samchain/econo-pairs-v1 huggingface dataset:
The task of the capital markets is to channel capital to investment projects with a high return. If financial investors assess the return on investments in a particular country to be higher than in other countries, there is reason for the exchange rate to strengthen. One cannot rule out the possibility that this is exactly what happened in the USA. Whether the level of indebtedness, the deficit on the current account and the strong USD exchange rate comprise a significant risk of large fluctuations in growth and a threat to global financial stability in the near future depends to a great extent on whether the long-term growth in the US economy will develop much more weakly than was expected when decisions on loans and investment were made. And, as I mentioned earlier, the shaping of economic policy and improvements in regulatory frameworks and risk management systems should have reduced the uncertainty in investment and savings decisions and thereby also the risk of a build-up of large financial imbalances. However, it remains to be seen whether globalisation, IT and telecommunications technology and perhaps also more efficient financial markets have really created the potential for higher growth that lay behind the expectations that pushed up economic activity. So far, the economies have reacted fairly moderately to the shocks they have faced over the past year.

Each country can then choose whether or not to publish the results of the assessment. A summary of the assessment is included in the IMF's annual assessment of member countries' economies. Dependence and complexity are increasing While the markets have thus (hopefully, I should perhaps add) become more robust, our use of them has grown. Households and companies have become operators on the financial markets, mainly because these offer better and cheaper services than those traditionally offered via the banks. An increasing percentage of the investments made are financed on the market through shares and bonds in other countries than the USA. This has become possible because households' savings are to an increasing degree channelled into shares and mutual funds. We use the financial markets much more than we did just ten years ago. This means that we have good reason to be concerned over their functioning. It has also meant that questions regarding financial stability have acquired greater importance on the international political agenda. At the same time as use of the markets has grown, new instruments are being traded that are increasingly complicated in structure and their risk content has become more difficult to assess. Various forms of derivative have been developed, for instance, to spread risks more efficiently. This in itself creates conditions for reducing the vulnerability of the banks as well as the financing costs of the investments. Essentially, this development benefits long-term growth. In recent years, the use of credit risk derivatives and securitisation has increased, for instance.
Under inflation-targeting, a flexible exchange rate system will be a first line adjustment that can help lessen the risk to financial stability. Next, to manage the impact on domestic liquidity, it will be useful for central banks to have a variety of monetary tools to absorb liquidity and influence market conditions. But, to deal effectively with both price and financial stability, two instruments will be needed. The first is monetary policy that focuses on price stability. The second is bank regulation and effective supervision that ensure financial stability through maintaining a robust and resilient financial system. Important in this context for emerging economies is the strengthening of risk management and governance of financial institutions. Furthermore, if needed, monetary and financial policies can be further supplemented by macroprudential measures aimed at reducing procyclical behaviour in the financial system. And finally, running fiscal surpluses is an effective counter-cyclical measure to restrain the impact of demand expansion on domestic inflation and asset prices. The third challenge is to develop and maintain a robust, efficient, and resilient financial system. As I noted earlier, a resilient banking sector is most crucial for helping the economy to adjust to the impact of external shock. An efficient financial sector will also raise the ability of the private sector to manage risk. In the last fifteen years since the Asian crisis, much has been done to strengthen the region’s financial systems.

Following a further depreciation in the currency, rises in administered prices and the prospect of continued weak growth in productivity, inflation was thought “likely to remain above target for much of the forecast period”. But “attempting to bring inflation back to target sooner…would risk derailing the recovery” and it was therefore “judged appropriate to look through the temporary, albeit protracted, period of above-target inflation”. I don’t think this was so exceptional. There is no inflation-targeting monetary authority that behaves so rigidly as to attempt to offset all shorter-term shocks to inflation, no matter the effects on the variability of interest rates and output. As the economist Lars Svensson puts it, “in practice, inflation targeting is always ‘flexible’, because all inflation-targeting central banks not only aim at stabilizing inflation but also put some weight on stabilizing the real economy”. In the UK, this regard for the occasional trade-offs faced by monetary policy, and their implication for the planning horizon, was formally enshrined in the MPC’s remit in March 2013. The Committee is now required to “promote understanding of the trade-offs inherent in setting policy and… [to communicate] the horizon over which it is appropriate to return inflation to the target”. This description of the appropriate horizon is now a regular part of our communication, notably in the newly introduced Monetary Policy Summary that introduces both the Inflation Report and the Minutes of our meetings. What of the current situation?
Developments in loans to enterprises continue to reflect the lagged relationship with the business cycle, credit risk and the ongoing adjustment of financial and non-financial sector balance sheets. The annual growth rate of loans to households (adjusted for loan sales and securitisation) increased to 1.4% in November, compared with 1.2% in October. The bank lending survey for the euro area for the fourth quarter of 2015 points to further improvements in demand for bank loans, supported by the low level of interest rates, financing needs for investment purposes and housing market prospects. Credit standards eased further on loans to enterprises, notably owing to increasing competitive pressures in retail banking, and reverted to a net easing on loans to households for house purchase. Overall, the monetary policy measures in place since June 2014 have clearly improved borrowing conditions for both firms and households, as well as credit flows across the euro area. To sum up, a cross-check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed the effectiveness of the monetary policy measures in place and the need to review and possibly reconsider our monetary policy stance at our next meeting in early March in order to secure a return of inflation rates towards levels below, but close to, 2%. Monetary policy is focused on maintaining price stability over the medium term and its accommodative stance supports economic activity. However, in order to reap the full benefits from our monetary policy measures, other policy areas must contribute decisively.

Today, I’ll start by talking about the broad range of innovative responses people within the Fed and other public sector institutions devised to restore confidence in part by providing liquidity, capital, and information during the chaos of 2008. Next, I will focus on some of the fundamental changes that have been implemented in the wake of the crisis. In my opinion, those changes go a long way toward making financial institutions and the financial system overall more stable and resilient. We should also recognize that, notwithstanding their increased resiliency, one or more firms will fail at some point in the future. It is imperative for US law to have an avenue to handle such a failure, and without systemic consequences. Finally, I will address some more recent legislative proposals to amend post-crisis reforms, emphasizing proposals relating to the orderly 1/6  BIS central bankers' speeches  failure of major financial institutions. Disorder and the unprecedented steps to right It I will start with the obvious. The crisis caught the world off guard. Many have argued that the crisis should have, would have, and could have been predicted and averted. Others have claimed that bubbles are inevitable and that regulators should principally focus their time and attention on cleanup and mitigation rather than avoidance. I will not engage here in that debate. From my perspective, prevention and cleanup are not mutually exclusive. Indeed, in exploring how to survive a crisis, you inevitably think about how to avoid it.
Environmental pollution is a typical example of market failure, and central banks should not be at the forefront of efforts to correct such failures. It’s not their job. What’s more, going green implies abandoning market neutrality, a principle which ensures maximum monetary policy effectiveness. It’s hard to imagine central bankers deciding whether bonds issued by a nuclear power station are green or not. And finally, in pursuing such remits, central bankers would again be entering the political arena, where there are many potential political traps that could undermine their independence and decision-making in the areas that need to stay of primary, if not exclusive, importance to them. This is a topic that would certainly warrant a separate presentation. I have tried to show at least briefly that central bank independence may not be as cast in stone as it seemed before the Global Financial Crisis. The new remits that central banks are starting to take on likewise indicate that opinions are changing. After the GFC, the former exclusive focus on price stability was widened to encompass financial stability. And new goals – or at least items – are gradually being added to the contemporary remits of central banks. All this shows that, beneath its seemingly placid surface, the world of central banks is a very lively, dynamically developing and extremely interesting place. What is interesting Czech central bankers at the moment?

Instead of expressing its goal of maximum employment in purely technical and macroeconomic terms, the Fed has come out in favour of collective efforts to combat poverty. Maximum employment may be a legitimate Fed goal alongside price stability, but the plan phrased in this way marks a departure from the previous world in which the Fed isolated itself from political influence. The ECB is unlikely to follow the same path as the Fed when it completes its monetary policy review. It is prevented from doing so by European law and by the limited appetite of EU citizens to reduce social disparities in this way. Instead, central bankers are increasingly voicing support for climate protection. This comes in the wake of a speech given by the former Bank of England governor Mark Carney, who in 2015 drew attention to the risks to financial stability from climate change and the responsibilities this implies for financial regulators. The ECB, however, is going even further: Christine Lagarde says she wants “to explore every avenue available in order to combat climate change”. In a sense it’s understandable that central banks are subscribing to broader government policies, whether at national or EU level. After all, it’s something that’s written into the laws governing their activities. One might also accept that if they want to maintain their influence, they need to move with the times and embrace the values that are increasingly driving world affairs. However, there are many big risks associated with this approach.
–  Second, to avoid any loophole basically due to an international failure to apply the debtor principle in withholding taxation, we are ready to reshape our system in line with the EU directive, i.e. to apply the payment agents principle in withholding taxation whenever a client of a Swiss bank is fiscally domiciled in the EU. –  Third, and this must not be forgotten, Switzerland grants full judicial co-operation to fight tax fraud. Thus, our position is fair. With these measures - which are fiscally equivalent to the exchange of information - Switzerland cannot be accused to be a fiscal paradise attracting foreign money like an offshore centre. With capital being extremely mobile internationally, it is evident that co-ordinated taxation policy makes sense only if it covers all the main financial centres. The EU regulation will not have to be only implemented in the member countries, but also in their many dependent and associated territories. Furthermore, it is crucial for Europe that similar measures are taken on a world-wide basis. Without a fully watertight solution, offshore centres around the globe will expand their business at the expense of Europe and this with an increasing lack of transparency and with higher global risks. One last point about fiscal harmonisation. I live in a country that counts nearly three thousand different tax regimes. In Switzerland, every town, every canton and, of course, the federal government, all have the authority to levy taxes and to set the rates.

Secondly, it is necessary that central government finances continue to be in surplus in the next 10-15 years, which can be used for amortisation. A lighter debt burden creates scope for future increases in costs. The government’s expenditure ceiling and balance targets aim at creating such space. At present, the prospects for growth in the economy are so good that the surplus in central government finances is expected to be sufficient to amortise central government debt at a rapid rate and to reduce income tax. The challenge lies in maintaining this ambition over a long period. It is therefore important that economic policy is focused on creating the conditions for growth. In this perspective, it would in my opinion be unfortunate to take decisions on a shortening of working hours since it would worsen the prospects for growth by reducing the supply of labour. By taking responsibility for stable prices and financial stability, the Riksbank can make a contribution to creating favourable conditions for long-term good and even growth. 1  BIS Review 98/2000  Stable inflationary prospects and free resources make possible low interest rates The strong upswing that we are now experiencing has been supported by the Riksbank being able to keep the interest rate at a relatively low level due to low inflationary pressure. Despite us being ahead of Europe in the cycle, we have an instrumental rate which is one per cent lower than in the euro area.
I will also reiterate a point I’ve made previously, which is that when we consider whether or not firms are in a position to pay dividends, one of the 2  main quantitative yardsticks we use is capital levels after the benefit of transitionals . In other words, we regard transitionals as creating high quality capital. Given the substantial benefit arising from TMTPs, it is important for both firms and the PRA that their level remains appropriate over time. And there is a mechanism to ensure just that, whereby firms may apply for a recalculation following a material change in their risk profile, or every two years. Our goal is that the maintenance of TMTPs should be as straightforward as possible and not onerous for any of those involved. 3  The PRA recently closed a consultation on proposals for this process and we expect to issue a supervisory statement on the subject later in 2017. Another industry complaint is about the quantity of data firms must report, and the compressed timetables for doing so. It is a plain fact both that the volume of reported data is higher than under the previous regime and that regulatory returns are due to the PRA more quickly. I view both of these things as a significant improvement, which will enable better delivery of the PRA’s objectives of policyholder protection and firm safety and soundness.

The target range for our reference interest rate, the three-month Libor for Swiss franc investments, thus remained unchanged at between –1.25% and –0.25%, and we confirmed the interest rate on sight deposits at the SNB of –0.75%. We also reaffirmed our willingness to intervene in the foreign exchange market as necessary. The SNB’s policy of negative interest and foreign exchange market interventions – measures that are intended to relieve upward pressure on the Swiss franc – is helping to stabilise price developments and 4  BIS central bankers’ speeches  support economic activity in our country. The SNB thus continues to take account of the exchange rate situation in formulating its monetary policy. Conclusion The SNB – like the ECB and many other central banks – has been deploying unconventional monetary policy measures in recent years. These were prompted by the financial and debt crisis, which caused the central banks to reduce short-term interest rates to near zero and significantly expand the monetary base. In Switzerland, the crisis led to a very substantial appreciation in the Swiss franc, particularly against the euro. The SNB thus took targeted unconventional measures to ease upward pressure on the Swiss franc. Between September 2011 and January 2015, it maintained a minimum exchange rate against the euro. Since the discontinuation of this measure, monetary policy has been based on negative interest and the willingness to intervene in the foreign exchange market. Logically and quite rightly, the central banks were major economic protagonists during the financial and debt crisis.
International Capital Flows in the Post-crisis World, September 2019 CENTRAL BANK OF CHILE  Monetary policy framework and its effectiveness Institutional investors provide a natural base for financial market deepening and market-based FX-risk coverage instruments Main financial assets holders (*)  Derivatives market activity  (percent)  (annual transactions, percent of GDP)  100 90 80 70 60 50 40 30 20 10 0  7  1998  2001  2004  2007  2010  2013  2016  6 5 4 3 2 2008 2018 2008 2018 2008 2018 2008 2018 2008 2018  1  Bank Bds. 0  Sov. Bds. Pension funds  Corp. Bds. Mutual funds  Term-dep Insurance Co.  Stocks Other  Emerging Economies  Latin American Economies  Chile  (*) Other includes other investment funds, stock exchanges, and stock brokers. Source: Central Bank of Chile, based on data from the Superintendence of Pensions, CMF and Santiago Stock Exchange. The ability to overcome the fear of floating was helped with the buildup of capacities for companies and financial intermediaries to manage the risks associated to a more volatile FX. Consequently, derivatives markets were deepened as well as institutional investors provided a natural base for financial market deepening and Page 10 of 12  Central Bank of Chile September 2019  market-based FX-risk coverage instruments. The Chilean financial market has transited from being largely dominated by traditional banking to being composed by several other market participants, including Pension Funds, General Fund Administrators and Insurance Companies; among others.

In looking at the future terrain of the financial sector in Malaysia, six trends are particularly important – first, the changing configuration of the global economy and global financial markets; second, regional economic and financial integration; third, financial sector development amidst increased liberalisation in the Asian region; fourth, increased role of domestic demand in the Asian economies; fifth, growing significance of Islamic finance in the international financial system; and finally, developments in the regulatory structures and approaches. It can be expected that all these trends will have a significant bearing on the future of the banking industry. First, the global economic configuration has been altered by the emergence of several large emerging economies into the global economy. This is especially evident in Asia, where the  BIS Review 83/2007  1  rise of China , India and the South East Asian economies have increased Asia's global role. As a result, Asia today features four 1 of the world's twelve largest economies and several of the fastest-growing economies. Collectively as a region, Asia contributes about 40% of global output 2 and one-fourth of world trade. The region is also a significant net exporter of capital, holding two-thirds of the world's foreign exchange reserves and is the largest holder of the developed economies' sovereign bonds. One-quarter of Fortune's top 500 global companies are Asian corporations. This opens up tremendous business opportunities for Malaysia as a part of this dynamic growth region.
The ideas and experiences shared could then be contextualised to the prevailing local conditions to enhance financial inclusion. This proposal was welcomed by the members and resulted in the first Financial Inclusion Advisers programme conducted in Lusaka, Zambia in April 2009. The success of this inaugural programme hosted led us to this second programme hosted here in Malaysia with the support of JICA. JICA has long been involved in capacity building in  BIS Review 4/2010  1  the African continent, and we look forward to collaborating in the future in this area of building more inclusive financial systems. The Malaysian experience on the financial inclusion agenda In Malaysia, the commitment to the financial inclusion agenda is reflected in the new Central Bank of Malaysia Act 2009 which incorporates financial inclusion as an objective of the Central Bank. With the enactment of the Act in November of 2009, the Central Bank has imbedded in the legislation the financial inclusion agenda to ensure that future generation of central bankers will continue to direct efforts to building an inclusive financial system. Additionally, the Central Bank in the process of formulating a new blue print for the financial sector for the next decade. This blueprint would also ensure the development of a more inclusive financial system. The results of the financial inclusion measures thus far have shown positive results.

This stance will however be subject to continual review, depending on developments in the domestic economy and external environment. Financial services sector Performance of financial services sector The financial services sector saw an improved performance last year, rebounding from a negative 8.1% growth rate in 1998 to register flat growth in 1999. The recovery was largely fuelled by the surge in the stock market and fund management activities over the year, reflecting buoyant market sentiments and a brighter regional economic outlook. The upturn is likely to be sustained for the rest of the year. For the first quarter of 2000, the sector has already turned in an encouraging 6.9% growth. Review of financial reforms and key priorities MAS has continued apace with our financial sector reforms over the last year, introducing a series of strategic policy changes to foster a more transparent, innovative and dynamic financial sector. We have taken measures to fine-tune and update our legislation and guidelines to keep pace with the changing market environment. To further strengthen the domestic banking sector, we recently announced regulations to separate the financial and non-financial activities of our local banking groups, and to require the rationalisation and unwinding of cross-shareholdings. Last week, MAS also unveiled our policy on internet banking, whereby we affirmed that the existing prudential regulation and supervision framework will apply to such new business models. On the insurance front, we have liberalised the entry into the direct insurance industry and adopted an open policy for admission of insurance brokers.