samchain/econo-pairs-v1 huggingface dataset:
Before proceeding, I will emphasize that I am speaking for myself and these views do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System. Climate The U.S. economy has experienced more than $ billion in direct losses over the last five years due to climate and weather-related events.1 In addition, climate change has significant consequences for the U.S. economy and financial sector through slowing productivity growth, asset revaluations and sectoral reallocations of business activity.2 For these climate-related risks, a new lexicon has emerged. Physical risk is the potential for losses as climate-related changes disrupt business operations, destroy capital and interrupt economic activity. Transition risk is the potential for losses resulting from a shift toward a lowercarbon economy as policy, consumer sentiment and technological innovations impact the value of certain assets and liabilities. These effects will be felt across business sectors and asset classes, and on the strategies, operations and balance sheets of financial firms. Risk managers must be aware of these risks and develop the tools needed to identify, monitor and manage them appropriately. Physical and transition risks may manifest through traditional risk stripes such as credit, market, operational, legal and reputational risk, but today’s tools are not necessarily well-suited for the unique challenges associated with climate change. Let me mention three of these challenges. First, climate change is a long-term issue where actions today are likely to have an impact over many decades.

Kevin Stiroh: Emerging issues for risk managers Introductory remarks by Mr Kevin Stiroh, Executive Vice President of the Financial Institution Supervision Group of the Federal Reserve Bank of New York, at the GARP Global Risk Forum, Federal Reserve Bank of New York, New York City, 7 November 2019. * * *  Prepared for delivery  Introduction Good morning and welcome to the GARP Global Risk Forum. The Federal Reserve Bank of New York has been collaborating with GARP on this forum for a decade and it is always a pleasure to participate. This discussion provides real-time insight into critical issues at the center of the practice of risk management. A quick scan of today’s agenda highlights a number of topics of obvious importance—operational resilience, cyclical aspects of risk management, technology and big data. We are all thinking about these issues, and I look forward to your insights. I’d like to briefly discuss two topics where I expect risk managers will increase their focus in coming years—climate change and the cultural aspects of digital transformation. Both issues reflect potentially transformative trends for the economy and the financial system, and I believe they will take an increasing share of your bandwidth over the next decade. In both cases, the relevant questions from a supervisors’ perspective are: what new risks are introduced? How do firms manage them? And how do supervisors view them?
Norman T L Chan: Development of e-Cheque usage in Hong Kong Speech by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the Electronic Cheque (e-Cheque) service Launching Ceremony, Hong Kong, 11 December 2015. *  *  *  Ms Helen Wong, Mr Allen Yeung, Mr Wong Kuen-fai, distinguished guests, media representatives: 1. Welcome to the official launch of the Electronic Cheque (e-Cheque) service jointly organised by the Hong Kong Association of Banks and the Hong Kong Monetary Authority. For the first phase of the e-Cheque service, nine banks have started offering the e-Cheque issuance service, while all banks in Hong Kong can already accept e-Cheques deposited by their customers. 2. Traditional paper cheques have been widely used in Hong Kong, but there are limitations. For example, the payer must deliver a physical cheque to the payee, and the payee must also physically deposit the cheque at a bank. These steps involve quite some time. Besides, paper cheques consume a lot of paper and are not environmentally friendly. In view of this, the HKMA began work with the banking industry on developing the necessary infrastructure for the electronic form of cheque service three years ago. Benefits of e-Cheques 3. As e-Cheques have a number of obvious benefits over their physical counterparts, I believe they will become a popular form of electronic payment soon. I. The e-Cheque issuance and deposit service is available via Internet banking platforms and the Hong Kong Interbank Clearing Limited’s portal on a 24-hour basis.

Future changes will not be simple at all, but all of us together, by exchanging experiences and necessities for change, will build a safer environment, which I hope will make future challenges somewhat easier. Granting independence to central banks represents one of the most relevant steps in the financial system reform in the countries of our region, as an important precondition for maintaining inflation under control and becoming an ESCB member. However, our endeavours for the consolidation of the institutional and real independence should be coordinated carefully by taking into consideration the specific features of our economies in transition, and not as a mere implementation of what may seem to be a successful model for the ESCB countries. In this framework, I consider today’s meeting as very important, since the Bulgarian economy and the Bulgarian National Bank have been going through substantial reforms in the context of EU accession. I believe that the challenges that we have faced and those that we will face in the future are more or less the same with those experienced by the Bulgarian authorities, including the Bulgarian National Bank. As a consequence, I think that the bilateral cooperation between our banks carries a high potential, and in the name of my institution, I avail myself of this opportunity to offer maximal guarantees with regard to the fruitful development of these relations. 1/2  Passing into a multilateral framework, I will return once more to the idea that focuses on the institutionalisation of the inter-regional cooperation between central banks.
12  This last factor may create a dangerous vicious circle. Against a backdrop in which it is expected that the lower interest rate bound may frequently limit central banks’ capacity to act, economic agents will expect that any inflation deviations above the target level will be swiftly corrected. But not deviations below the target level. In consequence, expected inflation, in terms of the average over a broad period, will tend to move below the target level. Given that in the long run, the nominal interest rate is the real equilibrium rate plus expected inflation, any fall in the latter implies lower nominal rates on average, which means that these will hit their lower bound more frequently. All the above implies less headroom for providing stimulus measures in downturns marked by low inflation. This in turn leads to lower inflation expectations, and thus it continues. Asset purchase programmes, such as the ECB’s APP and PEPP, are an attempt to break out of this vicious circle. These programmes are conducive to lower interest rates on medium and long-term public and private-sector bonds. In this way, although short-term interest rates are limited by the lower bound, the ECB is able to reduce longer-term interest rates, which are often the most relevant rates for determining economic agents’ spending decisions. This is what is known as “flattening the yield curve”.

This was the only way to avoid a sharp tightening in capital markets which, with all certainty, would have fuelled a greater economic contraction and, possibly, a deflationary scenario. A specific additional problem of the euro area was the so-called “fragmentation” in the transmission of the common monetary policy. This means that the financing conditions of governments, and also of firms and financial institutions, vary significantly across countries, as a result, among other factors, of the different sovereign risk premia in the euro area. In fact, the cost of government debt in each country usually acts as a “floor” or “baseline” for 2  corporate and bank debt. Consequently, in those countries whose governments have a better outlook for the repayment of their debt and, consequently, which have more favourable financing conditions, the borrowing costs of firms and households, through bank credit, will be lower. The initial phase of the COVID-19 crisis had an asymmetrical effect on euro area countries. This meant that certain countries, such as Italy and Spain, which already had substantially high levels of public debt, were hit harder by the first wave of the virus both epidemiologically and in terms of their reliance on more vulnerable industries such as tourism and hospitality. Borrowing costs duly rose much more markedly in these countries. Faced with this situation, the ECB Governing Council decided to announce new monetary policy measures with the dual n objective of reducing fragmentation and increasing the accommodative stance of monetary policy. For this reason, we adopted two types of measures.
There is, in other words, a degree of flexibility in monetary policy, both upwards and downwards of course, that should not be underestimated. With this comforting thought in mind I would like to thank you all for your attention. BIS Review 113/2008  7

The economies of Southeast Asia are particularly exposed to such reconfigurations as they have high participation in global value chains, but are located mostly downstream in those value chains, and thereby face higher risks of being left out. •  At the same time, greater importance attached to ESG considerations have led to new standards and expectations--new global rules of the game--about how countries can participate in international trade. •  For small open economies, the challenge is to find their place in the rapidly evolving international trade landscape. How should they position themselves between the major trading powers? To what extent can regional trading blocs help to increase their voice in the international arena? Where are the best opportunities to plug themselves into a new configuration of global supply chains? •  Small open economies can best navigate and benefit from the shifting trade landscape by keeping their outward orientation, strengthening domestic institutions, and undertaking structural reforms that enhance flexibility. This would allow them to harness technology to upgrade their production capabilities and adapt to new trade patterns, including integration into evolving global supply chains. Services trade, especially in intermediate services such as telecommunication services and IT management, offer large growth potential. As world trade bounces back following the pandemic, opportunities for exports of services are likely to exceed those in goods. Active engagement in bilateral and regional free-trade arrangements will also help to diversify the trade base. •  Our economies must also quickly adapt to the new global rules of the game.
And international cooperation requires that the IMF and the Financial Stability Forum work together to propose a new set of regulations – some of them were already discussed here today, and particularly regulation and supervision of cross-border transactions, which are not directly restricted to one national supervisory authority. The Basel Committee will most likely continue to be the focal point of conducting the implementation of the process. The third topic is the IMF role in supporting emerging and developing countries, which have no financial conditions to address the effects of the financial turmoil on their economies. Traditionally, the IMF has focused on crisis generated in one specific economy or group of economies and in proposing policies to restore that country’s soundness. The problem that we are facing today is that some countries might have a sound policy but were affected by the global systemic crisis. How to react to that? If the crisis is “imported” and the country cannot meet its financing needs, the IMF should provide liquidity and contribute to any kind of anti-cyclical adjustment. In that regard, the authorities of leading economies should usefully consider to allow the IMF to issue bonds. In a moment of de-leveraging, when we are talking about re-leveraging, a leveraged IMF would have increased ability to meet its rising challenges. In regard to the World Bank, it should focus on poor countries, the ones that not only require liquidity or loans, but effectively need financial support.

We are in the very preliminary phase of this discussion and many challenges lay ahead in that regard, particularly deciding what should be subject to international supervision and what should be subject to national or regional supervisory entities. Much of the discussion today evolves around crisis prevention. In terms of crisis resolution, the recommendation is for every country to take all the necessary actions to restore the regular working of its financial system, consumer and investor confidence and the level of economic activity. But every country must act according to its needs and resources. Countries were financial institutions faced severe losses require capital injections, while some countries have to boost domestic demand to compensate for too much dependency on exports. The important point here is to draw a clear difference between fiscal stimulus, liquidity management and monetary policy. 2  BIS Review 147/2008  The difference between liquidity management and monetary policy is not clear for many observers nowadays, but it is nonetheless fundamental. In moments of market disfuntionality, for instance, monetary easing sometimes does not work. It is important to mention that in some circumstances liquidity management is the critical issue. Of course, we should not forget the need for price stability in order to have the basis to restore growth.
Conclusion Allow me to conclude. The pandemic has led to an unprecedented economic crisis, followed by a recovery that is still partial and uneven and subject to a great deal of uncertainty, especially against the backdrop of the second wave of the pandemic that we are currently living through. In this case, there has been a forceful European economic policy response. A common response that encompasses not only monetary and macro and microprudential policy, but  10  See speech by the Governor of the Banco de España “Banking resolution: firm foundations for stability”, October 2020. 10  also new fiscal instruments, such as the recovery fund. A response that must be adapted to the course of the pandemic and its effects. In the case of monetary policy, we have already stressed our willingness to recalibrate in December the tools to deal with the new economic challenges, ensure favourable financial conditions and counter the impact of the pandemic on the inflation outlook. Europe’s reaction has meant unprecedented support for domestic economic policies and, in particular, fiscal policy, enabling them to act forcefully. The latter is particularly important since fiscal policy has the most appropriate instruments for tackling the effects of a crisis which has had a very uneven impact across countries, sectors, firms and population groups, and for adapting to a shock whose duration is uncertain.

18 18  1.2 17  17 Jul. 18 18  (f) Forecast. Source: Bloomberg. Figure 6 MPR expected by the market  Interest rate differential between the US and Germany and multilateral dollar  (at December of each year, percent)  (basis points; index)  3  3  330  June MP Report 2 Fed fund  2 March MP Report  95  2 years  310  94  290  93  270 1  1  Libor  250  0  0  -1  -1 12  14  91  230  10 years  210  Euribor 10  92 DXY (right axis)  16  18  20  190 01.18 18  Source: Bloomberg. 10  90 89 88  03.18 Mar. 05.18 May  Figure 7 Nominal exchange rate and multilateral measures (1)  Parities against the US dollar (1) (2)  (index, 2017-2018=100)  (index, 2017-2018=100)  110  110 120  120  105  105 110  Latam currencies 110 (3)  MER-5 100  100 100  100  MER 95  95  90  90  80  Commodity currencies (4)  Chile  90  TCN 90 17  17 Jul. 18  80 17  17 Jul. 18 18  (1) Dashed vertical line shows statistical cutoff date of March 2018 Monetary Policy Report. (2) Uses April 2018 WEO weights. An increase denotes a depreciation of the currency with respect to US dollar.
We’re just adding a bit more fruit juice. Before I conclude, let me make a few comments about the Federal Reserve’s balance sheet. As you are undoubtedly aware, the Federal Reserve dramatically expanded the size of its balance sheet during and following the financial crisis to provide accommodation to support the economy when short-term interest rates were constrained by their effective lower bound. Currently, we are reinvesting maturing Treasury securities and agency mortgage-backed securities repayments to keep the size of the balance sheet generally stable. We have said that we plan to continue this policy of reinvestment until we are well along in the process of normalizing the level of the federal funds rate. As the FOMC has raised the federal funds rate three times, this process seems to have proceeded smoothly so far, prompting renewed interest in our balance sheet and reinvestment policy. The anticipation of and actual announcement by the FOMC of changes in reinvestment policy is likely to push up longer-term interest rates and tighten financial conditions somewhat, just as the earlier purchases pushed down long-term interest rates. To what extent is difficult to judge. Presumably, financial conditions would tighten by more if we were to end reinvestments earlier and more abruptly. This suggests a better course may be to taper reinvestments gradually and predictably. 5/6  BIS central bankers' speeches  In addition, because changes in reinvestment policy will likely tighten financial conditions, we will have to take this into account in our interest rate decisions.

William C Dudley: The importance of financial conditions in the conduct of monetary policy Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the University of South Florida Sarasota-Manatee, Sarasota, Florida, 30 March 2017. * * * It is a pleasure to be here today. I would like to thank the University of South Florida for sponsoring this conference. As always, what I have to say today reflects my own views and not necessarily those of the Federal Open Market Committee (FOMC) or the Federal Reserve System.1 One aspect of today’s event is the dedication of a financial laboratory to help students learn about financial markets, which I think has great value. Knowledge of how financial markets operate is an important aspect of financial and economic literacy, and it leads to greater financial security over time. For example, one important lesson is that when the promised returns on an investment offering are extraordinarily high, it is because the investment is either very risky or fraudulent. When investing, it is important to remember that if it seems to be too good to be true, it likely is! Today, I want to take the opportunity to talk about the importance of financial markets in influencing the economic outlook and, in turn, U.S. monetary policy. This is a subject near and dear to my heart.
Thus UK consumer prices fell significantly during the 1840s, for example, and again in the late 1850s; they also fell through the 1880s (Chart 2). And although real pay tended to grow over time, these deflations were sometimes severe enough to mean that nominal wages declined. Chart 2 Deflations common during Gold Standard  Source: ONS and Hills,Thomas, Dimsdale (2010). However, there’s no evidence this had an especially severe effect on the economy. To be sure, lower inflation was associated with weaker GDP growth, lower wage growth with higher unemployment (Charts 3 and 4). But there doesn’t look to be anything particularly bad about negative inflation: as far as one can tell, the economic cost of moving from of zero to –1% (say), whether in price or wage space, wasn’t any worse than that involved in going from 5% to 4% (for example 5). One reason for this may be that people were adapted to the regime – they were used to the idea that prices, and even nominal wages, occasionally declined, and because these things were therefore more flexible, it didn’t take an especially severe recession to get that to happen. 4  The lower bound for nominal interest rates may be relevant in this context too: in the United States wage growth averaged -13% between 1929 and 1932 and, by the time that deflation got going, it would have been impossible to cut interest rates to those sorts of levels. This led to dramatic rises in the burden of debt and rates of default.

Waves of financial innovations from new players, but also from incumbents on the market, create massive changes in the financial industry. In this light, the highlight of the conference is embracing changes, that is opening doors to financial innovations in the payment landscape, while preventing disruptions to the financial markets and to the overall financial stability. New wave of digitalization can have wide ranging positive effects on the economy – it spurs innovation and productivity, transforms public and private services, contribute to higher financial inclusion by reaching underserved households and overall, improve wellbeing of the society as information, knowledge and data become more widely available. Benefits go hand in hand with challenges to jobs and skills needed, to taxation, financial markets, and invite new thinking on how to preserve fundamentals such as privacy and security, as well as how to preserve monetary and financial stability. Financial innovations, underpinned by digitalization, have a potential to gradually reshape the financial sector. “The Pulse of Fintech” report of KPMG1 shows that Fintech investment globally more than doubled during 2018, and reached $ billion. In addition, while new startups sprouted across emerging fintech subsectors, highly mature areas like payments saw some consolidation through mergers and acquisitions of big developed players. Reports also show that highest number of fintech service providers are in the payments, clearing and settlement category, thus, giving them the potential to gradually undertake a paradigm shift in the payment landscape.