samchain/econo-pairs-v1 huggingface dataset:
If dishonesty is unacceptable, then it is unacceptable regardless of whether we are dealing with a neighbour or with a counterparty. The global financial crisis has been a sobering reminder of why we must not divorce ethics from finance. Second – we must all face up to the difficult but necessary decisions of keeping out bad apples from the financial industry. Recruitment and promotion plays a key role here. Organisations should pay careful attention to the individuals they hire and promote. Recruitment assessments should be done with utmost vigilance, and financial firms must be more candid in dealing with cases of misconduct. Complaints and suspicions should be investigated properly, with an opportunity for the individual in question to make representations. If their name is cleared, then this should be recorded, to protect them against unfounded accusations in the future. If they are found to be in the wrong, then proportionate disciplinary action should be taken and recorded. Often, bad apples are allowed – and even requested – to leave quietly before investigations are opened. This leaves them with a clean record to go on and stir wrongdoing in another organisation, and the next, and so on. This practice should stop. We are collectively responsible for upholding the integrity of our entire industry, not just our respective institutions. What is important is transparency, to allow the job market to make informed decisions. In this regard, the Bank is currently pursuing an initiative that will mandate the sharing of employment references with future employers.

Encik Abdul Rasheed Ghaffour: The ethical challenge – building a culture of professionalism and integrity Remarks by Mr Encik Abdul Rasheed Ghaffour, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the AIF-FSBP Business Ethics Conference 2017 “The ethical challenge: building a culture of professionalism and integrity”, Kuala Lumpur, 24 April 2017. * * * Ethics is not a new topic. It has been talked about for thousands of years. Plato claimed that “Good people don’t need laws to tell them to act responsibly, and bad people will find a way around the laws”. In essence, he suggests that there are “good apples” and there are “bad apples”. More controversially, he implies that the state of the apples has nothing to do with “the barrel”. I am sure that many of us in this room are probably inclined to disagree. But while ethics has been discussed and debated throughout the ages, it has been put into sharp focus lately. This is especially so within the ambit of the financial industry. It is therefore an honour to address you today at the onset of this conference. The need for ethics Prior to the global financial crisis, the focus of investors, financial firms and even many regulators fell primarily on strong balance sheets and robust internal controls. While necessary, these were not sufficient. Many financial institutions still failed to function as they should.
Michael Gondwe: Skills development as a catalyst for youth employment promotion, income growth, and micro, small and medium enterprises Keynote address by Dr Michael Gondwe, Governor of the Bank of Zambia, at the stakeholder consultative workshop, organised by the Technical Education, Vocational and Entrepreneurship Training Authority (TEVETA) of the Republic of Zambia, Lusaka, 18 October 2012. *  *  *  Chairperson Ladies and gentlemen It is indeed an honour and privilege to make this keynote address on skills development as a catalyst for youth employment promotion, income growth, and micro, small and medium enterprises (MSMEs) development. Mr Chairman Over the recent past, macro-economic stability and appreciable economic growth has been achieved in Zambia as reflected in: i. Positive real GDP growth averaging 6.5% per annum in the last 5 years coupled with rising per capita incomes;  ii. Falling inflation, relatively stable exchange rate and downward trend in lending rates;  iii. Favourable external sector performance; and  iv. Stability and growth in the financial sector;  The main challenge that still remains is that of meeting the basic needs of the majority of Zambians, in particular our youth and women, who suffer the brunt of high unemployment. It is for this reason that action is urgently needed to boost skills development in order to enhance productive capacities, investment and decent jobs to sustain the incomes of working families, the poor and the vulnerable.

This should be coupled with easier access to credit for productive enterprises - especially micro, small and medium-sized enterprises (MSMEs) – and reforms to foster technological change and productive diversification in line with the changing structure of the global economy. In the above recognition and its continued quest to contribute to unleashing the potential of local MSMEs, the Bank of Zambia hosted a strategic forum on the role of finance in this area, in June this year. As a follow-up, the Government is working closely with stakeholders and the cooperating partners in improving availability of financial resources to MSMEs. Further, some provision has been included in the 2013 Budget. Distinguished participants MSMEs could play an important role in creating employment and spurring growth. However, their competitiveness is undermined by inadequate infrastructure, limited access to financial and business services. Stakeholders can help small firms to integrate in, and reap more benefits from local and international value chains, by facilitating the provision of business services, among which continuous skills development is paramount. An important policy question is how to address the constraints which affect the capacity to grow and generate earnings of MSMEs, very often informal that operate in traditional sectors and account for the bulk of jobs in our country. This feat, ladies and gentlemen, can only be achieved gradually, as the drivers of informality are usually multiple and deeply rooted in long-standing development gaps and weaknesses.
When margin levels are set more conservatively, firms are likely to have more flexibility in responding to stress and are less likely to take action that might amplify the market shock and exacerbate the reduction in liquidity. When competitive pressure drives margins down, markets may be less resilient. Third, we believe the major financial institutions need to continue to improve their capacity to measure their exposure to risk in a less benign market and economic environment. The discipline of stress testing and scenario analysis that is designed to measure tail risk is at the frontier of this challenge. Senior management and boards of directors need to understand the limitations and uncertainty that pervade the tools we use to assess these risks, to try to better understand the potential scale of losses the firm may face, and to carefully examine how well risk exposures reflect the overall risk appetite of the firm, and the size of the capital and liquidity cushion maintained in relation to those exposures. Let me conclude by reiterating the fundamental view that the wave of innovation underway in credit derivatives offers substantial benefits to both the efficiency and stability of our financial system. The extent of these benefits will depend, in part, on the degree to which market participants can keep up with the pace of change in the market through continued investment in both risk management and in the processing infrastructure.

The underlying economic exposures involved are harder to assess in part because of the complexity of the instruments, the embedded leverage in many products and the difficulty of estimating correlations across different exposures. BIS Review 55/2006  1  For these reasons, the risk individual dealers attribute to exposures involving some types of credit derivatives exhibit a very large variance, substantially larger than one would typically find in measurements of traditional credit exposures. That variance illustrates the magnitude of the uncertainty involved in capturing the direct exposure in these markets. But perhaps the more difficult challenge is to capture the broader risks the institution might confront in conditions of a general deterioration in confidence in credit and an erosion in liquidity in these markets. This task, which is the province of stress testing and analysis of very low probability but extreme scenarios, is, of course, fundamentally difficult. The analytical challenge is magnified by the inherent difficulty in predicting how behavior changes in crisis, that is, how investors and counterparties would react to actual losses and the fear of future losses. This challenge is substantially more difficult in markets where there have been dramatic changes in the instruments involved, in the nature of the participants and in the structure of the markets. We tend to look more closely at things we can measure than those we cannot. We are drawn to approaches that offer the comfort of precision and tend to look past the wide band of uncertainty that surrounds those estimates.
We launched the pandemic emergency purchase programme (PEPP) to help stabilise financial markets and ease our monetary policy stance considerably. The PEPP is temporary, targeted and proportionate. It addresses the specific shock at hand, and aims to repair the economic damage and the resulting downward pressures on inflation wrought by the pandemic. In addition, it was also vital that we limited the risk of a credit crunch. So we substantially eased the conditions under which banks can obtain liquidity under our targeted longer-term refinancing operations. Banks can now borrow from the ECB at interest rates which can reach -1%, under the condition that they are lending to the real economy. Six months after we introduced our measures, our policy package has stabilised markets, protected the supply of credit and supported the recovery. This, in turn, should support the return of inflation towards our medium-term objective and safeguard price stability. At the same time, the uncertainty of the current environment requires a very careful assessment of the incoming information, including developments in the exchange rate, with regard to its implications for the medium-term inflation outlook. The Governing Council continues to stand ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner, in line with its commitment to symmetry. When you look at the past six months, the ECB has not been the only game in town. Our measures have been complemented by forceful fiscal responses at both national and European levels.

SPEECH  Jointly shaping Europe’s tomorrow Introductory remarks by Christine Lagarde, President of the ECB, at the Franco-German Parliamentary Assembly, 21 September 2020 Frankfurt am Main, 21 September 2020 Dear President Schäuble, Dear President Ferrand, Honourable Members of the Franco-German Assembly, I would like to thank you very warmly for inviting me to join you today. As President of the European Central Bank and a French citizen living and working in Germany, it is an honour to speak at this historic forum. This parliamentary assembly is an embodiment of the special relationship between our two countries and their commitment to European integration. I find it essential that the ECB constantly engages in two-way communication, especially with citizens’ representatives. We need to make sure that the ECB’s voice is heard by the people and that the people’s voice is heard by the ECB. This is why events like today’s are so important for me. Our regular interlocutor is the European Parliament, to whom we are accountable under the Treaty for our monetary policy tasks. Transnational settings like this one give us a further chance to look past nation-specific concerns as we discuss Europe’s future. The coronavirus (COVID-19) pandemic is a crisis of unprecedented magnitude. Many of you will recognise the famous words of Jean Monnet, one of the founding fathers of the European project, who said: “Europe will be forged in crises and will be the sum of the solutions adopted for those crises”[1] . This pandemic has proven him right once more.
The results of inflation targeting My retrospective begins in autumn 1992, when the krona moved from a fixed exchange rate to a floating rate. It was then important to find a new anchor for monetary policy as rapidly as possible. The alternative chosen was inflation targeting. In January 1993 the Riksbank stated in a press release that the change in CPI inflation would in future be limited to 2 per cent a year with a tolerance interval of ± 1 percentage point. The floating exchange rate and the inflation target constituted a drastic changeover of monetary policy. There were also a number of problems in the initial stages. The decision to introduce inflation targeting was controversial and much criticised in the public debate. Naturally, the Riksbank had no experience of this type of monetary policy regime and even in countries where it was already established it was a relatively new phenomenon. Moreover, the experiences of Swedish stabilisation policy in both the monetary policy and fiscal policy fields during the 1970s and 1980s were less than positive. This meant that there was considerable opposition at first and many believed the new regime would be short-lived. The Riksbank had to balance the need to create confidence in the new, price stability-based regime against the need to conduct less restrictive monetary policy to soften the effects of the economic crisis. It was a difficult starting point for many reasons, including the fact that public finances were in very poor shape. There were also problems with inflation.

The combination of the Riksbank now publishing its own interest rate forecast and at the same time continuing to report how we think has the potential to change the discussion outside of the Bank. It could to a greater extent concern how new information should affect  2  BIS Review 111/2007  expectations of interest rate developments rather than exactly what formulations are used in for example speeches and press releases. Interest rates are by definition always uncertain Let me take up some issues that are important to keep in mind when formulating forecasts for the repo rate. Firstly, the interest rate path we present is a forecast and forecasts are, as we know, very uncertain. To illustrate this, the Riksbank publishes uncertainty intervals, known as fan charts, around its interest rate forecasts and also its inflation and GDP forecasts (Figure 8). As you see, the uncertainty interval increases considerably in relation to the length of the time horizon. Put simply, the probability of unexpected shocks arising in the economy that would lead to developments deviating from the forecasts increases when the time horizon is longer. In other words, it is not easy to make accurate forecasts of the development of the interest rate in the longer term. One means of illustrating this is to see how the implied forward rates have changed over time. Figure 9 shows implied forward rates measured on a quarterly rate. Expectations of the development of the repo rate have varied substantially over time when measured in this way.
The referendum was an event very specific to Greece. Indeed, the fact that this day was a public holiday in parts of Europe implies that the news flow on that day was more limited than usual. In response to the announcement yields on Greek government bonds and Greek sovereign CDS premia soared even further. The transmission of this shock to some other euro area sovereigns and euro area banks, in particular, appears to have been rapid, large and persistent. The CDS premia of France, Germany, Italy and Spain exhibited the largest oneday increase of the year. But whereas the CDS premia of France and Germany quickly receded to their previous levels, those of Italy and Spain further rose in subsequent days. Movements in bond yields were comparatively muted, although Germany benefited from strong safe haven flows.5 The above observations offer quite a compelling case for contagion, but such narratives are still subject to the question of whether alternative interpretations of these events are possible. It therefore makes sense to have a more systematic look at the data using empirical models of contagion. For this purpose, ECB staff has developed and is extending an analytical toolkit of models, which is “state of the art” in this area. Generally speaking, the results from these multiple analyses tend to support the notion that contagion is indeed a driving force behind the trends in the data.

•  The creation of the euro is leading to larger and more integrated financial markets, improving the allocation of financial savings. 1. By safeguarding price stability, the Eurosystem contributes to the safeguarding and consolidation of savings. The primary objective of the monetary policy of the Eurosystem, as laid down in the Treaty, is price stability. This objective is founded on the conviction that price stability makes it possible to ensure the full efficiency of the price mechanism and to avoid both arbitrary redistribution of wealth as a result of inflation as well as the costs and distortions caused by uncertainty and periodical adjustments of nominal values. These positive effects of price stability obviously benefit savings. I personally see three aspects to this: an effect on the protection of the value of savings, an effect on their structure and allocation, and finally an effect on the distribution of saving within society. First, by aiming at price stability, monetary policy directly preserves the real value of a large proportion of financial savings. This is immediately obvious in the case of fiduciary money or sight deposits which are remunerated only a little or not at all (which accounted for 39% of the monetary aggregate M3 in 1999). However, fixed-term deposits are not totally safeguarded from inflation where their remuneration is fixed over a specified period or where they only adjust to market rates after a time lag.
In April of last year, the Fed launched the FR 2420 Report on Selected Money Market Rates, a mandatory daily collection of fed funds, Eurodollar, and CD transactions from around fifty domestic banks and one hundred U.S. branches of foreign banks. 24 The goal of initiating this data collection was to better understand institutional behavior in money markets, and indeed, as indicated in observations shared with you this evening, our findings have already helped us analyze results of our operational tests to prepare for normalization. These data also present an opportunity to make additional improvements in light of the recent international focus on identifying best practices for reference rates. 25 Earlier this year, the Fed announced plans to improve the process for calculating the fed funds effective rate by transitioning the data source from data supplied by federal funds brokers to data reported directly by banks through FR 2420. 26 The new data source includes more activity and transaction-level data, which will make the calculation process more robust. The Fed also announced it would begin daily publication of a second, broader measure of unsecured bank borrowing activity based on transactions in both federal funds and Eurodollars. This rate, called the overnight bank funding rate, will provide increased transparency on broad overnight funding costs for U.S.-based banking offices.

The difference between the sale price and the repurchase price, together with the length of time between the two legs of the transaction, implies a rate of interest (the reverse repo rate) paid by the Federal Reserve to its counterparty. The transaction leaves the size of the SOMA’s securities portfolio unchanged, but shifts some of the liabilities on the Fed’s balance sheet from bank reserves to reverse repos while the trade is outstanding  7  Unlike IOER, however, a full-allotment ON RRP facility would theoretically offer a perfectly elastic supply of a safe asset at a fixed rate. In practice, the amount of ON RRPs that the Federal Reserve could supply would likely be limited by the lesser of the level of excess reserves or the amount of securities available from the SOMA portfolio for such transactions. BIS central bankers’ speeches  3  point target, is viewed as appropriate for providing some flexibility in interest rate control when the quantity of reserves remains elevated. As for the Fed’s tools for policy implementation, setting the IOER and ON RRP rates at the upper and lower bounds of the target range is a straightforward arrangement at the start of policy firming.
BIS Review 122/2007  UNIDROIT or UNCITRAL] have turned the focus of their activities on financial market issues, such as secured transactions or cross-border holdings and transfers of securities. This focus is mirrored by a multitude of complementary initiatives on the European level, where I would just like to mention the various legislative projects aimed to enhance the integration of the EU financial markets that were combined in the so-called Financial Services Action Plan as well as the more recent attempts to enhance efficiency and integration in the EU post-trading industry, that is the clearing and settlement of cross-border securities transactions. 4. Lessons of the recent market turmoil  Turning to more recent events, the emergence of structured products, where the creditor is separated from the debtor by a complex financial infrastructure that transforms and repackages the underlying asset, might create significant legal challenges and this might become an important concern in the light of the recent market turmoil. Who pays if debtor A defaults, in case his debt has been repackaged by bank B, sold to the non-bank intermediary C and finally to investor D? These are legitimate questions that need to be addressed carefully. But answers have to be given if the uncertainties surrounding the current environment are to vanish.

It would be unconceivable to think of a financial system and indeed of any financial instrument without a legal system to support it. The keyword for economists in this context is “asymmetric information”: the lender, in particular, does not know if the borrower is trustworthy or not, or whether the investment project the latter is undertaking is worthwhile. A financial asset is ultimately a claim in the form of piece of paper or even, and increasingly so, an account entry. In any credit relationship – and this includes almost any economic transaction beyond simple barter – the possibility of default is always looming and this inherent complication cannot be solved without a precise system of norms that protects both the creditors and the debtors. For the creditor to consider entering in a financial relationship, the legal system must not make it too easy for the debtor to walk away from his obligations. At the same time, the legal system cannot be too taxing for the debtor, as Shakespeare’s Merchant of Venice reminds us. The legal system has thus to develop along a fine line between protecting the rights of the borrowers as well as those of the lenders. No wonder that developing a sound legal system to support financial markets is a very complicated matter and we hope to learn something from today’s conference. 2.