samchain/econo-pairs-v1 huggingface dataset:
To start with, as of today, our toolkit is very much bank-centric. We are making some progress to extend macroprudential  policy  beyond  the  banking  sector. But  we  should  acknowledge that we are not there yet and that this is becoming a pressing issue as the non-banking sector is developing in reaction to the macrofinancial environment and changes in the regulation framework. In addition, as our macroprudential arsenal is still rather new and untested, uncertainty remains on the quantitative magnitude of the effects of our interventions viii. Experience will teach us how to adapt and adjust our policies over time, but uncertainty will remain a feature of real-world policy-making. Finally, we should refrain from hubris: over time, we will design a more comprehensive macroprudential toolkit and learn to make the best use of it. But while macroprudential policies can certainly contribute a lot, some root causes of financial crises will remain out of their reach and macroprudential policies alone would fall short of achieving financial stability. Page 6 sur 11 If prudential policies have limitations, it is legitimate to ask whether monetary policy should take into account financial stability concerns or even assist prudential policies. To be sure, monetary policy has drawbacks as an instrument to foster financial stability. In particular, it cannot target specific risks. But as Jeremy Stein noted, the bluntness of the tool is also its strength: it affects all financial players. ix Let me take a step back.

For the past ten years, there is little doubt that ECB monetary policy under Mario Draghi’s Presidency has made a decisive contribution not only to safeguarding the euro in 2012, but also to the significant recovery of the euro area since 2013. Over this period, more than 10 million jobs have been created. Our unconventional measures are estimated to add almost 2 percentage points of growth and of inflation between 2016 and 2020. Since I am talking to an audience of researchers I should of course emphasise that such numbers are subject to uncertainty. However, the most recent monetary policy decisions of the Governing Council have given rise to many comments. My rule of conduct has been to not add mine in the heat of the moment. Two weeks later, let me only say that I supported many elements of the package, including the strengthening of the state-dependent forward guidance and the welcome introduction of a tiering system, similar to those in all other jurisdictions with negative interest rates. But I was not in favour of the resumption of net asset purchases at this time, because I thought that further purchases are unnecessary right now, given  Page 3 sur 11 the very low levels of both long-term interest rates and term premia, which have continued to decrease significantly since we stopped net purchases last December.
By moving the banking industry collectively back to Figure 1 from Figure 2, the “bad state of the world” becomes less likely. In the SCAP, we had to make a number of important decisions. These included:   The appropriate capital target. We focused on the Tier I common ratio because we believed that this was the most credible form of capital. This put much greater emphasis on common equity than previously.   The severity of the stress test. We assumed a stress scenario with an unemployment rate 1.5 percentage points higher than the baseline scenario, and further home price declines of about 29 percent compared with 18 percent in the base case. We were aiming for a stress test scenario that had about a 5 percent to 10 percent probability of being realized.   The capital target at the end of 2010 and the stress test severity were both important in terms of the credibility of the SCAP. Going in, we were worried that with our capital goal, the BHCs’ needs might turn out to be higher than the available  BIS central bankers’ speeches  3  resources from the private sector and the U.S. Treasury. We decided not to compromise the credibility of the stress test to save on needed capital resources.

Enhanced international coordination between monetary authorities is ensuring that their actions are part of a consistent overall strategy. These measures are highly exceptional with indeed unprecedented monetary easing leading key policy rates to historically low levels and the adoption, in certain cases, of unorthodox monetary policy actions. As such, they should greatly contribute to restoring confidence and a smooth functioning of money markets. Governments have moved aggressively to support banks' solvency and resilience. Since the Paris Declaration by euro area member-countries, Europe, under the leadership of France until year end, has been acting according to what I consider a sound and consistent action plan. I won’t enter into the details. Just bear in mind the three following elements. First, authorities are extending guarantees to banks’ refinancing so that they can, in turn, properly finance the economy. Second, significant reforms of accounting rules are now being implemented. Basically, these reforms allow banks to transfer instruments previously marked to market to portfolios where that will no longer be the case. They also provide for greater flexibility in methods used to value assets whose market has shut down. Third, and lastly, governments have confirmed their willingness, when warranted, to step in and support banks’ capital. What about France’s actions? Government and Parliament very quickly put meat on the bones of the European principles. A new bill has been passed, which provides for two things. First, it sets up a EUR 320 billion funding vehicle to guarantee banks’ medium-term refinancing (i.e. up to five years).
Carmen’s influence on the profession is also reflected by the fact that she has coined a number of terms that have since become part of economists’ vocabulary. Every student of international macroeconomics learns about ‘twin crises’ – situations in which banking and  Page 2/4  currency crises occur simultaneously. The term goes back to a paper written by Carmen and Graciela Kaminsky, which demonstrated that these two types of crises often go hand-in-hand and reinforce each other. Another well-known term coined in Carmen’s work is ‘debt intolerance’, which refers to the tendency of emerging market governments to default at relatively low levels of debt. Carmen’s research is distinguished by her extensive efforts in collecting and compiling historical datasets. This is best exemplified by her famous book ‘This Time is Different: Eight Centuries of Financial Folly’, co-authored with Ken Rogoff, who by the way gave the Karl Brunner Lecture in 2016. Based on a vast dataset covering several centuries, the book documents the way in which financial crises have repeated themselves over and over again in history, often following similar patterns. Even when the signs of an impending crisis are there for anyone to see, people usually find good reasons why ‘this time is different’. Such a failure to learn from history often turns out to be the breeding ground for the next crisis. With their book, Carmen and Ken accomplished the seemingly impossible task of writing an international bestseller consisting mostly of economic data and analysis.

Carmen’s work reminds us that the financial crisis of 2007/08 was far from unique in economic history. However, when it comes to the coronavirus pandemic, even Carmen concludes that this time truly is different. The global lockdowns imposed as a reaction to the virus are something the world has never seen before. Page 3/4  Today, Carmen will talk to us about monetary policy in times of high public debt. Carmen has published extensively on the various implications of high public debt. For instance, in an influential paper written with Maria Belen Sbrancia, Carmen showed how Western governments managed to repay their debt after World War II through a set of policies known as ‘financial repression’. Measures such as legal ceilings on interest rates and restrictions on international capital flows created an environment where domestic savers had no other option than to invest in low-yielding government debt. Financial repression was particularly effective in liquidating public debt when accompanied by a steady dose of inflation. The relation between monetary policy and government finances is an old and critical issue in central banking. It is also a very timely topic, given the massive increase in public debt that many countries have experienced since the outbreak of the coronavirus pandemic. We are living through times of extraordinary uncertainty. What we can safely assume, however, is that the interplay between monetary and fiscal policy will be among the key challenges that central bankers will face in the years to come.
Figure 10 CPI inflation forecast (1) (2)  CPIEFE inflation forecast (1) (2)  (annual change, percent)  (annual change, percent)  5  5 5 Dec.19 MP Report  4 3  5 Dec.19 MP Report  4 4  4  3 3 Mar.20 MP Report  2 1  3 Mar.20 MP Report  2 2 1 1  0  1  0 0 18  19  20  21  22  0 18  19  20  21  22  (1) 2018 figure shows the annual variation in the CPIEFE obtained by splicing the 2013=100 series with the monthly variations of the 2018=100 basket as from February 2018. See box IV.1 Monetary Policy Report of in March 2019. (2) Gray area, as from the first quarter of 2020, shows forecast. Sources: Central Bank of Chile and National Statistics Institute (INE).

Conversion arrangement for trade settlement in 2011 Following the substantial expansion of the geographical coverage of the cross-border RMB trade settlement scheme in June this year, the amount of cross-border RMB trade settlement has grown rapidly, from a monthly average of about RMB 4 billion in the first half of the year to about RMB 30 billion each month in August and September, and close to RMB 68 billion in October. Under such circumstances, the amount of RMB purchased by the Participating Authorized Institutions (Participating AIs) through the Clearing Bank in the China Foreign Exchange Trading System in Shanghai increased notably in October, and the conversion arrangement concerned was suspended in late October. In response, the HKMA promptly introduced a number of measures, and the RMB market in Hong Kong has been operating orderly and smoothly to date. As regards the conversion arrangement for 2011, after discussions with the People’s Bank of China (PBoC), the HKMA consider appropriate to introduce certain refinements to the arrangement for the conversion of RMB conducted by Participating AIs for their customers in relation to cross-border trade settlement.
Larger institutions would therefore be in a better position to reap the benefits of greater economies of scale, and would also increase their financial muscle to withstand potential shocks. Unfortunately, however, there are no free lunches in the economy and it seems that financial integration can also have negative effects on financial stability. Therefore, fully integrated financial markets pave the way for shocks to propagate more quickly among market participants, thereby affecting a wider range and number of them. Contagion becomes more likely. In the same way, the larger an institution, the higher is the probability that it becomes systemically relevant, which would clearly have implications for financial stability in the event that it runs into problems. 2  BIS Review 118/2006  And, the more institutions operate across borders, the more the risks associated with their business extends across these borders. Despite these challenges for financial stability of an increasingly integrated financial system, let me stress that, so far, the experience both for Spain and the Global Economy seems reassuring, but these aspects clearly need further investigation. And the immediate and obvious question that arises is the following: can we mitigate the potentially negative effects of integration on financial stability in order to take full benefit of the advantages that I mentioned earlier in my intervention? It is the supervisory authorities who are responsible for dealing with the risks I have identified. But this is not an easy task.

But apart from our interest in the effective transmission of monetary policy, there is a broader reason why central banks wish to see greater integration. At the end of the day, the ultimate objective of a central bank, as of any public policy maker, is to enhance citizen welfare. A number of pieces of empirical evidence reveal that financial integration has a positive effect on economic growth and, therefore, on welfare. The European Commission, London Economics and several researchers have provided us with interesting studies which estimate that a total removal of national barriers in European financial markets would imply a long-term increase in GDP growth of up to one percentage point. There is also evidence for the US, based on analysis of the effects of the removal of restrictions on cross-state bank branching and ownership, which points in the same direction. These two aspects – monetary policy transmission and promoting citizen welfare - explain the efforts that central banks have made to contribute to the integration process, although the leading roles and initiatives rightly correspond to the European Commission and to market forces. Maybe the most telling example of the central bank contribution is the establishment of TARGET, promoted by the Eurosystem and introduced at the beginning of Stage Three with the aim of integrating the system of large value payments across the euro area. It is widely recognised that its success has played a crucial role in the integration of interbank markets in Europe.
(Figure 3). 3. CPI and UND1X inflation Percentage 12-month change 14  14  12  12  10  10  CPI UND1X  8  8  6  6  4  4  2  2  0  0  -2 1990  1992  1994  1996  1998  2000  2002  -2 2004  Sources: Statistics Sweden and the  It is not easy to determine what effect the various changes in economic policy have had individually. However, when taken as a whole they have led to an overall changeover in stabilisation policy. A clearer allocation of roles has been created in economic policy. The task of monetary policy is to attain  BIS Review 9/2004  3  price stability, while fiscal policy is to secure a long-term sustainable development in public finances. The government and the Riksdag (parliament) also have the task of increasing the number of those in regular employment to 80 per cent. This clear allocation of roles is an important reason behind the more successful economic policy over the past ten years. The current monetary policy situation The international recovery is increasingly evident During 2001 there was a downturn in global economic activity, which was partly due to the financial setback following on from the stock market bubble in the second half of the 1990s. Resource utilisation fell and growth in the OECD area as a whole was 1 per cent that year.

But you can’t have a meal without food — and you can’t have banking without service, trust, and capital. 6. Yes, technology is replacing some traditional banking channels and processes. But that actually enhances those core principles. So, I don’t think technology will replace banks. Rather, I’ll be making the case today that technology will make banks better — whether it is delivered by an established bank or a new market entrant. A new era established 7. In 2017, the HKMA launched seven initiatives to begin a new era of smart banking. Since then, the competitive landscape for banking in Hong Kong has changed quite a lot. We are proud to be one of the first markets in the region to have fully digital banks — or virtual banks. As we speak, our city has one of the highest numbers of virtual banks in Asia. 8. Today, customers can choose from a wider range of banking providers and platforms. They can choose digital or physical, niche or universal. 9. Not surprisingly, competition is bringing down costs and improving customer experience. For example, traditional banks have been phasing out fees for maintaining low account balances. Many are proactively improving their digital platforms to improve the user experience. 10. We owe this progress to the innovators, entrepreneurs, and bankers in today’s audience. It has been driven by your hard work and determination. 11. As a regulator, we help to facilitate this progress. We ensure a level playing field for all types of financial institutions.
15  20  25  Weeks  Source: Bank of England  Moment 6: where there’s a Means there a Way  The scale and uncertainty of the economic downturn, combined with the sharp deterioration in financial market conditions in mid-March raised another issue: how to manage the Government’s cashflow needs, but in markets that at the time seemed to be barely functioning? And that’s how, at the height of the crisis, I found myself on another call, this time with the Treasury and its Debt Management Office (DMO), to discuss the ‘Ways & Means (W&M) account’ – in modern language, the Government’s overdraft facility at the Bank of England, funded by reserves creation. W&M sits at the very bottom of the hierarchy of tools used to meet the Government’s borrowing needs. The primary tool is gilt issuance – for many years used by the DMO to ‘fully fund’ those needs over the medium term (usually a fiscal year). Because government cash flows are not perfectly predictable, ‘rough tuning’ is achieved through the issuance of marketable Treasury Bills. And ‘fine-tuning’ is done through the money markets. The W&M exists purely as a back-up to those fine-tuning operations. Given these multiple alternative tools, W&M had seen no material usage in over a decade (Chart 13). But clearly the period of dysfunction in gilt and money markets in March and early April raised the possibility that it might be needed if all of the other alternatives were temporarily rendered ineffective.

The previous day had seen disorderly conditions in the US Treasury market and the largest one-day fall in equity prices since the 1987 crash, despite major new policy announcements from the Federal Reserve and ECB. As I ran through my gloomy update, it was clear that further action would be needed – but perhaps not at that stage quite how much more. Monday morning would be no quiet start for Andrew Bailey, the new Governor. In my remarks today, I want to give a bird’s eye’s view of what happened in those extraordinary weeks, and the steps we took – either in concert with others, or using our own balance sheet – to neutralise the sudden pre-lockdown 'dash for cash' – the biggest test of core market functioning and resilience since the Great Financial Crisis (GFC) of 2008-9. Judged solely against that narrow yardstick, central bank actions – unprecedented in scale and speed – were successful in averting a market meltdown. Commercial banks, strengthened by the post-GFC reforms, have continued to lend, supported by a range of public sector schemes. And we learned some surprisingly positive things about operating a financial system remotely – both in terms of market resilience, but also in terms of diversity and inclusion. But this is no time for self-congratulation. The broader aspects of the Covid-19 crisis – medical, social, economic, and personal – remain hugely challenging, and involve a much wider set of actors than central banks alone. Further financial instability cannot be ruled out.
Although TALF is off to a relatively slow start – hurt, in part, by the reluctance of some investors to participate because of worries about the potential implications for them of the TARP funding that is involved in the TALF program, it has helped to restart the securitization markets in the consumer asset-backed securities area and has brought down funding costs for consumer ABS issuers. The third goal of these policy interventions has been to improve market function. By dramatically reducing rollover risk, the Federal Reserve’s willingness to serve as the lender or investor of last resort has helped improve market function in a broad number of areas. Rollover risk is the risk that a borrower may not be able to obtain new funding in order to repay an investor when the investor needs the funds for other uses. If rollover risk is high, the investor is going to be concerned about getting its funds back and, thus, may be unwilling to make the investment in the first place. The impact of the Fed’s intervention on rollover risk has been especially important in the triparty repo market and in the commercial paper market. The triparty repo market is a market in which investors such as money market mutual funds lend funds, mostly on an overnight basis, to securities dealers, with the loans collateralized by high-quality securities. During the crisis, this market became less stable.

Jacqueline Loh: Shanghai and Singapore - synergies amidst a dynamic Asian financial landscape Keynote address by Ms Jacqueline Loh, Deputy Managing Director of the Monetary Authority of Singapore, at the Second Shanghai-Singapore Financial Forum, Shanghai, 30 November 2016. * * * Ladies and Gentlemen Introduction 1 Good afternoon, it is my pleasure to join you at the 2nd Shanghai-Singapore Financial Forum (SSFF). 2 In November last year, the Monetary Authority of Singapore (MAS) and the Shanghai Municipal Financial Services Office (Shanghai FSO) launched the inaugural SSFF. That was a significant and important milestone. As the Chinese saying goes, 二人同心，其利断金. The SSFF is more than just a forum. It is a reflection and commemoration of the longstanding relationship and cooperation between Shanghai and Singapore. Following last year’s success, both sides are keen to build on the good momentum achieved and bring our relationship to a higher plane. 3 The aspirations of both the MAS and Shanghai FSO are reflected in the theme for this year: “Shanghai and Singapore – A Partnership for a New Asian Financial Landscape” . Our hope is that both cities can work together to forge a stronger, more future-ready partnership ahead. This is important for both Shanghai and Singapore, which are international financial centres in the midst of a rapidly evolving Asian financial landscape. 4 Let me outline briefly what we have achieved together so far and highlight the synergies that we see ahead for both Shanghai and Singapore. I.