samchain/econo-pairs-v1 huggingface dataset:
Sterling markets, where my main responsibilities lie, start in a reasonable place:  -  Many sterling swaps – the primary hedging instrument – have referenced SONIA rather than LIBOR for some time. That transition was given a further kick by the adoption of a ‘SONIA first’ trading convention in interdealer markets in October.6  -  In sterling loan markets, all customers discussing new or refinanced lending with their banks should have been offered a non-LIBOR alternative since the end of September. And new loans for anyone still unable to avoid using LIBOR in the near-term should include a clear mechanism to ensure those loans are converted to an alternative ahead of end-2021. But there’s further to go. In sterling swaps, we’ll need to see another jump if the market is to hit its target of ceasing all new LIBOR use7 by the end of March next year. All new lending linked to sterling LIBOR is also due to be phased out on the same timeline, with the exception of very short loans maturing before end-2021.8 Those are challenging goals – particularly for firms that are still not ready to move away from LIBOR, who have some rapid catching up to do. We recognise this comes at a time of difficult operating conditions more generally. But with LIBOR’s retirement now in the diary, sending new business its way isn’t just optimistic – it’s imprudent too. Though the precise timelines differ slightly in other currencies, the bottom line there is also clear.

The conclusion of this process and the launch in October of ISDA’s protocol to insert these fallbacks into existing contracts provides the means for LIBOR users globally to plug a glaring risk in their derivative positions.10  And they are doing so, in large and ever-increasing numbers. As of this morning, nearly 1,700 legal entities around the world had adopted the protocol – from huge global banks and corporates, to local building societies and property firms. The list covers all twenty of the largest traders in sterling swap markets by volume. And both LCH and CME, the world’s largest swap clearing venues, have committed to adopting the same measures in their own rulebooks. But there’s much more left to do. Derivative exposures are not just the domain of large banks – they also hedge real economy risks. It’s therefore encouraging to see big household names like Unilever and Tesco, Vanguard and Aberdeen Standard, among the early adopters. But we need to see this coverage expanded to much more of the investment community and to the non-financial corporates who use these markets, as well as completing sign up by banks. If your firm has not yet assessed whether to sign up to the ISDA protocol, or discussed plans with your trading counterparties, this should now be a top priority. And if you determine the protocol is not the right approach for your particular circumstances, you will need to make clear alternative plans to mitigate the risks.
Norman T L Chan: Building "Hong Kong" as a brand for financial services - beyond marketing Welcoming remarks by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the Treasury Markets Summit 2017, Hong Kong, 18 September 2017. * * * Ladies and gentlemen, 1. A few months ago when my staff asked me what I would wish to talk about at today’s Summit, my immediate response was “culture”. In a rather polite manner, my staff told me that I had spoken on this subject many times before and it would help the TMA sell the tables if I could talk about something else. I didn’t commit myself one way or the other and so I hope it won’t disappoint you too much if I am going to talk about culture and ethics again this morning. 2. That said, I am not totally insensitive to the audience’s desire to hear something different from me, so I am going to start with a true and, I hope, interesting story on what marketing can and cannot do. We all know and appreciate the importance of good marketing in the commercial world. Rule number one in marketing: No matter how good your product is, you need to undertake an effective campaign to reach out to your target customers to make them aware of the product and convince them that they should be interested in it.

I welcome the intention for ADB to launch a review of its Long-Term Strategic Framework and the fact that this has been preceded by the work of the Eminent Persons Group convened by the President last year. I am also happy to see emphasis being given in the Report of the Eminent Persons Group to financial sector development and financial integration in the region, among other operational priorities. I certainly hope that this emphasis in the Report will be reflected, through the review process, in the Long-Term Strategic Framework. I feel also that such a strategic review should cover the governance structure of the ADB as well, in order better to reflect the new economic realities and the Asian heritage of the ADB. Hong Kong looks forward to contributing appropriately to this review process and seeing a new long term strategy developed for ADB that would reflect the consensus of its members and stakeholders. Thank you. BIS Review 44/2007  1
Why didn’t the markets and clearing institutions react to the large build-up of risk? And why didn’t the lenders adjust their margin calls to correspond to the risk concentration? Better disclosure of Amaranth’s risk profile, from the authorities, the markets, the clearing institutions and individual lenders would probably have increased the chance of detecting the risk positions being built up. Conclusion New financial crises will occur and hedge funds, which have become an integral part of the modern financial markets, will probably be involved. The large capital flow to the sector has meant, not unexpectedly, that profitability has declined and it is not unreasonable to expect that a number of funds will consequently be forced to close down after more or less substantial losses. However, the advantages of the hedge funds’ operations exceed the risks from a welfare perspective. The Riksbank’s view as regards further regulation is that the focus should be on the hedge funds' counterparties - particularly the systemically-important banks - being able to manage their risks. Improving the banks’ risk management with regard to hedge funds has been the objective of a number of initiatives by the Basel Committee on Banking Supervision and other organisations ever since the LTCM crisis in 1998. From a stability point of view, the central issue is that the systemically-important banks should manage their counterparty exposures correctly – take sufficient collateral, have appropriate limits and be capable of managing potential liquidity problems. The arguments for further regulation of hedge funds are in this context weak.

In addition, a large part of the capital inflow today is through funds that invest in other hedge funds, known as Funds of Hedge Funds (FOHFs), which also allow relatively low investment amounts. These funds also entail an advantage in that the investor does not need to have specific knowledge of each individual fund. On the other hand, the investment is more expensive as these funds generally take out an additional fee on top of the hedge funds’ own fees. What, then has driven and is driving the explosive development in hedge funds? One important explanation is, of course, that the hedge funds, as I recently described, have become more accessible to a wider circle of investors. Hedge funds have a number of positive characteristics, one of the most important being that they help the investors to diversify their portfolios. By supplementing an existing investment portfolio with a hedge fund, the investor can both reduce risk and increase earnings, which may appear as a contradiction. However, the reason is the hedge funds’ low correlation to traditional asset types such as shares and debt securities. With the aid of hedge funds, the investor can both protect his/her portfolio during downswings and dampen the effects of a fluctuating market. The heavy stock market decline immediately after the turn of the millennium gave hedge funds an additional boost, as many people were looking for alternative forms of investment.
One approach that I find promising was recently outlined in a presentation by Michael Woodford. 11 He described a version of a new Keynesian model with two possible states for credit spreads: normal and elevated (that is during a crisis). He argued that it is the degree of leverage in the financial system, rather than the level of asset prices, that poses a risk to financial stability. In a standard New Keynesian model, the optimal policy commitment will be to hold the output-gap-adjusted price level (the “optimal target criterion”) constant. However, Woodford showed that when the likelihood of a crisis increases when leverage increases, the optimal target criterion is altered to include a factor relating to the marginal increase in the expected loss from a crisis per unit increase in the level of leverage. Therefore, the central bank should balance its inflation and output stabilisation objectives against its concern about financial instability. An attractive feature of this model is that it shows that, in most cases, the central bank will set the optimal policy rate in the usual manner (that is, it can disregard the factor relating to the marginal risk of a crisis in the optimal target criterion) but, if required, the central bank can affect the probability of a crisis by keeping the policy rate higher. An alternative approach is to describe the connection between the Taylor rule for monetary policy and a form of Taylor rule that describes how regulations vary based on an assessment of, for example, credit growth.

12 The different rules are connected through the stylised view of the monetary policy transmission mechanism presented earlier:  The policy rate ( ) is determined by the well-known Taylor rule for monetary policy. The interest rate margin ( ) is influenced by regulation ( ), which is itself determined by nontime varying regulations ( ), the credit gap (measured as actual credit volume in relation to a level deemed sustainable over the long-term ( )), and the output gap (measured as the actual level of output in relation to a level deemed sustainable over the long-run, ( )):  Together, the Taylor rule for monetary policy and the rule for regulation form, through the bank lending interest rate equation, a system that describes the relationship between monetary policy and macroprudential policy. I should emphasise that this is merely an  11  Michael Woodford, “Inflation targeting and financial stability”, Czech National Bank seminar, September 2010. 12  Stefan Ingves, “Monetary policy and financial stability – some future challenges”, Swedish Economics Association, May 2010. 10  BIS central bankers’ speeches  illustration of a quite loose concept, rather than a description of a concrete proposal or model. But it helpfully illustrates the type of work that must be carried out before any theory or model can be applied in practice. The Riksbank has used a simple version of this rule to illustrate the effect that countercyclical capital buffers could have had in Sweden between Q1 1997 and Q2 2009 (see Figure 5).
The discussions on this topic are especially important for the Republic of Macedonia at this point, having in mind that the IPA project was initiated through the funds of the European Union, aimed towards implementation of the directives in the field of payment systems and financial markets. Therefore, tomorrow we will hold a panel discussion in order to encourage active participation of the Macedonian financial sector in the domain of card payments, e-commerce and innovations, in general, as well as of the National Bank from the aspect of its role in the payment system of the Republic of Macedonia. Fifth, the social welfare is greater in countries with higher level of financial inclusion, which implies access to financial services to as many people, especially those with lower income. In that context, this conference will also induce discussions about the effects of the greater financial inclusion on the economic growth and income inequality. Furthermore, financial inclusion will be considered from the aspect of integration of the payment trends outside the formal financial sector. One of these channels is the flow of remittances, which are of great significance for the countries in the region. In that regard, the discussions will particularly focus on determinants of the choice of the payment channel through which emigrants transfer remittances. Sixth, from the aspect of institutional changes, we will cover the new Euro Retail Payments Board, as a successor to the SEPA Council.

Previous prudent fiscal policies have allowed an expansionary stance to support the growth while low inflation and excess capacity has allowed for the monetary stimulus. Third, favourable demographic factors The Asian region accounts for more than half of the world’s population and continues to grow at a relatively high and stable rate. Of importance is that the region has a relatively young demographic structure with rising education, which augurs well for securing a large and dynamic labour force going into the future. These favourable demographic prospects of the region increase the potential for creating a consumer group with high purchasing power, thus providing an increased potential for growth in domestic demand. 2  BIS Review 43/2003  Four, rising middle-income consumers Rising income and urban migration in Asia has produced a large and vibrant middle-income group, creating a pivotal change in the pattern of consumption to deliver the positive benefits in domestic demand growth. The cumulative effects of policies that have been implemented previously have resulted in increasing income and living standards and established the foundations to accentuate the transformation of domestic demand in the region. China’s domestic market with a population of more than 1.2 billion, is already the world’s largest market for mobile phones and is poised to be the world’s largest market for personal computers. By 2005, it is estimated that 15% of China’s population would consist of about 200 million middle-income consumers equipped with a high propensity to consume.
Jan F Qvigstad: Lessons from the crisis for monetary policy and financial stability Speech by Mr Jan F Qvigstad, Deputy Governor of Norges Bank (Central Bank of Norway), at the Annual Money, Macro and Finance Conference, Limassol, 3 September 2010. *  *  *  First I would like to thank you for inviting me and giving me this opportunity to comment on lessons from the crisis. I will concentrate my talk around three lessons and two questions. What I am going to highlight is by no means revolutionary, rather it reflects a growing consensus on experiences from the crisis. 20 minutes only allows me to briefly touch on the different subjects. For a more in depth analysis and discussion of similar issues that I raise here today, I can recommend the Jackson Hole paper by Charles Bean et.al. Transmission mechanism was affected by the financial crisis  The first lesson is that monetary policy is more than setting the key policy rate. We also need to monitor the transmission mechanism closely. The transmission mechanism was affected by the financial crisis. Constraints on banks’ access to funding and a heightened level of perceived risk led to higher lending margins and higher bond spreads. The chart shows developments in our key policy rate and banks mortgage lending rates from August 2007 to November 2008. The widening spread between these two interest rates was not unique to Norway, but occurred in several countries. Banks also tightened their credit standards in response to the crisis.

A financial meltdown was averted, economic activity was supported and protectionism was contained. The chart shows the decline in world trade during the Great Depression compared to the much quicker decline in the recent crisis. 4  BIS Review 113/2010  Historical perspective II The decline in world trade during the crises of 1929–1933 and 2008–2010  But in the 1930’s, it took 3–4 years before world trade stopped falling, and the pickup in trade was slow. This time, a fairly quick rebound of trade has taken place. Some two years after the crisis started, world trade was more or less back to the pre-crisis level. IMF lending June 30, 2010  Early on, the IMF advocated forceful and coordinated measures that the G20 followed up with broad international efforts to stabilize the global economy. Without such prompt and comprehensive action, the consequences of the crisis would have been far greater. BIS Review 113/2010  5  It is in the interest of all that the large and systemically important countries discuss issues of common interest. Their successful collaboration benefits not only themselves, but also the rest of the world. G20, IMF and small countries  Among the G20 initiatives were the efforts to strengthen confidence in international financial institutions, the IMF in particular, to permit these institutions to play an effective role in tackling the crisis. Large financial resources were raised by IMF members, many outside the G20. Indeed, the G20 has used the IMF as an instrument of its policy implementation.
The normalization process for monetary policy started in June with a 50 basis point hike and continued the following four months at the same speed. Between October and December the normalization pace was slowed down to 25 basis points. In January the Monetary Policy Rate was kept unchanged, but the Board has stated that it will be necessary to continue to reduce the monetary policy stimulus in the coming months. But, important risks persist on this scenario. As I mentioned at the beginning of my presentation, the risks in the external scenario are high, especially due to the fact that global recovery has been imbalanced between developed and emerging economies, with high commodity prices, low interest rates, a sluggish recovery of developed economies and a depreciated US dollar. Relevant risks include escalating financial tensions in Europe, persistent high unemployment rates in developed economies and sharper adjustments in some emerging economies that are facing inflationary pressures. Considering this risks and the fact that the real exchange rate had appreciated significantly, the Board of the Central  BIS central bankers’ speeches  3  Bank decided, on January 3rd, to start a program of foreign currency purchases aimed at strengthening its international liquidity position. Thus, the Central Bank will hoard additional international reserves amounting to $ billion over the year 2011, via periodic purchases of foreign currency until the end of December of 2011.

Consistently, monetary policy had a strong reaction. The Monetary Policy Rate (MPR) was increased by 200 basis points in just four months, starting in June. By September 2008, before the collapse of Lehman Brothers, the Central Bank estimated that it would be necessary to increase the MPR further, even above market expectations. Monetary and fiscal policy during the crisis As in most of the world economies, financial tensions in Chile were severe after the collapse of Lehman Brothers. Interest rates in both peso and dollar markets posted substantial increases in the most stressful times from mid-September to mid-October 2008 (Figure 4). The Central Bank acted quickly, providing peso and dollar liquidity facilities to the financial system to mitigate liquidity tensions, but also to ensure financing in foreign currency should foreign loans become scarce. Also, the foreign exchange reserves accumulation process was cancelled. Local money market conditions normalized rapidly, over a period of weeks. The additional liquidity facilities put in place were not used extensively by financial institutions, reflecting their sustained access to external markets. Beyond the stressful episodes in local money markets, the global confidence crisis that swept around the world was very important in Chile. The events of developed financial markets prompted a deep and widespread revision of investment and spending plans of businesses and households, bringing expenditure to a halt. Domestic demand and economic activity dropped significantly and lending standards tightened (figure 5). 2  BIS central bankers’ speeches  The inflation outlook changed radically, and monetary policy reacted forcefully.
This was especially so between 2000 and 2016, wherein GDP increased by a compounded annual growth rate of 10.4%, while exports grew only 4%. Page 5 of 17  Sri Lanka’s economic growth during the past decade or so has mainly been generated by the expansion of domestic demand, rather than increased exports. The tradable sector, that is Imports and Exports as a percentage of GDP, declined from nearly 80% to 45% from 2005 to 2015. As a Small Open Economy you simply  cannot do that. The problems were compounded by a heavy recourse to foreign commercial borrowing for projects with low returns. That is what has led to the debt problems and many of the other difficulties we are having. When compared with regional peers and competitors, Sri Lanka’s export performance has lagged behind significantly. The Export Value Index presented by the World Bank shows the extent to which Sri Lanka’s export sector has been lagging in comparison to its regional counterparts, during the period from 2000 to 2015. Sri Lanka has only increased its exports by 1.9 times in that period 2000 to 2015, while Vietnam and Bangladesh have increased by 11.2 times and 5.1 times respectively. Even South Korea and  Thailand which have a much higher base, increased their exports by 3.1 times, whereas we, as I said only recorded a 1.9.

Moreover, if banks and fintechs did not both know how to innovate, and often innovate together, bigtechs would ultimately reap the rewards. Furthermore, we take very seriously the commitments we made to you last year: we have therefore worked with you this year on the deadlines and visibility of the stages in the authorisation process of fintechs. In this context, I am pleased to announce that a Fintech Charter will be adopted and published before the end of the year. This charter will clearly explain, in great detail, the stages in this authorisation process, from their first contact with the ACPR to their obtaining the required authorisation or registration. It will contain specific commitments on the part of the ACPR, firstly in terms of the visibility of the process: the appointment of a dedicated analyst, an indication of the additional information to be provided, and an authorisation certificate to facilitate procedures with investors. Secondly, in terms of deadlines: at each stage of the process, acknowledgement of receipt will be provided within two days and a response will be given on the content of the request within two weeks. The charter will also clarify our requirements regarding authorisation applications so that they can be prepared as well as possible. In order to help entrepreneurs navigate the regulations, a set of guides and Q&As will be posted on our website: these Q&As have been devised with representatives of the ecosystem to answer the regulatory questions that fintechs most frequently ask. III.