samchain/econo-pairs-v1 huggingface dataset:
What about “leaning against the wind” (as advocated by, for instance, Borio and White, 2003, and Cecchetti, Genberg and Wadhwani, 2002), the idea that central banks should raise the interest rate more than what appears to be warranted by inflation and resource utilization to counter rapid credit growth and rising asset prices? It has sometimes not been quite clear whether advocates of leaning against the wind mean that credit growth and asset prices should be considered targets and enter the explicit or implicit loss functions alongside inflation and resource utilization, or whether they mean that credit growth and asset prices should still be considered just indicators and are emphasized only because credit growth and asset prices may have potential negative effects on inflation and resource utilization at a longer horizon. In the latter case, leaning against the wind is a way to improve the stability of inflation and resource utilization in the longer run. Then it is completely consistent with flexible inflation targeting. However, in line with the previous discussion, other instruments than interest rates are likely to be much more effective in avoiding excessive credit growth and asset-price booms, since interest rates that are high enough to have a noticeable effect on credit growth and asset prices may have strong negative effects on inflation and resource utilization, and a central bank will probably rarely have sufficient information about the likely beneficial longer-horizon effects on inflation and resource utilization for the trade-off to be worthwhile and motivated.

Simon M Potter: The Federal Reserve’s counterparty framework – past, present and future Remarks by Mr Simon M Potter, Executive Vice President of the Markets Group of the Federal Reserve Bank of New York, at the 2015 Roundtable on Treasury Markets and Debt Management, Federal Reserve Bank of New York, New York City, 19 November 2015. *  *  *  Good evening. I would like to thank the Office of Debt Management for inviting me to speak at this year’s roundtable. This forum provides a valuable opportunity for policymakers, academics, and market participants to discuss issues related to the primary and secondary markets for U.S. Treasury securities. I will focus my remarks tonight on the counterparty framework employed by the Federal Reserve Bank of New York, which directly affects not only our implementation of monetary policy, but also the underwriting and distribution of Treasury debt issuance. I will begin with an overview of the objectives that underpin the framework, continue by describing how those objectives have influenced the historical development of the primary dealer system, and conclude by looking ahead as the private and official sectors adapt to the evolving structure of the Treasury market.
However there continues to be a lot of mixed views around how the changes can and should be initiated and implemented. The interconnectedness of the industry has resulted in the public viewing the industry as “one.” Therefore, I believe to address the tarnished reputation of the industry as a whole in a credible and sustainable way, firms must be willing to address it with a unified front. 6  BIS central bankers’ speeches  Culture is a bit of a nebulous concept that tends to go unattended. Accepting that cultural change is a necessity, not a “nice to do,” is the first step in a long road that will require the participation of management, boards and every employee on your payroll. The culture within the organization will guide the behavior of employees, particularly when there are shades of gray. Therefore, if organizational values and norms conflict with the rules or guidance you are required to follow, the organization is headed for trouble. The failure to understand the purpose of a law or regulation may lead one to adopt an overly technical or game-like approach to compliance. Left uncorrected, this type of compliance arbitrage can fester and lead to micro-cultures lacking in respect for law. The recent enforcement actions addressing sanctions violations offer prime examples of this unfortunate and costly phenomenon. Last week we hosted a workshop on “Reforming Culture and Behavior in the Financial Services Industry” at our offices downtown.

I will share some of the challenges we see in the road ahead as the industry continues to adapt to and implement necessary changes. And then I’ll finish with a brief discussion of two of the issues that keep me awake at night. Progress to date Three years ago, I encouraged you to acknowledge that it is impossible to predict the nature or timing of a future crisis event. I posed a question about what a financial system better prepared to weather all storms would look like. As financial institution supervisors and as leaders of financial institutions, we all knew we needed to be better prepared for crisis events, whatever their character, source or timing. Since I made those remarks, a number of stress events have reinforced not only the need for continued substantive changes in firms, but also the benefits of the changes we have made so far. 1. Starting first with what has been accomplished to make financial firms – and the system – more resilient today to future shocks. First, in the area of capital resiliency, as a result of both new bank capital standards and our new stress testing regime, bank capital levels and the quality of capital have increased significantly – and on some measures, nearly doubled from pre-crisis levels. The banking system has more capital and, thus, a better ability to withstand stressful events when they arise.
21 One can see that international interest rates are very important to Sweden if one studies longer time series of international real rates. Figure 2 shows long real interest rates for a number of developed countries. It is clear that large movements in real interest rates are common to most developed countries, even if the smaller cyclical fluctuations can vary in different countries. One also sees that the degree of covariation has increased over time, as the financial markets have become increasingly integrated and globalised. This is also something confirmed by more formal analysis. 22.It is also striking that real interest rates have shown a declining trend in recent decades and are currently around zero. 23 At the end of the  18  This is also confirmed by more formal studies, see for instance Lindé, J., “Swedish Postwar Business Cycles: Generated Abroad or at Home?” Scandinavian Journal of Economics no. 4, 2004. 19  Robert Mundell was awarded the economics prize in 1999 for this analysis and theory on optimal currency areas. Marcus Fleming, who also contributed to developing a similar intellectual framework for stabilisation policy in open economies, died in 1976 and was therefore not available to receive a prize. 20  This also leads to a strengthening of the real exchange rate, as price levels are assumed to be constant. 21  See, for instance, “Account of monetary policy in 2014”, page 37, the section “Policy rate differences, the exchange rate and inflation”, Sveriges Riksbank.

If monetary policy were to need to be more expansionary we can extend the purchases of government bonds, or cut the repo rate further and lower the repo-rate path. We also have the possibility of introducing a programme of loans aimed at companies similar to the ECB’s TLTRO or the Bank of England’s “Funding for Lending Scheme”. Moreover, we can intervene on the foreign exchange market. How do complementary monetary policy measures work? Regardless of which measure one chooses, the effects of complementary monetary policy can be divided into two main lines; one is that they contribute to reducing interest rates in general and the other that they increase the amount of money in the economy. The purchases of government bonds reduce the supply available in the market, which leads to an increase in the price and a decrease in the yield. When government bond yields fall, investors find it more attractive to seek higher-risk assets, which pushes down interest rates and raises prices there, too. This is usually called the portfolio balance channel. When the price of the assets rises, the wealth of those who own the assets also increases, which contributes to stimulating consumption and investment. More liquidity among the banks may also lead to increased lending. All in all, complementary monetary policy thus functions in roughly the same way as normal repo-rate cuts.
Assuming, however, that we nevertheless conclude that monetary policy has not been clearly inefficient in the sense that I described earlier, the next step is to focus on what combination of the stabilisation of inflation and the real economy the central bank actually selected or, in other words, which of all the possible points on the Taylor curve the central bank selected. There are many different efficient monetary policy alternatives to choose between every time a monetary policy decision is made. But did the central bank make a good choice? In the event of a conflict between stabilising inflation and stabilising the real economy, did the combination chosen by the central bank represent a reasonable balance between the two? Did the central bank attach reasonable importance to the stabilisation of the real economy in relation to the stabilisation of inflation? In the literature, as in the case of the forecast loss function I presented earlier, the constant that is the relative weight that the central bank gives to the stabilisation of the real economy in relation to the stabilisation of inflation is usually denoted by the Greek letter lambda, λ. In Figure 3, we can show the forecast loss function with the help of iso-loss curves for combinations of sums of squared inflation-gap and output-gap forecasts that generate equally large losses. Such iso-loss curves are in this case downward-sloping, straight lines with a slope of 1/λ, the reciprocal of lambda. Iso-loss lines closer to origin correspond to lower losses.

An effective implementation of monetary policy presupposes that there is a high level of private-sector confidence in the central bank with regard to both the inflation target and the monetary policy analysis. It also requires that the central bank is successful in communicating its analysis and intentions. In other words, a precondition for an effective monetary policy implementation is that the central bank is open and transparent. Most central banks use a short-term interest rate as the policy rate to implement monetary policy. However, the actual policy rate in the two months prior to the next monetary policy  BIS Review 29/2009  11  decision plays a very minor role in the economy. Expectations regarding future policy rates, on the other hand, do play an important role. They affect interest rates with longer maturities which in turn are the interest rates that have an impact on the economic decisions of households and companies. The Riksbank and a few other central banks have taken this seriously and publish their own policy rate paths to facilitate the formation of expectations regarding future policy rates and to influence these expectations more effectively. If the central bank is successful in its communication, the market participants should be able to predict rather well how new information or new shocks will affect the central bank's forecast for the policy rate. If the central bank's analysis is credible, the market's expectations regarding the future policy rate should also change in line with the revised interest rate path of the central bank.
2 2 See Alternative Reference Rates Committee, Second Report, March 2018 3 3 See remarks by William C. Dudley, Restoring Confidence in Reference Rates, October 2, 2014 4 4 See remarks by William C. Dudley, The Importance of Incentives in Ensuring a Resilient and Robust Financial  System, March 26, 2018 5 5 See, for example: 6 William C. Dudley, Enhancing Financial Stability by Improving Culture in the Financial Services Industry, October  20, 2014 7 William C. Dudley, Opening Remarks at Reforming Culture and Behavior in the Financial Services Industry:  Expanding the Dialogue, October 20, 2016 8 William C. Dudley, Remarks at the Culture Imperative – An Interbank Symposium, January 11, 2017 9 William C. Dudley, Reforming Culture for the Long Term, March 21, 2017 10 Michael Held, Reforming Culture and Conduct in the Financial Services Industry: How Can Lawyers Help?,  March 8, 2017 11 Kevin J. Stiroh, Misconduct Risk, Culture and Supervision, December 7, 2017 12 6 See remarks by William C. Dudley, Lessons from the Financial Crisis, November 6, 2017 13 7 See Alternative Reference Rates Committee, Second Report, March 2018 14 8 The U.K. Wheatley Review led to changes in many areas of LIBOR, including statutory regulation of LIBOR,  selection of a new administrator, new governance and oversight regimes, and a code of conduct for submitters.

Financial crises typically result when we fail to identify vulnerabilities, and then unexpected triggers turn those vulnerabilities into points of weakness that can lead to catastrophic failure. The discontinuation of LIBOR, however, is different. We can see it coming, and we know the impact of a disorderly transition would be huge. Therefore, a half-hearted effort or a failure to act would be inexcusable, especially after all we have learned from the experience of the financial crisis. Moving this core piece of the global financial system to a firm and durable foundation is essential and worth the cost. This task is admittedly hard, but I am optimistic given our past successes. We have demonstrated that effective collective action can provide solutions to longstanding structural vulnerabilities in the financial system. A key lesson from the crisis is that structural vulnerabilities must be addressed continually. If they are ignored, larger problems eventually will result. For example, through collective action over the past decade, we have successfully addressed structural weaknesses in the tri-party repo market, the over-the-counter derivatives market, and money market mutual funds. Each of these challenges required a tailored solution that relied on different tools—including a diverse mix of market, regulatory and supervisory measures—to get the job done. Everything isn’t a nail, and the best tool is not always a hammer. You have to identify the problem that needs fixing and select the right tool for the job. This is likely to require both official sector engagement and private sector initiative.
Need to ensure that the financial system continues to function well to perform its intermediary role and continue to provide support the recovery. a. Thailand is a bank-based economy and banks are currently in good shape as reflected by their robust capital positions and high liquidity. SME credit growth is also positive while NPL ratios are low near pre-pandemic levels as a result of the financial measures implemented since the pandemic. We wish to see this momentum going forward. • SME credit growth has become positive since Q2/21. Current Q2/22 credit growth = 0.9%  b. We actively assess if further action is needed to ensure the functioning of the financial system as we are phasing out some “all-in” broad-based measures while focusing on targeted measures. Financial measures that are left in place for too long while they are no longer warranted by the economic situation may lead to moral hazard behavior, which will result in the build-up of inefficiencies and distortions in the financial system. We need to make sure that inflation does not derail growth and the financial system remains healthy and acts as a lubricant to keep the economy taking off smoothly. Part 2: How do we get there? Guidelines for our policy normalization • A holistic and integrated approach towards both monetary and financial policy normalization. Just as we required concerted effort of all policies and financial measures to get us through this crisis, the unwinding and recalibrating of both monetary policy and financial measures must be done in unison.

The national payment system is the backbone of a country’s monetary and financial system and it plays a critical role in a country’s economic development. It is through the payment system that money is transferred between savers and lenders, buyers and sellers or from one point to another. Developing a national payment system is an ongoing process. By reforming and developing the national payment system, it is possible to reduce the overall transaction costs and expand opportunities for commercial and financial transactions in an economy. In recent years, there has been a rapid acceleration in fundamental reforms to national payment systems worldwide, although the pace of implementation of reforms in different countries has been uneven. Planned outcomes have not always been achieved in terms of expected use, benefits or costs of payment system reform projects and many planned reforms have been unexpectedly slow to complete. In its modernization programme which commenced in 2001, the Central Bank refocused on its core objectives, i.e. the economic and price stability and the financial system stability. The financial system stability objective encompasses a wide range of subjects of which, the establishment of a safe and sound payment system was seen crucial for the development of the financial sector, which is also complementary to the maintenance of price stability. In this context, the Central Bank examined the adequacy and the efficiency of the payment system to satisfy the needs of an evolving economy and decided to undertake comprehensive payment reforms.
With that move, the algorithm broke all previous human playing conventions, built up over thousands of years of play. If you watch the documentary of the match, Move 37 appeared to personally traumatise the World Champion Lee Sedol.38 He promptly lost the game and, in time, the match. Much less widely reported on, but for me as interesting, is what happened in Game 4, Move 78. This move was played not by the AlphaGo algorithm, but by Lee Sedol. This, too, broke all centuries’-old human conventions; it was the imagined made real. Watching the film, Move 78 appeared to send the AlphaGo algorithm into meltdown. It was digitally traumatised, began playing erratically and promptly lost the game. It is difficult to know what prompted Lee Sedol to create an untried and untested move. Perhaps the personal trauma of Move 37 caused some re-wiring of his brain. Perhaps out of destruction was forged creativity, as after the Great Fire. If so, this would be an example of co-evolution in practice, with the neurological and the technological combining in a mutually beneficial cycle. 35  https://www.soci.org/news/general-news/dr-hermann-hauser-delivers-machine-learning-lecture Berlucci (2009). Carr (2011). 38 https://www.alphagomovie.com/ 36 37  15  All speeches are available online at www.bankofengland.co.uk/speeches  15  Since 2016, humans playing Go have adapted their playing strategies learning from the ever-improving algorithms. The same was true of Chess champions after Deep Blue. Move 37, or its successor strategies, has become a new human convention. This creativity was machine-assisted.

Rosling, H (2018), Factfulness: Ten Reasons We’re Wrong About The World – And Why Things Are Better Than You Think, Sceptre. Smith, H, Parker, F, Kotze, S and Laurin, M (2013), ‘Multiple independent appearances of the cecal appendix in mammalian evolution and an investigation of related ecological and anatomical factors’, Comptes Rendus Palevol, Vol. 12, No. 6, pp. 339-354. Tegmark, M (2017), Life 3.0: Being Human in the Age of Artificial Intelligence, Allen Lane. Unger, R (2019), The Knowledge Economy, Verso. Viereck (1929), What Life Means to Einstein: An Interview by George Sylvester Viereck, The Saturday Evening Post. 22  All speeches are available online at www.bankofengland.co.uk/speeches  22
Norman T L Chan: Development of e-Cheque usage in Hong Kong Speech by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the Electronic Cheque (e-Cheque) service Launching Ceremony, Hong Kong, 11 December 2015. *  *  *  Ms Helen Wong, Mr Allen Yeung, Mr Wong Kuen-fai, distinguished guests, media representatives: 1. Welcome to the official launch of the Electronic Cheque (e-Cheque) service jointly organised by the Hong Kong Association of Banks and the Hong Kong Monetary Authority. For the first phase of the e-Cheque service, nine banks have started offering the e-Cheque issuance service, while all banks in Hong Kong can already accept e-Cheques deposited by their customers. 2. Traditional paper cheques have been widely used in Hong Kong, but there are limitations. For example, the payer must deliver a physical cheque to the payee, and the payee must also physically deposit the cheque at a bank. These steps involve quite some time. Besides, paper cheques consume a lot of paper and are not environmentally friendly. In view of this, the HKMA began work with the banking industry on developing the necessary infrastructure for the electronic form of cheque service three years ago. Benefits of e-Cheques 3. As e-Cheques have a number of obvious benefits over their physical counterparts, I believe they will become a popular form of electronic payment soon. I. The e-Cheque issuance and deposit service is available via Internet banking platforms and the Hong Kong Interbank Clearing Limited’s portal on a 24-hour basis.

The Inland Revenue Department became the first government department to participate in the Pay e-Cheque portal, providing a convenient and easy option for paying tax demand notes, business registration fees, and stamp duties as well as purchasing tax reserve certificates. III. Lastly, the Treasury has also actively helped promote the acceptance by other government departments of e-Cheques in paying general demand notes. 6. I would like to thank all those involved in bringing the e-Cheque service into fruition. The HKMA will strengthen public education programmes with the Hong Kong Association of Banks to increase public understanding of the use and benefits of e-Cheques. 7. Thank you. 2  BIS central bankers’ speeches