced. In Sweden, the credit system had been liberalised in the middle of the 19th century but after the 1930s it was regulated once more. The risk of serious financial crises was countered by controlling the domestic credit supply in detail and more or less prohibiting cross-border capital movements that were not directly connected with trade in goods and services. But these controls also had the effect of hampering the financial system’s development. If the costs of this period of regulation could be identified and estimated, we would probably find that they were considerable. What this amounts to is that high capital requirements for banks are costly, not just for the banks but for the entire economy, and the same applies to controls on credit and foreign exchange. As this was recognised by more and more countries, national policies in this field were realigned in the course of the 1970s and 1980s. Controls were abolished and domestic capital markets were opened up for cross-border capital flows. But in many instances the financial system was unprepared for a freer environment. The era of regulation had lulled many banks into a false sense of security. Moreover, supervision concentrated on the wrong issues and was by no means appropriate. Neither did economic policy observe the discipline that a deregulated financial system requires.
The policy rate is the rate of interest applying to the Central Bank’s repo transactions with credit institutions, i.e. interest on liquid funds that they borrow from the Bank. Monetary policy has been the subject of lively debate in recent weeks and months and the Bank has been under steady pressure to cut interest rates. As the Central Bank has repeatedly underlined, its viewpoint has been that lowering interest rates entails a greater risk than waiting for a while for tangible signs that the assumptions behind the August inflation forecast will hold good. It is crucial to bring inflation down swiftly, since it goes without saying that inflation is the worst enemy of both households and businesses. A tight monetary stance inevitably has consequences which are sometimes painful for households and businesses. There is nothing to be done about that. Households and businesses alike must accept the consequences of their actions and it is obvious that many of them have simply gone to excesses in their consumption, investments and borrowing in recent years. They will need to reduce their spending, cut costs and put their finances in order. That cannot be avoided. BIS Review 95/2001  3  I also point out that the current account deficit is very large. Even though it has shrunk rapidly this year and will foreseeably continue to decrease substantially next year, it is still very large both in a historical and an international context. In order to achieve acceptable macroeconomic balance, a contraction in national income is unavoidable.

To quote an English translation: “A commercial bank operates independently, takes up responsibility for all risks that it may encounter and for its own profits and losses it may bear, and exercises self-regulating mechanisms on the management principle of economic efficiency, safety and liquidity.” 25. What this means is that the board of directors and senior management of banks have the main responsibility to ensure that effective systems of internal governance are in place to plan for the future, to identify and manage the risks to which they are exposed and to control the operations of the bank on a day-to-day basis. I believe that this point is appreciated around the region - from our contacts with fellow supervisors, we know that in many banking systems there is a heightened awareness of the importance of sound risk management. But the difficulty is in turning this into actual changes in behaviour, which requires great efforts to be devoted to the training of staff, for example in credit skills, as well as more fundamental changes in culture in some banks. 26. This change in culture may require some banks to wean themselves off property lending which is sometimes seen as an easy option, given that it is based on collateral and on expectations of ever-rising property values. This can prove to be a fallacy, as the Japanese example shows only too well.