samchain/econo-pairs-v1 huggingface dataset:
The third imbalance is the one that results from globalisation and from the escape from poverty of hundreds of millions of people, notably in China, India and elsewhere in Asia as well as in Africa, a change which is putting pressure on energy and agricultural commodity prices. The imbalance between growth in global demand and rigidity of supply points to scarcities that are reflected in prices. The uncertainties of the financial markets have in the end contributed to price tensions. Also in this instance, the alarm was raised some time ago, although little notice was taken. The price of oil, for example, was around USD 20 a barrel in 1999 and in the eight years thereafter it rose fivefold (tripled when priced in euro). Fortunately, European countries have resisted the temptation to reduce energy taxes, which would have led to an increase in demand and therefore ultimately raise the rich countries’ oil bill. On the other hand, other industrial countries have continued to keep energy taxation at very low levels, in order to support consumption. In some cases production of “bio-fuels” has been encouraged, which has led to further distortions in energy and food prices. The main oil and energy companies until two years ago have continued to price oil at USD 40 a barrel in their industrial plans, thus underestimating the need – and the opportunity – for investment in order to increase supply.

It is targeted at raising the bar of professionalism and integrity of participants in the money and foreign exchange markets. In line with the focus of many prudential regulators worldwide, the next phase of our efforts in strengthening corporate governance includes enhancing our supervisory toolkit to effectively address culture. Beginning 1 January 2018, the Bank will also be introducing a strengthened transparency framework for our enforcement actions, to serve as a deterrence against misconduct. At the same time, we have to be realistic. There is only so much regulation and supervision can achieve. Firstly, because enforcement actions are ex-post, occurring only after a finding of misconduct. Secondly, because not everything unethical is illegal. Morality cannot be legislated. The spirit of the law may be violated even when the letter of the law is kept. As such, while public sector efforts are necessary to ensure minimum universal standards, the values for the financial sector are ultimately solidified by private sector forces. In particular, professional bodies have a crucial role to play. This role includes – but is not limited to – promoting competence within the financial sector. Beyond training, these organisations are uniquely positioned to build for financiers, a sense of pride and societal purpose toward their vocation. The Asian Institute of Chartered Bankers (AICB) is making substantial progress in this direction for the banking profession. I am pleased to note that its flagship Chartered Banker curriculum dedicates a significant emphasis on professional ethics.
The notion that the welfare of a country boils down to the short-run profits of a few foreign exchange dealers is narrow minded. The reality offers a completely different picture. Switzerland has always suffered from external monetary turbulences and always wished for a stable monetary order. For example, the various crises of the European Monetary System in the 1990s, with a dramatic drop of the Italian lira, have led to the complete removal of the traditional textile industry from our economic geography. Such structural adjustment could arguably have occurred anyway, but the decisive factor at the time was of monetary origin. The purpose of the creation of the common currency was not only to concentrate the monetary power in the hands of the European Central Bank, but also to promote the conditions for transparency and competitiveness that would in turn foster trade, investment and growth in the internal European market. Price comparisons are indeed easier today, andtrade and liquidity management are much simplified, although it is still too early to numerically assess the impact of these effects on growth. Simplifying trade and investments in the European market not only benefits members of the European monetary zone, but it also helps anyone interested in being active in the European market. Switzerland, with its high degree of integration in the euro zone, reaps large benefits from this stable situation. Thus, it is clear that on those aspects, the introduction of the euro was very good news for the Swiss economy. 2.

Potential drawbacks of the new framework on a small open economy  But would the introduction of the euro be only good news for the Swiss economy? A revolution is always associated with risks and uncertainties, thus it should not surprise you that we were concerned about potential negative developments. In the mid-1990s, as the European monetary construction was under way, we tried to imagine the potential negative effects of the euro introduction on the Swiss economy. Our goal was to be prepared to face difficult situations. This is what central bankers are paid for, after all. We had identified three main challenges: (a)  First, the major risk was that the introduction of a European currency would destabilize the Swiss franc. In the past, the Swiss franc, along with the German mark, played the role of a safe haven currency whenever monetary crises occurred. With the disappearance of the German currency, the Swiss franc would find itself first in line of fire in case of a dollar crisis, for example, or even worse, in case of doubts about the stability of the European currency. (b)  Second, we risked seeing the euro being increasingly used as a means of payment in Switzerland. As the common currency was about to become the main unit of account for our exports, we feared that domestic firms might adopt the euro as well, so as tominimize exchange rate risks. Some were even imagining wages being paid in euros.
Indeed as a monetary policy maker, that is perhaps the most important question to ask. Judging by the behaviour of measures of inflation expectations derived from index-linked gilts, markets are attaching a low probability to the idea that the current weakness in inflation will prove permanent. Market-implied measures of long-term inflation expectations have been remarkably stable over the period in which inflation has declined (Chart 3). That is consistent with the MPC’s view that the majority of the decline in inflation over the period since the middle of 2013 can be accounted for by factors that are unlikely to have permanent effects on inflation. There has been a 44% decline in the price of oil from its peak, and a 17% appreciation of sterling since early 2013, and such phenomena can be expected to have large – but not permanent – effects on prices of consumer goods. The most important determinant of inflation at the horizon the MPC is concerned with is domestically generated inflation. And measures of domestically generated inflation (such as unit wage costs, Chart 4) have stayed relatively stable during the period in which headline inflation was declining. But what is a little puzzling is that, given the growth of the economy in recent years and the associated decline in economic slack, measures of domestically generated inflation have not picked up as quickly as we would otherwise have expected.

Beyond measures to enhance technological diversity in our core infrastructure, we continue to make meaningful progress developing manual contingency procedures in the event of a protracted wholesale service disruption from which we cannot recover on a same day basis, our best efforts to ensure resiliency notwithstanding. Recognizing the constraints on operating capacity in such a scenario, this work seeks to maintain critical functionality and to identify and support systemically important payments in our transaction flow to mitigate customer and market impacts. Increasingly, this work extends beyond the Federal Reserve to include infrastructure peers and other systemically important market participants to test our protracted outage hypotheses and manual contingency procedures. It also complements a number of industry initiatives, including the work of the Payments Risk Committee and the newly established Financial Systemic Analysis and Resilience Center, to consider systemic risk mitigants in the event of a major outage of a large payments processing financial institution. Notwithstanding progress advancing these important initiatives, and in recognition of their enormous complexity, the message for policy makers, boards of directors, and senior management of systemically important institutions is to invest sufficiently in resiliency and security such that we never find ourselves reliant on manual contingency measures whose invocation is likely to produce profound, and unpredictable, consequences. One sphere of resiliency that has grown in prominence for payment and market infrastructures over the past year has been the focus on endpoint security, a theme that has also captured the attention of global policy makers.
He is to be responsible for the execution and administration of policies and measures adopted by the Monetary Board, for the direction, supervision and control of the operations of the Central Bank, and for its internal management and administration. He is to be chief representative of the Bank in its relations with outside persons, ….. Accordingly, the Governor should be a man of recognized and outstanding competence in, and understanding of, the economic and financial problems of Ceylon, and of unquestioned integrity and responsibility...” Exter then states, and I quote further: “It is important that the Governor should have had actual financial experience. In many countries this point has actually been incorporated in legislation, as the following quotation from De Kock’s book on Central Banking shows: ‘… in the case of some central banks it has been laid down by statute that the Governor and Deputy-Governor shall be ‘men of proven financial experience’, as in Canada, or ‘persons possessed of actual banking experience’, as in New Zealand, or ‘persons of recognized banking and financial experience’, as in Argentina, or that the Governor shall be a ‘person of tested banking experience’, as in the Union of South Africa and Mexico.’” Mr. Chairman, you may remember when I was first appointed Governor, there were some who claimed that a person with “financial experience”, was not a suitable choice, to undertake the duties of the Governor.

It is thus with the need for further economic and social development that consumer finance should expand in line with domestic savings. Ladies and Gentleman, Once again we are back at the regulator’s dilemma of regulating without dampening the exuberance and vitality of the market. Consumer finance need not be damaging as long as we can be sure that the individual or household have the prerequisite responsibility, maturity and financial literacy to manage their finances. Both the service provider and regulator must share the task of addressing these concerns and issues. lt is hoped that service providers will not only focus on improving their bottom line but to also consider the social impact of their business model. Through the use of gimmicks, service providers risk enticing under-qualified and immature applicants whose inability to manage their finances will only exacerbate social costs and NPLs. As such, if social impact considerations become embedded in the process of determining business strategy for consumer finance, service providers could easily address the social concerns previously mentioned, while at the same time securing quality growth in the consumer finance market. However, it is understood that competition may pressure service providers to leave behind these social concerns. Thus it is the duty of the regulators to issue rules and guidelines that will level the playing field in order to prevent consumer finance from causing an unsustainable bubble. The industry has already seen the Bank of Thailand’s forays into the credit card market with rules governing minimum monthly incomc, interest rate ceiling, fees etc.
Mr Yam comments on Hong Kong: from crisis to recovery  Speech by the Chief Executive of the Hong Kong Monetary Authority, Mr Joseph Yam, at the HKMA Luncheon on the occasion of the opening of the HKMA Representative Office in London on 28 September 1999. * * * It is a great pleasure to be speaking here in London again, and to do so at this large and expert gathering. Some of you may have been present at my last speaking engagement here, in June last year at the 11th Dragon Boat Dinner, which now seems like a very, very long time ago. In that speech I described Hong Kong, against the background of the financial turmoil in Asia, variedly as a pillar of stability, the eye of the storm and the typhoon shelter of Asia. My message then was that Hong Kong, with prudent policies and robust financial structures, had been the last and the least to be affected by the storm. Since that time, as you all know well, the tail of the storm has swept through Hong Kong and it has not been so gentle after all. The painful downward adjustment in the internal cost/price structure under a fixed exchange rate system eventually and inevitably came. This was reflected in plummeting asset prices, declining GDP and rising unemployment. Although the fundamentals of the Hong Kong economy remained sound, these events provided an attractive environment for the launch of speculative attacks.

Fair value measurement – by its nature – tends to introduce pro-cyclicality into the accounting framework. It requires the immediate reflection of marketrelated information in the financial accounts (thus providing a “snapshot” of the reporting entity’s economic condition). In doing so, all fluctuations in fair value (even if only temporary) are to be reflected, thereby increasing accounting volatility. Downward swings in fair valuations of assets cause entities to sell these assets; these “fire sales” may themselves add to further downward pressure on respective market prices. As a result, further adjustments to the fair values of these assets become necessary, thereby perpetuating the “downward dynamics”. 1 These dynamics may in the end have adverse implications for the “real economy”, e.g. banks may further curb their lending to the economy. In this context, the potential impact of fair value accounting on behaviour, asset price dynamics and subsequently on financial stability should not be underestimated. Pre-crisis provisioning practices delayed the recognition of credit losses inherent in loans. Accounting rules require a specific trigger event, such as a default in payment to take place before allowing an entity to create provisions for credit losses. As a result, major write-offs usually accumulate during severe downturns when the inherent credit losses actually materialise, adding further stress to the financial system. Hence, a more forward-looking provisioning methodology should be developed. This has also been a recommendation of the G20 Leaders. In this context, the ECB welcomes the recent IASB proposal for an expected cash flow approach.
Operating profit also rose at a higher rate in 2003, helped by both increasing interest- and non-interest incomes, and falling operating expense. Meanwhile, the growth of loan* portfolio maintained its momentum well at the rate of 5.6 percent at the end of 2003 compared with 4.9 percent a year earlier, in tandem with the robust economic recovery. On the stability front, the banking sector’s average provisioning was well above the required provision by about 35 percent, and capital to risk-weighted asset ratio remained comfortably above regulatory requirement in 2003, with a ratio of 13.7 percent for Thai banks and 20.5 percent for foreign banks. Moreover, the non-performing loans continued a declining trend with the ratio of 12.8 percent to total loans in 2003, compared to 15.7 percent in the previous year. The number is still high, admittedly; but one only needs to recall that we started with an NPL ratio of nearly 50 percent right after the crisis to realize that we have come a long way. The remaining NPLs do not pose a significant downside risk because of the over-provisioning and the continued robust performance of the economy. However, we will not be complacent. Regulations will be forthcoming to further expedite the resolution of the remaining NPLs - an issue that will be revisited later. BIS Review 43/2004  1  At the same time, banks have made substantial progress on productivity, with improvements on many fronts. Operating costs have been drastically cut by means of organizational restructuring and work process re-engineering.

Hence, the second major challenge for banks is to put in place a good data base and systems to identify, measure and manage all banking risks to optimize their use of capital and price their products according to risks. In addition, when taking into account the risk associated with business cycle, banks must be prepared to beef up financial strength during favorable economic conditions so that they could weather vulnerability during the downturns. These are daunting tasks and again require the full attention and commitment of the Board. Banking is all about customer relation; this is particularly true for personal banking segment. The needs for financial institutions to properly take care of customer complaints are occasionally highlighted by a few high profile cases in the media. This type of issue will gain more importance, given the growing retail banking sector. To remain competitive and maintain customers’ trust, banks must be fair and transparent about their provision of financial services, a challenge which is very much in line with the Basel II’s Pillar 3. Ladies and Gentlemen, I have not forgotten the capital market, another integral part of the financial market, which makes it vibrant and offers diversification in terms of channels of financial intermediation. Deeper and broader capital market can avert or at the very least lessen the liquidity crunch effect on corporations in the event of a banking crisis. Efforts, therefore, have been made to develop the capital market to curtail dependence on the banking sector.
As of now the near-term strength in UK inflation is expected to be transitory, and surveys of households, businesses and professional forecasters are consistent with UK inflation remaining well anchored. One measure of inflation expectations that has picked up since the start of 2021 is the five year UK inflation swap rate, five years forward: a key indicator of longer-term financial market inflation expectations and one to which the MPC naturally pays close attention. As Figure 3 shows, this measure is historically relatively stable for the UK. In fact some of the larger historical moves have reflected uncertainty about possible changes to how the underlying RPI index is calculated, rather than fundamental shifts in inflation expectations. And as Figure 4 shows, it fell by much less, and rebounded more quickly, than equivalent measures in other economies. That history of stability means that while the recent pick-up in the indicator is not especially large in a historical or international context, it is still worth noting. Unlike some of the other risk indicators that I have been discussing, it has also decreased rather than increased since May, in line with the broader falls in nominal yields that I flagged earlier. And while shorter-horizon market inflation expectations did increase in  10  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  10  response to this morning’s CPI release, the reaction in the five year five year rate was more muted. Nevertheless it remains about 15 basis points higher than at the start of the year.

The map had been gradually filled in, revealing a more complex and bumpy economic landscape than had been depicted in our initial outlines, perhaps most apparent in the evolution of our inflation forecast. The stance of monetary policy during the Covid period has been guided by that evolving economic outlook. In the initial phase of the crisis the outlook was very uncertain, but the direction for policy was clear: the priority was to support economic activity and employment, both with the goal of returning inflation sustainably to the MPC’s 2% target, and to provide a bridge through the Covid crisis and minimise the potential for longer-term damage or ‘scarring’ to the economy’s potential. To that end the MPC deployed its full range of policy tools in March 2020, cutting Bank Rate to 10 basis points, launching a new Term Funding Scheme with additional incentives for SME lending, and announcing additional very substantial programmes of asset purchases, first in March, and again in June and November 2020. As the economic outlook became somewhat clearer, the focus of monetary policy also evolved. While our ultimate goal remained to return inflation to target by bridging through the Covid crisis, our priority shifted to ensuring that the economy remained on track and that we were not blown off course as further risks crystallised.