samchain/econo-pairs-v1 huggingface dataset:
In advanced economies, this was 6 times the level of exports and imports as a % of GDP. This helped to drive unprecedented growth and poverty reduction in the global economy, with the share of the world population living extreme poverty falling over 60% since the 1980s. But financial globalisation also gave rise to a series of regional capital and financial crises that exposed the risks; and the international governance structures did not keep up. It took the great financial crisis and the near-death experience of the global economy to bring home the lesson that a step change in governance was needed. And to create the political will to make it happen. 3  All speeches are available online at www.bankofengland.co.uk/news/speeches  3  The response to the great financial crisis has been the largest, most comprehensive set of reforms to the governance of the international financial sector that we have seen. New international standards ensure that banks engaged in cross border activity are far more resilient. They have more and better quality capital to absorb losses and much greater reserves of liquidity to withstand stress. The development of resolution regimes and an international standard for loss absorbency in resolution makes it far more possible for international banks to fail without endangering the whole financial system. OTC derivatives, a key amplifier of the stress and largely unregulated and unreported before the crisis, are now transparent and collateralised – an additional $ is now held globally against all derivatives trades.

For example, while it may capture some important aspects of how asset purchases work it’s not really an accurate representation of how the conventional policy rate is set. That’s fine for today, as I’m focusing more on QE. But one should at least be aware that the monetary authority needn’t vary the supply of reserves in order to change its policy rate[7]. Second, the downward slope of the MD line was often justified, in the textbook account, by the assumption that reserves don’t pay interest. This would mean that any rise in bond yields is bound to make central bank money comparatively less attractive to hold. These days, however, reserves do pay interest (at the official central-bank rate). As a result, central bank money and government debt – the two sides of the QE transaction – are closer substitutes than they otherwise would be. This has the effect of making the downward slope of the MD line less pronounced. Third, the model – the way it was often taught in the textbooks, at least – glosses over the distinction between “narrow” and “broad” money. For the wider economy it’s clearly the second that matters. Firms and households don’t have deposits at the central bank – for them, “money” is  Page 13  what they hold in their commercial bank accounts. But, as conveyed to students, IS-LM elides the two, assuming that the one is just a multiple of the other[8].
Monetary policy cannot simply wait until we have a clearer understanding of whether we are correctly measuring employment, whether the Phillips curve has shifted down, tilted or both – or whether there is a better framework for understanding the relationship between supply, demand and inflation. 13  All speeches are available online at www.bankofengland.co.uk/speeches  13  But we are almost certainly going through a period of heightened change at present. The current level of uncertainty around the key assumptions on which we model and understand the economy is, in my view, different in kind to uncertainties about the data or signals we receive which are always mixed. Some of the relationships between economic variables that we depended on in the past appear to have gone on a longish leave of absence, but we are not sure why, or whether this is a temporary or more persistent departure. Against that background – and although it makes forward looking monetary policy more difficult – I tend to put more weight on the evidence we can or cannot see in the data and a little less on the un-observables and on how we think the economy works. In any event, monetary policy makers have a personal reason to be careful of complaining too much about the burden of uncertainty. It is not just that it is one of the things that makes the job challenging and worth doing. It is also why it cannot be done by a rule – or, at least as yet, by a robot.

Zeti Akhtar Aziz: Towards the positioning of Islamic finance as an integrated component of the International Financial System Opening speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the 5th Annual Islamic Finance Summit, London, 24 January 2006. *  *  *  It is my great pleasure to be here in London to speak at this 5 th Annual Islamic Finance Summit organised by Euromoney. Islamic finance has made significant breakthroughs to now gain a place in today's challenging global environment with its international dimension now becoming increasingly more significant. It has now evolved to become an integral part of the international financial system. As this international financial integration process intensifies, it will not only increase the potential for Islamic finance to contribute towards enhancing the prospects for more balanced global growth through fostering greater trade and wealth creation, but also through facilitating greater diversification of risks, it will contribute towards increased global financial stability. Rapid Evolution of the Global Islamic Financial Services Industry As recent as five years ago, the development of Islamic finance was still regarded as an infant industry striving to prove its viability and competitiveness in the global financial environment. At that time, the growth of Islamic finance was mainly organic and largely concentrated in countries where the Muslim population was significant. Islamic finance was also for the most part governed by conventional regulatory and accounting standards. In addition, the divergence of views on some of the outstanding issues called for greater harmonization.
Several regional economies have already implemented measures including macro prudential measures to preserve macroeconomic and financial stability. Against the backdrop of continuing uncertainties, Asia is expected to continue to lead global growth, supported by strong macroeconomic fundamentals and sound financial systems. The revival of private sector economic activity has been an important factor in sustaining the strong growth prospects in Asia. On the domestic front, the Malaysian economy is set to register a growth in the region of 7% for 2010. While the external sector may be affected by  BIS central bankers’ speeches  1  the slower global growth, the growth momentum of domestic demand is projected to be sustained in 2011, supported by the continued firm expansion in private sector activity. Most encouraging is that private investment is expected to strengthen and become an important contributor to the growth. Achieving financial stability objectives Let me now turn to the efforts to achieve greater financial stability. While there is still much work to be accomplished at the international level, an immediate priority ahead is to achieve effective and well coordinated approaches to the implementation of the announced financial reforms. This is important given the greater inter linkages in the global economy. While the outcome of the quantitative impact studies have predicted that the long term benefits of the measures will outweigh the short term costs arising from the adjustments, actual experiences are likely to vary across different jurisdictions.

Zeti Akhtar Aziz: Better supervision and better banking in a post crisis era Welcoming address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Financial Stability Institute (FSI) – Executive Meeting of East Asia Pacific Central Banks (EMEAP) High Level Meeting Dinner, Kuala Lumpur, 16 January 2011. *  *  *  It is my pleasure to welcome you to this Financial Stability Institute (FSI) EMEAP high level meeting for Banking Supervisors. Bank Negara Malaysia is honoured to host this event that brings together senior officials from the regulatory community, as well as, the leadership from the banking industry from the Asian region to discuss Supervision and Banking in this post crisis era. We are now in a period of profound and fundamental change for the industry and for regulators and supervisors. The issuance of the final reform package by the Basel Committee in December 2010 marks the completion of a key milestone in the international financial reform process that began in the aftermath of the global financial crisis. This process has been complex, involving multiple tracks of intense dialogue taking place, both at the international and regional levels. The journey towards building a more resilient international financial system, however, is far from over. For this set of reforms that have been issued by the Basel Committee, the next phase involving the implementation will be equally challenging. There is already great anticipation on how the new standards would be phased in, and its impact on the financial sector landscape.
As I just said, I subscribe to a 2 percent target for inflation over the long run. However, given how badly we are doing on our employment mandate, we need to be willing to take a risk on inflation going modestly higher in the short run if that is a consequence of polices aimed at lowering unemployment. With regard to the inflation marker, we have already experienced unduly low inflation of 1 percent; so against an objective of 2 percent, 3 percent inflation would be an equivalent policy loss to what we have already experienced. On the unemployment marker, a decline to 7 percent would be quite helpful. However, weighed against a conservative estimate for the natural rate of unemployment of 6 percent, it still represents a substantial policy loss. Indeed, weighed against a less conservative long-run estimate of the natural rate, it is a larger policy loss than that from 3 percent inflation. Accordingly, these triggers remain quite conservatively tilted in favor of disciplined inflation performance over enhanced growth and employment, and it would not be unreasonable to consider an even lower unemployment threshold before starting policy tightening. I would also highlight that while I believe that optimal policy would be consistent with inflation running above our 2 percent target for some time, this policy does not abandon the 2 percent target for long-run inflation. Indeed, I would support combining this policy with a formal statement of 2 percent as our longer-run inflation target in conjunction with reaffirming our commitment to flexible inflation-targeting.

The wage growth rate influences inflation, unemployment and interest rates In the Riksbank’s most recent forecast, we estimate that hourly wages will increase by about 3.5 per cent per year in 2012 and 2013, and that this corresponds with underlying CPIF inflation of close to 2 per cent towards the end of the forecast period. At the same time, unemployment will only fall to just above 6 per cent at the end of the forecast period. The National Institute of Economic Research’s most recent report of wage formation, from May of this year, presents calculations of the impact of the size of wage increases on inflation and employment. These indicate that wage increases would have to be limited to about 3 per cent per year in 2012–2014 for unemployment to be sustainably decreased to 5 per cent, in accordance with the government’s ambitions. I assume that we will be hearing more about this later today. The Riksbank has made similar calculations that also indicate a connection between wage trends, inflation and unemployment. The basic mechanism in these calculations is that higher wage increases lead to increased costs for companies. If companies wish to retain profitability, they have to choose between raising their prices or decreasing their personnel costs by reducing employee numbers. The most likely scenario is that a combination of these measures will be adopted. Inflation will increase and employment will decrease.
Figure 1 Monetary Policy Interest Rate, Deposit Rate, and Forward Curve (percent) 12  12  10  10  8  8  6  6  4  4  2  2  0  0  Jan.08  May.08  180-day prime deposit rate  Sep.08 MPR  Jan.09 6 month forward rate  Source: Central Bank of Chile  BIS Review 35/2009  5  Figure 2 Lending Rate Spread over MPR and Other Financial Indicators (index, average Jan. 2002-Jul. 2007=1) 4.0  40  3.5  35  3.0  30  2.5  25  2.0  20  1.5  15  1.0  10  0.5  5  0.0  0  02  03  04  05  06  Lending spread over MPR  07  08  VIX (1)  09  Libor - OIS (2)  (1) The VIX index measures implied volatility in the U.S. stock market (2) Libor-OIS spread measures the difference between dollar financing cost for banks around the world and a measure of the expectation of the monetary policy rate in the U.S. Sources: Central Bank of Chile; Bloomberg.

José De Gregorio: Monetary policy and pass-through to interest rates Speech by Mr José De Gregorio, Governor of the Central Bank of Chile, before the Honorable Chamber of Representative’s Economic, Promotion and Development Commission, Santiago, 16 March 2009. The Spanish original prevails. *  *  *  Mr. President. I wish to thank you and the Economic, Promotion and Development Commission of the Honorable Chamber of Representatives for inviting me to speak about how our monetary policy decisions affect the country’s financial and lending conditions. The global economy is enduring terribly uncertain times, which have implications on our country’s prospects for growth and inflation. Thus, we share your preoccupation for evaluating how monetary policy actions – one of the main stabilizing tools we have available as a country – ultimately affect the cost of borrowing faced by households and firms. Monetary policy, in the context of an inflation target and a floating exchange rate like the one operating in Chile since 1999, is an important mechanism for smoothing out the business cycle. Periods of weak output and demand performance, which reduce the medium-term inflation outlook, lend themselves to countercyclical monetary policy actions that cushion the negative effects on consumption, investment and employment. This is what the Central Bank of Chile is presently doing, acting resolutely to moderate the effects that the global crisis – the worst we have seen in decades – is having in Chile.
Whereas a trawl of the web reveals over 200,000 articles referring to LOLR, there are around 1,500 mentions of MMLR, most of them published over the past year or so. 24 And like all new territory, it needs to be thought through. One recent contribution 25 suggested that if the purpose of LOLR in a bank-based system is “to stabilise the balance sheets of banks”, in a market-based system it should be “to stabilise the limit-order book, by placing orders to buy”. By analogy with the more familiar “LOLR” function, the following thoughts suggest themselves for debate in our community. First, as with LOLR, central banks cannot engage in MMLR operations if to do so would interfere with monetary policy. Securities are purchased in exchange for cash, entailing an injection of reserves into the banking system. That has to be consistent with the target for the central bank’s net supply of reserves. Second, a MMLR should aim to charge a penalty (eg buy at a discount) to the fundamental value of an asset. Put another way, any bid-ask spread should be unattractive relative to peacetime conditions in private markets. Third, any purchase (auction) mechanism should be designed to reveal information about the state of the market and the fairness of prices paid. Fourth, while the MMLR cannot avoid the risk inherent in outright purchases, it absolutely must not over reach its capital resources. Fifth, the MMLR should aim to be catalytic, helping ideally to kick-start the market rather than replace it.

Sixth, the MMLR should avoid propping up markets that would not be fundamentally viable once peacetime returns. I must stress that those are just starters for debate. But, unfortunately, we cannot always wait for consensus around fully articulated principles. Recently, in the context of its Asset-Purchase Facility programme, the Bank of England has embarked on what could, perhaps, be viewed as two variants of MMLR in the sterling corporate financing markets. Both have been focused on our being a buyer, rather than operating on both sides of the market, but arguably that is what the various MMLR ideas really amount to in crisis conditions. In the first, we offer to buy Commercial Paper at announced spreads, which are designed to be above those warranted by credit-fundamentals, and above market spreads during peacetime, but below those prevailing in the market before we stepped in. In other words, we are ready to lend without charging a hefty liquidity premium, since we are not liquidity constrained. We offer to buy paper in both the primary market and the secondary market. The latter is in effect a temporary liquidity facility to money market funds and others, at an extra cost of 25bp over the fixed spread, and with the aim of increasing their willingness to buy new paper. The goal has been to stimulate the market to bring market prices to at least our spreads, with market transactions occurring there or more cheaply.
That said, irrespective of the instruments that may soon be adopted, both the objective and the main criteria that have been followed in recent years should, in my opinion, be maintained. The objective is clear and leaves little room for discussion: to have solid institutions that are able to contribute effectively to the financing of households and businesses. And it would also be useful to preserve the main criteria used hitherto in the financial restructuring. Specifically, I am referring to the anticipation of problems, minimisation of the use of public funds, reducing capacity, the conditionality of assistance, the emphasis on downsizing balance sheets and the promotion of transparency. First it is very important to anticipate problems. The primary obligation of a banking supervisor is to ensure at all times that the credit institutions operating are solvent and viable. However, good supervisors should not limit themselves to analysing the present, but should also anticipate possible scenarios of non-viability that might arise in the future and attempt to reduce problems to a minimum before they emerge. When the crisis broke, the 45 Spanish savings banks then existing were all solvent and viable. However, taking into account the new economic and financial environment stemming from the crisis, it was possible to foresee that while some of them were very well-managed and unquestionably sound, many others, within a matter of years or months, might eventually be non-viable.

So as not to overstay my welcome, and given that next week several meetings involving these European institutions are to be held, I propose that we assume that these meetings will eventually see the adoption of the decisions needed to turn the markets around. This assumption about what the European institutions will do allows me to conclude my address by talking exclusively about our national problems. What must Spain do to emerge from the crisis? As I said at the outset, the conjunction of three economic crises, and in particular the worsening of the sovereign debt crisis, mean that precise economic policy implementation is extremely difficult at present, although the diagnosis as to what must be done is relatively simple and widely known. At present, what is most important is to promptly pursue an ambitious reform of our labour market institutions, while continuing to make headway on two key fronts: budgetary consolidation and financial system restructuring. In the past two years significant steps have been taken in both these areas, but to achieve fully satisfactory results, perseverance with the path of reform is needed. Starting with the reform of the labour market institutions, certain measures have been taken recently. But the truth is that, since the outset of democracy, Spain has not been capable of making any meaningful progress in this area, whereas most European countries have used the past three decades to reform their labour systems, in order to achieve higher levels of flexibility and job protection, i.e. greater “flexicurity”.
William C Dudley: Panel remarks at The Clearing House Annual Conference Panel remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at The Clearing House Annual Conference, New York City, 18 November 2015. *  *  *  Dianne Dobbeck, Robert Fitchette, Charles Gray, Joyce Hansen, HaeRan Kim, Kristin Malcarney and Joseph Tracy assisted in preparing these remarks. It is a great pleasure to have the opportunity to speak here today alongside my fellow Reserve Bank presidents, Loretta Mester and Dennis Lockhart. Today’s event comes almost exactly two years since I delivered a set of remarks at NYU School of Law that covered various aspects of what we know as the “too big to fail” problem. In view of some significant milestones that have occurred over the past two years, I would like today to briefly review my sense of the work that has been accomplished on this critical issue, and the work that still remains to be completed. As always, what I have to say reflects my own views and not necessarily those of the Federal Reserve System. Broadly speaking, the regulatory reforms that the U.S. has adopted since the crisis have been designed to address the risks posed by large financial institutions in two related ways. First, our reforms are designed to reduce the probability that large financial institutions will fail by requiring those institutions to be more resilient to stress.

To the extent size is a proxy for productivity, this is also as we would expect.18 During expansions, more productive firms hire more, and lose fewer, of their workers than less productive firms (Charts 14a and 14b). Other patterns in the data less obviously fit the facts, however. Despite jobs flows picking up, pay growth has until reasonably recently remained slow and low. Meanwhile, productivity growth has remained 18  For example, Bernard et al (2014) and Wales et al (2018). 13  All speeches are available online at www.bankofengland.co.uk/speeches  13  stubbornly subdued despite a seven-year jobs recovery. So has the jobs ladder broken? Have its rungs been removed? To understand these developments, it is useful to break the decade down into phases. Charts 14a and 14b: Hire and quit rates by firm size Hire rate  Quit rate  7%  2.5%  1.0%  Small firms (< 50 workers) Medium firms (50-499 workers) Large firms (500+ workers)  0.9%  6%  2.0%  0.8% 5%  0.7%  4%  0.6%  1.5%  0.5% 3% 2% 1%  0.4% Small firms (< 50 workers) - LHS  0.3%  Medium firms (50-499 workers) - RHS  0.2%  Large firms (500+ workers) - RHS  0.1%  0%  1.0%  0.5%  0.0%  0.0%  Sources: ONS LFS and Bank of England calculations. Notes: Charts show four-quarter moving average of hire and quit rates.