samchain/econo-pairs-v1 huggingface dataset:
The labour market is also expected to strengthen, with the unemployment situation improving for the rest of the year. Against this backdrop, MAS shifted to a policy of modest and gradual appreciation of the $ in April 2004. This policy stance was assessed to be supportive of economic growth, while ensuring low and stable inflation over the medium term. Let me now turn to other aspects of MAS’ work during the past year. II  Regulation and supervision  First, in the area of regulation and supervision, we issued the “Objectives and Principles of Financial Supervision in Singapore” monograph earlier this year. This will help the financial institutions we regulate and supervise better understand the desired outcomes of our supervision. Let me say a few words specifically on risk-based capital. We issued details of changes to the capital adequacy requirements for Singapore-incorporated banks in May 2004. We believe the new requirements are prudent but competitive, and more sensitive to the banks’ actual risk profiles. These changes will give the banks greater flexibility to manage their capital while maintaining a prudent buffer against future shocks. The Basel Committee on Banking Supervision finalised the New Basel Capital Framework last month. We intend to adopt the New Framework at the same time as the G10 countries. We will continue to work closely with the Singapore-incorporated banks to assess the impact of the New Framework and determine how best to adapt the proposals for Singapore.

In the international regulatory front, we recently assumed the chair of the Asia Pacific Regional Committee (APRC) of the International Organisation of Securities Commissions (IOSCO), and sit on the IOSCO Executive Committee. We have also assumed the chair of the EMEAP Working Group on Banking Supervision, which will facilitate the region’s discussion on implementation of Basle II. We are committed to regional and international co-operative efforts that help to foster a stable global financial system. In that regard, we contributed actively to initiatives of other forums such as BIS, FSF, IAIS and FATF, in the areas of financial stability, regulation and supervision, corporate governance and antimoney laundering. VI  Ensuring business continuity  In the area of Business Continuity Management (BCM), MAS conducted several exercises last year to ensure the effectiveness of our BCM plans. We also inspected BCM plans of major financial institutions (FIs) and found that FIs are generally prepared. For example, during the recent blackout, affected FIs continued operations smoothly on back-up power and activated their incident management process to verify that their buildings and operations were functioning normally. The blackout had minimal impact on the financial sector. VII  Accounts  Let me now move on to the MAS’ financial statements. MAS’ total assets grew 16.8% during the year ended 31 March 2004 to $ 179.7 billion. The Currency Fund’s assets, at the financial year-end, exceeded the $ 14.6b currency in circulation, providing 110% asset backing.
The worst-in-a-lifetime financial crisis of the past few years is exhibit one. It is unlikely to be the last. Yet the history of political and economic progress offers a clue to solving these problems. This has relied heavily on long-lived, far-sighted institutions which are able to tackle the problems complex, integrated, information-rich societies throw up. Post-crisis financial reform has recognised that, giving system-wide regulatory responsibilities to a set of arms-length, long-lived institutions. There are many other areas of public policy where long-tailed risks loom large – pandemics, cyber risks, trade disputes, carbon emissions. Left to their own devices, societies may underinsure against these tail risks too. That is why institutions matter, now more than ever. They explain why nations failed in the past. They may be even more important in helping them succeed in the future. 5  See FSB (2011), “Macroprudential policy tools and frameworks”. BIS central bankers’ speeches  9  10  BIS central bankers’ speeches  References Acemoglu, D and Robinson J (2012), “Why nationals fail. The origins or power, prosperity and poverty”. Profile Books. Acemoglu, D, Ozdaglar, A and Tahbaz-Salehi, A (2013), “Systemic risk and stability in financial networks”. NBER Working Paper No. 18727. Aikman, D, Haldane, A and Nelson, B (2010), “Curing the Credit Cycle”, Columbia University Centre on Capitalism and Society Annual Conference “Micro foundations for Modern Macroeconomics” New York.

Available at: http://www.bankofengland.co.uk/publications/Documents/speeches/2010/speech463.pdf Alloy, B and Ahrens, A (1987), “Depression and pessimism for the future: Biased use of statistically relevant information in predictions for self versus others” Journal of Personality and Social Psychology, Vol 52(2), pp. 366–378. Arthur, W B (2009) “The nature of technology: what it is and how its evolves”, Penguin. Banerjee, A and Duflo, E (2011), “Poor economics”, PublicAffairs. Barro, R and Gordon, J (1983), “A positive theory of monetary policy in a natural rate model”, Journal of Political Economy, Vol. 91, No.4 pp 589–610. Barton, D (2011), “Capitalism for the long term”, Harvard Business Review, March. Bernanke, B (2004), “The great moderation”, remarks at the Eastern Economic Association, Washington, DC, 20 February. Carr, N (2011), “The shallows: what the internet is doing to our brains”, Atlantic Books. Claessens, S, Kose, M A and Terrones, E M (2008), “What happens during recessions, crunches and busts?”, IMF Working Paper, WP/08/274. Coase, R (1960), “The problem of social cost” Journal of Law and Economics Vol. 3 pp. 1–44. Coase, R (1990), “The firm, the market and the law” University of Chicago Press. Coase, R (1995), “Essays on economics and economists”, University of Chicago Press. Coffey, S F, Gudleski, G D, Saladin, M E and Brady, K T (2003), “Impulsivity and rapid discounting of delayed hypothetical rewards in cocaine-dependent individuals”, Experimental and Clinical Psychopharmacology, Vol. 11, No. 1, 18–25. Crockett, A (2000), “Marrying the micro- and macroprudential dimensions of financial stability”, BIS Speeches, September.
As observed earlier, credit volume has gone from around 150% to around 170% of GDP in the past few years. This is the result of an average growth of credit of nearly 4%, while nominal GDP growth has averaged slightly above 1% over the same period. For this movement to be fully reversed, credit growth would have to significantly undershoot nominal GDP growth. The critical question is: could such a reversal happen smoothly, or in other words, is a soft landing possible? International experience (Figure 3) suggests this is a significant challenge. Credit-to-GDP ratios often fall in the wake of a severe crash, with pronounced falls in property prices and large increases in credit default rates; but this is exactly what we aim to avoid. While the diagnosis cannot be totally certain until history has run its course, the lessons from the analysis are, in my mind, crystal clear. The large increase in leverage, presumably of a  10  Reinhart, C. and Rogoff, K. (2009)  11  According to SNB survey data, about 20% of new mortgages are granted for investments with a loan-to-value ratio above 80%, and 25% of newly originated mortgages are granted to lever existing mortgages. Moreover, in the case of 40% of new mortgages the imputed costs would exceed one-third of gross income at a mortgage interest rate of 5%.

However, the very fact that interest rates must – eventually – rise again implies that credit expansion based on low interest rates cannot be viewed as a shift to a permanent higher credit level. At higher interest rates, credit demand will decline once again. To the extent that the credit expansion was driven by miscalculations on credit affordability, this may even lead to a crisis. 3.4. Behavioral biases  The latter remark leads to a fourth potential explanation, that is, credit expansion driven by behavioral biases. As highlighted by Hyman Minsky7, the credit cycle appears to be driven by “waves of optimistic and pessimistic sentiment”8. In an upswing, expectations about future developments may turn erratically exuberant. Observing a long period of price increases, investors tend to believe that new circumstances justify the perpetuation of the upward trend and act on this belief. Overconfident lenders and borrowers are increasingly ready to take higher risks. Ever increasing prices become a necessary condition to enable borrowers to service their debts. Then the tide turns. A few investors fail to meet their obligations, confidence crumbles, asset prices stop increasing or begin to fall and optimism turns into a wave of pessimism. Clearly, credit expansion driven by such erratic beliefs is a cyclical phenomenon and no viable explanation for a sustainable increase in the credit-to-GDP ratio. As we have seen, there are various potential explanations for an increase in the credit-toGDP ratio, some suggesting a permanent, structural increase in this ratio, others hinting at a temporary, cyclical upswing.
History has shown that the countries that devalued in 1931 weathered the depression better than those which did not. 12 Following the British lead was a decision that produced a good outcome. In 1949 there was a new sterling devaluation, this time 30 per cent against the US dollar. As in 1931, the Norwegian government announced that the value of the krone would be lowered correspondingly 13 . But unlike at that time, the level of activity in Norway was now high, and  9  The letter from the British Academy to the Queen is available at: http://media.ft.com/cms/3e3b6ca8-7a08-11de-b86f-00144feabdc0.pdf. 10  See Frank H. Knight (1921): Risk, uncertainty, and profit, Hart, Schaffner & Marx; Houghton Mifflin Co, Boston. 11  See the article “Fotspor med historie” [Footsteps with history], Aftenposten, 8 July 1989 and Rod Pyle (2007): Destination Moon: The Apollo Missions in the Astronauts’ Own Words, Harper Paperbacks. For further discussion and additional examples, see Thomas Gilovich, Dale Griffin and Daniel Kahneman (2002): Heuristics and biases. The psychology of intuitive judgment, Cambridge University Press. 12  See the discussion in Tore Jørgen Hanisch, Espen Søilen and Gunhild Ecklund (1999): Norsk økonomisk politikk i det 20. århundre. Verdivalg i en åpen økonomi, [Norwegian economic history in the 20th century. Ethical choices in an open economy] Høyskoleforlaget, Kristiansand. 13  The government had discussed how Norway should respond to a British devaluation. However, they had not reached a final conclusion and the government was split.

3  See inter alia Report No. 29 (2000–2001) to the Storting, Guidelines for economic policy, Ministry of Finance, and the Regulation on Monetary Policy of 29 March 2001. BIS Review 147/2010  1  That it is tempting, but dangerous, for a government to focus on short-term gains was a lesson Greek politicians learned this spring. Government spending exceeded revenues over a long period. Accounts and official statistics were fudged. Politicians may have hoped to secure a quick admission for Greece into the euro area, with the advantages this would bring. They may have also believed that high government spending and low taxes might help their re-election prospects. Instead, they now have to steer the country through harsh reforms and substantial cuts. 4 The Norwegian economist Finn Kydland received the Nobel Prize for economics in 2004 for having shown that on the whole, monetary policy decisions are better if policymakers delegate interest rate setting to an independent central bank under a clear mandate. 5 As a central bank we must adhere to the mandate we have been given and be able to set the key rate based on a professional assessment. 6 This is a system that lays a solid foundation for making good decisions. 3. We make decisions under uncertainty  Independence alone does not guarantee good decisions. Even if an independent central bank is better positioned to avoid having short-term expediency and changing preferences dictate interest rate policy, its decisions must be made under considerable uncertainty.
Fixing the Fault Lines of the Global Financial Crisis Let me begin with the regulatory and supervisory responses to the Global Financial Crisis. The advances over the last 20 years can be broken down into three broad phases. The era of regulatory reform (2008 to 2016) The first eight years following the Global Financial Crisis of 2008 saw the most wide-ranging set of reforms ever in the history of financial regulation. The destruction that the Global Financial Crisis had unleashed on our economies and societies galvanised action on an unprecedented scale. The Global Financial Crisis revealed some deep fault lines in the financial system that had been masked by fortuitous growth. Many financial institutions had leveraged themselves to the hilt – some of them by as much as 40 dollars of debt to 1 dollar of equity – unthinkable these days. Many banks had severe mismatches in liquidity. An opaque OTC derivatives market led to rapid contagion when liquidity suddenly dried up. Moral hazard grew as some financial institutions were seen as too-big-to-fail. 1/9  BIS central bankers' speeches  The Financial Stability Board, or FSB, was strengthened and tasked to oversee reforms to address each of these vulnerabilities. The way the international regulatory community came together and forged a consensus on the necessary reforms was exemplary. Between 2008 and 2016, the FSB, working closely with the Basel Committee, IOSCO, and other standard-setting bodies, put in place the basic building blocks for a new regulatory architecture that continues to serve us today.

15  In a letter of 27 June 2008, the Ministry of Finance has asked the Financial Supervisory Authority of Norway to assess the need for regulatory revisions to the Norwegian Banks’ Guarantee Fund. BIS Review 110/2008  7  Conclusion The experience so far is that inflation targeting has provided a good basis for stabilising inflation and inflation expectations. Interest rate setting and interest rate forecasts have also contributed to stabilising output and employment and prices in property markets. In some areas, regulations and frameworks can result in amplifications of fluctuations in asset prices and credit flows. For example, tax subsidisation of homeownership can be a source of recurrent instability in house prices and credit. The turbulence in financial markets has prompted many countries to consider measures to improve regulation and the functioning of markets. In Norway, the authorities can also strengthen the work on preventing systemic risk. With our cross-border banks, broader Nordic cooperation, particularly between finance ministries and supervisory authorities, would be appropriate. But there is also work to be done at home. Norges Bank is proposing, for example, revisions to the Norwegian Banks’ Guarantee Fund with a view to reducing moral hazard. Thank you for your attention. 8  BIS Review 110/2008  BIS Review 110/2008  9  10  BIS Review 110/2008  BIS Review 110/2008  11  12  BIS Review 110/2008  BIS Review 110/2008  13  14  BIS Review 110/2008  BIS Review 110/2008  15  16  BIS Review 110/2008
The service of electronic transactions (e-banking) as a banking product began four years ago, although it may be said that it has not reached satisfying levels as far as its introduction and the use by the public is concerned. So far, two banks have been providing this service to particular clients (mainly businesses) for the carrying out of transfers, different payments etc. Over the present year, other banks have planned to provide this service. Table 1: Number of cards and ATM/POS 2004  2005  2006  Cash cards  26,736  173,161.00  220,657.00  Debit cards  6,552  50,066.00  70,176.00  Credit cards  806  2,550.00  4,245.00  136.00  169.00  Pre-paid cards Total  34,094  225,913.00  295,247.00  ATM  93  205.00  266.00  EF/POS terminals  155  779.00  1,073.00  4. The network and services expansion through the bank offices  Over 2005 the banking system continued to expand its network rapidly within the Republic of Albania territory. It expanded with more than 50 branches and agencies throughout the country, although most of them were established in Tirana. A considerable number of branches and agencies have been opening in small towns, indicating that a large share of the population is now being provided with banking services. Almost all banks have established new branches and agencies, but just like in 2004, the opening of 29 branches and agencies by the small banks (G1 group) makes an impact.

Since student loans are currently receiving a huge amount of attention, and since the New York Fed has been a leader in providing information about the sector, I’d like to spend the rest of my time discussing what I see as the main issues with student debt and what to do about them. 2  BIS central bankers’ speeches  Issues with student debt Student loans seem like a good part of the solution, but over the past decade our reliance on loans for funding higher education has increased and we are learning that they have many problems and implications we had not sufficiently understood or considered. As shown in Chart 1, between 2004 and 2014, the total student debt in the US tripled from $ billion in 2004 to $ trillion in 2014. Expressed in annual terms, this means student debt increased by an average of 13 percent per year. As shown in the chart, among the various types of household debt, student debt is unique. While balances on all forms of household debt – including mortgages, credit cards, auto loans, and home equity lines of credit – declined during and after the Great Recession, student debt has steadily risen. In 2010, student debt surpassed credit cards to become the second largest form of household debt after mortgages whereas prior to 2008, student debt was the smallest form of household debt.
It is only within such a framework, that they can really flourish and that the benefits of technological change can be secured. The views expressed here are not necessarily those of the Bank of England or the Financial Policy Committee. I would like to thank Jennifer Enwezor, Bernat Gual-Ricart, Akeel Hansraj, and Cormac Sullivan for their help in preparing the text. I would like to thank Kushal Balluck, Stephen Fishbourne, Amy Lee, Matthew Osbourne and Magda Rutkowska for their helpful comments. 1. Bloomberg Data and BoE Staff Calculations. 2. Share of Trade Volume by Pair Denomination, The Block. Exchanges included in calculation: Binance, Poloniex, Bitfinex, Huobi, OKEx, Bittrex, Coinbase, Kraken, Bitstamp. 3. Figures from CoinMarketCap.com 4. This is illustrated by the recent fall in Coinbase’s share value, which has been linked, in part, to a statement in its regulatory disclosures that “the crypto assets held in custody on behalf of customers could be subject to bankruptcy proceedings and that such customers could be treated as general unsecured creditors”. 5. Speech at SIBOS by Jon Cunliffe - ‘Is ‘crypto’ a financial stability risk?’ (13 October 2021) 6. Prudential treatment of cryptoasset exposures - second consultation 7. IOSCO Crypto-Asset Roadmap for 2022-2023  (30 June 2022)  (7 July 2022)  8. FSB Statement on International Regulation and Supervision of Crypto-asset Activities  (11 July 2022)  Page 9 9.

Mario Draghi: The path to recovery and the ECB’s role Speech by Mr Mario Draghi, President of the European Central Bank, at the Symposium on Financial Stability and the Role of Central Banks, organised by the Deutsche Bundesbank, Frankfurt am Main, 27 February 2014. *  *  *  Summary The euro area has made considerable progress on its reform agenda, says ECB President Mario Draghi. Speaking at a conference organised by Germany’s Bundesbank in Frankfurt he emphasises that euro area governments have improved their fiscal positions despite recessionary headwinds and stressed euro area countries have become more competitive. “In parallel, the architecture of EMU has been strengthened in ways that many would have considered inconceivable two years ago”, says Mr Draghi. The move towards a banking union is crucial not only for the functioning of the financial system, but also for the conduct of monetary policy. Since the beginning of the crisis the ECB’s Governing Council has taken decisive steps to engineer a monetary policy stance that is commensurate with the subdued medium-term inflation outlook. But standard monetary policy in the form of rate cuts was not enough to ensure an appropriate monetary policy stance, because unwarranted fears of euro break-up impaired the monetary transmission, he says. Against this background the ECB announced Outright Monetary Transactions (OMT). Like all the ECB’s monetary policy measures, OMT served, says Mr Draghi, to ensure compliance with the bank’s price stability mandate.
In the really long term, the recent level is more normal than the relatively low figures in the 1970s and 1980s. This accordingly means that the potential annual growth rate could be between 2 and 2.5%. A feature of the picture in the United States that I touched on earlier is the combination of high productivity growth and an investment boom. One factor behind the investment activity appears to have been the high profit expectations associated with the new technology. The massive investment has paved the way in turn for good productivity growth in that it has introduced new technology and led to a higher capital input per employee. No corresponding pattern is discernible in Sweden. It was mainly in connection with rapidly rising capacity utilisation in 1992-94 that industrial productivity improved. Productivity growth since then has been more normal. Manufacturing investment has risen but not as markedly as in the United States. It should be borne in mind, however, that compared with the United States, resource utilisation in Sweden was considerably lower in the 1990s. This can explain a part of the upswing for productivity, particularly in 1992-94, at the same time as it implies a weaker propensity to invest, either to save labour or to expand capacity in response to growing demand. Against this background it will be interesting to see how the Swedish economy performs when resource utilisation is high again. Briefly, then, it looks as though the inflation process in Sweden has been modified in recent years.

In addition, changes in labor markets made it harder to allocate workers to new jobs  BIS central bankers’ speeches  3  in quick order. As a consequence of these structural shifts in the functioning of the economy, the Fed policymakers failed to realize that output was higher than they thought relative to its potential. As a result, additional monetary stimulus couldn’t bring about stronger growth and lower unemployment, but only exacerbated inflation, higher inflationary expectations and an accelerating wage – price spiral. In fact, inflation rose to double digits, wages chased these prices higher in order to minimize reductions in living standards, and unemployment remained high. The Burns-Miller Fed failed, but where was the failure greatest? With regard to my earlier description of the policymaking process, the Burns-Miller Fed did not properly understand the changing evolution of the U.S. economy in the 1970s, nor how monetary policy interacted with the new structure. To be fair, the Burns-Miller Fed was not alone – other experts at that time made the same mistakes. These common misunderstandings meant that the credibility loss over being slow to understand the changing environment probably was not large. Far more damaging to the Burns-Miller Fed’s credibility was the failure to adjust policy when it later saw rising and high inflation and inflation expectations. Surely, those developments were major evidence of a change in the structure of the economy, and the Burns-Miller Fed’s failure to adjust its thinking and policy in light of them had huge implications for credibility.