samchain/econo-pairs-v1 huggingface dataset:
Economists understood the broad problem, but somehow failed to draw or contemplate the correct conclusions, despite our knowledge of previous episodes of financial collapse. However, the charge against the economics profession also has merit in that ultimately these global imbalances gave rise to or produced perverse economic incentives in financial markets which existing models did not or could not contemplate. This was compounded by a lack of regulatory oversight of key sectors of the financial market. But let me return now to the question of Africa and the global financial and economic crisis. How does Africa respond to the real prospect of lower growth than is necessary to reduce poverty on a sustainable basis? I believe that Africa needs to retain open economies, expand regional markets and integration; and expand the reach and benefits of the market economy. Zambia has been an active and founder member of the Southern African Development Community (SADC) as well as the Common Market for Eastern and Southern Africa (COMESA). Through these bodies Zambia is looking to leverage its own potential through projects such as the North-South Corridor under COMESA, which seeks to open up efficient transport routes for the flow of goods, service, and people, from the south to the north of Africa. Further, under SADC Zambia is looking to develop its vast hydro-electric power potential, estimated at around 6,000MW, as well as transmission infrastructure to enable Zambia to supply countries in the East African Community which face severe power deficits.

And notwithstanding my rather jaundiced remarks above about forgotten lessons, some of the risks involved in commercial property are now better understood. This could simply mean that this cycle will repeat history but in a less pronounced way than last time. Perhaps I should at this point recognise the VAT changes announced in the last budget. These have caused a strong reaction from the property industry. They have caused a halt to a number of major deals. I do not know how the matter will be resolved and will not speculate whether the impact will be lasting. More of that no doubt in coming weeks. But are there any other new influences which could bring about a different - and better - outcome than the last cycle? There are at least four other important factors which arguably did not exist in 1989. They may all make the market less volatile in the years ahead. Let me be a bit visionary. 18 The first of these is a low inflationary environment. The political constituency for low inflation is now almost certainly stronger than at any time in living memory. There is a real prospect that a low inflation environment can be sustained into the future. This is a profound change and should help to smooth the path of future economic cycles. This environment is likely to mean slower growth in nominal rents and also less volatile capital values. The emphasis will continue to change from capital gain to running yield.
The accommodative stance has been maintained until now and is starting to bear fruit as political clarity resuscitates confidence from both domestic and international stakeholders. Given that balance sheets are healthy enough to resume normal activity, regained confidence of economic agents is the key to recovery and return to the existing growth potential. The most recent economic data shows that consumption and investment have started to recover in line with progression of political clarity and accelerated government disbursement. At the same time, world economic growth which continues to recover steadily, especially in the U.S., will help export recovery. With all these positive developments, prospect of growth recovery is promising. In fact, we project the economy to grow at around 5% over the next 4 quarters. Once again, in this situation, the monetary policy committee needs to weigh the gain of shortterm boost to growth with the risk of financial instability that can deter future growth. Besides price stability, financial stability is also a necessary component of healthy growth potential. Financial instability can spread to and disrupt the real economy as seen in the recent economic development of industrial countries over the past decade. What methods does Bank of Thailand have to maintain financial stability? Monetary policy’s priority is maintaining inflation expectations within the target range. As a tool against 2  BIS central bankers’ speeches  financial imbalance, monetary policy is blunt and can create costs to sectors that are not at risk. Macroprudential tools can complement monetary policy by acting on specific high-risk sectors.

Therefore, cooperation of financial and business sectors is vital for lifting growth potential. The private sector needs to add more value to products and services by having long run commitment and investing in both physical and human capital, for example, high technology machinery, employee training as well as research and development. In order to support this, the public sector and Bank of Thailand can improve accessibility to sources of funds, especially for SMEs, and lower the costs of long-term investment. Ladies and Gentlemen, The Bank of Thailand pursues economic growth as part of its commitment to sustainable well-being. Economic growth, as discussed today, is maximized by keeping growth close to potential as well as lifting growth potential itself. The central bank can contribute to growth potential by stabilizing the overall economy. The Bank of Thailand has looked after growth, price, and financial stability during the downturn, leaving the economy on a more confident track to recovery. As for raising growth potential, cooperation of all sectors is needed, while the central bank provides a favorable financial environment which is prerequisite. In the football game of the economy, the Central Bank acts as Center Back. In order to safeguard stability during the recent circumstances, we have played a proactive role due to high economic uncertainty. Now that political and economic clarity is higher, the central bank will play a supportive role.
Gross capital formation will be just over 14% of GDP this year, the lowest investment ratio since World War II. In my opinion, although lower real interest rates will stimulate investment (other things being equal), other factors are more important, such as post-crisis risk aversion, bruised corporate balance sheets, uncertainty about demand and operating environments in the future, and drastically reduced access to foreign credit. I think this chart, which shows the limited connection between real policy rates and investment ratios in OECD countries last year, supports this view. There is no significant  2  BIS Review 130/2010  relationship between the two, and if we exclude three outliers (Israel, Hungary, and Ireland), the inverse emerges. The UK and Iceland had similar investment ratios, even though the real policy rate was negative there and positive here. Of course, any simple cross-sectional correlation of this type should be interpreted with extreme caution, as the economic structure of countries varies and other important influencing factors are not taken into account. Furthermore, correlation is not the same as causation. Thus, in many countries, real policy rates are historically low because investment is weak. On the other hand, the relationship should be stronger than is shown here if real interest rates currently exert the strongest influence on investment ratios. It is important for future output growth that Iceland re-establish a normal business relationship with the rest of the world, including lifting the capital controls and gaining access to foreign credit markets on acceptable terms.

In closing, I wish to say this: If we succeed in restoring confidence in the Icelandic economy, which is the cornerstone of the IMF programme – and this includes lifting the capital controls and regaining access to foreign credit markets – we will be able to rise up from the depths. How quickly we can travel once we’ve reached the surface is another matter. It could be that we will have to content ourselves with less than before, but that is not a given. If we play our cards right, our small country – with its location and natural resources – can enjoy a wealth of possibilities. What we may never do again, however, is force our economy to grow faster than it is able to do – which has dire consequences for stability. 6  BIS Review 130/2010
The affected countries in many cases have been the traditional donor and investor countries. The knock on effect of these changes is that many corporations have scaled back on their corporate expansion  BIS central bankers’ speeches  1  plans, donor countries and donor organizations have also put in place austerity measures resulting in less donor funding globally. Chairperson, I am sure you would agree that against this background, it becomes imperative to ensure that the financial sector is sound and can withstand shocks, whether from within or external, as well as to have the capacity and capital to support local ventures including large corporate expansion programs. We have seen moves aimed at ensuring stability of the financial sector in places such as Nigeria and Ghana, where the capital requirements for banks were raised in recent times. In Zambia we have also introduced new capital requirements for Commercial banks that have to be in place by the end of this year. I am happy to inform you that the Bank of Zambia is working with each Commercial Bank to ensure that this requirement is met in order to strengthen the banking industry in Zambia. Ladies and Gentlemen, the Bank of Zambia has also embarked on some key projects that shall have a lasting and beneficial bearing on the Zambian economy, such as the rebasing of the Zambian currency as well as the branchless banking initiative.

Philipp Hildebrand: The international monetary system Opening remarks by Mr Philipp Hildebrand, Chairman of the Governing Board of the Swiss National Bank, at the High-Level Conference on the International Monetary System, Zurich, 10 May 2011. *  *  *  Good morning, Ladies and Gentlemen. I am pleased to welcome you to the second joint SNB-IMF conference on the international monetary system. It is a privilege for the Swiss National Bank to cooperate with the IMF and contribute to this important debate by yet again bringing together such a distinguished group of policy makers and experts. The IMF Managing Director, Dominique Strauss-Kahn, is once more honouring this event with his participation. The reform of the international monetary system is subject to an ongoing debate. The global financial crisis put a sudden end to a near decade of seemingly healthy growth widely distributed across the globe. The crisis rocked the system to its core. It has brought forth concerns about the stability of an increasingly complex and interconnected global economy. It has also refocused attention on the potentially destabilising effects of unprecedentedly large and, at times, extremely volatile cross-border financial flows. Globalisation has led to dramatic changes. Emerging economies have been steadily moving to the fore of the international scene. It is imperative that the international monetary system adapts itself to these rapid changes. A thorough reassessment and reform of the system have become a priority among policy makers.
More generally speaking, Central and Eastern Europe countries are already major contributors to the overall growth on the European continent. In 2001, despite the international context, they remained at quite high a level of growth, around 2.8%. This contribution is bound to further increase given these countries’ considerable potential for growth. I thank you for your attention. BIS Review 71/2002  9

This was compounded by unforeseen changes in the credit market when banks began offering mortgage loans in competition with the state-owned Housing Financing Fund [HFF], after the latter announced a substantial increase in its loan-to-value ratio and mortgage amounts. Another unexpected event was the issue of króna denominated Eurobonds [glacier bonds], one sideeffect of which was to delay the transmission of the Central Bank’s policy rate hikes across the domestic yield curve. The background to these transactions is a global glut of savings which has led to exceptionally low international interest rates, coinciding with unusually high interest rates in Iceland. One consequence was to divert much of the monetary policy impact into the exchange rate channel. 1  The press release is posted on the Central Bank’s website, www.sedlabank.is  BIS Review 16/2007  1  Another more positive consequence was a surge in turnover in the domestic financial markets, which deepened them by bolstering price formation and enabled them to handle much larger trading volume smoothly, without significant price volatility. Policy rate changes are only passed through in full to domestic demand with a sizeable lag. In a small, open economy like Iceland, the impact is initially reflected in the exchange rate. Other things being equal, a rise in the policy rate causes a temporary appreciation of the króna, which squeezes the export and traded goods sectors and also channels demand out of the economy. The banks’ surprise entrance into the domestic mortgage market made it difficult for the Central Bank to respond effectively.
Secondly, it requires unwavering determination and capacity to act: let me reiterate firmly here today, not just our forecast but also our commitment, alongside Christine Lagarde, to bring inflation back towards 2% in the euro area and France by end-2024/2025. Credibility ultimately means renewing our communication: since last year, like all other major central banks, we have stopped giving the markets “forward guidance” in the form of a commitment to a path of key rates that is unconditional and/or extended over time, as this no longer appears suited to today’s highly uncertain environment. However, market expectations of the future path of key interest rates are an essential determinant of medium and long-term interest rates, those that matter the most for investment and spending decisions. We therefore need to aim, with humility, for a “new predictability” in our communication.6 To do this we need to overcome at least one challenge, which relates to the overly strict interpretation of what “deciding meeting-by-meeting” means. As witnessed with our meetings at the end of last October and in December, this would lead to surprises and excessive volatility. Monetary policy deserves better than a “live” prediction contest, or an overinterpretation of statements by different individuals. On 2 February, on the contrary, we made it clear that we intended to raise our key rates by another 50 basis points on 16 March, and that we would then evaluate the subsequent path of our monetary policy. Refusing to give long-term and unconditional “guidance” does not preclude providing some short-term visibility, today or tomorrow.

The main thing is that our future decisions shall remain dependent, first and foremost, on the economic data. Amidst the uncertainty, I am calling, more than ever, for pragmatism. What is the current level of market inflation expectations? After remaining fairly stable for a long period below the 2% inflation target, expectations initially increased markedly in the recent period – including five-year ahead expectations which are the most important for us – and rose to over 3% in spring 2022. 6  See François Villeroy de Galhau (2022), Jackson Hole Economic Symposium, 27 August 2022, “Monetary policy post pandemic: balancing between science and art, predictability and reactivity”. 5  Page 6 of 19  But these expectations have since improved spectacularly as energy prices have subsided; swap markets are now expecting inflation to fall rapidly towards 2%, including in one year’s time. This can also be seen in five-year options markets. 6  Page 7 of 19  These expectations can be regarded as too volatile, or a little too premature when it comes to the inflation decline. But they still have a significant impact on the rise in expected real rates, and this leads me to the channel of financial conditions. The channel of financial conditions and demand The fact that an expectations channel exists does not mean that monetary policy only works like a magical incantation.
This market provided a source of funds for international banks, and securities that referenced Eurodollars were issued and became actively traded. This growing market gave birth to a new financial market product – the interest rate swap – to help investors and borrowers to better manage the interest rate risks associated with their financial exposures. 1  Lorie Logan, William Riordan, Kevin Stiroh, Joseph Tracy and Nathaniel Wuerffel assisted in preparing this speech. 2  Charles Dickens. A Tale of Two Cities. BIS central bankers’ speeches  1  In 1984, as part of the “Big Bang” in U.K. financial markets, the British Bankers Association (BBA) assumed responsibility for developing a set of standards for these interest rate swaps. One of these standards was for the reference rates used to fix the settlement of the contracts – this led to the birth of LIBOR.3 Additional standardization followed, including establishing a fixed schedule of settlement dates for these contracts. This further increased the liquidity in these contracts, but also significantly concentrated the timing of settlement activity. At the same time, new reference rates were developed that extended the LIBOR-style methodology to many different currencies. How LIBOR was designed to work LIBOR is a set of reference rates that measure large banks’ funding costs in different currencies and at different maturities. For example, U.S. dollar LIBOR measures how expensive it is for a large bank to borrow U.S. dollars in the unsecured interbank market at different maturities.

In that financial utopia, the interests of accountants, investors and regulators would be perfectly aligned. Accountants would have a verifiable valuation yardstick; investors a true and fair view of their true worth; and regulators an objective means of evaluating solvency. Fair value would serve treble duty. In practice, the fair value debate is contentious and has been for at least a century. Through history, accountants, investors and regulators have not always sung in tune. Today, accountants are singing opera Pacioli-style, regulators are rapping at 300 words a minute, while investors are left to whistle. In part this discord has been blamed on failures of EMH, “the precarious yardstick of current market quotations”. It should come as no surprise that fair value principles have faced their stiffest tests at times of crisis – the Great Depression during the previous century, the Great Recession during this. For it is at crisis time that EMH itself faces its stiffest test, perhaps none greater than recently. The heterodox British economist George Shackle observed: “Valuation is expectation and expectation is imagination”. 9 Imagination, and thus valuation, is apt to run wild at the peak of the boom and trough of the bust. These episodes of over-active imagination, or deviations from EMH, can be grouped roughly three ways.
Any structure needs to be funded. The use of emergency support should be reduced over time. Maximise Value – The Bank of Cyprus has received substantial capital. It needs to manage its loan book, restructure loans and maximise value. This will not be best achieved through a fire sale. Support the Economy – As the largest and most important bank in the country the recovery of the Bank of Cyprus is vital to the recovery of Cyprus. The bank must continue to prudently lend to business and consumers. BIS central bankers’ speeches  1  The Cypriot economy and the Bank of Cyprus have undergone a severe shock. However, both Cyprus and the bank are resilient and can emerge strongly. It is important to recognise that substantial progress has been made. The Bank of Cyprus is now adequately capitalised and has exited resolution. New management is in place and they are working on preparing the strategy and restructuring plan. The ECB’s Governing Council has recognised the steps taken to restore confidence. Continuing the efforts to create a stronger and safer Bank of Cyprus is in all of our interests. I look forward to hearing the panellists’ views on how this can best be achieved. 2  BIS central bankers’ speeches

I could have quoted one of our famous French bildungsroman, such as Sentimental Education by Flaubert, but I will give primacy to the German master Goethe, who created the genre with his Wilhelm Meister's Apprenticeship: "One ought, every day at least, to hear a little song, read a good poem, see a fine picture, and, if it were possible, to speak a few reasonable words." I have endeavoured to follow this last piece of advice with this speech. Thank you for your attention, and have a good conference! i See the FIS Worldine Global Payments Report 2022 as regards Europe and Asia, and  the FSI Insights on Big tech interdepency – a key policy blindspot (July 2022) as regards India ii Big techs' "DNA feedback loop": data, network effects, activities iii Digital payments make gains but cash remains, Bank for International Settlements, 30  January 2023 iv FIS Worldine Global Payments Report 2022 v Villeroy de Galhau, F., Anchors and catalysts: central banks' dual role in innovation,  speech, 27 September 2022  4/5  BIS - Central bankers' speeches  vi Centre for Economic Policy Research (CEPR), A policy triangle for big techs in finance  , 23 October 2021 vii Big tech in financial services: regulatory approaches and architecture, International  Monetary Fund, 24 January 2022; and Big techs in finance: regulatory approaches and policy options, Bank for International Settlements, 16 March 2021 viii TARGET Instant Payment Settlement  5/5  BIS - Central bankers' speeches