samchain/econo-pairs-v1 huggingface dataset:
Government policy on public health, in the face of the most extreme pandemic for at least a century, led to deliberate lockdowns. Much of economic activity simply ceased. The important question we faced as monetary policymakers was what would happen when the restrictions were lifted as Covid abated. Would a synchronous and equivalent fall in demand and supply simply be followed by a synchronous and equivalent rise? At the time, I remember being asked quite often if the pandemic would leave scars on the economy: would there be any lasting damage to the economy? Bank of England  Page 14  As put, the question was about whether firms would be able to survive the prolonged economic impact of the pandemic, let alone continue to invest in the future – or whether millions would be driven into unemployment as the Government furlough scheme, which remunerated those whose jobs were in effect suspended, was set to end at the end of September 2021. This was by no means clear at the time. The furlough scheme was unprecedented and had been operating for 1½ years, and even firms were unsure of what the effects on recruitment would be, as they reported to the Bank’s Agents at the time. A key consideration for policy, therefore, was to ensure that supply would come back on stream, and for monetary policy in particular to ensure that there was sufficient demand in the economy to pick it up. What actually happened was quite different from what we had feared.

European Central Bank: Press conference - introductory statement Introductory statement by Mr Jean-Claude Trichet, President of the European Central Bank, and Mr Lucas Papademos, Vice-President of the European Central Bank, at the press conference held in Frankfurt, 1 April 2004. *  *  *  Ladies and gentlemen, welcome again to our press conference. Before I proceed, I would like to remind you that I have conveyed the Governing Council’s sincere condolences to Jaime Caruana, Governor of the Banco de España, following the terrorist attacks in Madrid on 11 March 2004. I assured him of the Governing Council’s total solidarity with the Spanish people and the Banco de España. The Vice-President and I will now report on the outcome of today’s meeting of the Governing Council of the ECB. On the basis of our regular economic and monetary analysis, we have not changed our assessment that the current stance of monetary policy remains in line with the maintenance of price stability over the medium term. Accordingly, the key ECB interest rates have been left unchanged. The low level of interest rates also provides ongoing support to the economic recovery in the euro area. We will continue to monitor carefully all developments that could affect our assessment of risks to price stability over the medium term. Let me now provide a more detailed explanation of our decision, turning first to the economic analysis.
The results show that the independence index does not have a statistically significant effect on bank efficiency contemporaneously or lagged by one year. Second, they used the loan growth rate as a dependent variable. The result is similar: the index does not have a statistically similar effect on loan growth. These results differ somewhat from others have found. Dincer and Eichengreen (2013) find when the supervisor is independent some measures of bank credit are lower. In contrast, Barth et al (2013b) find supervisory independence is associated with higher bank efficiency. Table 4: Results for regressions of a bank efficiency ratio or loan growth on the RegulatorySupervisory Independence Index Dependent variable Bank efficiency ratio (a)  Loan growth rate  Regulatory-Supervisory Independence  1.083  0.027  Index  (0.992)  (0.022)  Regulatory-Supervisory Independence  0.155  0.004  Index lagged by one year  (0.367)  (0.015)  Observations  30,698  30,698  Adjusted R2  0.737  0.105  (a) Defined as (non-interest expense before foreclosed property expense + amortisation of intangibles + goodwill impairments) as a percentage of (net interest income + non-interest income). Conclusion  In this speech, I have set out a framework for thinking about ideal post-EU institutional structure. The ideal model involves independent regulators with mandates. The evidence backs that independence of prudential regulation increases financial stability with no cost to efficiency.

But it would have meant putting the whole of the economy, including the exposed sectors, at risk of accelerating inflation, and it would in all probability have meant a much sharper downturn in the economy as a whole a little further ahead. We’ve been round that buoy all too often before. And so we tightened policy, trying as best as we could through our tactics to minimise the unwanted upward pressure on the exchange rate. I know, Chairman, only too well that this will be cold comfort to many of you in the exposed sectors - but there’s no point in pretending things are other than they are. The present imbalance means that we are trying to maintain stability in extraordinarily difficult circumstances. But I will make one final point. The inflation target we have been set is symmetrical. A significant, sustained, fall below 2½% is to be regarded just as seriously as a significant, sustained, rise above it. And I give you my assurance that we will be just as rigorous in cutting interest rates if the overall evidence begins to point to our undershooting the target as we have been in raising them when the balance of risks was on the upside. There is now evidence that domestic demand growth is moderating, as it must do, and that the labour market is tightening more slowly than before.
Yiu-kwan Choi: Basel II implementation in Asia Introductory remarks by Mr Yiu-kwan Choi, Deputy Chief Executive (Banking) of the Hong Kong Monetary Authority, at the BCBS/FSI/EMEAP: Basel II Implementation in Asia, Hong Kong, 17 October 2007. *  *  *  Dear colleagues, Good morning. On behalf of the HKMA, I would like to extend a very warm welcome to you all here today to take part in this outreach event organized jointly by the Basel Committee, the FSI and EMEAP, focusing on the IRB validation aspect of the Basel II framework. The event coincides with one of the regular meetings of the Validation Subgroup of the Basel Committee’s Accord Implementation Group, which was held here over the last two days. The Validation Subgroup, or the AIGV as it is commonly called, is one of three subgroups under the AIG that share information and discuss specific issues related to Basel II implementation. The AIGV specifically explores issues related to the validation of systems used to generate the ratings and parameters that serve as inputs into the internal ratingsbased approach to credit risk. The AIGV has done some excellent work, using the regular AIGV meetings as an information dissemination platform for members of this Subgroup to explore various IRB validationrelated issues. The AIGV has also published several high quality supervisory guidance papers covering topics on validation of low-default portfolios, use of vendor products, use test and control expectations for validation under the Basel II IRB framework.

These topics, as I understand, will be discussed this afternoon under the two scheduled working group sessions. To broaden the geographical reach of the large pool of useful reference documents on IRB-related issues produced for its meetings or contributed by the member jurisdictions, the AIGV has developed an electronic library on eBIS to store these documents for access by the supervisory community. The hosting of this event is well timed, as some jurisdictions have already entered into the implementation phase of the Basel II IRB framework and other jurisdictions, including many from Asia, are in the pipeline for the introduction of the framework for adoption by their banks. The event is therefore a good opportunity for representatives of jurisdictions which have yet to adopt Basel II to hear from jurisdictions already implementing the framework about the emerging issues, and to facilitate future communications on this topic among participants. As Chairman of the EMEAP Working Group on Banking Supervision, the HKMA certainly welcomes the opportunity to host this outreach event, and would like to thank the AIGV members who have stayed behind after the regular meeting to provide support. A major innovation of Basel II is that it allows banks to calculate their regulatory capital requirements using the output of their internal rating systems, subject to supervisory approval. Under the IRB Approach, banks employ internal rating systems to produce estimates of one or more risk components, which are then used as the key inputs to the calculation of regulatory capital requirements for credit risk.
The central banks draft, implement, monitor and assess their monetary, micro and macro-prudential policies against the backdrop of a highly integrated and interdependent global economy. On the one hand, integration bolsters economic growth, enabling a more efficient distribution of labour and capital, thus facilitating the transfer of knowledge and of technology, and promotes the adoption of best practices in economic and financial management. On the other hand, experience has shown that globalisation may spill over and amplify negative shocks among the countries, hence creating risks to financial stability, which interfere with central bank mandates. The experience of Albania during the transition period and onward perfectly illustrates these aspects. The Albanian economy has benefited from integration with the global economy; but, recently, we have also been under the pressure from consequences that some of our trading partners experienced due to the financial crisis. Therefore, our response functions have become increasingly complex, relating not only to the adjustment of the domestic product, labour and capital markets to external shocks, but also to the performance of international markets. This reality requires us to be heedful of international developments, and seek common solutions for the challenges we are facing. 1/3  BIS central bankers' speeches  The cooperation, coordination of policies and strengthening of effective dialogue between central banks is an indispensable requisite for drawing advantages from the opportunities arising from economic, financial and technological integration, and enhancing the immunity against the relevant challenges. 2.

Sunil Mendis: Financial system stability and Basel II - the way forward Inaugural address by the Chief Guest Mr Sunil Mendis, Governor of the Central Bank of Sri Lanka, at the 17th Anniversary Convention of the Association of Professional Bankers, Colombo, Sri Lanka, 28 August 2005. *  *  *  Ladies and Gentlemen It is an honour for me to be invited to give the keynote address at this forum of eminent bankers in Sri Lanka and distinguished persons from the international banking arena. I am happy to see our friends from the Reserve Bank of India and from the Basel Committee who will no doubt make this convention very lively for discussion on a subject which concerns us all. As Central Bankers we have a common interest in ensuring financial stability which impacts upon the macroeconomic performance. Further, as monetary policy transmission takes place through the financial institutions for the achievement of its target of economic and price stability, the Central Bank has the responsibility for ensuring that the financial system as a whole is sound. It should be strong enough to withstand internal and external shocks. We must ensure that our payments and settlements system is protected from the risk of failure at any cost since it is the conduit through which our economic business and commercial activity is facilitated.
Here one is struck by the fact that the recent significant upward trend in the credit-to-GDP ratio has been preceded by an even more spectacular jump during the 1970s and 1980s, pushing the ratio to about 150% – a high level in international comparison. During the 1990s, it then fluctuated around this mark. From 2000, we again observe an increase in the ratio3, at accelerated speed since 2009, such that, as of today, the ratio has reached about 170%.4 This more recent upward trend seems to be continuing unabated. How can we understand these developments? And can this understanding form a basis for predicting the likely future evolution of this variable in Switzerland? These are the questions I would like to focus on in this speech. To begin with, let me argue that if the dynamics in credit-to-GDP observed since the 1970s cannot be construed as an ongoing trend, the recent development must either be viewed as a structural adjustment to a new plateau – which seems to have been the case until 1990 – or as a cyclical upswing to be followed by a later correction. Schematically one can describe these possibilities in terms of Figure 5.5 In the first case, the implication is that at some point, credit volumes will be growing in line with GDP again. This could be either the result of an acceleration of nominal GDP growth at constant credit volume growth, or of a moderation of credit growth to adapt to the long run growth rate of nominal GDP.

In 2012, these imbalances intensified further reaching levels that pose a risk to the stability of the banking sector, and hence to the Swiss economy. Here, two facts stand out. First, real estate prices in Switzerland have been persistently increasing since 2000, at accelerated speed since 2008, reaching levels estimated to be 40 to 60% higher than 12 years ago (see Figure 1).1 Second, the growth of credit volumes has been significant with the consequence that credit volumes relative to gross domestic product (GDP) have reached new historical peaks (see Figure 2a and 2b). The fact that these two developments have progressed hand in hand spells out conditions that may lead to subsequent financial instability. Indeed, historical evidence – widely documented by the Bank for International Settlements (BIS)2 – shows that such a twin development – elevated residential prices and dynamic credit growth – constitutes the prime advance indicator of financial instability. We only have to look outside our borders, to the US and various regions of Europe, or back through Switzerland’s own past to get a feel for the devastating consequences on the real economy of financial crises originating in real estate excesses. 2.  Credit: is the sky the limit? Today I would like to focus on one of the two critical elements mentioned above, the growth of credit volumes. Figure 2b easily explains the question asked in the title: is the sky the limit? The answer is just as easy.
I know of no-one who has argued that the problem with the UK economy is that it has not had a sufficiently deep recession. Inflation rose to over 5% but has now come down to 2.7%, and the Committee believes that it is likely to come back to the target over the next two years. In effect the MPC has allowed a longer inflation overshoot than usual in order to avoid pushing up unemployment. Our current remit does not specify how the MPC should strike a balance between growth and inflation in the short run. The horizon over which inflation should come back to target is effectively delegated to the MPC. But should the MPC itself choose how quickly to bring inflation back to target, or should the government use its annual remit to set that horizon? Is there a gain from trying to quantify how the MPC should manage the trade-off between growth and inflation in the short run? The recent guidance by the Federal Reserve about the conditions under which it would continue to hold interest rates at close to zero is a way of quantifying the “flexibility” in flexible inflation targeting. It describes how the Federal Reserve will interpret its freedom to balance its twin objectives for employment and inflation.

Sukuk has drawn strong interests as an attractive source of funding and a new asset class. UK, Hong Kong, Luxembourg and South Africa issued sovereign sukuk last year. With this leadership taken by the British Government, UK became the first non-Muslim country to issue sovereign sukuk of GBP200 million that attracted strong demand of more than 10 times. Hong Kong issued the second sovereign sukuk in 2015 following its successful inaugural issuance. The sovereign issuances are hoped to pave the way for corporate sukuk issuances particularly from these jurisdictions. Another landmark transaction is the syndicated Islamic financing facilities of GBP467 million for the Battersea Power Station Phase 3 project in London. The involvement of our Malaysian players in some of these global transactions has encouraged cross-border business transactions and enhanced collaboration with players in other jurisdictions. Despite the above, sukuk recorded a lower amount of new issuances of USD40 billion during the first half of 2015 due to a slowdown in the current global financial markets and still-low oil prices. Malaysia remained the key jurisdiction for sukuk origination with issuances of USD19.8 billion or 50% of total market share. Malaysia has evolved into a multicurrency sukuk issuance marketplace with issuances in US Dollar, Chinese Renminbi, Singapore Dollar and Japanese Yen. Our banks, Islamic fund management companies and professional service providers, some of whom are with us today, have global capabilities and expertise in advising and managing cross-border financing and investments.
In Spain, banks have had to provision for potential losses through the cycle. They were required to provision using non-tax deductible amounts for future losses at the time the loan was extended. Such dynamic provisioning has probably functioned effectively also because this system did not require that the supervisory authorities or the banks themselves had to decide that capital should be increased. 12  BIS Review 131/2009  Nordic cooperation  Equal competition considerations require that banking rules are practiced as evenly as possible across countries. For Norway, there are limits to how effectively regulations specific to Norway will be because we are part of the Nordic banking market. The Nordic region, however, is a well-suited region for an active use of regulatory measures. Nordic banks engage in cross-border operations. At the same time, they have little activity outside of the Nordic region. Nor are foreign banks from other regions large in this region. The conditions are therefore in place for effective cooperation in the area of banking regulation and crisis management between the political authorities, supervisory authorities and central banks. In the growth period from 2004 to 2008, foreign banks expanded rapidly in the Nordic market, but during and after the crisis they curbed their activity. I am afraid it can be said that they have amplified fluctuations in Norwegian markets. However, we assume the decline in their market share over the past year is attributable to their being harder hit by the international crisis than Norwegian banks.

15  Financial Services Authority (2009): “Strengthening Liquidity Standards”, Policy Statement 09/16, UK October. BIS Review 131/2009  15  House prices in Norway have risen sharply and probably excessively. We must take account of developments in equity prices and property prices when projecting inflation and output. Norges Bank’s interest rate setting does not rely solely on one simple rule. Instead, we seek to take account of all factors that influence inflation and output in the medium term, and the key policy rate is set on the basis of an overall assessment. Asset prices such as house prices, the exchange rate and credit growth therefore have a bearing on Norges Bank’s interest rate setting. A written formulation of Norges Bank’s monetary policy reaction function would be fairly comprehensive and include all the variables that are considered. However, a reaction function must not be confused with the monetary policy target – our target function. The fact that we give weight to variables such as the exchange rate, house prices and credit growth in interest rate setting does not imply that there are specific target for these variables. The operational target for monetary policy is annual consumer price inflation of close to 2.5 per cent over time. Interest rate setting in a small, open economy can be particularly challenging in periods of strong credit growth and a wide interest rate differential against other countries.
Certainly the portents are worrying. The storm that the modern Prospero has conjured is having an impact. Over the past year, the global economy has shifted from a robust, broad-based expansion to a widespread slowdown, with the proportion of the global economy growing above trend falling from four fifths to one sixth. In its May Inflation Report, the MPC projected that global growth would soon stabilise before recovering to around its potential rate by the middle of next year. This reflected: i)  the relative absence of fundamental imbalances in the global economy that would by themselves be expected to derail the expansion;  ii)  a considerable degree of expected policy support to the expansion; and  iii)  some positive momentum in trade discussions. 3  All speeches are available online at www.bankofengland.co.uk/news/speeches  3  On 5 May, with the ink on the MPC’s Report barely dry, President Trump announced further increases in tariffs on imports from China and China retaliated. Later that month, the US additionally threatened new tariffs on Mexico despite having only recently agreed a revised NAFTA accord. The US threat to increase tariffs on auto imports from Europe remains. The latest actions raise the possibility that trade tensions could be far more pervasive, persistent and damaging than previously expected. The rationales for action are broadening.

15  All speeches are available online at www.bankofengland.co.uk/news/speeches  15  material trade shock, other policies, including fiscal policy, would likely need to play important roles in supporting the economy. Conclusion For now, a global trade war and a No Deal Brexit remain growing possibilities not certainties. Monetary policy must address the consequences of such uncertainty for the behaviour of businesses, households and financial markets. In some jurisdictions, the impact may warrant a near term policy response as insurance to maintain the expansion. Markets are currently pricing in much more stimulus than this, suggesting greater pessimism about trade developments as well as potentially concerns about the absence of inflationary pressures. In the UK, the combination of the relatively strong initial conditions – including a tight labour market and inflation at target – and the prospect of greater clarity emerging in the near term regarding the UK and EU’s future relationship argues for a focus on the medium term inflation dynamics. These will be importantly influenced by global developments and even more so by the form that Brexit takes. The MPC’s projections for the UK economy are based on the assumption of a smooth Brexit to the average of a range of outcomes. That assumption is consistent with the MPC’s standard approach to condition its projections on the government policy and with the fact that agreeing a deal is the preferred strategy of both candidates to be the next Prime Minister.