samchain/econo-pairs-v1 huggingface dataset:
In spite of this, most of the attention in banking regulation has been focused on solvency (Rochet, 2008). However, some steps have been taken in this direction by the BIS in terms of contingent liquidity demand and related triggers associated with off-balance-sheet positions (BIS, 2008). The literature has identified several elements that could generate externalities related to liquidity, and therefore could justify some degree of regulation, where the main arguments are linked to asymmetric information and market incompleteness. 1 Moreover, policies put in place by central banks after September 2008 have made moral hazard concerns for liquidity management more pressing. Nonetheless, there are still open questions as to the kind of regulation to reduce the potential consequences of the imperfections in this area. There are no straightforward answers on this matter. Some pending questions are: Should a capital charge be put in place for liquidity  1  2  Allen and Gale (2000), Freixas and Rochet (2000), and Morgan, (2002). BIS Review 97/2009  risk? Is it necessary to impose an additional liquidity requirement to intra-day liquidity needs? Should central banks act as the lender of last resort in this market? Credit rating agencies The role played by risk rating in the subprime crisis is also an important corollary to the current crisis.

Ravi Menon: The Institute of Banking and Finance at forty Welcome remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore and Chairman of the Institute of Banking and Finance, at the Institute of Banking and Finance 40th Anniversary Dinner, Singapore, 10 June 2014. *  *  *  Deputy Prime Minister and Minister for Finance, Tharman Shanmugaratnam, Pioneers of IBF, distinguished guests, ladies and gentlemen, On behalf of the Council and staff of IBF, let me welcome you to IBF’s 40th anniversary dinner. IBF is where it is today because of what previous generations of Council members and staff, industry practitioners and training providers accomplished together. They are the Pioneers of IBF, whose contributions and achievements we are gathered here to celebrate. It is the inspiring vision and tireless efforts of these Pioneers to build competencies in finance that helped create the international financial centre that Singapore has become today. I am delighted that several of them are here with us this evening. IBF was set up in 1974 with the support of the Monetary Authority of Singapore (MAS) and the Association of Banks in Singapore (ABS). Those were early days in Singapore’s development as a financial centre. The birth of IBF helped to fill a critical gap in the training of Singapore’s financial sector workforce. The subsequent growth of IBF has been a story of each generation building on the efforts of previous generations and helping to strengthen the capabilities of Singapore’s finance professionals.
For the same reason, as was the case with this Report, the time span between the Report’s publication and this presentation has been a little longer. Please note that we see this delay as a one-time thing and we are willing to attend this Committee to present our Monetary Policy Reports with all the haste that you may require. We have used this opportunity to add some information that came after the Report’s cutoff date to this presentation, plus some issues that have come up in the days following its publication. Thus, we look forward to an exchange with the Committee as enriching as it can be. Now let me share with you the main conclusions and projections of our Report. First, it is important to stress that this Report clearly marks a turning point in the business cycle that translates into higher growth and lower risks to both activity and inflation. The National Accounts figures we published two weeks ago showed two important developments. On one hand, the economy was quite weak between late 2016 and early 2017. In retrospect, these figures are consistent with other recent indicators such as labor market fundamentals, which were some of the reasons why we lowered the monetary policy rate (MPR) by 100 basis points, thus significantly boosting the monetary impulse in the first half of 2017.

A significant part comes from the US economy, which is currently near or above full employment and inflation pressures that could trigger a more forceful reaction from the Fed. Special mention deserves the fiscal stimulus package recently approved by the US Congress, which will put pressure on an economy where, as I just pointed out, gaps are already tight.3 It is worth stressing that the deterioration that this would cause in the global financial conditions could have particularly severe consequences for those emerging economies with weaker fiscal or financial positions or that are highly indebted. China's situation is worrisome, as there are still several imbalances in its markets yet to be 2  / This Report includes a box analyzing the magnitude of the pass-through coefficient of exchange rate variations to inflation, identifying the origin of the variation and establishing that its effects on inflation change depending on the type of shock faced. In particular, it reviews how the inflationary effects of exchange rate fluctuations change depending on where they originate, e.g. in a movement of the global value of the dollar as opposed to an idiosyncratic shock hitting the Chilean economy. The analysis finds that the inflationary impact of exchange rate movements associated with deviations of the interest rate parity is stronger and more persistent than if stemming from changes in foreign inflation. Thus, the implications for monetary policy are obvious: not all exchange rate variations have the same inflationary consequences and, therefore, the policy rate response must factor in their origin.
There are three aspects of our collective goal [slide 7]: first, we aim to reach all members of the public, young people of course, teachers, students and financially vulnerable people, as well as all our fellow citizens over their entire lifetimes; second, we will deal with all subjects, from budgetary to financial and economic questions, in order to provide the basic knowledge required in all these fields to better understand and therefore make informed decisions; and lastly, we will use all relevant means to pass on this financial knowledge as widely as possible, including websites, efforts on the ground and partnerships. 2. The strategy is being quickly and effectively implemented [slide 8] On 24 January 2017, the dedicated financial education internet portal, "mes questions d'argent.fr", went on line. This portal is intended to become the primary information source for all our fellow citizens looking for answers to their day-to-day banking, budgetary, economic and financial questions, and a first milestone of 200,000 consulted pages has already been reached. Access through the portal is simple and quick; in three clicks users can access free content carefully chosen for its educational qualities, neutrality and freshness. We have opted for a similar approach to the Dutch "Money Wise" platform, in that it is both practical, with a limited amount of entries and materials, as well as cooperative, offering a variety of sources from all of our partners.

In order to ensure that the national strategy is rapidly implemented, we rely on the Operational Committee, which I chair, and which is responsible for management and coordination. Our roadmap for 2017 is clear: during the first half of the year, operational objectives will be defined and available resources will be identified; and during the second half, a robust and effective assessment methodology will be developed. We are already actively working on introducing specific mechanisms for people in financial difficulty and students. To help those experiencing financial difficulties, we are working closely with social service providers to produce practical educational materials covering seven concrete subjects: budgeting, relationships with banks, credit, bank payment incidents, banking inclusion, overindebtedness and complaints. From June 2017, these materials will be made available to social workers and associations so that they can be used with people in financial difficulty. By the end of the year, the Banque de France's teams have planned to hold nearly 900 meetings to present in detail these educational materials, as well as the "mes questions d'argent" portal, to 14,000 social service providers. For students, in December 2016 the Ministry of Education set up a group of experts in which the Banque de France and the French Institute for Public Financial Education actively participate.
In contrast to goods – which tend to be traded internationally – the services sector is more heavily oriented towards the domestic market. So if the margin of domestic spare capacity or weak demand in the UK economy is pushing down on inflation, we should see this reflected more clearly in measures of services sector inflation. Chart 11 Resilient services inflation in UK Annual percentage change in consumer and producer prices 5 4 3 2 Consumer prices  1  Producer prices 0 -1 2005  2006  2007  2008  2009  2010  2011  Source: ONS  Instead, as Chart 11 shows, services inflation – whether measured by the prices charged by firms or the prices faced by consumers – has been remarkably resilient. After a short dip in the aftermath of the recession, price increases – whether measured by consumer prices or producer prices have returned relatively quickly to the levels we saw in the mid-2000s. And if we look at the services component of the consumer prices index, this 3–4% level rate of inflation has been a fairly consistent feature in the decade prior to the recession. There is not much evidence here of spare capacity and weak demand pushing down on services inflation. And whereas relatively high services inflation in the late 1990s and early 2000s was offset by flat or falling goods prices, this is no longer the case.

BIS central bankers’ speeches  3  which emerged before VAT was raised to 20% in the UK. Indeed, the UK is not alone in raising indirect taxes to reduce its public sector deficit and VAT rates have been rising in other European countries as well.3 In addition to this contrast with other European countries, our experience of rising UK inflation has been at odds with the standard “output gap” model used by many central banks and economic forecasters to project inflation. The impact of depressed demand and spare capacity created by the recession should mean that inflation falls in a recession and the early phase of an economic recovery – and this was indeed the expectation of the MPC and other forecasters in 2009 and early 2010. As Chart 3 shows, the forecasts published in the Bank of England Inflation Report at that time were for CPI inflation to be around 1% or below in the first quarter of this year, whereas in fact the out-turn is above 4%. Short-term inflation forecasts have had to be radically altered as evidence of higher inflation has accumulated. And yet the settings of UK monetary policy have not changed at all in the light of this experience of much stronger inflation. The view that spare capacity and weak demand will bear down on inflation in the future still underpins the majority view on the MPC, despite the evidence that this is not what has happened over the recession and the early phases of the recovery.
These factors affected the government’s borrowing cost and imposed pressure on achieving targets under the Medium-Term Debt Management Strategy (MTDS), particularly towards the latter part of 2018 with the upward adjustment in yield rates and market preference for short to medium term maturities. 34  The new Treasury bond issuance system, which was introduced, in July 2017, was reviewed at the end of first quarter of 2018 taking into account the performance of the issuance system and the feedback from market participants to further enhance the efficiency and transparency of the issuance process of government securities. Several improvements, including an enhanced market based acceptance arrangement as a prerequisite for the activation of phase III are to be introduced to the Treasury bond issuance system, by the end of the first quarter of 2019. Further, the auction calendar for Treasury bonds and Treasury bills was published by the Central Bank on a rolling basis with the view of improving transparency and predictability of the primary auction process and the government securities market in general. We are contemplating taking several measures to develop market and debt management practices in 2019. With the passage of the Active Liability Management Act (ALMA), in March 2018, we have laid the groundwork for liability management exercises in the domestic and foreign market. In consultation with the Ministry of Finance, we have already earmarked actions to implement liability management techniques on future debt obligations and the proceeds mobilised would be maintained in a ring-fenced arrangement to meet future debt liabilities.

The Central Bank will be resolute in preserving this achievement of a low inflation environment going forward irrespective of domestic and international challenges that we may face in future. This is the prime reason why the Central Bank has embarked on a mission to upgrade the monetary policy framework with a view to strengthening the ability of the Central Bank to deliver sustained price stability amidst a rapidly evolving environment characterised by elevated uncertainty. During the year 2018, significant progress was made towards the transition to FIT in terms of initiating necessary amendments to the Monetary Law Act (MLA) with a view to establishing a strong Central Bank mandate, building effective fiscalmonetary coordination and further improving technical and institutional capacity. Let me elaborate on a few important areas in relation to the progress towards FIT. Last year, we highlighted the need and the importance of strengthening the existing mandate of the Central Bank to perform its key tasks related to price stability. It is widely accepted that a strong legal mandate is an essential prerequisite for the successful adoption of FIT as it is considered the linchpin that holds the entire framework together.
We may conclude that the right way forward is a like-for-like replacement of the current RTGS using more modern technology. Or we may decide that more radical change is needed to meet the needs of the UK’s future financial system. We genuinely do not have preconceptions on this question – and will want to consult closely with all of you, and a wide audience beyond this room, on the benefits, costs and risks of alternative options. A blueprint for RTGS and the Bank’s settlement infrastructure Having set out the context in which we will develop the blueprint, I want to say a few words about how it will be structured. The blueprint will seek to answer four overarching questions. First, what should the Bank’s policy objectives be in the delivery of sterling settlement in central bank money? Second, what functions should the UK High Value Payments System have? Third, who should be able to access it, and how? And, fourth, what should the role of the Bank of England be in the delivery of that service? Let me elaborate a little on each – starting with policy objectives. The mission of the Bank of England is to promote the good of the people of the United Kingdom by maintaining monetary and financial stability.

I try to sum up these principles which guide us not only in weathering this storm, but also in sunnier days, when the role of crisis prevention cannot be overlooked. The first and foremost principle rests upon the authorities’ ability to carry out prompt and preemptive actions with the best set of available information in dealing with changes in the market conditions and practices. Of course, we all know that to be able to identify where the risks are is no longer a simple task in this current environment. But once any significant sign of imbalances in the economy is detected, central banks need to be vigilant and act in a timely manner. True, it is difficult to counter the sentiments of the government, investors and  BIS Review 120/2008  1  the public alike if central banks play their role of “taking away the punch bowl when the party gets going”. In a nutshell, this implies that we central bankers need to be watchful and decisive, not to be swayed by these voices. Second, we also need to maintain flexibility in the conduct of central banking policies. By this, I mean flexibility in terms of policy instruments and also in terms of using innovative methods to deal with the evolving challenges. For example, we may not be able to just rely on, say, using traditional solutions of raising interest rates to address rising inflation, but we may also have to resort to a mix and match of the toolkit available to us.
The Riksbank in a democracy When Sweden became a member of the European Union and the Government signed the so-called Maastricht Treaty, this entailed, among other things, acceptance of the requirement that the Riksbank was to have an independent position in relation to the Government and the Riksdag. However, many regarded it as a controversial demand, not least in the Swedish trade union movement and within social democracy. It is hardly surprising that there were strong reactions in many places as an independent central bank is a quite new and unfamiliar element in Swedish public administration. It meant that the conduct of monetary policy should be delegated to an authority that was only restricted by legislation. This procedure can be most closely compared with the independent interpretation of laws by the courts. 1  BIS Review 44/2000  However, on closer inspection of the content of the new law and the practice established since then, it can probably be said that the reactions and concerns were exaggerated. Mention is often made in general discussion of, for instance, “the independence of the Riksbank”, which may call to mind an organisation that can carry out its policy wholly without control and parliamentary supervision. In fact, in my view, what is involved is rather more a sensible arrangement, where the objective of monetary policy, stable prices, has been established by law.

Purely hypothetically it is conceivable that the Riksbank would increase interest rates even if we regard it as most probable that the inflation target would not be  BIS Review 44/2000  4  threatened. In this case, the motivation would be that we make the assessment that the credit expansion in the bank system risks threatening the stability of the system, for instance in the event of a large fall in asset prices. An interest rate decision of this kind could probably also be motivated by the risk of strongly falling inflation if the risk scenario is realised. In practice, it is probably only in retrospect that it can be noted that financial assets and liabilities that have been built up have been an expression for serious financial imbalances. It is therefore normal that the interest rate weapon is only used if the inflation target is threatened. The pressure for change creates challenges for banks and authorities It is evident from everything that I have said that there are no sharp boundaries between the various areas of responsibility of the Riksbank. The Riksbank’s analysis of the development of the banks also serves as a basis for our assessments of stable prices and financial stability. For instance, structural changes in the financial markets probably affect the impact of interest rates on the economy, at the same time as they change the risks banking activities are associated with.
373–409 and Cochrane, John, H. (2011), “Inflation and Debt”, National Affairs 9, Fall 2011, pp. 56–78. 11  Letting the central bank itself determine the employment target is no solution, either. As discussed in the section on criticism of a lack of clarity, assessing what could be an appropriate target level/equilibrium level entails considerable problems. 12  A press release in connection with the Federal Reserve introducing an inflation target on 25 January 2012 stated that: “The maximum level of employment is largely determined by nonmonetary factors that affect the structure and dynamics of the labor market. These factors may change over time and may not be directly  6  BIS central bankers’ speeches  One can illustrate the fact that the long-run level of employment is determined by factors other than monetary policy in different ways. Following the crisis in the 1990s, unemployment and the employment rate have varied around an apparently unchanged long-run level, despite the policy rate having been both relatively high and very low during this period. Although there is a relationship between monetary policy and the labour market in the short run, monetary policy does not seem to have influenced the labour market on average. Despite periods of very strong growth and economic activity, unemployment has never been lower than just under 6 per cent, with an average rate of around 7 per cent since 2000. An overwhelming proportion of unemployment is thus structural rather than cyclical. This picture is also supported by unemployment varying substantially between groups.

This is the first time that a zero coupon bond product is offered to the retail public in Hong Kong. It is also the first time we are issuing retail bond with a ten-year tenor. "Zero coupon" bonds are intended for investors who wish to save up funds for longer-term use. They do not need the cash flow from the interest payments on conventional bonds, but they would wish to save up the principal and interest for future retirement or children’s education. By investing around $ in this zero coupon bond, the investor will receive $ after ten years. If investors should find a need to sell the bonds prior to maturity, they are free to do so. We have a market making arrangement with our placing banks to provide quotes to buy such bonds to ensure secondary market liquidity. Apart from the zero coupon bond, the HKMC is also issuing two-year US Dollar retail bond, following our successful, inaugural issue of retail US Dollar bond last year. We are now offering two-year retail bond denominated in US Dollar as well as in Hong Kong dollar to provide more investor choice. Out of the total deposit base of over $ trillion in our banking sector, about one-third are in US Dollars. We believe there should be good demand for these two-year notes, especially given the recent pause in interest rate hike by the US Federal Reserve. To sum up, the retail bonds offered today will provide the general public with an additional, relatively safe investment vehicle.