samchain/econo-pairs-v1 huggingface dataset:
We have already seen the sensitivity of markets to changes in the expected path of US monetary policy during the “taper tantrum” last spring and its attendant consequences for other countries – especially, but not exclusively, in the emerging economies. Movements in yield curves have been strongly correlated across countries, not only at the long end, which is not too surprising, but also at the short end of the curve, where domestic monetary policy considerations ought to dominate. Another reason the exit may be bumpy stems from the starting point. Implied volatilities in many financial markets have been at historically low levels for some time now (Chart 7). Together with low safe interest rates in the advanced economies, that has underpinned a renewed search for yield and encouraged carry trades. Taken in isolation, this is eerily reminiscent of what happened in the run-up to the crisis. Episodes like the “taper tantrum”, which produced a short-lived bout of volatility but no major disruption may also be contributing to a sense of complacency and an underestimation of market risk by investors. It is inevitable that at some stage market perceptions of uncertainty will revert to more normal levels. That is likely to be associated with falls in risky asset prices and could be prompted by developments in the Ukraine, the fault lines in the Chinese financial sector, monetary policy exit in the advanced economies, or something else. But it will surely come at some point.

Everything was decided according to the two laws that apply in these cases, with, in the case of the BRRD, the potential exception of precautionary recap, which is in the law, and state aid rules. This was applied. At the same time, as a result of state aid rules, and logic, policy, the overall capacity of the banking sector in Italy went down. So there was downsizing; there was restructuring. Indeed, everything was applied according to European legislation. Is that just the beginning now for the Italian banking sector? As we all know, it has a huge slab of NPLs. Can we be prepared for more of these kind of… Constâncio: I don’t anticipate anything of that sort. There is the situation which was announced also during these days that is about to be concluded regarding Monte dei Paschi di Siena, but that has been discussed with the European authorities, and very likely it will have, as was stated in the past few days, a solution very soon for that case. 3/3  BIS central bankers' speeches
And heightened uncertainty can add to market volatility, resulting in diminished market liquidity. But these debates about trade-offs expose a basic problem. Everyone is familiar with the idea of a "jack of all trades." Using monetary policy to mitigate financial stability vulnerabilities can lead to unfavorable outcomes for the economy. Monetary policy should not try to be a jack of all trades and a master of none. There must be a better way. Fortunately, there is. Instead of looking at this as a problem of choosing the point on an unfavorable trade-off curve, we must look for ways to shift the curve by enhancing the resilience of the financial system. The value of this approach to building resilience was demonstrated by the global efforts to strengthen the banking system following the global financial crisis. Despite the economic disruptions caused by COVID-19 and Russia's war on Ukraine, the banking system has functioned well, serving as a source of strength for the economy, not a weak link. Alternative Solutions, Prudent Results As monetary policymakers, we need to count on well-functioning markets that promote financial stability as we pursue our price stability and maximum employment goals. So, what can be done to enhance financial stability? At the Federal Reserve, we have instituted changes over the past few years that support market functioning in times of stress.

In the decade before the pandemic, this debate occurred in the context of inflation running persistently below the FOMC's long-run 2 percent target.4 On one side, there were those who argued that an extended period of accommodative policy aimed at boosting inflation would contribute to a buildup of asset prices, leverage, and risk-taking that would ultimately undermine financial stability. They concluded that policy should lean against the wind of financial stability risks, even at some cost to achieving the price stability goal. On the other side, I and others have argued that using monetary policy to address longer-term financial stability considerations could come at a high cost in terms of current economic activity and could also undermine credibility in the central bank's longrun inflation goal. For example, based on the estimated effects of monetary policy on GDP and house prices, using monetary policy alone to fully deflate the housing bubble that preceded the global financial crisis would have caused a decline in output much larger than the one that occurred during the recession of 2007-09.5 Today we are seeing this debate resurface, but in a very different economic reality. Some now argue that there is again a trade-off between price stability and financial stability goals, but this time it is because large and rapid shifts in monetary policy may contribute to stresses and expose vulnerabilities in global financial markets. Investors  2/4  BIS - Central bankers' speeches  and financial institutions need to adjust to a rapidly changing and highly uncertain environment.
Lars Nyberg: Hedge funds and the recent financial turmoil Speech by Mr Lars Nyberg, Deputy Governor of the Sveriges Riksbank, at the Nordic Hedge Fund Investment Forum, Stockholm, 28 January 2008. *  *  *  Hedge funds have come to play an increasingly important role in the financial system. In the past decade the assets managed have quadrupled and now stand at around USD 2 000 billion; growth of between 25 and 30 per cent per year. 1 But it is not just the fact that the hedge funds have grown in number and size that makes them important. They also have different trade strategies and more liberal investment rules than many other types of investor. This makes them important players on several of the world’s financial markets. Many have said (and some have perhaps hoped) that hedge funds would cause the next financial crisis. As we know, the past autumn saw a number of unpleasant surprises in the financial markets. In this context I believe it may be of interest to note that the hedge funds have not contributed to amplifying the problems in the market. To date, if anything they have had the reverse effect, that is, their actions have generally had a stabilising effect in the markets. 2 At the same time, many hedge funds, like many other financial market agents, can surely learn some lessons from recent events. I will reflect on this today. This also brings me to the current animated debate on the regulation of hedge funds.

When subprime borrowers experienced problems in paying their credit, it became difficult to value products with subprime loans as underlying assets. At the end of the summer the credit rating institutes also began to downgrade credit instruments containing such loans. This resulted in the financial markets more or less losing confidence in anything that might contain subprime loans. This, in turn, fuelled price falls. 3 A common denominator for many of the investors, both hedge funds and others, who have experienced problems, is that they have had a high share of securities with subprime content, often in combination with high leverage. Considerable attention, as we all know, has been focused on the US investment bank Bear Stearns’ hedge funds, where the situation was such. When the financiers wanted to pull out, the funds were forced to sell their assets. The problem was that it was no longer possible to sell these assets, since liquidity in the market had disappeared. Quite simply, there were no buyers at prices anywhere near those that were previously listed or calculated. The funds therefore collapsed with substantial losses. Bear Stearns’ funds have received considerable attention, not merely because the losses were extensive, but also because they were among the first to experience problems. But there is also another category of hedge fund, which without having any actual exposure to subprime, was particularly affected by the turmoil. This was a type of fund that mainly relied on quantitative models for their investment decisions, so-called quant funds.
For example, “popular narratives” can emerge which shape collective expectations among the public – optimism or pessimism, exuberance or depression – and which can then drive aggregate economic fluctuations. 19  Recent research has demonstrated just how powerful those emergent popular narratives can be, economically and financially. As one example, the work of Nick Bloom and co-authors has constructed various measures of businesses’ degree of uncertainty around key issues, based on the words used in media reporting. 20  These narrative-based measures of uncertainty have been found to be important for  explaining the investment behaviour of companies over time. David Tuckett and co-authors have constructed measures of the popular narratives used by participants in 21  financial markets. They find that these narratives can play an important role in explaining asset price  dynamics, over and above the impact of macro-economic fundamentals. In a similar spirit, the work of Michael Bailey and co-authors has found, using Facebook data, an important role for shared social narratives in explaining behaviour in the housing market. 22  At a macroeconomic level, the work of George Akerlof and Robert Shiller has looked at the popular narratives which emerge during periods of boom and bust. 23  Using words extracted from newspapers, they  find the prevailing popular narratives about the economy have played a significant role in accounting for the heights of the peaks and depths of the troughs during macro-economic booms and busts. Public expectations, embedded in the stories they tell, are a key macro-economic driver.

Financial market measures are adjusted for RPI-CPI wedge; and the Bank/TNS household measure is adjusted for the perceptions wedge. ** Except for household measures, where we need to use five-year-ahead expectations. ~ Simple average of all measures available in a given quarter. This will include measures that become available part way through the sample. 29  All speeches are available online at www.bankofengland.co.uk/speeches  29  Figure 2: Illustrative diagram of ‘wisdom of crowds’  30  All speeches are available online at www.bankofengland.co.uk/speeches  30
Other annexes are still under development and will be finalized during the course of this year. Second, I would like to inform the Committee of the results of an evaluation that the CBC voluntarily underwent as part of the International Monetary Fund’s (IMF) pilot scheme for the new Central Banks Transparency Code. The Code, which was approved by the IMF in July 2020, covers transparency in governance, policies, operations, outcomes, and official relations.7 This evaluation was done over five months, and concluded that “the Central 5  This document can be seen at https://www.imf.org/-/media/Files/Publications/PP/2020/English/PPEA2020038.ashx The Panel was composed by former Governor of the Bank of Israel Karnit Flug (Chair of the Panel); Senior Research Fellow at the Brookings Institution, Member of the Financial Stability Committee of the Bank of England, and former Vice Chairman of the US Federal Reserve Donald Kohn; Professor at the University of Cambridge, England, and Expert Evaluator on Transparency and Communication of Monetary Policy Petra Geraats; Professor at the University of Columbia University, United States, and former Chief Economist of the IADB Guillermo Calvo; and University of Pennsylvania Professor and former IMF Research Fellow Enrique Mendoza. The Panel conducted its work between January and September 2019. Both the final report and the CBC’s response to each of the Panel’s recommendations are available at https://www.bcentral.cl/documents/33528/2077651/BCCh_Evaluaci%C3%B3n_Externa-Respuesta_BCCh.pdf 7 For the IMF’s Central Bank Transparency Code, see footnote 5. For the result of the CBC evaluation, see 6  Page 13 of 27  Bank of Chile has implemented broadly advanced transparency practices.

It raises the purchase price of commercial property, so those, as you say, with a lot of financial firepower, global institutional investors and so on, will find it easier to deal with that. And as you say, there are knock-on effects in the rental market, absolutely. We have a strategy review this year, where I think we have always been alive to these concerns. Revisiting how we think about housing in how we do monetary policy is part of that review. For monetary policy, if it has these consequences, we need what we call macroprudential policy to go hand-in-hand. So here in Ireland, as you know, the Central Bank of Ireland has mortgage rules, and it is a very difficult situation. If someone says that in order to allow the individual to compete with the global investors, maybe they should be able to borrow more money: I don’t really think that’s part of the answer. We tried that before here, and we need to keep a limit on the amount of debt that households take on. Because the cost of excessive debt is so high, as we know in this country. Going back, how we deal with improving affordable housing, all of these are frontline political issues, that is true across Europe in different ways. For a fast-growing economy like Ireland, where the workforce is growing, where there is so much pressure on housing, it’s obviously quite intense. But we don’t think tighter monetary policy from us is part of the answer.
Charts 3 and 4 plot the distribution of quarterly (since 1955) and annual (since 1700) GDP growth rates in the UK, with the Bank’s May MPR scenario highlighted. By any conceivable metric, the Covid crisis has generated an extraordinary left-tail shock to the economy, with few if any historical precedents. Chart 3: Distribution of quarterly GDP growth since 1955  Chart 4: Distribution of annual GDP growth since 1700 Number of observations  Number of observations 160  50  140  45 40  120  35 100 80  May MPR 2020 Q2  60  30 May MPR 2020  25 20 15  40  10  20  5 0  0  -15 -13 -11 -9 -7 -5 -3 -1 1 3 5 7 9 11 13 15 17 19  -24-22-20-18-16-14-12-10 -8 -6 -4 -2 0 2 4  Annual GDP growth (%)  Quarterly GDP growth (%)  Sources: ONS and Bank calculations. Sources: Bank of England Millennium of Data, ONS and Bank calculations. “The Second Quarter”  The same fast indicators used to track the collapse in activity in the first part of this year can also be used to track its recovery. Generally speaking, these indicators suggest the recovery in both the UK and global economies has come somewhat sooner, and has been materially faster, than in the MPC’s May MPR scenario – indeed, sooner and faster than any other mainstream macroeconomic forecaster.

Maja Kadievska-Vojnovik: Drivers of European Payment Integration - Innovations and Cooperation (opening speech) Speech by Mrs Maja Kadievska–Vojnovic, Vice Governor of the National Bank of the Republic of Macedonia at the opening of the 10th jubilee edition of the NBRM's Conference on Payments and Market Infrastructures: Drivers of European Payment Integration - Innovations and Cooperation, Ohrid, 5-7 July 2017. * * * Ladies and Gentlemen, Dear guests from home and abroad, It is a great pleasure to wish you very warm welcome to the annual Conference on Payments and Market Infrastructures. This year marks the 10th anniversary of the Conference and we are very proud to host it here in Ohrid in front of a group of eminent speakers and distinguished audience. Let me first thank you all for coming as you are the ones who bring the success to the Conference. I hope you find the next couple of days interesting, informative and productive and most of all enjoyable as we celebrate the occasion. I would like to take this opportunity and extend my sincerest gratitude and appreciation to De Nederlandsche Bank and Banco de Portugal, as institutions with whom we maintain close and fruitful collaboration on many fronts, and particularly with respect to this conference. Your continued support and cooperation is highly appreciated and I believe it will only grow stronger in the future to come. Ladies and Gentlemen, We named this 10th jubilee Conference – Drivers of European Payment Integration – Innovations and Cooperation.
In its country evaluations, the IMF will also be paying more attention to the development of the financial system. There is to be cooperation with the World Bank; these two organisations have agreed on a joint model for the appraisal of national financial sectors. These appraisals are to be based on the current minimum standards for banks and other financial institutions, a broad review of developments and risks in the country’s financial sector, and other conditions such as legislation, accountancy rules, payment systems and financial markets, for example. 3. Greater transparency A more stable development also calls for greater transparency. If the global capital markets are to function as intended, their players must know about the actual risks and be in a position to make realistic profit assessments. This in turn means that international organisations as well as  BIS Review 52/1999  6  governments, private companies and financial institutions must convey a fair picture of the prevailing conditions. As regards the IMF, increased transparency has been proposed in the country assessments, for example. A pilot project has been initiated for the voluntary publication of material about individual countries. Sweden has promised to participate in the project. Transparency also applies to the individual countries and the private sector. One element in the recent crisis has been a misleading account of both private debt and the size of foreign exchange reserves in a number of countries.

This has prompted several emerging economies to restructure their fuel subsidies in an effort to create more efficient economies and to achieve more sustainable fiscal positions. This has been followed by the consequent adjustments in consumer prices as the gap between international market prices and domestic prices narrow. In Malaysia , petrol prices were adjusted by  BIS Review 90/2008  1  40.6% while diesel prices by 63.3%. This adjustment would be reflected in the consumer price inflation in June, which is expected to exceed 6%. Beginning 1 July, electricity tariffs have also been raised by up to 18% for households and an average of 26% for some commercial and industry users. While domestic inflation is expected to remain elevated for the remaining part of this year and early next year, it is expected to moderate in the second half of 2009. In the current international environment, the policy response needs to be contextualised to the conditions prevailing in each individual economy. In those economies that are experiencing overheating and strong demand conditions, there is greater clarity in terms of the need for policy to rein in demand. However, for economies that are experiencing moderating growth, the risks to growth and inflation need to be carefully evaluated. In addition, consideration needs to be given to the deflationary impact of the fuel price increases on consumption.
International Fund for Agricultural Development Mission •  An International Fund for Agricultural Development (IFAD) Mission was in the country to solicit comments on the Rural Finance Programme Inception Report of November 2003 on the development of rural finance. The major findings were that the Inception Report provided the basis for the provision of rural finance, however, it was noted that the report was limited in scope and was too focused on creating an enabling environment for the provision of rural finance. In addition, the report lacked concrete initiatives for rural finance. In view of this, the Mission proposed the following interventions: •  Support of community based financial institutions;  •  Rural banking;  BIS Review 27/2004  5  •  •  Credit facility for contract farming operations;  •  Innovation and outreach facility; and  •  Policy, legislative and management support. As a way forward, the Mission agreed to complete a draft formulation report by end-April 2004, hold a stakeholders’ workshop by end-May 2004 and finalise the formulation report by end-June 2004. The programme appraisal would be conducted by end-September 2004. AFRACA Workshop •  A workshop was held in South Africa under the auspices of AFRACA. A number of issues came up but a particular one we would like to encourage in our market is the linked banking. This involves commercial banks entering into arrangements with other institutions, such as, microfinance institutions to extend some form of banking services even to outlying areas.

The increase in copper export receipts was on account of the rise in both the volume of copper exports by 2.1% to 30,076 metric tons in January 2004 from 29,449 metric tons in December 2003, and an increase in realised prices by 5.5% to 96 cents per pound in January 2004 from 91 cents per pound in December 2003. •  However, cobalt export receipts decreased following the decline in the sales volume by 42.9% to 131.8 metric tons in January from 230.9 metric tons in December 2003. Cobalt realised prices, on the other hand, increased by 46.6% to US $ per pound in January 2004 from US $ in December 2003. •  Non-metal export earnings increased by 1.6% to US $ million in January 2004 compared with US $ million realised in December 2003. The major non-traditional export items that contributed to the rise in export receipts in January 2004 were burley tobacco, cement, cotton lint and sugar. 2. Developments in the financial sector  Banking sector Overview of financial performance of the banking sector •  On the basis of capital adequacy, asset quality, earnings performance and liquidity, the overall financial condition and performance of the banking industry during the month of February was satisfactory. •  The industry’s net worth position increased by 3.2% to K639,660 million from K619,955 million in January. The sector also continued to be adequately capitalised. All banks met their minimum regulatory capital requirements in the month under review.