samchain/econo-pairs-v1 huggingface dataset:
This duration mismatch means it is more likely than not that risk and reward may get out of kilter in the financial sector. The current environment is evidence of such a mismatch: while bank performance has fallen off a cliff, executive pay remains close to pre-crisis Himalayan heights. Lengthening deferral or claw-back periods, say to 10 years or more on an internationally co-ordinated basis, would help close this gap in horizons, between risk and return. It would elongate the period of liability bank managers face when they take on risk. This would better align firm-level risk-taking incentives with the societal optimum. Avoiding relative benchmarks in the setting of remuneration would also reduce the risk of an upwards-only pay escalator. 29  Bank of England (2012). 30  Bank of England (2011b). 31  Bebchuk and Fried (2003). 8  BIS central bankers’ speeches  There is scope, too, for a reconsideration of the instruments used for remuneration. The focus to date has been on non-cash distributions, often in equity. But paying in equity appears in some pre-crisis cases to have exacerbated risk-taking incentives, acting as a disincentive to raising new equity and encouraging gambles for resurrection. Remunerating in long-maturity debt, or contingent capital instruments, may do a better job of aligning risk-taking incentives with the public good than either cash or equity.32 Speed races in financial markets potentially generate societal sub-optimality, for example due to message traffic congestion.

With respect to the agricultural sector, the favourable performance is, largely, on account of the affirmative Government agricultural policy that is supportive of expansion activities in the sector as well as good weather conditions. For instance, the continued improved performance in cash crops such as tobacco, sugar, cotton, groundnuts, floriculture and horticulture, among others, all point to increased economic activity in the medium term. In addition, improved investor confidence in the Government’s economic policies has also contributed to increased production in the sector. In the mining sector, the prospects are buoyant, mainly, due to favourable international metal prices as well as the increase in production due to the recapitalisation of the existing mines. Further, the coming on-stream of greenfield mines, such as Kansanshi and Lumwana, are expected to boost production in this sector. This will further enhance economic activity in the country since growth in the mining industry positively affects several sectors of the economy, such as manufacturing and construction. With regard to the tourism sector, the potential for growth is immense, as long as Government support to the sector through tax incentives and, most importantly, infrastructural development, such as improvement of access roads and airports, continues. If well nurtured, this sector could be a major employment generating and foreign exchange earner in the country.
“Quantitative easing” is able to provide the much desired relief for everyone, be it a household in negative equity that has overstretched itself, an over-expanded enterprise or a government faced with social unrest as a result of the stringent measures it is forced to implement. Yet, quantitative easing is the exact opposite of deleveraging. Quantitative easing aims at: 1. reducing the interest burden of highly leveraged individuals, enterprises and governments, and 2. propping asset prices, lessening the negative wealth effect or even trying to create positive wealth effect, enhancing people’s confidence so that they will be more willing to spend, and increasing employment. However, quantitative easing is not a panacea. In the past three years, quantitative easing had limited stimulating effect on the real economy. There are several reasons. First, household deleveraging has reduced households’ propensity to consume, particularly for the  BIS central bankers’ speeches  3  lower income households. Secondly, with interest rate close to zero in the US, and the cost of current consumption already very low relative to future consumption, further interest rate cuts would have little effect in stimulating households to bring forward future consumption. Thirdly, regulatory reform and economic uncertainty are restraining banks’ ability and incentive to lend. And we must not forget there is a price to pay for implementing quantitative easing, the interest income of depositors, including investment funds and retirees, is greatly reduced.

Although the US may fare better than Europe, its economy is heading towards the “fiscal cliff”. Similar to Europe, it is also necessary for the US to make significant cut in expenditures in the medium to long term in order to regain fiscal balance and discipline. The situation in Japan is even more worrying. Public debt in Japan has now exceeded 200% of GDP, excluding civil service pension and other contingent liabilities. Currently, the market is not concerned about Japan’s repayment ability as it is believed that the Japanese government will continue to address the ever-increasing deficits by maintaining an exceptionally low interest rate environment. However, it is worth noting that the market was treating the European countries in the same way until recently. Once market sentiment changes, the situation can take a sharp turn and it would be very difficult to arrest a deteriorating trend. In addition to the pain brought about by deleveraging, I would also like to talk about the different forms of “quantitative easing” implemented by the various central banks. Why did these economies implement “quantitative easing”? If we agree that the root cause of the global financial crisis is excessive leveraging, then the only solution would be deleveraging. However, in reality, the process of deleveraging is just too painful.
When the Riksbank's responsibility for financial stability is formulated, it is therefore important to do so in a way that ensures that Swedish interests in affecting and receiving relevant information in the international cooperation, for instance regarding systemic risks and financial regulation, can be taken into account in a good way. Important to have a broad task and flexibility in the use of instruments What I want to illustrate with my speech today is that the Riksbank's tasks on the whole concern contributing to the smooth functioning of the financial system, by safeguarding the supply of liquidity in various ways. In addition to the responsibility for supplying cash, we are the banks’ bank both under normal circumstances and in crisis situations. We give credit to the banks during the day, we use our balance sheet to influence access to liquidity and market rates, and we can enter in as lender of last resort in an emergency situation. The Riksbank, like all other central banks, thus has an important responsibility for financial stability and this is also closely linked to monetary policy. 11 [12]  But while the monetary policy task is clearly stipulated in the law, the responsibility for financial stability is not so clear. This responsibility is also shared with other authorities. It is good that there is now an inquiry that will clarify the Riksbank's responsibility for financial stability in an amended Sveriges Riksbank Act. It is important that the Riksbank's task of promoting financial stability is then given a broad wording.

Thailand has advantages to be a hub for regional headquarters of multinational companies; a hub for logistics and distribution activities; a sourcing hub for regional markets; and a financial hub for regional markets. However, to remain competitive as a regional hub is a challenging task. 2  BIS central bankers’ speeches  14. To remain as the preferred hub and entry point of the region, we perceive an opportunity for investment from China which has the advantage in capital, construction capacity and technology. As the advantage of low cost factor of productions is rapidly declining, China is facing an urgent need to re-orient supply chains through Thailand to enter ASEAN and the Greater Mekong Subregion (GMS) in particular. China and Thailand should therefore make every effort to grasp this opportunity and construct win-win solutions for both sides. Ladies and gentlemen, 15. Let me conclude that China economic prosperity and advancement provides wide range of untapped opportunities for Thailand. They are right here where we are now, in our region. We should seize it and not miss it. And I am confident that so long as we work hand in hand with China, unite together, and embrace the merit of economic integration, the synergy of the two will surely give its fruit on the growing tree. Thank you. BIS central bankers’ speeches  3
At the same BIS Review 72/2000  4  time, there are similarities with regard to the strong penetration of information technology in the economy, although we are also later in this development. As in the USA, high asset prices and strong optimism have stimulated demand and increased the level of indebtedness in the Swedish economy. Although it is not yet possible to write off the risk of financial imbalances building up the USA imbalances that can have negative effects for the American economy - it now seems as if the American economy may be on its way to a soft landing. However, there still remain the global financial imbalances that have been built up over many years with very high saving in Japan and very low saving and high indebtedness in the USA. We have still not seen how these imbalances are to be resolved and the consequences this will have for the world economy. Although there are some indications that the Swedish economy is experiencing a similar development as the American, the structural differences cannot be disregarded, which probably create greater inertia in the Swedish economy than in the American. One such area is the labour market. Considerable barriers to competition remain in the Swedish economy as well. Another difference is that the cyclical upswing we are now experiencing is taking place at the same time as an increase in growth and resource use in the rest of the world.

Scope for major differences, despite a common strategy Even if there is agreement on the strategy for monetary policy, there is, of course, considerable scope for differences in assessments of where the interest rate should be in each situation. In the first place, the Executive Board can make different assessments of the most probable price tendency. As we know, economics is not an exact science and forecasts of prices and growth potential always rest on many assessments of an enormous mass of information and correlations. Models can never capture the complexity of the economy and how people’s economic decisions interact and must therefore always be regarded as one of many aids in assessments. The Riksbank uses a lot of different approaches and indicators to make assessments. The focus of the Riksbank’s analysis has been until now on the real economy and how it affects price trends. In many areas, we have come further than other central banks, while we have not come so far as regards the analysis of different financial aggregates and their linkage with inflation and real demand. An endeavour has certainly been made to take into account information provided by the development of the quantity of money and growth of credit. However, we have not for instance developed methods that can give guidance as to the level of indebtedness and the quantity of money that is compatible with the long-term sustainable growth of the economy on the basis of the inflation target.
And within that asset class, most market participants have rebalanced their portfolios towards US Treasuries and government agency bonds. This confirms that the portfolio rebalancing channel has been instrumental in delivering the intended benefits of our quantitative easing. Slide 4 shows the extent of this rebalancing more clearly. Since the start of our asset purchase programme (APP), euro area investors alone accounted for more than half of foreign purchases of US debt securities. History suggests that these shares are highly unusual for the euro area. Only recently has the share started to decline again. Now, according to conventional models of the term structure, such capital flows should play no direct role in determining yields.4 In these models, the term premium reflects the covariance between expected bond returns and the representative investor’s stochastic discount factor. However, the conditions under which the supply of and demand for bonds are entirely neutral on yields are very restrictive and unlikely to hold in practice. Indeed, it is now widely accepted that arbitrageurs are often risk-averse and that many investors have so-called preferred habitats for certain assets or segments of the yield curve.5 Pension funds, for example, typically need to invest a significant portion of their assets in safe long-dated bonds to match the liability side of their balance sheet. With arbitrageurs capital-constrained, changes in the demand from preferred habitat investors can then affect the price of duration risk and hence term premia.

However, long periods of low interest rates unavoidably create incentives for risk taking and “search for yield”. That dilemma can, in principle, be solved through proper macroprudential policies. I will return later to challenges we face in that specific area. The meaning of price stability Let me start with a crucial point. Central banks have a strong mandate to preserve and achieve price stability. Strict adherence to this mandate – and the clear willingness to fulfil it – is their main protection against the dangers created by the zero lower bound. As we all know, inflation is ultimately driven by expectations. Inflation expectations were remarkably stable during the whole first decade of the euro. Today, the major risk in the euro area is a downward drift that would durably set long-run inflation expectations at a level below our objective of price stability. We do not know much about how expectations are formed. However, I have no doubt  BIS central bankers’ speeches  1  that the perceived reaction function of the central bank plays a major role in anchoring price stability. Second, symmetry is of the essence. For a significant period of time, we have been well below our definition of price stability in the euro area, both in terms of effective inflation and long-term expectations. There is a temptation to take a benign view of this situation and consider that low inflation is beneficial per se, irrespective of its level.
Consequence refer to the impact or harm that money laundering or terrorist financing may cause and includes the effect of the underlying criminal and terrorist activity on financial systems and institutions, as well as the economy and society in general. Contrary to the  BIS central bankers’ speeches  3  impact of other type of risks such as credit or market risk, the impact of money laundering and terrorist financing risks are difficult to quantify. For the purpose of this NRA, we used perception surveys conducted among reporting institutions, supervisors, regulators and LEAs as our sole data-point of assessing the impact or consequences. In summary, the key point in conducting the NRA, is that whatever the approach is, it should be able to distinguish the extent of different risks to assist with prioritising mitigation efforts. Findings of risk and more importantly the effectiveness of risk mitigation measures is key to our mutual evaluation reports and the ratings. Scope of the NRA Based on the understanding of what the NRA entails, the scope of this NRA is broadly categorised under 2 broad elements; i.e. threats and vulnerabilities. In assessing threats, the extent of money laundering and types of prevailing crimes in Malaysia were analysed based on statistical data provided by law enforcement agencies and intelligence data from the FIU.

Numerous countries with highly expansionary monetary policies have witnessed just such a trajectory, and hence a marked rise in capital market debt, in the last few years. However in Switzerland, the opposite has occurred. As chart 2 shows, after peaking in spring 2011 at almost CHF 560 billion, the volume of all outstanding Swiss franc bonds trended sideways for four years, and since the introduction of negative interest in 2015, the total volume has even fallen by around CHF 40 billion. It is evident that the domestic segment has been steadily growing since the financial crisis. Let’s take a closer look at the domestic segment. Chart 3 shows the development of domestic Swiss franc issuance by sector. Three aspects are striking. First, this development is chiefly driven by Switzerland’s two mortgage bond institutions (mortgage bond bank and mortgage bond institute); these entities jointly account for around a third of the domestic segment. The strong rise in this sector reflects both the growth of the Swiss mortgage market and greater use of this refinancing instrument by the banks. From the banks’ perspective, it is preferable to borrow via long-term instruments such as mortgage bonds than to finance mortgage loans via customer deposits, as doing so enables better maturity matching on both the assets and the liabilities side. Furthermore, in the current interest rate environment, mortgage bonds offer banks better financing conditions than customer deposits. Second, domestic non-financial corporations (‘other corporations’, light blue) were a further important driver of the increase in bond issuance in the domestic segment.
Arjuna Mahendran: Central Bank of Sri Lanka’s 65th anniversary Speech by Mr Arjuna Mahendran, Governor of the Central Bank of Sri Lanka, at the commemorating ceremony of the Central Bank of Sri Lanka’s 65th anniversary, Central Bank of Sri Lanka, Colombo, 28 August 2015. *  *  *  Today is a very important day for all of us. 65 years is not a small period in the life of an institution and first and foremost I must thank all of you who have kept the torch of central banking alive and well in Sri Lanka over the last 65 years. I know most of you haven’t been here for that length of time but certainly those traditions have been passed on to you and you are I think preserving them very well and making sure that they are moving on into the next generations’ hands in good condition. At this point, we should take a step back and look at what we have achieved in those 65 years. First of all, when we were established in 1950, the statute that enabled the establishment of this institution was very clear, in-terms of its objectives and that statute has more or less remained unchanged in that whole period, which I think in Sri Lankan terms is quite a record.

A short list of current issues includes policy normalization in the advanced economies; potential spillovers to emerging market economies (EMEs); fragility in some EMEs; ongoing economic and financial adjustment in China; trade policy tensions; and Brexit. So, there should be no shortage of things to talk about. Diverse perspectives often lead to better thinking and outcomes, and given the variety of experiences represented today, I expect a very fruitful set of discussions. In my remarks today, I will focus on monetary policy, highlighting the evolution of Federal Reserve policy actions and communications as we’ve exited from the extraordinary stimulus that followed the crisis and recession. The good news is that 10 years after the crisis, the U.S. economy is doing very well overall. From the perspective of the Fed’s dual mandate of maximum employment and price stability, quite honestly, this is about as good as it gets. As a result, the Fed has naturally been moving toward more “normal” monetary policy. And that brings me to a key theme of my remarks today: What does “normal” monetary policy look like? Before I go any further, I should note that what I have to say represents my own views and not necessarily those of the Federal Open Market Committee (FOMC) or anyone else in the Federal Reserve System. Strong, Strong, Strong My take on the economy is well summarized by the most recent FOMC statement, in which we used variations on the word “strong” five times in only four short paragraphs.
Beyond clearing, MAS also recognises Europe-based exchanges such as ICE Futures, London Metal Exchange, and Eurex Deutschland, which allows financial institutions, 1/4  BIS central bankers' speeches  traders, and finance and treasury centres based in Singapore to have access to a wide range of risk management instruments. With this experience, MAS has fine-tuned our approach to the recognition and regulation of overseas players, including European exchanges and clearing houses, in our markets. In setting our standards and the methodology to determine equivalence, we have aligned ourselves with international standards such as Principles of Financial Market Infrastructures (PFMI). We have also clarified the factors that we will take into consideration in determining whether an overseas player has “substantial and reasonably foreseeable effect in Singapore” and hence requires recognition by the MAS4. However, beyond just standards and rules, regulatory cooperation can promote appreciation for each other’s regulatory framework, and to lay the foundation for an outcomes-based approach in equivalence assessments. I am pleased to note that this has been the spirit guiding the interaction among regulators, including with our European colleagues. For instance, in, 2014, the EC recognised the central counterparty (CCP) regulatory regimes of several Asia-Pacific jurisdictions – Australia, Hong Kong, Japan, Singapore and Korea - as equivalent on the basis of an “outcomes based approach”. This was also seen in September 2016 with the positive opinion issued by ESMA on the grant of the AIFMD passport to Singapore and other Asia-Pacific jurisdictions.

Beyond equivalence assessments, we will consider the formation of supervisory colleges for our CCPs should they be deemed as internationally active. Putting recovery and resolution plans in place Allow me to share a final set of remarks on recovery and resolution plans. Even as we continue to strengthen the resilience and accessibility of CCPs, we must continue our efforts to ensure that recovery and resolution plans for CCPs are in place. There have been greater focus and thought given to arrangements to deal with default risks but it should also be recognised that other risks such as custody and investment risks can also pose a threat to a CCP's viability. Hence, in line with the CPMI-IOSCO report on Recovery of Financial Market Infrastructures, MAS expects and will place priority to ensure our CCPs have clear arrangements to enable custody and investment losses to be allocated in a way which allows CCPs to be solvent and can continue to provide its critical services. At the same time, there must be appropriate governance arrangements and incentive structures to promote prudent risk management on the part of the CCP. Such arrangements can include providing transparency to member firms, having “Skin-InThe-Game” (SITG) contributions from the CCP, and putting in place oversight structures to oversee such safeguards.