samchain/econo-pairs-v1 huggingface dataset:
Yet efficient market forces ‘should’ eliminate these disequilibria by having wages adjust to ensure full employment always and forever. Monetary Policy is not only a response to these rigidities; it is made effective by them. 9 But economists of a more nuanced persuasion pointed out as far back as the 1950s that this logic is flawed. See Lipsey, R and Lancaster, K (1956), “The general theory of the second best”, Review of Economic Studies, 24(1). 10 Their world imagines self-interested, atomistic agents, coolly calculating odds over all future possible states of the world, writing and trading contracts with each other, all frictionlessly enforced, all achieving mutually beneficial – indeed socially optimal – outcomes. Arrow, K and Debreu, (1954), “Existence of an equilibrium for a competitive economy”, Econometrica, 22 (3). 11 The bankers who played a leading role in developing the credit derivatives market declared “Credit derivatives are a mechanism for transferring risk efficiently around the system” and that defaulted loans that would have knocked a hole in a bank’s balance sheet ten years ago were “now hits that we have spread around the system, and represent tiny blips on the balance sheet of hundreds of financial institutions”, see p99, Tett, G., “Fool’s Gold”, (2009). 4  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  4  The impossibility of completing markets was not the only practical problem with the pre-crisis approach.

Further, while the heterogeneity of regulatory frameworks has recently been lessened following the entry into force of the Capital Requirements Directive and Regulation (CRD IV and CRR), differences persist and must be discussed. Such differences include most notably so-called national discretions and options. On one hand, the new framework provides for a gradual transition to the new capital requirements, in line with the Basel III Accord. The regulation gives countries some discretion in setting the pace of convergence towards the new requirements, which may give rise to temporary differences in the treatment of some specific aspects. For instance, a country may decide to bring forward the application of the new capital conservation buffer, initially envisaged for 2016, or the deduction of certain capital components. Moreover, the regulation provides for a series of national options that might give rise to permanent differences in the treatment of specific aspects. It is logical that the SSM should work to achieve a degree of harmonisation, seeking to restrict national options of a permanent nature. It is perhaps less logical to take steps in the case of temporary discretionary arrangements, which by their very nature must disappear within a few years. Different accounting practices, especially as regards provisioning, also significantly affect the uniformity of capital figures and should be a supervisory concern. It is thus reasonable to expect the SSM to contribute to convergence in the interpretation of international accounting standards. And it is essential that the SSM should strive equally to revise the calculation of riskweighted assets.
Given my role in the Markets Group at the New York Fed, I'd like to focus on what financial market participants' beliefs and market prices can tell us about this question and what we should do with the answers from them.8 Let's first consider asking market participants directly and then use observed asset prices to answer the question. Prior to the January 2019 FOMC meeting, as part of its routine policy expectations survey, the New York Fed asked market participants to report what percent chance they attach to the U.S. economy currently being in an NBER recession, and what percent chance they attach to the U.S. economy being in an NBER recession in six months.9 We have been asking survey recipients 2/6  BIS central bankers' speeches  these questions for over 10 years. As shown in Figure 1, the median respondent assigned a 2 percent probability to the U.S. currently being in a recession and a 12 percent probability to the U.S. being in a recession in six months, with a fairly small degree of dispersion around these predictions. Separately, we posed a newer and more complicated question, asking respondents to provide a probability distribution of the timing at which they believe the U.S. economy will first enter a recession. The bubble chart shown in Figure 2 illustrates the range of results, with the relative size of each bubble indicating the relative number of responses for each probability. Perhaps not surprisingly, responses were much more dispersed.

In addition, financial advisers may be perceived to be more independent than tied agents, which will be important as consumers become more discerning. As a relatively new channel in most of Asia, the primary focus is to establish public confidence through raising professional and ethical standards of financial advisers. This is a key focus under the LIFE Framework for Malaysia. In addition, the Bank will reduce paid-up capital requirements for financial advisors to encourage new entrants. Previously consisting mainly of tele-marketing and direct mailing, direct distribution is today considered an important channel by most insurers, in view of the new possibilities enabled by the high levels of internet penetration and proliferation of mobile devices such as smartphones and tablets. Social media has become a vital platform for business to engage with consumers and build their brand as well as being a rich data source in its own right on today’s fast moving consumer trends. The availability of instantaneous information has tipped the balance of power in favour of consumers. One such innovation is the aggregator, which has seen an increase in utilisation of 44% and 50% for motor and home insurance respectively in just a short period from July 2012 to April 2013 16 according to a report on the insurance market in Asia-Pacific. In Malaysia, the high levels of internet banking and mobile  11  25th Pacific Insurance Conference 2011- Plenary Session 1 – Bancassurance and Its Impact on Consumers and the Insurance Industry. 12  BNM IFAS System. 13  BNM TOSS System.
Under inflation-targeting, a flexible exchange rate system will be a first line adjustment that can help lessen the risk to financial stability. Next, to manage the impact on domestic liquidity, it will be useful for central banks to have a variety of monetary tools to absorb liquidity and influence market conditions. But, to deal effectively with both price and financial stability, two instruments will be needed. The first is monetary policy that focuses on price stability. The second is bank regulation and effective supervision that ensure financial stability through maintaining a robust and resilient financial system. Important in this context for emerging economies is the strengthening of risk management and governance of financial institutions. Furthermore, if needed, monetary and financial policies can be further supplemented by macroprudential measures aimed at reducing procyclical behaviour in the financial system. And finally, running fiscal surpluses is an effective counter-cyclical measure to restrain the impact of demand expansion on domestic inflation and asset prices. The third challenge is to develop and maintain a robust, efficient, and resilient financial system. As I noted earlier, a resilient banking sector is most crucial for helping the economy to adjust to the impact of external shock. An efficient financial sector will also raise the ability of the private sector to manage risk. In the last fifteen years since the Asian crisis, much has been done to strengthen the region’s financial systems.

Since then, reform of the policy regime to increase flexibility, especially the exchange rate, has contributed importantly to greater resiliency and abilities of the economies in Asia to adjust to changes in the external environment. So, the fact that the Asian economies have done better this time is not only because of the policy response during the crisis, but also because of the policy choice that was made long time ago to increase flexibility. Let me now turn to the second part of my talk on the post-crisis environment and the challenges for emerging markets. The challenges for emerging markets in the post-crisis world will be shaped importantly by the forces of change that will emanate in the new global economic and financial environment. Some of these forces will relate to cyclical shifts in trade and financial flows in response to  2  BIS Review 36/2010  new configuration of risk and opportunities that arises. Others will represent a more fundamental change as the new structure of economic and financial relations between countries emerges to replace the old structure that had been dismantled by the crisis. Recent discussion on this issue has pointed to the new normal global growth, the rise of Asia, and the increased role of government in the economic system as the new economic realities in the post-crisis world. But amongst these three possible new changes, I think the most important that will have far-reaching implications for emerging economies will be the durability and the composition of global growth.
Thus, the presentation to the Senate will no longer be an extensive description of the Report, to become an institutional appearance where the Bank's Board will deliver a synthesis of the messages in its reports, explain the reasons behind its policy decisions and answer the questions and comments that may arise. This will be a challenge for both parties. At the Board, we will try our best to be up to it. Another element of change is that this is the last presentation to this Committee with the participation of Deputy Governor Sebastián Claro. It has been ten years since the current President of the Republic appointed him in her first presidential term and was approved by this Senate. Since then, Sebastián has served his position with commitment, capacity, accountability and team work, as I am sure you have observed. On behalf of the other Board members and the staff of the Bank, I want to take this opportunity to thank him for his enormous contribution to the Institution and the country. Alongside these elements of change, however, many more continue. As usual, we come to report on the recent macroeconomic developments and share with you our vision about future prospects and risks facing the Chilean economy. This institutional continuity is important when we are only a few months away from a new Congress and a new Administration, a transition that always involves challenges and in which it is important for the newcomers to be familiar with the prospects for the economy.

Ravi Menon: Future of finance jobs Opening remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, and Chairman of the Institute of Banking and Finance, at the Launch of the Study on Future of Finance Jobs, Singapore, 23 April 2019. * * * Mrs Josephine Teo, Minister for Manpower, members of the IBF Council, ladies and gentlemen, welcome to IBF. IBF will be turning 45 this year. It is hard to imagine the financial sector today without the IBF. Not all countries have the equivalent of an IBF. Fewer still have as strong a collaboration as we do here in IBF – among financial institutions and between financial institutions and the regulator. And all for a common cause that has been consistent for the last 45 years – to equip the professionals in our financial sector to do their jobs better, and to make the Singapore financial centre more competitive IBF began life in much simpler times. Its primary aim in the 1970s through the 1990s was to provide training for the financial sector professionals. In the 2000s, IBF shifted its focus to setting competency standards and facilitating skills development for the industry. Looking to the future, the jobs and skills landscape in the financial industry is a lot more complex and uncertain. Technology is transforming finance – the way financial services are produced, distributed, and consumed. This means that jobs in financial services will also be transformed.
Progress has already been made on the financing of infrastructure projects and businesses, thanks to two amendments that came into effect in April 2016 and September 2017, respectively, which adapted the calibration of capital requirements. More generally though, the reviews of the standard formula and long-term guarantee package measures planned for 2018 and 2020 respectively, are important opportunities to make essential improvements. The work is already underway and I welcome the proposal published by EIOPA early in November to reduce the capital requirement for unrated debts and unlisted equities under certain conditions. The Commission specifically requested that it look at those unlisted or unrated investments. But we may want to look more widely and encompass other types of long-term investments with innovative proposals for amending Solvency II, with the aim of striking the right balance between effective supervision and the financing of the real economy. It is now up to the industry to seize this opportunity to share its views and experience: tomorrow’s regulation should benefit from your ideas. Looking at the overall picture of solvency calculation, the correlation between assets classes, for example, to fully recognise the benefits of the diversification of long-term investments, could be an innovative way forward. 3. Technological innovation Let me now elaborate on my third and last point: technological innovation. The digital revolution is creating many opportunities for both financial players and consumers, including an increasing number of more accessible financial services, and more complete customer satisfaction.

While it is imperative that takaful operators seek to provide as seamless an experience as possible in terms of online content for consumers, this does not have to lead to the substitution of agents. On the contrary. Agents can in fact enrich the process by being trained and equipped with useful tools to guide and advise potential customers. Agents should also work with aggregators as a means to develop an online presence, in the same way real estate agents are featured on property websites. It is important to note, however, that technology is only a platform, a tool. Without strategy or purpose, the adoption of tech alone cannot spur change. What is needed to complement this is a fresh approach to business. This means broadening one’s horizons beyond given market conventions, and being courageous to compete in new, unexplored strategic areas. Compete better – and more broadly To truly capture the market of the future, agents will need to sharpen their competitive edge. There are many ways to go about this, but I’d like to talk about two in particular: Doing what you already do better, and doing it for a much broader market. 2/5  BIS central bankers' speeches  Akio Morita, the co-founder of Sony, once said about his company’s products – “We don’t ask consumers what they want… We focus on what they need, what they will want and make sure we’re there, ready.” I find this relevant to the role of agents today.
It is in this context that small businesses have raised concerns and aired their views to the political and regulatory authorities. It may be relevant to quote a statement made by H.E. the President at a recent meeting with the state banks where he said “I have seen banks getting tough on small time defaulters, but the same attitude must be there for large scale defaulters too”. When the government policy framework is geared towards enhancing access to credit, we should not leave room to deny access to those who wish to use the formal credit institutions. That is why I said that it is difficult to assess the performance of a service organization, using only the financial and operational performances. It is important to look at the disservice it has inadvertently inflicted on the society, perhaps due to reasons beyond its control. Of course, the root cause is the defaulting borrowers due to reasons within or beyond their control. For good order and conduct, the credit institutions should report credit profiles of all segments of borrowers and clientele and the reporting formats should clearly indicate the repayment schedule from the beginning up to the reporting time. Until such time the reporting credit institutions make a conscious attempt to send-in reliable credit details of all borrowers, the CRIB will not be able to provide an equitable service. The CRIB on its part should remove the label fixed on defaulters and prepare aggregate credit reports indicating the repayment pattern by borrowers over the reporting period.

In other words, these borrowers have been permanently denied of access to formal lending institutions. BIS Review 66/2006  1  There may be others in this group such as the SMEs, the retailers, self-employed and micro borrowers who, for reasons beyond their control, have faced the same fate. Even if a few of them have the potential, in terms of their cash flows or earning capacity, to repay debt at a later time and become honourable customers, the negative label issued by the CRIB would not give them another chance of reaching formal credit institutions. The inevitable result would be to drive them back to the informal sources of borrowing or to seek political redress. There is no doubt that there could be several willful defaulters in this group who deserve to be blacklisted, but among them the influential ones will seek ways and means of getting back into the system. It is well known that the banks and the credit institutions do not report the full list of borrowers to the CRIB. It is also no secret that the institutions cherry-pick the borrowers according to the former’s preference. The affluent borrowers, multi national companies, large corporates, highly connected borrowers and the banks’ other preferred customers do not get reported to the CRIB, even if they default altogether. The credit profiles of the affluent customers will continue to have clean records of regular payments which protect their image.
Although the Federal Reserve may be able lend to a securities affiliate under its emergency lending authority under Section 13(3) of the Federal Reserve Act, this is not a standing facility – it can only be established if “unusual and exigent” circumstances exist and the program or facility must have broad-based eligibility, among other requirements. 8  8  A program or facility has broad-based eligibility only if it is designed to provide liquidity to an identifiable market or sector of the financial system. The program or facility will not be considered to have a broad-based eligibility if fewer than five persons or entities would be eligible to participate, or if it is designed to assist a company avoid bankruptcy, resolution or insolvency (including by removing assets from its balance sheet) or aid a failing financial company. See Regulation A, 12 CFR 201.4(d). In addition to the “unusual and exigent” circumstances and broad-based eligibility requirements, other conditions for making Section 13(3) emergency credit include obtaining the affirmative vote of a requisite number of Federal Reserve Governors and the prior approval of the U.S. Treasury Secretary, the emergency credit is not extended to an insolvent borrower, the lending Federal Reserve Bank is secured to its satisfaction, evidence is obtained regarding the unavailability of adequate credit accommodation from other banking institutions under prevailing circumstances to borrowers of the emergency credit, penalty interest rate is set for the emergency credit, and meeting disclosure/reporting requirements.

See Section 13(3) of the Federal Reserve Act (12 USC 343) and Regulation A (12 CFR 201.4(d)). BIS central bankers’ speeches  5  In the U.S., given the restrictions on central bank lending, if a securities firm were to lose access to funding the remaining options available would be finding a means of replenishing the firm’s capital, selling assets, or selling all or part of the securities firm’s operations. While this might be manageable in the case of a firm-specific idiosyncratic shock, it might prove more difficult if a common shock was broadly hitting the securities industry. In this circumstance, the failure of one firm could increase the stress on other firms that were facing similar difficulties. If all of the requirements for Section 13(3) are met, the central bank could provide liquidity support. However, since this is not a certainty, it is worth considering possible alternatives. Now that all major securities firms in the U.S. are part of bank holding companies and are subject to enhanced prudential standards as well as capital and liquidity stress tests, providing these firms with access to the Discount Window might be worth exploring. To me, this is a more reasonable proposition now than it was prior to the crisis when the major dealers weren’t subject to those safeguards.
José De Gregorio: Workshop on financial markets and monetary policy Opening remarks by Mr José De Gregorio, Governor of the Central Bank of Chile, at the Workshop on Financial Markets and Monetary Policy, Santiago, 6 August 2010. *  *  *  On behalf of the Central Bank of Chile I would like to welcome you all to this workshop on the interactions between financial markets and monetary policy. We have put together a very interesting group of papers that are surely at the forefront of research in this area. The episodes that started to unfold during the second half of 2008 reminded us once more of the central importance of financial markets for the functioning of the economy. As the crisis progressed and policy makers tried to mount a response that could mitigate the effects on the real economy, understanding which actions would have the bigger impact at the smallest possible cost become a key priority. At the same time, gauging how the traditional policy actions would affect the economy in a scenario of deep disarray of financial markets also become an important priority in Central Banks and Treasury Departments around the world. The collection of papers that will be presented here today try to illuminate different features of the policy dilemmas I just mentioned. They are then a very welcome contribution. To some extent economists lacked a clear theoretical framework to understand the role of financial markets as both an originator and propagator of shocks when the crisis started.

The papers to be presented by Luca Dedola from the European Central Bank and Óscar Jordá from the University of California-Davis are part of a very active literature that studies the determination of nominal exchange rates incorporating insights from recent developments in the theory of financial markets. On line with developments on financial markets theory, the paper to be presented by Craig Burnside shed lights on a central discussion on the exchange rate dynamics theory. Along with his coauthors they offer an explanation for the forward premium puzzle in foreign exchange markets, their analysis is also consistent with opportunities of profitable carry trade strategies. Given the importance of the nominal exchange rate for an open economy like Chile, these papers are also a very important and relevant contribution. As you can see this promise to be a very interesting conference and I invite you to engage in the discussion and seize the opportunity to learn from this very excellent group of researchers. BIS Review 104/2010  1  Finally I would like to thank Miguel Fuentes, Diego Saravia and Felipe Labbé for organizing what promises to be a very interesting workshop. Thank you. 2  BIS Review 104/2010