samchain/econo-pairs-v1 huggingface dataset:
3 6/7  BIS central bankers' speeches  3 Potter, Gradual and Predictable: Reducing the Size of the Federal Reserve’s Balance Sheet, October 11, 2017. 4 See Potter, Implementing Policy with the Balance Sheet, November 6, 2017, for further discussion of lessons  from experience with balance sheet policy. 5 The maturity structure of the balance sheet was only loosely incorporated into the purchase plan. Purchases of  Treasury securities were targeted at maturity sectors; within each sector, specific issues were selected for purchase using a relative-value approach based on a spline fitted to market prices. Sack, Implementing the Federal Reserve’s Asset Purchase Program, February 9, 2011. Treasury securities acquired through reinvestment are purchased in proportion to issuance. Agency MBS purchases are distributed across instruments roughly in proportion to anticipated gross issuance of those securities at the time. Potter, The Implementation of Current Asset Purchases, March 27, 2013. 6 Early FOMC discussions of balance sheet normalization, then referred to as an “exit strategy,” were predicated  on an intention to return to, as put in the January 28, 2009, meeting transcript, “a more normal framework for conducting monetary policy,” which meant a return to an asset and liability structure closely resembling that which prevailed before the financial crisis. Normalization-related matters were discussed in the minutes to most of the FOMC’s 2009 meetings.

The FOMC has not specified how large the balance sheet should be at that point, other than an expectation that the level of reserve balances will be appreciably below that seen in recent years, but larger than before the financial crisis. My colleague Lorie Logan spoke in May on the many technical drivers of this ultimate level, which include the mode of policy implementation that the FOMC chooses in the longer run, possible increases in recent years in the financial system’s demand for reserves and Federal Reserve reverse repo liabilities owing to new financial regulations and other factors, and the long-term evolution of demand for paper currency.10 Let me spend a few minutes discussing the importance of gradualism and predictability. Gradualism The case for gradualism in reducing the Fed’s securities holdings rests on evidence, as well as potential risks, that an overly fast flow of securities into private hands could be disruptive to market functioning, as well as the FOMC’s confidence that it can adjust its policy stance as needed through changes in the federal funds rate. In particular, there is evidence that the agency MBS market, due to the nature of its trading conventions, is prone to dislocation when market participants expect large transitions in central bank agency MBS flows.11 Such concerns can be self-fulfilling: if market participants are concerned that an abrupt shift in flow might be disruptive, they might, for example, withdraw from liquidity provision.
Estimations for 2015 and 2016 based on available information from listed companies (FECU), Capital Goods corporation surveys, Chilean Chamber of Construction and National Accounts by institutional sector. For 2017 and 2018, Central Bank projection models and sectoral sources are used, including investment plans and Capital Goods Corporation surveys. Source: Central Bank of Chile. 4  10. The labor market continues to gradually adjust and runs the risk of becoming a drag on consumption. Wage employment declined by 2% annually in the moving quarter ending February, and annual wage growth moderated. In addition, working hours declined due to demand rather than supply reasons. Yet this has not translated into an increase in open unemployment, due to flexibility in the Chilean labor market: the unemployment rate is still low from an historic perspective. In fact, despite being more precarious, self-employment has acted as a significant buffer to the loss of dynamism in wage employment (Figure 6).

In fact, what did I do last weekend? Well, I was in Basel, Switzerland, at the BIS. This is where central bankers get together from across the world, exchange information with one another. So, the first thing is to explain ourselves to people in the community. Because the Federal Reserve is pretty mysterious in terms of – when I went to grad school even, I wasn’t really sure again what the Federal Reserve was. Had to be explained to me. The second thing we do in the community, and this is the more important piece, is to really learn what’s going on, on the ground, in the community. What’s happening in terms of businesses – are they successful? If they’re having trouble, what are the reasons for the trouble? Do they have access to the credit? Can they find people with the job skills they need to support their businesses? What are the challenges in the community, in terms of education, in terms of transportation? Queens, one of the issues is that if you’re not located near a subway line, it’s pretty hard to get around in Queens, and that has pretty significant implications for people’s ability to get to and from work, which is important in terms of economic development. Another issue is the affordability of housing. Queens is actually doing quite well. If you look at the employment growth in Queens over the last few years, it’s been very strong. Just like New York City as a whole.
A dedicated high court of common law has been assigned to adjudicate Islamic finance cases more expeditiously, giving due recognition on issues surrounding Shariah. For a complete dispute resolution on Islamic finance, the Kuala Lumpur Regional Centre for Arbitration (or KLRCA) has introduced the i-Arbitration Rules. The first of its kind, the rules incorporate a reference procedure to a Shariah Advisory Council or Shariah expert for professional opinions whenever the arbitral tribunal has to form an opinion on a point related to Shariah principles. Thirdly, is to develop a strong governance framework for Islamic financial institutions. We introduced a dedicated governance framework in 2010 that outlined the requirement for the Shariah governance structures, processes and arrangements to ensure that all the operations and business activities are in accordance with Shariah. This framework ensures that talent in lead arranging of sukuk, among others, have the expertise and Shariah knowledge to ensure that the sukuk structures are in compliant with the necessary rules and principles. Areas of collaboration between Hong Kong and Malaysia There are a few areas where Hong Kong and Malaysia can collaborate for mutual benefit. Firstly, is to have both Hong Kong and Malaysian expertise to work together in the quest to launch the first sukuk out of Hong Kong. We look forward to sharing our Islamic finance marketplace with Hong Kong in terms of expertise in structuring, managing and distributing the sukuk, as well as providing advice on legal and Shariah matters.

This inaugural conference is set to mark a significant step to enhance collaboration and deepen financial linkages in Islamic finance between Malaysia and Hong Kong. The theme “Sukuk as a Viable FundRaising and Investment Instrument” is most apt, given that the ethical-based fixed income instrument has increasingly gained recognition by the global financial community as an attractive source of funding for real sectors and long-term development. Adoption of best practices for sukuk issuance The growth of the global sukuk market has been very promising. It reached a stock value of USD268 billion at the end of 2013 and since 2000 has grown at a cumulative average rate of 50% per annum. The creation of a sukuk market in Hong Kong is a timely initiative as it has the potential to further spearhead its foray into Islamic finance. Sukuk, as a new asset class, is ideal for portfolio diversification and is increasingly well-accepted all over the world. From our experience, the new venture by Hong Kong into the sukuk market may be able to deepen its bond market further and open the opportunity to tap the burgeoning investor pool seeking good quality Shariah compliant and ethical-based instruments. Being a player in an increasingly developed sukuk market, Hong Kong has the opportunity to adopt the best practices in sukuk issuances. Firstly, in the area of Shariah standards where it provides principle-based guidance on the execution of Islamic financial contracts. Such standards are designed to cover the needs of different jurisdictions.
Compared with other countries, productivity gains have been particularly strong in the banking industry and other service sectors. The business sector has been quick to adapt and change, and to make use of new technology that is available in an international market. This is probably due the modernisation of the functioning of the economy through the 1980s and 1990s, which resulted in more efficient markets. Turbulence in financial markets The financial market turbulence may result in a reversal of some of the positive driving forces in the Norwegian economy. The turbulence was probably triggered by falling house prices in the US. There were reports of an increase in defaults on subprime mortgages from the second half of 2006. Securities portfolios had been developed around these mortgages. Uncertainty arose among bankers and investors who directly or indirectly were exposed to losses on these mortgages. This resulted in a sharp decline in prices for these securities, which then spread to a range of mortgage-backed instruments. In the course of summer 2007, it became clear that the losses had spread to banks, funds and financial establishments in Europe, Asia and the US. The turbulence also spread to other financial market segments. Few knew who was exposed to losses, and financial market participants started to question counterparties’ financial situation, and held on to their money. Many banks have sustained substantial losses on their own investments related to these markets, but have also had to bring back onto their books loans from companies they had established.

The Fund’s own history includes a period that illustrates the importance of not changing strategy during a downswing. After the dotcom bubble burst in 2000, the value of the Fund’s equity holdings fell sharply for a period. At the same time, the Fund’s fixed-income investments partly offset the losses on the equity side. Norges Bank is the operational manager of the Government Pension Fund – Global. Since the Fund’s establishment, we have built up an organisation that is capable of implementing the strategy laid down by the Ministry of Finance. Pursuant to the mandate assigned to Norges Bank, we seek to generate value added in excess of the return that follows from the strategic allocation. The Fund has achieved an average annual real return of 4.25 per cent since 1997. The contribution to the return from active management has averaged 0.39 per cent annually in the same period. Active management has thus made a contribution of about 9 per cent of the Fund’s total return. This result has been achieved without changes in the Fund’s return variability or risk exposure. Norges Bank’s investment management has thus improved the risk to return trade-off. In the long run, even a small percentage increase in the average annual rate of return will have a substantial impact on the Fund’s size. A stated goal of operational management is that a large number of investment decisions are to be taken independently of each other both at a given point in time and over time.
It could be said that the Riksbank acted as an intermediary in the sense that the banking system was able to borrow at longer maturities in order to invest in a secure and liquid asset in the Riksbank. Image 7a: The Riksbank’s balance sheet 30 June 2008 (before Lehman Brothers) Assets Gold Currency reserve  26 Banknotes & coins 158 Fine tuning  108 0  Lending USD  0 Riksbank certificates  0  Lending SEK  4 Debt to Fed  0  Other  4 Equity  59  Other  25  TOTAL  10  Liabilities  192 TOTAL  192  BIS Review 41/2009  Image 7b: The Riksbank’s balance sheet 31 December 2008 (after Lehman Brothers) Assets Gold Currency reserve Lending USD Lending SEK Other  TOTAL  Liabilities 30 Banknotes & coins 200 Fine tuning  112 207  196 Riksbank certifikates  49  262 Debt to Fed  189  7 Equity  59  Other  84  700 TOTAL  700  If we compare the balance sheets at the end of June and the end of December 2008 – that is before and after Lehman Brothers applied for bankruptcy protection – we can see that lending in Swedish kronor increased by approximately SEK 260 billion. This is reflected on the liabilities side by the increase in the Riksbank's fine-tuning facility, where the banks deposit their surplus liquidity overnight, as well as the increase in Riksbank certificates with a maturity of one week.

Stefan Ingves: The monetary policy landscape in a financial crisis Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, at the Swedish Economics Association, Stockholm, 31 March 2009. *  *  *  Introduction "The monetary policy landscape in a financial crisis" is the theme of my speech this time. I thought for once that I would begin by showing you a picture. The slide shows an oil painting that was done in 1842 by the English artist William Turner.1 It is called ”Snow Storm – Steam-Boat off a Harbour's Mouth”. It is part of the collection at the Tate Gallery in London. The only thing you need to know about the painting just now is that Turner used a very special technique. He built up the picture gradually by painting several thin, semi-transparent layers on top of each other. He then added somewhat thicker, more pastose sections. As you can see, this layer-by-layer technique gave his paintings a special lustre and a special atmosphere. We would probably say that the atmosphere in this painting is dramatic. Turner's technique can also act as a starting point for a description of the situation today. Reality is made up of different layers. Every layer that is added or peeled away reveals a partly new landscape. We can compare the financial crisis to the snow storm in Turner's painting. In order to paint the picture of the complete storm we need to begin with a layer that describes the macroeconomic preconditions, the macroeconomic landscape.
And how can we ensure that institution-specific insights of the national supervisors are best maintained and incorporated? Allow me to give you a few examples to explain the conclusions we have reached. I will focus on the specific features of the SSM. So do not be surprised if I do not mention things that are self-evident, such as a preventative, forward-looking and risk-oriented supervisory approach. 18 perspectives – one best practice Let us start with 18 perspectives and what is deemed best practice. In developing the SSM’s supervisory culture, we are in a unique starting position. Following the financial market crisis, many countries adjusted their supervisory structures. The reforms generally focused on addressing country-specific experiences of the crisis and on international recommendations. We are in a similar situation in setting up the SSM – but with one major difference: we are not just looking at the experiences of one country; we are incorporating the perspectives of 18 – soon 19 – Member States into a common European supervisory culture. For me personally, this is one of the most exciting aspects of creating the supervisory mechanism. An example of this is the weekly meeting of SSM management. Every Friday, Danièle Nouy and I meet with the heads of the four SSM business areas. Around the table we therefore have representatives of the French, German, Finnish, Spanish and even US supervisory traditions. Another colleague brings to the table many years of experience at a systemically relevant bank.

It will be exciting to follow developments. Evolution will follow its inexorable course. However, cash will survive, like the crocodile, even though it may be forced to see its habitat gradually cut back. 3  Press release from the Swedish Bankers’ Association, 24 March 2010. 4  Squareup.com  BIS central bankers’ speeches  5
We are the only place in the world that practises an English and Chinese bilingual common law system that inspires confidence from overseas and Mainland investors alike. We have an ecosystem of topnotch financial institutions and professional services firms that are trusted by asset owners and asset managers to look after their investments. These unique advantages cannot be easily replicated anywhere else in the world. 15. Of course, apart from providing a convenient conduit for overseas investors to enter the onshore equities and bond markets through the Connect schemes, Hong Kong’s stock market has long been a venue for Mainland companies to raise funds and for global investors to get exposure to Mainland enterprises. Today, over 1,100 Mainland enterprises are listed on the Stock Exchange of Hong Kong, with a total market capitalisation of nearly HKD22 trillion and an average daily trading volume of around HKD60 billion. 16. And we are not standing still. We are doubling down on our work to enhance our financial platforms, build more connections with the Mainland’s markets and consolidate our strengths. 17. One exciting example is the two-way cross-boundary wealth management connect scheme for Greater Bay Area residents, announced earlier this month. This new Connect scheme links up Hong Kong’s asset management industry to one of the most economically vibrant and wealthy regions in Mainland China, with a population of 60 million and a per-capita GDP of some $ Guangdong is also home to some 290,000 high net worth families.

Up to September, Stock Connect captured over 65% of foreign holdings of A-shares; its Northbound daily average turnover doubled year-on-year to RMB42 billion for the first nine months of this year. In just two years’ time, Bond Connect has also quickly gained traction. It now has over 1,300 investors from 31 jurisdictions, and 61 of the top 100 global asset managers. In the first ten months of the year, it contributed to around 40% of the increase in foreign holdings of onshore bonds; its daily turnover increased 2.7 times year-on-year, and now accounts for more than 60% of the overall trading turnover by foreign investors. 10. And like other things we do, we build on the good start and keep working to make the Connect schemes more attractive to international investors. We introduced in June a new arrangement that will enable investors to obtain and hedge in CNY for the Stock Connect. For Bond Connect, we have expanded the settlement cycle, introduced DvP settlement and block trade functionality, and added an additional electronic trading platform. We continuously listen to market participants, and are exploring further enhancements such as expansion of tradable product scope under Bond Connect and launch of its Southbound leg. Huge Inflow into Mainland China’s capital markets 11. Given the much greater ease of investing in the capital markets in the Mainland of China, foreign holdings of A-shares and onshore bonds increased rapidly by 73% and 93% respectively in the past 2 years.
This assessment derives from studies conducted by the Eurosystem but also from the reports published by “ECB Watchers”, with whom, incidentally, the ECB has regular contact, notably in the context of annual conferences. Figures 5 and 6 show for example that on average, the Eurosystem’s monetary policy decisions were anticipated by financial markets, whatever their orientation, at least two weeks in advance, and fully factored in at least a week before. A comparison with the Fed, moreover, does not reveal significant differences between the two institutions with regard to the ability of markets to anticipate the monetary policy decisions of the two institutions. This point to the transparency of the single monetary policy. In particular, the fact that the ECB has chosen channels other than the publication of minutes of the meetings of the Governing Council has not prevented it from reaching a high level of predictability. As regards the frequency, since the inception of the euro in 1999, the Eurosystem has changed its policy rates 16 times (8 cuts, 8 hikes), which is on average close to the usual average frequency of interest rate changes 1 However, compared to the Federal Reserve, in particular since 2001, the frequency of the changes is by far lower. Does this necessarily imply that the Eurosystem does not move enough or too low?

Further benefits should accrue to business from the eventual linkage of the domestic payment system to the EU’s TARGET system. By linking together the national systems of Member States with the payment mechanism of the ECB, TARGET allows payments in euro to be effected much faster, potentially improving liquidity conditions in the financial sectors of participating countries while lowering the processing costs of cross-border payments in euro. The challenges posed by the single currency Thus far we have reviewed the opportunities inherent in membership of the euro area. As might be expected, however, membership will also present new challenges. For example, while it places the  2  BIS Review 61/2004  economy in a better position to compete internationally, it exposes businesses to additional competitive pressures. For a start, customers will be better able to compare local prices with comparable prices abroad and will increasingly question price differentials. Some operators will, of course, benefit from lower procurement costs, but others might find it difficult to survive. It is, therefore, advisable for pricing strategies to be reassessed well in advance of the date of the actual euro changeover, especially where price is an important variable in marketing strategies. In the same manner that the euro will facilitate price comparisons, other monetary variables such as cost per unit, average wage, annual sales volumes, administrative expenses and profits will also become easier to compare across countries.