samchain/econo-pairs-v1 huggingface dataset:
The main changes consisted in reducing banking credit risk associated with deposits in commercial banks maturing in or before one year. The reference composition for banking risk was reduced from 37% to 20%, while for sovereign risk it was raised from 63% to 80%. Furthermore, during this year the minimum risk rate for banks to be eligible was changed from A- to A, also restricting investments in banking institutions rated A and A+ to a maximum of 5% of the investment portfolio. In line with the new bank deposit policy, deposits maturing in the months of October and November will not be renewed, in order to comply with the newly defined ceilings before December. Regarding asset breakdown by maturity, 60% of resources in the internally managed portfolio are invested in short-term instruments, with average maturity of three months, and the remaining 40% is invested in long-term securities (mainly sovereign bonds) with a duration of 30 months. Thus, average duration for the overall portfolio is 13.9 months. The reference currency composition remains 59% in US dollars and 41% in euros. Despite turbulences in international financial markets, and considering that the biggest fraction of resources is invested in fixed-income sovereign instruments, the annualized return obtained from managing the Central Bank's international reserves in the first half of 2008 was 3.47% measured in foreign currency. 1 The differential return obtained with respect to the benchmark structure was 0.15%.

1 Today, many advanced countries and emerging economies have adopted a flexible exchange rate regime. 2 By this I understand a regime in which the exchange rate is basically left to fluctuate in response to market pressures. True, the central bank can, and in some circumstances will intervene to mitigate extreme exchange rate fluctuations. But the main objective of the central bank is domestic price stability, not exchange rate stabilisation. This is the system that Switzerland has chosen to pursue. It has served us well. Exchange rate flexibility allows national budgetary and monetary polices to diverge from one country to another. It confers monetary authorities more room to adapt policies to domestic economic realities. A different strategy has been followed by many European countries. Abandoning their domestic currencies, these countries have fully insulated themselves from intra-zone exchange rate fluctuations by adopting the hardest possible peg, which is a monetary union. Monetary policy is the responsibility of a supranational institution, the ECB. Towards the rest of the world, the euro is allowed to float, and the necessary adjustment of prices in member countries, rather than taking place via movements in the exchange rates, is expected to occur by means of changes in wages and product prices in an increasingly integrated economic area. Thus the Bretton Woods system has been replaced by an order of sorts, in which there are two extreme choices which increasingly dominate national strategies. At the one extreme, countries have opted to let their currencies float and be determined by market forces.
And it is not comprehensive: it won’t protect pedestrians, and pile-ups will still block important highways to traffic. In macroprudential policy as in road safety: an ounce of prevention can be worth a pound of cure. 34  Crash resilience must be accompanied with standards of driving behaviour that prevent accidents in the first place – with speed limits and a Highway Code. We have applied that principle in the mortgage market. Alongside capitalising banks to withstand a deep downturn in the housing market, we have put guards in place against looser lending standards:  A limit on mortgage lending at high loan-to-income ratios;  And a requirement to test that borrowers can still afford their loan repayments if interest rates rise. 35  These measures guard against lending standards that make the economy more risky; that make what could happen even worse. Debt overhangs – induced by looser lending standards – drag the economy down when corrected. And before they are, high levels of debt make consumer spending more susceptible to the unexpected. 36  So they guard against lenders being exposed to both the direct risk of riskier individual loans, and the indirect risk of a more fragile economy. This multiplicity of effects means there is uncertainty about precisely how much bank capital would be needed to truly ensure bank resilience as underwriting standards loosen. 37  A diversified policy strategy –  speed limits and air bags – is more robust to that uncertainty.

Further expansion of renminbi business into trade settlement and related financial services would bring convenience for traders and enterprises on both sides. More importantly, it will help to lay the ground work for the use of renminbi for trade related activities through a formal and supervised channel. The demand for a wider use of renminbi outside the Mainland is likely to increase further as the Mainland economy grows. In addition, the recent global financial turmoil has highlighted the need for a more diversified international monetary system, including more currency choices for international transactions. In time renminbi could be one of the obvious choices for many countries. In this process, using the well-established institutional framework of renminbi business in Hong Kong for pilot schemes will enable better monitoring and assessment of the flows, and mitigate the potential risks particularly on the domestic monetary policy management. One important pre-requisite for designing appropriate policies to facilitate the Mainland's capital account opening is a good understanding of the economy and financial system. Here at the HKMA, we have closely monitored, as well as undertaken in-depth analytical work on the Mainland economic, monetary and financial developments. Our Half-Yearly Financial Stability Report has a section devoted to the Mainland economy, and research reports on the Mainland are published as working papers available on our website. We also started in 2006 a China Economic Issues series dedicated to detailed analysis of economic and financial market issues in the Mainland.
So if the incentives to invest in new physical capital have been depressed since the Great Recession, by things like higher rise premia or problems in the banking system, perhaps the same applies to investment in human capital. It’s also possible the relative supply of low-skilled labour has risen. We know, for example, that migration flows have risen significantly over the past fifteen years, and that immigrants are more likely to take low-skilled jobs than UK-born workers (see, for example, the Report of the Migration Advisory Committee (2014)). So if easier immigration has made the overall supply of labour more responsive to economic conditions in this country – if, as if often argued, it’s flattened the Phillips curve (Bean (2006), Bentolila (2008)) – it’s probably done so to a greater extent for low-skilled than high-skilled workers. So when the UK economy grows faster than its neighbours, as has been the case over the past couple of years, you’d expect to see greater inward migration and a disproportionate rise in the supply of low-skilled labour in particular. I came across a possible example of this on a recent Agency visit. The head of a small business told me his firm had been looking to hire an accountant. They’d originally wanted someone very experienced who might in time fill the shoes of the finance director. However, they soon realised that the only way they could get someone like that was to bid them from an existing job within the UK – apparently a costly and lengthy process.

The immediate consequence of such an increase in demand relative to output is a current account deficit and inflationary pressures. This is not a new point. It was prominent in the post-mortem examination of the UK boom and subsequent bust in the late 1980s. Nigel Lawson wrote in his memoirs “in the mid to late 1980s, there was a substantial upward revision of the permanent element [of income], particularly if we include capital gains, notably from home ownership. In part this was wholly justified, given the undoubted supply-side improvements that had occurred. But it clearly went too far”. (Lawson, N, The View from No 11, Bantam Press, 1992, p 632.) And there is the rub. Provided the increase in productivity materialises, families and firms will be able to repay the debts incurred to finance the increase in spending. The levels of spending and output will converge, and the current account deficit will steadily subside. But if optimism has run ahead of reality, then, at some point an awkward downward adjustment to spending must take place. In such circumstances, the adjustment to quantities - both spending and the trade deficit - are likely to follow sharp adjustments in asset prices - both stock markets and exchange rates - when expectations come back into line with the underlying increase in productivity. My final question was what does this mean for the economic see-saw in the UK? At present domestic demand is up and external demand is down.
Øystein Olsen: The conduct of monetary policy Introductory statement by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), at the hearing before the Standing Committee on Finance and Economic Affairs of the Storting (Norwegian parliament), Oslo, 6 May 2021. * * *  Introduction The year 2020 was a peculiar and dramatic one. The Covid-19 pandemic abruptly changed the way we were accustomed to living our lives. It has been particularly difficult for those directly affected by the disease and for those furloughed or made redundant. Since the Covid-19 outbreak, the Storting has approved extensive fiscal policy measures to mitigate the economic fallout of the pandemic and measures to contain it. With a view to dampening the downturn, Norges Bank reduced the policy rate in spring 2020 from 1.5 to zero percent. In addition, we took measures to improve liquidity in the money and foreign exchange markets. The pandemic is not over, but vaccination is well underway, and we will likely be able to start living more normally in a few months. The economy and economic policy will then also gradually normalise. A global pandemic The Covid-19 outbreak and the measures to contain it led to a severe downturn in the global economy. In many countries, the decline in GDP in 2020 Q2 was the steepest ever recorded. The outbreak also led to considerable volatility in global financial markets. Equity indexes fell, and bond and money market risk premiums rose.

In the first months of 2020, CPI inflation slowed substantially, reflecting a fall in electricity prices. The rise in the CPI adjusted for tax changes and excluding energy products (CPI-ATE) moved up through spring and summer and remained above the inflation target, primarily owing to higher imported goods inflation. Higher imported inflation reflects the krone depreciation in early 2020. Annual CPI inflation was 1.3 percent in 2020, while CPI-ATE inflation was 3 percent. Towards the end of 2020, higher electricity prices pushed up CPI inflation. In March 2021, the 12-month rise in the CPI was 3.1 percent, while underlying inflation was somewhat lower. Surveys indicate that inflation expectations are firmly anchored around the 2 percent inflation target. In the immediate aftermath of the Covid-19 outbreak in Norway, housing market turnover fell and house prices edged down. But through spring 2020, housing market activity picked up and prices rose. In April 2021, house prices were more than 12 percent higher than at the same time in 2020. Growth in household credit increased slightly through 2020, but is still lower than in the 2/4  BIS central bankers' speeches  years prior to the pandemic. Economic policy Let me now say a few words about the economic policy conducted since Covid-19 hit Norway. Fiscal policy has taken the lead and played a decisive role in limiting the adverse economic impact of the pandemic and the measures to contain it.
If the forecasts for inflation and the real economy are assessed to show a desirable development, market expectations will provide a reasonable forecast for coming monetary policy decisions. However, it is important to remember that new data are being received all the time, which must be taken into account in our monetary policy. The fact that implied forward rates are being used in our forecasting work should not be regarded as a commitment regarding future monetary policy. There is considerable uncertainty over future macroeconomic developments, and this means that market expectations of the future repo rate path may often be incorrect. This is also illustrated by the considerable uncertainty intervals around the assumed interest rate path (see Figure 4). The current monetary policy situation The principles that I have just discussed apply primarily when we produce and publish complete forecasts in connection with Inflation Reports. At the intervening meetings, we start from the forecast that applied in the previous Inflation Report and study how the information received since then affects both the interest rate assumption and the forecasts. Our next monetary policy meeting on 27 April will involve making this kind of intermediate, more qualitative assessment. The implied forward rates on which the forecast in the Inflation Report published on 23 February was based reflected a 15-day average as per 9 February. On 16 February, an unexpectedly low CPI outcome was published for January.

The strong level of economic activity and the inflation forecast indicate, however, that it will again be necessary to gradually shift monetary policy onto a less expansionary path to ensure that inflation remains close to target. 6  BIS Review 33/2006
These are only some of the many dynamics that we are experiencing at a rapid pace today. What these underscores to all of us, is the importance of continuous learning so we can continue to adapt and evolve. I am sure the knowledge you have learnt in your respective courses will provide you a strong foundation as financial planners professionals. However, to keep pace with the changing environment you must have a lifelong learning mindset. It is important to keep abreast with the latest economic developments and continuously update your information set so that you are able to provide the most optimal advice to your clients. Apart from providing information and filling the gaps in financial knowledge, financial planners play the important role of defusing biases that lead to common financial mistakes among consumers and help mediate in joint decision-making. This is especially true for vulnerable consumers who largely lack capability to fully understand and comprehend the risk-return assessments, not only of complex financial products and services but sometimes even those basic ones. One financial decision can have far-reaching consequences on their current and future livelihood. It is therefore crucial not to downplay the importance of professional advice in improving the quality of life and the wellbeing of individuals and households.

Norhana Endut: Keynote address at the Malaysian Financial Planning Council Keynote address by Ms Norhana Endut, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Malaysian Financial Planning Council, Kuala Lumpur, 5 November 2022. *** It is my great pleasure to be here today at the 9th MFPC Graduation Ceremony. First of all, I wish to congratulate all successful graduates from the Class of 2019 to 2022. I am sure many of you have been waiting for this ceremony as it was postponed due to the pandemic since 2020. The critical role of financial planning is often overlooked. But one lesson that we can take from the recent pandemic and economic crisis is that a sound financial management and planning is critical in weathering the storm. It is your role now as Registered Financial Planners and Shariah Registered Financial Planners to take the stage in helping Malaysians manage and rebuild their financial standing post-pandemic and be prepared for the future. The Malaysian economy has recorded a strong growth momentum following the reopening of all the sectors in the economy this year. Key to this is the improvements in labour market, in particular, income growth. While there are reasons to be optimistic about the growth momentum, next year presents a more challenging outlook to the global economy with rising global inflationary pressures, signs of moderation in growth in several major economies, ongoing geopolitical conflicts and highly volatile financial markets. Malaysia is certainly not insulated from some of these headwinds.
We believe that the search for excess return has had a strong disciplinary effect on the organisation with a view to controlling both market and operational risk, and to ensure that all inside and outside suppliers do exactly what they are paid to do. 7. We have tried to build an organisation where the focus is on investment returns. In order to keep that focus we have tried to implement three basic principles: •  Accountability for decisions is clearly defined  •  There is transparency, nothing can be hidden away  •  The professional standards required for employees are very high  8. For investment decisions these principles mean that every decision is made by one individual and that the remuneration paid to him or her depends on the profitability of the decisions. We have defined a large number of independent profit centers, each with a clearly defined mandate. A compliance function checks that no one operates outside the mandate. For external managers we apply the same principle: Hiring an external manager is an investment decision, and someone inside NBIM is held responsible for it. 9. The salary system is different from the rest of the central bank. The main objectives are to focus attention on performance, and to give distinct signals to people who do not perform according to expectations. Salaries have two components, a basic salary and a performance-based component.

78, No 2, Papers and Proceedings of the One-Hundredth Annual Meeting of the American Economic Association, 435–439. Bernanke, B. and M. Gertler (1995), “Inside the Black Box: The Credit Channel of Monetary Policy Transmission”, Journal of Economic Perspectives 9 (Fall), 27–48. Blattner, T.S. and M. Joyce (2016), “Net debt supply shocks in the euro area and the implications for QE”, ECB Working Paper No 1957. Blattner, T.S. and J. Swarbrick (2017), “Monetary policy and cross-border interbank market fragmentation: lessons from the crisis”, mimeo. Campa, J.M. and L.S Goldberg (2008), “Pass-Through of Exchange Rates to Consumption Prices: What Has Changed and Why?”, in Ito, T. and Rose, A.K. (eds. ), International Financial Issues in the Pacific Rim: Global Imbalances, Financial Liberalization, and Exchange Rate Policy, University of Chicago Press, Chicago, 2008, 139–176. Cœuré, B. (2017), “Scars or scratches? Hysteresis in the euro area”, speech at the International Center for Monetary and Banking Studies, Geneva, 19 May. Comunale, M. and D. Kunovac (2017), “Exchange rate pass-through in the euro area”, ECB Working Paper No 2003. Corsetti, G. and L. Dedola (2005), “A macroeconomic model of international price discrimination”, Journal of International Economics, Vol. 67, Issue 1, 129–155. Di Mauro, F., R. Rüffer, and I. Bunda (2008), “The changing role of the exchange rate in a globalised economy”, ECB Occasional Paper No 94. Dornbusch, R. (1987), “Exchange Rates and Prices”, American Economic Review, Vol. 77, No 1, 93–106. Draghi, M. (2015), “Global and domestic inflation”, speech at the Economic Club of New York, 4 December.
7  8  http://www.britac.ac.uk/templates/asset-relay.cfm?frmAssetFileID=8285  BIS central bankers’ speeches  Figure 1: Global financial assets $ trillions Corporate bonds Financial companies' bonds Government bonds Nominal world GDP  120 100 80 60 40 20 0  2000  2005  2006  2007  2008  2009  2010  2011  2012  2013  Figure 2: Market value of FICC derivatives contracts  BIS central bankers’ speeches  9  Figure 3: The Review Framework  10  BIS central bankers’ speeches

In parallel, it will continue to regularly reassess the need for an adjustment of the CCyB. Page 3/3
In summary, the baseline scenario considers a reduced external impulse associated to slower world growth and somewhat tightened external financing conditions. It also considers that new stress episodes will occur in external financial markets (table 2). As has been observed in recent months, these events can be triggered by negative news coming from the fiscal accounts, economic growth and the banking situation in the Eurozone. The feeble external outlook contrasts with the performance of Chile’s domestic demand and output in the last few quarters. In the first quarter of this year, GDP grew 5.6 percent, exceeding forecasts in the March Monetary Policy Report. In quarter-on-quarter terms, it expanded at trend rates, leading the Board to estimate that output gaps are still narrow. This view is based on the fact that, although the labor market continues to show signs of being tight, these signs have not intensified: employment has reduced its rate of expansion, the unemployment rate has settled at low levels and y-o-y growth in wages, while still strong, has moderated lately. In the first quarter, domestic demand grew somewhat less than output, but private consumption and investment are still robust. Inflation has behaved favorably in the past few months, below March’s forecasts. This, combined with oil prices falling in external markets, has reduced the risks that were envisioned then for its short-term trajectory.

Encouraging banks to take risks that result in large dividend and remuneration payouts when things go well, and losses for taxpayers when they don’t, distorts the allocation of resources and management of risk. That is what economists mean by “moral hazard”. The massive support extended to the banking sector around the world, while necessary to avert economic disaster, has created possibly the biggest moral hazard in history. The “too important to fail” problem is too important to ignore. There are only two ways in which the problem can – in logic – be solved. One is to accept that some institutions are “too important to fail” and try to ensure that the probability of those institutions failing, and hence of the need for taxpayer support, is extremely low. The other is to find a way that institutions can fail without imposing unacceptable costs on the rest of society. Any solution must fall into one of those two categories. What does this mean in practice? Consider the first approach. To reduce the likelihood of failure, regulators can impose capital requirements on a wide range of financial institutions related to the risks they are taking. This is the current approach underpinned by the Basel regime. In essence, it makes banks build a buffer against adverse events. It has attractions but also problems. First, capital requirements reduce, but not eliminate, the need for taxpayers to provide catastrophe insurance.