samchain/econo-pairs-v1 huggingface dataset:
Henrique Meirelles: Challenges for monetary policy – Brazil and the international context Speech by Mr Henrique Meirelles, Governor of the Central Bank of Brazil, at the Conference “The Impact of Brazil on the Global Scenario”, São Paulo, 10 July 2008. *  *  *  In mature economies, the years from the beginning of the 1990s to mid-2007 were characterized by low GDP volatility and low inflation, circumstances that led prominent economists to name the period as the era of the “great moderation”. That environment resulted from better monetary policy, a fact that translated into credibility gains for central banks, globalization and advances in productivity linked to information technology developments. At the time there was a substantial consensus that the emergence of Asia, particularly of China and India, would contribute to keep global inflation permanently under control. Thanks to cheap labor and the intensive use of new technologies on the production process, China – and to a lesser extent India – exported deflation (or at least disinflation) to the world economy through a consistent decrease in their export prices. There is now growing evidence that this era might have came to an end with the unbalances between the expansion of global demand and supply. Moreover, there are also signs of increasing labor costs in China, due to both changes in labor legislation and increasing shortages of specialized workforce. In the benign environment that prevailed through mid-2007, central banks of mature economies engaged in neutral or even expansionary monetary policies for relatively long periods.

1  1 [8]  need a broad discussion of what it means when central government’s presence on the payment market’s supply side risks disappearing along with cash. Introducing an e-krona would entail taking a new step and the consequences of this must be analysed carefully. But accepting a situation in which the general public no longer has access to any form of central bank money would also be a step into the unknown. Issuing digital Riksbank money, an e-krona, as a complement to cash would be one way of avoiding this situation. The alternative to an e-krona would be for central government to intervene with more detailed regulation of the market to ensure society’s different interests are met. But this too would have its problems, as I shall discuss in more detail. The largest and smallest payments: the Riksbank’s role today and in the future Traditionally, the Riksbank has been responsible for the underlying system in which all payments in Swedish kronor are settled, the RIX system. This system was created to manage large-value payments in a highly secure manner. In addition, the Riksbank’s banknotes and coins have been used for the very smallest payments. The payment market is currently undergoing a large number of major changes that are affecting both of these ‘systems’. As cash usage declines, almost all consumer payments in shops are now made by card. This market is completely dominated by Visa and Mastercard and much of the infrastructure is located outside Sweden’s borders.
But the oil remaining under the North Sea lost even more of its value when oil prices fell from USD 150 to USD 40 in the course of a half year. On the other hand, oil prices may show a more favourable tendency than equity prices. The slide in equity prices over the past quarter has not been accompanied by weaker oil prices. Norges Bank has been delegated the responsibility for managing the Government Pension Fund Global and hence has an independent responsibility for limiting and managing risk. We  19  See national accounts data from Statistics Norway: http://www.ssb.no/histstat/aarbok/ht-0901-355.html and historical data on the Norges Bank website http://www.norges-bank.no/en/price-stability/historical-monetarystatistics/  20  See, for example, World Bank data on www.databank.worldbank.org  21  For the results of the Pisa survey, see: http://www.pisa.no/english/index.html  22  http://www.statsbudsjettet.no/Statsbudsjettet-2012/English/  6  BIS central bankers’ speeches  have therefore reduced the fund’s holdings of southern European government bonds in recent months. We have also reduced counterparty exposures to European banks. Maximising returns As a long-term investor, Norges Bank seeks not only to minimise the risk of losing wealth, but to maximise the return on the fund’s capital within the risk limits set by the fund’s owner. But how can we manage our wealth to promote capital growth? Many have probably wondered as does the poet Jan Erik Vold when he writes: “You put as the advert says 20 000 kroner into a high-interest savings account in one of our largest banks.

Domestic and external public debt 40  Figure 4. International reserves 40 EUR bn. percent of GDP  35  35  30  30 25  25  20  20  15  15  10  10  5 5  domestic public debt Source: MPF  2015  external public debt  2016  Aug. 2017  gold  foreign exchange reserves  Oct. 2017  2014  Sep. 2017  2013  Dec. 2016  2012  Dec. 2015  2011  Dec. 2014  2010  Dec. 2013  0  Dec. 2012  0  Source: NBR 3  Figure 5. Economic growth rates worldwide 10  percent  8 6 4 2 0 -2 -4 -6  global economy emerging market and developing economies Romania  2018*  2017*  2016  2015  2014  2013  2012  2011  2010  2009  2008  2007  2006  2005  -8  advanced economies euro area US  *) IMF forecast, October 2017 – baseline scenario Source: IMF  4  Figure 6.
According to this hypothesis emerging and developing countries are unable to borrow abroad in their own currencies reflecting lower degrees of portfolio diversification at the global level to emerging currency denominated investments. Needless to say, borrowing in foreign currencies creates currency mismatch problem – increases in the cost of debt-servicing of foreign currency – denominated external obligations in cases of real exchange rate depreciation. The cost is measured in terms of the reduced purchasing power of domestic output over foreign claims following the depreciation. The original sin indicator depicted in Figure 5 shows that original sin level is much below that of the 1990s despite its rise since the beginning of 2012. BIS central bankers’ speeches  3  In other words, EMEs’ share of obligations in foreign currencies is well below those observed in the 1990s.7 Bailing out banks during the above mentioned EME financial crises put heavy burden on government budgets of EMEs. It was well-understood that banking sector plays a systemic role. In order to avoid bailout costs and disturbances to the intermediation of loans to real economy EMEs overhauled their banking sector regulatory and supervisory systems. These reforms tried to ensure that banks hold adequate capitals to be resilient to shocks and, in general, run their businesses in a prudent way. Figure 6 shows that leverage ratios measured as (risk unweighted) capital divided by total assets, on average, stayed above the average levels of the 1980’s and 1990’s and also the average ratio of advanced economy banks.

The aim of the CBRT’s road map is to improve the resiliency of the economy to external shocks through (i) maturity lengthening – encouraging banks to shift their non-core liabilities from short-term to long-term (Figure 17); (ii) providing incentives to banks for borrowing and lending  BIS central bankers’ speeches  7  directly from and to the Central Bank in times when foreign players are reluctant to engage with banks in Turkey due to heightened volatility in global markets; (iii) bolstering safety-nets – making sure that the banking sector has access to adequate foreign exchange liquidity in times of market stress; (iv) supporting financial stability – providing incentives to banks to improve loan to deposit ratios; and (v) simplifying the monetary policy framework to improve the communication of the monetary policy stance. All but the interest rate corridor simplification step on the roadmap have already been taken and the focus is now firmly on fine-tuning their parameters. Overall, these measures ease the policy tradeoffs posed by the excessive volatility in cross border flows, enabling the interest rate policy to concentrate on the primary objective of price stability. So far the financial market performance of Turkey suggests that the measures undertaken since August 2015 have helped Turkey outperform many peer EMEs. Of course, on the way, Turkey also enjoyed the benefits of lower oil prices relatively more than many EMEs and reduced political uncertainty after the general election result in November 2015.
As can be seen from Chart 1, throughout that year markets expected the Real to depreciate as evidenced by the fact that the implied forward exchange rate was lower than the spot rate by more than the crawl would imply.11 In order to defend the crawling peg, the central bank raised interest rates in September 1998 from 20% to 40% a year. The implied forward exchange rate promptly fell. Raising interest rates actually increased the expectation that the peg would be abandoned, since markets knew that high interest rates were likely to prove politically unsustainable. Any government prepared to keep interest rates that high was not likely to win re-election. In January 1999 a second speculative attack on the peg occurred. And this time the peg was abandoned. Although short-term interest rates were raised  8  Svensson (2003) takes a view that is related to the argument here. In his opinion, commitment to ‘targeting rules’ objectives that the central bank must pursue - are workable, while commitment to ‘instrument rules’ - reaction functions - are not, since it is “impossible” that “every conceivable contingency be anticipated” [p439]. 9  This is cited in David Dewey (1918), page 68. 10  The costs and benefits of discretion in a world where we cannot describe future possible states of the world are set out in Philippe Aghion and Patrick Bolton (2002). 11  The forward rate was below the spot rate even allowing for the devaluation implied by the crawling peg.

William C Dudley: Securing the recovery and building for the future Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the United States Military Academy at West Point, West Point, New York, 17 November 2011. *  *  *  I am honored to have the opportunity to speak to you today in the hallowed halls of West Point. I do not need to tell anyone here of the long and distinguished tradition of this institution and the U.S. Army. I believe that the U.S. military is one of our nation’s greatest institutions and a living demonstration of the best of America. Your example of national service inspires us all to live up to our duty to do all we can to advance the national interest. I am the president of the Federal Reserve Bank of New York, part of the Federal Reserve System that serves as our nation’s central bank. In this capacity I am also vice chairman of the Federal Open Market Committee (FOMC), the Federal Reserve committee that sets interest rates and makes other decisions about monetary policy. This committee sets policy to advance the mandate given to us by Congress: to promote maximum employment and price stability. In the support of these objectives I and my colleagues must also guard as best we can against threats to financial stability, because credit is the lifeblood of the economy.
To facilitate this and to promote the cost competitiveness in Labuan, it is supported by a balanced regulatory regime that effectively regulates the market while facilitating market development. LOFSA, the Labuan Offshore Financial Services Authority was established ten years ago not only to put in place an effective regulatory regime and to provide the supervisory oversight, but also to focus on market development and facilitation. To further ensure a conducive business environment, it is also supported by a robust legal framework including trust laws. While Labuan has in place a business friendly tax regime it also has never been positioned as a low tax finance repository. On the contrary it has leveraged on its strengths and unique advantages to meet the market's need. In going forward, a number of programs will be initiated. The Labuan International Business and Financial Centre (IBFC) aspires to achieve the status of being the "gold standard for holding company jurisdiction". This market has been identified as a further business driver for Labuan IBFC. Malaysia's extensive tax treaty network with over 63 countries in addition to the introduction of a more flexible tax framework supports this initiative. It was announced in the 2008 Budget that Registered Labuan offshore companies now have the option to be taxed under the Malaysian Income Tax Act 1967 or the Labuan Offshore Business Activity Tax Act (LOBATA) 1990, thus enabling businesses to structure their transactions more efficiently.

Nor Shamsiah Mohd Yunus: Launch of the Joint Report on naturerelated financial risks in Malaysia Speech by Ms Nor Shamsiah Mohd Yunus, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the launch of the joint report with the World Bank “Exploring nature-related financial risks in Malaysia”, Kuala Lumpur, 15 March 2022. * * * Good morning and welcome to today’s launch of our joint report with the World Bank, Exploring Nature-related Financial Risks in Malaysia. Over the last three years, the Malaysian financial sector has stepped up its response to the urgent and existential threat posed by climate and environment-related risks. Joint efforts by regulators and the industry to better understand, assess and manage climaterelated risks have made substantial progress. In the Financial Sector Blueprint 2022–2026 recently released by Bank Negara Malaysia, we further reiterated our vision, and expectations, for the financial system to facilitate an orderly transition, towards a greener economy. The financial sector has a crucial role to play in this. To that end, key tools and frameworks are being put in place to: (i) channel financial flows and increase funding solutions towards a greener economy; (ii) strengthen supervisory oversight and address the appropriate treatment of climate and environment-related risks in prudential frameworks; and (iii) address knowledge and data gaps around these risks. Even as we continue to move these priorities forward, we are aware that climate change is not a standalone environmental threat.
Real estate bubbles in some countries, widening current account deficits and generalised losses in competitiveness. The minimalist institutional construction of the euro area lacked the tools to discourage these developments. When these bubbles burst, the shock-absorption capacity of EMU was lower than anticipated. Indeed, financial integration acted as a shock-amplifier. Cross-border capital flows rapidly reversed and created contagion. This was in part because private agents realised that there were no mechanisms to ensure the continued solvency of banks and governments in situations of financial distress. Financial assistance at the European level, such that it existed, was reserved only for non-euro area countries. Moreover, there were no federal institutions – like the FDIC in the U.S. – to remove the burden of repairing the financial system from individual Member States. The official bodies that could – and perhaps should – have intervened to prevent these developments were national supervisors. Yet they lacked the perspective to do so and also the instruments to contain private capital flows that were considered to result from optimizing self-equilibrating markets. Only macro-prudential measures made possible by a consensus at the European level could have dealt with the situation. In other words, there was a mismatch between the degree of integration and the scope of governance. In retrospect, the euro area was not prepared to deal with the build-up of systemic risks. This was in a large part because it had not equipped itself with the institutions commensurate with a highly financially integrated monetary union.

Resolution is the toughest nut to crack in the financial reform package, but it is also the one that I think does more to unlock other issues, including the appropriate steady-state endpoint for the bank capital regime. Put simply, the answer in my view is different in a world of effective resolution that ends too big to fail. But in the alternative outcome, where too big to fail remains with us and there are doubts around the effectiveness of resolution, it is hard to avoid the conclusion that higher capital requirements will follow, and cross-border establishment will be through subsidiaries. Let me also say that we have made more progress on resolution in the last few years than many people expected. To say that we are not there yet should not conceal the real progress made. And, an important credit on this goes to Paul Tucker who has led much of the international policy thinking on resolution. Paul leaves us at the end of the week for the calmer environment of Harvard – we shall miss him in many ways, and I hope that when we get to an outcome on bank resolution that meets our wish to reject the permanence of fragmentation, we will remember how much Paul did to get us there.
As part of the FSB-led and co-ordinated effort, the central bank Committee on Payment and Settlement Systems and IOSCO are beginning to work on this area of resolution. They must make a clear distinction between measures to procure, on the one hand, Recovery from distress and, on the other hand, Resolution. Orderly resolution is what is needed when a CCP is bankrupt, when we all need somehow to avoid the chaos that follows a standard liquidation of assets and closing out of positions. The issue, always, is where do the losses go? The answer cannot be the taxpayer. In the banking sphere, the answer, broadly, is bond holders and other unsecured, uninsured creditors. In the CCP sphere, it is probably the clearing members, as they would be the principal creditors in an insolvent liquidation. The technical issue is how to achieve that in a way that minimises disruption and value destruction and enables essential CCP services to be maintained. This is a key agenda item going forward. It will involve achieving greater clarity in the related area of the optimal “waterfall” of margin, default fund and CCP owncapital resources in absorbing losses. 4. Margin requirements and macroprudential policy  Earlier this year, US Treasury Secretary Geithner called for the world’s major financial authorities to agree minimum initial margin requirements for uncleared OTC derivative contracts, on the grounds that we must avoid a race to the bottom and incentives that make it attractive to clear bilaterally rather than via a CCP. I agree.

In terms of financial stability – my own focus – it is vital that the risk manager in the CCP, which means the heart of the CCP, should have a clear and independent line to the group board, so that they cannot be lent on by the affiliated exchange to reduce or shade initial margin requirements or collateral terms or portfolio investment policies in order to generate more turnover. This will matter more than ever during a period in which there is likely to be more than one CCP clearing some markets. In the same spirit, the core risk management functions of CCPs should not be outsourced. Regulators have been slow to embrace this. But I am glad to say that it does get some recognition in the EMIR text, perhaps not as unambiguously as is warranted in my view. 2. Global CCPs and access  The efficiencies and risk management advantages of multilateral netting across a variety of products make it likely that the world will have a few global CCPs. There must be broad access to these CCPs, provided always that that can be made consistent with maintaining the integrity of risk management (including default procedures). The benefits of putting over the counter (OTC) derivatives trading through CCPs cannot be confined to a few currencies or markets. That is not what the G20 mandated; and, in any case, it would not be in the interests of global stability.
One might also ask whether inflation targeting, even if it should have succeeded in anchoring long-term inflation expectations, can become better than it is today at facilitating the formation of expectations in the near and medium term? This relates to an issue that is addressed in several of the contributions, namely how we should best communicate our expectations and plans regarding the future conduct of policy. Recently, a number of central banks have begun to depart from the assumption of an unchanged policy rate in their forecasts, choosing instead to work with paths for future interest rate developments. What kind of interest rate paths should we use in that case - “exogenous” paths based on implied forward rates or “endogenous” paths that reflect the central bank’s own expectations and plans, and what are the advantages and disadvantages of both options? And could, for example, an excessive degree of openness and detail as regards the central bank’s own expectations risk increasing market volatility instead of facilitating economic agents’ planning? These are just a handful of the issues that are addressed in the contributions to the conference and that I hope will provide the basis for a rewarding discussion. Once again - you are all very welcome! 4  BIS Review 45/2005

Whatever the motivation, the point is that debt in its early life had a tendency to grow beyond what in the end turned out to be the ability to repay or to repay without profound social or economic change. The more recent historical record shows similar examples of major adjustment of debt when the future turned out to be unable or unwilling to pay. The trigger for the adjustment was often an unforeseen or ‘exogenous’ event that changed the economic fundamentals. The re-imposition of long forgotten constraints on the ownership of land seems to have triggered the great financial crisis of AD 33, leading to fire-sales and a crash in land values, default of leveraged landowners and a credit crunch throughout the Roman Empire.5 The default by King Edward III of England on the massive amounts he had borrowed from the leading Florentine banking families contributed – along with a bank run by the Neapolitan nobility and the bankruptcy of the Florentine Commune – to the Florentine credit crunch of the 1340s. Edward borrowed to finance what became the Hundred Years War and defaulted when it became apparent that he could not win the war and capture the revenues he needed to repay the debt.6 The adjustment has sometimes been triggered from within the financial system itself.