samchain/econo-pairs-v1 huggingface dataset:
On top of this, a substantial part of the growth in one of our best-performing sectors - exports - is generated by offshore trade, which by its nature creates fewer jobs domestically than does the more traditional entrepot trade, not to mention domestic exports. What this means is that, however quickly the recovery penetrates society as a whole, and whatever the efforts made to open up new areas of economic activity, a large pool of unemployed may still be left behind. These fellowcitizens will have a legitimate claim on the community for assistance in one form or another, and how to tackle this issue without further compromising fiscal discipline will be a great challenge. It is a challenge that many developed - and not-so-developed - economies have been grappling with for many years. But it is a fairly new and unfamiliar challenge for Hong Kong. A related issue is the question of property values, although how far this should be classified as a structural or a cyclical issue is uncertain. Hong Kong's property market is a complex and volatile creature: it is not at all clear how the various factors on the demand and supply sides have contributed to the extraordinary collapse we have seen in the market over the past five years. How the market will behave in the future is even less clear, though it does seem that there has been some stabilisation in prices recently.

I have already mentioned the doubtful argument about changing the Link to jump-start the economy, and there have been other ideas put forward - all of them well intentioned - for example, that the Government should dig further into the foreign reserves to stimulate growth. One very specific suggestion which comes up periodically, and which gained currency once again over the summer, is the proposal that the HKMA should relax the guideline that says that banks should not lend more than 70% of the value of a residential property for which a mortgage loan is taken out: this is known as the 70% loan-to-value guideline. The idea behind the suggestion was that relaxation of the guideline would make it possible for prospective homeowners to borrow more and that this would help stimulate property purchases  4  BIS Review 44/2003  and thus stabilise the property market. I think the idea has now passed, partly because the property market appears to have stabilised, but mainly because it seems that public opinion accepted the reasoning that we and others put forward for maintaining the guideline. Setting aside the question of whether relaxing the guideline would have had any effect at all on demand for property, let us go through this reasoning. It is, in fact, quite simple. The guideline exists to prevent banks from excessively exposing themselves to the risks posed by an extremely volatile property market.
The most challenging recommendations found in the report are those requiring a change in mindset, such as the identified lack of awareness of AML risks in non-bank financial institutions and the wider professional community, resulting in a very low number of suspicious transactions reports  Page | 4  being filed by them. We all have a collective responsibility and nobody can procrastinate in getting our house in order. On a related note, our size will always present diseconomies of scale for large correspondent banks when evaluating their risk-adjusted returns from Maltese business. The risk aversion of these banks is impacting more heavily on the smaller jurisdictions. It is essentially a market failure, a true manifestation of asymmetric information. This does not mean, however, that we should be complacent and fatalist. While banks and authorities continue to search for technical solutions, we are all duty-bound to endeavour to convince these banks that they are dealing with a reputable jurisdiction and that our market players are fit-for-purpose in an age of increasing global financial transparency. These correspondent banks have neither the time nor the interest to understand risky business models or the overly-complex structures of your clients. As practitioners, you are the system’s first line of defence. The more layers of controls in the system, including a thorough understanding of clients and business models, and the less complex their corporate structure, the easier it is for banks to service them. There is indeed purpose in our cause to safeguard what we have achieved so far.

The RMB Clearing Agreement lays down the framework for RMB business in Hong Kong. I will not bore you with the details but just to highlight two important changes made in the Agreement. First, the restrictions on the types of institutions that can open RMB bank accounts were lifted. This effectively means that securities firms, asset management companies and insurance companies are now free to open RMB bank accounts. Second, the restrictions on RMB interbank transfers between personal accounts and corporate accounts were also removed. With these relaxations, the key hurdles that had previously limited the development of offshore RMB wealth management business have been eliminated. Market players have been responding to these relaxations quickly with the launch of a wide range of RMB investment products. These include RMB-denominated insurance policies and investment funds. Investor interest in these products has been phenomenal. In developing our offshore RMB business, let me stress that Hong Kong does not have a monopolistic power and we are also facing competition from other financial centers. BIS central bankers’ speeches  3  However, Hong Kong does enjoy the first mover advantage over the others in a number of ways. Over the years, the HKMA has built up a very good working relationship with the Mainland authorities. We have accumulated a wealth of operational and regulatory experience in RMB business. We have also developed the most advanced financial infrastructure for RMB transactions with cross-border links with the Mainland.
The other key element of the capital and liquidity regime to be agreed is the Net Stable Funding Ratio. This standard addresses banks longer-term liquidity risks. Proposals are currently out for consultation and the Basel Committee aims to agree the standard in September this year. Concerns have been raised by some in the industry that taken together, the main elements of the new capital and liquidity regime can interact to have potentially serious and unwelcome unintended consequences particularly on market liquidity. The official sector takes such concerns seriously and is already looking closely at them. We should not however set the objective of ensuring a return to pre-crisis liquidity conditions. Liquidity premia were likely too low with liquidity risk very probably under-priced before the crisis. Prior to the crisis, market-makers were permitted to fund their inventory with dangerously high levels of leverage, funded at very short-maturities. Though lax standards allowed dealers to carry high levels of inventory and to easily accommodate shifts in the demand for market making, dealers were vulnerable to falls in asset prices and tightening in  4  BIS central bankers’ speeches  wholesale markets conditions. When faced with severe stress, they were forced to withdraw from market making altogether. With regulation tighter, it may be harder for dealers to absorb inventory when end investors wish to offload assets; market liquidity may start to fall away at an earlier point. Market participants will need to recognise this change in market structure and adjust their balance sheets accordingly.

Indeed, credit rating agencies specifically identified a ‘public support uplift’ in their ratings. Nor was the reluctance of authorities to put banks into administration surprising. Administration results in a poorer and potentially disruptive outcome for continuity of functions critical to the economy. Where the bank is large and complex, it can be very difficult to split up the constituent parts. And the effects of putting all or some of the bank in to administration can spill-over to hit the financial system and the wider economy. Nowhere was failure more disruptive than for the liquidation of Lehman Brothers, where the FDIC lacked the requisite powers to resolve the firm in an orderly fashion. The process was disorderly, time consuming and expensive. And it was very contagious. It triggered the worst phase of the crisis. In the weeks following the failure, Reserve Primary Fund broke the buck, sparking a run on the US money market fund industry. More than five years on, the liquidation is still not yet fully complete. Fees paid to the administrators have, so far, totalled more than $ The sheer size and complexity of Lehman’s derivative book made it very difficult to wind-down. The FDIC estimates that, had a legal framework existed to put the firm through a resolution and receivership process, a quick resolution could have recovered far more value for unsecured creditors and, importantly, limited contagion to short term commercial paper and funding markets.
However, with a rule of action, the application of regulations itself becomes a function of a number of variables that vary over time:  itlending  it   t ( z ( z , lt , yt ,...)) . Various institutional arrangements can be imagined, based on the distribution of responsibility for assessing the variables in the function, determining rules of action or functional form and, finally, for translating the function into actual regulations. The latter would probably require an element of discretionary decision-making. One possibility would be for the central bank to determine the policy rate ( it ) and for the supervisory authority to determine regulations, that is to say both z and z (...) , as is the case in Sweden. Another possibility would be for the central bank not only to determine the policy rate, but also to determine the time-varying regulations through taking responsibility for the application of the rule of action ( z (...) ), while the actual implementation of the non-time variable regulations ( z ) would be the responsibility of the supervisory authority. A variation of this would be for the central bank to be completely responsible for the implementation of the time-varying regulations. Finally, there is the possibility of the central bank taking responsibility for all regulation and supervision. At present, it is still too early to say whether the international debate will conclude that one form of organisation is better than any other.

François Villeroy de Galhau: Beyond Brexit, our common challenges and our common answers Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the City Week 2018, London, 24 April 2018. * * * Ladies and Gentlemen, It is a pleasure to be in London again and allow me to thank you for inviting me to speak at City Week 2018. As is to be expected, Brexit is omnipresent on the agenda. But, as the Belgian friar Dominique Pire said when he received the Nobel Peace Prize in 1958, “men build too many walls and not enough bridges”. That is why I am not going to speak about what divides us, but rather about what unites us. We are and will always remain close friends and partners, even if we will no longer be in the same European club. Today I will elaborate on two challenges that should unite us in the near future: the utmost need for active multilateralism and the finance of tomorrow in an interconnected world. 1. The need for active multilateralism International cooperation between countries is more important than ever to preserve the current improvement in the global economic environment: according to the latest IMF forecast, global growth should stand at 3.9% in 2018, after 3.8% in 2017. And we should together resist two temptations: financial complacency, and protectionist escalation.
7  Data strategy  A second major fintech-related work stream for the Bank has been around our data strategy. The Bank has long been an active proponent of universal standards for data, a classic example of soft infrastructure. 5  https://www.bankofengland.co.uk/-/media/boe/files/speech/2020/cross-border-payments-innovating-in-a-changing-world-speech-byvictoria-cleland.pdf 6 https://www.bankofengland.co.uk/news/2021/april/boe-publishes-policy-for-omnibus-accounts-in-rtgs 7 https://www.bankofengland.co.uk/news/2021/april/bank-of-england-statement-on-central-bank-digital-currency 3  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  3  That means things like the Legal Entity Identifier (LEI), a global standard designed to uniquely identify any legally distinct entity that engages in financial transactions, whose adoption the Bank is supporting. And it means standards that enable the efficient transfer of data between multiple parties like ISO20022, which we are implementing alongside our RTGS renewal programme. As Gareth Ramsay, our Chief Data Officer put it in a recent speech, standards like these are “a key part of the soft infrastructure of the digital age”. 8 They are foundational for unlocking many of the benefits of data for both the public and private sector. Such standards could help support the idea of an open data platform for SME finance that the Bank has helped to champion. By bringing together a global identity standard and a safe, secure and permissioned method of sharing information, an open platform could harness novel data sources and advanced analytics to provide SMEs with more choice and better access to productive finance.

Support for new and growing firms One issue the Kalifa Review raised that we are working to address is the “scale up” challenge; that is, how successful start-ups can scale up into larger companies that play a more significant role in sectors of the UK financial system that still remain relatively concentrated. This is a challenge the PRA, along with the FCA, has been seeking to address for some time. We are working to actively improve how we tailor our supervisory approach to support growing firms.15  We provide support and proportionate supervision to start-up banks. This is a more resource-intensive supervisory approach than we deliver to larger, more established banks, and we provide a relationship manager and team that get to know each start-up bank and keep a close eye on emerging risks. We set out our expectations, and the sort of progress we expect firms to make, in the Supervisory Statement published on 15 April.16 Furthermore, at the same time we re-launched the New Banks’ website which provides a lot more information around the standards we expect at authorisation and beyond. The PRA is also looking at creating a ‘Strong and Simple’ regime for smaller banks as well as potential changes to Solvency II.17 This will help enable a dynamic and diverse banking sector while maintaining firms’ resilience. For example, as part of that we will look to simplify the way we approach certain rules such as the approach to capital.
It is worth reminding that this initiative has led to a considerable drop in charges for cross-border transfers in the euro under correspondent banking, although for the time being the drop is of benefit mainly to banks, and hardly at all to clients. SEPA consists of the following elements: the single currency, a single set of euro payment instruments – credit transfers, direct debits and card payments, efficient processing infrastructures for euro payments, common technical standards, common business practices, a harmonised legal basis, and ongoing development of new customer-oriented services. I am sure than many of you are wondering "Why SEPA?". To answer this question we have to think like Europeans. Currently, the euro area economy is unable to fully exploit all the benefits of the Monetary Union. Customers face difficulties when making euro retail payments to other euro area countries, as these payments often turn out to be more time-consuming. As long as this is the case, the euro cannot be viewed as a fully implemented single currency. Despite the introduction of the euro in 1999 and the development of TARGET, the common largevalue payment system for euro, low-value electronic payments (i.e. retail payments) continue to be processed differently throughout the euro area. Overall, the number and variety of payment instruments, standards and processing infrastructures for retail payments has not really changed since the introduction of the euro.

Institutions that are able to embrace new technological developments and offer customers additional services will benefit from this new integrated market. In a competitive and integrated economy, a forward-looking view is required so that retail payments have a level of safety and efficiency that is comparable with the best national systems in place today. Undoubtedly, this approach will considerably influence the balance of power on the European market of payment services, as well as on our local market. The proposed mechanisms will favour consolidation processes in the sector of payment infrastructure providers, and possibly also in the banking sector itself. SEPA stands for (S)Speed, (E)Efficiency, (P)Positiveness and (A)Automatisation. It is important that the SEPA project is not viewed just as a “one-shot operation”, but rather as a continually evolving project that fosters European integration, seeking to improve all aspects of the euro area retail payments market on an ongoing basis. The SEPA will also make a notable contribution to the socalled Lisbon Agenda, which aims at fostering competitiveness and ensuring the continuous development of the European economy. The National Bank of Poland, as a forward-looking and acting institution, which supports development of the Polish banking sector, has been participating, for two years now, in the TARGET system, and is now proceeding with intensive preparation for the transition  BIS Review 29/2007  1  to the new platform – TARGET2.
Chart 8: MPC wage forecasts Total pay growth, per cent  5 4 3 2 1  February 2014  February 2015  February 2016  February 2017  February 2018  May 2018  0 -1 2012  2013  2014  2015  2016  2017  2018  Why have wages been so persistently weak? One reason is weak productivity growth. How much companies are prepared to pay their workers depends ultimately on how much those workers are able to produce. Weaker productivity has meant weaker wage growth. But wages were weak even relative to productivity. Statistical models that take account of the effects of slack and productivity struggled to explain the full extent of the weakness in wages. “Missing wage inflation” and the question of whether the Phillips curve was dead became a hot topic among economists. As with the productivity puzzle itself, there are a wide range of candidate explanations for this “wage puzzle”. I won’t go through the full list now. But I do just want to mention three that I find relevant. One candidate explanation is that there may be lags between unemployment falling and wage growth starting to pick up. That might be the case for instance if wage expectations take time to adjust to a tighter labour market – any lasting effect of the post-crisis downward nominal wage rigidity should have worn off, but could re-emerge if 2% wage inflation has become accepted as more typical following the financial crisis.

10  In addition, demand has been helped by an unexpectedly strong global recovery, which  will have boosted trade and investment, as well as by more supportive financial conditions, particularly 10  The MPC’s policy package in August 2016 – which consisted of a cut in Bank Rate, the introduction of the Term Funding Scheme to ensure that that cut was passed through, and an additional £ of asset purchases including corporate bonds – will have provided stimulus, as will the mild loosening in the fiscal stance in the subsequent Budget. In addition, the FPC amended the leverage ratio framework for UK banks by excluding central bank reserves, cut the counter-cyclical capital buffer to zero, and emphasised that banks’ liquidity reserves are usable, while the PRA Board decided to use regulatory flexibilities to smooth insurers’ transition to new regulatory standards in a very low interest rate environment. 8  All speeches are available online at www.bankofengland.co.uk/speeches  8  intense competition in mortgage markets, which will have helped offset some of the effects on consumption of the fall in income. 11  Finally, the third channel through which Brexit is affecting the UK economy is through its effect on the exchange rate. I have already discussed its effects of the recent depreciation on demand, where it has contributed to a rotation away from consumption and towards net trade. Equally important for the MPC has been its effect on inflation.
Variation margin flows -which simply reflect losses and gains in the underlying markets were in many cases much larger than the increases in initial margin controlled by CCPs’ own models.   We need to go more granular than quarterly data to understand the speed of margin increases over that crucial period in mid-March.   We also need to understand how much of the headline increase in initial margin resulted from members simply trading more. Our analysis suggests this varied widely across UK CCPs and over the crisis period. We already know that changing portfolios don’t tell the whole story. For almost all services, volume accounted for well less than half of CCP initial margin increases over March as a whole, with CCP models a much more important driver.13    Finally, to really get into the walls of the dash for cash, we need to look beyond service-level aggregates to understand if particular groups of firms saw their margins increase more than across the service as a whole. 13  Bank of England calculations. 9  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  9  But even as we delve into margin data, we need to keep in mind that the increase in margin is only one piece of the puzzle.

BIS Review 103/2009  1  Figure 1: Annual CPI Inflation and Target Path 14 12 10 8 6 4 2  Annual CPI Inflation Yıllık Enflasyon  Outer Band Aralığı Belirsizlik  II*Index*  Target Path Hedefle Uyumlu Patika  1109  0909  0709  0509  0309  0109  1108  0908  0708  0508  0308  0108  1107  0907  0707  0507  0307  0107  0  * Temporary tax adjustments corrected I Index. Source: TURKSTAT, CBT. In addition to the sharp contraction in aggregate demand; the fall in commodity prices and temporary tax cuts within the scope of fiscal measures were also instrumental in the sharperthan-expected drop in inflation. The fall in commodity prices specifically led to a more-thananticipated decline in annual processed food and energy inflation. The fall in annual inflation has reached approximately 19 percentage points for processed food prices and 25 percentage points for energy prices since October 2008, when the effects of the turmoil started to prevail (Figure 2 and 3). Figure 2: Food Prices  Figure 3: Energy and Processed Food Prices  (Annual Percentage Change)  (Annual Percentage Change) 35  27  Processed Food  24  22.35  Unprocessed Food  21  Energy  30  Processed Food  25  18 15  20  12 9  15  6  10  3 5  0 -3  Source: TURKSTAT, CBT.