samchain/econo-pairs-v1 huggingface dataset:
Banks recognised a substantial counterparty risk in lending to each other, given that interbank lending was generally unsecured. But, even if collateral was taken, the ability to liquidate it at a reasonable price was severely impaired in an environment of widespread fear and uncertainty. Bank positions in the interbank market can be highly persistent. Large diversified banks tend to be borrowers and smaller, regional banks lenders. When the financial turmoil erupted, persistent borrowers endured a sharp and sustained jump in their funding costs and many of them had no access to markets at all. When Lehman Brothers finally filed for bankruptcy in mid-September 2008, widespread financial panic broke out. The paralysis of transactions spread beyond the money markets, where it had been more or less confined for a year. Outside the money market, dealers play a critical role guaranteeing market liquidity. But in order to be able to take positions on both sides of the market, they need to finance their securities positions via collateralised funding. For that, they need their own capital, which they can use to pay for the margins required by those who lend them securities. When confidence evaporates, margins increase and dealers’ capital is eroded, so that their ability to trade as buyers is restricted. Markets lose a critical actor, assets become less liquid, and the value of assets declines further. Having tasted the forbidden fruit of excess risk-taking, financial institutions were cast out of the paradise of seamless financial markets.

Michael Gondwe: Collective bargaining Remarks by Dr Michael Gondwe, Governor of the Bank of Zambia, at the official opening of the Zambia Union of Financial and Allied Workers (ZUFIAW) Negotiations Forum – Phase 1, Lusaka, 20 March 2012. *  *  *    The ZUFIAW President, Mr Cephas Mukuka    The General Secretary of the Zambia Union of Financial Institutions and Allied Workers (ZUFIAW), Mrs Joyce Nonde Simukoko    The Executive Secretary of Federation of Free Trade Union in Zambia, Mr Lyson Mando    The Representative from the International Labour Organisation    Workshop Facilitators    Distinguished Participants    Ladies and Gentlemen  I wish to welcome you all to this important Workshop, on Collective Bargaining, organized by the Zambia Union of Financial and Allied Workers (ZUFIAW). Let me take this opportunity to commend ZUFIAW for taking the initiative to organise this Forum, which is intended to facilitate exchange of information and views on aspects of effective collective bargaining. Mr President, as you are aware, in spite of the recent global economic crisis, our country has continued to enjoy relative macroeconomic stability, with favourable prospects for the future. As a result of consistent implementation of appropriate macroeconomic policies: i. The country has registered positive real GDP growth averaging 6.5% annually since 2007. This is a necessary condition for poverty reduction efforts;  ii. Inflation and exchange rates developments have also been favourable.
If you’re interested in risk in the financial system it isn’t enough simply to look at levels of debt and compare them with those in other countries or long-distant periods of time. For the most part those variations seem to be explained by differences in sustainable levels of debt, not differences in riskiness. Another possible lesson involves the speed of any policy response. The Bank’s Financial Policy Committee, which is responsible for monitoring and stabilising risk in the financial system as a whole, has many tools at its disposal. One of the main instruments is the so-called “Counter-Cyclical Capital Buffer” (CCyB). This is an extra margin the FPC can add to banks’ capital requirements when risks are rising. The aim is to ensure that, in the event of a downturn and losses on their books, banks don’t make it worse by actively cutting back on lending. 13  See Chart 18 in Broadbent (2012). 17  All speeches are available online at www.bankofengland.co.uk/speeches  17  However, it takes time to implement changes in the CCyB (we have to give banks advance notice). So if it’s true that swings in credit supply develop relatively rapidly, it may be necessary to supplement the CCyB with other safeguards. I would put the 2014 housing measures, which placed limits on high-LTI lending, into this category.

BIS central bankers’ speeches  1  The other is the Executives’ Meeting of East Asia-Pacific Central Banks or EMEAP, which have helped develop the capital market in the region through the establishment of the Asian Bond Fund and many other initiatives. The increasingly important role of China to the Thai economy and financial system has brought about the need for broader and deeper understanding of the Chinese economy and a more proactive response from public agencies, including the Bank of Thailand, to seek a presence in China. Your Royal Highness, Ladies and Gentlemen, Following the initial foothold in the form of two representative offices in New York and London twenty years ago, the Bank of Thailand recently established a representative office here in Beijing. The Beijing office is our first representative office in Asia. I also believe that we are the first central bank from the ASEAN region to have its representative office in China. But, being the first is not the only measure of success for our journey here. Since its establishment last year, our Beijing representative office has fulfilled its objectives to further promote closer ties between the Bank of Thailand and the People’s Bank of China, as well as other Chinese government agencies. The office also aims to sharpen its focus and first-hand understanding of the economic and financial developments in China. This achievement is well-illustrated by the deepening financial cooperation between China and Thailand.
The blue line in Chart 10 measures profits of UK-quoted firms (including some that have operations outside the country) and, as the denominator, the market value of their capital (debt plus equity). Chart 11 subtracts the gilt yield from a national accounts measure of profitability: profits of firms located in the UK relative to the book value of their capital. But they’ve behaved in a similar fashion and convey very much the same message. 11  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  11  Chart 10: The required rate of return for UK firms  Chart 11: The combination of rising profit  has risen even as risk-free yields have fallen  margins, falling investment growth suggests significant increase in risk premium  Sources: Bank of England, Eikon from Refinitiv, TradeWeb, Bloomberg Finance L.P and Bank calculations. * Adjusted for changes in leverage. Sources: Bank of England, ONS and Bank calculations. UKCS are UK continental shelf companies. Before the crisis, rises in profitability (relative to interest rates) would lead to faster investment growth. That’s not been true in the past few years. Profits have been very healthy, relative to the existing stock of capital. The spread between the rate of return and the risk-free interest rate has risen significantly, from around 10% in the middle of the last decade to close to 15% today, a proportionate rise of 50%. On the face of it the financial incentive to expand capacity is very strong.

More than 70% of the total trade is with EU countries, the foreign owned banks are mostly of EU origin, and the bulk of financial flows comes from EU. Very importantly, these financial flows went in export–oriented and more productive segments, that fortified the fundaments of the economy, provided impetus to growth and did not add to inflationary pressures, or pressures on foreign reserves. And, this model should actually be the proper way to proceed after the EU entrance, as well. Less reliance on short-term volatile financial flows, and import of longer term capital is the only way to enhance the productivity of the economy and improve its competitiveness. Very often, the entrance on the large EU common market of goods, services, capital and labor, not only is connected to faster growth and real convergence, but also to convergence in price levels. As wages start to increase, and gradual shift towards consumption of more expensive services occurs, the price level might elevate as well, thus posing challenges for monetary policy. These price pressures can be avoided by boosting the 1/2  BIS central bankers' speeches  productivity, thus creating more favorable environment for the monetary policy, without pressures on the interest rates. The second angle that should be pinpointed is the implication that EU entrance does have on the further monetary integration, the adoption of the Euro as a single currency and the role that the national central bank would have in this context.
BIS Review 36/2010  5  risk failure by pursuing strategies that are different from the norm. The penalty of failure may be less if others fail in the same way – as Keynes pointed out was true of banks. (iv)  People have excessive faith in their own judgements and are subject to confirmation bias and wishful thinking. An experiment, well known in the literature, asked respondents to report 90% confidence intervals around our estimates of a set of unknown quantities (e.g. the diameter of the moon). 13 But the true answer lay outside the reported confidence intervals half of the time. This reflects a general result that people are overly confident in their own judgements. This effect suggests that there may be a tendency to understate uncertainty and could explain why the “severe” stress testing scenarios used by banks before the crisis were so mild. 5. Policy implications  These observations about decision making under uncertainty in economics have implications for policy along three dimensions. First, decision making under uncertainty affects the dynamics of the economy. Some of the psychological biases discussed above can offer an explanation for “herding” behaviour and “risk illusion” (a tendency to over/underestimate likelihoods of different type of events). Taken together, these biases could offer an explanation for periodic bouts of exuberance in the economy and the financial system in particular. 14 As such they should bear on our assessment of the likelihood of the range of possible outcomes.

This dynamic suggests scope for a strong recovery in which falls in unemployment are much more limited than usual. Potential growth in the UK could also be pro-cyclical but for different reasons. In Britain, the employment rate has fallen only a third as much as in the US (Chart 6). The flipside of that strength has been exceptionally weak productivity growth (Chart 7). Will UK productivity growth pick up alongside demand? The fundamentals are promising. Given the flexibility of its labour market, the continued openness of the economy and the credibility of macro policy, it is hard to think of any reason why there should have been a persistent deterioration in the rate of potential growth in Britain. This hypothesis holds particularly now that the UK financial system is beginning to function more effectively. Until recently, the weakness of the banking system limited the reallocation of capital and labour from less to more productive activities. Indeed, whereas half of all productivity growth at the economy-wide level in the years prior to 2008 occurred through this channel, reallocation appears to have made no contribution to productivity growth in recent years.5 There are other reasons to think that growth itself should bring a supply side improvement. As the economy recovers, investment should pick up and part-time workers should shift into more productive full-time work. With the sharp fall in real wages during the recession (Chart 8), employees effectively priced themselves into low-productivity work at a time of weak demand.
Nonetheless, I am not  entirely convinced the Bank of England press release which announces “This is Andy deep hanging out in Stoke” will scan. So I am open to crowd-sourced alternative suggestions. Let me give one or two concrete examples of how this regional engagement has helped my own understanding of the economy, its hidden corners, its quiet voices. When UK GDP returned to its pre-crisis peak in 2014 economists told the world the economy had “recovered”. 16  Around 30 seconds into a talk about the “recovery” with charities in Nottingham in 2016, I was  put straight. The language of recovery resonated with no-one in the room. This experience was repeated on TV, some months later during the referendum debate, when a questioner in Newcastle put straight one of the participants on tonight’s panel with the memorable line “That’s your bloody GDP, not ours”. 14  http://www.visualscribing.com/ Geertz (1998), with thanks to Grace Blakeley at the Institute for Public Policy Research. The date that real GDP returned to its pre-crisis peak has changed between different vintages of ONS data and was originally thought to have occurred in 2014. In the latest vintage of ONS data, it was in 2013. 15 16  8  All speeches are available online at www.bankofengland.co.uk/speeches  8  When I returned to my desk from Nottingham and plotted GDP regionally as well as nationally, something surprising emerged from the numbers.

Yves Mersch: Translating a shared vision into a winning story Closing remarks by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the T2S Launch Celebration, Milan, 2 July 2015. *  *  *  We chose to call this T2S launch celebration “Translating a shared vision into a winning story”. Listening to the speakers for the past two hours I believe the name was just right. We have heard how the T2S Community transformed the shared vision of an integrated securities settlement landscape into a winning story, culminating in the launch of T2S on 22 June. Stimulating views have been shared tonight and I would like to thank the speakers for presenting their perspectives on the capital markets union. It is evident that T2S, post-trade harmonisation and the CSD Regulation are among the elements that will be pushing this agenda forward. Looking around the room I am happy to see so many familiar faces. Faces of people who have been part of the project since the idea of T2S was born in 2006. The journey over the past nine years has been an inspiring one. There have been some bumps in the road, some twists and turns, but with the launch of T2S we have achieved a monumental milestone. We made the vision of a single securities settlement platform for Europe a reality.
Elvira Nabiullina: Review of recent inflation developments in Russia and economic outlook Statement by Ms Elvira Nabiullina, Governor of the Bank of Russia, in the follow-up to the Board of Directors meeting, Moscow, 14 December 2018. * * * Today the Bank of Russia Board of Directors has decided to raise the key rate by 0.25 pp to 7.75% p.a. This move is aimed at limiting the scale of inflation risks in the coming year. I will subsequently elaborate on the rationale of this decision. The second decision made today was to resume regular fiscal rule-based foreign currency purchases from 15 January. As we said earlier, the postponed purchases will be made gradually in the course of several years. We will decide on the fiscal rule-based foreign currency purchases postponed in 2018 in due course, after regular purchases are resumed. We have factored in this decision in our forecast. Let me now proceed to give you the details of the key rate decision. Today’s Board meeting took an in-depth look at the reasoning for both keeping the key rate unchanged and revising it upwards. The main argument in favour of an unchanged key rate is the performance of the domestic demand. It is expanding moderately without posing any inflation risks. This primarily concerns consumption. In October, annual growth of retail sales came in at 1.9%. The heads of Bank of Russia regional branches, who contribute to the key rate decision, have also pointed to low demand and mixed consumption dynamics across regions.

Annual wage growth has also slowed considerably after peaking early in the year. The savings rate has been recovering in the recent months after a considerable drop in the second and third quarters. Household deposits resumed growth driven by interest rates attractive for depositors. In this context, strong growth in retail lending underpins consumer demand without posing inflation risks. The evolution of the household behaviour model meets our expectations. However, more arguments call for a key rate hike. What are these arguments? They are associated with both external and domestic factors. External factors include, first, the state of the global economy as a whole and the situation in emerging markets. Certainly, global financial markets have been less volatile this quarter than they were in August and September. This is partially attributed to the revision of monetary policy projections by major central banks. The next year normalisation may prove slower than expected, thus mitigating the risk of capital outflow from emerging markets. However, it is important that the altered projections of policy revision by key central banks are associated with downgraded next year growth forecasts for major economies. Also, the current standstill in trade disputes may merely prove a temporary truce. These risks are quite tangible for emerging market economies. Second, we have here the oil glut risk in 2019. This is partially associated with a downward revision of the global demand outlook. However, the main reason is an aggressive expansion of oil production in the US.
A syndicated loan is a loan where a bank sells parts of the loan to other banks; this is usually done internationally. These loans, like credit derivatives, have the advantage of spreading the risk in a large credit exposure over many hands, but are not traded so actively in the market. Another means of selling risk is to put together a number of credits to form a portfolio and then finance this portfolio by issuing bonds. This is called securitisation. The portfolio is often sliced up into different risk tranches, and the bonds corresponding to each tranche are sold to different investors, depending on what risk the investors are willing to bear – and to what price. These products in themselves are sufficient material for a whole speech – so let me just note that credit derivatives are not unique when it comes to trading in credit risk. Where are the dangers in the market? I have now gone through a number of advantages with credit derivatives and described their remarkable growth. But at the same time, they have brought with them a number of risks. These are mainly related to the market being new and relatively untested. There is a possibility of "teething  3  For example, iTraxx Europe consists of the 125 most liquid company names in the CDS market in Europe. The 125 CDS contracts weighted equally in the index. BIS Review 24/2007  3  problems”.

(2) Considers long-term interest rates on corporate and bank bonds with over 9-year duration, except for BBB bonds, which considers more than 8-year duration. Sources: Central Bank of Chile and LVA Índices. Figure 4 Stock-index volatility (*) (annualized percentage) 60 Hungary  July-December 2011  50  France Germany Spain Russia Brazil S. Korea Chile Turkey Mexico Australia Hong Kong U.K. U.S.A. Taiwan India Colombia N. Zealand Philippines China  40 30 20  Peru  10 0 0  10  20  30  January-June 2011  40  50  60  (*) Calculated with daily return of stock indexes, base 100=2010. Data at 16 December. Fuentes: Banco Central de Chile a base de información de Bloomberg. 8  BIS central bankers’ speeches  Figure 5 Retail sales and new car sales Emploment and unemployment rate (index, centered on mean of period (1)(2) (index, 2003=100) 1990-2010) 40 225 375 30 200 300 20 10  175  225  150  150 -10  125  75  100  0  0  -20 -30 -40 90 93 96 99 02 05 08 11  06 07 08 09 10 11 Non-durables  New cars  Employment  Unemployment  Durables (1) Sold in moving quarter. (2) Seasonally-adjusted series. Sources: Chile's National Automobile Association, Central Bank of Chile, Chile's National Chamber of Commerce, and Ricaurte, M (2011), “Indicadores de Mercado Laboral para la Comparación de las Crisis Asiática y Financiera Internacional,” preliminary document, Central Bank of Chile, June.
John C Williams: Research, policy, and the zero lower bound Remarks by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Shadow Open Market Committee Spring Meeting, New York City, 6 March 2020. * * * As prepared for delivery Good afternoon. I would like to start by thanking Athanasios for inviting me to participate in this event. It is a real honor to highlight the influence of our esteemed colleague Marvin Goodfriend, an outstanding and original researcher, policy advisor, and friend. Marvin epitomized the role of policy advisor. His research dug deep into the issues, introduced new ideas into the discussion, and developed options for policymakers to consider for the most challenging issues. The fact that we have so many researchers and policymakers here is testament to the importance of his research in shaping the conversations that we are having to this day. Before I reflect more on Marvin’s contributions to monetary policy, I should give the standard Fed disclaimer that the views I express today are mine alone and do not necessarily reflect those of the Federal Open Market Committee or others in the Federal Reserve System. In preparation for what I know will be a stimulating discussion, I’d like to highlight a few of the ways that Marvin changed the conversation in the U.S. about what was then commonly referred to as the zero lower bound on interest rates, or ZLB for short.

The high level of indebtedness built up during the economic upturn in many countries significantly increased this risk. Positive expectations of the future had increased companies' financing needs for investment. At the same time, a bright picture painted of the future and an increase in wealth had stimulated households' consumption and increased their investment in housing. It was easy to imagine a risk scenario where household sector demand declined so rapidly that heavily indebted companies went bankrupt, where unemployment rose drastically and where banks an other lenders suffered extensive loan losses. This negative spiral could continue with further falls in share prices and household wealth and rising credit risk premiums would make lending more expensive. If this negative sequence of events were not broken, high loan losses could eventually lead to bank crises and credit crunches, which would contribute further to the downward spiral. A credit boom, large increases in asset prices and a high rate of growth in investment, often concentrated on a particular sector, have been the factors preceding serious financial crises around the world. However, it is important to remember that neither a credit boom nor a large deficit on the current account need be interpreted as an accumulation of financial imbalances. If savings and investment decisions are based on realistic expectations of future growth and banks and financial investors have been able to make realistic assessments of the credit risks connected with investment projects and consumption loans, then this development is more a sign that the international capital markets are functioning efficiently.