samchain/econo-pairs-v1 huggingface dataset:
To this end, we now release copious amounts of information, including the forecasts of economic activity and the year-end level at which we see the rate on overnight money trading, as foreseen by each individual FOMC participant under his or her assessment of appropriate monetary policy. We call this exercise the Summary of Economic Projections, or SEP for short. We release it quarterly. I draw your attention to it because it has become something of a phenomenon among analysts preoccupied with the entrails of policymaking and has taken on a life of its own. You read about it in the papers and get analysis of it from market soothsayers. Yet, I want to caution you against becoming overly preoccupied with the FOMC’s SEP. In my less than humble opinion, it is a flawed tool. Let me explain why. Here is what the last SEP release for the fed funds rate looked like. It provided the FOMC participants’ projections for the overnight rate at year-end for the next three years and beyond to the “longer run,” as foreseen from March 19:  1  4  See “Forward Guidance,” by Richard W. Fisher, remarks before the Asia Society Hong Kong Center, Hong Kong, April 4, 2014, www.dallasfed.org/news/speeches/fisher/2014/fs140404.cfm.

As the Swedish krona is judged to be undervalued at present, we also assume that the exchange rate follows a path that represents a gradual appreciation. The technical assumption of an unchanged repo rate and the presumed path for the exchange rate are then incorporated in the main scenario for inflation. As inflation’s future course is not a straightforward matter, we also include assessments of uncertainties. The overall picture of inflation prospects amounts in practice to an estimate of probabilities. The assessments in the main scenario imply favourable economic fundamentals: a growth rate between 2.5 and 3 per cent between 1998 and 2000, low inflation and a rising government surplus. Domestic demand in the main scenario is expected to generate a relatively limited increase in inflation’s underlying rate, from 1.1 per cent at present to 1.6 per cent at the end of next year and 2 per cent in the autumn of 2000. The 12-month change in CPI inflation is expected to be somewhat below the inflation target in one to two years time but the figure at the end of the period is judged to be approximately 2 per cent. All this means that at the end of the period under review, inflation is relatively well in line with the Riksbank’s target. It should be underscored, however, that the assessment of inflation prospects is more difficult than usual on account of the financial turbulence.
The current outsourcing and off-shoring trend would also present opportunities for us. One estimate is that two million jobs would be created in lower-cost locations like India and China over the next 5 years. While we cannot compete with India and China on cost, we can compete for processing activities which are mission critical and of higher value-added. In the past year, major financial institutions have relocated higher-end middle and back-office operations here. These institutions take the view that Singapore’s developed infrastructure, reliability, and skilled manpower make us more suitable for these time-sensitive and mission-critical functions. In the banking sector, we have gone from 7 local banks to 3 over the last 5 years. Singapore banks have grown larger and stronger, and they are continuing to build up their regional footprints. As a regulator, MAS is happy that they have made progress strengthening management teams and building up risk management systems. Last year, one rating agency even ranked Singapore banks as being among the strongest not only in Asia but in the whole world.5 However, by international standards, the three local banking groups are still rather small, despite having made some regional acquisitions and undergone domestic consolidation. The largest of them, DBS Group, ranks only 96th in the world in terms of assets. The banks are also mainly Singapore banks, rather than regional players with strong presence in several countries. Possibilities for domestic growth are limited, other than by further consolidation.

Davíð Oddsson: Review of recent economic and financial developments in Iceland Address by Mr Davíð Oddsson, Chairman of the Board of Governors of the Central Bank of Iceland, at the Bank's annual meeting, Reykjavik, 30 March 2007. *  *  *  Chairman of the Board of Governors, Prime Minister, Ministers of Government, Ladies and Gentlemen: On behalf of the Board of Governors I welcome you all to this, the 46th annual meeting of the Central Bank of Iceland. At the Bank’s last annual meeting it was announced that the Government of Iceland and the Central Bank had been in consultation on the need to boost the Bank’s foreign reserves substantially and also to improve its capital position. Their motivation for doing so was not, however, that either position had weakened, nor that the Bank no longer met the benchmarks for capital and foreign reserves. For a long time the minimum foreign reserve has been set at an amount equivalent to three-months’ imports, and this level has always been ensured. However, the major changes – which could even be called revolutionary – that have taken place in Iceland’s financial sector over a relatively few years prompted the Board of Governors to regard it as prudent to take other factors into account, such as the size and scope of the financial sector. As far as the capital position is concerned, it can be said that clear guidelines are to be found in recent legislation on the Central Bank.
  More generally, we have issued over 700 approvals and waivers under Solvency II; many of these allow for alternative approaches to calculating technical provisions and capital requirements. We have made full use of the flexibility within Solvency II to tailor regulatory requirements to the wide range of different insurance business models present in the UK.   We have set out our proposals to reduce the reporting burden on firms. Of the part of the reporting package that is within the PRA’s gift to change, our proposals would reduce the required reporting by up to half.   We have implemented a streamlined and tailored regime for the smallest firms, representing 35% of the firms we regulate, that fall outside the scope of Solvency II.   We continue to support new firm authorisations, having authorised 26 new insurance firms since 2013. Furthermore, we are exploring how we might improve our current authorisations approach to facilitate the entry of new insurers. Some have expressed concern that the PRA's focus on prudential matters may inhibit competition. I would argue that the opposite is true. Prudential regulation is integral to competition. Without minimum standards, 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  policyholders would be much more exposed to the risks presented by imprudently run firms. An absence of prudent standards would enable less scrupulous firms to drive out better-managed firms by engaging in unsustainable pricing practices in order to gain a greater market share.

•  Let me also acknowledge a number of Peter’s colleagues on the Committee through the critical period of 1986–88 when the Accord was settled. I am delighted that you were all able to join us today. •  Finally, I would especially like to welcome Paul Volcker to the symposium. Paul was instrumental within the G10 Governors in pushing for an international benchmark on bank capital. In particular, together with Robin Leigh-Pemberton of the Bank of England, he was critical in forging the agreement that produced the world’s first international standard for bank capital. Paul – I don’t think it is too much to say that a great deal of today’s global financial regulation was founded on your original vision. BIS central bankers’ speeches  1  As a scene-setter for this morning’s discussions, I would offer some thoughts on the key influences on the evolution of the Committee to date. The Basel Committee and its activities have changed almost beyond recognition since its establishment in 1974, or even since 1988 when the first Accord was agreed. I doubt whether the founding Governors really foresaw what the Committee would eventually become: not just an international standard setter, but also one that now conducts peer reviews of members’ compliance with their agreements. Indeed, if they had, I suspect that a few of them might have been against the Committee’s establishment in the first place! But times change, the financial sector has evolved, and the Committee has moved with the times.
Going forward, the pace of Asian regional economic and financial integration will gain momentum, driven by structural factors, by the conscious policy to put in place the enabling environment and by the benefits derived that are mutually reinforcing. The evidence in this decade has demonstrated that a more integrated and cohesive Asia contributes towards more balanced global growth, while a more resilient Asia contributes to greater global financial stability. While a more connected world in this new phase of globalisation will bring new vulnerabilities, it also brings with it the promise of new opportunities, new relationships and partnerships in the world economy, and thus, new prospects for a greater shared prosperity. 4  BIS Review 94/2010

MAS also implemented a 24/7 Sectoral Security Operations Centre (SOC) to obtain information from intelligence sources on cyber threat targeting our financial sector. We have partnered the Association of Banks in Singapore (ABS) to update MAS’ Technology Risk Management Guidelines. Also in partnership with the ABS, we are in the process of establishing guidelines for “redteaming” to enhance cyber security testing. 27 I know that this theme of technology will feature prominently over these two days. Such mutual sharing and learning will be an important aspect of regulatory up-levelling. Integrity and Conduct 28 Last but not least, let me wrap up my remarks by highlighting the importance of strong integrity and proper conduct in the financial industry. No amount of regulatory reforms or supervision can assure a stable financial system if the culture and conduct of firms and individuals are flawed. Around the business complexities of different firms, the core should be the same – a business culture centred on doing right and doing good. 29 MAS will be stepping up our supervisory reviews on various aspects of risk governance and culture in financial institutions. Recently, we conducted a culture and conduct survey among a number of the key institutions. Based on the survey responses, we are carrying out dialogues to ascertain commonalities and differences in industry practices. We are sharing our supervisory experiences with other regulators to learn from one another. From these, we hope to provide the broader industry with our observations on best practices and areas for improvement.
In the face of a collapse in world trade even faster than that in the 1930s, countries needed no persuasion of the necessity of policy stimulus. But it has proved much harder to form a consensus on how to tackle the underlying problems. So, three years later, the imbalances in demand remain. Around the world, short-run stimulus packages of various kinds, and unsustainably low interest rates, have bought time. So far that time has not been used to deal with the underlying imbalances, or the weaknesses in bank and sovereign balance sheets. Four years after the financial crisis began, the foreign exchange reserve holdings of China are substantially larger than at the onset of the crisis. Markets now realise that before the crisis banks were seriously undercapitalised and so react in a volatile way to any news about the health of the banking system. And the indebtedness of governments around the world is certainly greater. Time is running out. So what is to be done? One way or another, domestic spending must be raised in the surplus countries and lowered in the deficit countries, relative to current trends. In the past, marketdetermined exchange rates have played an important role in rebalancing world demand and trade. Exchange rates are the natural safety valve, which can limit the extent of imbalances in demand across countries.

Governments in the G7 agreed that intervention in the currency markets should be undertaken only when there was a collective view that exchange rates had become out of line with their longer run fundamental values. That reticence served us well. But over the past two decades, some governments, particularly in Asia and the euro area, have tried to fix exchange rates without putting in place mechanisms to ensure that competitiveness could be rebalanced by other means. That has contributed significantly to the problems facing us. It is crucial to the health of the world economy that we find ways of allowing competitiveness to adjust so that trade imbalances, and hence the present scale of indebtedness, can be reduced. Neither liquidity nor austerity are answers to the question of how to restore a loss of competitiveness. Dealing with these structural issues will take time. Meanwhile, how do we resolve the immediate crisis of confidence in some banks and sovereigns? Since the summer, there have been renewed concerns about the adequacy of the capital of banks in the euro area to absorb likely future losses, thus jeopardising their ability to raise funds. Wholesale funding dried up for many banks over the summer, and share prices of European banks are around 35% lower today than at the start of July. A transparent recognition of losses and a substantial injection of additional capital are necessary to restore market confidence.
Add to this the persistence of the expansionary impulse from monetary policy, as can be seen by simple observation of the interest rates of consumer, commercial or mortgage loans, which are all at or very near their all-time lows. Moreover, different qualitative measures produced by the Bank, such as the Banking Credit Survey or the Business Perceptions Report, coincide in their favorable evaluation of the cost of credit, considering its low interest rate. Another way to measure the expansionary nature of monetary policy is to review how far or near the MPR is from its estimated neutral level, which we place between 4% and 4.5%. Therefore, a 2.5% MPR is clearly expansionary and, in our baseline scenario, we assume that we will come near the neutral level only by 2020. Furthermore, beyond the comparison with market rates or their neutral levels, Chile's monetary policy rate is among the lowest when compared to its Latin American peers or with other commodity-exporting countries with a similar macroeconomic framework (figure 3). The better prospects for 2018 growth also rely on the recovery of non-mining investment, including construction and other works, whose decline seems to be ending after one and a half years, which combines with a moderate growth in consumption (figure 4). All this is backed by improved consumer and business confidence indicators, which becomes all the more evident when referring to expectations about the future. These factors are not necessarily independent of each other, so it is difficult to quantify the importance of each one precisely.

Joseph Yam: Asia’s ability to cope with the continuing challenges of globalisation Statement by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority and Alternate Governor on the Board of Directors of the Asian Development Bank, at the 37th Asian Development Bank Annual Meeting, Jeju Island, Korea, 15-17 May 2004. *  *  *  Mr President, I join other Governors in: first, thanking the Government and the people of the Republic of Korea for their warm hospitality in hosting this year’s Annual Meeting; secondly, thanking the Bank’s management and staff for the excellent arrangements made; and thirdly, welcoming our two new members - Luxembourg and Palau. Mr President, on the governance of the Bank, I would like to commend the Bank for adopting a number of reform initiatives in the past year to enhance accountability and efficacy of operations. Greater transparency and accountability in all aspects of the Bank’s operation is to be welcomed. Measuring, monitoring and managing development results are essential. The creation of the independent Operations Evaluation Department will enhance the credibility of the Bank’s achievements. These initiatives will put the Bank in a stronger position in meeting the many tasks ahead. On the region, Mr President, I would like to focus just on the continuing challenges arising from globalisation and the ability, or rather the lack of ability, of Asia in coping with them. The Asian financial turmoil of 1997-98 demonstrated this vehemently.
5 [30]  offers liquidity to households and firms by providing liquid deposits and illiquid loans. This creates a liquidity mismatch for the bank. A further problem here is that the bank's assets can be difficult for an outsider to evaluate. As a result, a bank's financial situation depends to a very large extent on the trust its customers have in it. A bank builds trust by having plenty of equity, good earnings, low loan losses and good liquidity. And not least important: a sound culture where risk management is central. Confidence is essential for a bank, but it can also disappear quickly. If this happens, there is a great risk that depositors and other financiers will want to withdraw their money quickly. The risk is that the depositors who arrive first can withdraw their money while those who arrive later are left without, as the bank's liquid assets are then exhausted. This is precisely the reason why bank runs can occur. It can also lead to other financiers quickly withdrawing their funding. If the bank is bad, it should obviously be wound up. The problem is that it is difficult to tell whether or not a bank is bad, so there can be a run on good banks as well. Experience also shows that even bad banks should be wound up in an orderly fashion. There are several reasons for this. One reason is what I just mentioned: banks are highly dependent on trust and are difficult to evaluate.

Former Bank of England Governor Mervyn King recently launched a more drastic idea, that a bank must hold more assets that can be used as collateral in the central bank than it has liabilities (including deposits) that can suddenly flow outwards.10 In this way, central banks could always intervene and have sufficient access to liquid funds. Admati et al. note in a response that the consequence of this would be that the authorities also supported bad banks, which would reinforce moral hazard problems and lead to banks that should be wound up not being wound up.11 There is a risk that we would then have so-called Zombie banks, and this would have negative effects on growth and efficiency. In any case, I believe that the instability of deposits is an issue that legislators and regulators around the world need to analyse more closely. The resolution framework also needs to be reviewed The second question concerns the resolution framework. This was introduced after the global financial crisis and the explicit purpose is to make it possible to resolve a systemically important bank in an orderly manner. The idea is that losses should be borne primarily by shareholders and secondarily by bondholders. Public funds should not need to be used. Allowing bondholders to bear potential losses also reduces the problems of moral hazard. So if you can use an effective resolution framework as intended, you reduce the problems created by the deposit guarantee. 10  See King (2023). 11 See Admati, Hellwig and Portes (2023).
This fall started earlier than in most other countries (see Figure 1). To counteract this development, the Riksbank started to cut the repo rate at the end of 2011. One circumstance that has a certain significance for my discussion going forward is that the Riksbank was already concerned about the rise in household debt and housing prices by this point. With the aim of contributing, to some extent, to dampening the build-up of debt and price increases, the repo rate was set slightly higher than otherwise would have been the case. 8 This is usually described as monetary policy ‘leaning against the wind’, where the wind represents some kind of financial imbalance that is deemed to be building up. However, what is important to understand is that, at this time, monetary policy was nevertheless largely governed by traditional monetary policy motives, that is, the expected development of economic activity and inflation over the coming years (see Figure 2). Risks linked to developments in household debt and housing prices were included in the assessment but did not play a leading role. I discussed this in detail in a speech a few years ago and, consequently, I shall not say much about it now. 9 But let me just emphasise that neither did other economic analysts consider that the monetary policy conducted was mainly a matter of the Riksbank  7 The CPIF is the CPI with a fixed interest rate.

6 [20]  of the problems among the general public, market participants and economic policy decision-makers. But it is, of course, necessary that this raised awareness results in concrete measures or changed behaviour that counteracts the financial imbalance. It is doubtful, as far as Sweden is concerned, whether it can be said that this has been the case, at any rate not to such an extent or at such an early stage as could have been hoped for. The fairly modest leaning against the wind that we practised was thus insufficient to halt the build-up of debts and housing prices. Nevertheless, I myself was not prepared to keep the rate any higher than we did in an attempt to achieve this. This was also apparently true of the Executive Board as a whole. If we had set the repo rate significantly higher, the increase in indebtedness would perhaps have stopped more permanently, but, at the same time, there is a severe risk that the development of the economy would also have been significantly worsened. Perhaps even more importantly, the development of inflation would have been even weaker than it actually was and it would have been even more difficult to bring it up and maintain confidence in the inflation target. One further conclusion, or lesson, is that a policy that leans against the wind requires that there is confidence in the inflation target.