samchain/econo-pairs-v1 huggingface dataset:
Ben Broadbent: The Monetary Policy Committee’s forecasts and the yield curve – predictions versus promises Speech by Mr Ben Broadbent, Deputy Governor for Monetary Policy of the Bank of England, at Reuters, London, 18 November 2015. *  *  *  I would like to thank Clare Macallan for research assistance and I am grateful for helpful comments from other colleagues. The views expressed are my own and do not necessarily reflect those of the Bank of England or other members of the Monetary Policy Committee. Good morning! The previous Governor of the Bank, Mervyn King, once referred to what he called the “rich seam” of MPC communication. Rich or not, it’s certainly a wide seam: MPC members each give several speeches a year; we publish minutes of every meeting, now supplemented with a Monetary Policy Summary; every quarter we publish a 50-page Inflation Report that summarises the MPC’s collective view of the economic outlook and includes our latest forecasts; every Report is followed by a session in front of parliament’s Treasury Committee. Yet, from all this, the outside world seems increasingly interested in only one particular nugget: the MPC’s central inflation forecast two years ahead. This forecast is derived assuming that interest rates follow the path priced into financial markets. Comparing the two, commentators often make very precise inferences from the MPC’s projections about future policy.

On the other hand, the deployment of innovation hubs and accelerators, which takes me to the last part of my address, may successfully contribute to maximising and better understanding the benefits of new technologies for society. Hence, they could encourage financial innovation and/or increase the adoption of these technologies by the supervisory authorities in their functions. Indeed, regulatory sandboxes try to find a balance between these two objectives: they are defined as controlled and delimited environments in which technology-based financial innovations can be tested and monitored by the supervisors, while minimising the risks to the financial system and  5/6  BIS - Central bankers' speeches  consumers. This is the main tool adopted by Spanish financial authorities since 2020 to respond to the emergence of new technologies in finance. The Spanish sandbox has opened up new ways for supervisory authorities to engage and cooperate with the fintech sector, whose players frequently do not have at their disposal other ways of interacting with financial authorities. More importantly, the sandbox has increased the participating firms' understanding of regulation and supervisory expectations and improved their regulatory compliance through their close interaction with the supervisor. The sandbox has also enhanced the supervisors' understanding of both the new technologies applied by the financial sector and their underlying benefits and risks, as well as of the potential regulatory barriers faced by innovators. Four cohorts have been run up until now, and the Banco de España has already published reports with the conclusions of six projects.
As we know from this recent crisis, incentives and a disproportionate focus on short term gains played a central role. This does not mean that we should put on hold initiatives that would promote a more competitive, efficient and sustainable insurance sector. But it does mean that we need to ensure that we have sufficient confidence in the system of checks and balances that exist to safeguard the interests of financial consumers and the long term viability of the industry. Corporate governance is clearly an essential part of that system of checks and balances. As the Government embarks on the Economic Transformation Programme, demand will increase for new and innovative solutions for investment, protection and risk diversification. As presented in the Bank’s Financial Sector Blueprint, expectations are for the insurance industry to be able to deliver a wider range of insurance products that include medical and  BIS central bankers’ speeches  1  health insurance, risk protection offerings for small and medium businesses as well as products supporting the global expansion of Malaysian businesses. Stronger insurance companies are also expected to expand beyond our domestic shores. These developments present tremendous opportunities, but also new risks that must be managed. As individual insurers chart their own paths in this landscape, strong governance systems will assume greater importance to keep business standards in check and to guard against actions that would put the long term interests of the company at risk.

It can be anything from three to ten years 11 , and the turning points therefore become difficult to predict. Economic downturns, that is, the period when the economy moves from a peak to a trough, are usually shorter. The normal condition for the economy is thus a growth phase. 12 The current economic cycle After this review of common cyclical patterns I shall take up some specific features that characterise the current downturn. Following the recent turbulence in the financial markets it can easily be forgotten that there are also elements of a “normal” slowdown in economic activity on this occasion, too. Even before the financial crisis took a serious hold in summer 2007 it was possible to see in the Riksbank’s and other analysts’ forecasts that a slowdown in economic activity was expected both in Sweden and abroad. Since then the world economy has been exposed to major shocks that have led the Riksbank, like other forecasters, to revise down the growth forecasts for the coming years. The financial crisis has proved to be more profound, more prolonged and to have more ramifications than one might initially have expected. In the most recent phase of the crisis the  10  The Riksbank’s own calculations. See also the box “Future labour market developments – experiences in other countries and the significance of growth composition” in Inflation Report 2005:2. 11  The longest expansion phase the NBER has noted for the United States was 10 years, between March 1991 and March 2001. 12  NBER.
Central Bank of Chile September 2019  Integration or Fragmentation? International Capital Flows in the Post-crisis World How the Revised OECD Codes Can Improve Transparency, Accountability, Credibility, and Trust Session : “Next Vulnerabilities: Capital Flows and the Migration of Risks to New Corners of the Financial System” September 11, 2019 – OECD Conference Centre, Paris, France “Capital Flows and the Migration of Risks: The Recent Chilean Experience” Remarks by Mario Marcel, Governor of the Central Bank of Chile 1. Issues for discussion a. Which new sources of vulnerabilities are building up a decade after the 2008 crisis? - Risks associated with the growing importance of non-bank lenders. In some EMEs, this may result in credit lending going informal due to a relatively higher cost in credit provision due to regulation. - Risks that can emerge from a less developed financial infrastructures outside the regulatory perimeter. - Risks attributed to disruptive FinTech activities, such as the development of crypto-assets markets, as well as cybersecurity issues. - Risks and challenges associated with the changing nature of banks’ business model. In particular, those coming from the internationalization of banks’ activities. b. How to better consider a cost-benefit framework for financial regulation, such as currency-based measures (CBM)? - While the banking regulation and supervision arising from the 80s-banking crisis was restrictive in several ways, it was supported by sound monetary and fiscal policies.

International Capital Flows in the Post-crisis World, September 2019 CENTRAL BANK OF CHILE  The Chilean banking industry  Main changes in the Chilean banking industry Change  Concept  Characteristics  Advantages  Challenges  New GBL  New solvency requirements (B3)  Reduces gaps with international standards  Bank’s capacity to comply with new standards  Regulatory environment  Revision of Compendium of Accounting Regulations  Changes if financial statement reporting requirements  Greater importance to the financial statement; reduces asymmetries in financial statement reporting  Maintaining the quality and timelines of financial information; measures for mitigating operational risk  Emerging risks  Cybersecurity events  Vulnerability of digital platforms; temporaray suspensión of services  Mitigation strategies at the industry level  Greater investment cybersecurity  Integration of retail financing  Parent banks absorb nonbank card issuers  Wider coverage of consolidated debtor information  Incorporation of new debtors in credit risk models  Oversear bank subsidies  Acquisition of Banks overseas  Diversification of business models  Different regulatory framework; large overseas investment by local parent banks  Expansion into new business areas  Source: Financial Stability Report, first half 2019, Central Bank of Chile. Let me add one more thing regarding the use of CBM by several EMEs, which have targeted the banking system, rather than the general resident-non-resident relationship, as is usually done by capital controls. The Figure below, for example, based on De Crescenzio et al.
A countercyclical capital buffer will come on top as a capital requirement that can be increased in good times and removed in bad times. The countercyclical buffer is to consist of Common Equity Tier 1 capital and will normally be set between 0 and 2.5 percent of a bank’s riskweighted assets. The countercyclical buffer is intended to counteract the procyclical effects of substantial changes in credit and asset prices. The buffer will help contain the risk of deleveraging in bad times. But an increase in the buffer can also dampen rapid credit growth in good times. The effect will depend on banks’ reaction when the buffer is increased. Norges Bank will have primary responsibility for elaborating the basis for decisions on the countercyclical capital buffer. In drawing up the basis, the Bank will collaborate and exchange relevant information with Finanstilsynet (Financial Supervisory Authority of Norway). The buffer will be set by the Ministry of Finance. Once the regulation is in place, most likely in late summer, Norges Bank will issue concrete advice to the Ministry of Finance on the level of the buffer. Thereafter, the Bank will issue  BIS central bankers’ speeches  3  advice on the buffer four times a year. The criteria on which the Bank’s advice is based were presented in the March Monetary Policy Report. Norges Bank will present analyses and issue advice on the size of the countercyclical capital buffer in conjunction with the decision basis for monetary policy.

Zeti Akhtar Aziz: Creating a sustainable pool of talent for Malaysia Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Kijang Emas Scholarship Award Ceremony, Kuala Lumpur, 30 April 2015. *  *  *  In preparing for the future, a future that is going to be fundamentally different from the current environment, talent development has become more important than ever before. The environment before us is rapidly changing and is continuously becoming more interconnected, more complex and certainly more competitive. It is also becoming more uncertain and unstable. Malaysia has, however over several decades, demonstrated time and again our ability to face the challenges arising from these transformative changes, supported by our resilience and strong foundations. Human capital makes up a critical component of these foundations. Developing the talent that we have and making greater investments in our talent pipeline will contribute to generating the development of our future leaders that will be able to effectively operate in this new environment. Education and capacity building to generate the new talent with the right skills, mindsets and values, as well as effective talent development strategies and their implementation, have now become key priorities of the nation. The Kijang Emas Scholarship Award is an eminent scholarship award that is part of the Bank’s commitment to creating a sustainable talent pool for the nation.
So you’ve turned the world upside down topsy-turvy and today we are seeing India along with other big emerging markets who are effectively lending money to the United States of America by buying their Treasuries and funding their development. So these three stands I think have to be taken into account because they are really new elements of the international financial architecture which have a bearing on how the global economy is going to perform. So what do we see today in the global economy that is different apart from what I just mentioned. First of all you have a liquidity trap. Keynes’s classic liquidity trap is alive and kicking around us. Whatever you do with interest rates it doesn’t care at all for production or for consumption because we have too much liquidity, the 8 trillion that I talked about. In that context how do governments stimulate their economies given that monetary policy has done the heavy lifting, it created this excess liquidity but now going forward there is a need for a new element, the Xfactor, which has to then propel the growth forward. You have very influential commentators like Larry Summers of United States who is calling for another round of quantitative easing in the US because he feels that the long term growth path of the United States economy is still not well embedded and the reason for that is partly due to the demographics.

Conclusion With just a few months before the launch of SEPA, banks are making preparations in order to be ready. I have been closely enough involved to see the tremendous efforts made by the banking industry, and I expect that the vast majority of banks will be operationally ready for SEPA. Operational readiness is, however, not enough. Indeed, SEPA is the next step of the euro. January 2008 will only be the start of this process. SEPA will enhance pan-European competition and foster integration, consolidation and innovation. SEPA requires us to take a broad view that goes beyond operational readiness. In the coming months, we need to go the extra mile and make an additional effort to ensure the readiness of customers and the card payments market. We also need to think about the next steps. And there are, indeed, important further steps in this process. Creative solutions will pay off! Some years ago SEPA was an idea. In 70 days, SEPA will be reality. I wish you an open and fruitful conference. Thank you for your attention. BIS Review 134/2007  5
Rather I want to discuss how the MPC is working towards achieving the 2% target. The institutional framework for monetary policy Just as no man is an island, no economic policymaker works completely in isolation. Let me start with a few comments on this observation, starting with the interactions between monetary and fiscal policies. Monetary policy is a potentially very powerful tool, central to achieving stability in the overall price level by steering inflation back to target. But monetary policy is also a pretty blunt tool, ill-designed to deal with the distributional consequences of relative price changes – changes in the price of one good compared with another. Recent experience in the face of dramatic increases in energy prices illustrates this point. 2/8  BIS - Central bankers' speeches  Monetary policy has been tightened to ensure that the impulse to headline inflation coming from higher utility bills does not become embedded in broader inflationary developments. It has weighed against the incorporation of so-called second-round effects in price, wage and cost setting behaviour. In other words, monetary policy has addressed the danger that self-fulfilling dynamics lead to overall price inflation remaining persistently above target, even as the original impetus to inflation from energy prices recedes. By contrast, the fiscal response to energy price developments has been more targeted.

The effect has been particularly significant in countries such as Spain, whose initial fiscal space was less than that of other countries, given its high starting level of public debt and structural budget deficit. 2  This amount – around € billion – could cover a volume of losses equivalent to almost twice the current volume of bad loans in the system, i.e. approximately 8.2% of total lending to the resident private sector. 2  The ECB’s targeted long-term refinancing operations (TLTROs) during the crisis have also managed to prevent liquidity problems in the banking sector and have smoothed and encouraged lending by the sector to the economy. For example, in the June TLTRO III operation, the participating banks received a total of € trillion, a record amount in the Eurosystem’s refinancing operations. These operations continue to be significant and, at the last TLTRO auction, TLTRO III.7, settled on 18 March, € billion were allotted to the participating group of Eurosystem credit institutions. The European authorities with prudential powers adopted, in coordination with the national and international authorities, numerous decisions so that the financial system could contribute to overcoming the crisis. Supervisors thus reviewed their guidelines on capital and liquidity buffers, allowing banks temporarily to operate below the regulatory level set for some of these buffers. Various recommendations on limiting the distribution of dividends were also approved.
For instance, if the labour and product markets are different, then the mechanisms with which the shock spreads and the mechanisms for the transmission of monetary policy may be different, and that in turn may entail different responses in terms of interest rate variation and levels. And finally, the third criterion concerns the preferences of the central bank and, on a broader level, of society as a whole, which may justify differences in approach. I would like to take a brief look at these three aspects (shock, structures and preferences) in greater depth, on the basis of analytical considerations and empirical results. 2.1  Macroeconomic shocks  Let us consider the extreme case of two countries whose central banks are absolutely identical in terms of preferences and of their decision-making systems. In other words, let us pretend that European monetary policy is not decided by the ECB, but by the Federal Reserve System. Next, let us suppose that the two areas are hit by macroeconomic shocks that are different in terms of their magnitude, nature and timing. If that were so, even if the same central bank were making the monetary policy decisions in both areas, the difference in the shock could be such as to demand broad and frequent official rate adjustments in one instance, while more moderate and gradual intervention might be sufficient in the other.

This difference may explain why, especially in cyclical slowdown phases, monetary policy action in the euro area tends to be less aggressive than it is in the United States. In the United States, on the other hand, analysis seems to show that demand shocks tend to prevail, which puts pressure on inflation and on economic activity simultaneously. Supply shocks like those related to productivity tend to have a considerable impact on demand if agents expect them to have an impact on permanent income, affecting consumption. For example, the increase in productivity in the second half of the 1990s led to strong growth in consumption in the United States, financed by debt. In this context, the monetary policy reaction can be more decisive, and transmitted through relatively more marked and more frequent official rate adjustments. This is true in phases both of economic growth and of economic slowdown. In conclusion, if Europe’s economy and the US economy suffer shocks of a different nature, it is only natural that the responses should be partly different. Some studies suggest that the role of shocks is the predominant factor in explaining the differences in conduct between the 3 ECB and the Federal Reserve. 2.2. Economic structure: the propagation of shocks  Now let us move on to the possible differences in the two economies’ structures.
The FX part of the balance sheet therefore had a significant maturity mismatch. However, there was no safety net of the type we have in a national setting, in the form of liquidity provision and lender-oflast-resort (LOLR) to back it up. It was an accident waiting to happen, and happen it did, with a vengeance, at the peak of the international financial crisis in autumn 2008, when there was a wholesale run on the FX financing of internationally active banks. When the Icelandic authorities were dealing with the failing banks, they assumed, based on published CAD ratios and stress tests, that the banks were solvent. Now, however, we know that this was probably not truly the case, as there were hidden vulnerabilities in their capital positions. Be that as it may, with the solvency assumption in mind, the authorities tried to build defences against potential foreign currency liquidity problems at the banks by  BIS central bankers’ speeches  1  negotiating swap lines and tapping foreign capital markets – in both cases, with limited success. Given the lack of international co-operation, the Icelandic authorities were forced to consider radical solutions. Although they were not necessarily articulated in full at the time, these solutions entailed several goals: to preserve a functioning domestic payment system, ringfence the state in the case of bank failures, limit the socialisation of private sector losses, and create the conditions for rebuilding a domestic banking system.

One reason behind the problems in the labour market is that we have not really been able to keep up with the structural change process that follows in the wake of globalisation or, expressed in another way, that we have not been quick enough in adapting to the increased pressure for change when, for instance, the manufacturing industry is challenged by low-cost countries in eastern Europe and Asia. To summarise: our look back in time leads to the conclusion that the change in monetary policy regime was a success, despite the fact that the period since the mid-1990s was a fairly turbulent time for conducting monetary policy. There have been, for instance, periods of considerable financial  4/7  unease and extraordinary events of various types. A few of the many examples are: the Asian crisis, the Russian crisis, the IT bubble and the acts of terrorism on 11 September 2001. In addition, food prices and various energy prices, in particular oil prices, have periodically varied substantially for varying reasons, such as war, natural disasters and dry summers. I would now like to give you a brief summary of the current economic situation and then conclude with a few thoughts on future challenges for monetary policy. The current economic situation As you have probably noted, we Executive Board members chose to hold the repo rate unchanged at our most recent monetary policy meeting in late October. This decision was also in line with market expectations. The outlook for the Swedish economy is bright.