samchain/econo-pairs-v1 huggingface dataset:
The greater concentration and interconnectedness in the global financial system may also have increased the magnitude of a potential crisis. The greater risk tolerance of market players is ultimately a logical consequence of the exceptionally long and stable period of calm in the financial markets. Market participants have had no reason of late to keep their risk-taking in check. Basically, anyone who held back felt they were missing the opportunity to generate high returns. Even the short-term corrections in the financial markets in February of this year and May of the previous year did not result in a change of attitude in this regard. On the contrary, the low impact made by these corrections and the ability of the markets to absorb them may have served as a confirmation for those operating a high-risk strategy to continue, and as an indication for the more risk-averse to take greater risks. The risk appetite is also fairly high in the Swiss banking sector at present. In our Financial Stability Report, we indicate for instance that the domestically oriented banks – Raiffeisen, cantonal and regional banks – are currently incurring a relatively high interest rate risk. At the same time, the big banks have also exhibited an increased risk tolerance in recent years. Although Credit Suisse Group’s overall risk has declined in the past year, following the sale of Winterthur, both big banks have significantly increased their risk-taking in the banking business; particularly their exposure in trading and in foreign lending business.

A monetary stimulus in the US will have a different effect on the euro area if, say, Asian countries have flexible exchange rates rather than fixed rates against the dollar. So the choice of exchange rate regime by any one bloc both depends on and affects the choices of the others. How did we end up in this position? Under the gold standard of the late 19th and early 20th century, exchange rates were fixed and capital flowed freely internationally. Domestic monetary policy was subordinated to the demands of the gold standard, except in time of extreme crisis when the need for flexibility overcame the desire to adhere to the standard. From the end of the Second World War until 1971, the member countries of the Bretton Woods system had a formal commitment to fixed but adjustable exchange rates, and capital accounts were largely closed to give members the flexibility to operate independent monetary policies. Since the breakdown of the Bretton Woods arrangements, countries have been free to make quite different choices of exchange rate regime, and have not hesitated to do so. As international financial markets have developed, there has been a general movement to flexible exchange rates supported by credible domestic monetary policies. That is a sensible use of the price mechanism to respond to complex and unpredictable shocks.
During his tenure at the IMF he pushed the research department to focus on financial-sector issues and explore ways of integrating them into the IMF’s macroeconomic models. This was long before modelling the financial sector more effectively became a high priority both in academia and central banking. After his three-year term at the IMF, Raghu returned to the University of Chicago. In 2012, he went back to India to serve briefly as Chief Economic Advisor to the Finance Minister. In 2013, he was appointed as Governor of the Reserve Bank of India (RBI), and in 2015 as ViceChairman of the Board of Directors at the Bank for International Settlements. With hindsight, Raghu himself acknowledged that putting an academic in the Governor’s job at the RBI was ‘like letting a kid loose in a candy shop!’. Which is not to say that the job was always easy or enjoyable. When he joined the RBI, inflation was at double-digit levels, the rupee was in free fall, capital was fleeing, and growth was weak. Raghu did not waste any time. In September 2013, on his very first day in office, he gave a press conference outlining a number of planned reforms. Investors and markets were soon convinced that the RBI would follow a stability-oriented monetary policy. However, there were also occasions when Raghu’s comments had surprising consequences.

Speech  Embargo 19 September 2019, 5.30 pm  Fourth Karl Brunner Distinguished Lecture Introduction of Raghuram Rajan, ETH Zurich  Thomas J. Jordan Chairman of the Governing Board Swiss National Bank Zurich, 19 September 2019 © Swiss National Bank, Zurich, 2019  Page 1/4  Ladies and gentlemen I am very pleased to welcome you all to this year’s Karl Brunner Distinguished Lecture. This occasion marks the 30th anniversary of Karl Brunner’s death. In the Karl Brunner Lecture Series, the Swiss National Bank pays tribute to academics whose research is of particular relevance for central banking. Today we are celebrating the outstanding contribution made by Raghuram Rajan, the Katherine Dusak Miller Distinguished Service Professor of Finance at the Booth School of Business at the University of Chicago. We are honoured that Dr Rajan has accepted our invitation to deliver this lecture. Raghuram Rajan was born on 3 February 1963 in Bhopal, India. He started his career with a bachelor’s degree in electrical engineering from the Indian Institute of Technology Delhi. Following the decision to leave the sphere of electromagnetic fields and waves in favour of the oscillations of the economy and financial markets, Raghu joined the doctoral programme at the Massachusetts Institute of Technology (MIT), where he received a PhD for his thesis ʻEssays on Banking’. Four years later, at the age of just 32, he became a full professor of finance at the University of Chicago. Exceptional academic Raghu is an exceptional academic.
Our currency nevertheless remained strong against the euro. At the end of November, it was quoted at 3.5 % above its average rate during the first eight months of the year. The euro-Swiss franc rate was somewhat more volatile as well. Its volatility in additional currencies now stands at about the same level as previously against the D-mark. On the stock markets, a distinct corrective movement set in even before the end of September. Meanwhile, most stock indices are above the level obtaining on 10 September. Bond yields have increased a little in the last few weeks as well. Both effects can be interpreted as a sign of renewed optimism concerning the economic development in the medium term. In the days after the terror attacks, the resiliency of the financial system was put to a test never before described or even considered in any emergency plan. Payment transactions in US dollars were affected directly. Faced with the possible breakdown of individual banks and parts of the system which are crucial for carrying out transactions, the Federal Reserve - by way of the discount window pumped massive amounts of liquidity into the system. On the basis of a swap agreement, the European Central Bank supplied banks in the euro area directly with dollar liquidity. The National Bank  BIS Review 101/2001  1  was in close touch with the Swiss banks and - should this have been necessary - we would have been in a position to lend support as well.

Zeti Akhtar Aziz: Islamic finance and financial stability Opening remarks by Mrs Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the BNM High Level Conference on Financial Stability, Bank Negara Malaysia, Kuala Lumpur, 24 November 2009. *  *  *  It is my great pleasure to welcome you to Bank Negara Malaysia Conference on Financial Stability that is being held in conjunction with 15th IFSB Council Meeting and the 3rd IFSB Public Lecture on Financial Policy and Stability. This conference takes place at a time when there has been intense discussion by the international community on the necessary financial reforms at both the national and international level so that we will avoid such global crisis of such a scale in the future. This conference today provide us with an opportunity to reflect on the new challenges that are emerging from this global financial and economic crisis and discuss Islamic finance and the need to ensure not only its resilience but how it might contribute to global financial stability. Indeed, Islamic finance has a potential role in contributing not only to global financial stability but also towards a more balanced global growth. While Islamic finance by its very nature and its direct link to economic activity contributes to this process, the recognition of the new financial challenges ahead require further steps to be taken to strengthen its resilience and robustness.
The elimination of Central Bank credit to the public sector will go far to create the confidence needed to launch the crucial struggle with inflation. Central banks are responsible for keeping prices stable as well as for ensuring that the financial system runs smoothly. A stabilized financial system and stable prices are essential conditions for steady economic growth in the medium term because only a stable financial system can provide the necessary link between savings and investments. Price stability is needed to reduce uncertainties for investors and encourage investments. In the long run, stabilizing prices is likely to increase both living standards and productivity. For this reason, the price stability that is the main goal of central banks is valid and urgent not only in the short run, but also in the long run. And once countries like ours have achieved price stability after long effort, they must continue the effort to maintain it. For central banks, price stability is a permanent goal. Inflation inflicts several burdens on a society: · Overall, it introduces uncertainty into economic decisions and profit seeking. · It reduces the discipline of price and market systems. · It has negative effects on the cost of capital. · It directs resources to unproductive activities. In periods of high inflation, investments in real estate and financial investments become more desirable. · Growth declines as inflation rises. In countries with high inflation, it has been observed that most resources are directed to the financial system.

The main points of monetary policy under this program were as follows: ·  The Central Bank set a ceiling on increases in net domestic assets. ·  The Central Bank paid close attention to keeping increases in reserve money in line with increases in demand. Open market operations were actively used during the year to mop up excess liquidity created by the increases in our net foreign assets. ·  The Central Bank monitored exchange rates throughout the year, with special attention to maintaining stability in the foreign exchange market. ·  Continuous domestic borrowing by the Treasury made a positive contribution to achieving all targets. ·  Turkish lira interests rates were determined mainly by the borrowing strategy of the Treasury. The Turkish Central Bank has played no direct role in the determination of interest rates. In an economy with market-determined interest and exchange rates, where a persistent public deficit is being financed mainly through the domestic markets, the monetary policy tools available to the central bank are few and of limited effectiveness. As noted above, interest rates are determined primarily by the borrowing activities of the Treasury. By the same token, foreign exchange rates are determined as a function of the external trade deficit (itself a function of growth) and the level of interest rates. Under these conditions, the central bank is absolutely obliged to keep the items on its balance sheet under careful control.
Remarks to Open Policy Panel Mark Carney, Governor Bank of England ECB Forum on Central Banking – 20 Years of European Economic and Monetary Union Sintra, Portugal Tuesday 18 June 2019  1  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  Introduction It is an honour to participate in such a distinguished panel on such a special occasion. Before I begin, I should emphasise that the usual caveat of the past providing no guide to future performance applies particularly to my remarks today. My reflections are on history alone. I am speaking in the MPC’s blackout period, so my comments have no bearing whatsoever on the decision to be announced by the MPC on Thursday. There are no messages – coded or clarion – in what follows … about policy. But there is one message that my presence here today is meant to convey. I want to pay homage to President Draghi’s extraordinary leadership of the ECB, the ESRB, the FSB and, by example, of the G7 and G20. The crisis years here have been extraordinarily challenging but these challenges have been met because of his leadership, innovation and determination. The theme for this year’s conference is “20 years of European Economic and Monetary Union”. I will focus my remarks today on how monetary policy has evolved over that period, drawing on the experiences of the ECB and Bank of England. Economic performance The global financial crisis divides the past twenty years.

In exceptional circumstances, like Brexit, when the economy is facing profound structural change, the MPC can extend the horizon over which it returns inflation to target from above in order to balance the effects on jobs and activity. After all, even though monetary policy cannot prevent the weaker real income growth likely to accompany the transition to new trading arrangements with the EU, it can influence how this hit to incomes is distributed between job losses and price rises. This flexibility cannot be used without limit of course, and the MPC has set out its framework for managing the trade-off including guidance for its tolerance of the overshoot of inflation.3 Developments in monetary policy In response to the challenging post-crisis environment, the conduct of monetary policy has made important advances that have helped to shape the expectations of both market participants and the public we serve. 2  The ECB also has flexibility to pursue its inflation target, but given the absence of trade-off inducing shocks has not yet had cause to use it. The ECB General Council adopted a quantitative definition of price stability in 1998 as a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2%; and from 2003, they clarified that this objective was to maintain inflation rates below, but close to, 2% over the medium term. 3 See Carney M (2017), Lambda, speech given at the London School of Economics, 16 January 2017.
In annual terms, they grew approximately 1 percent, due to positive growth rate of consumer goods import, whereas import of intermediate goods and capital has declined. Monetary indicators of September presented a slower performance of the banking system’s intermediating activity. In annual terms, broad money recorded a nominal growth of 2.8 percent in September, against 4.5 percent in August. Foreign currency credit contraction and intermediation of the public sector credit by nonbanking agents have influenced the slowdown of monetary indicators growth rate. In September, loan portfolio of economy grew at lower rates than in the previous months. Annual credit growth rate decreased to 13.2 percent. The credit slowdown is totally a consequence of foreign currency credit tightening, while the ALL credit increased by 31 percent in annual terms. The major part of the new credit, around 85 percent of it, was absorbed by businesses and was used mainly for meeting the needs for liquidity, whereas credit for long-term investments decreased. Also, household loan portfolio growth decreased, chiefly due to consumer credit contraction. Housing loan to households continues to maintain positive growth rates, remaining at 5 percent in annual terms. 2  BIS Review 153/2009  Domestic credit intermediation in ALL has raised the need for Bank of Albania’s presence by injecting liquidity. The banking system needs for liquidity have been met through open market operations of the Bank of Albania, preserving an appropriate time structure of this injection.

Moreover, the composition of growth has been structurally desirable, focusing on exports and industrial expansion. This helps to establish a better foundation for a sustained increase in future consumption. A reduction of external debt has begun. Prospects for the coming years also look favourable. It seems that output can grow relatively rapidly by Swedish standards, accompanied by relatively low inflation. There is reason to emphasise, however, that what we see is hardly the final solution to our problems but rather important initial steps towards a more balanced development. For one thing, the positive trend in the Swedish economy does not yet apply at all substantially to the labour market. A downward adjustment in the rate of wage increases towards more reasonable long-term figures has begun but we do not know how permanent it will be. What will happen in the next round of wage negotiations if capacity utilisation at that time is high? Is the functioning of the BIS Review 66/1998  -6labour market in other respects sufficiently smooth for the adequate creation and filling of new job vacancies? This is a key question. If we do not succeed in finding good solutions in Sweden when it comes to wage formation and the workings of the labour market, in the longer run it will not be possible to permit such strong economic expansion as we have experienced in recent years. Another aspect of economic policy that, like the functioning of the labour market, is closely connected with the Riksbank’s domain is fiscal policy.
Recently, research informed the recommendations of the Warsh Review into what we could do to enhance monetary policy transparency here at the Bank of England. This research theme continues in that vein by asking what more might be done to enhance effective transparency in all areas of policy. The fourth research theme covers “New data, methodologies and approaches” Increasing amounts of data – structured and unstructured, current and historical – are available on almost every aspect of the economy and the financial system. That holds great promise. Computing power has transformed our economies; it needs now to be harnessed to transform our understanding of them. Theoretical and methodological techniques continue to advance. In some cases that will mean measurement ahead of theory. That is one way to advance. In the short term, a black box could be better than none, and with time the patterns it reveals could prompt a greater understanding of the underlying forces. Recall that Kepler needed to uncover the empirics of planetary motion before Newton could conjure the theory of celestial mechanics. It is important to exploit developments in advanced analytics of large data sets to formulate better policy. They’ll improve our understanding of household and corporate behaviour, the macroeconomy and risks to the financial system. They need to be harnessed to enhance our forecasting and stress testing capabilities.

Table 2 Parities with respect to the U.S. dollar (1) (index 2005=100) Currency Australian dollar Brazilian real Canadian dollar Chilean peso Colombian peso Czeck koruna Euro Hungarian forint Indonesian rupiah Israeli shekel Japanese yen Korean won Mexican peso New Zealand dollar Norwegian krone Peruvian peso Polish zloty Russian ruble  15-Sep-08 Maximum 96.5 67.8 88.7 94.7 88.5 74.7 94.5 93.3 101.9 81.5 101.8 107.3 95.7 108.2 94.4 90.6 77.9 91.9  129.4 93.9 107.8 121.4 111.5 103.9 108.1 138.5 136.2 97.5 104.5 151.3 138.6 144.9 118.0 99.2 128.7 131.0  Depreciation Minimum (2) percentage 34.1 38.4 21.5 28.2 26.0 39.1 14.4 48.4 33.7 19.6 2.7 41.0 44.9 33.8 25.1 9.6 65.1 42.6  Appreciation (3) percentage  83.0 63.5 84.8 87.6 78.0 75.2 89.0 96.6 100.6 84.5 84.1 111.1 112.5 93.9 90.4 86.9 89.5 103.3  -35.8 -32.4 -21.3 -27.8 -30.1 -27.6 -17.7 -30.2 -26.2 -13.3 -19.6 -26.6 -18.8 -35.2 -23.4 -12.4 -30.4 -21.1  (1) From 15 September 2008 to the statistical closing of the Monetary Policy Report. (2) Difference between the currency's highest exchange rate over US dollars and the rate at 15 September 2008. (3) Difference between the currency's highest and minimum exchange rate in US dollars. Source: Bloomberg.
Besides entailing rising inflation, this causes firms and households to start accustoming themselves to a high level of inflation. Monetary policy may then be forced to adopt a contractive stance in order to bring inflation back to the target rate. So if the central bank waits too long, the interest rate increases may be all the larger. In the meantime, moreover, economic imbalances and tensions may become so great that they lead to economic setbacks. We are familiar with such a course of events from the 1970s and 1980s, and perhaps not least from the early 1990s. Against this background, in situations when capacity is coming under pressure, it is clearly better for a central bank to act at an early stage. Future inflation The assessment in the inflation report, published just over a month ago, is that growth in the Swedish economy will be about 2 per cent in 1997 and around 3 per cent in 1998. In 1999, the rate is expected to go on accelerating to just over 3 per cent. This assessment envisages that, in an expanding world market, export growth remains relatively high. This is accompanied by an accelerating increase in private consumption, while public consumption at least stops falling. Economic growth in Sweden in 1998 and 1999 would then most probably exceed the potential rate, which is estimated to be just over 2 per cent in annual terms. The broad rise in all the major demand components will therefore gradually exert pressure on the available resources.

As economic activity becomes stronger and monetary policy adjusts its sights on the future picture, the Riksbank’s monetary stance will have to gradually move away from its current expansionary position. The timing of such a move has to be assessed in the light of new information and today one cannot say when it will happen. Our present assessment is that the monetary stance is well balanced. There has been some shift in the spectrum of risks but our inflation forecast for the coming years is unchanged. BIS Review 101/1997