samchain/econo-pairs-v1 huggingface dataset:
Three factors of uncertainty come into the picture: -  first, there is by essence a high degree of uncertainty surrounding the assessment of misalignments, related to their equilibrium prices and the channels of transmission to the real economy;  -  second, central banks have to keep in mind the balance of risks facing the economy: a monetary policy action that would reduce the risk of a large loss in the future might be very costly for the economy in the short run;  -  third, the effects of monetary policy decisions on asset prices are very uncertain. •  The announcement of a systematic reaction could therefore lead to moral hazard and undermine the central bank’s anti-inflationist credibility, which is its most precious asset. Moreover, the single interest rate policy cannot be geared simultaneously towards two potentially conflicting objectives. c.  Be aggressive or experiment  There may be two cases where gradualism is not the systematic guideline. •  Worst-case outcomes may best be prevented by following policy rules that are rather aggressive in responding to inflation deviations from target. •  A more aggressive policy rule may generate more information, which would improve the learning of the central bank and thereby future policy performance. But the learning process might be costly since it could generate increased volatility. 2. Some approaches to address uncertainty  a. Rely on monetary policy rules  •  Simple monetary policy rules (like the Taylor rule) may perform well in many different models.

The financial crisis clearly demonstrated that high quality and up-to-date statistics are indispensable to policy makers and market participants alike. Thank you very much for your attention. Now, the Director General Statistics, Mr. Steven Keuning, will present more detailed features and the first results of the new statistics. Following his presentation we stand ready to answer your questions. 2  BIS Review 165/2009
So rather than focusing on the debt burden of the government, or households, or nonfinancial corporations, this line of work focuses on the debt burden of the financial sector itself.7 It is important to mention that, in a series of studies, Atif Mian and Amir Sufi have proposed a complementary mechanism in which they focus on the increase in household debt as a strongly predictive factor in explaining the depth of the recession associated with the financial crisis.8 Across the United States, regions in which household leverage was fueled by more aggressive lending tended to have larger subsequent busts. Hence the procyclicality of household and financial sector leverage were tightly intertwined. The first and central finding is that financial intermediary balance sheet growth is highly procyclical. This finding is broadly consistent with how we think banks operate and the role they perform in providing financing to households and firms: As the economy expands, banks  7  See Adrian and Shin (2008, 2010, 2014), Adrian, Boyarchenko, and Shin (2015), Adrian, Moench, and Shin (2010, 2014), Adrian, Etula, and Muir (2014), and Adrian and Boyarchenko (2012, 2013, 2014). 8  See Mian and Sufi (2010, 2014). 4  BIS central bankers’ speeches  find more potentially profitable projects to which to lend, and also find it relatively easy to attract more funding, as households and businesses have more savings to invest. A more cautionary finding is that the size of bank balance sheets tends to forecast aggregate economic volatility.

Mian, Atif R., and Amir Sufi. House of Debt: How They (and You) Cause the Great Recession, and How We Can Prevent It from Happening Again. 2014. Chicago, IL: University of Chicago Press. Reinhart, Carmen M., and Kenneth Rogoff. This Time is Different: Eight Centuries of Financial Folly. 2009. Princeton University Press. Reinhart, Carmen M., and Kenneth Rogoff. 2011. “From Financial Crash to Debt Crisis.” American Economic Review 101 (August): 1676–706. Sastry, Parinitha. Forthcoming. “The Political Origins of Section 13(3).” Economic Policy Review, Federal Reserve Bank of New York. Schularick, Moritz, and Alan M. Taylor. 2012. “Credit Booms Gone Bust: Monetary Policy, Leverage Cycles, and Financial Crises, 1870–2008.” American Economic Review, 102, no. 2 (April): 1029–61. Stein, Jeremy. 2012. “Monetary Policy as Financial Stability Regulation.” Quarterly Journal of Economics 127 (February): 57–95. 10  BIS central bankers’ speeches
If a particular security is scarce in the market, we will presumably not be shown offers at attractive terms, and hence we will not end up removing additional supply of that security. 9  The Desk tends to avoid conducting operations on days that coincide with FOMC announcements and on days that are known to have lighter liquidity conditions. 10  The Desk has begun publishing additional information from its operations, including information about the prices paid for each security, on a monthly basis. In addition, under the Dodd–Frank Wall Street Reform and Consumer Protection Act, the Federal Reserve will publish additional information about its open market operations, including the individual securities purchased, the transaction prices and the counterparty, with a two-year lag for all transactions subsequent to the legislation. 11  Implementing the program over an eight-month period would not be expected to significantly reduce the speed or magnitude of its effects on financial conditions and, ultimately, on the real economy under the view that the program’s effects arise from the expected stock of our holdings rather than the flow of our purchases. Under this view, financial conditions react immediately to the announcement of the program, bringing forward its effects on financial conditions. This view provides policymakers with some flexibility regarding the amount of time to implement the total amount of purchases. BIS central bankers’ speeches  3  The flexibility of this procedure can be seen in the patterns of our purchases over time.

The relevant risk for the SOMA portfolio instead has to do with movements in interest rates at different maturities. BIS central bankers’ speeches  5  controls. The interest paid on reserves can be thought of as the “funding cost” of the portfolio. Today, because short-term interest rates are low relative to longer-term interest rates, this mismatch produces a very elevated stream of net income. In particular, the SOMA portfolio has a weighted average coupon yield of about 3.5 percent, which, if applied to a $ trillion portfolio, produces about $ billion of income at an annualized rate. 14 In contrast, the annualized funding cost of the portfolio at this time is only around $ billion. This cost is relatively low because of the near-zero level of the interest rate paid on reserves. In addition, the private sector holds nearly $ trillion of currency, which are liabilities of the Federal Reserve that bear no interest. 15 Thus, the SOMA portfolio should produce a considerable amount of net income over the near term. 16 Beyond the near term, though, the income that will be produced by the SOMA portfolio is uncertain. If short-term interest rates were to rise, the funding cost of the portfolio would increase relative to the fairly steady yield earned on the assets held, reducing the amount of net income from the portfolio. In addition, if longer-term yields were to shift higher, the Federal Reserve could realize capital losses if it were to begin selling assets.
Relative to large companies, SMEs were traditionally considered riskier, as SMEs tend to have fewer assets that can be offered as collateral, lack of sufficient credit history and regarded as unbankable for some. CGC was established to address these concerns, by providing guarantees that enable SMEs to have expanded access to loans offered by financial institutions. Thus far, CGC has done a commendable job, providing guarantees to more than 420,000 companies, representing about 65% of the total SMEs, with total loans approved of more than RM51 billion as at end of 2012. SMEs are an important agent of growth and a component to support the nation’s aspiration to transform into high income and a high value-added economy. As a group, SMEs is a formidable force in the economy, as it forms 97.3% of established businesses and provides employment to 57.3% of the nation’s workforce. This contribution was recognised in the SME Master Plan where the growth by SMEs to the GDP is targeted to increase from 32.5% currently, to 41% by 2020. As the economy grows and becomes more sophisticated, so does the needs and requirements by the SMEs. In this regards, CGC has shown its ability to constantly reinvent itself to meet the needs of both the SMEs and financial institutions over the last 40 years. Looking at the list of CGC schemes throughout the years, the development of CGC’s products had mirrored the development of the country and the increased sophistication of the economy.

From the book, we can see a long list of CGC schemes introduced throughout the years, each reflecting the stage of development of the country then, and also consistent with the strategy of the country’s economic policies. From CGC’s earliest products such as the  1  Keluaran dalam Negeri Kasardan Pendapatan Negara Kasar pada Harga Semasa dan Harga Malar, Economic Planning Unit (EPU) statistics  2  Bank Negara Malaysia data  BIS central bankers’ speeches  1  Hawkers and Petty Traders Loan Scheme, catering to financing as low as RM500, to the recent Green Technology Financing Scheme, CGC has done well in providing the needed support to the ever-progressing and expanded nature of the Malaysian economy. CGC’s achievements would not have been possible without the support of the financial institutions. The successes of CGC’s guarantee schemes were the result of the trust and collaboration between the corporation and the participating financial institutions. It is for this reason that over the years many achievements have materialised. CGC has achieved a lot of success it can be proud of, but as with life, we must move forward. Change is constant it becomes more rapid. There are a few things that we could do for the SMEs. First, we can lower the financing cost for SMEs which obtain guaranteed financing under CGC. On the average, SMEs are being charged between 10 to 12 percent. This is about BLR plus 5 to 6 percent. The rate imposed is much too high.
8  See the box on page 5 of the July 2010 Agents’ summary of business conditions, available at: http://www.bankofengland.co.uk/publications/agentssummary/agsum10jul.pdf  BIS Review 122/2010  5  But it may also reflect the nature of this recession. Speak to almost any businessperson and they will tell you the same story: to be successful, businesses need healthy cash flow. Cash is king. That has always been the case. But one consequence of the financial crisis – as the availability of bank financed tightened and trade credit dried up – is that the importance placed on maintaining cash flows increased. Companies were less able to trade-off lower selling prices today for future gains in market share. 9 Inflation expectations The final factor emphasised by the pricing model is inflation expectations. The importance of inflation expectations is well understood. If wage and price setters expect the MPC to keep inflation close to target for much of the time, this will be reflected in their behaviour which, in turn, will help keep inflation close to target. Successful policy and anchored inflation expectations are self-reinforcing. A significant risk associated with the recent period of above-target inflation is that it causes inflation expectations to become less well anchored. The dangerous talk may start to be believed. If so, temporary deviations in inflation would tend to be given greater weight in wage and price setting and so become more persistent. And the task of monetary policy would become substantially harder.

Before the 11th of September the chances were that the US economy - which is of course key to the whole global outlook - was close to the bottom of its cyclical slowdown, and that we would see a gradual pick up into next year. The Eurozone, which is a particularly important trading partner for the UK, was also expected to recover lost momentum. That prospect may well have been set back by the terrorist attacks. These clearly had a direct impact on some sectors, including for example, air travel and the aerospace industry. And they had an effect on consumer and business confidence more generally. But the degree and duration of the set-back is very far from clear. We need to be careful not to exaggerate the likely consequences. The effects on confidence, particularly consumer confidence, are already showing signs of abating; and global equity markets, although they remain volatile, quite quickly recovered much of their initial losses. Nor should we underestimate the swift and strong policy response both in the US and elsewhere. Looking further ahead it is difficult to see that the supply side of our economies has been materially affected: in particular the potential for modern technology to spread across different sectors, with the promise of improving productivity, remains intact, even if this is delayed by earlier excesses and by the more recent damage to business confidence.
It allows insurance companies to recognise as capital  Page 4  up-front a part of the income they expect to earn on their assets in the future, but only as long as they can show that the cashflows they expect to receive from those assets closely match the payments they have undertaken to make to their insurance policyholders (hence “matching” adjustment). This is therefore most relevant for the annuity business, where insurance companies promise to pay individuals’ pensions far into the future. You might ask why the regulator favours such an arrangement, which is not common in other bits of regulation, when perhaps it would be more prudent to make insurance companies wait until those returns (for instance, interest payments on corporate bonds) are actually paid to them before recognising them as capital which could be paid out to shareholders. The reason is that we think it protects policyholders if insurance companies are incentivised to invest in assets which will produce cash at the right time, so that insurance companies are not scrabbling around for the right assets when they have to make payments to pensioners in the future. [2] However, you would be right to think that if we allow such an arrangement we must operate it with a very high degree of confidence that those future returns will in fact materialise – in other words that insurance companies do not recognise up-front returns which then later don’t show up. Second, why does the MA matter? For me there are two reasons.

Let me share a few thoughts on some of the current issues which have a bearing on Asia’s growth and the global environment ahead. Rising global food prices The first, and perhaps most pressing issue that the world faces, is spiraling inflation. Global food prices have spiked in the recent months due to a confluence of factors. Demand has increased to feed a growing global population with a rapidly expanding middle class in the developing Asian countries. This demand is compounded by competing uses for food sources to generate biofuel and feed. Meanwhile, sources of supply have been hit by rising energy costs, increased competition for arable land, and the erratic weather. As a result, prices of many food commodities including wheat, corn, and rice, a staple for all Asians, have soared. The United Nations has declared the drastic increase in food prices “an unprecedented challenge of global proportions” and established a task force to tackle the food crisis. This is indeed a global issue and cannot be resolved overnight. Many of these factors are structural and will take time for the demand-supply equilibrium to be established. On the Asia Pacific front, the Asian Development Bank has recently announced $ million of immediate budgetary support to help countries that have been worst hit by rising food prices. With increasing food prices and high oil prices, mitigating the impact of strong inflationary pressures will remain a key priority for many Asian governments.
(2016) document similar patterns in real interest rates around the world. 6. Within our central framework for understanding its determinants, R* is the price that equilibrates supply and demand in the capital market. On one side of the market, households accumulate wealth and use capital as a means of storing that wealth. Households’ accumulation of wealth is the result of their desire to smooth lifetime consumption. On the other side of the market, firms require capital to produce. They choose the optimal quantity of capital to use, equalising the marginal costs and marginal returns. See Bank of England (2018) for details. 7. See Cesa-Bianchi et al. (2022). 8. Estimates of the underlying trends in the structural factors that drive Global R* are obtained for 1950–2015. The trends are extracted using a statistical filter and to avoid so-called ‘end point’ problems the latest data are omitted. Given the frequency of the releases of some data series and because the model focuses on a five-year real interest rate, the sample period therefore ends in 2015. See Cesa-Bianchi et al. (2022) for details. 9. The table also shows that varying the simulation assumptions results in simulations that imply falls in Global R* that vary between 1.1 and 3.3 percentage points. 10. As shown in Cesa-Bianchi et al. (2022), the dynamic paths of the structural model simulation and statistical estimate differ more in other parts of the sample period, so do not imply exactly that same change in Global R* over all subsamples. 11.

For example, firms’ entry and exit rates have been stable in the United Kingdom since the early 2000s, in contrast to the declining rates observed in the United States. [27]  Taking stock and looking ahead My remarks today have purposefully abstracted from short-run influences on the macroeconomy in order to focus on the longer-term structural trends that have driven the secular decline in Global R* and the puzzling weakness of investment in the United Kingdom and other advanced economies. Why do these secular developments matter for central banks? The level of the trend real rate has important implications for the conduct of both monetary and financial policies. In a low interest rate environment, other things equal, monetary policy may find itself more often constrained by the effective lower bound on nominal interest rates (Bernanke et al., 2019). But prolonged periods of low interest rates may also pose financial stability risks via greater risk taking (Cunliffe, 2019). Understanding the trends in investment is also key given the importance of investment in driving long-run growth and productivity. In turn, productivity growth is an important determinant of potential output. Estimates of potential output are used to assess the size of the output gap, or level of spare capacity, which influences the degree of inflationary pressure in the economy. Such estimates can therefore have an important influence on the judgements that inform monetary policy decisions. The analysis I have discussed so far has looked at a number of secular trends over the past few decades.
Significant progress has in fact been achieved in the development of the Malaysian sukuk market, underpinned by strong collaboration among the Government, regulatory agencies, players and investors. By early 2007, Malaysia accounted for 67 per cent, or about twothirds, of the global outstanding sukuk amounting to about USD47 billion. Malaysia is important for the global sukuk market, not only because it represents the largest sukuk market in terms of outstanding size, but also in terms of number of issuance which signifies a strong edge in market vibrancy. Malaysia's strong performance in sukuk activities can be attributed to several key factors that may be similarly leveraged by other issuers and players participating in the Malaysian Islamic capital market. These are: (i)  Firstly, Malaysia has the strong edge by having an efficient platform for sukuk issuance and trading activities covering the infrastructure and facilitative rules that contribute towards efficient price discovery and shorter time to market. The established legal, regulatory and Shariah frameworks in the Islamic financial infrastructure are key competitive advantage for Malaysia. These initiatives have been reinforced by the supporting financial infrastructure including the settlement and bond information systems. There is no restriction on the use of proceeds, ability to use international rating services, ability to hedge positions and ability to swap issuance proceeds into foreign currencies. Submission for foreign currency sukuks from qualified issuers with at least a single “A-” credit rating would be deemed approved upon proper filing of documents with the Securities Commission.

So much so, that their journey towards an open capital market has seemed, at times, a nightmare. The core of the problems faced by a number of emerging markets has been the sharp reversal of capital flows. Between 1996 and 1998, the reversal of capital flows to the five Asian countries primarily affected (Korea, Thailand, Indonesia, Malaysia and the Philippines) was of the order of $ billion, equivalent to 12% of the pre-crisis level of GDP. These reversals imply equal and opposite swings in the current account. To turn a large current account deficit into a substantial surplus within two years almost certainly requires a recession. In 1998 real GDP fell by 6% in Korea, by 9% in Thailand, by 14% in Indonesia, by 7% in Malaysia and by 1% in the Philippines. Moreover, the reversal of capital flows to emerging markets means that the industrialised countries must in aggregate run a larger trade deficit. The distribution of that increase in the collective deficit has already led to a debate about domestic policy, making it harder to resist the ever present protectionist pressures, especially in election years. So rapid reversals of capital flows bring substantial economic costs. Capital flows also bring real economic benefits. They enable savings in one country to finance more profitable investment in another. That was a key feature of the world economy in the nineteenth century. Such flows also facilitate the transfer of knowledge and expertise.