samchain/econo-pairs-v1 huggingface dataset:
As the Central Bank, we have continued to monitor and review developments in the foreign exchange market and provide prudent support when necessary in order to dampen excessive volatility in the exchange rate and safeguard the recently achieved macroeconomic stability. To this end, the Bank has been a net seller of foreign exchange to banks. However, the Bank’s interventions were limited, given the global extent and magnitude of the crisis. Some of the specific measures the Bank of Zambia implemented include the following: •  Improving information flows: The Bank of Zambia has enhanced its vigilance and interaction with the domestic financial system to ensure adherence to its supervisory guidelines and to enhance information flows. The BOZ is continuously interacting with banks to ensure that detailed information regarding foreign exchange transactions is provided and has also engaged major business entities to understand their expected foreign exchange requirements. This is necessary to ensure market constraints are addressed expeditiously. •  Sale of foreign exchange: Increased the supply of foreign exchange to the market with the primary purpose of smoothening short-term volatility in the exchange rate  4  BIS Review 161/2009  and the foreign exchange market generally.

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We care about the health and stability of the tri-party repo market both because of our interest in promoting stable and liquid financial markets and because we use it to implement monetary policy. The recent financial crisis showed us that the tri-party repo market was inherently unstable due to deficiencies in the settlement infrastructure. Prior to 2008, there was limited recognition of the ways in which adverse developments in this market could quickly transmit risk to other parts of the financial system with unforeseen consequences. We now know, with the benefit of hindsight, that the market was overly reliant on massive extensions of intraday credit by the clearing banks to the broker-dealers, that market participants did not adequately appreciate the magnitude of the risk embedded in the role played by the clearing banks, and, as a result, market participants underpriced risk in ways that undermined the market’s resiliency during periods of stress. These vulnerabilities were made apparent in the spring of 2008 when the events surrounding Bear Stearns demonstrated the run risk that existed more broadly in the tri-party repo market, prompting the Federal Reserve to intervene in order to restore confidence and market functioning. This intervention took the form of the creation of a Primary Dealer Credit Facility in March 2008, and a subsequent expansion of the facility in September 2008. The scope and scale of the market disruption were clearly very troublesome.

Chart: Key policy rate in the baseline scenario The degree of transparency regarding Norges Bank’s interest rate decisions has increased gradually since inflation targeting was introduced. We provide clear guidance about the future path of the key policy rate. Explicit interest rate forecasts were introduced in 2005. A key objective is to convey the contingency and the uncertainty in the forecast. To that end, we seek to be transparent about the considerations underlying each interest rate forecast and what the objectives and trade-offs are. We consider it important to explain why our forecast has changed. In our Monetary Policy Report, the interest rate forecast is accompanied by a separate chart showing the revision since the previous report due to changes in news and new assessments. Monetary policy also seeks to mitigate the risk of a build-up of financial imbalances. Operationally, and as a support to monetary policy decisions, our objectives and trade-offs are described by a monetary policy loss function7 The loss function is minimised subject to our model of the Norwegian economy, and the implied interest rate path is an important aid to the policy decision process8 Since models are simplifications, our projections are based on a combination of model analyses and professional judgement. Transparency allows financial market participants and other interested parties to make their own judgments on the revisions to our interest rate forecast – and the revisions will often be anticipated.
Table 1 Largest banks (by assets) and asset managers (by assets under management), end 2012 Bank  Country Assets $ % of total  Manager  Country AUM $ % of total  ICBC Mitsubishi UFJ Financial HSBC Holdings Deutsche Bank Credit Agricole BNP Paribas JP Morgan Chase & Co Barclays China Construction Bank Bank of America TOP 10  China Japan UK Germany France France US UK China US  BlackRock Allianz Vanguard State Street Fidelity AXA JPMorgan Chase Bank of New York Mellon BNP Paribas Deutsche Bank TOP 10  US Germany US US US France US US France Germany  2,789 2,709 2,693 2,655 2,649 2,516 2,359 2,351 2,221 2,212 25,154  2.5% 2.4% 2.4% 2.4% 2.4% 2.2% 2.1% 2.1% 2.0% 2.0% 22.4%  3,792 2,448 2,215 2,086 1,888 1,475 1,431 1,385 1,303 1,247 19,270  5.6% 3.6% 3.3% 3.1% 2.8% 2.2% 2.1% 2.0% 1.9% 1.8% 28.3%  Sources: The Banker Database “Top 1000 World Banks ranking” (2013), Towers Watson "The World's 500 Largest Asset Managers" (2012) and Bank calculations  BIS central bankers’ speeches  13  References Andonov, A., Bauer, R. and Cremers, M. (2013), “Pension Fund Asset Allocation and Liability Discount Rates: Camouflage and Reckless Risk Taking by U.S. Public Plans?” Adrian, T. and Shin, H. S. (2010), “Liquidity and Leverage”, Staff Report, Federal Reserve Bank of New York, No. 328. Amir, E., Guan, Y. and Oswald, D. (2010), “The Effect of Pension Accounting on Corporate Pension Asset Allocation”, Review of Accounting Studies, 15(2), p.345–366.

If we take into account the margin provided by the loan-to-value ratio and the fall in real estate prices that has already taken place, it would be necessary to make catastrophic assumptions, beyond all reasonable expectations, regarding the expected losses in order for the total losses to be well above the total volume of loan loss coverage. Moreover, the Spanish system of specific provisioning has been tightened so that banks have an even greater incentive to speed up their balance sheet write-downs. Thus doubtful loans, once the value of the collateral has been taken into account, have to be fully provisioned within a period of one year. In addition, the value of collateral is subject to significant haircuts ranging from 20% for completed housing to 50% for land. Finally, the law requires provisions of up to 30% to be recorded for foreclosed assets that have remained on the balance sheet for two years. But perhaps the characteristic which makes Spanish provisioning regulations unusually strict is that the parameters determining the provisions are transparent and apply to all banks. Therefore, unlike in other countries, they are not left entirely to be negotiated between the bank and its external auditors. It is not only legislators and regulators who have adopted measures to anticipate future problems. Spanish banks too, savings banks included, have made an enormous effort to clean up their balance sheets, something which is not always duly acknowledged in analyses of the Spanish banking system.
It is well known that the strong growth of household and corporate demand has been accompanied by a notable rise in borrowing and in their debt ratios. Although this has not led to any deterioration in the financial position of these sectors (because their assets have also risen in value) or to rises of the same magnitude in their debt burden (thanks to lower interest rates), their higher indebtedness has made them more vulnerable to adverse changes in economic and financial conditions. Household debt cannot grow indefinitely at the rapid pace of recent years. The higher indebtedness and the increasing weight of floating rate loans, along with the rising share of equities and real estate in households’ asset portfolios, have made their spending decisions more sensitive to interest rate and asset price movements, in a situation complicated by the limited disposable savings remaining after debt service. The property market is particularly significant in this respect because most household indebtedness is linked to house purchases. Although the supply of housing has responded fairly flexibly to the increased demand and the price trajectory has not departed substantially from the pattern seen in previous upturns, a certain degree of overvaluation of these assets is detectable in Spain. This overshoot, which was not corrected in 2003, makes it particularly necessary for buyers and sellers in this market to act cautiously. A gradual absorption of the overvaluation would establish a frarmework of greater financial stability for households and forestall interference in their consumption decisions.

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.
Alongside Singapore’s vibrant REIT market, we offer a strong value proposition for real estate players to tap on Singapore’s capital market to finance the rapid growth in the Asian real estate sector. BIS Review 38/2007  1  Singapore’s Real Estate Investment Trust (REIT) market Singapore was the first country in Asia to introduce a regulatory framework to facilitate the offering of Real Estate Investment Trusts (REITs). This framework allows property companies to securitise their completed real estate assets in the capital markets, realise capital gains and re-invest into developing new properties. By offering investors direct exposure to assets with stable cash-flows, REITs tap a new pool of investors who are seeking higher-yielding securities, including pension funds and insurance companies. Since the first REIT listing in 2002, the Singapore REIT market has become the largest REIT market in Asia outside of Japan. Currently, Singapore has 16 listed REITs, making up a total market capitalization of over $ billion. Singapore REITs offer investors access to a diversity of real estate assets including retail malls, office buildings, industrial properties and serviced apartments. In 2006, we also saw the first dedicated hotel REIT as well as Asia’s first healthcare REIT. Several key factors have contributed to the growth of the Singapore REIT market. Our established and robust, yet pro-business regulatory framework and competitive tax regime have drawn the attention of global investors, attracting the securitization of not just domestic, but increasingly offshore assets.

The forum provides the opportunities for policy dialogues, exchange of views and concerns, and information updates, among other things. This is the major operational arrangement that we have put in place to make the separate authorities model work for us. No doubt other operational arrangements can be put in place to make the integrated model work as well. Having said that, let me add another dimension to the issue of supervisory arrangement – one that is related to central bank’s other key function, namely, monetary policy. I believe that supervisory policy and monetary policy can be arranged in such a way that they are complementary and supportive to each other. I also believe that the often-cited conflicts of interest between the two roles, if performed by the same institution, may have been overstated somewhat. If there are policy conflicts, these conflicts will have to be resolved regardless of who is in charge of supervision. Then, would it not be more efficient if the conflicts could be internalized and resolved within an institution? In fact, many possible mechanisms exist to help ensure full accountability for each role, thereby minimizing potential conflicts while getting synergies from having the two roles under one roof. The arrangement we use In Thailand, as I alluded to earlier, is the establishment of two separate policy boards that include outside experts.
Well, by considering how quickly we should aim to return inflation to target. If, for instance, inflation is below target while growth in the economy is high, as has been the case in Sweden in recent years, a monetary policy that aims to quickly push up inflation through very low interest rates could lead to demand being stronger than the economy can manage further ahead. We would then risk overheating, where prices and wages begin to increase rapidly and where inflation expectations would perhaps also be adjusted upwards. The Riksbank could then be forced to tighten monetary policy substantially. If we instead gradually begin to raise the interest rate earlier, there is a greater chance that we can avoid overheating. We can thereby also avoid the recessions that often follow overheating. This type of policy can thus mean that the fluctuations in the economy are smaller over time. This is where the  BIS Review 101/2006  3  two-year horizon that we work with comes in. It means that we can in normal cases allow up to two years before inflation attains the target. What I have described so far with regard to the principles for monetary policy is currently an accepted view of how monetary policy with an inflation target should be conducted. Central banks around the world have chosen slightly different varieties, where the details of the monetary policy system may differ considerably. However, the overall strategy is still the same. How to take into account house prices?

This puts pressure on emerging economies’ exchange rates and external accounts. This is one element we have seen in the past year, with parities against the dollar posting the greatest appreciations of the last decade (figure 2). So far, the Chilean economy has been able to withstand this challenge, but the risk of these pressures intensifying is still latent. The real exchange rate has risen after the announced intervention early this year, and now its level is near its average of the past 15 to 20 years (figure 3). Among the policies that emerging economies have used to mitigate the impact on their currencies has been the adoption of foreign exchange measures. These have taken a variety of forms, including foreign currency purchases and the implementation of administrative measures. In Chile, in early January, we announced a program of reserves accumulation of 12 billion dollars, which will be completed over the course of this year. This is the equivalent of 5 GDP points, the largest since the first half of the 1990s (figure 4). To this date, we have already made purchases amounting somewhat more than 8.5 billion U.S. dollars. This program serves two purposes. The first, as we emphasized in the announcement, is to transitorily attenuate the appreciation of the peso. This should allow the productive sector to make the necessary adjustments within a context in which these pressures could remain for a long time. The program did have an effect on the peso. Without the intervention, it would have appreciated further.
Capital flow measures are applied “at the gate” seeking to regulate flows into and out of the economy; macroprudential measures are applied “inside the house” targeted at sectors where financial vulnerabilities are building up. •  Capital flow measures are highly distortionary and pose long-term costs to the economy. Clearly, such measures should not take the place of needed macroeconomic adjustments. •  Capital flow measures may be warranted under extreme circumstances to safeguard financial stability. But as the IMF puts it, their implementation should be “targeted, transparent, and generally temporary”. 39 Asian economies have deployed macroprudential policies to deal with financial imbalances, to a greater extent than other economies. So far, the results have not been bad. They have largely tempered the credit cycle and the pace of asset price increases, while generally maintaining price and output stability. A synthesis? 40 Let me bring together the main strands of my remarks. The view that central banks ought to pay due consideration to financial stability is gathering momentum. I have described two alternative approaches to the status quo to achieving this: •  The second approach incorporates financial stability considerations in the setting of monetary policy; and  •  The third actively uses macroprudential policy to help secure financial stability. 41 Perhaps the differences between the two approaches are exaggerated. Both approaches require the central bank to integrate monetary policy functions effectively with prudential policies.

He argues that monetary independence is still possible, but because of the impact of financial globalisation, monetary policy carries a much bigger burden in trying to achieve both financial stability and purely macro objectives. 26 Recent Asian experience is illustrative. The exuberance in Asian asset markets and consequent build-up of financial risk in recent years has been exacerbated by the global search for yield in a zero interest rate environment. Raising policy rates may not sufficiently alter the level of risk-taking in these economies. •  In fact, paradoxically, a central bank that tightens monetary policy to stem financial vulnerabilities could perversely attract more capital flows into the economy, resulting in stronger credit growth and rising asset prices. 27 Third, it is not clear that monetary policy can fill all the cracks. Monetary policy flows into all the cracks no doubt, but some cracks are just too big to fill. 28 Financial vulnerabilities are not evenly spread across the economy. They tend to be concentrated in specific sectors and segments, such as in real estate. So, even when monetary policy has configured overall liquidity and risk-taking settings appropriately, specific pockets of financial market vulnerabilities, e.g. a property bubble, could remain. 29 Monetary policy is too blunt an instrument for addressing such specific risks to financial stability, and it can cause significant collateral damage on the rest of the economy if it tries to do so.
The depreciation in the Kwacha was largely on account of reductions in emerging market premia due to continued interest rate hikes in major global economies, which resulted in reduced participation by foreign portfolio investors in the domestic securities market, a change in the commodities market sentiment aligned with lowering copper prices and uncertainty associated with the run-up to September 28, 2006 elections and the period immediately following the elections. 5. Another important milestone in 2006 was the licensing of credit reference bureau. As you are all aware, one important objective of a credit reference bureau is to help separate truant borrowers from good borrowers thereby help reduce the cost of borrowing in Zambia. As you endeavor to deliver daily targets of newspapers and electronic media that are in a hurry to report on a daily basis, there also needs to be some commitment to create a longer term trail of rigorously investigated news that is backed by authoritative evidence. Bank of Zambia, commercial banks, the Central Statistics Office and other information providers amass a lot of detail that is reflective of what has happened in the economy. I would encourage business and financial writers to  BIS Review 10/2007  1  monitor and highlight trends that can help us forecast where our economy and business sector is actually headed. If economic indicators are tracked effectively by the media and progress highlighted, it helps to generate even greater confidence in those seeking to make Zambia an investment destination.

Caleb M Fundanga: Recent significant developments in the Zambian economy Speech by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the 2006 Business and Financial Writers, Media Awards, Lusaka, 24 January 2007. *  *  *  • Heads of Diplomatic Missions, Permanent Secretaries and senior Government officials • Heads of Economic, Financial and Business organizations • Heads of Media Institutions • Economic, business and financial writers • The ACCA International Assembly Member and the Branch President • ACCA Country Manager • Distinguished invited guests, ladies and gentlemen I am delighted both as Governor of the Bank of Zambia and as patron of the business and financial writers forum, to officiate at the 5th annual business and financial writers awards ceremony for the second consecutive time. I must say I am always delighted to interact with you my colleagues from the media because we are both stakeholders in the provision and dissemination of financial and economic information to the public. The purpose of this annual event is to recognise outstanding journalism effort demonstrated by economic, financial and business writers from various media institutions. In this room tonight are different organizations represented with a commonality, that is, we all wish to have accurate, timely, informative, creative, relevant and in-depth information. Distinguished Ladies and Gentlemen, I am pleased as patron of the business and financial writer forum to continue working with you.