samchain/econo-pairs-v1 huggingface dataset:
The way other crisis management procedures are set up also affects the scope for ELA. This is covered in the first part of this note. Second, the way ELA issues are organised within the central bank is also very important for whether it is an effective measure and, in particular, whether it will reduce or increase moral hazard in the financial sector. This is discussed in the second part of the note. Before discussing these two aspects, the importance of speed in granting ELA must be emphasized, as the speedy implementation of ELA is essential to its being effective in a crisis situation. ELA is the only measure in the crisis management framework that normally can be used quickly. It should be seen as an acute measure that is used for avoiding a sudden disruption of the large-value payment system, in particular when threats to the system emerge suddenly. Incidents like the failure of Barings bank, LTCM and the Swedish currency and banking crisis show that threats to the financial system may indeed emerge suddenly, and that authorities must react very quickly - if not within minutes, at least within hours. The growth and increasing globalisation of financial markets, the high volatility in these markets and the increasing complexity of financial institutions, are all examples of factors that increase the risk for sudden crises and increase the probability that such crises will spread from one market to another. 1.

The decline in commodity prices, above all crude oil, will curb inflation further over the short term. We continue to assume that global economic growth will gradually firm over the course of next year. The considerable fall in oil prices should be a contributory factor. However, the  BIS central bankers’ speeches  1  prospects for individual countries vary widely. For the US, we are expecting that growth will remain robust over the next few quarters, leading to better utilisation of economic capacity. For the euro area, by contrast, we have revised the growth forecast downwards once more, and the outlook for this region remains very subdued. The picture for the emerging economies is mixed. China will continue to be a driver of the global economy, although it is likely to see a gradual weakening of growth. For India, growth prospects are picking up again. The outlook for Brazil and Russia, by contrast, remains muted. Overall, the global economic outlook is still very uncertain and dominated by downside risks – the most important of which are the continuing difficult conditions in the euro area and a possible escalation in geopolitical tensions. Swiss economic outlook I will now look at economic developments in Switzerland. Following a weak second quarter, real GDP growth was unexpectedly favourable in the third. On the demand side, the increase was supported predominantly by goods exports, with manufacturing the main beneficiary of the strong export demand.
But what people say and do are not always the same – and several studies have shown that this approach may lead to systematic upward biases. 13 Perhaps the most authoritative method is to use national surveys of well-being and life satisfaction alongside data on the characteristics of the survey participants. This approach lies behind the recent report by Fujiwara et al (2014). This report estimates the impact of various factors, including formal volunteering, on an individual’s life satisfaction. Their results provide a relatively clear ranking of what factors really matter for well-being. Health (physical and especially mental) comes at the top of this well-being league table, followed by employment prospects. On the next rung down, however, sits volunteering. In terms of personal well-being, this puts volunteering on a similar footing to playing sport. If you were wondering where watching TV would come in the well-being list I can tell you – close to the bottom. Indeed, watching TV is found to detract from well-being. 14 This I think confirms what we all knew deep down: X-Factor is bad for you. It is possible to translate these into monetary-equivalent values – the money an individual would need to be given to increase their well-being by the same amount. On this evidence, you would need to be compensated around £ on average per person per year for forgoing the opportunity to volunteer. 15 That is a very significant sum for the average person, whose median annual salary was only £ in 2013.

Other investment opportunities include in Shariah-compliant real estate investment trusts (REIT), in unit trusts and in the Islamic exchange traded fund (ETF). The capital market intermediaries in Malaysia, that is, the investment banks and Islamic fund management companies have had a key role in supporting the development of this industry. Both retail and wholesale products are being offered in ringgit and non-ringgit currencies. There is also no restriction in investing 100 per cent of the funds abroad. The foreign exchange administration rules now allow for the free mobility of inward and outward movement of funds. Pillar 3: international Islamic banking The Islamic financial system has also been extensively liberalised to allow for the entry of foreign Islamic financial institutions that offer both domestic and international banking business. In addition, the foreign equity ceiling in Islamic financial institutions has been raised to a maximum of 49 percent as part of the effort to promote strategic alliances. The Islamic banking business in foreign currencies can be conducted by the international  2  BIS Review 97/2008  currency business units (ICBUs) that may be set up within existing financial institutions and the international Islamic banks. Such international Islamic banks may be established as either a branch or a subsidiary. Currently, about 16 percent of total assets in the Malaysian banking system is Shariah compliant. Pillar 4: international takaful business The fourth pillar is takaful and retakaful business.
(An effect of this sort was clearly at work in the last Inflation Report forecast: weaker equity prices led the Committee to revise down its forecast of domestic investment, partly offsetting the effect of a shallower yield curve on the projection for GDP growth.) But the impact of such swings seems to be larger on market yields than on actual forecasts of interest rates. The red line in Chart 6 plots the gap, in months, between the date of the first UK rate rise implied by the sterling yield curve and that expected by professional forecasters. When the line goes up, markets are pushing out this “lift-off” date further than analysts. And you can see this tends to happen when risky assets do poorly (the blue line is an estimate of the risk premium). Conversely, the gap narrows when risk appetite improves. This pattern suggests that market interest rates might be influenced by more than the expected path of interest rates 6. To be clear, the MPC produces its forecasts on the yield curve as it is, not what it believes the market’s true expectation of future interest rates to be. So the fact that the two might differ does not, in and of itself, invalidate the sort of inferences we’ve been talking about. But it should, at the least, make one a little careful about describing the yield curve as “the market’s expectation of future interest rates”.

They all kick off with the same unwelcome economic conditions, presumably caused by some prior, off-stage shock to costs: inflation is 2% points above the target, output’s 1% point below potential and official interest rates are at (what is assumed to be) their “neutral” rate, which is assumed not to change. All three simulations also have inflation back at target two years later. But each involves a very different means of getting there. In the first, the policymaker – call it Committee A – hikes Bank rate immediately and aggressively, by 2% points. This rapidly pushes the economy into recession, making the output gap even larger. But it does at least succeed in bringing inflation back to target pretty promptly, well within the two-year point. Indeed, inflation then falls somewhat below target thereafter, and interest rates fall back sharply, to a level below where they started. Perhaps “A” stands for “austere”, or (hyper) “activist”. Committee B – “balanced”, maybe? – is a little gentler in its approach. Recognising that a significant existing output gap will do some of the work in reducing inflation it raises rates only a touch. Inflation therefore takes longer to come back to target. But it just about gets there by the two-year point and, in the interim, the real side of the economy suffers less and interest rates are less volatile. Finally, just for effect, I’ve added a Comedy MPC (Committee C).
To cut a long story short, it was decided to introduce a new monetary framework in March 2001. An inflation target was set for the Central Bank and the króna was floated. By that time it had already fallen to the lower tolerance limit. The króna then depreciated further, driving up inflation which rose beyond 9% in January 2002. A rapid reduction in inflation followed, the target was attained by the end of the year and the policy interest rate was quickly lowered. Inflation remained below or close to target until the middle of 2004. Later that year, major investments were decided in the aluminium and power sectors. Shortly afterwards, sweeping structural changes in the housing mortgage market caused a surge in bank lending and domestic demand. The current account also deteriorated significantly. In the face of mounting inflationary pressures, the Central Bank steadily raised its policy rate (undiscounted yield) from 5.3% in spring 2004 to 14.25% at the end of last year, where it still remains. Higher interest rates caused the króna to appreciate and it ended up at a historical high, especially in late 2005. Following earlier comments to that effect in its Monetary Bulletin in December 2005, the Central Bank pointed out that the króna was at its strongest in real terms since 1988. One assumption in the inflation report presented then was that the exchange rate would remain unchanged over the forecast horizon. The Bank described this assumption as unlikely to hold.

Other positive spinoffs include fund of hedge funds managers and consultants, who can add value to investors in the areas of hedge fund selection and allocation among different fund strategies. 4  Merrill Lynch/Cap Gemini Ernst & Young World Wealth Report, 2002. 5  An estimated 1.7 million high net worth individuals (defined as individuals with more than $ million in financial asset wealth) in Asia hold in aggregate $ trillion of financial assets. (Merrill Lynch/Cap Gemini Ernst & Young World Wealth Report, 2002). 2  BIS Review 52/2002  Second, hedge funds can lead to more wide-spread use of innovative financial instruments and the development of cutting-edge technical and investment skills. Unit trusts typically go long-only on listed equities, bonds and cash. In comparison, hedge funds, with their broad investment mandates, can employ a selection of designer instruments and creative investment strategies and face little (if any) restrictions on what they can hold. Third, hedge funds can add to the liquidity and efficiency of our capital markets. The contrarian instincts of hedge fund managers provide liquidity and help curtail unsustainable asset bubbles. By seeking out arbitrage opportunities, hedge funds also improve the information flow and, consequently, the efficiency of the market. Further, specialist hedge funds that invest in unlisted stocks and unrated bonds facilitate fundraising by small, relatively unknown companies. Singapore’s regulatory approach Singapore’s approach to regulating hedge funds is risk-focused and differentiated, balancing the potential benefits with the risks that hedge funds could pose to the financial system.
Timothy F Geithner: Credit markets innovations and their implications Remarks by Mr Timothy F Geithner, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the 2007 Credit Markets Symposium hosted by the Federal Reserve Bank of Richmond, Charlotte, North Carolina, 23 March 2007. *  *  *  I am grateful to Jeff Lacker for including me in this conference, and my compliments to him and the Richmond Fed for bringing together an excellent group to discuss the implications of recent innovations in credit markets. The past few years have seen remarkable changes in credit markets, and this is a good time to take stock of what we know about those developments and their implications. The latest wave of credit market innovations has elicited some concerns about their implications for the stability of the financial system, concerns similar to those associated with earlier periods of rapid change in financial markets. Will the most recent credit market innovations amplify credit cycles, contributing to "excessive" lending in times of relative stability, and then magnify the contraction in credit that follows? Will they introduce greater volatility in financial markets? Will they create greater risk of systemic financial crisis? These concerns have been heightened in some quarters by the problems currently being experienced in the subprime mortgage sector. It will take some time before the full implications are understood and the full impact can be assessed.

Central Bank of Chile October 2018  Central Bank of Chile’s Twenty-Second Annual Conference: “Changing Inflation Dynamics, Evolving Monetary Policy” Opening remarks by Mario Marcel, Governor of the Central Bank of Chile October 25, 2018 – Santiago, Chile Welcome remarks Good morning everybody and welcome to the Twenty-Second Annual Conference of the Central Bank of Chile. It is a pleasure to host this event that every year gives us the opportunity to reflect and discuss about issues that have direct implications on our work as central bankers and stimulate the related academic agenda. I am looking forward to active discussions today and tomorrow on this year’s conference theme: changing inflation dynamics and its implications for monetary policy. This conference is being followed online via live streaming on our website. Inflation dynamics and monetary policy in recent years The last ten years have been an extraordinary time for macroeconomics. The deepest financial crisis since the Great Depression was followed by an unprecedented bold, coordinated, unorthodox and persistent response by central banks in advanced countries. In all, a decade in which the world economy stood a long way from normal and, as it depended so much on emergency support, it was not easy to detect how much the economy was changing underneath. So it is perhaps not that surprising that once the same central banks began to envisage a gradual, cautious and well communicated approach to monetary policy normalization, some challenges appeared on the road.
Bwalya K E Ng’andu: Financing small- and medium-scale industries in Africa Keynote speech by Dr Bwalya K E Ng’andu, Deputy Governor (Operations) of the Bank of Zambia, to the United Nations Economic Commission for Africa Expert Group Meeting on “Financing small- and medium-scale industries in Africa”, Lusaka, 26 June 2012. *  *  *  •  The UNDP Resident Representative, Ms Khanni Wignaraja;  •  Director of UNECA, Southern Region office, Ms Beatrice Kiraso  •  The AfDB Representative, Dr Fred Kwesiga;  •  Officials from the Ministries of Finance of various countries;  •  Officials from various central banks; Development Banks, Commercial Banks and other financial institutions;  •  Private Sector Representatives  •  Participants;  •  Ladies and Gentlemen;  I would like to firstly express my appreciation to the Director of UNECA, Southern Region Office for extending an invitation to me to deliver the keynote address at the start of the Experts Group meeting of Financing Small and Medium Scale Industries. I commend UNECA for this great effort to bring together this assembly of high level officials and experts from Government, the financial sector, private sector and academic institutions to discuss the vexing problem of enhancing financial flows to the SME Sector in Africa.

Firstly, it gives recognition to the fact that we are all aware of the potential of this sector in generating employment, promoting economic growth and reducing existing poverty levels. In low income sub-Saharan African countries, SMEs and micro-enterprises make up about 90% of all enterprises. However, due to the various constraints they face, their overall contribution to GDP can in some countries be as low as 20% although estimates show that this could be scaled up to 60% with the greater realization of the sector’s potential. Contribution to employment can be as high as 63%. For most low income countries, SMEs are the main  BIS central bankers’ speeches  1  source of jobs and income after subsistence agriculture. Particularly significant is that they are a great source of livelihood for women who own more than half of SMEs while over 70% of Africa’s rural population survives through the formal and informal SME sector. There is little doubt, therefore, that SMEs form a solid basis for sustainable economic development on our continent. Secondly, the continued discourse on SMEs reminds us of the possibility that we have probably done more talking about the problem than fixing it. Although the development of SMEs is varied extensively across Africa, what is clear is that in most countries a major obstacle to their growth is the lack of sustainable and cost effective financial products. South Africa and Mauritius in this region and North Africa have done a commendable job in developing flourishing SMEs sectors.
(b) Data shown in two minutes intervals, and may not fully capture the lowest traded prices during each event  Chart 2 Thomson Reuters Matching GBP/USD price and order book behaviour in the sterling flash event of 7 October 2016  (a)  Source: BIS Markets Committee report: “The sterling flash event of 7 October 2016” (a) The blue and red circles here represent resting bid and offer limit orders, respectively, in the order book. The black line represents the implied mid-price, and the intensity of the blue and red colours signifies the size of the order. 10  All speeches are available online at www.bankofengland.co.uk/speeches  10  Chart 3 Numbers of electronic and floor equity exchanges  (a)  Chart 4 Share of algorithmic trading in FX spot markets  Number of exchanges  Electronic exchanges  Floor exchanges  Algorithmic trading  Manual trading  Per cent  140  100  120  90 80 70  80  60 50  Electronic exchanges  Floor exchanges  100  60  40  40  30 20  20  10 0  0 75  85  95  05  2004  15  2007  2010  2013  2016  Sources: Jain (2005), Hendershott & Seasholes (2006),  Sources: Bank of International Settlements and Electronic  exchange websites and Bank calculations  Broking Services (EBS)  (a) Based on the date of automation of largest international stock exchanges across 119 countries.

So rather than just taking the latest vintage of official data at face value, we can employ statistical techniques to exploit this information in order to refine our assessment of the past. An example of this approach, drawn from our May Inflation Report, is shown in Chart 6. This shows our assessment of the range of possible final outturns for four-quarter GDP growth rates for the past six years. The current vintage of official GDP growth data is shown by the green line. The centre of the darkest purple band of the fan reflects our view of the most likely path once the revisions process is complete – a “backcast”, if you like. The fan around this path indicates the uncertainty around this projection, with a 9 in 10 chance of the eventual outturn lying somewhere inside it. The width of this fan is based on the historical experience of data revisions. The fan becomes progressively narrower the further back in time one goes, reflecting the reduced incidence of revisions for more distant periods. For the recent past, the most likely path for the mature estimates of growth lies above the current vintage of data, reflecting our judgement that the business surveys and the past history of revisions together make it somewhat more likely that the official estimates for this period will in future be revised up, rather than down.
However, this required estimating the cyclical position of the economy and the elasticity of public finances to the cycle, which have proven to be notoriously difficult to estimate in real time. In fact, evidence shows that in the case of the European Union, estimates of potential output are revised up to ten years after the first release. Second, while the current economic environment bears little resemblance to that of the 1990s, the reference values were included in the Treaty as if they were “structural permanent values” of the economies. These limits were calibrated on the basis of the average macroeconomic conditions at the end of the 1990s. But economies are subject to structural transformations over time, and such limits should therefore be updated. Third, despite its focus on fiscal sustainability, the framework did not prevent a general and consistent increase in public debt. Again, experience shows that this is to a large extent 2 For a more detailed discussion on the reform of the fiscal governance framework in the European Union, see Alloza, M., J. Andrés, P. Burriel, I. Kataryniuk, J. J. Pérez and J. L. Vega. (2021). “The reform of the European Union’s fiscal governance framework in a new macroeconomic environment”. Occasional Paper 2121. Banco de España. 3  related to a failure to comply with the rules, particularly in good times, which were not used to build up fiscal buffers for periods of economic distress. This is not surprising.

Three, the focus on debt sustainability also makes it possible to include previously missing elements (specifically the macroeconomic environment, in addition to potential growth and the natural interest rate) that can encourage structural reforms. Finally, it allows for greater cross-country heterogeneity in the targets and for the design of fiscal consolidation. Allow me to elaborate a little more on these elements. In my view, which is consistent with that expressed by a number of academics and by the Eurosystem 6, the new framework should reflect a number of principles.7 First, it should take into account the economic transformations that have taken place over recent decades, including the sharp increase in public debt. The persistence of some of these, such as the fall in the natural rate of interest and in potential output, has, however, been challenged by a series of major shocks in recent years. At the same time, the new rules need to accommodate a greater degree of cross-country heterogeneity. In this regard, as I have said before, the Commission’s orientations include country-specific expenditure targets, which could incorporate the differences in potential growth and interest rates into the debt sustainability analysis framework. In any event, the devil is in the details. While this is in principle desirable, the key aspect is how the deadlines for the necessary fiscal adjustment are calibrated. The credibility of the fiscal framework could be endangered if the deadlines are too lengthy or if the adjustment is backloaded.