samchain/econo-pairs-v1 huggingface dataset:
Transmission channels of the international crisis to the domestic economy Let me now review the various channels whereby we have been affected by the international crisis, which provides the necessary context to explain our policy decisions and the projections on our economy contained in this Report. The complex moment for the world economy has prompted, on one hand, a sharp fall in world demand for our exports; growth projections for Chile’s trading partners for the two-year period 2009-2010 went from an average of 1.6 percent in January to 0.3 percent in the baseline scenario in this Report, affecting the prices of the products we sell to the world. The terms of trade, as we had already anticipated in January, have seen a steep fall, hurting national disposable income. Nevertheless, the drop in commodity prices has had an immediate positive effect on household income, particularly through oil and other imported goods. 2  BIS Review 65/2009  Although some specific sectors are having difficulties placing their products abroad, the volume of Chilean exports, largely linked to natural resources, has not declined significantly. This reveals that price adjustments have permitted them to continue to be present in markets around the world. This is quite different from the realities of some manufactured goods exporters that have experienced sharp, severe and widespread downfalls. The figures show that the impact in terms of economic deceleration during the fourth quarter of last year was much more severe in those economies whose export basket is tilted towards durables (Figure 5).

The lessons learned from the Great Depression and the commitment on the part of policymakers around the world to ensure that the misery that it caused will not replicate itself this time have prevented the current situation from causing even more severe disruptions. One particular aspect of the current crisis has been the synchrony among different countries. The financial earthquake that devastated developed markets last September and October and its aftershocks that swept over the financial systems of every economy, over output prospects in the world, over income and wealth, just to name a few, propagated to expectations which deteriorated across the entire world. The Chilean economy has not been absent to this phenomenon. As we said in the very beginning, our economy is not and cannot be immune. You can see it in the latest figures and projections contained in this Monetary Policy Report. The channels and mechanisms through which the crisis is transmitted to our economy are varied, and the severe international shock that hit us during the fourth quarter of last year has had damaging repercussions locally, even more so than we foresaw in January. A question that arises naturally is, why the big impact on our economy? Unfortunately, no single answer exists and only time and the gathering of information will allow us more certainty.
The past few weeks have seen some calming of global financial markets, but we are still a long way away from normalisation. With the worldwide deterioration in the economy, credit risks at banks will rise considerably. Attention was drawn to this in June 2008, in our last report on financial stability. Bank provisions for credit risks are currently at a historically low level, and they will need to be substantially increased. This will have a negative impact on their profitability. In the case of the big banks, the situation also involves considerable risks for trading portfolios. The worldwide economic downturn comes at a time when the international financial system is already in bad shape. In particular the big banks that have been hit especially hard by the crisis could be forced to curtail, or further curtail, their lending. This, in turn, could have additional negative effects on the real economy. In order to put a halt to this negative spiral, we consider it important that the economy be supported with monetary and fiscal measures. The interest rate reductions carried out by the Swiss National Bank (SNB) should be seen as part of these measures. ... but the resilience of the big banks has been increased Given this situation, the fact that it has been possible to increase the resilience of the Swiss big banks is crucial. Credit Suisse boosted its capital through private investors by a total of CHF 10 billion. It thereby strengthened its equity position substantially and increased its capacity for absorbing additional shocks.

Manuela Pfrunder, the graphic artist, has further developed her drafts and completed the design for the CHF 50 note, taking the technical aspects of banknote production into account. At its meeting of 29 August 2008, the SNB Bank Council approved the design of the new CHF 50 banknote and gave the go-ahead for the further work that is to be done. Preparations for the technical aspects of implementation of banknote production are now in full swing. A particular challenge is posed by the security features that will be used in the new banknote series for the first time. Based on the progress of work to date, the SNB is confident that the first banknote in the new series will be ready for production within the planned time period. The CHF 50 banknote will mark the beginning of the new series of banknotes and is scheduled to be issued in autumn 2010. The appearance of the new banknote and the security details for the entire series will be presented shortly before the scheduled issue date. 1  Nout Wellink, The Importance of Banking Supervision in Financial Stability, High Level Meeting, 17 November 2008, Beijing  BIS Review 157/2008  3
In my opinion, it seems that is the case, although a number of opinions highlighting potential problems should not be ignored. In favour of the ECB are its strong expertise in the financial sector, as well as the synergy that exists between banking supervision, on the one hand, and the lender-of-last-resort function and payment system oversight, on the other hand. As the third pillar of the banking union, the single bank resolution mechanism is deemed to ensure a centralised management of banking crises that provides options for dealing with bank failures in an orderly way, with minimal disruptions to the economy. The principles of the resolution should be set out in a single rulebook and they should address the issues of the cost of bank recovery, the fiscal backstop, and the moral hazard problem that may occur. The cost of banks’ recovery or resolution should be borne by shareholders and creditors. Nevertheless, in the case of systemic crises, an explicit fiscal backstop may be required, on the design of which a political consensus will be difficult to achieve. Another challenge to establishing this mechanism relates to the heterogeneous resolution framework at the national level, which calls for significant changes in national insolvency, labour and tax laws. Additionally, if the European Stability Mechanism were enabled to recapitalise banks directly, negative consequences could occur in terms of moral hazard within the single market, as well as unfair competition between participating and non-participating banks in the banking union.

They mean that in thinking about ways to mitigate systemic risk it is not tenable to focus simply on bank-centered financial institutions, and it is not feasible to achieve change through national approaches applied only to the institutions of the home country. For these reasons, where we see a need to induce a broader change in market practice, a broader range of informal mechanisms of cooperation among supervisors, among market participants and involving supervisors and market participants would be useful. The second generation of the Counterparty Risk Management Policy Group, led by Jerry Corrigan, is one example of a market-led initiative to define a set of common challenges and recommendations for  4  BIS Review 14/2006  change. Supervisors in the major financial centers are following progress against those recommendations closely. The effort to improve the post trade processing infrastructure for over-the-counter derivatives is an example of regulatory cooperation to help address a collective action problem among market participants, with some encouraging initial results. In this effort, the 14 major dealers along with almost as many supervisors and market regulators from the United States and other major countries, met at the New York Fed in September 2005. We outlined our concerns and asked the dealers to give us a plan for how to fix the problem. They came up with a credible plan, with a set of outcomes-based targets, and agreed to report progress on a common set of metrics.
We are also taking steps to rationalise the requirements that branches are subject to, including consideration of the removal of branch capital requirements as part of the Solvency II review, with the aim of limiting regulatory requirements to those required to deliver our objectives. We are, however, also conscious of the need to ensure a level playing field among all insurers operating in the UK – there can be no question of insurance branches being held to lower standards than insurers that are based here, which would distort competition and potentially increase the risks to PRA objectives. All insurers will be supervised proportionately based on their possible impact on safety and soundness and policyholder protection. We will assess our ability to rely on home state supervisory authorities, considering both their supervisory equivalence and level of co-operation with us, on an ongoing basis, and will take action as needed if we judge that we are unable to supervise a branch effectively. 4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  We have also been clear that some overseas insurers have UK liabilities that that represent too great a risk to PRA objectives, including the impact of branch failure on policyholders and Financial Services Compensation Scheme (FSCS) levy payers, to rely on branch supervision with its inherent limitations, even with strong co-operation from home state regulators.

The UK is currently the single largest market for non-life insurance globally, with £ of annual premium (equating to c.7% of global insurance premiums) written through the London Market with 85% of this business undertaken in the UK by insurers which are themselves part of groups headquartered overseas.2 UK domiciled insurers alone rank fourth globally in written premiums and UK-domiciled insurers in the life and long-term savings sector manage over £ of assets.3 We have only been able to reach this position, and will only be able to maintain it in future, through open international insurance markets. The Government’s stated policy is to maintain and enhance the position of the UK as a leading international financial sector, and the insurance sector forms a key part of this. An important aspect of achieving this objective is how we ensure that the UK is open and competitive as a place to do business. But what does this mean in practice, and for the insurance sector in particular? One of the key changes wrought by Brexit is the increased role the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) now play in decisions regarding which EU insurers are permitted to operate in the UK market and how they are supervised.
These developments, coupled with the massive public support targeting NFCs at the apex of the pandemic, and possibly the room for carry-trade offered by the current design of liquidity provided by the Eurosystem through TLTROs, have raised some concerns about the sovereign-bankcorporate nexus. It is clear that in the future this nexus could give rise to vulnerabilities from a financial stability standpoint and we should remain vigilant about the negative feedback loop that it may facilitate. However these concerns should not be overstated. Let me observe first that in the Eurozone, these linkages between banks, sovereigns and corporates have been crucial for absorbing the economic and financial shocks created by the pandemic. Second, the growth in the intensity of these interlinkages must be put into perspective. For 3/4  BIS central bankers' speeches  instance, relative to their total assets, banks’ exposure to their domestic sovereign have only increased modestly and has remained well below their historical peak. And third, if the so-called bank sovereign “doom loop” was a significant threat for the Eurozone after the Great Financial Crisis, we must reckon that this time is different, and that this threat has been weakened.Indeed, the pandemic crisis does not originate from banks, and banks are materially more resilient compared to what they were in 2008 thanks to the implementation of Basel III. And thanks to the implementation of the Banking union in its various dimensions, spillover risks have been reduced.

2/4  BIS central bankers' speeches  In addition to clearing, the extended use of electronic platforms also contributes to the resilience of the European repo market. As mentioned in the last ICMA survey, the segment of the electronic repo trading (via bilateral trading) in particular has benefited from the turmoil observed during H1 2020 because of the dash for cash situation. Nonetheless, support that voice-brokers can punctually bring to clients has been also an important factor during these difficult times. 2. Some points of attention going forward The resilience of the sovereign debt markets during the crisis and their contribution to the absorption of the economic and financial shocks we had to face, should not hide however a few attention point that their development has contributed to intensify or bring back to the forefront, from a financial stability perspective. I would like to highlight two of them, margin calls and the sovereign-bank-corporate nexus. a) European sovereign debt is of course used as collateral to obtain liquidity on the repo market. Episodes of volatility in times of crisis, like during the March 2020 market turmoil, or idiosyncratic events, such as the Gamestop or Archegos ones, can result in significantly increased cash needs, in particular stemming from margin calls across centrally cleared and non-centrally cleared markets. The resilience of the repo market, meaning its liquidity and depth, is thus critical in responding to those margin calls, including for the non-bank financial sector.
On the other hand, future financing needs related to “recovery and repair” should be the natural domain of European financial solidarity. B. Our common instruments : combining solidarity and responsibility I believe that an "effective and collective exit strategy" should combine four cornerstones of the European recovery – : (i) an ambitious “recovery plan” to provide European financial solidarity, (ii) a clarification of fiscal rules ensuring the responsibility of Member States, (iii) a Financing Union for Investment and Innovation fostering “private risk-sharing”, and (iv) an accommodative monetary policy, against the backdrop of low inflation. Page 8 sur 10 a/ Regarding the first cornerstone, an ambitious "recovery plan", the discussion so far has focused on its amount – it should be above EUR 1 trillion which is roughly the expected loss of euro area GDP this year – or on its structure: should it take the form of loans or grants? Let me answer clearly: it should combine both. Hence, as agreed by the European Council on 23 April, it will be crucial to combine the recovery fund with the next multiannual financial framework – which should be increased. But let us now discuss the content of the fund. First, it should target investments that generate additional potential growth. Second, it should include a "European value added", with positive cross-border spillover effects. Climate change, digital technologies, research and development are good candidates if we know how to be selective. “Technical” institutions such as the European Investment Bank (EIB) could be entrusted, and possibly “pari-passu” with private money.

First, the Fed's commitment to achieve and sustain 2 percent inflation is a now bedrock principle. This was not always the case. It's only been 10 years since the FOMC defined 2 percent inflation as its longer-run goal. 7 This transparency about our objectives provides a "North Star" for policy decisions and communications. It likewise improves the public's understanding of our goals and actions. It has also served us well in keeping longer-term inflation expectations well anchored. For example, the most recent Survey of Consumer Expectations shows that consumers expect inflation to decline over the next three years. 8 And market-based measures of inflation expectations have also remained well anchored. This anchoring of longer-term expectations is critical to keeping high inflation from becoming embedded in the psychology of consumers and businesses, which we know from the past is costly to undo. Economic Outlook So, what does tighter monetary policy mean for the economy? We are already seeing some of the effects. Broad measures of financial conditions, including borrowing and  3/5  BIS - Central bankers' speeches  mortgage rates and equity prices, have become significantly less supportive of spending. This has led to a decline in activity in the housing market and signs of slowing in consumer and business investment spending. As this continues, I expect real GDP to be close to flat this year and to grow modestly in 2023.
The Riksbank’s holdings of securities by asset type Nominal amounts, SEK billion 1000  1000  Corporate bonds Covered bonds Municipal bonds  800  800  Treasury bills Government bonds  600  600  400  400  200  200  0  15  16  17  18  19  20  21  0  Note. Holdings of securities, excluding commercial paper, issued in Swedish kronor. Holdings after decided purchases are shown for the second and third quarters of 2021. Source: The Riksbank  Figure 10. Central banks’ balance sheet totals Per cent of GDP 70  140  Bank of England The Federal Reserve  60  120  The ECB The Riksbank  50  100  40  80  30  60  20  40  10  20  0  16  17  18  19  20  21  0  Note. GDP is calculated as the sum of the present quarter and the three previous quarters. For quarters for which GDP has not yet been published, the most recently published GDP statistics are used. Sources: The Bank of England, Macrobond and the Riksbank  19 [20]  Figure 11. Repo rate, and average lending rate to households and companies, new and renegotiated loans Per cent  Note. The lending rate is volume-weighted average of monetary financial institutions' lending at all maturities. Sources: Statistics Sweden and the Riksbank. Figure 12.

One can summarise this by saying that we need to better understand, clarify and explain the effects of new monetary policy tools. We are far from alone when it comes to this challenge. The Bank of England recently had to relate to an investigation that emphasised that these elements needed to be developed with regard to QE programmes. 31 We are working continuously on developing our analyses and communication of monetary policy. As I mentioned earlier, I think that the proposal for a new Sveriges Riksbank Act is good in several aspects. This includes the extended scope for the political system to examine our activities. Information, scrutiny and evaluation are central conditions for our strong independence. The world has changed a lot since 1668, but the Riksbank’s monetary policy task has remained a common denominator over the years. If we are to supply a monetary policy with price stability as objective, we need to accept that the conditions change over time and that the tools need to be updated when these changes occur. Independence is a large measure of confidence to hold in trust. Continued freedom with responsibility will enable the Riksbank to contribute to good economic developments going forward. Thank you for listening! 30  See, for instance, Melander (2021) and Di Casola (2021). 31 See Bank of England (2021). 12 [20]  References Alesina, A. and L.H. Summers (1993), “Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence," Journal of Money, Credit and Banking.
It is this substantive advancement in Islamic finance that we believe greater business and investment ties could be built upon to enhance economic relationship between Turkey and Malaysia. Turkey-Malaysia vast growth opportunities For Turkey and Malaysia, a productive partnership could be created when both parties are able to harness the strengths of each other. Turkey is Malaysia’s eighth largest trading partner among the OIC member countries, has had a significant growth in terms of its trade with Malaysia, which has expanded at an annual average rate of 22.4 percent since 2006. While the volume of trade and investment between the two countries is still relatively small, where Malaysia’s trade with Turkey accounts for 0.3 percent of Malaysia’s total trade and Malaysia’s investment in Turkey totalled to USD56.2 million as at end-2010, the figures also reflect the enormous opportunity for further growth. Turkey’s Prime Minister The Honourable Recep Tayyip Erdoğan, during the recent visit by the Malaysian Prime Minister to Turkey, has suggested a leadership aspiration for trade volume between Malaysia and Turkey to grow from USD1.3 billion to USD5 billion. With commitment and hard work, this target is certainly not impossible to achieve. I believe with a Strategic Framework Agreement that is planned to be signed later this year between our two Governments would further strengthen cooperation between the two through identification of important areas where we could focus and work on. Opportunity to enhance trade and financial linkages between Turkey and Malaysia is immense.

This is the right time to be discussing this topic, as we are experiencing the aftermath of one of the largest macroeconomic disruptions of the century. In the last three years, we lived through one of the most challenging times for policymakers, where governments and central banks were pushed to deploy everything at their hands to content the health and economic consequences of the pandemic, and lately to contain inflationary pressures. During these years we have learned that the effects of the Pandemic differed significantly between economies but also within households and firms of heterogeneous characteristics. The different exposure that households and firms have to credit conditions, supply chains, and final demand, affected their reaction to the original shock and also to the different policies. Firm size and household income distribution were important sources of heterogeneity to consider as well. Having widespread access to information regarding these dimensions was critical to develop sound policies. In response to these very challenging times, academia also reacted. Since early 2020, we witnessed an explosion of applied research that incorporated the lessons learned in the last 35 years in terms of the importance of considering firm and household heterogeneity to better understand the transmission mechanisms of fiscal and monetary policies. 1/5  BIS - Central bankers' speeches  This process of knowledge spillover from academia to policymaking is not something new.