samchain/econo-pairs-v1 huggingface dataset:
Domestically, although there has been tremendous support from the Hong Kong public, a lot of dirt has also been thrown around. A number of public officers, including myself, have been the targets of much of this dirt. But, thankfully, amid the inevitable, and I am sure well intentioned, political noise, there have also been constructive comments. Internationally, the initial response has been hostile, to put it mildly. The foreign press has been critical, almost as critical as it was about the imposition of exchange controls in Malaysia. Sadly, my most respected Nobel Laureate Milton Friedman, who has been most supportive of the free market philosophy so diligently practiced in Hong Kong, thought that we had simply gone crazy. Even Fed Chairman Alan Greenspan, in his testimony to the House Banking Committee, spoke up on the subject. He said in answer to a question, in his carefully chosen words, that: “I think it would be mystery to find that I think that the efforts on the part of the Hong Kong authorities to try and jack up their stock market was a wise effort.” But I am glad to see that opinions have changed more recently. Perhaps it was Russia, or Latin America, or Long Term Capital Management, or perhaps it was our untiring efforts to explain our case that did it. Let me quote a somewhat unexpected source - Barton Biggs of Morgan Stanley.

The measures to strengthen our currency board arrangements have been effective. But basically what we have done, amongst other things, was to dampen interest rate volatility by accepting some fluctuation in our foreign reserves. In isolation this would probably not have been effective in deterring market manipulation. The timing for doing anything is of course an easy question to pose, but the reality is much more complex than that. One should realize that the system, before the introduction of the technical modifications, has served Hong Kong very well for almost fifteen years. Furthermore, there is no free lunch. Costs are involved. The larger fluctuations in foreign reserves may affect confidence. It may be seen as a sign of weakness, although with foreign reserves in multiples of the monetary base this should not be a cause for concern. Tightening the provision of liquidity to the banking system by denying access to the discount window paper other than that issued by the currency board may affect the development of the debt market. And making explicit the passive convertibility of the monetary base into foreign reserves may dampen activity in the foreign exchange market. The pros and cons must be considered carefully before making these significant changes. I think I have spoken long enough. I hope I have made my case convincingly. Thank you Victor for giving me this opportunity. In closing, may I quote Barton Biggs again.
This may result in the duration of lower coupon securities exceeding the duration of the new production coupon securities (because borrowers backing lower coupon MBS would not have an incentive to refinance their loans). BIS central bankers’ speeches  5  settlement relative to other securities.14 Another consequence of this uncertainty is that the Desk is not able to provide the same detailed guidance about the composition of its future agency MBS purchases that it does with its purchases of Treasury securities. These same factors make it more difficult to determine ex ante the total amount and pace of securities that the Committee could purchase without causing market disruptions. For production coupon agency MBS with little outstanding stock available for trading – such as the 30-year 2.5 percent contract – there is risk associated with buying more than anticipated gross issuance. In the event of an increase in mortgage rates or a decline in refinancing activity, gross issuance of these securities could decline, leaving the market with less tradable supply. For TBA contracts with sizable outstanding stock, such as the 30-year 3 percent and 3.5 percent coupons, gross issuance may be a smaller concern, since market participants can deliver existing securities into TBA contracts.

In particular, we follow measures of market activity, such as trading volumes, bid-ask spreads, trade sizes, quote sizes, financing costs, and settlement fails, as well as other indicators. We also monitor indicators related to our operations, which can provide some direct insight into potential market functioning issues. These include the prices at which we can execute in comparison with prevailing market quotes, the extent and concentration of dealer participation in operations, and the ease of settlement of our MBS purchases. As an example, Figure 3 and Figure 4 show daily trading volumes and failures to deliver in the Treasury and agency MBS market. Based on these types of measures, our operations are going smoothly and market liquidity is holding up well. In addition to this monitoring, we have developed active policies to help prevent market dysfunction as a result of our operations. In the Treasury market, the Desk ceases purchases of a specific security once SOMA holdings of that security reach 70 percent of the outstanding stock. In addition, when SOMA holdings of a specific issue exceed 30 percent of outstanding securities, the Desk limits the rate at which it acquires new holdings of that issue based on a predetermined, graduated schedule. The Desk also refrains from purchasing certain Treasury securities in its operations if investors’ demand for those specific securities as collateral in the repurchase market or as deliverables into Treasury futures contracts is relatively high.
Well-crafted innovation can reduce market concentration, yield new risk-mitigating technologies, and increase the scope for electronic settlement in central bank money: all of which enhances, not reduces, financial stability. So we are open, not closed, to such advances. At the same time, we make no apologies for having a relentless focus on stability and resilience, and have 1  previously set out the criteria against which we assess change in the payments landscape . Indeed, households and companies expect nothing less. Surveys regularly show safety to be at the very top of people’s expectations from payments. No amount of real-time, API-enabled, mobile front ends can make up for the prospect – however remote – that one’s money might be lost or mislaid; or that a failure in one part of the payments network might bring down other parts of the banking system. Judged against those yardsticks, the UK’s payment systems have actually performed very well in recent years: combining the innovation of Faster Payments, Direct Debits and widespread use of online banking (to give just three examples) with a resilience record which – though by no means perfect – stands in contrast to some other parts of the financial system. So why the need for change? There is a one word answer to that, and that is: complexity. The UK has world-beating technologies. But too many sit in silos.

Naturally, since the exercise aims primarily to strengthen confidence in the European banking sector, it is vital that the European authorities should determine as soon as possible the formula to be used to cover the potential capital needs arising from the exercise, for those banks that cannot do so through their own means. Single resolution mechanism Yet if, as I said at the outset, we want to put an end to the current market fragmentation and to bank liabilities being valued differently depending on their location, the unified supervision of banks is not enough. These liabilities also need to be treated similarly – irrespective of the jurisdiction under which they fall – if banks experience acute solvency problems. Thus, the banking union requires, as indicated by various authors in the issue of Papeles de Economía Española presented today, the adoption of a single resolution mechanism for non-viable institutions. In the past, supervisory authorities responded to banks’ solvency problems following the principle of constructive ambiguity. Hence, except for guaranteed deposits, there was no specific legal framework for the treatment of banks’ liabilities, should a bank experience solvency problems, aside from commercial law provisions on insolvency. However, to prevent the undesired systemic effects of a disorderly bankruptcy of a bank, public authorities have traditionally used discretionary power to protect holders of bank liabilities (mainly deposits and debt) through capital injections so as to avoid the winding-up of these institutions. One of the lessons of recent crises is that the principle of constructive ambiguity has become considerably weaker.
Barbro Wickman-Parak: Is there a typical business cycle? Speech by Ms Barbro Wickman-Parak, Deputy Governor of the Sveriges Riksbank, at Nordea, Stockholm, 7 October 2008. *  *  *  The expression “economic downturn” is often used in the media and general debate, but there appears to be some confusion as to what the term actually means. Sometimes the term is used to describe generally less prosperous times, on other occasions it is avoided and people talk instead of a recession. The academic definition focuses instead on deviations from a long-term trend. 1 One imagines that GDP has a natural long-term equilibrium level that shows a growth trend over time and in periods when the economy is below the trend we have a recession and in periods above the trend we have a boom. This sounds simple, but in practice many questions remain. Many of the shocks that affect the economy can for instance be lasting and in this case they affect the long-term equilibrium level. As the long-term equilibrium level is not an observable variable, it is difficult to know in practice what point in the economic cycle the economy is currently at. There are patterns that often recur in economic cycles and which are therefore studied closely by forecasters. For instance, it is normal to have an over-investment in housing and for commodity prices to rise during an economic boom, just as in the current cycle.

At the same time as Keynes’ analysis began to be questioned on the basis of economic theory 3 , the world suffered deep recessions in the wake of the oil price shocks of the 1970s,  1  The NBER has a “Business cycle dating committee” which has a procedure for dating peaks and troughs in economic cycles in the United States. 2  J. M. Keynes., “The General Theory of employment, Interest, and Money”. London: Macmillan. 1936. 3  Lucas' criticism, for instance, R. E. Lucas "Econometric policy evaluation; a critique.” Carnegie-Rochester Conference Series on Public Policy 1976. 1: 19-46. BIS Review 121/2008  1  which led to a more pessimistic view of the ability of economic policy. People realised that fiscal policy measures often came too late and that attempts at an active economic policy often merely resulted in high inflation. An alternative interpretation began to emerge; fluctuations in economic activity were regarded as the result of changes in production conditions. The 1980s saw the advent of RBC-models 4 , which stands for Real Business Cycle. The characteristic of these was that they considered fluctuations in the production of goods and services to be natural consequences of externally caused changes in production conditions. This could be changes in technology; IT is one example. It could also be sharp swings in the oil price, terrorist attacks or war, but also more natural examples such as the weather. They assumed that the markets themselves were best suited to adapt to the changed conditions.
Chart 1  BIS central bankers’ speeches  1  One of the main reasons is the strong demand for Norwegian goods in countries where economic growth remains robust. The centre of gravity in the world economy is shifting. In the course of the next few decades, China will most likely be the largest economy in the world. Emerging economies – with China at the forefront – are the main driving force behind the increase in demand for crude oil and other commodities. As a result, prices for Norwegian export goods have remained high, even in the context of declining growth among our traditional trading partners. Chart 2  The emergence of newly industrialised economies has also led to lower import prices in Norway. The improvement in Norway’s terms of trade is without parallel in our recent history. We have to go back to the boom period at the time of World War I to find anything similar. Developments in other countries have been less favourable. What started as a banking crisis in the US and the UK has developed into a sovereign debt crisis, with Europe at the epicentre. Austerity measures and economic contraction are now going hand in hand. Social unrest is spreading. Unemployment in many countries has risen to alarming levels. Economic growth is weak, particularly in Europe, constrained by uncertainty and fear of new setbacks. Both the public and private sectors are focusing on reducing debt. Banks are consolidating their balance sheets and holding back on lending to businesses and households.

Improved competitiveness and the development of the oil industry facilitated the rapid integration of new technology by firms. Productivity growth remained relatively high up to around 2005. But since then it has declined. The decline has been more pronounced than among our trading partners. The phasing-in of a highly profitable oil industry and higher petroleum revenue spending via the central government budget has amplified the structural shifts in the Norwegian economy. Services production has increased. When the financial crisis hit, industries that do not benefit from oil sector demand or public spending stagnated. The differences in growth across industries has thus widened since 2008. 12  BIS central bankers’ speeches  Chart 14  Labour-intensive sectors with relatively low productivity have accounted for a large share of employment growth in recent years. Employment has shown only moderate growth in industries with a high productivity level, such as manufacturing and engineering. Productivity growth has stagnated in most OECD countries. Goods production has declined, while services production has increased, as in Norway. In many countries this shift was based on borrowing rather than increased earnings. After the financial crisis, funding sources dried up and these countries were faced with a debt crisis. Fundamental structural problems with eroded competitiveness came into evidence. These countries must not only reduce their debt levels, but also engage in a painful process of structural adjustment. Only then can these economies find the path to renewed growth. The Norwegian economy has experienced virtually 20 consecutive years of growth.
Svein Gjedrem: Monetary policy and wealth management Address by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), to the Board of Directors of the National Insurance Fund, Oslo, 14 March 2002. This address is based on assessments presented at the press conference following the monetary policy meeting of Norges Bank’s Executive Board on 27 February 2002, and on previous addresses. Accompanying charts can be found on the Norges Bank’s website (www.norges-bank.no). *  *  *  The guidelines for economic policy were revised last year. The expected real return on the Government Petroleum Fund is hereafter to be used over the central government budget, and monetary policy is to be oriented towards low and stable inflation. Economic agents can act on the assumption that low and stable inflation will be a constant feature of economic policy. Wide variations in the price level make it more difficult to predict the real content of agreements and budgets. Unexpected fluctuations in the price level may easily lead to fluctuations in the real economy and instability in financial and property markets. High and variable inflation also leads to an arbitrary redistribution of resources and income. Hence price stability is the best contribution monetary policy can make to economic growth, prosperity and appropriate distribution. Low inflation is the objective, and the interest rate is the instrument. Commercial and savings banks have accounts with Norges Bank, and the Executive Board decides the interest rate on these.

Øystein Olsen: Oil and the Norwegian economy – the challenges ahead Speech by Mr Øystein Olsen, Governor of the Norges Bank (Central Bank of Norway), at a lunch hosted by Danske Bank Markets, New York City, 27 March 2015. *  *  *  Accompanying slides can be found on the Norges Bank’s website: Slides (PDF). It’s a great pleasure to be in New York City again and an honour to be invited to give a lunch presentation here today. As Norges Bank, a week ago, published its latest monetary policy report, the economic outlook and the considerations behind the interest rate decision naturally warrant some attention in my speech today. First, however, I would like to give some background information on the economic policy framework in Norway, focusing on the sovereign wealth fund – the Government Pension Fund Global – the fiscal rule and Norges Bank’s foreign exchange transfers to the fund. Norway is a small, open, natural resource-rich economy. About a quarter of our GDP is related to oil and gas extraction, and a large share of our petroleum production is exported. The oil and gas industry has played a vital role for the strong growth in our economy over the past 40 years. When the first oil was brought to the surface in 1971, GDP per capita in Norway was lower than the average for a western economy. The picture has reversed since then. We have gradually caught up to the wealthiest nations.
The economic and societal benefits of access to long-term funding are well known. For instance, insurers are active loan providers in infrastructure, social housing and sustainable energy production. As part of the Solvency II review, we have been looking at how potential regulatory barriers to investments in productive finance for insurers could be removed. On the other hand, private investments are inherently characterised by the absence of transparent  Page 6  secondary markets. Model risk concentration is a PRA concern in two particular areas. The first area of model risk relates to valuation uncertainty, namely the risk that the balance sheet asset values are over-stated based on their marked-to-model values. This is a risk affecting all investors, not only insurers. Due to the novel nature of many of these assets, it is plausible that not all risks can be identified, let alone measured. These risks could have an adverse impact on the capacity to generate cash-flow, and hence real value of these assets. During the benign credit conditions in the lead-up to the global financial crisis, investors moved heavily into assets such as sub-prime mortgages, which, at risk of understatement - suffered from an over-valuation problem. Valuation uncertainty is expected to be even greater for securitised private assets, and for all private assets under stressed conditions. Firms have reported that more than half of the credit risky assets in their MA portfolios are not based on quoted prices in active markets [see Chart 4].

José De Gregorio: Financial stability, monetary policy and central banking Introductory speech by Mr José De Gregorio, Governor of the Central Bank of Chile, to the 12th annual conference of the Central Bank of Chile “Financial stability, monetary policy and central banking”, Santiago, 6 November 2008. *  *  *  Welcome to this 12th Conference of the Central Bank of Chile, entitled Financial Stability, Monetary Policy and Central Banking, which will gather a select group of central bankers, experts and academics today and tomorrow. I cannot open this conference without sending my most heartfelt condolences to Klaus Schmidt-Hebbel, our former director of Economic Research and creator of this series of conferences, and to all his family, on behalf of the Central Bank of Chile and myself, for the terrible loss of his beloved son Diego. To him we dedicate these two days' work. Like every year since 1997, we are looking forward to two days of intensive work with discussions of the highest technical level, which usually have opened areas for us to develop our research agenda with rigor and relevance, in an ever more complex world. This version of our Annual Conference finds us in the midst of severe global financial crisis. After the Asian crisis, many of us wondered about where the next blow would come from and what shape it would take. The academic literature has analyzed foreign exchange and financial crises in small, open economies.
Naturally, as prudent supervisors, the members of the Committee know that it is easier to enforce a simple rule than a more complicated one. Wherever possible, the Committee has sought to provide simple alternatives that can be applied in many markets and settings. Consultations helped us to simplify or remove a good number of rules thought to be unnecessarily complicated. However, it’s important to recognize that we intend to apply the New Accord especially to large, internationally active banks, all of which are highly developed and complex institutions. One blanket won’t cover a mountain range. In fact, the New Accord’s complexity stems partly from the options it provides to address the wide range of risk profiles, strategies, and systems that banks maintain. Many options were created precisely because some banks felt disadvantaged under a proposed blanket rule. Yet each new option alters the balance between simplicity and complexity. I think the best example of finding that balance lies in the treatment we’ve proposed for exposures to small and medium-sized enterprises. Equating loans to small and medium-sized businesses with loans to large corporations ignores critical aspects of the risks associated with each type of lending; it also could lead to results that seem unfair to banks that lend primarily to smaller businesses. So the Committee developed a special capital treatment for exposures to small and medium-sized enterprises that recognizes the unique characteristics of that form of lending, but admittedly makes the rules more complicated, and perhaps a page or two longer.

Denny H Kalyalya: Zambian financial sector – responding to the needs of business Speech by Dr Denny H Kalyalya, Deputy Governor-Operations of the Bank of Zambia; at the opening of Standard Chartered Bank Zambia Solwezi Branch, Solwezi, 10 December 2008. *  *  *  The Minister of Commerce, Trade and Industry, Hon. Felix Mutati The Minister, North-Western Province, Hon. Joseph Mulyata The Chairman of the Board of Standard Chartered Bank Zambia, Mr. George Sokota His Worship the mayor of Solwezi The Managing Director of Standard Chartered Bank, Mrs. Mizinga Melu Distinguished guests Members of the press Ladies and Gentlemen I am pleased to be here at the official opening of the new Solwezi Branch of Standard Chartered Bank Zambia Limited. Ladies and Gentlemen, recent times have shown a proliferation of commercial bank branches in areas which had previously been considered unattractive for business. Rural areas had even experienced closures where banks felt that they were unable to establish a case for business. The economic environment that the Government created through the reforms instituted in the early 1990’s has given new confidence to investors and has provided an opportunity for businesses to grow, thereby attracting banks to the areas which were deprived of basic financial services. The opening of this branch today, in a town which has attracted major investments, is a demonstration that the financial sector is indeed, now responding to the needs of business.