samchain/econo-pairs-v1 huggingface dataset:
Infrastructure finance is indeed promising, but has been promising for two decades now with little of the promise realised. There are a variety of country-specific risks – institutional and legal – that must be taken into account when operating in these markets. Managing risk and navigating a varied terrain are key to success. Singapore as the leading Asian asset management centre 37. This is where Singapore comes in. Singapore’s strong physical connectivity and trade and financial linkages with the rest of Asia make it a key node in the flow of information and ideas. It is an ideal vantage point for asset managers to understand Asia and manage pan-Asian investments. BIS central bankers’ speeches  5  38. The asset management industry in Singapore is broad based. Top-tier global funds have centralised a host of critical functions in Singapore, including portfolio management, investment research, trade execution, and product structuring – across both equities and fixed income asset classes. Singapore is also seeing a flourish of alternative investment managers specialising in strategies or asset classes that provide return streams uncorrelated to the broader market, or as the industry terms it, “generating alpha”. New initiatives to develop Singapore’s capital markets 39. A key component of the broader ecosystem that supports the asset management industry in Singapore is the capital market. Over the years, MAS has been making concerted efforts to broaden and deepen Singapore’s debt capital market.

As intermediaries in exchanges, stablecoins are far less effective than a settlement asset with legal tender status, insofar as (i) they are not entirely stable since their price stability depends on the value of a basket of assets, and (ii) they offer no guarantee of a refund in the event of fraud. The fact that they have no intrinsic value and that they offer no guarantee that they may be converted at par upon demand with commercial bank money or central bank money means that they cannot be used to create reliable stores of value. In addition, as pointed out in the G7 report on stablecoins issued last year, stablecoin schemes are significantly exposed to risks of various nature, including legal, financial, operational and compliance risk concerning money laundering and terrorist financing, competition law, consumer and investor protection. The risks identified must be seriously addressed if stablecoins are not to become the « weak links » undermining the safety of our payment systems. This is all the more important as some of these risks would be amplified and new risks might arise if stablecoins are adopted at a global level. Stablecoins of potentially large size and reach – so-called global stablecoins – may indeed pose additional challenges of system-wide importance both domestically and internationally, for the transmission of monetary policy, as well as for financial stability. They could also have implications for the international monetary system more generally, including currency substitution, and could therefore pose challenges to monetary sovereignty.
Michael C Bonello: The institutional, economic and monetary policy implications of EMU on countries applying for accession to the EU Speech by Mr Michael C Bonello, Governor of the Central Bank of Malta, at a workshop organised by the University of Malta, Gozo Centre, Gozo, 16 November 2002. *  *  *  I guess we are by now all too familiar with the fact that a country’s eligibility to join the European Union (EU) rests on satisfying the Copenhagen criteria, including the obligation to achieve compliance with the EU acquis and to show a commitment to the aims of the Union, including those relating to EMU. Indeed, unlike Denmark and the United Kingdom, the current wave of accession countries are all expected to join EMU eventually. This implies that they will also have to join the Exchange Rate Mechanism (ERM II). Participation in ERM II is in fact one of the Maastricht criteria which must be met before admission to the euro area. This requires the national currency to remain within the fluctuation margins of this mechanism for at least two years without resorting to a devaluation against the euro. What makes ERM II more important than the other Maastricht criteria? Participation in ERM II is not the only criterion which the accession countries will have to meet before being able to join EMU.

But, as the paper by Fischer, Lenza, Pill and Prof. Reichlin demonstrates, the careful analysis of monetary developments in real time has helped the ECB to shape its assessment of the economic situation and the associated risks to price stability and to better identify the nature of the shocks impacting on the euro area economy. As I already said I can bear testimony that, over the past eight years, monetary analysis has helped the ECB to improve its policy decisions. At the same time, the importance attached to the monetary pillar has also signalled that the ECB’s monetary policy has an appropriate medium-term orientation. I strongly believe that this has contributed to shaping agents’ expectations in a manner which enhanced the credibility of the ECB. In this context, the third issue raised by Jürgen – namely how monetary analysis should be presented to the public – is crucial. Presenting the monetary analysis in a manner that serves to stabilise private sector long-term inflation expectations by clearly signalling the ECB’s alertness with respect to risks to price stability at longer horizons is key. Thus, it is particularly important that markets and the public at large have a good understanding of the systematic and conditional conduct of monetary policy by the central bank, so that expectations about future price developments and the path of policy rates are in line with the central bank’s mandate.
During parts of 2006 house prices in Denmark, for example, rose at an annual rate of more than 20 percentage points, which was way above the Swedish increase. In the countries where  8  BIS Review 70/2010  real house prices had previously increased more rapidly than in Sweden, they have in most cases experienced fairly large price falls in connection with the crisis. For instance, in Denmark real house prices have fallen by around 20 per cent since the peak levels in 2007. So are developments in the Swedish credit and housing market cause for concern? My view is – not in the short term. But nor do I believe that the growth we have seen in household borrowing and house prices over the past decade is sustainable in the long term. The reason I do not believe developments to be a problem right now is that there are nevertheless reasonable explanations for the price increases. Recently it is probably the case that factors such as the fact that it is still cheap to borrow, and that households and companies according to indicators are regaining confidence, have contributed to the nevertheless strong development. There has also been relatively little new housing built in recent years, at least in relation to demand. The housing market is what one might call “regionally segregated” and migration to metropolitan areas has put upward pressure on house prices in these areas. Prices have also increased by far the most in Stockholm, Göteborg and Malmö.

And we need, and will most probably also obtain, better support from the framework for financial stability that we and others are now working to develop both in Sweden and abroad. When this project is complete, it will contribute to monetary policy more rarely needing to take into account untenable developments in the housing and credit markets. But I do not think we can achieve an entirely “bubble-free” world. 10  BIS Review 70/2010
This means that the financial sector is of considerable importance to the national economy and it is thus reasonable that the State should intervene in the workings of the financial system. In the wake of the crisis, one element of the discussion has been that regulation and supervision have to date focused too much on individual institutions and too little on the risks that were generated in other parts of the system. There is a lot of talk about the need to build structures that can prevent systemic risks, a so-called macroprudential framework. Exactly what a macroprudential framework contains is still unclear. It seems to mean somewhat different things to different people. I have therefore simply decided not to use this term today. Instead I intend to discuss the content of future efforts to prevent systemic risks without even mentioning the term macroprudential or its Swedish equivalent – a word that we have not yet invented. About the crisis: something old, something new and something borrowed Running a bank is about creating and maintaining confidence. When a bank makes losses – or it is feared that it will make losses – capital is required to cover these losses so that  confidence is not undermined. When the crisis became really serious, the banks did not have sufficient capital to retain confidence. This resulted in a liquidity crisis. The liquidity crisis became so severe because the banks had become increasingly dependent on short-term market funding.

Does SEK 2 800 in loss-absorbing capital provide sufficient resilience for a loan of SEK 1 million? My answer is no, it does not. The market’s requirements are also often higher today. I welcome the international discussion on a general increase in the capital requirements once the crisis is over. More capital is needed. I also think it is positive that the quantity requirements governing the capital in the capital base and the regulations governing hybrid capital will be tightened up and harmonised. Better capital is also needed. Ultimately, resilience is measured by common risk-bearing share capital. The discussion now underway in the international arena also concerns whether the banks’ resilience can be strengthened by having regulations that require the banks to build up capital buffers when times are good that they can then use when times are bad. To a certain extent, the build-up of capital buffers may also counteract the procyclical tendencies of the financial system by means, for example, of new regulations that increase the price of lending when times are good and reduce it when times are bad. Another method that is similar in principle is to allow the banks to make provisions for expected losses in economic upturns. The banks would thus build up a buffer against bad times in their accounting. In this context, the international discussion centres around which method – capital buffers or provisions – is most appropriate. Using capital has the advantage that it provides greater transparency and is more difficult to manipulate than provisions.
With monetary union soon to be launched, moreover, the agenda has more room for other matters. The Stability and Growth Pact is one example of earlier initiatives in connection with EMU. Various processes have likewise been started to bring the problem of unemployment into the limelight. 4. There are strong grounds, in the fields I have discussed, for keeping decisionmaking essentially at a national level. The effects of the policies, for instance in the labour market, mostly occur in the country in question. There are also considerable country differences in such matters as the premises for fiscal policy, the structure of government finances, labour market regulations and so on. Still, the ongoing integration of markets, which monetary union may stimulate, is presumably exerting increased pressure for reform. The process that monetary union is now driving onwards is, in fact, fairly typical of EU cooperation in general. The European Union is a highly decentralised organisation. Power and political legitimacy are essentially located at the national level. The joint budget is limited. Matters move forward in a process where external events, for instance in the global economy, and political initiatives modify the agenda. Problems are often managed with arduously negotiated compromises between sovereign states. Each new initiative and decision forms a platform for the next phase. Monetary union, which is now leading to the appearance of new items on the agenda, is after all largely a consequence in its turn of earlier decisions, for instance on the internal market.

In these matters, however, most decisions have to be made at the national level. But the connection with conditions for monetary policy is evident: the better the economy can be made to work, the higher the growth that can be achieved without this generating increased inflation. Monetary union is likely to accelerate the process towards increased integration in Europe. In this way it will also contribute to new demands for structural adjustment. One of monetary union’s primary purposes is, in fact, to stimulate competition and structural changes, primarily to the benefit of consumers in the EU area. At the same time, such a development will probably entail a greater degree of joint action and harmonisation in the Union. 3. Interaction As I have outlined, monetary union involves a central direction of monetary policy and a broadly national direction of budget policy, though discretion in budget policy is demarcated by the Maastricht Treaty and the Stability Pact, for instance, and is being further curtailed by the gradual extension of international integration. At the same time, structural policy is to varying degrees a common EU concern. This raises the question of how a balanced policy can be constructed in such an environment. Bodies for decision-making and cooperation One approach to this question involves describing the EU institutions that have been set up for economic policy decision-making and cooperation. •  Ecofin, as the decision-making body for the ministers of finance and economy, is the principal forum in the field of economic policy.
Contrary to the US, the use of modern technology and communications has made it possible for market operations not to be concentrated at a single geographical location, but to be carried out simultaneously at all of the National Central Banks. The same type of arrangement applies in other monetary areas (cash management, payment systems, etc.). 1.4. The Eurosystem benefits from an efficient operational framework The operational framework is based on two main guidelines: - a range of monetary policy instruments selected in accordance with the principles of an open market economy, a level playing field, simplicity and transparency: these instruments enable the smooth adjustment of banking liquidity and effective steering of short-term interest rates. - procedures guaranteeing a high level of security for all interbank transactions and large-value payments within the euro area and with other countries in the European Union, with in particular the TARGET system, which played a predominant role in the integration process of the euro money market. BIS Review 4/2006  3  2. The strategic framework also contributes to the efficiency of the single monetary policy From the outset, there was a consensus among the designers of the Eurosystem that the Single monetary policy would require a clear strategic framework. This framework can be characterised by two main principles: a quantitative definition of price stability and a medium-term orientation of monetary policy. 2.1.

2. Macroeconomic stability and convergence Price stability has not come at the expense of higher unemployment. Moreover, there are no visible signs of costs in terms of higher real macroeconomic volatility. Quite on the contrary, the volatility of real variables has declined relative to the averages observed during the 1980s and 1990s. Does one size fit all? It is often argued that a single monetary policy combined with inflation differentials leads to different real interest rates across countries, which in turn may destabilisize the currency union by creating divergence in output growth that exacerbate inflation differentials. This is by no way what we have observed:  BIS Review 4/2006  5  First, inflation dispersion among the euro area countries (measured as the unweighted standard deviation of annual HICP inflation rates) amounted to slightly less than 1 percentage point in 2005 compared to around 6 percentage points in the 1990’s. Since the inception of the euro, the average inflation dispersion across the euro area countries has been around 1 percentage point. This figure is very close to the dispersion observed across the 14 US metropolitan statistical areas. Concerning growth differentials, euro area averages naturally mask a variety of growth performances of individual countries within the single currency area, especially in a context where structural convergence has not been completed yet. Growth dispersion is a natural phenomenon in any large economic area.
Considering the government debt that has accumulated in the 1990s and the fact that Sweden’s public finances are relatively sensitive to cyclical activity, this objective is reasonable. Current assessments, based on existing decisions and official economic policy, suggest that the budget policy target will be met in the coming years. Besides the greater awareness of the importance of stable finances, the conditions for fulfilling the budget objective have been improved by institutional changes to the budget process. Sweden’s new budget process is inherently more disciplined than before and this can contribute to the maintenance of sound finances. The Swedish objective of government financial consolidation is in line with the EU budgetary aim of positions close to balance or in surplus over the medium term. So Sweden’s fiscal policy is also subject to EU agreements even though we have deferred participation in the monetary union. Sweden has undertaken to aim for the objectives in the Stability and Growth Pact. More generally, as a member state, Sweden has undertaken to regard its economic policy as a matter of common concern to all EU member states. We will accordingly be participating in the economic policy discussions and be subjected to assessments and evaluations. We are also taking part in the drafting of the broad guidelines of economic policies; these guidelines, which can be likened to fiscal plans for the Community, are to be incorporated in the construction of EU countries’ economic policies.

The relationship between labour input and future pensions has weakened. The link is especially weak in the contractual early retirement scheme (AFP). For most workers, the annual pension does not depend on when they choose to retire, as long as they are between 62 and 67 years of age. Nor does the age of retirement affect the size of the national insurance benefits after the age of 67. Hence, the earlier an employee retires, the higher the total pension benefit will be. A clearer link between labour input and future pensions may be achieved in a defined-contribution pension scheme. The total pension for individual employees will then be determined by the employee’s contributions and the return on these contributions. The annual pension is determined by the individual’s age of retirement and the total contribution. For every extra year of employment, the employee increases his pension wealth. In addition, the total pension wealth will be spread over a shorter retirement period. This means the longer a person remains in employment, the higher the annual pension will be. 12  BIS Review 11/2002  The main principle is that there should be a clear link between labour input and pensions. Such a link may also be established in a system where the individual receives an annual pension that is stipulated in advance. Sweden has recently implemented a pension reform that ensures that annual pension benefits increase in relation to the number of years the individual has worked.
Monetary policy Last week the FOMC took additional action to promote a more robust recovery in a context of price stability. In order to ease policy, the FOMC deployed two complementary tools: asset purchases and forward guidance on interest rates. With respect to asset purchases, the Committee said it would start buying additional mortgage-backed securities at a rate of $ billion a month. In terms of rate guidance, the Committee said it anticipated that exceptionally low levels for the federal funds rate would likely be warranted “at least through mid-2015.” As Chairman Bernanke explained in the press conference that followed the meeting, the Committee also took two steps to underscore its commitment to ongoing support for the recovery. First, the Committee said that if it did not see substantial improvement in the outlook for the labor market, it will continue the MBS purchase program, undertake additional asset purchases and employ its other policy tools as appropriate until it does. Second, the Committee emphasized that it expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens. As usual, the Committee will publish minutes of the meeting three weeks after it took place. In the interim, however, I thought it might be useful to provide my own perspective on these actions. In my view, the decision to ease policy further is fully consistent with our dual mandate and policy framework. As I mentioned earlier, we have two goals – to promote maximum employment and price stability.

However, it is also worth noting other channels through which monetary policy affects economic activity are not impaired, including the impact on spending that is generated by rising wealth, declining risk premia and improving confidence. It is important to recognize that our tools are not all-powerful – monetary policy is not a panacea for all that ails our economy. But, at the margin, firms facing lower borrowing costs for any given economic outlook will invest and hire more. People who refinance at lower rates, or see the value of their homes and 401K pension plans go up, will spend more. I believe that a nudge in the right direction will move us closer to a self-reinforcing cycle of more hiring, more spending, more growth, and more investment. This is the type of virtuous cycle that we should seek and one that is consistent with a self-sustaining and improving economy. I believe our latest statement provides greater clarity about how we intend to use the tools we have to promote our statutory objectives. As Chairman Bernanke said at his press conference, the idea is to make it “more explicit, more transparent to the public, make it more obvious that the Fed will do what’s needed to provide the support for the economy.” In particular, the amount of asset purchases that we undertake will be a function of how the economy evolves. If the economy is weaker, we’ll do more.