samchain/econo-pairs-v1 huggingface dataset:
With greater amounts of capital and liquidity in the financial system, this may be more realistic. There may be less need to fine-tune the regulatory engine and correspondingly less need for the tug-of-war between regulator and regulated that has characterised the past few years. A robust banking system ought also to be less prone to credit booms and busts, thereby reducing the need for discretionary macro-prudential actions to lean actively against the wind. Regulation would be handed back to the risk managers. In this world, the operational activities of central banks could also return to a more even keel. Wider collateral, longer tenors and new counterparties were necessary ingredients during crisis. But a return to more conventional operations – short-term lending against government collateral to banking counterparties – may be sufficient to oil the wheels in normalised market conditions, as it was for hundreds of years prior to the crisis. Market-making, at least beyond short-term money markets, would be a last resort. As for central bank transparency, with monetary, regulatory and operational policy no longer hyperactive, it is conceivable central banks could retreat from centre stage. Central banks could migrate to the back pages of newspapers. Like good children, they would be relatively rarely seen and infrequently heard. Central bank-watchers would find something better to do with their lives than hang on to every gubernatorial semi-colon. For a central banker, this sounds like the good life – a low-intervention, low-visibility world. In some respects, it would be back to the future.

It will be home to 60% of those aged over 65 worldwide by 2030, with countries in East Asia leading the way. This will place great demands on healthcare and retirement solutions, beyond the universal or mandatory schemes that governments put in place in many countries. 6. In the other parts of Asia where populations are still youthful – such as India and parts of ASEAN – insurance penetration remains low and has huge potential to grow. 7. Equally important, Asia is rapidly digitising. 330 million people bought insurance products online in China in 2016. In Singapore, a few of the bigger life insurers have offered online life insurance purchase for some products and two fully online life insurers have emerged over the past two years. Enabling Customers through Digital Solutions Insurers can and must take advantage of the digital wave. In particular, there is significant scope for health insurance to venture beyond paying for medical claims post-affliction, to preventive care and to encourage a healthy lifestyle and habits. 8. Health insurers are already beginning to track users’ health and habits through fitness 1/3  BIS central bankers' speeches  devices and apps, and are pricing in premium discounts for healthier habits. The top five life insurers in Singapore, including Prudential, have unveiled programmes to support healthier living and habits by their clients. Healthcare itself can be delivered and administered more effectively, and insurers should encourage this. Tele-health is increasingly being used, saving patients time and convenience.
Finding the right balance Speech given by Dave Ramsden, Deputy Governor for Markets and Banking  Society of Professional Economists Annual Conference, London 28 September 2018  With thanks to Amy Lee and Tom Smith for their assistance in preparing these remarks and to staff across Markets and BPFR and elsewhere in the Bank for their many contributions, as well as to my colleagues on the MPC and among the Governors for their helpful comments and suggestions. 1  All speeches are available online at www.bankofengland.co.uk/speeches  Introduction It’s an honour to be invited to talk here for the Society for Professional Economists (SPE) today, and I’m very grateful to Bloomberg for the opportunity to speak again in their fantastic HQ. Although I’ve spoken many times at the Society’s events over the years either in my previous role at the Treasury or in in my ongoing role as President of the SPE this is the first time I’ve spoken at the Society in its new guise as the Society for Professional Economists and in my role as the Bank of England’s Deputy Governor for Markets and Banking. This week is national inclusion week in the UK. And in that spirit I do think the SPE’s new moniker, which Kevin Daly has championed, is more inclusive and speaks to a wider group of economists. That is borne out by the excellent turn-out today. At the same time we need to improve diversity in today’s economics 1  profession, in central banking and in finance more generally.

The quote from the Governor is taken from Carney, M. (2013), “The UK at the heart of a renewed globalisation”, speech at an event to celebrate the 125 th anniversary of the Financial Times, available at https://www.bankofengland.co.uk/-/media/boe/files/speech/2013/the-uk-at-the-heart-of-a-renewedglobalisation.pdf. 16 The three liquidity insurance facilities are: (I) Indexed Long Term Repo– for predictable/regular need for term collateral transformation; (II) Discount Window Facility – for firm-specific liquidity shock requiring liquidity in bespoke size and timing, with lagged disclosure; and (III) Contingent Term Repo Facility – for actual or prospective market-wide stress meaning SMF participants need cheap, plentiful cash at term. More information on the Bank’s facilities can be found in the ‘Red Book’ https://www.bankofengland.co.uk//media/boe/files/markets/sterling-monetary-framework/red-book . 6  All speeches are available online at www.bankofengland.co.uk/speeches  6  Prior to 2006, the Bank had just 17 members of its Sterling Monetary Framework. But liquidity needs are not just for the biggest banks & building societies. In recognition of this, we had already increased the number of members to 106 by 2012; today it stands at 207. 17  The crisis also revealed that liquidity shortages can materialise far beyond the banking system; and the financial system has continued to evolve since then. And so in 2014 we widened access to our facilities to include central counterparties and broker-dealers as well as banks and building societies.
The Swiss Value Chain, run by the three companies, is of vital importance for the implementation of monetary policy. There is no alternative infrastructure for our monetary policy operations. Therefore, we will keep a very close watch on further developments in this area. 3. Developments in the financial markets  The positive underlying sentiment in the international financial markets remained largely unchanged in the first half of 2007, despite some turbulence in the stock markets, which was rather strong at times, and some difficulties in the US sub-prime mortgage market. On 27 February, after a correction in the Chinese stock market, major falls in share prices were recorded worldwide. The price decline temporarily gave rise to fears that the current bull market, which has lasted for many years now, could come to an end. After only a few days, however, the markets returned to normal. A few weeks later, most share indices had already compensated the losses (figure 1). A further correction has occurred in the past few days. However, despite this turbulence, the rise in implicit volatilities – a measure of expected uncertainty – has been relatively insignificant and shortlived in historical terms. Implicit volatilities are still at a very low level (figure 2). In addition, interest premiums on credit risks both for companies and emerging economies remain low, although yields on long-term government bonds have increased markedly since the beginning of March.

2  BIS Review 67/2007  The steady rise in the prices of high-risk investments, the low risk premiums and low volatilities might possibly even have an influence on the external value of the Swiss franc. Let me comment on this statement in a little more detail. In international currency portfolios, the Swiss franc has always been a safe haven currency. In the past, this was reflected in the fact that the Swiss franc rose against other investments when the situation was uncertain. Thus, the Swiss franc took on a kind of insurance function and many investors held Swiss franc investments to protect themselves against political and economic crises. Just as the Swiss franc is particularly attractive as a safe haven in stormy conditions, there is little interest in the Swiss franc when the weather is calm. Due to the very low level of risk awareness and risk aversion at present, the demand generated for hedging and thus for Swiss francs is weak. However, in the past, phases of calm weather in foreign exchange markets were repeatedly interspersed with stormy periods. Therefore, financial market participants and other market players with exchange rate exposures should remain aware of the exchange rate risks they are incurring. BIS Review 67/2007  3  4  BIS Review 67/2007
These same precautions have permitted macroeconomic policies – both fiscal and monetary – to be clearly countercyclical, helping to cushion the effects of the world crisis on our economy. 1  2  Central Bank of Chile (2009). BIS Review 35/2009  The transmission of MPR reductions to lending interest rates One important element in the diagnosis of how this countercyclical effort is actually working is the evaluation we perform on a permanent basis to the way our decisions are affecting the borrowing conditions facing households and firms. This issue is not new, and was the subject of analysis several years back when the Central Bank’s monetary policy was on a sustained expansionary path. 2 The evidence we gathered then can be summed up in that the Central Bank’s monetary policy decisions are reflected in the banks’ financial cost very quickly, but in the overall cost of credit only after a few months. This response pattern was similar to that in other economies. Lately, we have reviewed that information, 3 and we have found that, even in moments of great uncertainty as we experienced in recent months, reductions to the MPR are translating into reduced borrowing costs for both businesses and consumers. One good example is the trend of the interest rate on commercial loans at 30 to 89 days, which can be linked to the funding of working capital. This rate was very high in October last year, but this year so far it has fallen substantially.

If we do the exercise of asking ourselves where would the lending rate be in a hypothetical scenario without the global financial crisis, we find that it would be between 50 bp and 350 bp below its present level, with the larger effect on the interest rates on commercial and consumer loans. In the specific case of mortgage loans, the increase in the interest rate occurred between September and December 2008 can be largely linked to the implications of the external conditions on the local perception of risk (figure 4). All the above is a clear illustration of how the severe uncertainty and high risks that were unleashed last September are affecting the domestic economy. Non-bank financing sources Notwithstanding the key role played by domestic banks in funding households and firms, especially smaller ones, for the bigger companies there are other equally important credit sources. Thus, around 45% of total corporate borrowing is non-bank, with external debt and domestic bonds at the top of the list. Therefore, it is important to understand the behavior of the interest rates on these credits before offering a global outlook of financial conditions. The Central Bank of Chile has no direct effect on external financial conditions. Like banks, Chilean firms have seen their borrowing conditions tighten under the changed state of affairs. Still, our banks and firms continue to enjoy normal access to world financial markets, owing  2  Berstein and Fuentes (2003). 3  Becerra et al. (2009).
In the case of financial infrastructures new systems may have unknown weaknesses that are not apparent in the trials, leading to financial disruption and critical episodes such as “flash crashes”. Retail payment systems may add credit risks during offline operations and transparency issues in prepaid systems. Users of payments and transfers systems may also be pressed to undertake unwanted credit operations, while “smart contracts” that are automatically executed may enhance instability if the system fails to check the solvency of each counterpart. Algorithm-based credit assessments may generate biases in the access to financial products and replace know-your-client approaches, increasing transactional costs and engendering volatility and herd behavior. Uninsured deposittaking is an area of particular concern due to its exposure to fraud. The emergence of cryptocurrencies poses a number of challenges to financial systems and central banks alike. The main risks in the use of DLT-blockchain technology to support privately issued currencies lie in the monitoring of money aggregates, the potentially damaging volatility of rates of exchange, the broader risk of volatility under fixed or unexpected changes of supply, and the risk of runs due to losses of confidence when such currencies coexist with legal tender and deposit-taking banks. Perhaps the greatest risk of FinTech is that of cybersecurity. The more financial systems depend on electronic platforms and digital records, the more exposed they are to cyberattacks, which can disrupt the flow of funds across the economy. Of course, this is not an exclusive risk of the more innovative FinTech developments, but of any electronic-based financial system.

Slide 20  FX derivatives market FX derivatives market depth, 1998-2016 (annual amounts as percent of GDP) 30  26.6  28.4  25 20 15 10  6.5  5  2.4 2.5  2.3 2.3  4.5  0 Advanced Economies  Emerging Economies 1998  2001  2004  Latin American Economies 2007  2010  2013  Chile  2016  Sources: Salinas, J. M. and J. M. Villena (2014), “Mercado Cambiario Chileno, Una Comparación Internacional: 1998 a 2013,” Studies in Economic Statistics 104, Central Bank of Chile, Bank of International Settlements, and IMF. [SLIDE 21] In addition to the above, it should be noted that Chile has reached almost universal coverage of basic services through the so-called Cuenta RUT (ID bank account), managed by the state bank (BancoEstado). This is a sight account that can be opened only with a legally issued ID. At present, there are some 9 million of these accounts under operation (for a total population of 17 million), allowing its bearers access to electronic transfers, debit cards and ATM cash withdrawals. 16  Central Bank of Chile 29 June, 2017  Cuenta RUT is a hybrid financial product that provides a good example of the factors that facilitate technologically-enabled financial products in Chile. These include: universal and secure identity registration; universal online invoicing; internet penetration, and regulations that foster cash-flow services, like factoring and leasing.
At times during 1996 and 1997 the 12-month change figure for the CPI was below the tolerance interval’s lower limit of 1 per cent. On a number of occasions the Riksbank pointed out that this was mainly an effect of the repo rate cuts during 1996. In that it was not a question of more permanent effects and the inflation assessment pointed to a future increase, there was no need for further repo rate cuts. During the summer and autumn of 1997 inflation did, in fact, move up fairly rapidly, as expected, in that these transitory effects successively dropped out of the 12-month figures. As a result, actual inflation has moved closer to the underlying rate. In describing this tendency, the Riksbank has been far from alarmist. The latest inflation report This brings me to the future development of inflation and the current situation for monetary policy. Our December inflation report provides a natural point of departure. The assessment there was that during 1998 inflation would somewhat exceed the target, with a gradual acceleration to a rate of about 2.5 per cent in 1999. Underlying inflation was likewise expected to move up and reach just over 2.5 per cent at the end of 1999. This assessment was broadly in line with the more or less concurrent forecast from the National Institute of Economic Research, for example, as well as with the figures that forecasters in general presented last November and December.

All those with a say in price and wage formation must also realise that the Riksbank’s endeavour is to fulfil the inflation target. The repo rate increase in December was therefore important when the overall assessment of future inflation pointed to the target being exceeded. Inflation outlook somewhat more favourable Information of some relevance for the assessment of future inflation has become available since the December report. It concerns the crisis in Asia, the early stages of the wage negotiations, and the rent negotiations. The crisis in Asia has deepened both in terms of its effects on financial markets and as regards its probable consequences for global economic growth and inflation in the coming years. The extent of the effects cannot yet be assessed reliably but there are many indications that they will be greater than most people envisaged at the end of last year. This  BIS Review 5/1998  -7-  suggests that in the coming months the statistics will point to a more subdued growth of Swedish exports and industrial production. Some wage agreements have been concluded, for instance for the paper industry. They still cover just a small segment of the labour market but many observers consider that the existing settlements will serve as a guide elsewhere. It is difficult to arrive at a definite assessment of what these settlements imply for total wage increases but a cautious conclusion could be that the outcome will be somewhat below the Riksbank’s estimate in the main scenario, at least for 1998.
Ladies and gentlemen, in today’s forum, we have arranged two panels, chaired by Eddie Yue and Arthur Yuen respectively, to elaborate on and discuss the initiatives and measures I have just mentioned. It would be useful for us to receive your comments and feedback. These initiatives and measures require persistence, dedication, and collaborative efforts of all the stakeholders: regulators, industry practitioners, international bodies, environmental groups. We must all work together. Thank you very much. 3/3  BIS central bankers' speeches

Exports being our only area of sunshine, we have to make sure that the increasing exports are maintained until such time that investment or consumption is taking place normally and this can only be done with a low interest rate and a competitively priced baht. For this reason, it is our belief that the low short-term interest rate, coupled with the long-term interest rate of the same level as the EU and the US, is a correct strategy that we will try to maintain. Inflation is still low, around 2% headline and less than 1% core. This looks like a good level of economic numbers to nurse and nurture an economy that is still weak and recovering with a capacity utilization of only 54%. Astute investors will I think see all this and invest in the country just as they did two years ago when I lowered interest rate from the very high and unbearable level to the low level of today, against many contradictory advice from people who should know better. Whilst nursing the economy though, let me emphasize that we intend to put in mechanisms to improve the sustainability of growth and stability, some of which occurrence I have outlined in this speech, and others we are working on as we learn more and more about the economy and improve the accuracy and speed of our data collection and dissemination system. Ladies and gentlemen. In ending my statement let me recall that I began by stating that we still have plenty of problems.
National economic policies are – or should be – trying to create stable monetary and fiscal frameworks to condition expectations of future economic policy. Policy surprises should not add noise to the news about economic fundamentals. It is in each of our national interests to avoid sudden or large changes in capital flows induced by volatile or unpredictable changes in economic policy. We want the monetary and fiscal decisions not only at home, but also in other countries, to be boring. Although domestic economic policies seem to have become increasingly boring over the past decade or two, their interaction has not. Consider two, related, examples. First, the rise in the US current account deficit to more than 6% of national income has raised fears of how the inevitable correction will eventually be achieved. Second, for much of the past twenty years, as evidenced by the Asian crisis of the late 1990s, we have worried about emerging market countries accumulating excessive dollar liabilities. Now we seem to be worried about their accumulating excessive dollar assets. Capital has flowed “uphill” from poor to rich countries. The invisible hand of international capital markets has not successfully coordinated monetary and exchange rate policies. Many countries are no longer the atomistic entities of textbooks whose policy choices have no effect on global prices: whether an exchange rate, a real interest rate, or the prices of particularly sensitive commodities such as energy.

It is an institution, it is said, which has lost its way. What is the truth of these allegations? Certainly, the Fund’s remit is unclear. Its lending activities have waned, and its role in the international monetary system is obscure. The tasks given to it by the conferences at Bretton Woods in 1944 and Savannah in 1946 need to be adapted to the financial circumstances of the 21st century. That was attempted in 1976 with the Second Amendment to the Fund Articles. But 30 years later it is evident that there is still more to do. We have an opportunity to return to first principles and ask some basic questions. Do we need an IMF? Is there a role for a multilateral institution in the management of the international monetary system? If so, what is it? Not before time are those questions now being asked in the corridors, if not the main floor, of international meetings which rotate endlessly around the world from one windowless room to another. Belatedly, the G-7 has started to discuss the future role of the Fund, and the IMF has initiated its own strategic review. Last October, the ministers and governors of the G-20 countries said that “more work is needed to develop a ‘roadmap’ for the future strategic reform of the Bretton Woods institutions”. And speeches by several G-7 ministers and governors, and as recently as ten days ago from the Managing Director himself, show that the debate on the role of the IMF is live.