samchain/econo-pairs-v1 huggingface dataset:
Lender of last resort should be an essential element of the wider institutional framework for governments and central banks for dealing with banking crises in addition to prompt corrective action, bank resolution and deposit insurance among others. Distinguished delegates, the speed with which the crisis spread across the globe highlights the global nature of financial markets and the importance of cross border supervision. The risk posed by cross-border operations by financial institutions is clearly significant if not properly supervised. Over the years, many financial organisations worldwide have adopted more flexible and complex structures through the establishment of a wide range of subsidiaries and affiliates that are engaged in business lines different from the core business of the parent financial institution. The emergence of financial conglomerates has seen banking activities, asset management or insurance activities that previously were conducted on a stand-alone basis now being provided within one financial group. Some of these financial groups operate businesses across borders. The main economic and financial benefit which encourages the formation of such groups is the enhanced ability to achieve economies of scale and capture synergies across complementary financial services business lines. These synergies result in improved operational efficiency and effectiveness due to lower costs, reduced prices, and improved innovation in products and services. At the same time, the emergence of such groups has brought complex linkages and relationships among economic agents. Consequently, they have also necessitated a paradigm shift in supervisory approaches in order to identify, manage and monitor risks both within and across borders.

We are starting with a public debt of 115.7% of GDP at the end of 2020, which is almost twice as high as 20 years ago:  Under a no-policy-change assumption, with potential growth of around 1.1% and a rate of public spending growth in real terms of around 1.1%, which is close to the trend over the last ten years, we will only succeed in stabilising our public debt at this high level over the next decade; this would be a dangerous strategy given the risk of a new exogenous economic crisis or an interest rate shock. But we can write a more positive script to avoid this trend-based scenario. It involves a combination of three ingredients: time - only start to reduce our debt ratio once we are economically out of the Covid crisis, hence after 2022, and adopt a tenyear strategy; growth – which will generate revenue but not miracles; and more controlled and efficient public spending:  Zero growth – i.e. stabilisation – of total public expenditure in real terms at constant taxation rate would reduce the debt to around 100% of GDP in 2032. Real expenditure growth of 0.5% per year would reduce the debt to around 110% of GDP.
The necessity of temporary controls now appears to be generally recognised, and support for them appears to have grown, so much so that this actually gives cause for some concern. There are likely two reasons for this. In the first place, many people appreciate the exchange rate stability they have brought – that is, after their tightening started to have some effect. Second, this change in attitude may indicate that a certain group has benefited to some extent from the controls, which prompts me to conclude that it is desirable to begin lifting them as soon as is practicable, but without jeopardising stability. To find our way out of the capital controls, we must understand the reason they were imposed. To start with, we can recall a few basic facts. It is true of both banks and currencies that their stability is based on confidence. If confidence evaporates, banks fail and currencies plunge, often far below the levels justified by fundamentals. Confidence in a country’s currency and confidence its main financial institutions are closely connected, because the banking system links domestic and foreign financial markets. It is the lifeline of any currency. If that lifeline is cut, the consequences are catastrophic. In simple terms, this is what happened when the Icelandic banking system collapsed. There was a real danger that a vicious circle, as capital fled ISK-denominated assets, could have amplified major difficulties faced by highly indebted households and businesses.

It therefore comes as no surprise to hear the view expressed that the capital controls should be maintained on a more permanent basis. This is not as attractive an option as might appear at first glance, however. In the first place, liquid capital cannot be kept here forcibly for an indefinite period of time. The controls are a violation of various international agreements signed by Iceland. They are tolerated as long as Iceland follows the economic Recovery programme supported by the IMF, and thus indirectly by the member states of the EEA, OECD, and the Fund itself. Soon after this programme concludes, the controls will likely have to disappear; i.e., if the Icelandic government does not wish to renege on international treaties it has ratified. Eventually, frozen capital will have to be allowed to go wherever it wishes. Second, long-term confidence cannot be established as long as uncertainty exists as to how much capital is tied up in ISK assets simply because of the capital controls. This uncertainty will not dissipate fully until they are removed. Until that time, there is a risk that it will restrain foreign investment, which is a premise for export-driven economic recovery. Third, the hefty profits that can accrue to parties that circumvent the capital controls undermine business ethics and create a competitive advantage vis-à-vis those who abide by the law. The controls prompt individuals and firms to devote efforts to seeking ways to circumvent them, resulting in waste of resources and excess cost in the economy in the longer term.
Moreover, it is possible, albeit with the benefit of hindsight, to explain why inflation in recent years has been higher than we expected. But that is all in the past. What matters for monetary policy are the prospects for inflation over the next 2 to 3 years. My broad view of the inflation outlook is similar to that described in the February Inflation Report. Inflation will probably rise further in the near-term as recent commodity price increases pass through the supply chain. But further out, inflation is likely to fall back as the temporary impacts of the price level shocks wane and the slack in the economy associated with the deep recession from which we are only gradually recovering continues to pull down on inflation. But the risks and uncertainties associated with the inflation outlook means it is impossible to know with any certainty by how much and over what period inflation will moderate. Indeed, it is quite possible that inflation may be considerably higher or lower than the central view taken in the February Report. This leads to the third item on our charge sheet: could inflation remain high? The simple answer to this question is – I’m afraid – yes. I would highlight two risks in particular. The first is that global price pressures continue to add to domestic inflation. There are a number of potential channels through which this could operate.

17 There is another feature to this collaboration here, which is to bring start-ups together with venture capital and other investors. tryb is an investor in promising technology start-ups that are building the financial infrastructure platforms of the future for ASEAN. tryb is currently in the process of raising $ million in long-term funding. The Marvelstone Group too, has been investing in FinTech start-ups and linking them up with their network of business and specialist expertise. Further MAS initiatives to grow VC activity 18 MAS is working with the VC industry to grow the funding landscape for start-ups in Singapore and the region. The role VCs play in stimulating economic dynamism has been a recurring theme in discussions of the Committee on the Future Economy (CFE). 19 There are two key prongs in MAS’ approach. 20 First, MAS is reviewing its regulatory regime for VC managers. Specifically, MAS is looking to significantly simplify and shorten the authorisation process for new VC managers. Further, to the extent that there are contractual safeguards to provide sufficient protection to a VC’s sophisticated investor base, MAS is also looking to exempt VC managers from business conduct requirements that are currently applied to asset managers in general. MAS will be doing a public consultation on its proposals in January next year, and targets to introduce changes by July 2017.
At times in the distant past it has been higher still: the average payout ratio to Bank of Scotland shareholders over the period 1800 to 1995 was around 70%. 10    Second, there is little evidence of payout ratios being higher for financial than for non-financial companies. Such high payouts are themselves something of a puzzle because, at least in theory, the payout ratio ought not to affect the value of a firm. 11 This may be a collective action problem, with firms fearful of sending an adverse market signal through lower payouts.   Third, for both financials and non-financial firms, the flow of dividend income is much less volatile than firms’ stream of profits. In other words, there is evidence of firms systematically smoothing dividend payouts to shareholders. 12 This may also reflect a problem of collective action.   Fourth, the profits stream of the financial sector is significantly more volatile than for non-financial companies. That appears largely to be the result of large-scale, one-off losses by banks. This is as we would expect, given their greater leverage.   Fifth, as a result, the dividend payout ratio for banks is more volatile than for nonbanks. This behaviour is unlikely to support banking stability. It risks profits being distributed as dividends when they are most needed to augment capital ratios and boost confidence. In 1996, the Chief Executive of a famous company observed: “We are an old-fashioned business, not a quoted plc, and we don’t pay dividends to shareholders”.

Chart 5  Chart 6  Changes in international equity indices since trough(a)  European corporate bond spreads  Interest rates Expected earnings  Implied risk premium Total  Per cent 100  Basis points (log scale) Illiquidity premium (a) 10,000 Compensation for credit risk (b) Great Depression (c) Current (d)  80 60 40  1,000  20+ 0 20  100  EuroStoxx  S&P500  FTSE 100  40  Current  March  Current  March  Current  March  Current  March  Current  BIS Review 10/2010  March  Sources: Bloomberg, IBES, Thomson Datastream and Bank calculations. (a) Based on a three-stage dividend discount model. See Panigirtzoglou, N. and Scammell, R. (2002), 'Analysts' earnings forecasts and equity valuations', Bank of England Quarterly Bulletin (Spring), pages 59-66. (b) Taken as 9 March 2009. 10  Sources: Citigroup, Moody's Investors Service, UBS Delta and Bank calculations. (a) Spread of iBoxx € corporate bond index over iTraxx Europe credit default swap index. (b) iTraxx Europe five-year credit default swap index. (c) Credit risk premium for realised default rates on US corporate bonds issued in 1931. (d) Credit risk premium for Moody's current default probability forecast for European corporates.
Such quality developments come from long-term training, discipline and fear of losing credibility and reputation. In other words, microfinance practitioners should have the long-term sustainability, and not quick profit, as their goal. It is, therefore, necessary to develop microfinance practitioners before they are allowed to develop microfinance beneficiaries. Noble eight-fold path is a guide for everyone The Buddha preached the Noble Eight-fold Path to be followed by both the kings and the subjects alike. It is a complete personal development programme for those who aspire to become successful and be of help to others in the society. It is a moral code that requires people to speak rightly, act rightly, live rightly, make efforts rightly, know rightly, concentrate rightly, think rightly and understand rightly. The Noble Eight-fold Path is not a moral code that should be enforced by means of a moral law. It is simply a voluntary action which everyone should follow for his own benefit and for the benefit of others. In essence, the Noble Eight-fold Path converts the followers to be truthful, honest, respectful and exemplary. When these qualities become essential traits of the personality of those who run organisations, such organisations do not have to worry about governance principles. That is because, in such organisations, right practice and right men become totally inseparable from each other. Above all, such organisations would not attempt to cheat their customers by offering them seemingly attractive, but spurious investment programmes.

W A Wijewardena: Microfinance – issues in the current context Keynote address by Mr W A Wijewardena, Deputy Governor of the Central Bank of Sri Lanka, at the Seminar on Microfinance Services in Sri Lanka, Colombo, 29 June 2009. *  *  *  A new word that has been added to Sri Lanka’s vernacular usage recently has been “sakvithi”. This word has so far not got into lexicographers’ lexicon in its new sense. Literarily, it means the “Chief God of Heavens”. But, the contemporary media have used it in a different sense, drawing on a recent episode of fraud that had ended up pauperising many investors who were ambitious of high gains. Hence, its contemporary meaning has been clear even to its first-time spotters. The picture created in the mind when one hears the word is not that of a god but a man: a man bent on deceiving others with false promises of unusually high gains, but at the end, finishes up by appropriating to him their wealth. It is also the picture of a man who has played with the psychological frailties of people with crafty marketing and propaganda by projecting himself as a saint, friend and saviour. Those who fall for his artful schemes will get one thing for sure: complete loss of their life-time savings. It, therefore, foretells of shattering of hopes which they may have cherished about a better future as well. Sakvithi’s lessons for microfinance Sakvithi episode is not an isolated incident of breach of trust.
Along with the above-mentioned measures, we have also extended the maturity of the FX deposit borrowed by the banks from one week to one month, and reduce the lending rate from 10 percent to 7 percent for USD and 9 percent for Euro in the FX market. Needless to say, as the high level of volatility in global financial markets prevails, the Central Bank of Turkey will sustain its vigilance and will stand ready to take additional measures prudently within its means in order to ensure the smooth functioning of the financial system. Dear Colleagues, In the last part of my speech, let me say a couple of words about the current financial turmoil. This recent episode provides a good example of how, in a financially integrated environment, a country specific shock can spill over rapidly to seemingly distant markets and countries. The problems, which started in sub-prime mortgage markets in the United States, have spread to the whole financial system all around the world and reached a point that threatens the global economic stability. This shows that countries share not only benefits of financial integration but also the risks associated with it. In my opinion the most important lesson that we should derive from the current turmoil is the need for a global lender of last resort mechanism.

Compensation for the gold price risk and the dollar exchange rate risk, in particular, is relatively poor. It is therefore inevitable that tighter bounds will be set on SNB profit distribution, once the existing distribution reserve has been exhausted. BIS Review 123/2006  3
Let me add a final comment to this important issue. It is clear to me that we could also do more, beyond the strict solvency standards, and study how other regulations, such as those related to provisioning, can contribute to reducing pro-cyclicality. 8  BIS Review 8/2005  7. Basel II impact on global competition. Another broad concern that the Committee has worked to address is Basel II’s impact on global competition. In particular, some have asked whether banks that choose Basel II’s advanced approaches will enjoy benefits over those that choose simpler approaches or remain on the 1988 Accord. Basel II reflects also the existing diversity of banks and jurisdictions and the sense that no singlepolicy approach, and no single hard-and-fast rule, could be applied to all banks of all shapes and sizes. Consequently, the Basel Committee sought something bolder than a single, universal rule. The so called “menu approach” of Basel II offers different alternatives to different kinds of banks and jurisdictions, but in developing this approach significant efforts were made to ensure that the level playing field is maintained. We should understand that adopting an advanced approach requires significant investments and does not automatically reduce a bank’s capital requirements. In a more risk-sensitive capital framework, capital requirements for an advanced bank may actually rise relative to the current rules if the bank’s exposures are actually riskier than the measures under the 1988 Accord would have suggested.

The risk management function typically promotes the use of common risk measures across business lines. It can then report the firm-wide risk data to senior management. Even though no single model for organising an integrated risk management function has become dominant, all firms that establish integrated risk management units are highly dependent on the quality of their information technology to collect, analyse and report firm-wide data efficiently and effectively. Some participants have found that the greatest challenge in developing a centralised risk management structure lies in constructing compatible and efficient management information systems across all of their businesses. As a result, they devote substantial resources in terms of personnel and expenditures to the maintenance and enhancement of their management information systems. This trend is important for two reasons. For one thing, comprehensive firm-wide assessment of risk and consistent reporting helps to ensure that the firm is aware of the wide range of risks to which it is exposed, that it understands the relative  4  BIS Review 8/2005  importance of various risks and how they may interact, and that the firm is less likely to ignore material sources of risk. This facilitates early detection and resolution of problems. For another, this integrated risk management function requires a balance between the centralisation of some functions within the group as a whole, and the need to be close to local markets to incorporate better knowledge of local needs, risks, sensitivities and regulations.
As one illustration, Charts 8 to 10 show Inflation Report forecast profiles for these three variables since 2008. These suggest that the MPC, in common with every other mainstream forecaster, has been forecasting sunshine tomorrow in every year since 2008 – that is, rising real wages, productivity and real interest rates. The heat-wave has failed to materialise. The timing of the upturn has been repeatedly put back. Downside surprises have been correlated. What is true in the UK is also true globally. In their most recent World Economic Outlook, the IMF evaluated their forecast performance since the crisis. This too points towards systematic, serially correlated, downside surprises to global growth since 2008. Of course, this is evidence from the past not the future. Are there reasons to believe these surprises might persist into the future? Financial market prices can provide some guide, in particular about the likely future path of real interest rates. Chart 11 plots how global real interest rates have evolved since 1970. It exhibits a secular downward trend which long precedes the crisis, suggesting global desired savings rates outstripped global desired investment rates. Pre-crisis explanations for this trend included a “glut” of savings in the East and “excess” consumption in the West (King (2011)). Whatever the cause, the crisis resulted in a further lurch down in global real rates, with precautionary savings rising and investment intentions falling. More strikingly still, there has been the further marked fall in global real rates during the course of this year.

at  Barnett, A, Batten, S, Chiu, A, Franklin, J and Sebastiá-Barriel, M (2014a), “The UK productivity puzzle”, Bank of England Quarterly Bulletin, Vol. 54, No.2, pages 114–28, available at http://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/2014/qb14q2.asp. Barnett, A, Broadbent, B, Chiu, A, Franklin, J and Miller, H (2014b), “Impaired capital reallocation and productivity” National Institute Economic Review, No. 228, 2014. Dustmann, C, Frattini, T, and Preston, I (2013), “The Effect of Immigration along the Distribution of Wages”, Review of Economic Studies, Vol. 80, No. 1, pp. 145–73. Gardiner, L (2014), “All accounted for: The case for an ‘all-worker’ earnings measure”, Resolution Foundation Briefing. Goos, M and Manning, A (2007), “Lousy and lovely jobs: The rising polarisation of work in Britain”, Review of Economics and Statistics, Vol. 89, No. 1, pp. 118–33. Goos, M, Manning, A and Salomons, A (2009), “Job polarization in Europe”, American Economic Review: Papers and Proceedings, Vol. 99, No. 2, pp. 58–63. Gordon, R (2012), “Is US economic growth over? Faltering innovation confronts the six headwinds”, NBER Working Paper 18315, available at: http://www.nber.org/papers/w18315.pdf Gregg, P, Machin, S, Fernandez-Salgado, M (2014), “The squeeze on real wages – and what it might take to end it”, National Institute Economic Review, No. 228, 2014. Haldane, A G (2014), “The corridor of uncertainty”, speech at the Scarborough Business Ambassadors’ dinner, 18 June 2014, available at http://www.bankofengland.co.uk/publications/Pages/speeches/2014/738.aspx.