samchain/econo-pairs-v1 huggingface dataset:
The first half of 2012 saw a stepping up of so-called “redenomination” risk, which was a euphemism for the doubts over certain countries, Spain among them, remaining in the euro area and, indeed, over the survival of the single currency. In March, a second bail-out was approved for Greece and, in May, with the inconclusive Greek elections, rumours were again unleashed about the country exiting the Monetary Union. In parallel, there was a fresh bout of tension centred on Spain and on Italy, where two-year risk premia relative to the German Bund climbed to over 700 and 500 basis points, respectively. Fears intensified in Spain over the impact of the double-dip recession on the position of credit institutions and on the feedback loop between sovereign and banking risk. Funding conditions on the wholesale markets once again tightened and net fund outflows to the external sector stepped up, totalling € billion in cumulative 12-month terms, 29% of GDP. In mid-2012, Spain was facing what was practically a collapse in external funding, which it was able to offset with a substantial increase in Eurosystem funding, which came to account for € billion in August 2012, 34% of the liquidity injected by the Eurosystem into banks across the whole euro area.

Still, there may be a fundamental disagreement between the parties about what was agreed in the first place. It is the inevitability of disputes that makes the existence of dispute resolution systems so universal. Dispute resolution in Islamic finance is gaining more attention these days. I would take this to be a good sign. In a legal system, disputes may be viewed as an indicator of vigour rather than weakness – so long as they are resolved effectively and efficiently. The common law legal system is exemplary in this regard. Today, common law systems are the most widespread in the world, in terms of GDP generated under these jurisdictions . The large volume of commercial disputes resolved by these jurisdictions are a reflection of the widely-accepted strength of the common law legal system in providing certainty to business dealings. Today, legal certainty is widely said to be central to the rule of law . It is important that the law be accessible, clear and predictable. People should be assured that questions of legal right and liability will be determined by rules that meet these characteristics. This is not just crucial for social justice – this ensures a stable environment to facilitate sustained business growth. Of course, legal certainty does not mean that the laws are inflexibly set in stone such that justice and common sense are frustrated. In fact, dispute resolution in a healthy legal system will lead to evolution in the law over time – often with positive knock on effects.
A reduction in those capital market frictions would tend to lower the asset market spillover costs of the BFSP problem.   Finally, what guideposts should be provided by the international community in tackling the BFSP problem? The IMF recently began to explore such a framework (IMF (2011)). This raises a set of key questions about global financial governance. Are global financial network externalities sufficiently large to justify the international community imposing rules of the financial road? And how much driver discretion should instead be left to nation states which ultimately may bear the costs of the BFSP problem? These are big public policy questions. They are by no means new ones. If the quantitative experiments presented here are even roughly right, these questions may assume a new urgency in the period ahead. The BFSP problem is real. It may be rising. The result would be growing waves of global financial exuberance, punctuated by crashing capital busts. This roller-coaster has the potential to leave some nation states feeling queasy. They may even wish to get off. What is at stake may be more than just the future stability of the international financial system. References Barro, R J and Sala-i-Martin, X (1992), “Convergence”, Journal of Political Economy, Vol. 100 (2) pages 223–251. Dornbusch, R, Goldfajn, I and Valdés, R (1995), “Currency Crises and Collapses”, Brookings Papers on Economic Activity, Vol. 26(2), pages 219–294. French, K R and Poterba, J M (1991), “Investor Diversification and International Equity Markets”, American Economic Review, Vol. 81 (2), pages 222–226.

During the Napoleonic war, Sweden lost Finland to Russia and in the Kiel peace treaty of January 1814 it was decided that Norway, which was then a part of the Danish kingdom, should instead join Sweden. The treaty was of course op-posed by the Norwegians, and during the spring of 1814, when Sweden was occupied with wars on other fronts, the Norwegians took action. They declared their independence, drew up a constitution and appointed a committee to plan a new Norwegian central bank. But in July Swedish soldiers arrived. After a brief battle, Norway accepted the Swedish king as king of Norway. However, the union created was fairly loose. Except for the foreign service, Norway retained all state institutions that characterize an independent state. In June 1816, exactly 200 years ago, Norges Bank was established. The bank was located in Trondheim far from the politicians in Kristiania (which we now know as Oslo) and even further away from Stockholm and the Swedish king. Norges Bank was founded in a challenging environment where the economy was in a state of chaos following the Napoleonic wars, and confidence in the monetary system was low. The previous joint currency with Denmark had col-lapsed, and attempts to restore it had failed. It took a long time before the newly established Norges Bank managed to create credibility for the Norwegian currency. In the first years of its existence, the bank’s main tasks included managing silver tax payments and handling receipts, printing and distributing banknotes and bookkeeping.
This has proliferated in various types of institutions, including commercial banks - especially foreign-owned commercial banks, and existing credit card companies. In addition, new foreign-owned non-bank companies, registered as limited companies and not as financial institutions, can undertake the business of lending to individuals, without requiring approval from the Bank of Thailand, as they are not deposit-taking institutions. These companies have opened branches in many major provinces throughout the country. In many cases, these businesses rent a shop-house as an office to provide personal loans to low-income borrowers, for example, at around 4,000 baht per month. While Thai commercial banks charged interest on personal loans at the rate between 12 - 24% p.a., foreign banks charged between 12 to 46% per annum, and foreign-owned non-bank companies charged an even higher rate of 12-58% per annum. Charges by non-bank companies sometimes seem misleading as they split the monthly interest charge into two parts: one part called interest rate, and the remaining part called fee. But their fee calculations are done in the same way as interest rate charges. For example, one non-bank company charges an interest of 0.99% per month plus a service fee of 3.98% per month. Many borrowers, who do not fully understand this financial technique, misunderstand that they have to pay a one-time fee of 3.99% and an interest rate of 0.99% each month, which seems quite reasonable. In reality, however, such a company charges an effective rate of up to 58% per annum.

Let me stress a few recent and important steps forward in Europe and in France. The Eurosystem is now incorporating climate change into the ECB's monetary policy operations, as announced by President Christine Lagarde in early July. When it comes to its non-monetary policy portfolios, after achieving the 2°C objective, the Banque de France will now align them with the 1.5°C objective, starting with European equities by end-2023, and completely by end-2025. As supervisors, the French ACPR conducted the first pilot stress tests dedicated to climate risks in 2021, followed by the ECB in 2022. Many jurisdictions (36 at this stage, including Japan) have followed, or are following the same road. The release last summer of six updated NGFS(v) macrofinancial scenarios will allow for enhanced assessments. This network, based in the Banque de France with an Asian chair, Ravi Menon of MAS, now has more than 120 members. We are very happy to count the Bank of Japan and the Japanese FSA among them. C. Raising stakes for standard setting and supervisory requirements Appropriate disclosure is obviously of the essence to foster sound and trustworthy green finance. Europe has been a pioneer in drafting standards. Since then, the newly born ISSB(vi) has published two draft standards on general disclosure requirements and climate-related disclosures, and the US SEC(vii) has published a proposal on climaterelated requirements, which would – if adopted – gradually come into force between 2024 and 2026. These initiatives are obviously welcome: climate change is a global topic.
However, it is difficult to find any exact and stable link between confidence indicators and actual economic development. So, in this context too there is scope for different assessments when it comes to interpreting the economic situation and the consequences for monetary policy. New and difficult monetary policy considerations recently No longer a conflict of objectives When I took up my post as a member of the Executive Board, there was no longer really a conflict between upholding the inflation target and stabilising the real economy. Energy and food prices began to fall already in the summer of 2008. The global financial crisis that hit with full force in the autumn of 2008 contributed to a dramatic economic downturn in both Sweden and abroad. This reinforced the rapid fall in inflation. At the monetary policy meetings that I participated in during the spring and summer it was easy to make decisions about the direction of changes to the repo rate. Both inflation and the economic situation justified reductions in the interest rate and the repo rate was indeed cut, first to 0.5 per cent in April and then to the all-time low of 0.25 per cent in July. Any textbook on macroeconomics would have prescribed a cut in such a situation. However, the monetary policy decisions during the spring and autumn were still complicated. The difficult question, at least from my point of view, was how much should the repo rate be reduced.

Nor can I see, as economic activity has improved, any weighty reasons for making monetary policy more expansionary by reducing the repo rate even further. The adopted line, with a repo rate of 0.25 per cent that is expected to remain unchanged for several quarters, represents a very expansionary monetary policy. My view is that this policy should only be changed if inflation and/or the economic situation change considerably compared to our current forecasts. Concluding remarks I have now shared with you some of my experiences during my early months as a member of the Executive Board of the Riksbank. I realised already when I accepted the job that it would not be easy. However, the fact that monetary policy decision-making is not as straightforward as it appears in theory only serves to make the job even more exciting. A well-balanced monetary policy presupposes that we arrive at a reasonable balance between achieving the inflation target and stabilising the real economy. A reasonable balance requires in turn that we can effectively measure how much inflation deviates from the target and how resource utilisation relates to its normal level. We have fairly good measures of inflation, although it has been a problem recently that our main measure of inflation, the CPI, is so highly affected by our own repo rate decisions through their effects on housing costs. Consequently, at our most recent monetary policy meetings we have almost exclusively focused on alternative measures from which housing costs are excluded.
Petroleum-related exports from mainland Norway are also included. 3  Share of home-owning households. Debt is here defined as gross debt less bank deposits. BIS central bankers’ speeches  3  Even though the price decline is putting a brake on exploration activity and the development of new fields, we can expect further advances in the new technology and its wider use. Looking ahead, we must prepare ourselves for an environment of lower oil prices compared with the levels seen in recent years. It would be unwise to act on the assumption that oil prices will again settle around USD 100 per barrel. It has long been clear that activity on the Norwegian continental shelf would decline. The fall in oil prices in recent months has accelerated and amplified an announced decline in activity. Norwegian exporters of oil-related goods and services to other oil-producing nations may also face a decline. This does not mean that the oil age is nearing an end. Nearly half of known oil and gas reserves on the Norwegian continental shelf have not yet been extracted.4 Over the past few years, large new discoveries have been made. One of them – Johan Sverdrup – will soon be ready for development. The Norwegian oil service industry can expect new orders. Nonetheless, the Norwegian economy must adapt to considerably lower demand from the oil sector. From being in a unique economic position, Norway is now headed for a period of restructuring.

The social partners would have to go it alone. The experience of some European countries shows that this can be demanding. With a floating exchange rate, the necessary adjustment of the cost level can take place faster, and may prove less painful. The krone exchange rate can function as a stabiliser. The depreciation of the krone through autumn last year indicates that this mechanism is functioning (see Chart 8). The monetary policy credibility built up over the years is now of considerable benefit. Continued confidence that inflation will remain low and stable over time is a necessary precondition for a pronounced weakening of the krone concurrent with a low key policy rate. The benefit associated with a currency of our own disappears if the temporary rise in inflation associated with a krone depreciation is countered by higher wage increases. The result would be a higher key policy rate and a stronger exchange rate than would otherwise be the  4  4  Including reserves that have been approved for development by holders of oil rights and other proven resources in fields and discoveries. Source: The shelf in 2014, Norwegian Petroleum Directorate. BIS central bankers’ speeches  case and, not least, higher unemployment. The social partners have a particular responsibility in this regard. In December last year, Norges Bank lowered the key policy rate by 0.25 percentage point to 1.25 percent. Norges Bank gave weight to the weakening of the growth outlook for the Norwegian economy observed through autumn.
Chart 10: Chinese credit growth Percentage change on a year ago  45 40 35 30  Non-bank  25  Headline TSF  20  Bank  15 10  Nominal GDP  5 0  2013  2014  2015  2016  2017  2018  Sources: CEIC, Datastream from Refinitiv, The People's Bank of China and Bank calculations. A downturn in the Chinese economy would test the resilience elsewhere. China’s contribution to global growth has risen from one-fifth to one-third since the last US tightening cycle. 22  22 Reflecting the increased importance for China to the global economy, the scenario used in the FPC’s annual stress tests of the major UK banks includes a significant slowdown in the Chinese economy. 14  All speeches are available online at www.bankofengland.co.uk/speeches  14  To give a sense of the issue, in the 21 credit booms that matched the scale of China’s since 1975, annual growth dropped by 3¼ percentage points on average in the subsequent years. Adjusting for progress thus far and China’s degree of development, this suggests growth could slow a further 1 to 1½ percentage points. Of course, deeper trade tensions would worsen the slowdown. The Bank of England estimates that a 3% drop in Chinese GDP would knock one per cent off global activity, including half a per cent off each of UK, US and euro area GDP, through trade, commodities and financial market channels.

And many countries, including the UK, now have a range of macro-prudential tools to cut excesses off at source, before they affect wider economic prospects. On the surface, global debt burdens are alarming. The outstanding stock of debt has almost doubled since the crisis. Public debt burdens across advanced economies have risen above 90% of GDP for the first time since WWII. Public sector debt is important for intergenerational equity, and high levels of public indebtedness tend to result in lower growth over the long run.13 But history suggests that high public debt is generally a chronic not an acute problem. Provided fiscal frameworks remain credible, public debt tends to be less informative for predicting recessions. Research at the Bank of England and elsewhere finds that private sector credit growth is amongst the best early warning indicators of a downturn.14 Over half of recessions are preceded by private sector credit booms. And within advanced economies, two-thirds of private credit booms have also ended in recessions.15 As borrowers take on more debt and devote a greater share of cash flows to servicing it, they become more vulnerable to shocks. And there will always be shocks. Debt may not be the proximate cause of the crisis, but it can be the vulnerability that turns shock into slump. At present, aggregate private financial imbalances in advanced economies do not appear large enough, on their own, to tip global activity from slowing to stalling.
Malaysia also remains the leading global sukuk issuer, accounting for over 53% of new global issuance worth USD34.8 billion in 2015. Over the past decade, BNM and MyClear had invested significantly to build the capital market infrastructures to facilitate multicurrency securities issuance, depository and settlement via the Fully Automated System for Issuing/Tendering (FAST) and RENTAS, respectively. There are immense opportunities to add to the breadth and depth of the Malaysian debt securities market, especially in the diversity of its currency and investor base. Hence, the financial services industry has the opportunity to leverage on Malaysia’s capital market infrastructures by incorporating FAST and RENTAS in the securities offering documents as an additional option for foreign currency securities issuance, depository and settlement. To facilitate the synergistic collaboration that I had highlighted earlier, MyClear would share its infrastructure development roadmap with the industry. This would assist both the financial and business communities to align their resources for infrastructure development as well as to identify opportunities for the offering of innovative solutions to their customers. MyClear and BNM would coordinate the industry awareness and educational programmes to promote the new payment services for mass adoption by businesses and consumers. 4. Providing end-to-end financial solutions to customers  Holistic financial solutions as a competitive edge Financial institutions are no longer differentiated by payment infrastructure that is proprietary and duplicative in nature. Through the centralised payment systems offered by MyClear, the Malaysian Electronic Payment System Sdn. Bhd.

This Leadership Energy Summit will hear from the experience of successful individuals on the source of their energy in generating outcomes and results that have made a difference. We will also learn about other sources of energy from which we can tap on and strengthen. This is the challenge of the new generation of leaders if they will truly be able to make lasting and meaningful changes in their environment. On this note, let me wish you a highly energised Summit. BIS central bankers’ speeches  3
However, one welcome outcome from this experience is the consolidation of the banking sector, which is much more aware of the constant need for prudent risk management and good corporate governance. From our end, the Bank has also undergone a significant re-orientation of its supervisory techniques and approaches. These are now largely in line with international best practices and also constitute a platform on which we shall meet the future challenges facing the financial sector in the 21st Century. Ladies and Gentlemen, from time to time developments are associated with setbacks and the Bank of Zambia is no exception. Here I am referring to the issue of polymer notes which were introduced sometime last year. The introduction of these notes as we have explained at several fora was meant and is still meant to have cleaner notes in the economy and more importantly to have notes with a relatively longer life-span before replacement, than the traditional paper notes. With a relatively longer life-span, the nation would save resources because the frequency of replacing the notes would greatly be reduced. However, due to technical problems experienced by the printer, most of the notes have been fading faster than expected. May I re-assure the nation that we have continued to work with the printer and a solution is being worked out in the quickest time possible. Needless to say that this problem has posed a big challenge for all of us at the Bank of Zambia.

For example, if the one-year interest rate was 2 percentage points higher in Sweden than in the United States, this would be compatible with a 2-per cent weakening of the Swedish krona against the US dollar during the year. The logic behind this is that “risk-free” investments in different currencies ought to have largely the same expected return. According to uncovered interest rate parity, a higher interest rate in Sweden than abroad should thus be linked with an expected future weakening of the krona. So how is this connected to my claim that the krona would become stronger as a consequence of an increased interest rate differential in relation to other countries? The answer lies in expectations and in what has already been priced on the market. This can be explained by a simplified example. Assume that the interest rate is originally as high in Sweden as in the rest of the world. In that case, uncovered interest rate parity says that the anticipated future exchange rate will be the same as the current exchange rate. If this expectation of the future exchange rate is taken for granted, an unexpected interest rate increase in Sweden would lead to an inflow of capital and an appreciation of the krona. The krona would now be expected to weaken in the period ahead, as the present rate is stronger than the anticipated future rate. Note that, on average, the krona will be stronger during the period in question due to the rise in interest rates in this example.