samchain/econo-pairs-v1 huggingface dataset:
In particular, foreign demand for euro area exports has declined, and euro area domestic activity has contracted in the face of weaker demand prospects and tighter financing conditions. The survey data and monthly indicators for November and December that have become available since our last meeting clearly point to a further weakening of economic activity around the turn of the year, indicating the materialisation of previously identified downside risks to activity. Looking further ahead, on the basis of our current analysis and assessment, we continue to see global economic weakness and very sluggish domestic demand persisting in the coming quarters as the impact of the financial tensions on activity continues. At the same time, we expect the fall in commodity prices to support real disposable income in the period ahead. Furthermore, the euro area should over time reap the full benefit from the effects of policy measures announced over recent weeks. BIS Review 5/2009  1  In the view of the Governing Council, this outlook for the economy remains surrounded by an exceptionally high degree of uncertainty. Overall, risks to economic growth remain clearly on the downside. They relate mainly to the potential for a stronger impact on the real economy of the turmoil in financial markets, as well as to concerns about the emergence and intensification of protectionist pressures and to possible adverse developments in the world economy stemming from a disorderly correction of global imbalances. It is crucial that all parties concerned make their contribution to lay sound foundations for a sustainable recovery.

When evaluating whether the interest rate level is appropriate, one must consider the quality of the analyses of developments in the Norwegian and international economy, as well as the trade-offs that have been made. When we look back and assess interest-rate setting, we must also take into account the reasons for the deviations from the target. For the average annual rise in consumer prices over time to be the same as the inflation target, the disturbances that affect the economy must be fairly symmetrical. Price inflation has been lower than the inflation target for a longer period and the interest rate is being set with a view to gradually closing the inflation gap. The aim is not for inflation to overshoot the target to the same extent a few years ahead. Therefore, when we in retrospect assess interest-rate setting, we cannot solely look at average CPI inflation. Monetary policy must also be seen in the light of historical inflation. In the 1970s and 1980s, inflation was very high and volatile. The economy did not at that time have a nominal anchor. Since the beginning of the 1990s, inflation has been low and stable, both internationally and in Norway. While inflation in the 1970s and 1980s varied between 4 and 15 per cent, inflation has generally remained in the interval 1½ - 3½ per cent since 1990. The economy now has a nominal anchor.
But the monetary policy of the Banque de France was backed by the people. Historically, what matters is that all future euro area countries, including France and Germany, cooperated very closely from the very outset to ensure convergence. Today, people throughout Europe are convinced of the importance of price stability. And they are also aware of the fact that being addicted to inflation is like being addicted to a drug that over time has extremely negative effects: stagnation and the destruction of jobs. FOCUS: Nevertheless, many experts are expecting prices to rise significantly again in the near future ... Trichet: We have made it very clear that we always take the decisions necessary to guarantee price stability over the medium term: an inflation rate below, but close to, 2%. Observers and market participants are fully aware of this. It is precisely because of the challenges posed by price stability that we stand ready for action at all times. I call that “credible alertness”. FOCUS: At the moment, the markets are addicted to cheap money – to low interest rates. Politicians, bankers and stock market traders have already become too used to this situation, and as a result the risk of inflation is on the rise. How do you intend to change this? Trichet: You can be sure that the European Central Bank will continue, as before, to maintain price stability. Keeping inflation expectations solidly anchored – in line with our definition of price stability – protects us against the materialisation of both inflationary and deflationary risks.

You have in this city and this region a combination of excellent cultural opportunities – both in music and in the visual arts – and a cosmopolitan milieu which is very cultivated. FOCUS: You come from Paris. Is Frankfurt not too provincial? Trichet: You will not be surprised if I tell you that Paris is unique! FOCUS: And Frankfurt? Trichet: When I arrived, I found I had underestimated three things. First, the range of cultural opportunities in the area. There are five opera houses within just 45 minutes of my flat: in Wiesbaden, Mainz, Darmstadt and Frankfurt. There are very few places in the world that can compete in this respect – perhaps New York, London and Paris. Second, the quality of what’s on offer is very high indeed. I was very impressed, for example, by the sculptures in the Messerschmidt exhibition at the Liebieghaus or the Picasso theatre sets exhibited at the Schirn. I hope that I will find time over the next few weeks to see the much-praised Botticelli exhibition at the Städel. Third, as I have said, people here are impressively cultivated, as I saw for myself when the ECB launched its own Cultural Days. FOCUS: What are the highlights of your work as a central bank president so far? Trichet: When Economic and Monetary Union began, many were sceptical about whether it would be successful or even possible.
40  All speeches are available online at www.bankofengland.co.uk/speeches  40  Chart 25: Cartogram of local-authority level ECIs  Sources: ONS Business Register and Employment Survey (BRES) and Bank calculations. Notes: UK NUTS 3 regions re-sized and coloured using estimates of economic complexity. 41  All speeches are available online at www.bankofengland.co.uk/speeches  41  Table 1 lists the top ten local authorities by ECI across the UK in 2017, while Table 2 shows the bottom ten. There is a high degree of inertia in both rankings. The ECI framework could be used to help assess which industrial strategy interventions might boost the degree of specialism and diversity, and hence the income benefits, both in already-successful and struggling regions. Table 2: Bottom 10 local authorities by ECI Dudley  Moray  South Derbyshire  Hartlepool  Wrexham  Carmarthenshire  Aberdeenshire  Breckland  North-East Lincolnshire  Telford and Wrekin  Sources: ONS Business Register and Employment Survey (BRES) and Bank calculations. Economic complexity can also be assessed across industries using a product complexity index (PCI). This proxies the embedded knowledge in an industry. Table 3 plots the top-20 UK industries by PCI against their sector shares. Financial services, the creative industries, and higher education exhibit the highest economic complexity and thus potentially generate the highest value-added. PCI metrics could be used to identify industries where “sector deals” could benefit most the economy, as part of an industrial strategy.

Germany has nothing like the same skew, with the cartogram and map little different.10 A key focus of work among economic geographers is the importance of agglomeration effects – that is, increasing returns to economic scale at the spatial level.11 If those effects are powerful, and if workers are one of their most important sources, we would expect cartograms to have similar properties when looked at by population, income (per head) and wealth (per household). More should not only be merrier but wealthier. 6  For example, Case and Deaton (2017). For example, Viscek, Shlesinger and Matsushita (1994). McCann (2016), Centre for Cities (2019), What Works Centre for Local Economic Growth (2018). 9 See Dougenik, Chrisman and Niemeyer (1985). 10 Put differently, the correlation between geographic area size and population in the UK is in fact slightly negative (-0.05) while it is relatively high and positive (0.7) in Germany. 11 Viladecans-Marsal (2004) and Rosenthal and Strange (2003), example. 7 8  4  All speeches are available online at www.bankofengland.co.uk/speeches  4  Chart 1a: Map (LHS) and cartogram (RHS) of population in the UK  5  All speeches are available online at www.bankofengland.co.uk/speeches  5  Chart 1b: Map (LHS) and cartogram (RHS) of population in Germany  Sources: Eurostat and Bank calculations. Notes: Charts show population in 2018 for NUTS 1 regions. Cartograms resized by population. As Charts 2 and 3 show, broadly-speaking that is the case. The income per head cartogram suggests a shrunken North and a swollen South.
However, our experience has been that heavy and sustained interventions have little influence on the exchange rate, and hence inflation. Exchange interventions, whether they involve selling or buying currency, are not an appropriate means of influencing the exchange rate over time. If Norges Bank intervenes heavily in the market, a game situation may arise where market participants perceive central bank interventions as an interesting opportunity to make a profit. Market participants know that interventions cannot be sustained. This tempts operators to take positions against the central bank, thereby intensifying the pressure on the krone. Under the European currency crisis in 1997-1998, and probably during the currency turbulence in 1997-1998 as well, these mechanisms appeared to be at work. Norges Bank does not intend to act in a way that prompts such game situations. 6  BIS Review 74/2001  Other countries that conduct monetary policy using an inflation target also use the interest rate as the main instrument, and interventions are used only by way of exception. Over the last year, however, the ECB and Sveriges Riksbank have intervened in the foreign exchange market. The ECB intervened for the first time in September last year. The interventions were undertaken in concert with several central banks, including the Federal Reserve and the Bank of Japan. The ECB intervened again on three occasions in the beginning of November, but this time unilaterally. The ECB subsequently maintained that the interventions had been successful.

Although some key payment systems are probably less vulnerable to generic, non-bespoke attacks2 than most financial firms, given their limited reliance on the internet, the consequences of a successful attack could be  1  http://www.bankofengland.co.uk/publications/Documents/records/fpc/pdf/2013/record1307.pdf. 2  Such as “distributed-denial-of-service” (DDoS) attacks – which affected some banks earlier this year. BIS central bankers’ speeches  3  severe. Addressing this cyber threat will not be just about IT security and system enhancement, but also people, processes and culture, posing challenges to the managers of FMIs as well as their overseers. For systemically important systems, recovery arrangements are particularly important, and this is an area where alternative technology such as MIRS could come to the fore. The next issue relates to the times at which the Bank’s RTGS system can be accessed by settlement banks. Currently it operates for around ten hours each business day, with the most recent change occurring in 1999. Since we made that change, a number of central banks have lengthened their RTGS operating hours quite considerably, most obviously driven by the demands of the internationally-harmonised CLS cash settlement window, and also by a more general desire to operate with a greater overlap with major markets in other time-zones. And in the UK the move to a cash pre-funded model for two of our largest retail systems may create a latent demand to access the RTGS system outside of its current operating hours. Faster Payments, which operates 24/7, often provides confirmation to customers almost instantly.
Also envisaged is a resolution fund fed by contributions from the industry to meet any needs for capital which cannot be covered by burden-sharing exercises. Furthermore, last December the Council of the European Union reached an important consensus after several months of complex negotiations, which, taken together with the aforementioned Directive, amounts in practice to the creation of a single resolution mechanism. Further to this consensus, a bank resolution board will be set up whose scope of action will be the same as that of the single supervisory mechanism. It will have considerable freedom to act urgently in cases of restructuring or winding-up. It was also decided to set up a single resolution fund which will be progressively endowed with financial resources. The bank resolution board will be entrusted with applying resolution rules uniformly, approving restructuring and resolution plans for banks supervised directly by the ECB and determining how the resolution fund is to be used. The details of the single resolution fund are to be set forth in an intergovernmental agreement of the participating countries before March. However, the consensus reached stipulates that the fund will be financed through contributions from the European financial services industry, although the resources contributed by the banks in each jurisdiction will not be fully merged until ten years have passed. During these ten years the fund will have separate compartments funded by contributions from the banks of each country, which will be progressively mutualised year by year.

We also need to build bridges to the future and shape a recovery that makes our economies fit for the future. But bridges need solid foundations. Europe’s future must be built on strong democratic legitimacy. Europe’s citizens must be at the centre of the debate about the Europe that we want to build as we emerge from the crisis. As their elected representatives, you, together with the European Parliament, have a crucial role to play in making their voices heard. I now look forward to our debate. [1] In French: “J’ai toujours pensé que l’Europe se ferait dans les crises, et qu’elle serait la somme des solutions qu’on apporterait à ces crises.” See Monnet, J. (1976), Mémoires, Fayard, Paris. [2] In French: “[la Communauté européenne] elle-même n’est qu’une étape vers les formes d’organisation du monde de demain.” See Monnet, J., ibid., p. 617. [3] Following a significant drop in the first quarter of 2020, euro area real GDP fell by 11.8% in the second quarter, resulting in a record cumulative decline of 15.1% in the first half of the year. [4] ECB staff macroeconomic projections for the euro area, September 2020. [5] Milasi, S. et al. (2020), “  The potential for teleworking in Europe and the risk of a new digital divide”, VoxEU, 14 August. [6] Lagarde, C. (2020), “Payments in a digital world”, speech at the Deutsche Bundesbank online conference on banking and payments in the digital world, 10 September.
As a result, the capital buffer for the more systemic firms should be higher based on size, complexity, interconnectedness, global exposure and substitutability, so that their expected probability of failure will be lower than for less systemic firms.1  1  New liquidity requirements such as the liquidity coverage ratio also work to reduce the risk of failure by giving firm management more time to address problems before a funding squeeze becomes acute. BIS central bankers’ speeches  5  The SIFI surcharge acts as a penalty for size and complexity, leaning against any remaining funding cost advantage that might remain for a large complex firm even after a viable resolution regime is in place. This should further level the playing field for smaller firms and reduce the incentive to become systemically important in the first place. However, I expect that it will take considerable time for the surcharge to have a meaningful impact on size and complexity. We also need to create new mechanisms and incentives for bank management to act early, well before resolution becomes necessary. Early intervention is likely to be much more successful in preventing failure as compared to last-ditch efforts. These actions can take many forms – cutting capital distributions earlier, raising new capital faster, restructuring businesses sooner, and reorganizing senior management and boards of directors more radically when the firm is not performing well. In this regard, the Comprehensive Capital Analysis and Review (CCAR) should bolster the incentives for early action.

Jean-Claude Trichet: Macro-prudential oversight and the future European Systemic Risk Board Keynote address by Mr Jean-Claude Trichet, President of the European Central Bank, at the European Banking Congress, Frankfurt am Main, 19 November 2010. *  *  *  Ladies and Gentlemen, It is a pleasure for me to participate in the European Banking Congress. We are meeting at a very important time for Europe’s financial system, of which so many senior representatives are assembled here. This is also a very important time for the European economy and for the governance of the euro area. Looking at the current situation, we have to be very clear as to what the issues are and where the solutions lie. As its name suggests, Economic and Monetary Union has two attributes: one is “Economic” and one is “Monetary.” The “Monetary” attribute refers to the ECB, its mandate and its independence. I will come to this in a moment. The “Economic” attribute comprises the fiscal regime enshrined in the Stability and Growth Pact; the national frameworks of economic policy; and the system of mutual surveillance. The developments we are currently witnessing in Europe’s economy have to do with its “Economic” functions. They have essentially three origins: unsound fiscal policies in a number of member states; inappropriate macroeconomic policies in a number of member states; and overall an inadequate system of surveillance by all member states. This is the triangle that provides the perimeter of the current situation.
I think banks have been reassured about the possible negative impact of negative rates on some of them. They know we will not take rates into absurdly negative territory. But we can never rule out further moves. That would not be credible anyway. Over the last few months the ECB has been suggesting that it has done its part in the euro zone recovery, and has been asking governments to do theirs. At the same time, it insists it could do even more if needed, and that its toolbox is far from empty. Isn’t that partly contradictory? The roles of the ECB and governments are different. Our job is to bring inflation back to its near-2% level. That’s our mandate; you could say that’s our contract. Whenever we have doubts that the goal will be reached, we act. Monetary policy has a short-to-medium-term horizon. We think it is up to governments to act to foster long-term growth. According to the European Commission, potential growth in the euro area is at around 1% today. It was almost twice that in the years before the crisis. And we think that structural and fiscal policy must be used wherever there is scope to do so, in terms of both quantity and quality. But it is not the ECB’s role to go into detail about what governments should do. The founding treaties are explicit and give us different roles. The idea that the central bank should be the gendarme of economic policy among euro area countries simply doesn’t work.

•  Fourth, lack of anti-money laundering practices in a bank may also affect it’s relationships with correspondent banks because reputable international banks would not want to be associated with banks that do not practice basic anti-money laundering techniques, and therefore be a threaten to their own operations. •  Fifth, money laundering compromises the corporate governance structure of banks. This is an area of concern especially among the small banks when it comes to deposit mobilisation and customer selection. Mr Chairman, the increasing integration of financial systems means that money launderers can now make use of the financial system to hide the proceeds of the illegal activities easily. Launderers are now able to quickly move illicit money between national jurisdictions, therefore complicating the task of tracing and confiscating these assets. Further, differences in money laundering legislation and in the implementation of international standards such as, know your customer regulations, customer identification and secrecy laws have led to regulatory arbitrage. This has worked to the advantage of money launderers because they can move the proceeds of their activities to less regulated territories where there are lax laws. Therefore, to avoid launderers from taking advantage of the weaknesses in the application of international law, many governments have decided to co-operate in order to combat money laundering. In this regard, the most notable international initiatives/responses to money laundering include: •  First, the Financial Action Task Force (FATF).
William C Dudley: What kind of jobs have been created during the recovery? Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Regional Economic Press Briefing, New York City, 21 May 2014. *  *  *  Good morning and welcome once again to the Federal Reserve Bank of New York’s Regional Economic Press Briefing. I am pleased to have this opportunity to speak with you. This morning I want to focus on economic conditions in our region, giving particular attention to the kinds of jobs created in New York, Northern New Jersey and Puerto Rico during the recovery from the Great Recession. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee (FOMC) or the Federal Reserve System. While the New York Fed has broad operating responsibilities on behalf of the FOMC and the Federal Reserve System, we are also deeply committed to our region. That commitment manifests itself in several ways. We produce monthly indices of economic activity that enable us to gauge the performance of the region’s economy. We conduct a regular poll of small businesses in our region, and just last week, we hosted a summit examining new sources of credit for small businesses. We developed block-by-block flood maps which were created after Superstorm Sandy to inform residents and businesses in Brooklyn of their vulnerability to future storms.

Considering the need for market development and the identification of the role of the Bank of Albania in these markets as the Lender of Last Resort as indispensable, we have prepared and will soon enough implement a complete package of regulations, whose purpose is to establish incentives and minimize risks in the Albanian financial market. Concretely, these changes consist in:  2  BIS Review 122/2007  The law on repurchase agreements. There is compiled the draft-law, which enables the risk-free conduct of repurchase agreements among commercial banks. It will guarantee the prevention of credit risk, which is cited by commercial banks as one of the primary causes for the existence of limits in the lending relations among banks. This law will also prevent the legal risk the banks are faced with when using repurchase contracts. Drafting of the regulatory framework and putting into application the custodian principle of delivery versus payment. In order to minimize the payment settlement risk and facilitate the intermediation in all types of transactions involving securities, such as collateralized loans, repurchase agreements, and outright purchase and sale of government papers, it is being worked on to put into practice the principle of delivery versus payment. Reducing the frequency of government treasury bill auctions. In collaboration with the Ministry of Finance, we have agreed on less frequent and increased size auction schedule of the government treasury bills.