samchain/econo-pairs-v1 huggingface dataset:
Closed to 80 partners have joined the IFFO platform since its launch and today, I am pleased to welcome the City of London as the newest partner to IFFO. I believe City of London will serve as the linkage to foster partnership between the financial institutions of London and Hong Kong to leverage on the tremendous opportunities in infrastructure financing and investment. Being an investor itself, the HKMA is aware of the challenges when it comes to infrastructure investment. I think there are currently two salient gaps on which IFFO is focusing its work. First is the funding gap. According to an estimate, there would be a funding gap of over $ trillion in the coming 15 years in infrastructure investment. There is no way the public sector or multilateral development banks can shoulder this funding responsibility alone. More private capital is needed. Three months ago, the HKMA signed an agreement in London with the International Finance Corporation under the World Bank Group, committing $ billion to the innovative Managed Co-Lending Portfolio Program, which is a debt mobilisation platform for emerging markets. Meanwhile, we are working with some likeminded institutional investors to identify suitable opportunities. The aim of all these initiatives is to create a demonstration effect to encourage more private investment in infrastructure. The second gap is what I would call a language gap. In considering infrastructure pipeline, institutional investors talk more about the risks and how they can be mitigated, whereas project developers may be relatively more opportunity-driven.

Since the start of the year, there have been signs of stabilisation in the offshore RMB liquidity pool in Hong Kong, now hovering at around RMB 600 billion. On the other hand, our RMB RTGS system continues to record a high volume of turnover of some RMB 900 billion per day, indicating that a large amount of RMB financial intermediation activities have been taking place in Hong Kong. July this year, the HKMA and the People’s Bank of China jointly launched the Bond Connect. It provides an additional channel for international investors to gain access to the vast bond market in Mainland China, using international common practice in securities settlement and custody. This is made possible thanks to new infrastructure linkages between HKMA’s Central Moneymarkets Unit and relevant onshore institutions. So far, over 200 investors have successfully registered as Bond Connect investors, holding some RMB80 billion Mainland bonds. Daily turnover averaged RMB2 billion per day. This is not bad in four months’ time, but we foresee considerable headroom to grow further. The investment thesis is compelling – Mainland China’s solid economic fundamentals, RMB internationalisation, inclusion of RMB bonds in major indices, etc. And from an investor’s perspective, the nominal yield of around 4% on 10-year government credit is simply attractive. The Stock Connect schemes have been running smoothly and next year, A-share will be included in the MSCI Emerging Markets Index, which is tracked by some $ trillion in assets. This will be a big boost to Stock Connect trading.
A couple of the rate-cutting phases we have had during this period have also been a little unusual. What happened in 1996 in particular, when the repo rate was cut from almost 9 to just over 4 per cent, was largely a question of confidence in the inflation target become established and enabling a substantial cut in the policy rate. The substantial rate cut in connection with the global financial crisis, from 4.75 to 0.25 per cent within the course of a year, was also special, as crises of this kind are fortunately rare (see Figure 3). In the United States, which has a longer history of a floating exchange rate, it is usually estimated that the policy rate is cut by around 5 percentage points in economic downturns. 5 It is reasonable to assume that in Sweden, which is a small open economy, a larger share of the adjustment in an economic downturn will come through the exchange rate than is the case in the United States. Let us say, without claiming any scientific exactness, that it would be desirable to cut the repo rate by 2.5–3 percentage points in a normal economic downturn. If the downturn were to occur at the beginning of 2021 and the policy rate were cut  4 Rudebusch (2016) shows that the probability of an economic upturn being broken does not now increase in  proportion to the time it has lasted. However, this was the case with the economic upturns prior to the Second World War.

Depending on when the next downturn occurs and how deep it is, there is thus a risk that monetary policy will not suffice when it comes to counteracting it. As I see it, this has implications for how to look upon the division of roles in stabilisation policy. There has long been a tendency, both in Sweden and abroad, to claim almost by default, that when you have a floating exchange rate it is the job of monetary policy and not fiscal policy to stabilise economic activity. Perhaps it is  18 For economies with sustainable public finances, government bonds are credit-risk free. The interest rate on long maturity government bonds reflects the path of expected short-rates and compensation for other risks related to the horizon of the investment and the liquidity of the bond market. 9 [24]  time, in the light of our experiences following the crisis, to qualify this picture somewhat. In a way, of course, fiscal policy always contributes to stabilising economic activity. For instance, systems for taxes and expenditure are often designed so that they automatically adapt to economic developments. Examples are progressive income taxes and unemployment benefits. On the other hand, there has long been scepticism against using so-called discretionary fiscal policy – direct decisions on adjusting taxes and public expenditure – with the aim of stabilising economic activity. One problem is that discretionary fiscal policy measures are often implemented or have an effect too late because of various delays, and they therefore aggravate economic fluctuations rather than stabilise them.
Indeed, this is in line with the principles of Maqasid al-Shariah (objectives of Shariah). Financial innovation, as has been shown in the recent crisis has led to adverse consequences for the economy. By learning from the lessons of the recent crisis, the process of innovation in the formulation of Islamic financial products and services must be done carefully and in accordance with Shariah in its entirety and to take into account the distinct risk characteristics of Islamic banking. The second dimension is on the need for continuous investment in human capital development. It is important for the Islamic financial services industry to continually promote human capital development and expertise to create a larger pool of experts and high calibre professionals. This involves enlarging not only the existing talent pool, but also building a robust pipeline of skilled human resources for the future. Bank Negara Malaysia is committed towards promoting human capital development. The establishment of the dedicated ancillary institutions such as the Islamic Banking and Finance Institute in Malaysia (IBFIM), the International Centre for Education in Islamic Finance (INCEIF) and the International Shariah Research Academy (ISRA) to focus on the area of training, education and research are aimed to meet this objective. We would like to see a higher degree of engagements by the financial institutions to meet the talent need of the industry. Islamic financial institutions are encouraged to collaborate and engage with these educational institutions, with exchange of staff, attachments, and internships.

2 Unemployment peaked at nearly 12% in the eighties and over 10% in the early nineties – after smaller falls in output. 2  Labour force data were published after the date of this talk: unemployment has dropped to 7.9% in the three months to April. 2  BIS Review 91/2010  Throughout the recession we have heard many reports from firms about how they and their workforces have responded to recessionary pressures. Those reports are from our Agents or MPC members talking directly to business contacts across the regions and in all sectors – a truly invaluable source of information for the Committee. It has been clear that there has been an unusual response from companies and their employees. Many firms have sought to retain staff wherever possible, rather than shed them as in previous downturns – hours have been shortened and wages frozen or even cut where possible, rather than making people redundant. Large firms with smaller suppliers have tried to work with suppliers to keep their supply chains intact, which has helped smaller firms to survive. Many employees – at least in the private sector – have been willing to forgo income in order to retain their jobs. Tax officials have worked very hard with firms to give them the time for tax bills to be paid.
Indeed, I believe that it would make sense to seek to standardise the criteria for terms of office and their non-renewability across the various independent bodies in Spain. I wish now to focus on another aspect I consider relevant to strengthening the independence of the Banco de España and, in particular, its supervisory function. As I have just stated, the Banco de España has decision-making capacity over the performance of its functions. However, non-monetary policy acts and decisions (such as those concerning the imposition of supervisory sanctions) may, under the Law of Autonomy of the Banco de España,9 be subject to government review via the lodging of an administrative appeal at the Ministry of Economic Affairs and Digital Transformation. This ministry may thus review — and potentially annul —decisions made by the Banco de España.10 To avoid this possible government interference, it should be established that supervisory decisions by the Banco de España bring administrative proceedings to an end or, in other words, that  8  The average term of office of governors of the Eurosystem national central banks is more than ten years, assuming where this is legally possible that they are renewed once.

And in 2006 both the number of hours worked and the number of persons employed rose quite substantially. This was partly because the number of people in employment measures increased considerably during the fourth quarter of last year. But despite the fact that fewer people are in labour market programmes this year, the number of employed has continued to increase. This indicates considerable strength in the labour market. We also assess that employment will continue to increase during the forecast period, but at a slower rate. The fact that the pace slows down is due to the economic upturn slackening. It is also due to higher wage increases contributing to a lower demand for labour. The supply of labour has also increased, but not as much as employment. Open unemployment has thus fallen (slide 7). According to our forecast, the labour supply will continue to increase, albeit at a slower rate, during the forecast period. This development is mainly due to the economic cycle, but also to some of the Government’s measures. The fact that the rate of increase is slowing down is due to the economic upturn slackening, and also to factors such as the number of persons in the age groups with high participation in the labour force declining. All in all, this will lead to the number of open unemployed persons continuing to fall, but at an ever slower rate. Compared with what we were expecting in June, the conditions in the labour market have become tighter.
The Swedish banks are dependent on foreign funding 160 140 120 100 80 60 40 20 0  2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017  Note. Per cent. Swedish banking system’s foreign funding in relation to GDP Foreign funding refers to Swedish banks’ (including Swedish subsidiaries but excluding foreign subsidiaries) market funding and borrowing in foreign currency. The increase is due to Nordea’s previous bank subsidiaries with effect from the start of the year being incorporated into the Swedish parent company. Source: Statistics Sweden  If we also include the funding in foreign currency that remains in the major Swedish banks’ foreign subsidiaries, including Nordea’s mortgage lending companies in Denmark, Norway and Finland, the funding in foreign currency amounts to around 175 per cent of GDP, or SEK 7,650 billion. Part of the bank's borrowing in US dollars and euros is exchanged for Swedish krona and other Nordic currencies to finance assets in these currencies, including lending to households and companies. 6 And it is thus the banks’ international financiers, rather than the normal - protected by the deposit guarantee depositors who should be most disposed to withdraw their financing when the going gets tough. If these investors stop buying the banks’ bonds and certificates, the bank may very quickly suffer liquidity problems with a high risk of being forced to close down.

Inflation will nevertheless be curbed by slower wage growth from 2008 and a gradual rise in productivity growth. Somewhat further ahead higher wage growth will push up the rise in prices. The krone exchange rate has appreciated from weak levels. Combined with the fall in prices for imported consumer goods measured in foreign currency, this will push down the rise in prices for consumer goods in the short term. Consumer price inflation is expected to fall to somewhat below 2 per cent in 2010, and then gradually pick up to around 2.5 per cent towards the end of the projection period. Interest rates are low, resulting in renewed growth in household consumption. At the same time, house prices are rising. Over time, household borrowing may surge again and saving  14  BIS Review 139/2009  may fall. With low productivity, higher corporate costs, growth in household demand and higher capacity utilisation, inflation may gradually become too high. This would indicate that the interest rate should be raised. On the other hand, a marked increase in the interest rate in Norway and a wider interest rate differential between Norway and other countries may entail a risk of a stronger-thanprojected krone, resulting in an inflation level that is too low. This would indicate that the interest rate should not be raised too rapidly. Monetary policy cannot fine-tune developments in the economy, but it can mitigate the most severe effects when the economy is exposed to shocks.
To begin with this was perceived as just a temporary dip - a blip in the stocks cycle, a minor adjustment in the IT sector or something else. But stock markets seemed to be clearly over-valued and it would have been odd, particularly after such a long upward phase, if this had not led to a certain amount of overinvestment. There were also clear signs of insufficient saving, particularly in the United States. Consequently there were grounds for believing that once a slowdown had started, it could prove to be both relatively deep and long. Against this background, in the March Inflation Report we talked not so much about a V-shaped path as a U-shaped one or a “banana”. Since then the outlook has become darker but more of that later. For monetary policy, turns in the business cycle are not inherently a major problem, apart from the difficulty of foreseeing them. Falling resource utilisation, for example, should normally led to lower inflation in the future. That in turn can pave the way for interest rate cuts. In the past year, however, things have not been quite as simple as that. Two partly interrelated factors have contributed to this. One is inflation, which has been higher than expected and also above our target. The other is the exchange rate, which has been weaker than anticipated and also weaker than the real economy warrants. During a period in the late spring, moreover, the krona fell rather uncontrollably in the absence of similar movements in other currencies.

In Sweden’s case the fluctuations are possibly accentuated by the price-setting being comparatively centralised in some important respects, for instance the labour market and rents. 2. UND1X and product groups that fluctuate Percentage annual change 9  9 UND1X  7  7 electricity, telecom, meat, petrol, light fuel oil, fruit and vegetables  5  3  3  1  1  -1  -1  -3  -3  Ja n95 Ju l -9 Ja 5 n96 Ju l-9 Ja 6 n97 Ju l -9 Ja 7 n98 Ju l-9 Ja 8 n99 Ju l -9 Ja 9 n00 Ju l-0 Ja 0 n01 Ju l-0 1  5  Source: The Riksbank  Still, there are good reasons for taking a close look at the latest inflation outcomes. The prise rise has come mainly from food and energy but also from telecom prices (Diagram 2). In the case of food and electricity, the price increases, particularly during the spring, largely stemmed from factors on the supply side: foot-and-mouth disease, mad cow disease, a relatively dry winter, production problems at oil refineries and so on. It is, in fact, these CPI items that normally fluctuate most. It is not just a 2  BIS Review 89/2001  coincidence that in Canada, for example, the inflation index that primarily guides monetary policy does not include either food or energy prices.
Incentives Some of the pro-cyclical dynamics embedded in our financial system occur because market participants do not always have the incentive to behave in ways that will be good for the system as a whole. This occurs, in part, because market participants often do not have to bear the full costs of their actions. For example, the incentive to take on more risk without regard for the broader implications of those actions arises from a number of factors, including poorly constructed compensation schemes, ineffective risk management and gaps in regulatory oversight and risk capture. One problem evident during the crisis has been the reluctance of banking organizations to raise sufficient capital to be able to credibly have the resources to withstand particularly adverse economic conditions. This reluctance stemmed, in part, from concerns about what a capital raise would signal about the firm’s strength, but it also stemmed from an unwillingness to unnecessarily dilute shareholders. The reluctance led to more uncertainty about the adequacy of banks’ capital positions, which, in turn increased concerns about counterparty credit risk. These worries led to a further deterioration in market liquidity. These dynamics tightened financial market and credit conditions, increasing the downward pressure on economic activity and on the financial system. The Supervisory Capital Assessment Program (SCAP) exercise that we undertook in the United States leaned against this.

First, these institutions should not expect a return to “business as usual.” We are committed to implementing the reforms that will prevent a recurrence of the recent financial crisis. BIS Review 125/2009  7  Second, as most of the current reform agenda of the Financial Stability Board and the Basel Committee relates to the regulatory framework as applied by your home country, we expect that foreign banks’ operations in the United States will fully comply with these structures as they are put in place in their home country as well. Third, we support the continued international banking presence of global banking institutions. National implementation must not jeopardize the economic benefits derived from crossborder banking. We need to be wary about nationalistic approaches to supervision. Fourth, financial firms that operate in our markets should continue to be vigilant in meeting the expectations we have for strong risk management and compliance practices. It wasn’t too long ago that some foreign banking organizations faced supervisory discipline for failing to meet those standards. Given the lessons of the crisis, I would expect that our focus and attention on these areas would only intensify going forward. Fifth, we will be particularly focused on how the new supervisory framework will apply to the U.S. personnel associated with the operations of foreign banks in the United States. In particular, we will have substantial concern if these firms’ compensation practices are contrary to the text or spirit of the international agreements on compensation practices that are in the process of being hammered out.
I believe that central banks can play a special role in this area. Important “intra-financial system markets” are not restricted to banking. The reinsurance markets, and the mechanisms for sharing risks in Lloyd’s of London, are other examples. As are the inter-dealer markets in derivatives, which have traditionally employed different protocols (notably collateralisation, under Credit-Support Annexes) than get used in transactions with end users. Away from banks, these Over the Counter derivative markets have been the principal focus of policy. They are being rethought, under a mandate from the G20 Leaders7. The third category of markets is those that matter directly in their own right to end users. Notably the primary markets in equity and debt. These markets and the associated secondary markets often rely on “market makers” for liquidity, but they are not the marginal source of financing or risk management for banks and dealers. In the past, they have often  4  Drysdale, Lombard Wall, and so on. 5  See Tucker P M W (2010), “Shadow Banking, Financing Markets and Financial Stability”, January 2010. 6  See Gary Gorton “Securitized Banking and the Run on Repo”. 7  In September 2009, G-20 Leaders agreed in Pittsburgh that: “All standardised OTC derivative contracts should be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties by end-2012 at the latest. OTC derivative contracts should be reported to trade repositories. Non-centrally cleared contracts should be subject to higher capital requirements.

Housing cost overburden rate - Romania percent 60  1st  50  47% 44.9%  40 24%  30 20 10 0 2007  2008  2009 1st Q  2010 2nd Q  2011  2012  3rd Q  2013 4th Q  2014  2015  2016  5th Q  Note: percent of population with costs more than 40 % of disposable income Costs include rental or mortgage interest payments , cost of utilities such as water,  Source: Eurostat  Figure 11. Savings behavior in Romania - 2016 percent 100 90  82.7  80 70 60 50  34  40  25.9  30  19.1  20 6.6  10  14.4  11.6 2.9  2.5  0.3  0 EUR 0-2,200  EUR 2,200-11,000  EUR 11,00022,000 % in total number of depositors  EUR 22,000100,000 % in total deposits  >EUR 100,000  Source: BDGF  9  Figure 12. Access to mortgage loans percent 14  12.3  12 10 8 6 4.0  4 2  2.0  1.5  0.9  0 1st q. 2nd q. 3rd q. 4th q. 5th q. Note: Share of households with mortgage loans in total households, by income quintiles Source: Ministry of Finance, Central Credit Registry, Credit Bureau  Figure 13.