samchain/econo-pairs-v1 huggingface dataset:
The sanitary emergency triggered by the fast spread of COVID-19 has forced to take drastic containment measures across the world, which directly affect the functioning of the economy and cause global uncertainty to soar. Unlike other episodes that respond to the business cycle or financial turmoil, this shock brings activity to a sudden halt that shakes both demand and supply in countries both rich and poor, from within and from abroad. Because of these differences in its origin, this crisis may behave very differently from its predecessors. One factor determining its duration will be the extension of the sanitary emergency and containment measures and how the restrictions will be lifted as the spread of the virus is controlled. In the abscense of other shocks to the economy, this could mean that economic activity could recover faster than from previous crises. A second determinant is how deep the productive system will be damaged. The dramatically reduced or even dried-up revenues of businesses creates great pressures on their cash flows which, if not controlled and/or mitigated, in many cases may threaten their survival, the proper operation of payment chains, employment and financial stability. In such circumstances, all means must be sought to avoid the ripple effects of abrupt activity interruption. This calls for resolute policy interventions and the involvement of financial institutions. Although certainly not the source of the problem, banks and other financial institutions must be part of the solution. 7  Chile meets this situation with important strengths.

With the renewal of RTGS, the wider implementation of ISO 20022 messaging standards for payments and the inclusion of LEIs in credit messages, the Bank is committed to changes which will have a positive impact for users of payment services. But we, together with Pay.UK, and all of you here today need to keep up the momentum and energy to deliver this critical change – a foundational change which will help future proof UK payment systems; deliver the new products and services which your customers are asking for; and support and contribute to the wider economic transformation being brought about by the data revolution. 13  Such as HM Treasury, and GLEIF - the global body charged with supporting the implementation and use of LEIs. 6  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  6
And we should expect that trend to continue for a number of reasons. First, and most obviously, what I have called the digitalisation of everyday life will continue. The growth of internet commerce or use of banking and payments apps, for example is forecast to grow/unlikely to stop. Second, there are further developments in train within existing payment systems, infrastructure and regulatory frameworks. These include Pay.UK’s development of the New Payments Architecture[5]. The Bank of England is well advanced in the build and implementation of a new central bank real time payment system (RTGS), the central rail of the current UK payments infrastructure. This renewal programme will increase resilience and access, and offer wider interoperability, improved user functionality and strengthened end-toend risk management of the UK’s High Value Payment System. As announced this morning, the government and regulators[6] will expand the Open Banking framework through making improvements on API performance, improving the provision of information sharing to third party providers and working towards additional functionalities, such as variable recurring payments. Third, and looking a little further into the future, over the last decade a set of newer technologies have emerged which may have the potential for a further transformation in payments. I am referring here to technologies that have been pioneered and refined in the crypto world, such as tokenisation, encryption, distribution, atomic settlement and smart contracts. These developments have been much hyped of course, and one could not say it was a certain bet that they will be as transformative as some have claimed.

Rather, I would ask those interested in the payments innovation to read and respond to the consultation and the proposed model – if they have not already done so. In the next phase of the work, which will lead to a decision on whether or not to proceed to launch a Digital Pound, the Bank will work with the private sector on further experimentation, proof of concepts and to develop the technical blueprint. The digital pound is envisaged as a general purpose retail digital currency for use by households and firms in everyday transactions. The Bank is often asked why it is focussing on developing a retail rather than a wholesale digital currency, given the potential for the new technologies I have been discussing to transform wholesale financial transactions and the desirability of settling such transactions in the highest quality settlement asset – i.e. central bank money. There is, bluntly, a misunderstanding here of the Bank’s position. We recognise very clearly the potential transformative effect on wholesale financial markets of tokenisation of financial assets, atomic settlement, smart contracts and other emerging technologies[19]. Indeed, the Bill now in Parliament will enable us, with the FCA, to set up a sandbox in which developers can explore ideas like collapsing trading and settlement into an instantaneous smart contract. And we want for financial stability reasons, wholesale transactions to settle in central bank money to the maximum extent possible.
As you may be aware, Sri Lanka is presently engaged in a valiant effort to control many terrorist activities waged by the LTTE, a Group acknowledged worldwide as a Terrorist movement. USA, Canada, the EU and many other countries have banned this movement due to flagrant human rights violations and inhuman acts of terror. They have been designated as a terrorist group by most countries in the western hemisphere. As has been recognized worldwide, the most effective manner to undermine and defeat terrorist activities is to stop or curb its funding sources. Notwithstanding the bans, the LTTE has extended its tentacles in North America, the European Union and Australia. In response, those countries and nations are today taking meaningful steps to stop these fund raising activities and taking the perpetrators of such crimes to justice and we deeply appreciate such moves. The Government of Sri Lanka is dedicated to winning the support of all countries in this regard through the exchange of information on a bi-lateral basis which would enhance bi-lateral co-operation through a structured exchange of information. Only last week, one such initiative with Switzerland was commenced where fruitful discussions were held to establish a framework and modalities for structured co-operation. It has also been recognized that efforts to combat the financing of terrorism require jurisdictions to expand the scope of the anti money laundering framework to include non profit organizations and, in particular, some dubious charities. This is to ensure that such organizations are not used, directly or indirectly, to finance and support terrorism.

We cannot write a rule to take care of every situation that may occur, and as a forward looking supervisor we are applying judgement in conditions of uncertainty about the future. How firms deal with the uncertainty of the future will also shape their culture. I firmly believe that what we can best do in this area is to provide a clear sense of direction and guidance through open communication starting with those of us at the top, in which we are clear on what we expect of firms. Open and transparent communication of this sort should then be supplemented by the clear understanding that we will all stick to the script. Trust is important. Consumers need to be confident in the firms that they choose to use, and inevitably trust is an important part of that confidence. Likewise, as supervisors, our judgements are inevitably conditioned on whether we can trust the people with whom we deal. Good culture is a product of trust and it matters a lot for both prudential and conduct regulators. Culture is everywhere and nowhere in firms; everywhere in the sense that it is shaped and determined by all the features of the firm – its people, organisation, reward structures etc; and nowhere because culture is not a tangible thing sitting on a shelf that can be prodded and changed of itself.
In fact, Malaysia’s capital account remains free with free mobility of inflows and outflows of capital for investments. The market remains open to all market participants and we shall ensure the necessary liquidity to the market. In essence, the measures that were instituted over the past week are consistent with our long standing policy of non-internationalisation of the ringgit and one that we expect banks to fully adhere to without exception. We do not recognize or condone the non-deliverable ringgit offshore market. Those who engage in NDF or NDF-related transactions are doing so at their own peril. I understand that to some, these are challenging measures but as I mentioned earlier, they are not new. We need to remove the negative influence of the NDF activities that impacts the smooth functioning and stability of the onshore financial market. We need to protect the interest of genuine investors and businesses, irrespective of whether they are foreign or domestic. Only through a concerted effort by all the stakeholders of the ringgit market, can this objective be achieved. We need to remember, that integrity and proper functioning of our financial market is in 3/5  BIS central bankers' speeches  the interest of every market participant, and all of us have a role to play towards achieving this objective. Way forward To overcome these challenges and to take on new direction and impetus, we had formed the Financial Market Committee (FMC) earlier this year.

Of late, it has been trending down, but the average volatility remains high at 10.1% compared to its 5-year average of 8.2%. On a day-to-day basis, the ringgit was also volatile, particularly prior to the USD/MYR fixing time even though it can be quiet throughout the rest of the day. As trade related FX transactions are done throughout the day, it is highly perplexing as to why trading activities and observed volatility have to be concentrated just prior to the fixing time. The only plausible reason for the above phenomena is that it emanates from the fixing orders from non-resident financial institutions 1/5  BIS central bankers' speeches  (NRFI), the transactions of which are driven by NDF market activities. As NDF is settled using fixing rate, NRFI have been using fixing orders to square their offshore NDF positions. As a consequence of such speculative activities, the ringgit fixing rate has significantly diverged from the onshore traded ringgit prices. The ringgit fixing rate was clearly out of sync with real trades and investment activities done throughout the day. The impact of NDF market volatility has been clearly pervasive in the onshore market. Several FX traders in the domestic market were observed to be looking towards the NDF market to provide cues in determining the opening market price for ringgit. And this behaviour continues throughout the day in the pricing of the ringgit. Unfortunately, our media and public were also drawn into taking the lead from these offshore rates as well.
If the uneven pace of economic recovery in the euro area is confirmed and if we see a risk of inflation being too low for too long, we can take action in June. We can act in various ways, depending on the situation. At present, however, it is too early to say what exactly we’re going to do. A lot depends on the forthcoming economic data and on our staff growth and inflation projections, which are to be released in June. Your room for manoeuvre is limited as interest rates are already very low: the key rate is only 0.25%. They are low but they can still go lower. Are negative interest rates in the euro area possible? Negative rates are one of the instruments available to us. They have been discussed extensively by the Governing Council. We are technically and legally prepared for such a possibility. And market participants are well aware that we are contemplating such a move. Wouldn’t negative rates discourage people from keeping their money in banks? This depends on how negative they would be. Indeed, rates that fall deep into negative territory could have an impact on depositors. But a deposit rate slightly below zero does not necessarily imply that depositors would be affected, while still providing incentives for banks to lend more. In recent years, the ECB has used a number of non-standard monetary policy tools. It has purchased bonds on the market, pumped hundreds of billions of euro into the market in the form of cheap loans for banks.

The failure to satisfy such a margin call could lead to the liquidation of the position. This approach to risk management can transform credit risk into liquidity risk. In most circumstances, the impact of this is unexceptional. Other institutions will find the new prices attractive and step in and buy. In exceptional circumstances, however, as creditors and counterparties seek to reduce their exposure to future losses, actions intended to limit individual exposure to risk may instead increase overall risk. We do not know very much about what makes markets more or less vulnerable to this type of acute shock. This is in part because liquidity itself is not easy to measure. A broad range of indicators tells us something about funding liquidity, including growth in monetary aggregates, in financial assets and different forms of borrowing or credit. Other measures, such as movements in bid-ask spreads, the level of interest rates, changes in asset prices and risk premia, along with the level of volatility and expectations of future volatility, and turnover volume or other measures of market depth, help us evaluate market liquidity. Yet none of the measures provides a reliable way of judging how vulnerable markets are to a reversal, or the scale of damage that might accompany a reversal. BIS Review 19/2007  1  These measurement limitations are similar to those that make it difficult to judge when, and by what magnitude, asset prices deviate from fundamental values at any given point in time.
5  Typically, policymakers think about that in terms of the “output gap”, reflecting firms’ capacity utilisation and slack/pressure in the labour market. By contrast, in the academic literature – notably Michael Woodford’s Interest and Prices – the benchmark is to set monetary policy in order to offset the frictions in the economy, so as to obtain the conditions that would prevail if prices, wages etc were fully flexible. Policymakers and academics need to resolve how big the gap is between those two approaches. BIS Review 112/2008  3  that the textbook policymaker knows how the degree of slack in the real economy acts on future inflation (or the slope of the Phillips curve). The two forces sweeping through the world economy test the way policymakers typically apply various elements of this set up in more routine circumstances. For example, how do the commodity price rises and, separately, the credit crunch affect the “equilibrium” short-term real rate? Is the actual short real rate still an adequate proxy measure of monetary conditions? Is the “normal” relationship between economic slack and future inflation intact? The cost shocks, and monetary conditions Although they have fallen by nearly $ since the peak reached in July, oil prices are still up more than 200% since the middle of 2003; and, indeed, around 3% since the beginning of this year.

To overcome the damaging fragmentation, Europe needs to advance its institutional framework towards – among other things – a true banking union with single supervisory and resolution mechanisms. The set-up of euro area wide supervision under the auspices of the ECB is a prerequisite for breaking the vicious circle of sovereign and banking risks. Moreover, it will reinforce financial integration, mitigate macroeconomic imbalances, and – last but not least – unburden monetary policy. BIS central bankers’ speeches  7
So the challenges are ahead of us. It is not easy to change mindsets. Remember, that a lot of people in this country, particularly those who work for the government have been used to a war situation. For most of their working lives, they have been living in a war economy. A war economy is very different from an economy at peace. That, in my view, is why you had a change of government this year and you have a new government, who is trying to win the peace. We won the war, but it was very difficult to win the peace. Why? Because our mindsets were stuck in the past. There was that concept of control. You had to control everything in the economy including prices. When I say prices, I mean the exchange rates, the interest rates, other prices which affect the functioning of the economy. That is all justifiable in a war situation. But when you come into a peace situation, where it is a normal functioning market economy, then you have to re-think, you have to get back to first principles, and reassess how the economy should work in a new dispensation.

To whet your appetite – and here my comments are aimed particularly at the representatives of the press – I should like to stress that we have been particularly transparent and candid in preparing this work, something which was probably inconceivable just twenty-five years ago. So start looking for the scoops which, no doubt, are hiding within the pages of the book – happy hunting! 2  BIS Review 71/2007
This led to the displacement of more than 25,000 people, loss of lives and significant economic damage. Last year, 53 weather disasters across the world racked up more than USD1 billion in economic losses 1. In fact, it is estimated that altogether, economic losses from natural disasters were more than a quarter of a trillion US dollars in 2020 2. These events are prompting a renewed determination around the world to achieve a new balance of economic, social and environmental progress. Indeed, the pandemic presents a once-in-ageneration opportunity to place sustainable development firmly at the core of recovery plans. To date, Governments of more than 120 countries have committed to “Net Zero” by mid-century or earlier. Among the countries are some of Malaysia’s major trading partners such as the EU, South Korea, Japan and China. Similarly, more and more companies are also adopting net zero targets. It is noteworthy that in 2020 – during the pandemic - such commitments by regions increased by ninefold, and threefold by corporates. This is significant. A fast growing number of countries have also introduced climate change legislation and carbon management programs. Global climate change laws are reported to have increased twenty-fold since 1997 across 164 countries, up from 99 countries just 6 years ago 3. Climate-related laws and frameworks are also being strengthened in many countries, in ways that could significantly alter the course of economic development going forward.

It is a business issue and it is a social one, inseparable from the basic obligations of financial institutions to prudently manage risks, act responsibly towards their customers and create long-term value. Consistent with this view, let me just mention some of the things that Bank Negara will be focused on in terms of its regulatory and supervisory priorities in the near term to promote a climate-resilient financial system. Over the last two years, we have been actively encouraging improvements in how financial institutions consider climate risk in their risk management approaches. We know that it will take some time before we see greater uniformity in approaches and while we would prefer not to dictate practices, we see a clear need to reduce the substantial divergence currently observed across institutions. The Bank is exploring various options to encourage better risk management approaches by outlier institutions – including through Pillar 2 capital requirements and supervisory assessments to reflect an inadequate consideration of climate risks. Building on the implementation of the principles-based taxonomy and the work by JC3 to address data gaps, the Bank’s Financial Stability Committee has recently endorsed a four-year plan to prepare for industry-wide climate change stress tests at the counterparty level. This work is supported by efforts internally within the Bank to model the macroeconomic impact of climate shocks based on defined climate scenarios. And we will be taking further concrete steps to improve transparency on the management of, and exposures to, climate-related risks in the financial sector.
Monetary policy can only affect real variables during a limited period of time and means that only for a limited period they can deviate from their long-run sustainable paths of development. As I mentioned earlier, monetary policy has very little effect on housing prices and debt even in the short run. People sometimes talk about the “long-run effects of today’s monetary policy” on household debt, but according to this reasoning, monetary policy has no long-run effect on household debt.11 Monetary policy is stabilisation policy, not structural policy. Influencing household debt in the long run thus requires structural policy, such as fiscal, tax and housing policy, as well as financial stability policy, so-called macroprudential policy. A task for macroprudential policy The large negative effects on the economy as a whole mean that it is hardly possible at present to use the policy rate and monetary policy to influence housing prices and household indebtedness without prejudice to the mandate of price stability and highest sustainable employment. It is better to use other, more direct means, which do not entail such large real  8  Bernanke (2010, 2011) reaches the same conclusion. Bernanke (2010, Slide 9) also shows that for 20 countries the relationship between how expansionary monetary policy is (measured as deviations from a Taylor rule) and how house prices have developed is very weak, not statistically significant, and only explains 5 per cent of the variability in the increase in housing prices between the countries.

This mismatch has the potential to create large swings in household net worth which may well exacerbate fluctuations in demand and output. The upside consequence was seen in the consumption boom of the 1980s, and the opposite was evident in the bust of the early 1990s when falls in house prices meant that as many as 1½ million families had negative net equity resulting in higher precautionary saving and lower consumption. The forward-looking information contained in house prices underlines the importance the MPC attaches to measuring them accurately. The recent divergence between the rates of house price BIS Review 53/1998  -3inflation implied by the Halifax and the Nationwide indices is both puzzling and unfortunate. The rates of house price inflation recorded by the two indices began to diverge at the beginning of 1997. The most recently published data suggest that house prices, as measured by the Nationwide index, rose by 12.0% in the year to April 1998, whereas, according to the Halifax index, they rose by only 5.6%. Gross household wealth in the year to April 1998 rose by £ billion more according to the Nationwide than the Halifax index. Such differences matter in our assessment of the economy. The Bank of England, together with representatives from the Halifax and Nationwide and from the Department of Environment, Transport and the Regions (DETR), have spent a great deal of time and effort trying to understand the cause of this divergence and to assess what is really happening to house prices.