samchain/econo-pairs-v1 huggingface dataset:
Monetary policy comes to mind since it is conceivable that we might use the interest rate instrument more aggressively in the face of mounting cyclical excesses in the credit and real estate markets. Raising interest rates in the case of a credit boom – leaning against the wind – is a natural response, as the higher market borrowing rates would exert a dampening effect on credit demand and – eventually – on real estate prices.7 Using the interest rate to contain asset price growth would, however, regularly lead to deviations from the interest rate path that would be optimally justified by the pursuit of the price stability mandate. This is an illustration of the well-known principle according to which the number of policy tools should equal the number of policy goals. At a more practical level, empirical evidence suggests that the interest rate may be an inefficient tool when used single-handedly for the purpose of dampening the financial cycle. That is, containing a boom may require very large interest rate movements, leading to commensurate output losses.8 In sum, while interest rate policy may at times be counted on to support efforts to contain financial stability risks, it is unlikely to suffice as the main, or sole, instrument in doing so. 5  Blinder and Reis (2005). 6  Haldane (2010); Calculations based on former banking crises suggest that, on average, about 10% of GDP is lost initially (peak-to-trough) and that the cumulated (longer-term) cost may have added up to 20–100% of pre-crisis GDP (BCBS (2010)).

The challenge is to enhance efficiency and reduce costs, respond to market and regulatory demands and, most of all, gain competitive advantage through innovative products and services. Ladies and Gentlemen, The success of this IBBM-University of Nottingham collaboration will depend on the active involvement and support from the financial services industry. I therefore, encourage the industry to play a proactive role in supporting the activities organized by the Financial Services Research Forum. In concluding, I look forward to seeing greater collaborative efforts between the academia and the industry in research and development for the financial services industry. On this note, I am pleased to officially launch the collaboration between IBBM and the University of Nottingham , in the Financial Services Research Forum. Thank you. 2  BIS Review 63/2006
5 de octubre de 2017  Presentation of the III Seminar in Economic History Banco de España Luis M. Linde Governor  Good morning and welcome to the Banco de España for our III Seminar in Economic History. The Seminars in Economic History organised by the Banco de España were launched three years ago, in 2015. The first one was held on the occasion of the retirement of Pedro Tedde de Lorca, who for many years was the member of the Directorate General of Economics and Statistics in charge of the Economic History programme and that, by the way, has been recently elected as a member of the Spanish Royal Academy of History. Last year, in October, we celebrated the second edition of the Seminar. The main purpose of these seminars is to bring together economic historians from academia and economists from the Bank to engage in research into economic episodes of the past with relevance for the economic problems of today. For many years the Banco de España has devoted substantial resources to research in economic history. This tradition goes back to the mid-1960s when a project was launched to publish, in one volume, a series of essays tracing the origin and development of the Banco de España, one of the oldest banks of issue, originally established in 1782 as “Banco de San Carlos”. The result was El Banco de España. Una historia económica and Ensayos sobre la economía española a mediados del siglo XIX, both published in 1970.

Malaysia is also the host to a number of the international institutions in the area of finance that include the Islamic Financial Services Board, and more recently, the Alliance for Financial Inclusion. We are very pleased that SWIFT, an important market infrastructure service provider to the global financial community, has selected Kuala Lumpur as its Corporate Services Centre. Malaysia’s financial sector has in this recent decade made significant strides in facilitating the country’s cross-border economic linkages with other economies. Malaysia is part of a vibrant region, comprising ASEAN and of the greater Asia. The region has prevailing strong foundations and significant growth prospects with strong inter regional connectivity. Malaysia’s volume of cross-border trade and foreign exchange settlements with ASEAN economies alone has grown at an average rate of 10% in the recent four years, reflecting Malaysia’s increasing integration with the regional markets. A vibrant foreign exchange market has supported this growth, where the overall Malaysian foreign exchange market volume has increased by more than five-fold in a period of 8 years to USD11.1 billion per day, at a ratio of about 6 times of total trade. Like most regional blocs, the integration process for ASEAN seeks to promote greater regional connectivity which will in turn expand and reinforce the region’s growth potential. The aim of reinforcing the regional linkages in the payment and settlement systems is to enable the establishment of risk mitigation mechanisms such as Payment versus Payment (PvP) and Delivery versus Payment (DvP) to reduce the foreign exchange and securities settlement risk.
The progressive easing of underwriting standards that was needed to support housing demand could only persist as long as housing prices were rising rapidly. But for home prices to rise rapidly, underwriting standards had to be progressively relaxed in order to generate more buyers. When home prices began to slip beginning in 2006, the dynamic swung into reverse. The collateral values supporting borrowing and spending began to fall. As banks’ and other financial intermediaries’ credit losses began to mount, credit availability became impaired and this exacerbated the downward pressure on home prices and on borrowing and spending. Not only did households that had overextended themselves have to cut back; others also retrenched because they were also affected by declines in wealth and heightened uncertainty about the economic outlook and their job prospects. It is not surprising that the workout from the excesses of this type of boom would take a long time. Just as it took several years for the boom to begin and run its course, so it would take years, not months, for households and financial intermediaries to adjust their balance sheets and behavior to the new environment. Households had to raise their saving rates in order to rebuild their balance sheets. Financial intermediaries had to replenish their capital to replace losses via loan charge-offs and other credit impairments. Both adjustments would need to occur before the economy could grow rapidly.

The bigger the balance sheet becomes, the more a future rise in interest rates will squeeze the Federal Reserve’s net interest margin. Some worry that this exposure to higher short-term rates could conceivably affect the Federal Reserve’s monetary policy credibility in the future. Some market participants might worry that the Federal Reserve could become reluctant to raise short-term rates in a timely way because this would constrain the amount of revenue that it would earn and remit to the Treasury. I am confident there is nothing to worry about on this score. Even if the Federal Reserve was not obliged to act in keeping with its dual mandate – which it is – with its assets skewed toward longer-duration securities, the Federal Reserve would have every incentive to ensure price stability over the long term. It is true that the larger the size of the balance sheet, the more likely it is that the Fed would ultimately sell assets back into the market, potentially at prices that could result in losses. Although some fear that such losses could compromise the Federal Reserve’s independence, there is no reason why this should be the case, providing we stick closely to our mandate at all times. To date, the Fed’s actions in responding to the crisis have resulted in abnormally large profits that might reasonably be set against any subsequent losses.
The ultimate vision is for the Asia School of Business to be a premier business school that develops transformative and principled leaders who will contribute to the advancement of the emerging world, particularly in Asia. Bank Negara Malaysia’s commitment to this collaboration is not only in providing the 20-acre land that is in the green lung of Kuala Lumpur for the campus and in building state-of-the-art facilities for the School, but being very much part of the Asian region, we hope that Malaysia, and more specifically, the Central Bank, will also be leveraged upon for our knowledge and experience in the region. BIS central bankers’ speeches  1  Located in the heart of Asia, Malaysia offers an eclectic mix of cultures and ethnic backgrounds that reflects the heterogeneity of Asia. As a highly open economy, Malaysia has strong economic and financial inter-linkages with the world, from Asia to the advanced economies and other emerging economies, including Latin America, the Middle East and Central Asia. The School will, therefore, draw extensively from the network of businesses in the emerging world to provide a platform for learning and research, and thus offer an extensive experience of the diversity that exists, in particular, in Asia. With the strength founded in the collaboration, I am confident of our potential to develop the Asia School of Business on solid foundations. The Bank looks forward to working with MIT Sloan in making this collaboration a success.

Zeti Akhtar Aziz: Asia School of Business – meeting Asia’s increasing demand for talent Remarks by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Signing Ceremony of the Collaboration between Asia School of Business and Massachusetts Institute of Technology, Cambridge, Massachusetts, USA, 8 April 2015. *  *  *  President Rafael Reif, Dean David Schmittlein, And dear colleagues from MIT and the Asia School of Business It is my very great pleasure to be here in Cambridge at this ceremony today, for the formalisation of the collaboration between Bank Negara Malaysia and MIT for the establishment of the Asia School of Business in Kuala Lumpur. Bank Negara Malaysia has for more than a decade now, been involved in extensive investment in education – not only for the financial sector, but for the broader economy. Our reach has also not only been for the development of talent from our own country, but it has also extended to the Asian region and beyond. This is based on our conviction that the next generation of talent – whether in the private or public sectors – needs to recognise and understand the dynamics and interconnectivities of the new regional and international environment. In particular, as the pace of economic and financial integration that is now taking place in Asia intensifies, the talent needs to appreciate the implications of the new inter-linkages and its implications.
One suggestion that has received significant attention is for banks to retain a portion of the securitization on their balance sheets. The notion is that with “some skin in the game,” those making the loans will show greater due diligence in terms of the underwriting standards applied to the underlying loan originations. In some ways, the TALF program is already facilitating this outcome, with the highly-rated AAA-rated securities sold to investors and the lower-rated tranches generally retained by the issuers. Second, I suspect that investors will become less reliant on the rating agencies – conducting more due diligence themselves. Third, I believe there will be a greater focus among investors on standardized, homogeneous, easy-to-evaluate products. This will improve the underlying liquidity of  BIS Review 69/2009  5  securitizations, which should result in lower lending costs and should make the assessment of the risk of the assets easier. Fourth, I think the overall securitization market will be smaller. The demise of parts of the shadow banking system such as the SIVs and the fact that banks are likely to have to consolidate some off-balance activities back onto their books at the end of this year should reduce the overall demand for and supply of securitized product. Developing and implementing the TALF has been challenging. As the program enters into a new phase with the financing of CMBS and legacy CMBS, we will encounter further hurdles that we will have to overcome, adjusting and modifying the program as needed in order to make it more effective.

Moreover the type of deals has broadened out to include a wide range of asset classes. For example, this month’s deals included credit card, auto loan and lease, equipment leasing, insurance premium and mortgage servicer securitizations. Second, the market for such deals is not wholly reliant on TALF financing. TALF loans have accounted for a bit more than half of total issuance volume of ABS, with considerable variability from subscription to subscription period. We view this as a good thing. This means that the TALF is helping to restart the market, rather than the TALF being the market. Third, and most importantly, spreads on consumer ABS have been coming down sharply from their peak levels reached late last year. For example, the spreads on AAA-rated credit card ABS have narrowed from a peak of about 600 basis points over LIBOR to slightly above 200 basis points currently. Encouragingly, spreads of even lower-rated ABS – securities that are not TALF eligible – have also narrowed quite significantly. Although it is still too early to say the TALF has been a resounding success, we at the Fed are encouraged by the results so far. While we are generally pleased with how the TALF program has been evolving, many challenges remain. One challenge is in striking the appropriate balance between sufficient protections against abuse of the program, on the one hand, and a degree of red tape and restrictions that could make the program unattractive to issuers and investors, on the other.
One example of an explanation is that global saving has increased in recent decades due, for example, to demographic factors, at the same time as investments have decreased due, for example, to a falling relative price for capital and lower public investments. 1  1  See Rachel and Smith (2015). BIS central bankers’ speeches  1  Figure 1 Low interest rates in Sweden, Germany and the United States  Note. Yields on 10-year government bonds. Source: Macrobond. In that the level of interest rates is lower today than it was previously, central banks’ room for manoeuvre has decreased. It has become more difficult for them to stimulate the economy when economic activity is weak or inflation is below target. This is partly because when the level of interest rates is low, policy rates are also low, on average. This reduces scope for cutting the policy rate, as this cannot be decreased indefinitely but will reach its lower bound more frequently. 2 A low nominal interest rate situation will also reflect the low level of inflation. All other factors being equal, when average inflation is low, it is more difficult to achieve the really low or even negative real interest rates that are sometimes needed to stimulate the economy. Reduced lower boundary for the policy rate and unconventional monetary policy have increased scope for action In principle, the central banks have managed the reduced scope for action in two ways.

3 It also appears that the most important driving force behind the cycle is the monetary policy conducted in large countries, particularly the United States. Free capital movement makes it more difficult to isolate a country from the rest of the world – and indirectly thereby from monetary policy in large countries – even if it has a floating exchange rate. Some go so far as to say that developments on the financial markets have meant that the exchange rate is no longer a parameter for action in the trilemma. The trilemma has instead been reduced to a choice between only two alternatives – a dilemma: either one has free capital movement and accepts that it is then difficult or impossible to conduct a monetary policy of one’s own, or one conducts one's own monetary policy but counteracts the free movement of capital. 4 My main hypothesis: countries with floating exchange rates still have monetary policy autonomy However, this is probably going a bit too far as a general description of the actual situation in small open economies like Sweden. In a globalised world, developments abroad will always have great significance for what happens in your own country. Nevertheless, however, the situation seems to be that the choice of exchange rate regime plays an important part in how great the impact will be.
To give another example, under the transposition of the second European Payment Services Directive (PSD2) in 2018, third-party payment service providers – which do not hold client funds – are subject to reduced annual reporting requirements. However, this proportionality does not mean being less demanding, especially with regard to the fight against money laundering. The general principle of “same activity, same rule” must apply. Indeed, it is in the Fintechs’ own interest that we should help them to apply the regulatory framework. We also want to help them when new rules are put in place. Under the PSD2 framework, the ACPR was the first European authority to grant authorisations for payment initiation and aggregation services. In total, it has authorised more than 20 actors to offer these new services since 2018. It has also worked to promote the development of open banking, by making sure that all actors can work together on the deployment of APIs. The eight workshops this afternoon, led by experts from nearly all of the ACPR’s directorates, are testament to the focus we place on teaching and informing. But if we can do even better, even more, tell us today. I shall finish by focusing on the ACPR-AMF Fintech Forum which is what brings us here today. Created in 2016, it is a forum for exchange which we try to make as efficient as possible by setting up, where needed, targeted working groups to make concrete progress on key topics.

8  BIS Review 100/2008  Figure 10: Output Gap 8 6 4 2 0 -2 -4 -6 -8 08Q1  07Q3  07Q1  06Q3  06Q1  05Q3  05Q1  04Q3  04Q1  03Q3  03Q1  02Q3  02Q1  01Q3  01Q1  00Q3  00Q1  -10  Source: CBT. Dear Guests, After the significant weakening of the Turkish lira in the first four months of 2008 (Figure 11), exchange rates have reversed direction in the past two months, easing to some extent potential pressures on tradable inflation resulting from the exchange rate pass-through. In the April Inflation Report and the Open Letter, the first round impact of the recent depreciation was estimated to be close to 2-percentage points for the end-2008 headline inflation. The recent rebound in currency has led to a downward revision in the estimated pass-through. We now anticipate a cumulative exchange pass-through of around 1.2 percent points for 2008, most of which has already been materialized between March-May period. Figure 11: Risk Premium and Nominal Exchange Rates 450  2 YTL/Currency Basket (0.5 Euro+0.5 US Dollar)  1,9  400  EMBI+Turkey (right axis)  350  1,8  300  1,7  250  1,6  200  1,5  150  07.08  05.08  03.08  01.08  11.07  09.07  07.07  0 05.07  1,2 03.07  50 01.07  100  1,3 11.06  1,4  Source: CBT.
Based on the views expressed by industry participants and the work the Committee is currently engaged in, I can tell you that we are firmly committed to the use of banks’ internal ratings as an approach for setting regulatory capital requirements. Internal ratings Many of you in the industry have noted that a capital regime based on banks’ internal ratings, which reflect a wide range of information about borrowers, can prove to be quite sensitive to the level of risk in a bank’s portfolio. From a supervisory standpoint, an internal ratings-based approach can also provide banks with the proper incentives to improve their risk management practices, which is consistent with our overall objectives for revising the Accord. With this in mind, the Committee is actively exploring how to link banks’ internal ratings to a regulatory capital scheme. We are seeking to develop flexible approaches since all banks wishing to use internal ratings may not yet be able to generate the complete set of information necessary to tie ratings to capital requirements. Thus, for at least some banks, we are investigating the possibility that some of the information would have to be supplied by the supervisor, even while the core elements were supplied by a bank’s internal ratings scheme. As an important first step in developing these approaches, the Basel Committee has been gathering information about banks’ internal ratings systems, and assessing both “best” practice and overall sound practice in this area.

As part of the agreement between the HKMA and Standard Chartered Bank, the latter  BIS Review 41/2002  1  will in turn appoint Hong Kong Interbank Clearing Ltd, the current operator of the Hong Kong dollar and US dollar payment systems, to develop and operate the euro system. The role of the HKMA will be to oversee the design and implementation, and to ensure that the system meets the highest international standards. And so, Hong Kong will shortly have a pioneering facility for the efficient and secure conduct of euro transactions in Asian time, as a further significant piece of our financial infrastructure. The benefits to both local business and international customers, in both trade and finance, should be considerable. I take this opportunity to thank and congratulate those who have worked hard to bring the project to its present advanced stage in so short a time, and especially to thank Standard Chartered Bank for the enthusiasm and professionalism which they have brought to the exercise. I wish every success to all who will be involved in translating the design into reality. 2  BIS Review 41/2002