samchain/econo-pairs-v1 huggingface dataset:
One explanation for this can be a low level of customer activity. Such situations frequently tend to arise at the end of the year, when companies and financial institutions have adjusted their balances in preparation for closing their books and therefore have little interest in modifying their portfolios. Judging by comments on the market, there are expectations that the period of low activity in the market at the end of this year could turn out longer than usual. In other words, uncertainty about the effects the change of millennium might have on interest rates and financing possibilities could lead agents on the market to make adjustments to their portfolios earlier than usual. On this view, one possible explanation for why the interest rates on loans and investments that run over into next year have risen could therefore be a higher liquidity premium, i.e. a rise in the price that reflects how easily a security can be sold on the market. However, it is important to point out that this type of liquidity problem – a thin market – has no direct connection with the practical liquidity management exercised by the Riksbank. The Riksbank’s role in liquidity management is rather to function as the banks’ bank. This leads us to a second definition of the concept of liquidity: the opportunities available to financial agents to obtain refinancing without needing to sell assets. Uncertainty regarding the future liquidity situation in both senses risks reinforcing the problems.

Already in April 1998, “The Joint Year 2000 Council” was established;3 its principal task is to ensure coordination between the various actors in the market and to provide a platform for an exchange of information and experience. Everybody is working for a common goal – to ensure that the turn of the year passes by in a smooth fashion. Up to now, the preparations for the millennium shift has, in all essentials, been working according to plans. However, it is of great importance that this issue continues to have top priority. My opinion is that the financial sector and all interested parties can look ahead to the new millennium with confidence. In conclusion, it is worth recalling that the introduction of the euro at the beginning of this year was able to take place without any serious hitches, even though many systems were being taken into use for the first time. 3  Basel Committee on Banking Supervision, the Committee on Payment and Settlement Systems, the International Organization of Securities Commissions and the International Association of Insurance Supervisors. BIS Review 97/1999  4
•  Such risks include defaults and insolvencies of trading partners, regulatory changes, expropriation, labour unrest, and acts of terrorism. •  As the largest centre for structured trade credit and political risk insurance in Asia, Singapore can provide Chinese banks and corporates comprehensive and tailored risk management solutions. Infrastructure financing China is playing an increasingly important role in helping regional economies with infrastructure development through its “One Belt One Road” initiative. Chinese corporates and financial institutions can tap into Singapore’s well-developed infrastructure financing ecosystem in the following ways. •  Leverage on the strong network of multilateral agencies, banks and institutional investors to access regional infrastructure deals. •  Deepen their expertise in project structuring, risk allocation, and loan documentation. •  Gain access to the network of local project sponsors who are traditionally more accustomed to dealing with local and global banks. 4  BIS central bankers’ speeches  Asset management China is one of the key markets for Singapore-based fund managers, both as an investment destination as well as a source of capital. •  There is strong interest from financial institutions here to tap Singapore’s RQFII quota and offer investments with China exposures. •  Last week, Blackrock secured RMB 20 billion of approved RQFII quota in Singapore, which is the second largest quota granted to-date. At the same time, the Singapore market offers globally diversified investment portfolios for Chinese pension funds, insurance companies, and individuals.

Future of RMB internationalisation China has embarked on the formidable task of liberalising the capital account at a time when domestic growth is slowing, its financial system is still maturing, and US monetary policy is normalising. The process has therefore entailed careful calibration and periodic reassessment – crossing the river by feeling the stones. Since 2010, the offshore RMB market has experienced remarkable growth, driven by strong investor appetite and cross-border trade. In the near term, however, the trajectory of RMB internationalisation is likely to moderate, due to a confluence of factors. First, global trade, which is a key factor driving the overseas use of the RMB, has declined. •  Merchandise trade flows between China and its trading partners are expected to be modest in the next year or so, reflecting cyclical headwinds. Second, market expectations of China’s GDP growth affect expectations of the RMB’s appreciation or depreciation. •  As the Chinese authorities forge ahead with fostering a more market-based RMB exchange rate, greater two-way volatility can be expected, compared to what appears to have been a one-way trend appreciation in the past. •  This could have a bearing on investors’ expected returns on RMB deposits and financial assets, and therefore their demand for offshore RMB. Third, the liberalisation of China’s capital account is likely to proceed cautiously in the near term.
If implemented effectively across the financial industry, stress-testing can help curb destabilizing activities and help prepare financial institutions to deal with macroeconomic or financial shocks. Unfortunately, financial institutions and regulators in emerging economies have lagged behind their counterparts in advanced economies on this issue, especially on the credit and liquidity risk stress-testing. A priority for regulators in emerging economies, therefore, is to move faster on stress-testing. To accomplish this, they should push financial institutions to invest in human resource and technology, with the aim of conducting macro stress-testing at least on an annual basis. As regard implementation, regulators and monetary policy makers must increase coordination  6  BIS Review 98/2008  so that macroeconomic and financial stability assessment can be done in an integrated fashion, so as to arrive at a more relevant and convincing macro stress-testing scenario. Finally, the third challenge or decision is the use of prudential measures. While it is unclear how effective domestic monetary policy can be in checking excessive asset price volatility, the threat of financial instability has given rise to a more prominent role for macro-prudential measures to reduce the procyclicality of the credit market. As we see it, the primary challenge in this respect is how best to move forward. Combining the use of prudential measures with monetary policy is a useful policy option, but it is still an unsettling issue because of the concern for efficiency.

They highlight the tendencies of economists to be self-referential and analyze how the social perception of the finance industry is largely negative nowadays, and the more so since the financial crisis. In that respect, the paper focuses on the United States, but there is little doubt that France probably is no exception to that rule either. After the 2007–2008 crisis, some first steps have been taken to change incentives in the financial industry. And even more should be done in that direction in the coming years. At the same time, economists should also adopt a more critical view on the financial industry practices and judge them as impartially as possible. But what can we say about economists themselves? Are they really too self-referential and do they tend to overestimate their role in society? On a personal note – as a policymaker and central banker – I do believe it is possible that central bank governors may pay the cost of the so-called “superiority” of economists (for instance when they are too sure of their econometric models). How will we proceed in this conference today? In-depth discussion of papers will be left to participants. However, I would like to mention the potential role that the Foundation can play to help address some important issues. First, economic analysis is definitely needed in order to sharpen policy makers’ understanding of the world. At the same time, policy makers should continuously challenge the alleged “superiority” of economists with the complexity of the real world.
There are already some examples of voluntary debt-for-equity exchanges among companies. For example, Chelsea Football Club recently announced a large-scale swap, which accounts for their plummit down the debt league table. In principle, mortgage contracts could also be adapted to lessen the burden on over-indebted households by allowing lenders to convert their loan into an equity stake, as suggested, for example, by the charity Shelter. 16 Preventing tomorrow’s debt hangover Once today’s debt hangover is solved, how is tomorrow’s to be prevented? As debt crises have been with us for a millennium, it is fanciful to think they could be eliminated. But could the party be moderated in frequency and scale? In seeking new ways to tackle this old problem, two possible avenues would be the re-orientation of regulatory policy on the one hand and better designed debt contracts on the other. First, regulatory policy. Since at least the 1970s, public policy has not sought actively to moderate fluctuations in the credit cycle in most G7 economies. Moderating the business cycle was believed sufficient to hold credit in check. The experience of the past decade, in the UK and elsewhere, has called that into question. In the UK, credit grew at three times the rate of money spending over that period, sowing the seeds of the credit crisis, while inflation and growth remained remarkably stable. In tackling this problem, one option is a re-orientation of regulatory policy towards curbing the cycle in credit supply.

12  For some of the earliest evidence, see Lintner, J (1956), “Distribution of incomes of corporations among dividends, retained earnings and taxes”, American Economic Review, 97–113. 13  Bank of England Financial Stability Report (op.cit.). 6  BIS Review 10/2010  recently become one of the first firms to do so in 2010. Surveys of households suggest some of the windfall of lower interest costs is being used to repay debt. Opportunistic repayment or refinancing is the financial stability equivalent of repairing the roof while the sun is shining and it is important it continues. The second lesson comes from past debt crises, in particular among developing countries. If a borrower has a large debt overhang, there is a case for restructuring the claim from debt into equity – a debt-for-equity swap. 14 In some cases, such swaps are no more than recognition that an impaired debt is, in substance, an equity claim. But more than that, debtfor-equity swaps can potentially benefit both lender and borrowers by airlifting a debtor to the safer side of the debt Laffer curve. 15 A number of global banks have begun putting such a strategy into practice. Around a hundred debt exchanges were carried out by global banks during 2009, typically converting debt instruments into equity or retiring debt below face value, so reducing leverage in the financial sector. That these swaps were voluntary and market-based is evidence of their benefit to both lender and borrower. Debt-for-equity swaps could be used to tackle the debt overhang in other sectors.
The forecast in the main scenario of the Monetary Policy Report means that growth will slacken but will still remain good during the forecast period. I personally was slightly more concerned about the problems in the financial markets and the risk of weaker developments abroad, which would of course also affect developments in Sweden. BIS Review 30/2008  3  As the minutes of the meeting show I was, on the other hand, not quite as concerned about cost pressures as before. Wages did not appear to be rising as quickly as the Riksbank assumed shortly after the new agreements were met last year. The wage forecasts were also adjusted downwards in the Monetary Policy Report. In addition, my opinion was that the slowdown in productivity growth last year was more comprehensible when the publication of National Account statistics for the third quarter showed that output growth had clearly slowed down as early on as at the beginning of 2007. Growth in the number of hours worked did not slacken as output growth. This is the normal pattern when growth slackens in that the labour market typically lags behind somewhat in the economic cycle. I therefore assessed that weaker productivity growth indicates that companies will be more restrictive in recruiting labour rather than that we will see rapid price increases in the future.

And the chain is only as strong as the weakest link. Our success requires all parties; the private sector, regulators, law enforcement agencies and other government bodies, and consumers alike, to do their part – to adapt to these new threats, to transform themselves to deal with these challenges, and to collaborate to safeguard the integrity of our country’s financial system. See also: Accompanying Presentation Deck to Governor’s IFCTF Keynote Address
BIS Review 95/1998  -2-  Clearly, what happens in the EU matters to Hong Kong. What therefore will be the impact of the euro on the participating countries? There should certainly be a number of economic benefits, including in particular: • a huge increase in transparency from the single currency which will make it easier to compare prices across national frontiers. This will boost competition, bring down costs and prices, and improve efficiency; • a reduction in transaction costs, in particular from the elimination of foreign exchange commissions. This will encourage trade and cross-border investment flows; • lower interest rates in individual countries from the elimination from the foreign exchange risk premium. This will reduce financing costs and stimulate investment and output; • the development of larger and more liquid debt and stock markets across the euro zone. This will create a vast new pool of capital for companies, thus giving a further stimulus to investment; • tighter fiscal discipline on the member countries under the Stability and Growth Pact and monetary discipline exercised by the new European Central Bank. Both these should ease inflationary expectations and produce a more stable financial environment for the euro zone. In summary, the single currency should be able to deliver higher economic growth and therefore increased demand for imports by the euro countries. As one of the EU’s major trading partners, this should benefit Hong Kong.

Mr. Carse looks at the importance of the euro for Hong Kong Speech by the Deputy Chief Executive of the Hong Kong Monetary Authority, Mr. David Carse, at a Seminar on the euro, held in Hong Kong on 9/11/98. Introduction Ladies and gentlemen, I am very pleased to be here this morning to speak at this seminar on the euro organized by the Vocational Training Council in conjunction with the British Consulate-General and the Hong Kong Institute of Bankers. With the introduction of the euro less than two months away, this is obviously a good time to hold such a seminar. It is also fitting to hold it in Hong Kong where our fixed exchange rate system gives us a natural sympathy for its logical extension, the single currency. We are fortunate to have a number of experts on the euro here today to give us the benefit of their views, including my former colleague from the Bank of England, John Townend. My role in the seminar is to say a few words on the importance of the euro for Hong Kong. I will also take the opportunity to brief you on some of the regulatory steps which we have been taking to prepare for the euro. The introduction of the euro is a truly momentous change in the global economic and financial landscape. It is not simply a change of currency for the participating countries, though that in itself is a major event.
For these reasons, I see no extra cost associated with the fiscal and monetary policies that are consistent with progress towards monetary union. BIS Review 63/1997  -9-  The question of the costs associated with the launching of the ECB and the ESCB is also important. The question arises only to the extent that the ECB is supposed to start from scratch and has to build credibility on its own. But it is certainly not the spirit nor the letter of the Maastricht Treaty; it is certainly not the very nature of the monetary concept of the single currency. The single currency is neither supposed to start from scratch, nor to result from the averaging of the various currencies that exist within the European Union. It must clearly and it will according to the convergence concept, have the legacy of the most credible and solid currencies participating in the ERM mechanism. The euro, in any case, must be as solid and credible as are the most credible currencies in Europe. * * * In conclusion, I would like to make three points - Firstly, it is not only monetary union that we are preparing actively, but also economic union, i.e. political union in the economic field. We should not forget that the Treaty itself provides for a higher degree of political union than is usually acknowledged, with the concept of coordination of economic policies and the provisions for fiscal discipline and sanctions. The stability and growth pact grants important powers to the Council - i.e.

For instance, the supervisory authority may put pressure on banks to increase the level of capital – for example, through upward adjustment of capital requirements under the Basel III framework. In addition, authorities may resort to bail-in measures whereby a bank’s existing debt holders would be forced to convert parts of their debt into bank equity or to accept a (partial) write-down of their claims. Of course, authorities face several constraints, due to the lack of specific powers to force resolutions, for example, or incentive problems leading to delayed action. For instance, bail-in measures may take some time to administer because of the complexity of large banking groups and the various legal issues involved. In this context, Europe faces specific challenges given the lack of harmonisation of national systems, which strongly complicates the resolution of cross-border banks. Significant steps are being taken to overcome these shortcomings. I will return to this topic after discussing the implications of deleveraging for monetary policy. Monetary policy and the deleveraging process Whereas the deleveraging of the banking sector is a necessary process to correct the imbalances built up prior to the crisis and to bring the economy back to strong and sustainable growth path, “disorderly” deleveraging can represent a serious threat to price stability. I have already described some of the mechanisms through which deleveraging can spiral off. I would like to now focus on the implications of deleveraging for the transmission mechanism of monetary policy.
The cost level began to rise, although this was related to the sharp improvement in Norway’s terms of trade at that time and a gradual pickup in growth abroad. Prices for Norwegian exports such as oil, gas, metals, minerals, fish and freight, rose markedly, while prices for imported goods fell. From 2003 to 2008, terms-of-trade gains alone pushed up national income by more than 20 per cent, or a good 4 per cent per year. Institutions and mechanisms had also been put in place to manage the sharp increase in income. Norway’s sovereign wealth fund, which is now called the Government Pension Fund Global, and the fiscal guidelines were established with the express purpose of preventing fluctuations in oil prices from feeding through to the mainland economy. Improved terms of trade, higher revenues and increased government spending contributed to a shift in real resources towards sheltered sectors and to a stronger krone, but at the same time the fiscal rule provided a basis for growth in business sectors other than just the oil industry and the public sector through the decade. Norway had a plentiful supply of labour from new EU  6  BIS Review 15/2010  countries and experienced several years of high output growth. At the same time, the inflation target for monetary policy provided a sound anchor for inflation expectations. In 2008 the expansionary period was drawing to a close. Costs had risen sharply, credit growth had been strong, the interest rate had been raised and house prices had started to fall.

Svein Gjedrem: Economic perspectives Annual address by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at the meeting of the Supervisory Council of Norges Bank, Oslo, 11 February 2010. *  *  *  This current global crisis had its origins in an abundant supply of credit, market participants who took steadily higher risk and a lack of oversight on the part of banks, companies and authorities. This is reminiscent of a play by Bjørnstjerne Bjørnson’s entitled “A Bankrupt”. In a conversation between the main character, Tjælde, a businessman, and his daughter Valborg, she says that no man of honour would keep his family or his creditors in ignorance of the events that foreshadow a crisis. Her father rebukes her: 1 “… you don’t understand what a business-man’s hope is from one day to the other – always a renewed hope. That fact does not make him a swindler. He may be unduly sanguine, perhaps – a poet, if you like, who lives in a world of dreams – or he may be a real genius, who sees land ahead when no one else suspects it.” The conversation is also reminiscent of current discussions about accounting principles. Then, as now, the mark-to-market value of assets was under debate. Tjælde says: “[…] values are fluctuating things; and [a businessman] may always have in hand some venture which, though it cannot be specified, may alter the whole situation.” Valborg has little regard for ventures at creditors’ expense. She thinks accounts should be transparent.