samchain/econo-pairs-v1 huggingface dataset:
This decline in interest rates, which began in October 1995, corresponds to a considerable increase in confidence in the French franc and in the creditworthiness of France in connection with the policies set forth by the President of the Republic and the Government for the reduction of government deficits, the stability of the franc and Monetary Union in 1999. In 1996, the Banque de France's repurchase tender rate was cut from 4.45% to 3.2% today. It is one of the lowest rates in the G7 countries in both nominal and real terms. The five-to-ten-day repo rate fell from 5.85% to 4.75%. Short-term market rates eased substantially, with three-month rates shedding almost 400 basis points since October 1995 and currently standing at around 3.4%. The easing in short-term rates went hand in hand with a significant decline in long-term rates, which are the reference for a large share of lending to the private sector. Ten-year rates have fallen by more than 100 basis points since October 1995. Thanks to the credibility of every component of its economic policy, France today enjoys the lowest medium- and long-term market rates in the European Union, and the third lowest rates in the world, bettered only by Japan and Switzerland. This brings me to the monetary policy decisions for 1997. 1. The ultimate goal of monetary policy is to ensure price stability, as required by legislation.

M. Trichet presents the monetary policy guidelines of the Bank of France for 1997 BANK OF FRANCE, PRESS RELEASE, 17/12/96. 1. The ultimate goal of monetary policy is to ensure price stability, as required by legislation. The objective of the Monetary Policy Council is that the increase in prices, as measured by the consumer price index, should not exceed 2% in 1997, as in the medium term. 2. To meet this ultimate goal, the Banque de France uses two intermediate objectives, one of which is external and the other internal: -  The objective of a stable external value of the currency: as it has been for ten years, the stability of the franc will be maintained against the group of the most credible currencies in the European Exchange Rate Mechanism. -  An intermediate internal growth target for the money supply as assessed by the development of the narrow and broad monetary aggregates: in 1997, the money supply should be able to show a medium-term growth trend of 5%. This figure is consistent with price inflation of no more than 2% and non-inflationary real GDP growth of about 2.5%, which could be exceeded, in view of the potential for growth to catch up in the medium term. The Monetary Policy Council has decided to simultaneously monitor the main narrow and broad money aggregates in order to obtain a concise estimate of all monetary developments. 3. Total domestic debt is an important indicator.
6  BIS central bankers’ speeches  Figure 2 Government bond yields, 10-year maturity Per cent 8  8 Italy  7  UK  7  6  6  5  5  4  4  3  3  2  2  1  1  0  0 08  09  10  11  Source: Reuters EcoWin. This situation is very similar to the one experienced by Argentina, for instance, when they had a “currency board” that firmly tied their domestic currency to the US dollar. In the event of a crisis there has been no central bank that could create currency – in other countries with similar problems the physical currency has run out and the only solution has been to fly in dollar bills from the Federal Reserve. Now, of course, the fundamental problem is that Italy, like Argentina, has lost competitiveness, had a deficit on its current account and built up debt until the market has gradually lost confidence and demanded higher and higher interest rates. Competiveness then needs to be restored through some form of internal devaluation. This is unavoidable, but it takes a long time and does not help the acute liquidity crisis. The situation is different in the United Kingdom. If investors are concerned over the British credit worthiness they will sell their government bonds as in the example above.

Ravi Menon: Bending the curve of nature loss Keynote remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore and Chair of the Network for Greening the Financial System, at the COP15 Finance and Biodiversity Day, Montreal, 14 December 2022. *** Ladies and gentlemen, I am honoured and delighted to be able to address you on this important occasion of COP15 of the Convention on Biological Diversity. The world is getting painfully acquainted with the impending climate crisis. There are promising efforts at mitigating this crisis, though far from what is necessary to avert disaster. But the planet faces a second crisis –– nature and biodiversity loss. The nature crisis is no less threatening than the climate crisis. But it is much less appreciated and much less is being done to mitigate it. We assiduously measure and seek to grow our physical and human capital. We speak of the importance of social and political capital. But we fail to appreciate let alone measure natural capital – the world's stock of natural resources, comprising soils, air, water, plants, animals, and minerals. These are assets that sustain our food supplies, underpin our economy and society, and enable human life. We are collectively depleting our natural capital and degrading the ecosystems that support it. We are consuming more resources than the Earth can produce in a year. At current rates of consumption, we use up 1.6 Earths' worth of resources. By 2050, our annual resource use will rise to 2 Earths' worth.
12  (a) Survey-based measures (apart from GfK NOP) have been scaled to have the same mean as CPI inflation over a comparable period. (b) The questions ask about expected changes in prices over the next twelve months, but do not reference a specific price index. All measures are based on the median estimated price change, except GfK NOP which captures the weighted net balance expecting prices to increase.

Given these realities, we must ask ourselves what has changed to alter the way foreign exchange rates fluctuate in the global marketplace? It is obvious that this is not a case of declining volume. The foreign exchange survey most recently published by the Bank for International Settlements in 1996 shows that daily volume in foreign exchange grew by almost 50 percent between 1992 and 1995, and we have no reason to think that anything has changed since then to alter this trend. What has changed, however, is the new, higher level of transparency that has been introduced in recent years into the foreign exchange market. When I speak of transparency, I am actually referring to a combination of several factors. Broadly speaking, I define transparency in this market as the degree to which its participants have equal and simultaneous access to the inputs necessary to price assets and their associated risk accurately. By reducing guesswork and uncertainty, transparency helps to smooth price adjustments and eliminate some of the shocks that can result when market participants discover they have “priced in” assumptions that are inaccurate. In my view, the current move toward greater market transparency is reflected in four broad categories: policy, information, pricing, and risk management. The increased transparency of central bank policy -- which is a product of deliberate steps taken by policymakers -- is an important aspect of the move toward more transparent overall market conditions that we’ve been observing.
What is more important that the core purpose of banking remains intact – that is to provide reliable passage for resources to move to productive use, including under the most challenging conditions. I thought I would close these remarks by quoting Machiavelli ‘There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things’. Ladies and gentlemen, the future is about a new order of things. Thank you. 6  BIS central bankers’ speeches

In particular, ensuring the resilience of individual institutions is not enough to guarantee the stability of the system as a whole: a macroprudential framework for non-bank financial institutions is necessary for identifying and addressing risks at the system level.5  The links between the capital markets union and the banking union Revitalising the CMU agenda will also bring benefits for the completion of the banking union, as banks and markets complement each other in financing the real economy.6 We need to ensure that this reinforcing loop is strengthened over the coming years. I would like to highlight three key priorities for the banking union. First, it is important to operationalise a credible common backstop to the Single Resolution Fund to provide additional confidence in the bank resolution framework. The policy work on this backstop is at a very advanced stage. Second, in order to close potential liquidity gaps that may still hinder efficient resolution, the outstanding issue of liquidity in resolution needs to be addressed. Progress is needed in the discussions on potential solutions in order to place the banking union on a par with other major jurisdictions, like the United States and the United Kingdom. Third, it is crucial to establish a European deposit insurance scheme (or EDIS) to provide uniform protection to depositors within the banking union, regardless of their bank’s location, and to help reduce the sovereign-bank nexus. More efforts are still needed in this regard.
This can be how monetary policy should be adjusted to the rate of the recovery from the financial crisis, how global market prices and exchange rates may affect monetary policy, the monetary policy consequences of alternative outcomes in central wage agreements, what will happen if the sovereign debt crisis in Europe worsens, and so on. We should therefore continue to make forecasts and draw up alternative scenarios as a basis for our monetary policy. Report the uncertainty involved in comparisons of repo-rate paths We should report the uncertainty involved in the comparisons of forecasts for economic developments with different repo-rate paths that we regularly describe in our Monetary Policy Reports. Calculations of alternative scenarios are often made using Ramses, for practical reasons. My personal opinion is that the calculated effects of changes in the repo-rate path are unreasonably large. If this is the case, we would need to adjust the repo rate more so that monetary policy is well balanced. However, one can in theory show that the greater the uncertainty prevailing as to the effects of the interest rate on inflation, the less monetary policy should react when inflation deviates from the target. Within the framework of Ramses it is possible to place in order of preference different monetary-policy alternatives in figures, based on their average squared deviations from the targets for inflation and resource utilisation during the forecast period (see Figure 13).24 These figures, unlike the fan charts shown earlier, do not report the uncertainty.

I think that monetary policy can best be understood in terms of the yield curve. The Riksbank implements its monetary policy by determining the repo rate, the interest rate the banks face when depositing money in accounts with the Riksbank overnight, or when borrowing money overnight. Thus, the Riksbank determines the short end of the yield curve. But the market determines the long end. Everything in between is a combination of the Riksbank’s influence and market forces. The long end is affected by many factors, not merely expectations of the repo rate. It may, as recently, be a question of a flight to safety, which has pushed up, for instance, Greek interest rates and pushed down American, German and Swedish interest rates. The Swedish yield curve is currently much lower than is consistent with the Riksbank’s repo-rate path (see Figure 14). Moreover, the banks’ lending rates are affected by other factors than the repo rate, which has led to increased spreads between the repo rate and the banks’ lending rates. This means that what is known as the transmission mechanism – how the Riksbank’s repo rate affects economic developments – has probably changed. But it is difficult to say how it has changed. On the whole, we should develop the financial part of our macroeconomic models to give greater consideration to the financial markets.
This is available from 1997 and projected backwards using aggregate M4 growth before then. Chart 2: Broad money growth slowed significantly after the financial crisis, inflation still close to 2%  Page 5  Sources: ONS, Bank of England and Bank calculations. None of this means that at the margin (holding everything else fixed) QE doesn’t add to broad money or ultimately to the level of prices. Nor does it imply that the quantity measures are never useful or important. It would be as wrong categorically to ignore monetary aggregates as it would to assume that they’re the only thing you need to consider. As far as the theory’s concerned, people can’t always borrow and lend freely. In the presence of these and other “financial frictions” the availability of liquid assets can matter for spending, independently of interest rates. Besides, interest rates themselves matter only relative to some “neutral” rate that cannot be observed directly. So, in practice, monetary policymakers should always pay attention to other – indeed any – indicators of incipient inflationary pressure. And although changes in banks’ deposits have often been driven by shifts in demand there are times when they look more supply-led. Arguably, the surge in broad money in 2020 looks like one such episode. Supported by the furlough scheme, and because their spending was held back by the lockdowns, households accumulated significant deposits during the pandemic (Chart 3). While not literally a “helicopter drop” this came quite close to an exogenous increase in the stock of household (and aggregate) money.

So even the conventional IS curve says the result would be stronger demand. But let’s  Page 14  suppose the “drop” is financed by a tax on other, non-monetary assets, leaving household wealth in aggregate (the “W” term) unchanged. Because people’s financial positions differ, partly by age – older people have positive net financial wealth, those who’ve just bought a house have negative “W” – this pair of transactions redistributes resources, away from long-term savers and towards borrowers. And if the latter group is “credit constrained” – if they’d like to spend and borrow more at the prevailing level of interest rates but, perhaps for want of collateral, cannot do so – then this transfer should boost demand. Net payers of the tax will cut back on their spending by less than the increase in demand from beneficiaries of the policy. Even when offset by an equal and opposite tax, and even for given interest rates, this addition of liquid assets would add to demand and inflation. To me this sounds perfectly plausible. Indeed the MPC has often argued that these constraints can matter for the transmission of more standard changes in interest rates. If borrowers are (on average) more credit constrained than savers, and therefore more sensitive to changes in cash flow, equal declines in debt interest costs on the one hand, and deposit receipts on the other, will on balance be expansionary. Nor is this the only way in which a “helicopter drop” might matter.
For the past ten years, there is little doubt that ECB monetary policy under Mario Draghi’s Presidency has made a decisive contribution not only to safeguarding the euro in 2012, but also to the significant recovery of the euro area since 2013. Over this period, more than 10 million jobs have been created. Our unconventional measures are estimated to add almost 2 percentage points of growth and of inflation between 2016 and 2020. Since I am talking to an audience of researchers I should of course emphasise that such numbers are subject to uncertainty. However, the most recent monetary policy decisions of the Governing Council have given rise to many comments. My rule of conduct has been to not add mine in the heat of the moment. Two weeks later, let me only say that I supported many elements of the package, including the strengthening of the state-dependent forward guidance and the welcome introduction of a tiering system, similar to those in all other jurisdictions with negative interest rates. But I was not in favour of the resumption of net asset purchases at this time, because I thought that further purchases are unnecessary right now, given  Page 3 sur 11 the very low levels of both long-term interest rates and term premia, which have continued to decrease significantly since we stopped net purchases last December.

And as a result the spike in gilt yields reversed – a tightening in monetary and financial conditions was averted – and yields continued to decline as the purchase programme got under way (Figure 6). Reflecting the improvement in functioning, the MPC concluded in in June that purchases can now be conducted at a slower pace. The rate of APF gilt purchases has therefore been reduced first to £ in June and then £ in August. At that pace we expect the current programme of purchases to be completed at around the turn of the year. Where does that leave the policy toolbox today? Bank Rate stands at 0.1%, the lowest it has ever been. The Bank’s balance sheet has increased in size from 27% of pre-Covid GDP, already very large by historical standards, to nearly 40%; and still growing (Figure 7). And market interest rates remain historically low at all horizons. 3  Corporate bond purchases take place on a separate schedule, designed to reflect the more complex characteristics of the UK corporate bond market. 4 This was just one of a wide range of interventions to support the UK financial system that the Bank carried out over this period. Andrew Hauser’s speech “Seven moments in spring”, available at https://www.bankofengland.co.uk/-/media/boe/files/speech/2020/sevenmoments-in-spring-covid-19-speech-by-andrew-hauser.pdf, gives a comprehensive, first-hand account of developments.
As can be seen, the regulatory reforms are far-reaching and it is worth anticipating their impact as, although Spanish banks have largely adapted to the regulatory changes, application of some reforms is still outstanding. Although the total capital ratio has risen by 1.7 percentage points over the last four years (reaching 15.1% in June 2018, exceeding the regulatory minimum), and the leverage and liquidity ratios are slightly above their European averages, when we focus on the regulatory capital with greatest loss-absorbing capacity, i.e. ordinary capital or CET1, the ratio has risen by just 0.3 percentage points. In this regard, the Banco de España’s in-house stress tests to assess prospectively the level of solvency of the Spanish banking system revealed that institutions have a high degree of resilience to possible adverse macroeconomic scenarios. Nevertheless, in view of the dispersion of results across banks and the possibility that the risks which materialise exceed those envisaged in the adverse scenario, banks would be advised to strengthen their capital insofar as the recovery in profits allows. Indeed, according to June 2018 data from the European Banking Authority, Spanish institutions’ CET1 and Tier 1 solvency ratios are some of the lowest among the euro area’s banking systems.

More recently, the bursting of the technology and telecommunications bubbles, the wave of scandals that hit corporate America and the uncertainties in the US economy have led to a general decline in stock markets worldwide. This in turn provided fresh impetus for hedge funds as investors searched 3 for absolute returns. As one commentator put it, “Where else are they going to put their money?” . And the maths is compelling. From 1987 to 2001, the Hennessee Hedge Fund Index posted annualised returns of 18%, higher than the S&P’s 13.5%. 1  Brooks, C. and H.M. Kat, 2001, “The Statistical Properties of Hedge Fund Index Returns and Their Implications for Investors”. 8th Annual Hennessee Hedge Fund Manager Survey, 2002. 2  Financial Stability Forum, 11 Mar 2002, “The FSF Recommendations and Concerns Raised by Highly Leveraged Institutions: An Assessment”. 3  F-Times News, 10 Sep 2002. BIS Review 52/2002  1  The growing demand for hedge fund products has wrought changes on the supply side of the market. The prospect of untold riches has spurred on many former fund managers and proprietary traders to strike out on their own and set up new hedge funds. This year’s ranking of top 100 hedge funds by Institutional Investor magazine included several funds founded by “Tiger Cubs”, former employees of Tiger Management. Investors now have a wide array of hedge funds to pick from, instead of only a few prominent ones previously.
The National University of Singapore Corporate Governance and Financial Reporting Centre, as well as the Singapore Management University Sim Kee Boon Institute for Financial Economics both publish useful indices that assess the standards of corporate governance in Singapore. Professional associations such as ICPAS, IIA, SAICSA and SID have also been playing their roles in this area. Conclusion In closing, let me reiterate the point that good corporate governance pays – if not in immediate share prices, at least in the resilience of the firm in a crisis. Indeed, one key conclusion from the study by the Senior Supervisors Group3[3] is that financial firms that best rode out the recent crisis were ones with good corporate governance standards, demonstrating "a comprehensive approach to viewing firm-wide exposures and risk, sharing  3  William Rutledge et al. (March 2008), "Observations on Risk Management Practices during the Recent Market Turbulence", Senior Supervisors Group. 4  BIS Review 147/2009  quantitative and qualitative information more effectively across the firm and engaging in more effective dialogue across the management team." Better governance per se does not guarantee that there will never be a crisis, but it can minimise its probability and its impact if it does occur. Singapore has made good progress over the years in our corporate governance practices, but we must press on with continual improvements. As regulators, professional bodies, investors, academics and the media, we each have a role – let us work closely together in this journey.

Lessons from the crisis In the aftermath of crises, corporate governance standards and practices often come under scrutiny. For instance, after the Enron/Worldcom failures, critics pointed to the lack of independence of auditors and Audit Committees, and to deficiencies in accounting standards. After the bursting of the dot.com bubble, attention was drawn to the severe conflicts of interest by brokers and analysts. The recent financial crisis has been no different. Indeed, reviews by international bodies and national agencies have found that weak corporate governance played a role in this crisis. For instance, the OECD report on "The Corporate Governance Lessons from the Financial Crisis"1 noted that "the financial crisis can be, to an important extent, attributed to failures and weaknesses in corporate governance arrangements which did not serve their purpose to safeguard against excessive risk taking in a number of financial services companies." While many of the corporate governance failures that have been uncovered so far affected financial companies, many of the structural weaknesses may also be common to large and complex listed firms. It is therefore relevant for Boards of other companies to reflect on these findings. Let me briefly highlight a few common themes. The first relates to the quality and composition of Boards. Research shows that although having a good balance of directors with a range of skills and experience that are relevant to the business of the firm is an essential foundation for good corporate governance, this was also often the most neglected.