samchain/econo-pairs-v1 huggingface dataset:
It is therefore necessary for the payment system and credit markets to function so we can carry out our monetary policy tasks efficiently. Financial stability is thus a necessary condition for efficient monetary policy. As I have said on an earlier occasion, our task of safeguarding financial stability is in some ways like taking care of an electricity network. Most people give it very little thought until there is a power failure. But since last autumn one can say that there have been severe disruptions in the network and numerous measures have been required to keep the electricity flowing. Although there are some indications that the crisis is not as acute now as it was last autumn, many markets would probably not be functioning if the authorities in various countries were not regularly taking measures to promote financial stability. The effects of the crisis are also still affecting the situation for monetary policy and access to credit in the economy. Although the spread between Swedish mortgage rates and risk-free securities such as government bonds has declined since the most intensive phase of the crisis, households are for instance still facing slightly higher interest rates than normal if they want to fix their mortgage rates at longer periods. The financial crisis may also result in declining access to credit. Many companies in the Riksbank’s company survey state, for instance, that they are finding it difficult to borrow at longer maturities. The financial crisis has also contributed to a fall in equity and house prices.

At the present moment, the current configuration remains complex, with a significant number of national exchanges, clearing houses and central securities depositories. Further consolidation of some of the European infrastructure is advisable. The ECB has a particular interest in an integrated securities infrastructure because it uses it in the context of the collateralisation of its intraday credit operations for payment system purposes and its monetary policy. In addition, a major disruption in a securities settlement system could undermine the stability of financial markets. There are numerous private and public-sector initiatives under way to promote the integration, efficiency, and security of the European securities infrastructure. The “Standards for Securities Clearing and Settlement in the European Union” that have been drawn up jointly by the ESCB and the Committee of European Securities Regulators (CESR) are an important initiative. In its communication on “Clearing and Settlement in the European Union”, the European Commission recently outlined the actions it intends to undertake to improve clearing and settlement arrangements, which are welcomed by the ECB and the Eurosystem. In particular, we agree that the barriers as identified by the “Giovannini Group”, must be eliminated. In addition, we concur that some parts of the clearing and settlement industry deserve careful attention from a competition policy point of view. Finally, in order to ensure the smooth operation of the markets and guarantee financial stability, we share the Commission’s view that a sound regulatory framework is essential.
Reduced global imbalances could also entail rising long-term interest rates globally when the Asian countries with surpluses cut back their purchases of US government securities. This would probably also entail a weaker real exchange rate for the dollar. However, it is difficult to assess the consequences of this for the Swedish economy. There will always be current account surpluses and deficits as conditions differ from country to country. The fact that capital flows to rapidly-developing economies, where the return on capital is relatively high, also entails a redistribution of capital that makes the global economy more effective. Therefore, in my view, we should not set targets for the size of current account surpluses or deficits. Sweden can be seen as an example of the fact that a large surplus is not necessarily an expression of an underlying imbalance in the economy. However, significant deviations in the current account may be a sign that something is not quite right in the economy. They can also interact with other weaknesses, for example weaknesses in the financial system, as was the case before the financial crisis. It is therefore important to continue monitoring the development of global imbalances and to understand what lies behind major deviations. Although considerable improvements in the regulation of the financial markets are underway, there is always a risk that new weakness will develop that we do not see until it is too late.

Interest rate risk measures the potential for loss which results from a mismatch between the term structure of a bank’s assets (e.g. mortgages) and that of its liabilities (e.g. customer deposits). While the term structure of assets gets increasingly longer, that of liabilities remains very short. The rise in credit risk was due, on the one hand, to the deterioration in the outlook for the Swiss economy. A slowdown in economic growth in Switzerland could have a negative impact on domestic credit quality, with the result that banks would face the prospect of writeoffs on their assets. On the other hand, the continued strong rise in mortgage loans and real estate prices has also caused credit risk to increase further in the past few months. Furthermore, the results of our mortgage lending surveys suggest a high risk appetite on the part of individual banks. In this regard, the Federal Department of Finance (FDF) submitted two important measures for consultation which should counter potential imbalances in the real estate and mortgage markets: more risk-sensitive capital requirements for mortgage lending and a countercyclical capital buffer. With more risk-sensitive capital requirements, incentives for mortgage lending should be structurally improved. The countercyclical buffer is a component of the Basel III framework and represents a variable capital requirement which is only activated in the event of excessive credit growth. As soon as credit growth weakens again, the buffer can be deactivated.
In contrast to the main refinancing operations, these longer-term market operations are not aimed at signalling the Eurosystem’s monetary policy stance. The ECB announces standard allotment volumes in advance. Therefore, interest rates from these operations are to be seen as indicators of market conditions. III. Regular assessment of monetary, financial and economic conditions Finally, I should like to report on the Governing Council’s regular assessment of monetary, financial and economic conditions. We consider the current monetary trend for the euro area to be compatible with continued price stability in the euro area. The 12-month growth rate of the broad monetary aggregate M3 decreased from 5.0% in October 1998 to 4.5% in November 1998. The three-month moving average of M3 (covering the months September to November 1998) stood at 4.7%, i.e. very close to the reference value of 4½% per annum. With respect to the broadly based outlook for price developments and risks to price stability, financial market developments may be seen as indicating a favourable assessment of the recent monetary policy decisions of the Eurosystem, signalling that financial market participants expect the environment of price stability to continue. In this connection, I could mention the fall in longterm interest rates at the start of 1999 to new historical lows and the fact that the yield curve has shifted downwards. Indeed, conditions for investment at the start of Monetary Union are favourable. This relates, in particular, to the currently prevailing low interest rate level, which significantly reduces the costs of financing for investors.

Ladies and Gentlemen, Bank Negara Malaysia attaches great importance to payment system efficiency and will also continue to promote its security, reliability and efficiency, together with the industry and payment service providers, to foster an innovative payments industry. The FPX platform is an excellent example of this collaborative effort, and I wish to commend MEPS, and the pilot group of banks and corporations for their tremendous effort and commitment in developing the FPX solution. The launching of the FPX marks an important milestone in the development of Malaysia’s payments system. Thank you. 2  BIS Review 63/2004
Illiquid assets continue to be a small proportion of the total, generally of the order of 2%, and the houses mitigate the maturity transformation risk in holding these, and marketable assets of more doubtful liquidity (such as some emerging market instruments), by matching with long-term borrowings. What is certainly true is that the securities houses have expanded their activities enormously - with balance sheets extending to $ billion, which puts them in this respect on a par with large international banks. And, given their focus on trading activity - in money, capital and foreign exchange markets - they are, of course, huge counterparties of the banks, with very large exposures both among themselves and between them and the banks, but with the important distinction that exposures between, or to, securities houses are more typically secured. Size in any event does not in itself mean that the securities houses now have the special, distinguishing, characteristics of banks - any more than the long-term savings institutions or the money funds or indeed large non-financial corporates, which may also have huge balance sheets and which may also have large Treasury operations in-house to manage the funds for own account. Systemic risk So it seems to me that banks are indeed still special insofar as they continue to perform distinctive economic functions and insofar as their liabilities and assets still have distinctive characteristics.

In fact the public interest in non-banking financial activity has certainly increased in this sense - both in terms of the range of BIS Review 13/1997  -8-  activities covered and the standards of protection demanded - as is reflected in the spread of financial regulation over the past 10-20 years as the activities themselves have expanded. Our own Financial Services Act, for example, which provides for formal regulation of investment business dates only from 1986. A corollary of this broadening public interest is that multifunctional financial services providers are bound to be subject to a broadening range of functional regulation - however such regulation is structured. What I think is less clear is the extent and nature of the public macro-prudential interest in non-banking financial activities. I have argued that other, non-banking, financial activities are not - because of the different characteristics of the related liabilities and assets subject to runs in the same way as banks, and that they are not therefore subject to contagious systemic - disturbance in the same sense as banks. But that does not mean that non-bank financial institutions cannot face liquidity pressures. It does not mean either that the failure of a non-bank financial institution could not - through its direct credit or settlements exposures to other financial institutions (bank or non-bank) - have damaging knock-on effects.
These shocks, of which some have prolonged impacts, caused inflation to exceed the targets during this period (Chart 1). Chart 1. Inflation developments in Turkey between 2002-2008  (*) November inflation rate was used for 2008. Source: TURKSTAT and CBT. BIS Review 3/2009  1  The first serious shock to the inflation-targeting regime in Turkey arose upon a time when international capital conditions changed to the disadvantage of developing countries and capital outflow was experienced in many countries including Turkey, from May 2006 onwards. In this period, depreciation of the New Turkish Lira (TRY) around 30 percent and the lack of confidence created by financial turbulence combined with sharp increases in food prices due to drought led inflation rates increase and inflation expectations exceed the targets considerably. In order to avoid any permanent effect on pricing behaviors, the Central Bank tightened monetary policy significantly and took a series of additional policy measures. These measures varied from suspending foreign exchange buying auctions to several arrangements regarding TRY and foreign exchange liquidity. Even though the gap between inflation expectations and inflation targets widened following fluctuations, inflation and inflation expectations were to a great extent brought under control, owing to the measures taken. In the period covering 2007 and onwards, the main factors impeding the disinflation process were sharp increases in oil and other commodity prices in the international markets along with adjustments in administered/directed prices.

In addition to these forecasts, reports also provide information regarding the envisaged course of monetary policy. Since 2007, inflation forecasts, which extended to eighteen-month periods at the outset, started to cover a twoyear time-span. In the face of the extraordinary supply-side shocks experienced since the last quarter of 2007 and with a view to improving the predictability of monetary policy, since April 2008, the Central Bank has added projections to the baseline scenario under alternative scenarios based on the food and energy prices. Moreover, the forecast horizon has been extended to three years for economic agents to have a clearer vision of the future and develop a longerterm perspective. The main objective of sharing inflation forecasts and the likely policy stance with the public is to promote main principles of inflation targeting; i.e. transparency and foreseeability. Such an approach has helped strengthen the monetary transmission mechanism via expectations channel in recent years. However, the Central Bank preferred to avoid providing hints on the course of short-term interest rates in the recent period, as monetary policy now needs to be 6  BIS Review 3/2009  relatively more flexible given the current conjuncture with exceptional uncertainties in the global economy.
The infrastructure demand in Asia is huge. ADB estimates put the overall infrastructure investment needs of Asia at $ billion per annum over the 2010–2020 period. In the meantime, there is no lack of investors interested in infrastructure investment or financing. Despite a generally longer investment cycle, infrastructure projects can offer relatively stable returns and a hedge to inflation. That is why sovereign wealth funds, insurance funds and institutional investors have shown a growing interest in infrastructure investment in recent years. However, despite this increasing interest in infrastructure investment, there are significant impediments in channeling savings into infrastructure financing in emerging Asia. Put it in the language of bankers, there is a shortage of “bankable” projects, due to lack of a credible public-private partnership (PPP) framework; deficiency in regulatory regime and legal environment for contract enforcement; lack of transparency for monitoring project implementation; and political uncertainty. The above impediments call for coordinated efforts to facilitate financial intermediation, lower barriers to investment, enhance PPP standards, and improve project governance and delivery. A number of international and regional efforts have been made on this front, including but not limited to the establishment of the Global Infrastructure Hub by G20, the launch of the Global Infrastructure Facility by World Bank, and the setting up of the new Asian Infrastructure Investment Bank focusing on promoting infrastructure development in the region.

Opening Ceremony of Asian Financial Cooperation Association (AFCA) Keynote Speech by Dr. Veerathai Santiprabhob, Governor of the Bank of Thailand Beijing, July 24, 2017 Vice President Mr. Ma Kai, Vice Premier of China Mr. Guo Shuqing, Chairman of the China Banking Regulatory Commission (CBRC) Mr. Chen Yuan, Vice Chairman of the Chinese People's Political Consultative Conference Mr. Jin Liqun, President of the Asian Infrastructure Investment Bank (AIIB) Mr. Norman Chan, Chief Executive of the Hong Kong Monetary Authority (HKMA) Mr. Tian Guoli, Chairman of AFCA Excellencies, Executives of financial institutions, Ladies and Gentlemen. A very good afternoon to you all, Today’s opening ceremony of the Asian Financial Cooperation Association (AFCA) is a very auspicious occasion, and I am honoured to be a part of this historical event. I would like to congratulate the Chinese government for successfully establishing AFCA – a new forum, which I am certain, will play a significant role in enhancing financial connectivity and cooperation within Asia. I would therefore like to take this opportunity to share with you my thoughts on how we can further enhance financial connectivity to ensure sustained shared benefits – as stated in AFCA’s mission1. Ladies and gentlemen, People have long been connected by trade along the ancient Silk Road dating back more than 2,000 years ago. Today in modern times, many trade and investment agreements between China and other Asian countries have promoted close economic ties in the region.
For instance, we are currently facing a massive loss of biodiversity, to which some scientists refer to as the sixth mass extinctioniii and the first one caused by humankind. Indeed, the figures are daunting: according to the last WWF Living Planet Reportiv published this month, the world’s wildlife populations have declined by 69% on average since 1970. Other distressing biophysical patterns beyond climate change and biodiversity loss include pressures on freshwater availability and soil erosion. There is at least one conceptual framework to understand our multiple and interconnected ecological degradations, that of “planetary boundaries” developed by Johan Rockström and his colleagues.v These scientists identified and started to quantify nine planetary boundaries, which correspond to nine Earth subsystems or processes that define the “safe operating space for humanity”. Crossing certain thresholds (for instance, when there is too much CO2 concentrated in the atmosphere, or when biodiversity loss reaches a certain point) can trigger irreversible and massive consequences. These are the famous tipping points: when exceeded, specific Earth subsystems can irreversibly shift toward a new state, with potentially devastating consequences for human populations, let alone for ecosystems and other forms of life. For instance, evidence is mounting that tipping points related to the loss of the Amazon forest could occur more rapidly than previously thought, and have consequences on several planetary boundaries.

House price declines were reported in all but 11 states. House prices in Arizona and Florida, two of the housing boom states, declined by 8 percent. Distressed sales as a fraction of all repeat-sales increased to more than 40 percent after having declined into the low 30s earlier in the year. Some housing economists are forecasting house prices to fall by 10 percent or more this year. The growing inventory of defaulted mortgages continues to weigh down any recovery in the housing market. According to the most recent Mortgage Metric Report by the Office of the Comptroller of the Currency and the Office of Thrift Supervision, there were 598,000 newly initiated foreclosures in the third quarter of 2010. 1 This inflow of new foreclosures exceeded the outflow due to completed foreclosures and properties sold through short sales and deeds in lieu. As a result, the foreclosure pipeline increased to 1.9 million mortgages – double the level from a year earlier (Chart 6). Efforts to modify mortgages have not managed to prevent the foreclosure pipeline from increasing. As a consequence, distressed sales are expected to grow even further over the coming year. The combination of declining house prices and increasing delays in the foreclosure process will put upward pressure on default rates as well as losses on defaulted mortgages. CoreLogic estimates that in the third quarter of 2010 there were 10.8 million borrowers in negative equity where the balance on the mortgage exceeds the current value of the property.
Although circumstances differ, our experience may also be of value to others. Forward guidance in general Up until the 1990s, the code of conduct among central bankers was one of secrecy. Today, however, central banks strive to be transparent. This development reflects a general trend towards greater transparency in modern societies. For some central banks, including Norges Bank, a change from fixed exchange rates to an inflation targeting regime also highlighted the importance of greater transparency. Transparency is necessary for accountability. With accountability the central bank can build credibility and trust, both by showing that the objectives are actually attained in the longer run, and by explaining deviations from targets. Forward guidance, understood as information about future policy intentions, may be viewed as a natural extension of this accountability framework. Economic agents are forward-looking, and hence the future stance of monetary policy matters to them. As Michael Woodford has stated, “For not only do expectations about policy matter, but, at least under current conditions, very little else matters.” 1 In macroeconomic theory, the importance of expectations has been appreciated since the rational expectations revolution of the 1970s. In the early 1990s, theorists started to model monetary policy as setting the interest rate. 2 Central bankers have since had a theoretical  1  Woodford, M. (2005): “Central Bank Communication and Policy Effectiveness,” NBER Working Paper 11898. 2  See Taylor, J.

The illustration is from our third Monetary Policy Report in 2012. If monetary policy at that time had given weight only to the low level of inflation, the key policy rate should have been lowered sharply and kept close to zero for some time, as indicated by the red dotted line in the upper left panel. Inflation would then have been predicted to pick up relatively fast, partly owing to a weaker exchange rate. Taking into account our second criterion for an appropriate interest rate path, the key policy rate would have been somewhat higher in the short term, as indicated by the blue dotted line. Inflation would have been predicted to take somewhat longer to rise towards the target, but developments in output and employment would have been more stable. Finally, taking into account considerations of robustness (criterion 3), we reached the interest rate forecast indicated by the black dotted line. [Chart: Decomposition of change in the interest rate path] Our communication of interest rate decisions is aided by a decomposition of changes in the interest rate path. This is a model-based illustration of how the change in the interest rate forecast from one report to the next can be decomposed into contributions from exogenous disturbances. The intention is to communicate the driving forces behind any changes in the interest rate path. The chart illustrates the different forces behind the change in the interest rate path from the last report in 2012 to the last report in 2013.