samchain/econo-pairs-v1 huggingface dataset:
In contrast to stress testing exercises, a real liquidity stress scenario does not have a well-defined and understood severity or duration – in reality there is no such a thing as perfect foresight. Banks may therefore rationally choose to exercise caution in their use of liquid assets due to uncertainty around future shocks and their duration. [32] In general, while a combination of factors is likely to be relevant to banks’ liquidity risk appetite, these factors often may not only reflect genuine concerns about liquidity, but also reflect concerns around impacts on the LCR metric itself. And there is a number of reasons why focusing on the LCR – or indeed any individual liquidity metric – in stress is unhelpful. Liquidity risk can manifest in a variety of ways, for different reasons – and can be fast-moving and self-fulfilling. So any static liquidity stress scenario has limited value in understanding the forwardlooking risks facing a bank when a real stress hits. This is less true for regulatory capital and real solvency stress, especially in a world where regulators constrain both leverage, through a non-riskbased leverage ratio, and risk-based solvency risk, through risk-weighted capital requirements and perform regular stress tests. Page 10  The denominator of the LCR – the measure of liquidity risk we use to ensure banks hold sufficient liquid assets – is not straightforward to understand, and is particularly challenging to interpret when stress hits.

2/4  BIS central bankers' speeches  Furthermore, we have lifted the 2% countercyclical capital buffer on financial institutions. The buffer has been reset to 0% and will remain there for at least the next two years. Lifting the countercyclical capital buffer requirement will make it easier for the banking system to support households and businesses by creating the scope for new lending in an amount ranging up to 350 b.kr., or 12.5% of the current loan portfolio, all else being equal. Moreover, it was decided this past Sunday, at an extraordinary meeting of the Monetary Policy Committee, to begin direct purchases of Treasury bonds in the secondary market. This will both support fiscal policy and ensure that lower interest rates are transmitted out the entire yield curve, thereby lowering households’ and businesses’ financing costs, which is the Bank’s objective. Honoured guests: In Iceland’s campaign for independence, currency issues were never mentioned. It was automatically assumed that Iceland would continue to participate in the Nordic currency union as an independent member, as the Norwegians had done after separating from Sweden in 1905. Participation in Nordic currency cooperation was actually written into the agreement made when Iceland was granted sovereignty in 1918. This currency cooperation was based on the gold standard, as were most of the world’s currencies at that time. However, the Nordic currency union fell apart during the post-war years, and Icelanders were forced to rely on themselves as they endured the shocks that pummelled the country during its first years of sovereignty.
The dappled world Speech given by Andrew G Haldane, Chief Economist, Bank of England  GLS Shackle Biennial Memorial Lecture 10 November 2016  The views are not necessarily those of the Bank of England or the Monetary Policy Committee. I would like to thank Arthur Turrell for his help in preparing the text and Rafa Baptista, Karen Braun-Munzinger, Angelina Carvalho, Doyne Farmer, Jeremy Franklin, Marc Hinterschweiger, Andreas Joseph, Katie Low, Zijun Liu, Matthew Manning, Rajan Patel, Paul Robinson, Daniel Tang, Ryland Thomas and Arzu Uluc for their comments and contributions. 1  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  Introduction I am delighted to be giving this year’s Shackle Biennial Memorial Lecture. The past few years have witnessed a jarring financial crisis as great as any have experienced since the world wars, a crisis whose aftershocks are still being felt today. Against that dramatic backdrop, I thought I would use this occasion to reflect on the state of economics, not least in helping us make sense of such catastrophic phenomena. This topic has risen in both prominence and urgency since the financial crisis (Coyle and Haldane (2015), Battiston et al (2016)). Indeed, it would probably not be an exaggeration to say the economic and financial crisis has spawned a crisis in the economics and finance profession - and not for the first time. Much the same occurred after the Great Depression of the 1930s when economics was rethought under Keynes’ intellectual leadership (Keynes (1936)).

The case for “transparency about transparency” is the case for honesty in economic policy. Some progress has been made. Pilot transparency reports on the UK and Argentina have been produced by IMF staff. Other pilot reports are to come. Australia has published a self-assessment transparency report. The need now is to make the production of Transparency Reports an integral part of the Article IV process. There is no reason for further delay. Transparency Reports should always be published. I very much hope that the IMF will make rapid progress towards the regular production and publication of Transparency Reports on each country. This practical measure could do a great deal to enhance the performance of all economic actors involved in the international capital market. 6. Conclusions  Unrestricted capital mobility and the absence of an ILOLR are not a recipe for a stable international financial system. Short-term interbank flows are the Achilles heel of present arrangements, leading to both currency and maturity mismatches. Throw in a predilection of emerging markets for pegged exchange rates and you have a dangerous cocktail. Purist solutions – whether of an ILOLR or a return to permanent capital controls – are, for good reasons, unlikely to be pursued. What is needed now are some practical steps forward. Central to any such programme is the need to monitor and manage the national balance BIS Review 95/1999  8  sheet. The objective cannot be to eliminate the risk of financial crises. The middle way will not do that.
During the boom period from 2000 to 2006, home prices more than doubled in the Poughkeepsie area and increased by 150 percent around Kingston – exceeding the U.S. rise of roughly 90 percent and the average rise of roughly 50 percent that prevailed in our region. The price declines in the bust period, from 2007 to 2009, were somewhat less severe than the nation, falling by roughly 20 percent in both areas, compared with 30 percent nationally. Recently – and this is a hopeful sign – home prices in both areas have steadied. Next, how are families in the Hudson Valley doing in restoring their finances? During the recession, all across the nation, debt delinquencies soared and many families found that they needed to reduce their debt to a sustainable level. We keep track of the credit conditions in the Second District – including the average debt that people in area carry and whether they are current with their payments – using the Federal Reserve Bank of New York’s Consumer Credit Panel. In the Hudson Valley, debt per person with a credit report is now down by 5 percent from its peak level in 2008. As of the first quarter of this year, debt was continuing to fall modestly. At the same time, delinquency rates continue to rise. The proportion of debt that is at least 90 days delinquent has risen from 2 percent in 2005 – which was low for New York – to 9 percent currently, matching the delinquency rate statewide.

Zeti Akhtar Aziz: Sasana Kijang – Malaysia’s centre for central banking and financial collaboration and cooperation Welcoming remarks by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the launch of Sasana Kijang, Kuala Lumpur, 14 September 2011. *  *  *  It is my honour and great pleasure to welcome you to the official opening of Sasana Kijang. Today we are also honoured by the presence of Yang Amat Berhormat, the Prime Minister of Malaysia to officiate the launch of Sasana Kijang. Sasana Kijang began with a vision to have a centre for the development of thought leadership and for the promotion of greater regional and international collaboration in Central Banking and finance. Sasana Kijang is also an integral part of the initiatives that have been undertaken by Bank Negara Malaysia in the modernisation and transformation of our Central Bank. These have involved the introduction of new legislation and governance arrangements, the increased leverage on technology, the adoption of new practices in the management of talent, work arrangements and corporate culture, as well as the new institutional arrangements that facilitate our cooperation and collaboration with other monetary authorities and regulators in other parts of the world. The global economic and financial landscape is currently at an important turning point, as we transition to a fundamentally changed future. The challenges facing us in this environment are manifold. We therefore want to have the skills for this future – to be well equipped to effectively manage our future.
Collateralised lending programmes targeted directly at an appropriate set of non-banks would be materially less risky, to public money and to market incentives; they would pose fewer potential conflicts with monetary policy; and could be put in place ahead of potential shocks, with well-understood operational, collateral and pricing terms. Developing viable options for such facilities is therefore a high priority on our work programme. There are at least three key sets of operational design questions to tackle. First, which non-banks do you need to be able to get liquidity to, in order to stem potential systemic shocks effectively? Second, are those non-banks able to borrow (or can we devise mechanisms to allow them to do so), both in terms of their legal remits, and in terms of their operational arrangements? And, third, what terms and conditions would we want to impose on borrowers, including pricing, collateral requirements and any access conditions – including regulatory status? I have to say that my instincts are that finding a workable group of non-bank entities that are (a) collectively systemically important enough to allow us to maintain stability, (b) legally and operationally able to borrow at sufficient size and speed, and (c) willing to meet the conditions of a borrowing programme, could be challenging. But some central banks, for instance the  Page 9  Canadians,[14] have made important progress in this area – and we will be learning from them and others.

This was a fundamentally different approach to that taken in QE, where the goal was to achieve the MPC’s stock targets. As a consequence, our eventual total purchases were far lower than some early estimates – and that, combined with the short holding period, very clearly differentiated the LDI operations from the much larger and more persistent path of QE holdings (Figure 4). Page 11  Judged against the criteria we set ourselves, these operations were highly successful, a view supported by most market participants and commentators. But there were many important learning points for us, and for anyone contemplating such operations in the future too. The first is simply to underscore the value of effective preparation across every element of design. As I mentioned at the start, we had benefited substantially from the thinking of the BIS working group in the months ahead of the LDI crisis. Establishing and communicating a rigorous approach to governance is critical. Ensuring your operations genuinely are temporary is a vital but high stakes decision: make sure your deadlines are credible and clearly communicated. Most importantly of all, invest heavily in how you want to price your facility. The standard MMLR theory of operating at a spread wider than in normal market conditions but narrower than in stressed conditions is nice in theory.
The reason for locating insurance and banking in the PRA is in my view that we have learned during the crisis that our job as prudential supervisors is to ensure that the public and users of financial services, including the corporate sector, can be assured of continuous access to the critical services on which they depend. Many financial services may be regarded as critical by their users, but some are distinctive because it is hard for consumers to replace their provider with a substitute without accepting unacceptable cost and loss. Insurers provide critical services to the public in terms of risk transfer and very long-lived savings contracts. This last point draws out that insurance is not a single homogenous industry – general and life insurance are very different activities – and we recognise that in our supervision. It would be unacceptable to the public to have access to risk transfer through, say home or car insurance, or professional indemnity insurance, to name but a few, withdrawn in a disruptive and unannounced way. In the same way, savings contracts that are long-lived and provided by life insurers, and are often an individual’s primary pension provision, are critical financial services that are difficult to replace without unacceptable cost. For me, there is therefore a common feature of banking and insurance in terms of continuity of access to critical financial services. This is not, however, the end of the story on the issue of why the PRA will regulate banks and insurers.

The capital adequacy ratio is high due to the facts that the government securities portfolio of the sector is high and the mentioned portfolio is evaluated in the zero percent risk weight category. The high capital adequacy ratio improves the resistance of the financial structure of the banking sector against shocks. The Financial Strength Index, which provides information about the soundness of the banking sector and which has been enhanced by the sub-index of interest rate risk compared to the previous Report, reached its highest level at the end of 2005. Despite the declines in profitability, capital adequacy and interest rate risk indices, the recovery in the asset quality and liquidity indices were effective on this development. The Financial Strength Index is observed to maintain almost the same level in the first quarter of 2006 as well. In order to measure the resistance of the banking sector against shocks, the development of credit and market risks were analyzed via stress tests and scenario analyses. It was found that a sufficient amount of capital was maintained for the assumed risks and the sector’s resistance against probable shocks was strong. Thus, in May 2006, significant market movements were experienced, which can also be perceived as tests of the resistance of the sector. It was observed that due to their strong capital structures, our banks were less affected by these activities compared to the past.
Yet, not only has there been no depreciation pressure on the Hong Kong dollar: it has in fact strengthened following capital inflows into Hong Kong since the outbreak of the crisis in midSeptember last year. Consistent with the principles of the Currency Board, the Hong Kong Monetary Authority (HKMA) has bought a total of $ billion, injecting $ billion into the local money market. The inflow of funds to the Hong Kong dollar was a welcome development, paving the way for monetary easing, which was fortuitously the appropriate monetary policy stance to support the economy. The reasons put forward for the inflow have not been a cause for concern for they did not seem to relate to exchange-rate speculation. Market consensus about the  BIS Review 19/2009  1  causes pointed to the unwinding of carry trades and the repatriation of funds by corporates to finance operations in Hong Kong. It is also likely that there have been some inflows to position for investment in Hong Kong, in light of the better economic prospects of the region, and in particular, China. The second factor in the resilience of Hong Kong’s financial markets is our robust banking system. One of the lessons from this experience is that the stability and effectiveness of the banking system becomes even more essential when financial crisis shuts down the two other financial intermediation channels: the bond market and the stock market.

So without further ado, let me quickly turn to the main theme of my remarks this morning: “What does it take to build a successful global hub for offshore RMB businesses?” The key to success, if I may summarise it, lies in the acronym: “PIPs”. 5. “PIPs” stands for “Policy Headroom, Infrastructure and People/Products”. Let me cover these three elements in the reverse order. For People and Products, I have said many times that for any financial centre to thrive and out-compete other centres, the crucial building block would be its people and products. It goes without saying that a world class financial centre must have the right people designing and distributing the right products that serve the needs of the financial consumers. This is an important and core component of the soft power that I have been talking about in the last few years. It is a key attribute that differentiates a global hub from the other financial centres. People and Products fall into the area in which the financial industry, including the individual firms, practitioners and industry bodies like the TMA, can and should play a dominant role. I am sure that you will agree with me  BIS central bankers’ speeches  1  that policy makers and regulators, while having the responsibility to safeguard financial stability and to accord appropriate protection to financial consumers, are not really well suited to get too involved in gauging market demand and designing financial products that would best meet the requirements of the consumers. 6.
Shares of individual regions in global trade % Total  1990  1995  2002  Developed countries  72  67  63  US  12  12  11  UE15  44  39  38  Developing countries  28  33  37  Asia  13  19  20  Source: IMF Direction of Trade Statistics  6  BIS 75 Annual Report, 2005. 7  th  Ciccarelli, Mojon “Global Inflation”, Central Bank of Chile Working Papers No 357, December 2005. BIS Review 57/2006  3  Global capital flows keep growing even more dynamically, whereby the share of the global FDI in the global GDP increased from 8% in 1989 to 22.1% in 2003, and foreign assets expressed as percentage of the GDP increased from 62.6% of the GDP to 186.1% of the GDP, respectively. As evidenced, the role of trade and financial links between enterprises in various countries has become more important over recent years. Previously, in response to growing fuel prices or costs of living, trade unions demanded wage increases, which triggered the so-called second-round effects and central banks had to increase interest rates to mitigate inflation. Nowadays, trade unions must take into account the fact that in the case of wage increases, production and services may be transferred to countries with lower manufacturing costs.

[3]  South and Southeast Asia are among the most dynamic economic regions in the world. Growth in these two regions is driven by favourable demographics, rising affluence, young tech-savvy consumers, and rapid urbanisation. ASEAN is likely to benefit from supply chain diversifications and an outward shift of labour-intensive manufacturing from China. South and Southeast Asia have booming tech sectors that present opportunities for PE/VC investments. The pandemic has accelerated digitalisation in Southeast Asia as retail transactions and communications migrated online to overcome COVID-19 restrictions. According to industry estimates, 3 out of 4 persons in ASEAN are now online. [4] Higher digital adoption in ASEAN has helped spur a vibrant technology sector. There is a burst of entrepreneurial energy in ASEAN and the region is home to many innovative high growth companies. The number of unicorns in ASEAN has continued to increase over the last few years. ASEAN’s early wave of tech giants like Grab, GoTo and Sea have made public exits. As other promising start-ups in the region scale up and expand their footprint, they will need to raise capital and seek PE/VC funding. Private credit will be a key driver of growth in private markets. There are opportunities for private credit to play a larger role in Asian enterprise financing just like its private equity counterpart. Private credit is generally structured in the form of floating rate exposures. Hence, investors benefit from larger coupons as interest rates rise.
This increased transparency has contributed to monetary policy effectiveness. 1  See, for example, Cukierman, A. and A. Meltzer (1986), “A theory of ambiguity, credibility, and inflation”, Econometrica, Vol. 54, pp. 1099-1128. BIS Review 6/2008  1  The announcement of a numerical benchmark for price stability, in particular, has proven a powerful instrument to foster transparency by enhancing the public’s understanding of the given central bank’s objectives. In its pursuit of price stability, the ECB’s Governing Council, for example, has made clear that it aims to maintain inflation rates below and close to 2% over the medium term. By announcing a quantitative definition of price stability, the ECB has provided a focal point for the formation of medium-term inflation expectations, “close to, but below 2%”, and has made a significant contribution to the long-term predictability of inflation developments and monetary policy. Central banks are prudent in their communication to always preserve their credibility in all circumstances. Let me also say that prudence in communication finds solid justification, not least, in the existence of a multitude of audiences with different needs. 2 Effective communication has clear benefits. First, and certainly more fundamentally, it fosters the longterm predictability of monetary policy. This helps reduce uncertainty about inflation and the costs associated with such uncertainty for consumers and investors. With its communications, a central bank can influence the formation of inflation expectations, and ensure that they remain anchored at the levels consistent with the central bank’s objective.

•  For inflation to go down, back to our definition of price stability it is essential that we do not have prices and labour costs spiralling taking into account the present level of inflation and giving rise to what we call “second round effects”. All decision-makers whether private or public, including entrepreneurs and social partners should have that in mind all over the euro area. 4  BIS Review 6/2008  •  Decisions of augmentation of prices and costs that would depart from this recommendation would do nothing but contributing to higher inflation, diminishing purchasing power in the medium run, diminishing competitiveness and therefore hampering durably the job creation process which is presently a major success of the euro area. I thank you for your attention. BIS Review 6/2008  5