samchain/econo-pairs-v1 huggingface dataset:
We have Professor Dani Rodrik of Harvard University as our keynote speaker on the topic of “The Disappointments of Financial Globalization”, followed by five leading international researchers, namely Dr. Claes Berg, Sveriges Riksbank; Professor Raghuram Rajan, University of Chicago; Professor Jose Antonio Ocampo, Columbia University; Dr. Arvind Subramanian, the Peterson Institute for International Economics; and Dr. Robert McCauley, Bank for International Settlements who will be presenting their in-depth studies over the next two days on broad range of issues, a part of which I have barely begun to touch upon. This symposium will also be rounded up by a panel discussion on “Financial Globalization in Emerging Market Economies” which should provide an interesting discussion on the implication of financial globalization and the current financial crisis from an emerging market perspective. Ladies and Gentlemen, I would like to conclude by saying that the recent developments in financial markets around the world will stimulate considerable review and analysis in the months and years to come. Across the globe, legislatures, regulators, financial supervisors are already hard at work trying to distill the lessons to be drawn from this experience and their implications for future policies. For the private sector, banks, credit-rating agencies, and the investment community are also trying their best in coping and adapting to these developments. For central banks, the implementation of monetary policy will certainly become a more challenging task as a result of the current financial turmoil.

Muhammad bin Ibrahim: Harnessing human capital investment and forward looking leadership Remarks by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the launch of the Asian Banking School's Cambridge Summer School Programme, Kuala Lumpur, 18 April 2017. * * * I would like to take this opportunity to congratulate the Asian Banking School on the launch of the Cambridge Summer School programme. This is an exciting collaboration with Cambridge University, an institution synonymous with academic excellence and thought leadership. The advent of this programme represents yet another important milestone in the transformation journey on which we have collectively embarked, for both the Asian Institute of Chartered Bankers and the Asian Banking School. Participants of this programme can look forward to being part of a landmark initiative that will provide vast opportunities to expand knowledge, experience and networks. Cambridge University is truly prestigious. Many ideas by scholars from this great institution have transformed entire professions, understanding and thinking. Some of the ideas resonate to this day. Over 300 years ago, Isaac Newton, a Cambridge University alumnus and one of the most brilliant scientists in generations, first introduced the law of inertia – “The tendency of an object to resist change”. While Newton’s principles referred to physical objects in motion, it is equally thought provoking when considered in other contexts, including the pace of change in the banking sector.
While that could be useful in the longer run, I don’t think that is essential to make this resolution tool work. Moreover, operating on the capital structure of a holding company can cut through some of the complexity, since topco debt is structurally subordinated to the debt and other obligations of the bank operating companies it owns. A final thought before moving on to a possible resolution strategy for a different type of SIFI. What I have been describing is not a matter of designing new instruments with terms that automatically trigger a pre-determined write down or conversion into equity, which would essentially be a putative form of “Tier 3” capital. Today’s topic is rather the toolkit the authorities need, in a statutory resolution regime, to maintain order when all such instruments have converted, all other options are exhausted and liquidation beckons. But whether via contractual terms or under resolution, debt can add to a bank’s loss absorbing capacity. The resolution of deposit-funded international commercial banking groups We should not assume a monolithic approach to resolution. It is not a case of one size fits all. What I have described could work for banking groups that issue plenty of debt. It would not work so easily for groups operating commercial banks around the world that are funded pretty well entirely from insured deposits. If they haven’t issued bonds, then there would be no bond holders to bail in.

To all of this, the EU Directive will be crucial in giving us all the tools we need. I really do believe that, with Dodd Frank already in place, it will help set the tone for the world. BIS central bankers’ speeches  5
Moreover, there is a second reason for stressing the difference between the three types of response, which is that both the measures seeking to prevent the recurrence of a similar crisis, and those seeking to increase the future resilience of the financial system are usually of little use in resolving the problems that affect economies and financial systems in the short term, that is to say now. The authorities naturally wish to “sell” the decisions they are adopting. But nobody should think that the immediate application of the measures aimed at preventing future crises or mitigating their intensity will suffice to resolve our short-term problems. If we analyse the matters addressed on the FSB or European Commission’s agendas, we will see that, until relatively recently, most progress has been centred on preventing the repetition of a crisis such as the current one, which has affected the entire financial system. And in the case of a fresh crisis arising, the aim has been for the financial system – for banks and for the authorities – to have resolution mechanisms that mitigate its adverse effects. With sole regard to the management of future crises, although major efforts have been made to move towards more effective crisis-resolution arrangements, most of the prescriptions admittedly require time to be effectively set in place, meaning that they cannot be used to manage the current crisis. Returning to the management of the euro area sovereign debt crisis, much progress has clearly been made in the reform of European governance.

David Clementi: Maintaining financial stability in a rapidly changing world some threats and opportunities Speech by Mr David Clementi, Deputy Governor of the Bank of England, at the launch of the Oxford Centre for Computational Finance, University of Oxford, 10 October 2001. *  *  *  Introduction It is a great pleasure to be here this evening, and to be part of the launch of the Oxford Centre for Computational Finance. Responding to new types of risk demands an increasingly sophisticated combination of technology and intellectual thought, and I can think of few places as well suited to this exciting and challenging task as Oxford. As an honorary Fellow at Lincoln College, I know that the drive for excellence remains as high as ever, and I have to say that I look back at my time here as an undergraduate with great affection. That was some time ago, of course - back in the 1960s, when a photocopier or calculator was pretty high tech - and if you knew the current prices of equities on the exchange you had a five minute information jump on most of the market. The world today of course is much more complex and the risks correspondingly more difficult to analyse. What I'd like to do tonight is to cover three main topics. First, I want to explain the Bank of England's role in financial stability issues, and discuss some of the threats to that stability which have emerged recently.
On the other hand, there is the outstanding debt under the debt purchase programme established in 2010 (SMP), which amounts to close to € billion. Are we looking at a scenario entailing a potential loss of close to € billion if Greece leaves the euro? I do not want to speculate on that. Greece can remain in the euro area. What would be the consequences for the euro area of a “no” vote in the referendum, which would undoubtedly lead to “Grexit”? A distinction must be made between the short and long-term impact. The reaction of global financial markets on Monday demonstrated that they were surprised. Up until Friday evening, it was not envisaged that the negotiations would break down and a referendum would be  2  BIS central bankers’ speeches  called. The markets have become risk-averse. But their reaction remains relatively calm. This shows the extent to which Greece’s current situation is a unique one – it is a special case. Other countries in the euro area have experienced great difficulties. They have been through adjustment programmes, and come out of them. For these countries, this has been a chapter with a successful conclusion. This is the case in Ireland and Portugal. The Cypriot programme is still ongoing and proceeding well, which should allow the ECB soon to begin purchasing Cypriot securities. I do not underestimate the efforts these programmes have required, or their social costs. The citizens of these countries have paid dearly.

So does the responsibility for breaking off talks lie entirely with Greece? The decision to interrupt discussions was taken by the Greek authorities. That also surprised us, for we were coming to the end of some quite focused and fruitful exchanges. You are talking about proposals in the past tense. Does the ECB consider that the question to be put to the Greeks in the referendum is already null and void, since the assistance arrangement will no longer be relevant from the evening of 30 June? The programme will indeed formally expire on Tuesday evening. Having said that, if the response is “yes” I have no doubt that the euro area authorities will find the means, one way or another, to honour the commitments that have been made. The question is a political one. It’s the Greeks who hold the answer to that question. And if the Greeks say “no”… That would be to refuse the offer made by the other 18 members of the euro area. It would then be very difficult to revive the political dialogue. The Eurogroup clearly considered that the proposals of the three institutions had reached the limits of what was acceptable. Alexis Tsipras feels that Europe has not lived up to its commitments on debt restructuring… The debt question was indeed a priority for the Greek government.
4  A fuller definition of financial stability is that the financial system shall fulfil its fundamental functions and be resilient to various shocks occurring, see the Riksbank (2013) The Riksbank and financial stability, Stockholm February 2013. BIS central bankers’ speeches  5  The static tools can be illustrated by adding a variable ( z ) denoting how regulation affects interest rate margins and credit terms in the simple definition of the lending rate:  itlending  it   t (z ) . The primary purpose of static regulation is to adapt resilience according to the structural factors which give rise to systemic risk, such as the size, concentration and degree of maturity transformation of the banks. The introduction of static regulation involves a one-time shift in the interest rate margin. Monetary policy may need to take account of this. Monetary policy must naturally also take account of the extent to which the measure affects the risks of financial instability ahead. However, variations in the view of risk-taking and credit growth also involve variations in systemic risk over time. A time-varying macroprudential policy tool is therefore also needed. This is also a way of attempting to make the regulation slightly cheaper, i.e. managing the balance between stability and efficiency. An example of time-varying regulation is the countercyclical capital buffer. It aims to induce banks and other financial institutions to build up capital buffers in good times, which they can then reduce in bad times.

Stefan Ingves: The role of the central bank after the financial crisis – the challenges ahead Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank and Chairman of the Basel Committee on Banking Supervision, to the Swedish Economics Association, Stockholm, 12 June 2013. *  *  *  The last five years have been an extraordinary period for the global economy, with crisis management and major fluctuations in growth and economic development. For politicians and authorities in many countries, it has been – and still is – a complex world that is hard to navigate. Five years after the financial crisis broke out, many countries are still in the process of cleaning up after it. It can be ascertained that financial crises are expensive, timeconsuming processes, and that far too little has been done previously to prevent them from occurring. The financial crisis has made it clear that the monetary policy framework needs to be developed so that it takes greater account of the importance of financial stability. While the crisis was indeed not caused by monetary policy, a lesson nevertheless learned is that price stability does not suffice to ensure financial stability and a stable development in the real economy. The financial crisis has also brought to light deficiencies in financial stability policy, in that microprudential policy does not guarantee financial stability. Hence, financial stability policy must also be developed. It needs a clearer mandate as well as tools for managing systemic risks.
We expected inflation to fall back, once those changes had passed through. And, second, to prevent even a temporary rise in inflation consequent to those price level shifts, the MPC would have had to try to depress the economy even further, by consciously pushing down on output, employment and nominal wage growth – so real wage growth would have been weaker, not stronger – at a time when the economy was already very weak. So, despite the costs of the inflation which were  1  For a comprehensive review of the costs associated with anticipated and unanticipated inflation, see Briault, C (1995) “The costs of inflation”, Bank of England Quarterly Bulletin: February 1995 (http://www.bankofengland.co.uk/archive/Documents/historicpubs/qb/1995/qb950102.pdf)  2  Because no interest is paid on bank notes and coins. Also because of nominal rigidities in the tax system like fixed personal allowances. BIS central bankers’ speeches  1  experienced, the costs of the policy needed to counteract it would have been even greater in this specific circumstance of one-off shocks and left the UK economy in a much worse position now. I want to stress that these calculations would not lead to the same conclusion were inflation being driven by pressure arising from excess demand or if inflation had led to expectations of above-target inflation in the medium-term. In those circumstances, where inflation would be more persistent and hence much more costly, the benefits of bringing inflation back to target would outweigh the short-run costs of doing so.

The third discussion forum I would like to mention is the reference group for the payment system called together by the Riksbank and consisting of representatives from VPC AB, Bankgirocentralen, Stockholm Stock Exchange, the major banks and the Swedish Bankers’ Association. Part of the work in these working groups has entailed charting the flows and the infrastructure of the payment system. The charting process began as an internal project at the Riksbank, with a general review of the payment system’s basic conditions, agents and services. This has since functioned as a basis for discussion and as reference material for other working groups to make a more in-depth survey of some representative payment services. One example is the flow chart of the Swedish Social Insurance Administration's pension payments that I have spoken of today. Other payments that have been charted are credit transfers and payments for securities. The general conclusion reached by most participants in these discussions is that each organisation has a responsibility for supplying its services in accordance with the agreements it has with its customers. This responsibility includes solving crises internally and cooperating with those the organisation is dependent on to be able to supply their services. The discussions have also increased awareness that everyone in the chain must have a reasonable level of business continuity and crisis recovery planning and that cooperation may be necessary to safeguard common interests. It has not yet been decided how these discussions will continue.
On the other hand, I find it difficult to  * Thanks to Björn Lagerwall who has helped me prepare the speech and to Anna Österberg who has helped in  producing data and figures. Thanks also to Charlotta Edler, Henrik Erikson, Jesper Hansson, Jens Iversen, Marianne Nessén, Amanda Nordström, Tommy Persson, Ulf Stejmar, Marianne Sterner, Anders Vredin and Magnus Åhl for valuable comments. 1 [30]  see the value of later increasing and prolonging the asset purchase programme in a situation where the economy was recovering rapidly and the financial markets were functioning again.   Asset purchases need to be weighed against the risks and problems they can entail. One risk, which has now begun to materialise, is that the purchases entail substantial financial losses. This may, for example, jeopardise the Riksbank's financial independence and thereby impair the conditions for conducting monetary policy in the long run. Another risk is that market participants start to expect the Riksbank to step in as buyer when there is stress on the markets. Why should a central bank purchase assets? During and after the global financial crisis, central banks have needed to manage financial markets that have periodically functioned very poorly. Moreover, their policy rates have at times been limited by a lower bound. It has therefore not been possible to cut the policy rate as much as would have been needed. To manage the problems, many central banks have over the past 15 years launched extensive programmes for asset purchases.

Given this, the Riksbank focused its measures on ensuring that there was good access to liquidity and that the financial markets continued to function. We did not see it as meaningful to stimulate demand in an economy that was largely closed;  11 [30]  instead, the ambition was to avoid tightening financial conditions and, in the long run, to avoid the great uncertainty causing a financial crisis. Among the measures we decided at a number of ordinary and extraordinary meetings were broader and substantially extended asset purchases.20 At the monetary policy meetings in April and June 2020, these measures were consolidated in a programme where assets worth SEK 500 billion would be purchased by mid2021. The purchases now included not only government bonds, but also covered bonds, municipal bonds and corporate bonds.21 Since many actors at the same time put in place a variety of support measures, it is almost impossible to evaluate the effects of an individual measure. However, I do draw some conclusions. The support measures during the pandemic were important and worked very well First, I think it is clear that the overall measures worked very well. Risk premiums in the financial markets began to fall rapidly in April, and the pandemic did not lead to a financial crisis either in Sweden or abroad.
This is essential in order to facilitate the transition from a planned to a market economy and, at the same time, to support the conduct of a single monetary policy in an enlarged euro area. Setting up such a financial infrastructure is, however, a difficult task. First, preparatory work in this field is subject to very long lead times and, therefore, needs to be implemented years before the adoption of the euro. Second, the target of this preparatory work is a moving one: certain components of the euro area financial infrastructure may need to be adapted before new Member States can be integrated into the euro area. Furthermore, there is an ongoing debate in international fora about the optimal structure of modern financial markets in an increasingly integrated global financial system. More and more, market pressures, economies of scale and efficiency gains point to the need for further consolidation of the financial infrastructure. In the context of EU entry, and taking into account the relatively small size of the financial sectors in the accession countries, plans to develop the financial market infrastructure may need to bear in mind the specific conditions applying to accession countries. Indeed, there is a risk that accession countries may now be investing considerable efforts and resources to develop infrastructures similar to those that some euro area countries are trying to rationalise. Concluding remarks Ladies and gentlemen, I shall conclude with a few brief remarks of a more general nature.

With regard to the length of the period of ERM II membership, in view of the varying degrees of convergence of the accession countries, limiting the duration of ERM II membership to the minimum permissible time to qualify for the adoption of the euro – that is, two years – may not be an optimal choice for all accession countries. Longer membership of ERM II may, in some cases, be helpful since it would allow accession countries to retain the exchange rate as an instrumental policy variable during the catching-up process. Indeed, this option has proven useful for most of the current euro area participants. Again, it is worthwhile to recall the examples of Greece, Portugal and Spain. In the case of Greece, the final revaluation of the drachma on 17 January 2000 took place at the request of Greece, with the agreement of the EU authorities, to support the country's efforts to preserve sustainable price stability and progress in real convergence without jeopardising the competitiveness of the economy. Portugal and Spain, which participated in the EMS/ERM for a longer period of time, also used the option of realigning the respective exchange rates of the escudo and the peseta at several points along the road towards entry into the euro area. Participation in ERM II should, therefore, not be seen as a mere “waiting room” prior to the adoption of the euro.