samchain/econo-pairs-v1 huggingface dataset:
Financial crises typically result when we fail to identify vulnerabilities, and then unexpected triggers turn those vulnerabilities into points of weakness that can lead to catastrophic failure. The discontinuation of LIBOR, however, is different. We can see it coming, and we know the impact of a disorderly transition would be huge. Therefore, a half-hearted effort or a failure to act would be inexcusable, especially after all we have learned from the experience of the financial crisis. Moving this core piece of the global financial system to a firm and durable foundation is essential and worth the cost. This task is admittedly hard, but I am optimistic given our past successes. We have demonstrated that effective collective action can provide solutions to longstanding structural vulnerabilities in the financial system. A key lesson from the crisis is that structural vulnerabilities must be addressed continually. If they are ignored, larger problems eventually will result. For example, through collective action over the past decade, we have successfully addressed structural weaknesses in the tri-party repo market, the over-the-counter derivatives market, and money market mutual funds. Each of these challenges required a tailored solution that relied on different tools—including a diverse mix of market, regulatory and supervisory measures—to get the job done. Everything isn’t a nail, and the best tool is not always a hammer. You have to identify the problem that needs fixing and select the right tool for the job. This is likely to require both official sector engagement and private sector initiative.

More so, the 7% of GDP cap was set a long time ago; yet another review is needed to establish whether this volume of liquid assets is adequate to resist to sharp and lengthy change in external conditions. As we review these and similar suggestions, we urge to fully consider the benefit and loss balance driven by change in macroeconomic conditions which may be tangible enough. Approaches to fiscal and structural policies will have a significant impact on both our forecast and estimates of the balance of risks for inflation. This will in turn determine the monetary policy path. 3/3  BIS central bankers' speeches
Mr. Erçel considers the European financial markets and their implications for Turkish institutions Speech given by the Governor of the Central Bank of the Republic of Turkey, Mr. Gazi Erçel, in Istanbul on 23/10/97. The EMU will be the most important change in the international monetary system since the creation of the IMF at Bretton Woods. The creation of a new currency, the Euro, is in fact a historical event for the European Union (EU). It marks a new quality in the process of European unification because it is the final point and coronation of efforts since 1958 to create one big market in Europe. The success of the Euro area will, of course, depend on the future development of the value of the Euro. The Euro, as we all know, has to compete with two strong international currencies: the US dollar and the Japanese yen. According to one school of thought, the Euro will have a stable value. That is because the high stock of assets in Euro, held by official or private foreign holders and which were converted from national currencies, in particular from Deutsche Mark, will not be switched into other currencies. Besides, once the Euro is introduced, there could be a significant switch of foreign exchange reserves out of US dollars and into Euro. This could give a boost to the exchange rate of the Euro against the US dollar over time.

Even though the liberalization policies were adopted independent of the EU perspective, they helped to facilitate Turkey’s attempt to apply for full membership, by providing a solid basis for lasting progress. On the other hand, member countries of the EU have tried to make some adaptations in their banking regulations to integrate financial systems. Competition among them has increased. A universal banking system is accepted. Banks either have increased their assets or have merged with other banks in order to be strong in a market where competition is intensified. New financial products are created every day. Technology is used intensively in order to reduce costs and serve customers better. In parallel to these developments many reforms have been made in order to develop the Turkish banking system. Some amendments were made to the Banking Law to harmonize it with European standards, and now we are in the process of preparing a new Banking Law. These changes will require some banks to strengthen their financial situation and bring their credit risk and equity participation ratios closer to the EU norms. Within the process of becoming more deeply integrated with the European financial markets, the Turkish banking system will now face new competition. The CU agreement has naturally affected Turkish banks and changed the dimensions of competition. But Turkish banks seem ready in many ways for this new and larger competitive environment. Today banks in Turkey are made more dynamic by a high-technology electronic infrastructure, high-quality services and well-trained manpower.
In recent weeks, currencies have depreciated against the dollar and capital flows have fallen. The Chilean peso has followed the global trend, posting a depreciation since the close of the March Report, which in the last few days has fluctuated around 630 pesos per dollar, which amounts to an increase of more than 4.5%. The multilateral exchange rate measures—where the evolution of the peso is compared to a broader set of currencies—show a more limited nominal depreciation. Compared with the currencies of other commodity exporters, the depreciation of the peso has been similar, while it has been in the lower side of the variations in Latin American economies (Figure 7). The fact that the peso depreciation responds to a global phenomenon also implies that the real exchange rate (RER) has increased moderately with respect to the level it has shown since the beginning of the year and with a real depreciation similar to those of other comparable economies, standing around 90 in the 1986=100 index towards the statistical closure of this Report. Our baseline scenario assumes that the RER will return to near its average of the last fifteen to twenty years over the course of the policy horizon (Figure 8). The greater speed of adjustment of financial conditions has not been reflected in a change in the outlook for global activity. Thus, the growth projections for 2018-2020 continue to indicate that, on average, the world economy will grow to outperform the last three years.

(3) Includes Brazil, Colombia, Mexico and Peru. (4) Australia, Canada, New Zealand and South Africa. Sources: Central Bank of Chile, Bloomberg and International Monetary Fund. Figure 8 Real exchange rate (*) (index, 1986=100)  120  120  110  110 2003-2017 average  1998-2017 average  100  RER  100  90  90  80  80  70  70 89  93  97  01  05  09  13  17  (*) The May 2018 figure is preliminary estimate. The June 2018 figure uses information up to the statistical cutoff. Source: Central Bank of Chile. 11  Figure 9 Projected growth of selected Latin American economies (annual change, percent)  4.5  4.5  2018  4.0  4.0  Peru  3.5  3.5 Colombia  3.0  3.0  Brazil  2.5  2.5  2.0  2.0  Mexico  Argentina  1.5  1.5 1.17 17  5.17 May  9.17 Sep.  1.18 18  5.18 May  Source: Consensus Forecast.
During this period, the Central Bank adopted the following regulations in order to ensure the efficient functioning of the foreign exchange market and to strengthen foreign exchange liquidity in the banking system in case of liquidity problems: (i)  On 9 October 2008, the Central Bank resumed its intermediary activities in the foreign exchange deposit markets in Foreign Exchange and Banknotes Markets with a view to contributing to the enhancement of the mobilization of foreign exchange liquidity in the Interbank Foreign Exchange Market. (ii)  Transaction limits for the banks in the Foreign Exchange and Banknotes Markets were revised on 14 October 2008 and limits were doubled for each bank on 24 October 2008 to reach a total of USD 10.8 billion. (iii)  On 21 November 2008, the maturity of the FX deposit borrowed within predetermined borrowing limits by the Banks from the Foreign Exchange Deposit Markets in terms of USD and Euro was extended from one week to one month and the lending rate that had been previously set as 10 percent in the said market was reduced to 7 percent for USD and 9 percent for Euro. (iv)  On 5 December 2008, the FX required reserves ratio dropped from 11 percent to 9 percent, providing the banking system with an additional foreign currency liquidity amounting to USD 2.5 billion. In such a challenging environment, efficient utilization of foreign exchange reserves by developing countries assumes the utmost importance.

For instance, while an unexpected and strong monetary tightening was implemented in the face of capital outflows in the May-June 2006 period, an expansionary monetary policy was adopted following capital outflows in the last quarter of 2008 (Chart 4). The contradiction between these two responses can be explained mainly by the significant differences between the said two periods in terms of both economic conjuncture and the sources of the shocks. As both domestic demand and external demand were strong in 2006, the exchange rate movements triggered by capital outflows had the potential to rapidly damage disinflation and inflation expectations. However, in 2008, it is observed that the downward pressure of the global recession and weak domestic demand conditions on the inflation has come to the forefront. 4  BIS Review 3/2009  Chart 4. Policy rates and market interest rates in the 2006-2008 period  26  Policy Rate (Compound)  June 2006 24  Secondary Market Benchmark Interest Rate (Compound)  22 20 18 16 14  November 2008 06.11.2008  18.09.2008  06.08.2008  24.06.2008  09.05.2008  26.03.2008  12.02.2008  28.12.2007  13.11.2007  27.09.2007  14.08.2007  02.07.2007  18.05.2007  05.04.2007  21.02.2007  09.01.2007  22.11.2006  05.10.2006  22.08.2006  10.07.2006  26.05.2006  12.04.2006  28.02.2006  16.01.2006  12  Source: CBT and ISE. In sum, it is seen that the inflation-targeting regime has provided a significant amount of flexibility to take the necessary measures in the face of high-level shocks.
The second corner of the triangle is related to the exit from our exceptional measures. The time to exit has not yet arrived. We will continue PEPP net asset purchases “until at least the end of March 2022 and, in any case, until [we] judge that the coronavirus crisis phase is over” v. We still have ample time to judge and decide; nevertheless in our present baseline scenario this crisis phase will be over by March 2022. But the possible end of net purchases under PEPP by that date would not imply an abrupt tightening of our monetary policy. Reinvestments under PEPP would remain significant, net purchases would continue under the APP, possibly somewhat adapted. Hence we could still play the full “quartet” of our  Page 6 sur 9 accommodative monetary policy instruments, adding negative rates, liquidity provision, and forward guidance. The third corner of this triangle could indeed be an enhancement of our forward guidance consistent with the symmetry of our inflation objective. Rather than flexible average inflation targeting, which leaves many questions unanswered, my preferred option would be the use of a strengthened and non-linear forward guidance, mentioning explicitly our tolerance for inflation overshooting, with reference to past inflation shortfalls. It is the combination of these three levers that should be used as the foundations of the “equilibrium triangle” of our monetary policy in this next phase of the Covid crisis. II. Wider expectations are emerging Let us return to the question of broadening public expectations of central banks.

Annual accounts A few quick words on MAS’ financial statements. The Authority’s total assets grew 18.6 per cent during the year ended 31 March 2003 to $ billion. About 11 per cent or $ billion is due to the transfer of the Currency Fund from BCCS. All other assets and liabilities of BCCS as at 30  2  BIS Review 33/2003  September 2002 were similarly transferred to the MAS and have been incorporated into our financial statements. The net assets of the Currency Fund at the end of the financial year provided 112 per cent asset backing for the currency in circulation of $ billion. MAS’ profit after provisions for the financial year ended 31 March 2003 declined by 2.8 per cent to $ million as our investments continued to be affected by the low global interest rate environment and volatile financial markets. Conclusion In closing, let me restate MAS’s priorities going forward. Supporting economic growth while maintaining domestic price stability will remain the key focus of monetary policy. In the financial sector, we will continue to partner with industry players to build on our successes in key growth areas like asset management, the debt market, and treasury business, while looking out for new niche areas and opportunities. We will continue to refine our regulatory and supervisory framework as we progressively shift the emphasis from a rule-based regime to a risk-based and disclosure-based approach.
Lars E O Svensson: Differing views on monetary policy Speech by Prof Lars E O Svensson, Deputy Governor of the Sveriges Riksbank, at SNS/SIFR Finanspanel, Stockholm, 8 June 2012. *  *  *  I would like to thank Hans Dellmo, Karolina Ekholm, Gabriela Guibourg, Per Jansson, Stefan Laséen, Ulf Söderström, Staffan Viotti and Anders Vredin for valuable discussions and views. Pernilla Johansson, as well as Joanna Gerwin and Marianne Sterner at Sveriges Riksbank, has contributed to this speech. The views expressed are my own, and are not necessarily shared by the other members of the Riksbank’s Executive Board and other employees of the Riksbank. My view is that monetary policy should stabilise inflation around the inflation target and unemployment around a long-run sustainable rate. In my opinion, this mandate for monetary policy follows from the Sveriges Riksbank Act and the government bill that contained the proposal for this legislation. 1 According to the Sveriges Riksbank Act, the objective of monetary policy is to maintain price stability. The Government Bill states that the Riksbank should, without prejudice to the objective of price stability, support the objectives of general economic policy with the aim to achieve high employment. Accordingly, the mandate is to maintain price stability and to attain the highest possible sustainable employment. In practice, it is the same thing as stabilising inflation around the inflation target and unemployment around a long-run sustainable rate.

Do you have the impression that the Heads of Government have understood what is at stake? I believe they are conscious of their extraordinary responsibility. They all have to make decisions in the context of democracies which, in the advanced economies, are very inwardlooking, which is a real problem at the time of the worst global crisis for the last 66 years. What will happen if the European Heads of Government do not get the crisis under control? My working assumption is that the Heads of State and Government will overcome the crisis. Europe must realign its fiscal policy, as other large developed economies must also do. This year, at 10%, the deficits in the United States and Japan will be around twice as high as in the euro area on a consolidated basis. In spite of this, Europe is the epicentre of the government debt crisis. The reason for this is the mutual dependence of the 17 euro area countries. This is why it is so important that every euro area country plays by the rules. A few days ago in the European Parliament, I quoted what I told the Members of the Parliament in my first hearings, eight years ago, four years before the crisis, concerning the absolute necessity to stick to the Stability and Growth Pact. At your Governing Council meeting last week you reactivated all the crisis instruments. Is the euro in serious danger? The euro as a currency is evidently not in danger.
This was particularly so in the final stretch of the lockdown-easing process when trips between provinces in different regions and the arrival of foreign tourists from the Schengen area were once again permitted. However, it is worth noting the role that voluntary limitations on movement probably continue to play. These mean that movement is still some way off full normalisation, especially as regards international movements, which are so important for a country such as Spain where, as you know, the significance of tourism within the productive structure is so high. In late June, the volume of air traffic was still 65% down on the previous year. The recovery has been more patent in the mobility indicators, which tend mainly to reflect national movements (such as motorway traffic), or the indicators constructed with mobile telephony data, which include trips to workplaces, retail establishments or leisure centres, with yearon-year reductions of around 15% in all instances. This path of partial recovery in mobility has been reflected in the high-frequency indicators of economic activity, whose year-on-year declines have progressively eased. By way of example, the fall in electricity consumption by firms is expected to have eased between the opening weeks in April and the final weeks in June by close to 20 pp, to around - 10%.

That said, an improving path could be seen throughout Q2, in tandem with the ongoing gradual reopening of the economy. At present, then, we are witnessing an incipient recovery in the economy, which, however, is still incomplete, uncertain and uneven. The correlation of this economic activity during Q2 with the intensity of the restrictions on people’s movement in force at each point in time was very high. Thus, some indicators that measure people’s movements hit record lows in the first two weeks of April, with declines of around 80% in motorway traffic and fuel consumption, and of over 90% in the case of airport traffic. This was reflected in the high-frequency indicators of economic activity in the weeks in which the lockdown was stricter; then, for example, we saw reductions in electricity 1  consumption by firms and in consumer spending paid using cards of approximately 30% and 60%, respectively. For April as a whole, there was an unprecedented event in the time series when some variables fell practically to zero. This was the case of new car registrations and international tourist inflows, the latter variable obviously being closely related to the restrictions on personal movement. Since early May, and to a greater extent in June, the progressively staggered and regionbased easing of the lockdown measures prompted a gradual recovery in the mobility indicators and, in tandem, in economic activity indicators.
The perception was that the quality of the underlying assets was so good that the risk of a real loss (as opposed to some shorter-term mark-to-market fluctuations) was negligible, and that the returns accruing to the capital note holders and the asset manager were largely due to the funding arbitrage. Another way of explaining it would be that, because of the difference in liquidity, the “buffers” in the structure, the capital notes and the liquidity back-stop provider were effectively earning a risk premium for absorbing this liquidity mismatch between assets and liabilities. This view of the world made most of the capital note holders believe that the risk of any loss was very limited. We now know all of that changed when sub-prime mortgage assets had become a significant portion of the assets in a typical SIV. The US housing market had started to slide and the lax underwriting standards started to show their impact on recovery rates. Suddenly, investors in the ABCP market came to realize that the risk of actual loss was very real and that a game of “musical chairs” was unfolding in the roll-over process of the short-term debt. At this juncture, one would think that the optimal economic behaviour for the banks with outstanding SIVs, would be to let the SIVs unwind according to the legal construct in place, rather than accept responsibility. In fact, all the banks except one decided to collapse the structures and repurchase the securities10.

And all are competing for business in a way unthought of a few years ago witness the competition between LIFFE and Eurex for the long and short ends of the euro yield curve. The latest score in that particular England:Germany match is one all. No doubt German supporters think this score-line would have been a fairer result on Saturday night, given the balance of play! 1  BIS Review 51/2000  Role of technology But the common factor in all of these developments is technology. Physical trading floors for exchanges are fast-disappearing, particularly on this side of the Atlantic, replaced by virtual floors with trading conducted electronically. And exchanges are utilising their markets and system expertise to become trading system providers as well as market operators: OM has been a leader in this field for some time now, and LIFFE has announced some exciting plans - the creation of - fittingly enough “LIFFE.com” and its recent tie-up with Cap Gemini. On balance, these developments must be in investors’ interests. They reduce costs, improve access and allow exchanges to respond quickly and effectively to users’ changing needs. But they also present a number of challenges. To move from a trading floor, with its mix of locals, brokers and market makers, to an electronic order book, undoubtedly changes the dynamics of a market. For regulators, remote trading also brings some difficult challenges. Technology does not respect national boundaries; nor does it recognise different jurisdictions.