samchain/econo-pairs-v1 huggingface dataset:
If the central bank needs to be recapitalised, for example, the government will at some point have to tax the private sector to pay for this (for more on the wealth effects of changes in central bank liabilities see Weil (1989)  , Harrison and Thomas (2019) and Buiter (2020)  ). 5. Reserve remuneration began in late 2005 – see footnote 1 and Chart 1. 6. Those unfamiliar with the model might ask where the upward sloping “LM” curve comes from and why an increase in MS means it shifts to the right. The answer is that money demand is said (reasonably) to depend on spending (Y) as well as the interest rate – desired money balances (including the demand for central bank money) rise along with the level of economy activity. The LM curve traces out the combinations of r and Y consistent with equilibrium in the money market for a given level of reserves (MS) – it’s upward sloping because, if the demand for money is to remain unchanged, in line with fixed supply, then a rise in Y (raising MD) would require a rise in r. When MS is increased this amounts to a new LM curve, to the right of the old one. 7. This has more on the Bank’s market operations and how Bank Rate is set. Some economists (see Woodford (2000) ) have argued you don’t even need central bank money to set the official interest rate or, more generally, to influence demand and inflation. 8.

Given the digitalisation of finance and proliferation of technology in financial services, DFIs need to remain at the frontier of these developments. This could include leveraging on big data and forging partnerships with technology firms to develop digital solutions at lower cost and increased efficiency. At the broader level, the development finance architecture should also shift to be more effective in channelling resources and catalysing private investment to developmental oriented projects and initiatives. Whilst most DFIs have been self-sustainable for the past few years, DFIs will need to diversify their sources of funding and ensure that the structure of liabilities is appropriate for the assets that they hold to be sustainable in the long run. DFIs cannot be dependent on fiscal support to carry out their mandates. DFIs should aim to have strong competitive position on new growth sectors supported by a sustainable strategy and management execution capabilities. Last but not least, DFIs are required to continuously review their institutional fit and business models to increase their development impact while remaining financially sustainable. Effective DFIs should also be able to act as catalysts to promote private sector investments and support economic growth. One example of a financially sustainable business model is demonstrated by the experience of Nacional Financiera (NAFIN) as an enabler to Mexico’s aspiration to combat climate change through the Renewable Energy Financing Facility, or REFF.
For all the noise about QE, the key thing for me is that it has thereby contributed to keeping stable the cost of finance for companies during the Covid period, and that has been very important both for monetary and financial stability. QE has also provided insurance against the sort of market volatility and dysfunction that we saw at the outset of Covid. It has therefore helped to prevent any liquidity-driven rise in yields, should such an event have occurred and in particular ensuring that the corporate sector was supported through this crisis. That said, the current programme of asset purchases is currently scheduled to end in December. It follows that the monetary policy response, if we need to make one, to the inflation pressure should involve Bank Rate not QE. There is no reason to beat about the bush on this point. Let me turn to that response. The MPC’s task is to set monetary policy to meet the inflation target, and in a way that helps to sustain growth and employment. The remit makes clear that it is appropriate to focus on inflation in the medium term, which is appropriate given the lags between changes in monetary policy and the impact on inflation. In our view, there are good reasons why the current above target inflation will be temporary, as I described earlier. In considering how to use monetary policy, it is also important to understand the nature of the shocks that are causing higher inflation.

As a result, total outstanding ringgit bonds increased by 10.7% to RM363 billion, which is equivalent to 81% of the gross domestic product. The general market conditions have also remained favourable for both issuance and trading activities, given the low inflation and interest rate environment and the strengthening of economic fundamentals. The Islamic bond market has also experienced exceptional growth. In 2004 the market expanded by 13.4%. To further enhance market turnover, Bank Negara Malaysia announced in January this year the usage of repurchase agreements as a monetary policy instrument, introduced the Institutional Custodian Programme to enable borrowing and lending of securities, and provided a securities lending facility for principal dealers. The implementation of these measures are aimed at improving the price discovery process and increasing the efficiency of capital allocation within the financial system. To facilitate the further development of the Islamic bond market, the Government has also imposed tax neutrality between the treatment on Islamic and conventional capital market products. BIS Review 29/2005  1  It has been just one year since we allowed Multilateral Development Banks and Multinational Corporations to issue Ringgit denominated bonds in Malaysia, and we are now witnessing the third issuance of such bonds by a supranational. In that, I am pleased to welcome the IBRD's issuance of its 760 million Ringgit Wawasan Bonds in Malaysia. We are pleased to note that the World Bank has decided to make its inaugural issuance structured in compliance with the Shariah.
Here is how Norman described the relationship between the Bank of England and the Government in the 1930s: AUDIO INSERT: “The Bank of England has always been constitutionally a private body... but what matters is not the position on paper but the position in practice. In monetary as in other matters the Government of the day must have the final word and this is fully recognised.” Today, the position on paper and the position in practice are the same. Our job is given to us by the Government and by Parliament. But for me, the story of the modern independent Bank of England began exactly fifteen years ago in early May 1997. It was a Bank Holiday Monday, immediately following the general election. After an early morning tennis match, I returned home to find a message from the Governor, Eddie George. He wanted to meet me in the Bank as soon as possible. An hour later we met in his office, alone in the imposing building known to most of you only by the facade shown on television. Eddie told me of his meeting that morning with the Chancellor, Gordon Brown, who had explained the proposal for Bank independence. It was something for which Eddie and I had worked for five years since Britain’s departure from the Exchange Rate Mechanism in 1992. Now we had a chance to show what an independent central bank could do.

Financial waters, already extremely chilly, then froze solid. Banks found it almost impossible to finance themselves because no-one knew which banks were safe and which weren’t. From the start of the crisis, central banks provided emergency loans but these amounted to little more than holding a sheet in front of the emperor to conceal the nakedness of the banks. They didn’t solve the underlying problem – banks needed not loans but injections of shareholders’ capital in order to be able to absorb losses from the risky investments they had made. From the beginning of 2008, we at the Bank of England began to argue that UK banks needed extra capital – a lot of extra capital, possibly £ billion or more. It wasn’t a popular message. But nine months later, market pressure forced banks to raise new capital or accept 2  BIS central bankers’ speeches  it from the state. UK tax payers ended up owning large portions of two of our four biggest banks, Royal Bank of Scotland and Lloyds TSB, but almost all banks would have failed had not taxpayer support been extended. That bold action in October 2008 could have happened sooner. But the most important thing is that it was done. And the policy of recapitalising the banks was soon copied by other countries. Bailing out the banks came too late though to prevent the financial crisis from spilling over into the world economy.
3/5  BIS central bankers' speeches  Second, to measure and quantify the ESG impact of potential investments and loan portfolios, which is necessary to incentivise firms to make sustainable investments that meet their sustainability commitments. 11. To this end, MAS announced in December last year that we are embarking on Project Greenprint. Project Greenprint aims to deploy technology at different stages of the supply chain to better monitor commitment to the relevant green standards and requirements. For example, Internet-of-Things (IoT) devices could be deployed on-site to directly capture and assess relevant real-time data, such as energy and water consumption, by borrowers, portfolio companies, and suppliers. It will also explore the application of AI and other technologies on third-party data sources, to quantify the ESG impact of potential investments and loan portfolios. We will work with a consortium of financial institutions, FinTech firms, and industry players with expertise in Green FinTech, and also look forward to partner with like-minded central banks who are committed to harnessing the power of innovation to support sustainable finance. Multilateral connectivity to enhance cross-border payments 12. Let me turn now to cross-border payments. The G20 is leading a concerted global effort to make cross-border payments less expensive, faster, more transparent, and more inclusive, while maintaining their safety and security. We heard in an earlier session today how the pandemic has accelerated the shift to digital payments, a trend that is helpful to this objective.

The overriding focus for Thailand this year is ensuring domestic recovery and restoration after the devastating floods in 2011, as well as putting in place short and long-term plans to prevent a repeat of these events. The damage from the floods was severe, with widespread disruptions in the agriculture and manufacturing industries in affected areas. As a result, economic activity contracted by 9 per cent year-on-year in the last quarter of 2011 and the economy barely grew over the year as a whole. BIS central bankers’ speeches  1  In the face of such dramatic numbers, it is important to remind ourselves of the nature of the shock that Thailand faced. Floods, like other natural disasters, are temporary one-off events. They hit you out of nowhere, but then disappear. This is very different from growth slowdowns due to inherent weaknesses in the economy, such as financial crises. As we are witnessing in many parts of the developed world, such retrenchment in economic activity tend to be long-lasting as previous excesses have to be worked out from the system. The aftermath of one-off shocks, on the other hand, is generally characterized by rapid resumption of economic activity as things get back on track. Thus there is no question that Thailand will recover quickly and strongly from the floods. We project that economic growth will rebound to 4.9 percent in 2012, boosted by private and public spending for post-flood restoration. In 2013, economic growth is projected to gather momentum, expanding by 5.6 percent.
Governance of Financial Globalisation Speech given by Sir Jon Cunliffe, Deputy Governor Financial Stability, Member of the Monetary Policy Committee, Member of the Financial Policy Committee and Member of the Prudential Regulation Committee  German Economic Council Annual Finance Conference, Berlin 11 February 2020  1  All speeches are available online at www.bankofengland.co.uk/news/speeches  Thank you for inviting me to address you today. It is now nearly two weeks since the UK left the European Union. Our status as a non-member of the EU, what is called a ‘third country’, is now quite clear. The future relationship between the UK and the EU, of course, is not yet fixed. It will depend on the outcomes of the negotiation that has now commenced. Those negotiations are for the UK government and the EU authorities and member states. Our job as the Bank of England is to deliver monetary and financial stability within the mandates that are set for us. So I will not – and indeed I could not – talk today about the trade negotiations or hazard guesses about the outcome. But while we are not responsible for trade negotiations and while all decisions about the future relationship are for governments, the governance of the UK’s financial links with the rest of the world, the EU included, is important to us given our responsibility for financial stability in the UK. I want to talk today in part about the governance of financial globalisation, the progress we have made, and the challenges we face.

But it also put in place a monitoring framework to ensure that this assessment is kept current and keeps pace with rapid developments in this area. The FSB also identified a number of non-financial-stability risks that need to be addressed by the relevant regulatory bodies in line with its mandate to prevent regulatory underlaps and overlaps. 4  All speeches are available online at www.bankofengland.co.uk/news/speeches  4  And it is not just in the scanning of risks and responses to them that the post crisis reforms have left us in much better position. The stronger institutional framework, reporting to the highest political level, and the development of more granular and more comprehensive standards, provides much greater assurance for jurisdictions about the import and export of financial sector risks. That was the objective of the global leaders at the Pittsburgh Summit when they committed to developing and implementing global standards in a way that ensures a level playing field and avoids fragmentation of markets, protectionism, and regulatory arbitrage. And that is why, five years later, G20 leaders felt able to conclude that ‘jurisdictions and regulators should be able to defer to each other when it is justified by the quality of their respective regulatory and enforcement regimes, based on similar outcomes, in a nondiscriminatory way.’  We need to make sure we can sustain this especially in the face of new challenges. Crisis concentrates minds.
Finally, I’ll suggest some areas where new research could help push forward the frontier of stress test modeling, both of specific elements that go into the stress test calculation and of the broader impact of the stress testing programs implemented here in the United States and elsewhere. And of course, I need to note that my remarks today are my own and do not necessarily reflect the views of the Federal Reserve Bank of New York or the Federal Reserve System. I believe that stress testing and the CCAR program were the most significant and impactful regulatory and supervisory changes coming out of the global financial crisis. Why do I feel that way? To begin, it helps to remember the prevailing environment that generated the first broad-based supervisory stress tests – the SCAP – in early 2009. It was a period of significant uncertainty – uncertainty about the stability of funding markets, about losses at individual institutions and about losses in the financial system overall. There was a growing cottage industry in estimating global and U.S. financial sector losses on mortgages, mortgage-backed securities and other positions, with projected global losses ranging as high as $ Trillion. 1 Equity prices had plummeted, especially for banks, with declines running far ahead of falls in regulatory capital ratios. As of September 2008, the tier 1 capital ratios of the five largest U.S. bank holding companies ranged between 7.5 and 8.9 percent, well above the then-prevailing 4 percent minimum requirement.

In pursuit of this we look at factors affecting the underlying robustness of the financial system, as well as potential “triggers” which, especially at times of structural weakness, could bring on a crisis. Our remit is of course in relation to the UK financial system – but this work has a substantial international dimension, given the openness of the UK economy, and the international character of much of the City. What does this mean in practice? The Bank’s financial stability work include such things as overseeing the UK payments systems; analysing broader developments in the banking, securities and insurance sectors, and the evolving strategies of London’s securities exchanges; looking at developments in emerging market economies; and contributing to the debate on the reform of the international financial system. In short, the Bank’s financial stability team has to analyse and respond to any developments – market or institutional; structural or temporary – that could threaten financial stability. Our second relevant core purpose is to promote the competitiveness of the UK financial services sector. This is not a lobbying function; we are concerned with the promotion of effectiveness and efficiency, not the acquisition of favours. Nor is it a responsibility exercised only in respect of UK owned firms. The UK financial services sector is more truly international than that in any other country in the world. The Bank, and the other authorities in the City, have an unwavering commitment to openness, and the provision of a level playing field to all firms regardless of nationality.
If we look at Sweden, productivity growth in the business sector has been very weak since 2006, a year or so before the global financial crisis occurred. We have often had to revise down our productivity forecasts as a result of the surprisingly weak development. Productivity has also shown weak development in other developed countries recently, which indicates that it is the result of a joint trend. There are many possible explanations for the decline. Some economists, such as Robert Gordon, say we are in a period of very low productivity growth that will be the new normal for a rather long time. According to this point of view, a large share of the fruits of digitalisation have already been harvested. As early as 2005, for instance, several economies had adapted their business methods and models  3  Roine (2016). 2 [12]  to the internet.

A combination of insights, leadership, technical capacity and adequate preparation needs to be channeled into a general enthusiasm for both our regions to rise to the potential challenges and in the process become greater partners for success. In summary, the future direction of the ASEAN-EU relations will be dependent on several multidimensional facets that would include: the changing strategic landscape amidst globalisation, ASEAN's and the EU's desire to play a greater role in the global economy and international affairs, the EU's ability in managing its enlargement process, and ASEAN's commitment to forge greater regional integration. I am certain that the passage of time and closer analyses of the issues discussed at this Conference will yield more lessons that we could take to heart in making progress on expanding ASEAN-EU economic and financial links. It is my hope that in the future we can continue to have such constructive exchanges of views and experiences that will further nourish the broader learning environment. In closing, allow me to thank the speakers for enriching the Conference with their presence and their cutting-edge perspectives. I also wish to again thank the European Commission for giving Bank  1/2  Negara the opportunity to co-host this Conference. To all our participants from abroad, we hope you stay in Kuala Lumpur has been pleasant, and we wish you a safe journey home. 2/2
The euro area has also shown some improvement recently, with positive growth rates in some countries as early as in the second quarter. The latest figures suggest that economic activity may be expected to show positive growth rates across the area in the third quarter. That said, the upcoming recovery will be slow, meaning that quite some time will elapse before pre-crisis output levels are restored. BIS Review 151/2009  1  Public finances have worsened considerably in the euro area owing both to the operation of the automatic stabilisers, which have responded to the cyclical downturn, and to the discretionary measures adopted to boost demand and the action taken to support the financial system. The financial crisis and the decline in activity have severely affected some European credit institutions, which have come to depend largely on public-sector support and which are immersed in a process of adjustment that may have repercussions for their ability to effectively channel funds in the future. On the inflation front, we have continued to witness year-on-year declines in consumer prices in the euro area, due above all to notably lower oil prices than a year ago. Most forecasts suggest positive inflation rates will resume in the area in the coming months, as the comparison effects with the levels reached by commodity prices twelve months back cease to apply.

In 2021 the impact of the health crisis on the economy waned, prompting a decline in household savings, although these remained high from a historical standpoint. There has been a pronounced reduction in household savings flows since end-2021, against a backdrop of high inflation rates in which the nominal consumption growth rate is outpacing income growth. As a result, in 2022 Q3 the household saving rate fell below the levels observed in the years leading up to the pandemic. The high savings levels seen at the height of the pandemic owed to household consumption dropping far more sharply (more than 12% in 2020) than income, with the latter partially underpinned by the public support measures deployed to mitigate the adverse economic effects of the pandemic. The main factor behind the slump in consumption (and the  1  attendant growth in savings) were the health restrictions, which presented a barrier to spending on certain services such as hospitality and entertainment. Bear in mind that the savings growth recorded over the last few years was not distributed evenly across households. On the spending side, the restrictions had a greater impact on the consumption patterns of higher-income households, for whom hospitality and entertainment make up a larger share of the consumption basket. On the income side, they were hit less hard than lower-income households, since low-income individuals account for a larger share of employment in the sectors most severely affected by the health crisis.