samchain/econo-pairs-v1 huggingface dataset:
Although the specifics vary across central banks, the approaches outlined have several important common elements. We each have taken actions to provide more financing at terms longer than overnight. We each have chosen to auction funding against a broader range of collateral, collateral other than government securities, and in our case with a broader set of counterparties. And we have activated swap lines to help the relevant central banks provide liquidity in dollars in their markets. The initial spark to the pressures we observe in markets today was the sharp deterioration in the value of nonprime mortgage securities and the resulting increase in uncertainty about the value of a much larger amount of financial assets exposed to that risk. This was magnified by a substantial increase in uncertainty about the economic outlook and the consequences of that uncertainty for asset values and credit losses. Financial institutions faced a sharp drop in demand for a range of assets, impairing the securitization market as a source of funding. And a substantial amount of these illiquid assets were held in vehicles with implicit or explicit liquidity guarantees provided by banks. This produced a large unexpected increase in demand for funding from banks at the same time banks confronted a reduced capacity to raise financing. As market participants have adjusted to what has been a very acute change in expectations about economic and credit risk, they have become more cautious in how they use their liquidity and capital.

Although the mix of tools and approaches has varied across the major economies, each has tried to provide a more effective form of liquidity insurance to its financial institutions by expanding the capacity of banks to borrow at longer maturities from the central banks against a broader range of collateral. The actions to address liquidity issues – those we announced this week and those that we have taken over the past five months – can help reinforce our monetary policy actions by providing greater assurance for market participants of access to funding. By allowing strong banks to borrow against collateral that they can no longer easily finance in the market, the central bank is providing an additional source of liquidity to banks as a complement to our open market operations. The Term Auction Facility gives us a tool that lies somewhere between our open market operations and our primary credit program. It provides a mechanism for expanding the range of collateral against which we provide funds to the market – in effect to change the composition of our balance sheet – in ways we cannot do through traditional open market operations. And it does this in a way that may be more effective in mitigating a broader marketwide liquidity shortage than does the existing discount window facility, in part because of the perceived stigma in recourse to a facility that has come to be regarded as a source of funds for individual institutions facing a temporary, exceptional need for liquidity.
Medium and long term credit expansion, in a situation of a small reduction in collected deposits, is the main factor explaining the decline in public banks’ short term liquidity ratio to below the regulatory ratio of 100 percent. The oil price decline has engendered new challenges to financial stability in Algeria, notably with regard to the substantial impact on the balance of payments, which affects the external financial position and weighs on external financial stability, even if the banking sector has no external debt and is only marginally impacted by depreciation of the dinar, as banks can only have limited open foreign exchange positions. The resilience of the Algerian banking system to the external shocks in 2014 and 2015, supported by banks’ still comfortable financial soundness indicators, calls for more efficient resource allocation, notably to benefit productive investment. In view of the low levels of banking intermediation, the bank credit channel remains potentially important in financing nonhydrocarbon potential growth, as it places less dependency on the budget in the medium term. Based on audits of the banks, a wide stress testing exercise has been recently completed, allowing the assessment of the resilience of the banking sector in the face of recent economic developments. In the context of strengthening bank supervision, the new approach, more prospective and risk-based, will be more focused on the process of banks’ credit allocation with a view to containing both the re-emergence of risk concentration and increase in nonperforming loans.

23.05.2018  25th Financial Sector Meeting: Innovation, Transformation and Reputation Deloitte, Sociedad de Tasación and ABC Luis M. Linde Governor  Let me begin by thanking the organisers – Deloitte, Sociedad de Tasación and ABC – for their invitation to me to participate in this session of the 25th Financial Sector Meeting, which on this occasion turns on three ideas: innovation, transformation and reputation. In my opinion, these three concepts accurately encapsulate the main challenges currently faced by the financial sector. The new technologies are enabling financial institutions to transform their systems and their business models, but this transformation should not lead us to forget that the keystone of any market, and all the more so financial markets, is customer confidence. The financial sector is faced with a singularly complex setting and this conference provides an opportunity to confer with institutions’ key decision-makers on the different ways in which changes are being addressed at this time of transformation, which will be crucial for the future of the industry. The new technologies, which have already significantly impacted various sectors, now have the potential also to substantially change the way in which financial services will be provided in the not-too-distant future. I would thus like to take this opportunity to offer my view on the opportunities and risks these new technologies pose.
The recent narrowing of spreads between benchmark issuances and triple A rated papers indicate that risk aversion has now eased. In the primary market, new corporate bond issuance has increased by about 40 percent to RM28.4 billion in the second quarter of this year. In the secondary market, the recent average daily trading volume has also increased by more than 50 percent. Demand for higher-yielding securities are also beginning to rise ahead of the recovery in the global economy. In addition, in view of the prospects for an earlier recovery in Asia, global investors in the current uncertain international environment will increasingly be looking at Asian financial markets for investment opportunities. This trend is already being observed through the substantial inflow of funds dedicated for emerging markets since the middle of April this year with an estimated average inflows of USD 144 million per week compared to the net outflow recorded in the early part of the year. This positive trend enhances the opportunity for Malaysia to further expand its bond market. Timely issuance of corporate handbook by AmBank The corporate handbook being launched by AmBank today therefore comes at an important juncture in the development of the bond market. Encapsulating the profiles of 100 conventional and sukuk issuers in the Malaysian bond market, it is indeed a commendable  2  BIS Review 27/2009  effort by AmBank to provide this comprehensive information to foreign and domestic investors to facilitate their investment decisions.

It is responsible for promoting effective competition, ensuring that relevant markets function well, and for the conduct regulation of all financial services firms including all those authorised and regulated by the PRA. This includes acting to prevent market abuse and ensuring that consumers get a fair deal from financial firms. The FCA also operates the prudential regulation of financial services firms not supervised by the PRA, such as asset managers and independent financial advisers. In consequence it regulates a much larger number of firms than the PRA – over 50,000. But the FCA and PRA have a joint MoU and co-operate closely on a range of matters, most especially for those firms which are regulated by both ie by the PRA for prudential matters and by the FCA for conduct. Policy co-ordination basics The theoretical conditions under which one can achieve a number of different economic policy objectives at the same time was long ago embedded in the Tinbergen counting rule 6, named after the great Dutch Nobel prize winning economist. A necessary condition is that  3  In addition to Mark Carney as Governor, the proposed internal members from May 2015 will be Andrew Bailey as Deputy Governor and CEO of the PRA; Nemat Shafik as Deputy Governor for Banking and Markets; Jon Cunliffe as Deputy Governor for Financial Stability; Paul Fisher as Deputy Head and Executive Director at the PRA. 4  As I speak the independent members are Sandy Boss, Iain Cornish, Charles Randall and Martin Wheatley as CEO of the FCA.
Behind the veil lies the ultimate owner – citizens, whether as workers, customers, shareholders, stakeholders or voters. Institutions are executive gatekeepers of these citizen democracies. Ultimately, it is citizens to whom policymakers, economic and otherwise, are accountable. Those of us in the policy game need never to lose sight of that. Despite those ownership rights, it is nonetheless the RSA’s contention that citizens are not at present engaged in the economy, and in economic policy, as fully as would be desirable. They make the case for moving to a deliberative democracy, one in which citizens have a greater say on matters economic and financial. This is a big contention. Nonetheless it is one that I – as a citizen and as someone who works for one of those institutional veils, the Bank of England – fully accept. More than that, the Bank is making strides towards increasing citizen engagement in the economy and understanding of economic policy. In what follows, let me first say a word about the aims and objectives of a programme of citizen engagement, the like of which the RSA are proposing – the “ends”. I will then turn to the “means” – what practically could be done, and indeed is being done, to improve citizen engagement with the economy and economic policy. For reasons of familiarity, I will focus on Bank of England initiatives as one example of such public engagement, although the RSA’s recommendations cover a range of other policymaking functions.

However, we should be aware that at one point in the future their contribution will be overwhelmed and we will need to take appropriate action on time in order to impede any reverse effects. In the policy design and decision making process under the current dynamic environment, the strengthening of analytical tools and the enhancement of knowledge on the policy nexus are extremely important. The interplay of monetary, fiscal and macro prudential policies is a quite new area, seeking for deeper research work to support the decision making process at the central banks and other policy makers, to provide appropriate advices and policy recommendation and therefore, to prevent from underlying risks. The aim of our conference is to contribute towards building knowledge and exchanging views on the policy nexus issue. Having in mind the quality of papers that are going to be presented today, I truly hope that we will make our contribution towards this aim. I wish you a successful conference and fruitful discussion! Thank you. 2  BIS central bankers’ speeches
The work suggests a number of possible mechanisms: consumption that is financed by debt could mean that subsequent spending is more constrained; households may choose to consume from equity gains related to house price rises during expansions but may need to cut spending if those rises reverse; and a lack of investment opportunities could also play a role, weak investment and associated weak GDP growth could show up as consumption-led growth, not least because consumption is stickier. For more details, see www.bis.org/publ/qtrpdf/r_qt1703e.htm. 8  All speeches are available online at www.bankofengland.co.uk/news/speeches  8  Chart 7: Evidence of a trade-led global slowdown Index (long-term average = 100)  Percentage changes, 3 months on 3 months ago  102  8 US & EA capital goods orders (rhs) 6  OECD Business Confidence (lhs) 101  4  World trade in goods (rhs)  2 100  0 -2  99 2010  -4 2011  2012  2013  2014  2015  2016  2017  2018  2019  Indices, 50 = no change 58 Manufacturing PMI  56 Composite PMI 54 52 50 Export orders PMI  48 46  2010  2011  2012  2013  2014  2015  2016  2017  2018  2019  Sources: Conference Board, CPB, European Commission, ECB, Markit Economics, OECD, and Bank calculations.

4 John C. Williams, Financial Stability and Monetary Policy: Happy Marriage or  Untenable Union?, Presentation to the Deutsche Bundesbank Conference, Eltville am Rhein, Germany (June 5, 2014). 5 John C. Williams, 2015. Measuring Monetary Policy's Effect on House Prices, FRBSF  Economic Letter, no. 2015-28, Federal Reserve Bank of San Francisco. 6 Board of Governors of the Federal Reserve System, Statement Regarding  Repurchase Agreement Arrangements, July 28, 2021. 7 Inter-Agency Working Group for Treasury Market Surveillance, Enhancing the  Resilience of the U.S. Treasury Market: 2022 Staff Progress Report, November 10, 2022. 8 Financial Stability Board, Non-Bank Financial Intermediation, as updated November  10, 2022. 4/4  BIS - Central bankers' speeches
What I would like to say is that, in order to further facilitate Fintech development in Hong Kong, the HKMA has decided to launch two new initiatives today. Fintech Innovation Hub 14. First, I am pleased to announce that the HKMA will collaborate with the Applied Science and Technology Research Institute (ASTRI) to set up the “Fintech Innovation Hub”. It will be equipped with all necessary system and support resources to enable players of the banking and payment industry to conduct proof of concept trials of products and services through the use of new technologies, and do it safely – as this controlled environment is separated from their internal systems. Also, the Fintech Innovation Hub allows regulators to provide early inputs to the trial works before the actual implementation. While some of the largest banks have built their own laboratories, this new Fintech Innovation Hub will cater for the big and small institutions alike such that the industry as a whole would be able to adopt new technologies more speedily and in a more collaborative manner. 15. Among its potential uses, this Fintech Innovation Hub, as a neutral testing ground, will be ideal for two types of activities. First, industry players can test new Fintech solutions which involve the collaboration of multiple parties and are intended to be commonly adopted in the industry. A good example is biometric authentication.

Ladies and gentlemen, I have spent quite some time talking about Fintech today. Now I would like to talk about the third emerging trend that will impact the development of Hong Kong as a “Brand” for financial services, which is the intensification of competition amongst financial centres. We all recognise that money managers and asset owners are very smart and extremely mobile. They do have a choice on where they park and manage their money and wealth, and they know it very well. Therefore, it is not a question of whether Hong Kong is good or not. Even if we are good, it is a question of whether we are better than our competitors, many of whom have high aspirations and are catching up fast. Hong Kong as a Brand for financial services does not enjoy a monopoly or franchise. We must remain vigilant and diligent at all times if we wish to continue to maintain a competitive edge. 20. In this connection, I am pleased to say that, after several years of concerted effort between the HKMA, the TMA and the financial industry, we have finally succeeded in changing our tax regime to help make Hong Kong a more attractive platform for multinational corporates to conduct their group cash management and treasury  4  BIS central bankers’ speeches  functions here. However, a good product in itself is not good enough. A good product still requires good and effective marketing. This is what any world class brands always do.
Svein Gjedrem: Monetary policy’s role and contribution  Address by Svein Gjedrem, Governor of Norges Bank, at the Norwegian Savings Banks Association’s Conference Society and Economics 2000 held in Oslo on 13 October 2000. *  *  *  The long-term task of monetary policy is to provide the economy with a nominal anchor. Economic agents must be relatively certain of the future value of money. Agreements relating to purchases and sales, loans and interest rates are concluded in nominal terms. The decentralisation of decisions both in the public and business sector is based on nominal budget limits. The tax system is in nominal rates. When prices fluctuate widely, it is impossible to foresee the content of such agreements and budgets in real terms. Unexpected price variations could thus easily result in undesired fluctuations in the real economy.1 A credible and consistent monetary policy provides enterprises, households and institutions with the confidence that the value of the krone will be stable over time. This confidence is the best contribution monetary policy can make to employment, economic growth and welfare. This also prevents monetary policy from having arbitrary distributional effects. We thereby avoid high and varying inflation and boom periods that are followed by recessions. Norges Bank’s main monetary policy instrument is the interest rate. This instrument must be oriented towards the long-term objective of nominal stability in the economy. 1  See Rødseth (1987).

Although I have been told of some tentative signs of premium rates stabilising recently, they have been falling across most wholesale lines for around a decade now. For example, Guy Carpenter’s Global Property Catastrophe Rate-On-Line Index has reduced by more than a third since its peak in 2006. Our market survey earlier this year found further year-on-year declines (Chart 1). Looking at the possible causes of the current soft market, it is surely in part just another manifestation of the wider low return environment. The most obvious evidence is the inflow of capital to the market from institutional investors. Perhaps to a greater extent than historically, insurance is interconnected with wider capital markets and market forces have driven expected returns more into line with other investment opportunities. These wider pressures may explain a squeeze on profits. But insurers should still be pricing to cover their view of risk. At the beginning of 2016 we carried out a survey that captured views on the rate adequacy of new and renewed business. The results suggested that the estimated rate adequacy of new business is, in most cases, higher than renewed business. Whist this may reflect what many insurers tell us – that they only want to grow in segments that they believe are adequately priced; another interpretation is that some insurers are being overly optimistic on risks for which they have no or limited historical claims data and which previous risk carriers have declined as they no longer believe them to be adequately priced.
In this context, the Governing Council again stressed that the degree of forecast uncertainty tends to increase with the length of the projection horizon. Turning to the monetary analysis, recent data confirm the gradual increase in underlying growth in broad money (M3). The annual growth rate of M3 increased to 4.1% in January 2015, up from 3.8% in December 2014. Annual growth in M3 continues to be supported by its most liquid components, with the narrow monetary aggregate M1 growing at an annual rate of 9.0% in January. The annual rate of change of loans to non-financial corporations (adjusted for loan sales and securitisation) was –0.9% in January 2015, after –1.1% in December 2014, continuing its gradual recovery from a trough of –3.2% in February 2014. The three-month cumulated net lending flows were positive in January for the second consecutive month, compared with sizeable net redemptions still recorded a year ago. Despite these improvements, the dynamics of loans to non-financial corporations remain subdued and continue to reflect the lagged relationship with the business cycle, credit risk, credit supply factors and the ongoing adjustment of financial and non-financial sector balance sheets. The annual growth rate of loans to households (adjusted for loan sales and securitisation) increased further to 0.9% in January 2015, after 0.8% in December 2014. Our recent monetary policy measures should support a further improvement in credit flows.

The message is that the MPC makes interest rate decisions one at a time, and that it has not made up its mind about what future path of rates will be consistent with the inflation target. The market interest rate path too is a conditioning assumption, not the MPC’s prediction about future rates. The difference is that, to the extent that the market rate curve embodies the market’s guess about where the MPC will take rates, forecasts predicated on the market rate are more easily interpreted as a comment on that view. So how much significance should be read into our change of conditioning assumption? Did the switch to market rates represent a tentative step towards providing more guidance on the future direction of policy? The fact that interest rates were historically very low in 2003 and early 2004 has some bearing on the matter. Many academics, notably Lars Svensson, have argued persuasively that the use of an unrealistic conditioning assumption makes it more difficult for the public to interpret the MPC’s reading of the economic outlook. As Charlie Bean has pointed out,17 this is certainly true if interest rates are some way off ‘normal’ levels or if for other reasons, they are expected to increase or decrease substantially over the forecast horizon – and the longer the time horizon of the forecast, the more force this argument has.