samchain/econo-pairs-v1 huggingface dataset:
That would, of course, be grounds for us to contemplate further easing in our monetary stance. That follows because our inflation target is, importantly, a symmetrical one: we need to be just as ready to contemplate easing if we see evidence on the downside of the economy underperforming, and hence the likelihood of inflation running over time materially below our 2 1/2% target, as we would be to exercise restraint on the upside. We take this symmetrical nature of our responsibility very seriously and there is undoubtedly a significant risk that the US slowdown could have a material dampening effect on UK activity. Analysts have used a large part of the alphabet to try to describe various views of how the US economy may develop. I am not sure that I find any of these pictograms particularly helpful, not least because people are sometimes pretty vague about vital details like the dimensions of the letter they favour or the angle of its arms: a big V, after all, can feel awfully like a U when you are down the bottom and trying to find your way up again. The short answer is that none of us can pretend to know precisely how the story will develop. It will be important to keep an open mind and be prepared to adapt our assessment in the light of actual events. But in doing so, there are four considerations that I would suggest are particularly germane to this first area of uncertainty.

Jean-Pierre Danthine: Does cash have a future? Summary of a speech by Mr Jean-Pierre Danthine, Vice Chairman of the Governing Board of the Swiss National Bank, at the Assemblée Générale de l’Association des Alumni HEC, Lausanne, 8 May 2014. *  *  *  The complete speech can be found in German on the Swiss National Bank’s website: www.snb.ch. One of the traditional tasks of the Swiss National Bank (SNB) is to provide the economy with banknotes and coins. Since the establishment of the SNB, banknotes have constituted the most visible link to the population. As an everyday article of use, but also symbolically, banknotes embody the quality, security and stability of the SNB, and of Switzerland in general, not least of all also for the rest of the world. It is therefore of key importance that the SNB undertake the task of cash supply and distribution conscientiously. The role that banknotes play in the public’s trust in the institution and its decisions is not to be underestimated. In turn, this trust is an important prerequisite for the SNB to be able to fulfil its core monetary policy mandate, and thereby ensure price stability. Due to technological developments in the post-war period, the significance of cash declined, as measured in terms of economic performance. Since the beginning of the 1990s, however, the demand for cash has hovered at a stable level, and since 2008, in the wake of the financial crisis, there has even been a marked increase.
However, the economy has been weaker, widening the activity gap beyond expectations and reducing inflationary pressures. Accordingly, the Board deemed it appropriate to enhance the 7  monetary stimulus between January and March. Going forward, we believe that it will be necessary to increase this monetary impulse a bit more, using as a working assumption that the MPR will follow a a trajectory similar to the one implied by financial asset prices during the ten days prior to this statistical closing of this Report. As always, we reaffirm our commitment to conduct monetary policy with flexibility, so that projected inflation stands at 3% in the policy horizon. I will now share some final thoughts. Final thoughts The evolution of the economy in recent years has brought great challenges for monetary policy making around the world. The actions of central banks were paramount to take the world out of the financial crisis of 2008-2009 and to prevent a relapse in the following years, especially in those countries with less room for fiscal maneuvering. During this long period the effectiveness of monetary policy to influence inflation and economic activity was called into question. Though less dramatic than in other places, in Chile this discussion is also revisited every now and then. Before responding to the question of how effective monetary policy is, we must clarify two points: what objective does it pursue, and how does it operate, and then we can explore whether the means contribute to the ends.

For example, if home bias in the G20 was to fall as projected, then the sum of gross inflows to individual emerging markets – including flows from both advanced and other emerging markets – is on average $ trillion per year over the period. It would be easy to quibble with the detail of these projections. For example, cross-country information frictions, and hence home bias, may never be fully eliminated. East or West, home may remain best. Nonetheless, the slow, secular fall in this bias does not appear implausible if recent portfolio patterns are a reliable guide to the future. (b)  The evolution of financial depth  Theory would predict a positive, two-way relationship between financial depth and economic development. Not only does greater development spur the deepening of capital markets to finance investment projects, but deeper capital markets themselves may act as a spur for growth as they improve the efficiency of the financial intermediation process (Levine (2005)). Cross-country evidence again supports that hypothesis. Chart 9 plots the cross-sectional relationship between the log of GDP per capita and financial depth (measured as the ratio of equity market capitalisation to GDP). The correlation is positive and reasonably strong: GDP per capita accounts for almost half of the cross-sectional variation in the market capitalisation-to-GDP ratio. On average, a 10% rise in GDP per capita is associated with an increase in financial depth of around 1.5 percentage points. In principle, the relationship in Chart 9 could be used to simulate forward financial depth in the G20 economies.
Jessica Chew Cheng Lian: Distribution in a liberalised environment Keynote address by Ms Jessica Chew Cheng Lian, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the General Insurance Agents Convention “Distribution in a Liberalised Environment”, Kuala Lumpur, 5 August 2016. *  *  *  The profound impact of financial technology on the provision of financial services – including insurance – is set to gain more traction in Malaysia. Just last week, Bank Negara Malaysia issued a discussion paper which outlines the conditions for companies to test financial technology (also known as “fintech”) innovations in a safe environment. This responds to the innovations that we have seen emerge in the financial services industry; many of them tapping into opportunities now made possible by technology to enhance the customer experience, improve risk management and lower the costs of providing financial services. The insurance industry itself has just entered the first phase in the progressive liberalization of the motor and fire insurance tariffs which began on 1 July this year. After over 30 years during which more than 60% of the general insurance market has been regulated under tariffs, this is arguably the most significant reform of the general insurance market in decades. The implications of the reform are much wider than just an adjustment to premium levels. It will pave the way for a new wave of product innovation, significantly expanding choices for consumers.

In the absence of a credible nominal anchor in the economy, e.g. in the form of an inflation target, demand increases further. This in turn leads to a tendency on the part of firms to raise their prices, particularly in a situation where production is constrained by bottlenecks. In addition, employees will demand higher wages, and the combined effect will be to create a spiral with rising inflationary pressure, such as we experienced, for example, in the 1980s. Adjustments towards a higher price level can occur over an extended period but will gradually set in motion processes that put a brake on growth. This is a manifestation of the established theory that it is not possible to raise the long-run productive capacity of the economy with short-term stimulation policies. What happens in this scenario if the central bank has an inflation target? When inflationary pressure in the economy increases, the central bank will tighten monetary policy so as to prevent the inflation target from being exceeded. Such a course of events would result in an unfavourable policy mix. The stimulation provided by fiscal policy would be counteracted by the monetary policy, which would mean that even the positive short-term effects of the stimulation would decrease or even become negative. Moreover, if the stimulation provided by fiscal policy is very powerful, this could lead to expectations of an increased risk that the inflation target cannot be upheld, which would then lead to rising inflation expectations and higher risk premiums on Swedish interest-bearing papers.
That is good news from a robustness perspective. Less good is the fact that there will be a clear hierarchy of solvency rules, with the frontstop provided by a risk-weighted capital ratio and with the leverage ratio serving as backstop. In the hierarchy, leverage will be second-in-line. At least for the world’s largest and most complex banks – the ones for which Basel was designed – that hierarchy is difficult to justify. On the evidence presented here, the hierarchy should if anything be reversed, with the leverage ratio playing the frontstop role given its simplicity and superior predictive performance. The more complex the bank, the stronger is this case. The case against leverage ratios is that they may encourage banks to increase their risk per unit of assets, reducing their usefulness as an indicator of bank failure – a classic Goodhart’s Law. Indeed, that was precisely the rationale for seeking risk-sensitivity in the Basel framework in the first place. A formulation which would avoid this regulatory arbitrage, while preserving robustness, would be to place leverage and capital ratios on a more equal footing. That is why, in its recommendations on macroprudential instruments, the Bank of England’s Financial Policy Committee has given capital and leverage ratios equal billing. 21  19  Wall Street Reform and Consumer Protection Act, Section 171. 20  Basel Committee on Banking Supervision (2012). 21  Bank of England (2012).

On its own, the Act runs to 848 pages – more than 20 Glass-Steagalls. That is just the starting point. For implementation, Dodd-Frank requires an additional almost 400 pieces of detailed rule-making by a variety of US regulatory agencies. As of July this year, two years after the enactment of Dodd-Frank, a third of the required rules had been finalised. Those completed have added a further 8,843 pages to the rulebook. At this rate, once completed Dodd-Frank could comprise 30,000 pages of rulemaking. That is roughly a thousand times larger than its closest legislative cousin, Glass-Steagall. Dodd-Frank makes Glass-Steagall look like throat-clearing. The situation in Europe, while different in detail, is similar in substance. Since the crisis, more than a dozen European regulatory directives or regulations have been initiated, or reviewed, covering capital requirements, crisis management, deposit guarantees, short-selling, market abuse, investment funds, alternative investments, venture capital, OTC derivatives, markets in financial instruments, insurance, auditing and credit ratings. 8  BIS central bankers’ speeches  These are at various stages of completion. So far, they cover over 2000 pages. That total is set to increase dramatically as primary legislation is translated into detailed rule-writing. For example, were that rule-making to occur on a US scale, Europe’s regulatory blanket would cover over 60,000 pages. It would make Dodd-Frank look like a warm-up Act. (c)  The regulatory response  The density and complexity of financial regulation has had predictable consequences for the scale and scope of regulatory resources.
I consider three policy scenarios. In the first scenario (the green line), the central bank can credibly commit to its future policy settings. I do not regard this as attainable in practice over anything other than very short time horizons, as central bankers generally cannot tie the hands of their successors. But it does provide a useful benchmark against which to judge alternative policies. The nominal interest rate is cut straight to its zero lower bound and remains there for over six years, far longer than is necessary to bring output back to potential and enough to generate subsequent overheating and excess inflation. But it is precisely that expectation of temporarily higher future inflation that reduces expected future real interest rates and boosts demand today. In the second scenario (the red line), the central bank cannot commit in this way; the best it can do is simply to set policy on a quarter by quarter basis. Interest rates are again cut to their zero lower bound but now the monetary stimulus is withdrawn earlier, after about four years, and there is no overheating phase. The consequence is that expected real interest rates are higher than under the first scenario, demand is weaker and the output gap larger. From a welfare perspective, the first scenario offers a better outcome, because – at least in the model – the overheating period is a price worth paying to generate higher activity and less deflation in the near term.

So the central bank’s mandate needs to permit a temporary undershooting of its inflation target if it thereby reduces the risk of a subsequent painful bust. The past few months have, however, seen questions asked of our inflation-targeting framework for other reasons. According to some, the framework has constrained the ability of monetary policy to support the recovery; an objective giving higher priority to growth or employment might have produced a better outcome. A particular, and increasingly popular, variant of this involves combining growth and inflation into a single target for nominal income. The first thing to be said is that the MPC’s mandate already incorporates a growth and employment objective. While our primary objective is to maintain price stability, subject to that we are also expected to support the Government’s policies for growth and employment. The Chancellor’s annual remit letter puts flesh on those bones, by specifying not only the 2% target for CPI inflation but also the Government’s desire for high and stable growth and employment. And the letter goes on to note “that the actual inflation rate will on occasions depart from its target as a result of shocks and disturbances (and that) attempts to keep inflation at the inflation target in these circumstances may cause undesirable volatility in output.” If we had tried to offset the impact on consumer prices of, say, sharp movements in import prices, then we would need to engineer countervailing movements in domestically generated costs, in particular pay.
But during times of global slowdown and increased financial stress, the opposite occurs, with a peso depreciation and greater net worth in the books (figure 5). As is typical of our yearly account to the Senate, in this Report we present the evolution of the Bank’s balance sheet and its prospects for the next year. In the baseline scenario, if the gap between external and internal interest rates remains, we expect that the profitability of our assets will continue to fall short of the cost of our liabilities. Although we foresee no further deterioration in the Bank’s equity, it will continue to be negative. The recent increase in international reserves has a negative effect on these results, but it has to its favor the intangible benefit of a strengthened liquidity position. However, as we said when we announced the intervention program, the level of international reserves we will reach by the end of the year is close to the limits that can be absorbed by our equity position. Still, this net worth – which originates mainly in the costly financial crisis of the 1980s – has not been an obstacle for the Bank to conduct its monetary policy with independence and flexibility. To sum up, we face a complex external scenario. Doubts about how it will unfold and how it will affect the Chilean economy advise acting with prudence, but the Board is convinced that the country is on a good stand to deal with it.

BIS central bankers’ speeches  13  Figure 13 Retail sales and new car sales (1) (2) (index, 2003=100)  250  Employment and unemployment (1) (index, centered on mean of period 19902011)  225  300  200  250  175  200  150  150  125  100  100  50  20.00  20  0.00  0  -20.00  -20  -40.00  -40  06 07 08 09 10 11 Durables Non-durables  40  350 40.00  New cars  90 93 96 99 02 05 08 11 Employment  Unemployment  (1) Seasonally-adjusted series. (2) Sold during moving quarter. Sources: National Automobile Association of Chile, Central Bank of Chile, National Chamber of Commerce, and Ricaurte, M. 2011, “Indicadores de Mercado Laboral para la Comparación de las Crisis Asiática y Financiera Internacional”. Preliminary document, Central Bank of Chile, June. Table 3 Economic growth and current account (annual change, percent) 2009  2010  GDP National income  -1.7 -1.9  5.2 6.25-6.75 4.25-5.25 15.7 6.6 4.2  Domestic demand Domestic demand (w/o inventory change) Gross fixed capital formation Total consumption Goods and services exports Goods and services imports  -5.9 -2.9 -15.9 1.9 -6.4 -14.6  16.4 11.5 18.8 9.3 1.9 29.5  9.1 9.7 14.4 8.2 6.5 12.0  4.5 5.4 7.1 4.9 5.0 4.6  1.6  1.9  -1.0  -2.1  Current account (% of GDP)  2011 (f)  2012 (f)  (f) Forecast. Source: Central Bank of Chile.
It had suffered from the destruction of the wars and the Depression, and from the loss of Empire and protectionist policies at home and abroad, including capital and exchange controls. In a faltering economy trade in government debt had supplanted much of its international business, sterling had declined as an international currency, and the major British merchant banks and brokers had been overtaken by the investment banks in the US and the universal banks in Europe and Japan. Nonetheless, through all this London remained a leading international financial and banking centre. On some measures, indeed, it retained its position as the leading centre for international finance for all but a few years after the second war. 9 It had the critical mass to keep the skillbase and networks to retain the professional trade in many markets. So, even in the 1960s the Euro markets developed here. 6  Michie, RC “The City of London: Continuity and Change, 1850-1990” Macmillan, Basingstoke and London, 1992. 7  Cassis, Y. “Capitals of Capital. A History of International Financial Centres 1780-2005” Pictet and Cie, Geneva, 2005. 8  Kynaston, D. “The City of London”, Volume II Golden Years 1890-1914. 9  Reed, H. “The pre-eminence of international financial centres”, 1981. BIS Review 29/2007  3  The recent growth of the City of London Over the last twenty years, a number of reforms have improved the environment and helped the City to build on its position.

Among major economies worldwide, the euro area has the lowest interest rates, be they nominal or real, short or long-term. And the ECB has developed a wide range of tools. Quantitative Easing was not created in Europe, but corporate bond purchases, the wide range of eligible collateral, TLTRO or negative rates were developed here. In calibrating our decisions, we look of course at both the stance (based on our desired effect on future inflation) and the effective transmission of monetary policy (is the stance having the intended effect for economic agents, including SMEs and households?). These two considerations are evident in our recent decisions about the PEPP. The purpose of the PEPP is to preserve favourable financing conditions for all borrowers during the crisis phase of the pandemic and thereby prevent inflation from falling even further below our objective. From  Page 4 sur 9 the start in March 2020 and still more since December, we have included the possibility to buy flexibly across time, jurisdictions and asset classes, to ensure that all borrowers benefit from favourable financing conditions. The recent evolution of long-term sovereign rates illustrates our consistency. In January and February, long-term sovereign bond yields in the euro area began to increase, largely reflecting transatlantic spillovers from US monetary and fiscal policies. So we decided in our Governing council on March 11th to conduct our purchases “at a significantly higher pace”, which was implemented promptly and efficiently and limited the rates increase. From mid-April nevertheless, our action has been hampered by unwarranted tapering fears.
I personally feel that it is imperative for a country to have a well-developed futures market. They enable growers, traders and end-users to benefit from improved riskmanagement practices. For the price discovery mechanism to be well-functioning, the futures market needs to command respectable volume and liquidity - the achievement of which is a goal that I feel we should set for ourselves. To sum up, the future of futures promises to be exciting and challenging. For TFEX, I hope that it gets off to a very successful start. For AFET, I am seeing a lot of potentials for it to be a futures market with sustainable growth and efficacy, enhancing the efficiency in the agricultural market. To realise its vision statements is only possible with full and complete cooperation from all of us. Again, I would urge the board of directors of AFET to take a lead and push for the much-needed change. Thank you. BIS Review 14/2006  3

Enter a title for the industry  Source: Labour Force Survey (user guidance)  10  BIS central bankers’ speeches  Chart 7: Compositional effects driven by  Chart 8: Job creation fell further, and has  characteristics of employees, not sectors  since recovered faster, for low skilled  Source: Labour Force Survey  Source: Labour Force Survey  Chart 9: Over longer sample, shifts in  We can’t demonstrate this with the detailed  average qualifications driven compositional  LFS dataset from 1994, as it includes only one  effects  proper cycle. But the positive relationship with unemployment exists even during the Great Stability (1994–2008). And, at the cost of a smaller set of variables – the survey didn’t ask people about their occupation and sectors before 1994 – we’ve managed to extend the estimates back a few years, to the late 1980s. The aggregate series you’ve already seen in Chart 310. The more detailed breakdown is in Chart 9. You can see clearly the same cyclical pattern during the last-but-one cycle: steeper falls in employment for the less well qualified during the recession, resulting in a positive  Source: Labour Force Survey  10  compositional effect, the opposite pattern in the upswing. The longer series simply splices on the pre-1994 estimates, based on the narrower sample, to the existing post-1994 series. One might ask how similar the two sets of estimates are in the overlapping post-1994 period, and the answer is that they’re close.