samchain/econo-pairs-v1 huggingface dataset:
Much progress has been made in making the U.S. financial system safer and less prone to 2/3  BIS central bankers' speeches  panics. Still, there is more to do before we can say that we have ended “too big to fail.” This is work that we absolutely must complete. In particular, U.S. bank holding companies must do more to make their organizations resolvable under either Title I bankruptcy or Title II resolution. This requires having clean parent holding company structures, less corporate complexity, and essential service and support operations that are able to continue to operate even when the parent company becomes non-viable. Also, while there has been significant progress in terms of developing a workable resolution regime—the Single Point of Entry regime established under Title II of the Dodd-Frank Act—we still have to ensure that this regime can be safely utilized on a cross-border basis. This requires fully implementing the TLAC framework, and defining more explicitly the expectations and responsibilities of the different supervisory and regulatory oversight bodies that would have to work together internationally. In particular, this includes how liquidity would be provided to an insolvent firm during the early stages of resolution, so that the firm’s operations could be wound down in an orderly way without destabilizing the global financial system. Finally, I would like to address the issue of bank culture and conduct. Although there has been considerable effort here, there is still much more to do. Banks must restore their trustworthiness.

Since the end of the Great Recession almost six years ago, U.S. growth has averaged a somewhat disappointing 2.3 percent. But growth has picked up recently, and the latest Blue Chip forecast is for growth to average slightly below 3 percent over the next year. There are good reasons to think that a period of stronger growth can be sustained. •  Household balance sheets are in much improved condition, with total household liabilities well below their 2008 peak, and debt service burdens at the lowest share of disposable income in more than 30 years. Moreover, consumers are benefitting from the positive wealth effect of higher house and equity prices. •  Labor market improvement has picked up pace, with payrolls gains over the last several months the strongest since the mid-1990s. Workers are finally beginning to see at least modest real wage gains. And the U.S. unemployment rate has fallen to the lowest level since mid-2008. •  The recent drop in oil prices is providing a significant boost to household spending power with nearly a percentage point increase to real disposable incomes. •  The housing sector is now in much better balance. The inventory-sales ratio for homes is near, or even slightly below, levels typically considered “normal,” and there has been a significant drop in the fraction of households carrying mortgage balances in excess of the value of their homes. •  The fiscal restraint that has held back growth in recent years has given way to a more neutral posture.
5 Early FOMC discussions of balance sheet normalization, then referred to as “exit strategy,” were predicated on  an intention to return to, as put in the January 28, 2009 meeting transcript, “a more normal framework for conducting monetary policy,” which meant a return to an asset and liability structure closely resembling that which prevailed before the financial crisis. Normalization-related matters were discussed in the minutes to most of the FOMC’s 2009 meetings. In a January 2009 speech, The Crisis and the Policy Response, Chairman Bernanke provided extensive detail on the eventual normalization strategy, including his expectation that the balance sheet would be reduced “to the extent necessary at the appropriate time.” 6 See Potter, Money Markets at a Crossroads: Policy Implementation at a Time of Structural Change, April 5, 2017,  for an assessment of the efficacy of these tools. 7 Currency in circulation has risen steadily for decades. A simple assumption is that currency outstanding will  grow in line with nominal U.S. gross domestic product. However, it is easy to imagine shocks that could materially affect currency growth, either positively or negatively. For example, with heavy usage of largedenomination U.S. paper currency overseas, demand for dollars appears sensitive to changes in global growth and financial and geopolitical stability. In addition, it is hard to know what implications new financial technology, generational shifts in preferences about payment modalities, and other longer-term factors will have on currency demand.

Nor is this a complete assessment, focusing as it does on the prudential angle as opposed to market liquidity considerations. I make them to illustrate the point that it is sensible for us to maintain a spirit of active enquiry about these sorts of issues, and to track developments so that we can intervene if we are concerned that the regulatory system is being arbitraged or simply encouraging the wrong behaviour at firms. Conclusion  We, together with many others, have done a huge amount to make the financial system safer over the last 10 years. But the lesson of financial history is that unless we are absolutely vigilant, and keep questioning both firms and ourselves about evolving and emerging developments in the markets we oversee, then this safety can easily slip through our hands. So our horizon-scanning will be an important part of our effort in the coming period. And as the PRA is holding itself to a flat nominal budget this year I would like to finish by asking any birdspotters present here today to lend us their binoculars, in the national interest.
I would like to take this opportunity to thank you for the faith you have shown in me and the support and encouragement you have given me, as well as for your excellent cooperation, and that applies to you all irrespective of political affiliation. Thank you! 7/7

If use of the franc were to be crowded out by the euro, the Swiss National Bank would have had little leverage left to influence monetary conditions in Switzerland. It would become a sort of paper tiger! c)  Third, even short of a full “euro-ization” of the Swiss economy, we feared the loss of our monetary policy autonomy. Given the importance of the common currency for the Swiss economy, what else could the Swiss National Bank do other than follow the European Central Bank’s policy and de facto integrate the franc into the euro zone? A gradually shrinking interest-rate differential between euro and Swiss franc investments as well as a loss in monetary autonomy would have resulted. How does our recent experience relate to these concerns? 3. Our experience as an independent monetary entity  a)  The euro/swiss franc relationship  Our fears of a euro destabilizing the Swiss franc did not materialize. Relative to the euro, and since its introduction, the franc has been fluctuating in a relatively narrow band of plus or minus 5 percent, about four times less than against the dollar during the same period. The Swiss franc appears now to be less affected by exchange rate shocks and more shielded from speculative movements. In the past, the franc was overreacting to the dollar’s fluctuations, so that the pain of an appreciation of our currency relative to the greenback was exacerbated by a simultaneous appreciation of the Swiss franc relative to the German mark.
Journal of Political Economy 85: 473–492. 2  The advantage of tying oneself to economic policy objectives does not conflict with the ability of economic policy to stabilise the economy at the same time. On the contrary, a credible commitment to objectives can provide greater leeway for stabilising the economy. See, for example, Michael Woodford (2003) “Interest and Prices”, Princeton University Press. BIS central bankers’ speeches  3  The clearest expression of this lesson was found in monetary policy. In Norway, the authorities set an objective for the value of the krone, but devalued when the krone came under pressure. The devaluations were over time incorporated into expectations and inflation surged. It is tempting to quote Hermod Skånland, who stated that Norway “early and with great perspicacity” charted a course for economic policy – and thereafter promptly embarked on a different path. 3 During the upturn in the mid-1980s, the interest rate was held low and public spending was high. The economy became vulnerable. When oil prices fell in 1986, a change of course became imperative. All efforts were concentrated on bringing public spending under control. Interest rate setting was geared towards maintaining a steady krone exchange rate. The aim was to bring down inflation close to the level prevailing in other countries. The banking crisis and the downturn in the early 1990s led to renewed recognition that market forces had to be controlled and banks regulated. An approach based on broad economic policy cooperation was pursued.

The government and the Storting approved additional spending, bringing the overall contribution from fiscal policy to more than NOK 100 billion in these two years. Hardly any other country provided such strong overall stimulus through the use of public instruments during the crisis. The guidelines from 2001 provide a clear long-term framework for monetary policy and fiscal policy and provide for cyclical adjustments in economic policy – in part automatically and in part through judgement. In this way, the guidelines reconcile the need for a flexible approach to macroeconomic management with the gains brought by a commitment to more long-term operational objectives. A decade of inflation targeting Inflation is so low today that most people barely give it a thought. The rate of increase in consumer prices has disappeared from the front pages, where it was a frequent guest in the 1980s. We do not miss inflation. Even though inflation over the past decade has been close to the target of 2.5 per cent, demanding trade-offs have had to be made over the years. The element of judgment in the conduct of monetary policy has been put to the test. Through the years, we have gained insight into the functioning of the Norwegian economy under an inflation targeting regime. Let me touch upon some of those insights. BIS central bankers’ speeches  5  Chart 9: Krone exchange rate, inflation and Norges Bank key policy rate.
These conventional crises could turn into a financial crisis in the payment system, which is a subject in itself. However, my speech today is limited to conventional vulnerabilities. RIX links together the banks and certain other financial agents so that they can quickly and simply make payments to one another, and it has a turnover of around SEK 500 billion a day. The problem with the Riksbank’s RIX system meant that a number of payments had been erroneously made several times over. This double entry meant that the banks had incorrect balances on their accounts in RIX, which created problems at the end of the day, as banks with a negative balance must borrow money overnight from those with a positive balance. This in turn entailed a disturbance in the functioning of the very important money market, that is, the market where the banks borrow money in the short term. When the error was detected the contingency routines were implemented, which meant that payments could be made without being entered more than once. The problem was due to an error in the communications system that links the banks to RIX. It took a total of five days to find the fault and implement a new solution. Nordbanken’s problems meant, amongst other things, that it was impossible to compile the bank’s normal background data for customer payments. Outwardly this was noticeable in that customers experienced problems using Nordbanken’s bank cards and through delayed payments.

However, it was possible to limit the damage since the system functioned from time to time and the contingency communications system was working. The problems were partly due to faulty software in the system. The problems began between Christmas and New Year 2000 and were not entirely resolved until 3 days into the new year. Afterwards, we can note that the consequences of these two problems were slight and that the existing contingency routines were sufficient to limit them. However, both examples show how important it is to have preparations that enable operations to continue, despite various types of disruption. The cost of creating an entirely resilient system must at the same time be balanced against the cost of having a slightly less resilient system and instead having good contingency routines that can be implemented when problems arise. I will return to the work on creating resilience in the system. Firstly, I shall describe how the financial infrastructure functions in practice and the importance of crisis recovery planning. The functions of the payment system To provide an idea of the extent and complexity of the payment system, I will give you a concrete example. The Swedish Social Insurance Administration pays out billions of kronor every month in  BIS Review 98/2006  1  pensions. In theory, it would seem like a fairly simple process for them to send money to Ingrid, aged 93.
Goh Chok Tong: Strengthening Singapore’s position as a leading financial centre in Asia Speech Mr Goh Chok Tong, Senior Minister and Chairman of the Monetary Authority of Singapore (MAS), at the 2005 MAS Staff Seminar, Singapore, 29 November 2005. *  *  *  Let me begin by welcoming you to the 2005 MAS Staff Seminar. It has been a busy but good year for the industry and MAS. Positive global and regional outlook 2. Globally, 2005 looks set to end on a positive note. The IMF has projected world economic growth of 4.3% this year and sees the potential for further growth next year. The US economy remains resilient. It has withstood progressive interest rate hikes and the devastation caused by Hurricanes Katrina and Rita. While the oil market remains tight and the US current account and budget deficits continue to be cause for caution, the Greenspan era should end positively. 3. Asia is doing well. East Asia's combined economy has been growing by an average of 3.4% per year between 2000 and 2004. Take away Japan, East Asia's annual growth rate is even more impressive - 6.4%, well above the global average of 3.8%. East Asian countries have accumulated massive foreign reserves and now account for nearly 60% of global reserves. Global investors looking for better returns have shown strong interest in Asian equities, bonds and alternative investments. 4. The blockbusters in Asia's growth story are China and India. I have spoken about them in some detail last year.

Stakeholders have rated MAS favourably in most areas. For example, MAS' role in supervising financial institutions and bringing about a stable financial system in Singapore received positive feedback. I am heartened by this. More importantly, the industry also noted areas for improvement. Stakeholders, for instance, felt that MAS officers could be more attuned to commercial reality when formulating policies and decisions. MAS could improve the timeliness of its decision-making. MAS has taken note of the feedback and will work to improve its performance in these areas. 32. MAS' regular dialogue and consultation with the industry has worked well. We will now take this a step further by involving the industry at the early stages of policy formulation. This will give industry players the opportunity to shape policies. MAS will also be more open to suggestions of alternatives that achieve the same objectives. But for this new approach to produce results, both MAS and the industry must work together to build a high level of trust between them. Leveraging and building on our reputation 33. Looking ahead, we must continue to build and deepen relationships with the industry and our foreign counterparts. 34. To showcase Asia to the international community, the centrepiece for next year is the 2006 IMF and World Bank Annual Meetings. In partnership with the private sector and relevant agencies, we are organising a host of seminars and events. Collectively, they are known as Singapore 2006 or S2006. S2006 is intended to create intellectual buzz and profile the dynamism and optimism in Asia. 35.
However, it must be noted that similar problems characterise the other extreme of the financial market, the corporate – or enterprises sector – as we call it in Albania. Bank of Albania surveys show that micro units face shortage of financial resources and have limited access to credit. Thus, more than 1/3 of respondent enterprises consider the low level of access to finance and the cost related to it as the main cause for not expanding the activity. These micro units, which are basically family-run businesses, have a greater need to cooperate with non-bank financial institutions, due to difficulties they have in fulfilling the requirements for collateral or detailed financial documentation, criteria that banks require. This is another argument that leads to the logical conclusion that, in addition to own capital and bank credit, these enterprises would benefit greatly from other segments of the financial market. The low level of financial inclusion of the population is another element that prevents the deepening and expansion of the financial market in Albania. Latest data from the World Development Indicators show that only 38% of adults have an account with a financial institution, while only 6% and 22% of adults have a credit card and a debit card, respectively. Financial inclusion may not be increased only through the banking system. The financial system, especially the capital market and the corporate securities market should play a significant role in increasing financial inclusion.

The new Act empowers BNM to enforce the various provisions of the Act and to date 6 DFIs have been placed under the purview of the Act. DFIs, as a component of the financial sector will continue to play an important role in the socio-economic development of the country, in particular, in providing financing facilities to certain targeted sectors of the economy. Strategies are, therefore, formulated to promote the development of efficient and effective DFIs. The ultimate objective for the DFIs is to achieve their mandated functions at minimum cost to the Government. Moving forward, the focus will be on strengthening the overall financial and structural capacity as well as improving the operational efficiency of the DFIs. Bank Negara Malaysia's financial position in 2001, has been examined and certified by the Auditor General. Total assets of BNM rose to RM149.7 billion as at end 2001 (RM148.9 billion at end-2000). The major increase in assets is attributed to an increase in international reserves. BNM's international reserves increased to RM117.2 billion $ billion) as at end-2001. BNM registered a net profit of RM0.7 billion in 2001 for the financial year ended 31 December 2001. BNM declared a dividend of RM0.5 billion to the Government for the year 2001. BIS Review 21/2002  5
What is, perhaps, most notable is that the supervisory focus was placed on banks’ interest rate risk and the sustainability of their funding plans, issues that are crucial in a context of rising interest rates and liquidity withdrawal by central banks. Also, the most exposed European banks were required to improve the way in which they monitor and manage this risk. In some cases, they were even asked to be more conservative in their interest rate assumptions and in their model calibration and validation. Similarly, when it became apparent that there were interconnections between the banking system and non-bank financial intermediaries, the decision was also made to place the supervisory focus on analysing the risks for European banks of this type of exposure. The EU banking sector is so far benefiting from the ongoing normalisation of interest rates, as the interest rate pass-through on the asset side still significantly exceeds the pass-through on the liability side. Consequently, aggregate banking sector profitability is at its highest level since 2014. However, several factors continue to cloud the outlook for banks. First, the deceleration in economic growth and higher interest rates may have an adverse impact on asset quality, leading to higher impairment costs, and on lending volumes, exerting contractionary pressures on income generation capacity. Second, banks’ funding costs are on the rise, bringing potential pressure on interest margins. The impact of these factors is expected to become more pronounced over time and more likely the longer the high-interest rate period continues.

This leads naturally to a related question which has been the object of recent press commentary, namely should the Bank’s holdings of gilts just be cancelled? The idea is that this would relieve the Government of having to levy the taxes to pay both the coupons on the gilts and the principal when it falls due. Government debt would fall at a stroke of the pen, apparently relieving the future burden on the taxpayer. Unfortunately this is not as good an idea as it sounds. Cancelling the gilts would deprive the Bank of the assets it needs to sell back to the market in order to suck the bank reserves out  BIS central bankers’ speeches  7  when the time comes to unwind the policy. It would also deprive the Bank of the wherewithal to pay the interest on the reserves in the meantime, so we would need either to keep Bank Rate perpetually at zero or else be willing to continue issuing additional reserves indefinitely in order to meet our obligations. One can easily see how this would eventually lead to inflation taking off. 4 In any case, it is not really clear why one would want to go down the route of cancelling the gilts. In undertaking quantitative easing, we are, for a period, replacing part of the government gilt stock with a monetary liability paying Bank Rate; cancelling the gilts is tantamount to making that period indefinite.