samchain/econo-pairs-v1 huggingface dataset:
In my view, three main factors have been driving the recovery over the last year – a bounce back in business and consumer confidence, strong growth in Asia and other emerging markets, and the impact of policy stimulus. These three factors will also have a key bearing on future global economic prospects, and I will discuss them briefly in turn. Recovery in confidence A key factor which plunged the world economy into recession was the massive shock to business and consumer confidence across all the major economies of the world when the global financial system appeared to be rocking and reeling in late 2008 and early 2009. Since then, confidence has gradually recovered as the financial system has stabilised and the shock waves from the traumatic events of eighteen months ago have subsided. 3  See http://www.iata.org/whatwedo/economics/ for data compiled by the International Air Traffic Association (IATA). 4  The 8.5% increase relates to the seven-month period Q2 2009 to Nov–Jan 2010. 5  UK exports of goods and services grew in volume terms by 5.4% per annum from 1992 to 2007; exports of goods excluding oil and erratics increased by 4.5% over the same period. 6  This has been reflected in an upgrading of world growth forecasts for 2010. For example, the IMF forecast of GDP growth across the world economy this year has risen from 1.9% in April 2009 to 3.9% in its latest World Economic Outlook (January 2010).

The initial lift from the fiscal stimulus will likely wane over the course of this year. And financial conditions have become less accommodative over the past several months. In addition, we are now seeing some emerging headwinds to growth from the partial government shutdown in the United States and elevated geopolitical uncertainties abroad. Other “data” confirm that the winds in our sails have calmed. The headlines have been about investors’ concerns around growth, which have contributed to volatility in markets. This is also showing through in surveys of households and businesses, who say that they are somewhat less confident about future economic prospects. For example, the latest Empire State Manufacturing Survey and New York Fed Business Leaders Survey both point to slowing growth in the region. And there is no doubt that my colleagues and I are hearing the same thing directly from our business and financial market contacts, who are more focused on the possibility of a weaker economic outlook this year.3 But let me be clear: a softer economic outlook doesn’t mean we should prepare for doom and gloom. On the contrary, it’s likely we’ll see GDP growth somewhere between 2 and 2½ percent this year. That’s a step down from 2018, but still consistent with a healthy, growing economy. Supporting a Strong Economy So, how should the Fed respond to an outlook of slowing growth and one that’s less certain than, say, this time last year? In a word: carefully.
Digital currencies may alter the size and composition of central bank assets Most of my remarks today have focused on the potential implications of digital currencies for central bank liabilities. But of course, for every liability, there also has to be an asset. Whether those assets are, in total, any larger than today depends, in part, on whether new digital currencies cause a net increase in demand for central bank liabilities, or simply substitute for reserves or banknotes. A narrow digital currency that largely cannibalised banknote demand, for example, might have little or no impact. By contrast, a broad digital currency with many attractive payments features could materially increase the demand for central bank liabilities. The impact of any increase in demand on the size and composition of central bank assets depends on whether, and how, central banks choose to accommodate that demand. I’ve already noted that, in systems like the UK’s, digital currencies may cause some banks whose deposit bases have been partially disintermediated to increase their borrowing from market-wide facilities. A more interesting case could arise if the central bank chooses instead to back persistently higher demand with more long-lasting assets, for example to reduce rollover risk. At modest size, that may look little different to today’s banknote programmes.

But, to take one example proposed by some, if a systemic stablecoin were required to be fully backed by deposits at the central bank, the implications for central bank balance sheets could be very similar to CBDC (Chart 4). This would also be the case if a ‘narrow bank’ chose to issue its own tokenised deposits and put all the proceeds into holdings at the central bank. Indeed, arguably any stablecoin with a credible link to fiat currency relies ultimately on settlement in central bank money. Of course, that does not mean that it is central bank money: even fully-backed, regulated stablecoins would remain the liabilities of private sector companies, and hence pose a range of risks not associated with CBDCs. 4  See Record of the Financial Policy Committee - 13 December 2019 (bankofengland.co.uk) and https://www.bankofengland.co.uk/financial-policy-summary-and-record/2022/march-2022 5 As proposed by the UK Treasury in O-S_Stablecoins_consultation_response.pdf (publishing.service.gov.uk). Bank of England  Page 7  3. Digital currencies may alter the transmission mechanism for monetary policy A key unknown in assessing the impact of digital currencies lies in judging the extent to which they may affect the flow, and pricing, of money and credit in the economy – which in turn has implications for the transmission mechanism for monetary policy. When a bank creates a new loan, it must retain or attract sufficient deposits to fund it.6 Digital currencies do not fund credit creation, but they do increase the competition for, and hence the cost of, deposits, with knock-on implications for the price and availability of credit.
In this regard, the Central Bank has ensured that staff will not be forcibly retrenched as a result of this process and that the salary of no employee will be reduced from that which prevailed at end 2013. Also, financial institutions were encouraged to appoint competent Human Resource Consultants to perform independent reviews on senior management, while the Central Bank decided to keep the staff unions informed of the consolidation process to minimise any confusion in the minds of the employees. Fourth: Revival plan for cash-strapped NBFIs In our consolidation strategy, a common merger and acquisition plan was designed for wellrun financial institutions. However, there are few finance companies facing liquidity constraints. For such companies, we introduced revival plans on a case by case basis so that public confidence will be restored and financial system stability will be sustained. Under this revival plan, the Central Bank decided to provide supplementary long-term concessional funding facility through SLDILSS for any new investor or financial institution, which acquires or merges with any cash-strapped NBFI, so that operations of such NBFI could be revived and restructured without weakening the financial position of the acquirer. The liquidity support would be granted on a case by case basis after a careful assessment of the financial position and business restructuring plan of the cash-strapped NBFI by the Central Bank.

This approach was consciously at odds with that adopted for TAURUS, which had tried to be all things to all people 7. But it also focused minds in the industry, forcing them to make difficult tradeoffs, and creating a clear incentive to market providers to produce “add ons” for extra user functions. The project team itself projected a similarly minimalist, open approach in its work – building on their own past experience of having developed the Bank’s system for dematerialised settlement of gilts (the “Central Gilts Office”), involving a full range of disciplines (including policy, IT and legal) in all outreach and design meetings, and embracing a robust attitude to analysis and self-criticism, perhaps best summed up in their T-shirt logo “Purist and Bloody-Minded”. Not everything went to plan. Some early project management structures were found wanting. PWC’s audit of the project in Spring 1994 identified what might be euphemistically termed “a range of unfinished business”, but allowed the project to go forward. And the early months of operation after that launch day in July 1996 faced technological challenges and setbacks. But it is remarkable to think that this basic approach delivered a system that, at its core, remains with us twenty years later. How has the Bank applied the lessons from the building of CREST to the strategic renewal of RTGS?
The impact of employee misconduct extends beyond the individual and can impact the firm as a whole, as well as the economy and financial markets more broadly. That is, misconduct risk has both prudential and financial stability implications. For a firm, employee misconduct can make it less resilient by diverting management attention, by harming the firm’s reputation in a way that impedes its business, by driving adverse change in the composition of the workforce, or by depleting its capital through losses or fines. Since 2008, 1/5  BIS central bankers' speeches  for example, firms have paid, in aggregate, in excess of $ billion in fines related to misconduct.2 For the broader economy and financial markets, misconduct can inflict harm directly on consumers and employees. In addition, over time, market participants may lose confidence in the financial sector as a whole and adversely impact the sector’s critical role in financial intermediation. In 2016, for example, Gallup found that confidence in the financial sector had fallen by half over the previous decade.3 These incidents of misconduct can introduce frictions and raise the cost of financial intermediation, which in turn, reduces the flow of productive financial services. These sorts of external effects that spill over to other firms, consumers, and businesses are a critical rationale for official sector intervention related to employee misconduct. In the U.S., official sector concern with the damage inflicted by employee misconduct dates back to the Banking Act of 1933.

Background to the current system During the post-war era the exchange rate norm was supervised by international agreements through Sweden’s membership of the International Monetary Fund (IMF), and the Bretton Woods system. That meant that devaluations were only allowed in the event of fundamental structural problems or imbalances. So the Bretton Woods system limited the opportunities for individual countries to devalue their way out of a cost crisis. Instead, the countries were offered loans from the IMF on tough terms. For Swedish wage formation, this was a successful period. The Swedish Trade Union Confederation and other employee organisations/trade unions, as well as the Swedish parliament and government, were aware that the strict regulations did not permit devaluation, which had a disciplinary effect on Swedish wage formation. The Bretton Woods system was based on an arrangement whereby the US dollar had a fixed value in terms of gold and the currencies of the other countries in turn were pegged to gold via a fixed exchange rate with the dollar. When the US was forced to abandon its dollar peg to gold in the early 1970s after having borrowed large amounts to finance the Vietnam War, the Bretton Woods system collapsed. Thereafter, Sweden independently adopted other exchange rate regimes, all of which gave greater freedom than the Bretton Woods system. That resulted in less discipline in wage formation. What then does it mean to have a fixed exchange rate?
Monetary Policy From End To End: Define, Decide, Deliver Speech given by Dave Ramsden, Deputy Governor for Markets and Banking  The Strand Group Lecture Series King’s College London 20 November 2017  I’d like to thank Grellan McGrath for his assistance in preparing this speech, and colleagues around the Bank for their useful comments 1  All speeches are available online at www.bankofengland.co.uk/speeches  End to End Monetary Policy  This is my first speech in my new role as Deputy Governor for Markets and Banking, and as a member of the Monetary Policy Committee (MPC). It is a pleasure to be giving it in the newest part of King’s College London th  and in my position as a visiting professor here at King’s. And I’m delighted it’s the 25 Strand Group event, showing how this flagship series of policy relevant events has already become well established. One of the key differences between my old and my new role is the level of accountability. As Chief Economic Advisor to HM Treasury for the past 10 years, as would be expected under the civil service code, I was generally responsible for giving evidence-based advice to ministers who were ultimately accountable for their decisions to parliament and the public. That is very different in my new role in which I am directly accountable to parliament and public for decisions taken as a member of the MPC, Financial Policy Committee (FPC) and Prudential Regulation Committee (PRC).

By de-politicising the short run trade-off between inflation and activity, this arrangement has provided the grounds for the most successful monetary policy regime for the UK thus far. The MPC’s flexible inflationtargeting framework was further strengthened by the 2013 Treasury Review and the following Remit update which effectively ‘completed the contract’ by further specifying the relationship between the MPC’s primary objective for price stability, and its secondary objective to support jobs and growth. Though, having overseen the 2013 Review, I must declare an interest in judging its contribution. Since then, the Remit has explicitly acknowledged that, in exceptional circumstances shocks to the economy may be particularly large or the effects of shocks may persist over an extended period. In such a period the  1  Carney M (2017), remarks given at a conference to mark 20 years of the MPC’s operational independence, notes that Governor Eddie George once remarked that in the half century that followed the Bank’s nationalisation in 1946 it “operated under legislation which, remarkably did not attempt to define our objectives or functions.” 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  MPC must balance the trade-off between the speed with which inflation is brought back to the target and the consideration that should be placed on the variability of jobs and economic activity.
Potential output growth estimates for 2022, 2023 and 2024 in the European Commission’s Autumn 2022 European Economic Forecast also remain higher than the estimates in the Autumn 2019 and 2020 European Economic Forecasts. To put the size of the revisions to potential output in context, the European Commission estimates that potential output was 5% lower 5 years after the onset of the global financial crisis compared to the level it would have had if it had increased each year from 2008 to 2012 at the pre-crisis potential growth rate (that loss increased to more than 9% after 10 years). The European Commission’s Autumn 2022 European Economic Forecast estimates GDP to be 0.2% higher in 2024 than the level it would have had if it had increased each year from 2020 to 2024 at the 2019 potential growth rate, but 0.6 percentage points lower than the level implied by the Autumn 2019 European Economic Forecast. The potential output level in 2024 is therefore not estimated to be significantly different from the level that could be expected before the onset of the pandemic, with the sign of the change depending on the counterfactual used. This may reflect factors that have impacted potential growth in different directions: the pandemic and the recent shocks may have had a negative effect, while Next Generation EU investments and other policy measures in response to the pandemic may have had a positive effect, with the net effect being small. 15.

[7] Whose Problem Is It? In setting monetary policies, should advanced economies take into account the spillover eﬀects on EMEs through capital flows? It is neither feasible nor desirable for advanced economies’ monetary policies to be constrained by considerations of the cross-border spillovers they generate. Advanced economy central banks have their own domestic macro stability goals they need to meet and cannot be expected to sub-optimise their policy outcomes. Moreover, accommodative monetary policies in the advanced economies have generated positive spillovers to EMEs, through strengthening export demand and enabling conducive financing conditions. At the same time, it must be recognised that monetary policy latitude in EMEs is to some extent compromised by large capital flows. Empirical studies have found that EMEs’ monetary policy responds to movements in US interest rates and exchange rates, besides their own domestic macroeconomic conditions. [8]  EMEs should therefore have the flexibility to use the policy tools at their disposal to protect their domestic economies from risks arising from large capital flows. Some Questions for an Integrated Policy Framework What are some of the questions that an integrated policy framework should seek to address? The existence of diﬀerent policy objectives and multiple sources of disequilibria necessitates the use of a range of policy instruments. These can be grouped under three broad buckets: foreign exchange interventions (FXIs), macroprudential measures (MPMs) and capital flow management measures (CFMs).
Political leadership has support from relatively broad economic and social groups, with more impersonal relationships and hence stronger competition and mobility. The authors argue that the transition between development stages to what they refer to as “the second social revolution”, a somewhat broader concept than the Industrial Revolution that gives weight to, inter alia, the Enlightenment and Modernity, started over 200 years ago, and that it is still underway. In many countries, society has benefited from technological progress but is still captive of the old stage of development of personal power relationships. They point to a clear concurrence between the open-access society and economic prosperity. North Douglass C., Wallis, John Joseph and Weingast, Barry R. (2009) “Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History”, Cambridge University Press. 8  Nation-building is a difficult task if there is no trust in as vital an institution as the police. Johs Andenæs spent the spring semester of 1971 as a visiting fellow at Oxford, taking along his son Ulf, who was my schoolmate. That year, Leszek Kołakowski, one of the past century’s most famous philosophers, was also a visiting fellow at Oxford, and Johs Andenæs and Kołakowski became friends. Although Kołakowski had been one of Marxism’s prominent post-war thinkers, by 1971 he had completely lost faith in the ideals of his youth. His relationship with the same Communist authorities that he had served as an ideologist earlier in his life was becoming increasingly difficult.

This may well be the true answer or reality, but it is rather disappointing if not frustrating that the wide gap between demand and supply has continued to exist. 3. So the natural question for us would be how we can close that gap and bring about a winwin outcome for project proponents and operators on the one hand and financiers or investors on the other. And in this connection, I should say that Hong Kong is uniquely well positioned to play a pivotal role in facilitating and catalysing investment flows to infrastructure projects in the region. We have well-developed capital markets and a deep pool of professional talents, in addition to Hong Kong being a leading centre in arbitration and dispute resolution, all of which are essential building blocks in support of infrastructure investments and their financing. It was against this background that the HKMA set up the Infrastructure Financing Facilitation Office (IFFO) in July 2016. IFFO has the following mission: (a) provide a platform for the key stakeholders to get to know each other and share experiences; (b) enhance the capacity of the investing and recipient countries in infrastructure financing; and (c) facilitate infrastructure investment and financing flows. 4. IFFO now has 90 stakeholders from Hong Kong, Mainland China and overseas joining as Partners. They include project developers or operators, commercial and investment banks, multilateral development financial institutions, asset owners and managers and professional service firms. In the last two years, IFFO has accomplished a lot.
10  There are exceptions to this division of responsibilities between the plenary and executive sessions. First, whenever a resolution scheme would require the use of the Fund above certain thresholds, which levels depend on what the Fund’s means will be used for, a member of the plenary can within a strict deadline request the plenary session to decide. In such a case, the decision will be taken by a simple majority of the plenary members, but the majority must also represent certain levels of contributions to the Fund. Second, any decision which would involve the raising of ex post contributions from the banks or voluntary borrowing between financing arrangements, among other things, will also be taken by the plenary session. During the transitional period, such decisions require a majority of 2/3 of the plenary members, representing at least 50% of contributions to the Fund. In the steady state, after eight years, the same majority share of the plenary only need to represent at least 30% of contributions to the Fund to take such decisions. 11  This would be the case when the Commission does not agree with the scheme adopted by the Board. In such case, within 12 hours from receiving the resolution scheme from the Board, the Commission may propose to the Council to either: (i) object to the resolution scheme on grounds that there is no public interest of resolution, or (ii) approve or object to a material modification of how much the Fund is used in the resolution scheme.

As I recalled recently7, since the onset of the global financial crisis, the top 20 European banks have increased capital, net of share buy-backs, by higher amounts than the corresponding top 20 American banks: USD 289 billion by EU banks against USD 179 billion by U.S. banks. And according to the FDIC, the leverage ratios of the biggest European banks, calculated according to the same accounting standards, are very close to their American peers8. Furthermore, since midlast year in particular, European banks have implemented write-offs and increased provisions and capital, partly anticipating the Comprehensive balance-sheet Assessment that the ECB is conducting this year. Our estimates based on public information indicate that SSM banks (comprising 128 institutions) have, from July 2013 to April 2014, strengthened their balancesheet by EUR 104 billion. Measures taken include: EUR 34 billion through issuance of quoted shares (implemented and publicly announced), EUR 15 billion through the issuance of contingent capital hybrids or EUR 19 billion relating to additional provisioning. As a result, confidence in the euro area banking sector has improved and since the first quarter of last year, banks’ stock prices have risen at almost double the rate of the market average growth. But even if we were to agree that completing the strengthening of European banks is a necessary condition to consolidate the recovery, it is far from being a sufficient condition for jump starting growth in Europe.