samchain/econo-pairs-v1 huggingface dataset:
During my years at the IMF, I have seen this pattern repeat itself – and it is not a pretty sight. In Europe, we face a particular and somewhat peculiar cooperation problem. This is sometimes described as the trilemma of banking supervision. A trilemma is similar to a tradeoff, and means that you want to pursue three objectives but you can only achieve two of them. One needs to be given up. The three objectives in this context include, first of all, effective banking supervision and crisis management, secondly, national sovereignty of supervision and crisis management; and, finally, an integrated European market and all the benefits coming from more competition. In the EU, we have chosen the latter two – economic integration and national sovereignty of supervision and crisis management. This national sovereignty is manifested in what is known as the home country principle, meaning that the supervisory authority in the country where a bank is domiciled takes complete responsibility for the supervision of its branches abroad. This home country principle is combined with economic integration and allowing banks to establish operations across Europe. In choosing these two objectives, the third objective – effective supervision and crisis management – has been forsaken. This is clearly manifested in Europe’s current approach towards supervising banks and managing crises. Economic integration and the EU’s pursuit of a single market for financial services have meant that some banks have expanded beyond the means of their home countries.

The SNB’s monetary policy remains focused on the maintenance of price stability in the medium term and, since September 2011, on the enforcement of the minimum exchange rate. Consequently, possible distortions in the growth of credit aggregates that could endanger financial stability should be managed, first and foremost, with the macroprudential toolkit.5  5  Cf. speech by Jean-Pierre Danthine, “Taming the financial cycle”, 30th SUERF colloquium, Zurich, 5 September 2012. BIS central bankers’ speeches  5  Concluding remarks In conclusion, I would like to stress that we are living in an exceptional monetary policy situation, and not in a new world. The flexibility shown by central banks in the crisis was necessary to prevent a downward spiral. Apart from the central banks, governments have also taken measures to manage the crisis. Important steps have been taken in the regulation of banks, including the tightening of capital requirements. Measures to bring about a longterm restructuring of public finances, however, remain unsatisfactory in many countries. Monetary policy has opened up a time slot that will enable this to be done. It would be disastrous for the long-term future of the global economy if it were not used. In the countries most concerned, government budgets must be returned to a sustainable path as soon as possible. Moreover, a consolidation of this kind would reduce the risk of overburdening monetary policy. As far as Switzerland is concerned, the minimum exchange rate against the euro will continue to apply.
Such an acceptance comes naturally when consumers trust that the goods or services being offered by the company are of the quality that is worth their price, that they are being treated fairly and with respect; and that they do not have ill feelings towards the company. In Western society where there is great awareness for consumer protection, such ideas have therefore not been incorporated in the prescribed governance of the corporation. In the Oriental world, however, the idea of consumer protection has not been well embedded in our culture. Hence there is a need to broaden the principle of governance to include consumer protection. In short, this means that the Board of Directors needs to oversee that the firms provide not only quality goods and services, but that they also treat their customers fairly and with respect. Indeed, the absence of a strong consumer protection standard does not give the corporations the liberty to act in their interests alone at the expense of the interests of consumers. Producers and service providers that start by caring about the interests of customers as part of the principle of non-exploitation and mutual co-existence, will find that they can maintain long standing relation and consumer loyalty. Within the universe of businesses, the domain of financial services, particularly commercial banks, stand out as one of the most prone to abuse. As capitalist organizations, commercial banks are in a convenient position to profit directly from the general public.

The intuition we think is that the lowest value note should be sorted most often, and the highest value note least often. The reason for this order is that the lowest value note will be nearest to a pure transactional instrument, and the highest value note nearest to a pure store of  BIS Review 162/2009  7  value instrument. As the chart indicates, the intuition holds for all denominations except the £ On average, at £ note passes through a cash centre for sorting nine times a year, a £ four and a half times, and a £ just under once a year. But the £ has seen a decline from five times a year in the mid-1990s to one and a half times a year now. This goes a long way to explain the problem we have with the £ We need to see more dispensed so that they are less scarce and therefore they return to cash centres for sorting more often. In the last few years we have had some success in increasing the total number of £ in circulation. The overall value of £ in circulation had been stuck at around £ since the early 1990s. In the last two years it has risen to £ But the evidence from turnover indicates that we have a lot more to do. Recently, we have therefore run two pilot schemes.
The time-inconsistency problem that pervades the debate over the balance between rules and discretion in monetary policy (Kydland and Prescott (1977), Barro and Gordon (1983)) is arguably even more acute for prudential policy. This is partly because adverse crisis outcomes are highly non-linear and costly, making it more difficult to pre-commit to avoiding forbearance and bail-out. The low probability of crises may also mean that policymakers are insufficiently tough in tackling financial sector risks when times are good and memories of previous crises distant (Reinhart and Rogoff (2009), Malmendier and Nagel (2011), Gennaioli et al (2015)). This can create political pressures to relax regulations to support shorter-term goals. Public choice theory (Olson (1965)) would also suggest that lobbying pressure is likely to be more acute for regulatory policy than for monetary policy. The private costs of regulation are borne strongly by narrow, but 26  All speeches are available online at www.bankofengland.co.uk/speeches  26  powerful, interest groups in the financial industry. And while higher than target inflation is quickly observable, it may be very difficult to judge in real time that regulation is insufficiently stringent given the difficulties of quantifying the probability of future financial crises. These arguments point to the need for strong institutional frameworks, supported by clear mandates, objectives and instruments, to deliver financial stability policy. Indeed, on conceptual grounds, the need for such a framework appears to be at least as strong, if not stronger, than for monetary policy.

The Benefits of Higher Capital Requirements  The assumptions underpinning the marginal benefits of higher capital in the LEI study were as follows: banking crises occur, on average, once every 20-25 years; the median estimate of the cumulative discounted costs of a crisis is around 60% of annual pre-crisis GDP; each percentage point increase in the capital ratio reduces the probability of a banking crisis by a smaller amount, ranging from 1.4% to 1% (for a capital increase from 10% to 11%) to 0.4% to 0.3% (for a capital increase from 14% to 15%); and, finally, the level of bank capital has no impact on the severity of crisis. 10  All speeches are available online at www.bankofengland.co.uk/speeches  10  Since the LEI report, a rich seam of the literature has emerged on the determinants of crises and their severity (∆). Some of the most illuminating pieces of this research have drawn on evidence from a long historical time-series and across multiple countries (for example, Jordà et al (2013), Taylor (2015)). The key findings are as follows. First, credit booms are probably the single most important determinant both of the likelihood of crises and of economic performance in the recovery after them (Schularick and Taylor (2012), Jordà et al (2013)). A sustained 1 percentage point increase in the credit-to-GDP ratio raises the probability of crisis from 4% to around 4.3% per year.
Against that background, the view was that, while the US economy might be in for a bumpy ride over the next few months, associated for example with inventory adjustment in the motor industry, the likely outcome for this year as a whole is that the US economy will continue to grow by perhaps 2-3%, and that the overall world economy – helped by steady growth in the Eurozone – would again this year grow probably somewhat above its longer-term average rate. That, certainly, is a slowdown in the recent rate of growth – and a downward revision of earlier expectations of growth for the current year; but it is not a downturn in the sense of contracting activity. On this view, the slowdown in prospect would have relatively benign effects in terms of the longer term sustainability of the global economic expansion; and developments so far have already had positive effects both in terms of their impact on the world oil price, and in terms of their impact on the pattern of exchange rates, notably by reducing the exaggerated weakness of the euro. On that basis the global economic environment should provide a reasonable background for our own economy. We – and our partners in the European Union – would be relatively little affected by the US economic slowdown. The world economy as a whole would certainly be helped by the somewhat softer oil price – though I appreciate there may be mixed views on that up here in Scotland.

This slowdown has been reflected in a fall in equity prices – including a sharp fall in the previously hugely overblown “tech-heavy” NASDAQ index; and this in turn has contributed to a typically rapid escalation in the florid language of commentators, from slowdown, to downturn or recession, to possible slump (though I haven’t yet seen meltdown as we did in 1998), which many of the commentators appear to regard as near-synonyms. Of course it is always possible that it will come to this – no-one has a crystal ball – and it goes without saying that we are all watching what’s happening very carefully. But that is not my own view of the most likely outcome, nor that of my central bank colleagues from around the world when we met in Basel a week ago. We met in the wake of the Fed’s move to cut interest rates which was widely welcomed as timely and appropriate, demonstrating sensitivity to the possibility of a spiralling decline in financial market and business and consumer confidence. We noted, too, that in announcing its move the Fed had made a point of emphasising its expectation of continuing relatively strong productivity growth, giving it more room for manoeuvre than it would otherwise have.
SPEECH DATE:  6 Dec 2017  SPEAKER:  Deputy Governor Per Jansson  VENUE:  Fores, Stockholm  SVERIGES RIKSBANK SE-103 37 Stockholm (Brunkebergstorg 11) Tel +46 8 787 00 00 Fax +46 8 21 05 31 registratorn@riksbank.se www.riksbank.se  The ideological debate on monetary policy – lessons from developments in Sweden∗  These are unusually exciting times to be working at a central bank. Challenges have always been present, of course, but I think that it could be claimed that seldom have they been of such a fundamental nature as they are today. One example is the debate on limiting central banks’ independence that has arisen recently. This has come about after several countries have found themselves unable to conduct monetary policy using policy rate adjustments alone. Instead, they have had to complement this with tools that some observers feel have blurred the boundary between monetary policy and other economic policies. Another example is that technological progress within the area of payments has led to the rapid decline of cash usage in a number of countries, not least Sweden. Whether and how this trend will affect the conditions for conducting monetary policy and whether it provides reason for the central banks to issue electronic money as a complement to physical cash will be the focus of intense discussions in the period ahead. These are important and fundamental issues.

Natural to raise the repo rate 2010–2011 Purchasing Managers’ Index in the manufacturing sector  Lending to households and companies  An index over 50 indicates growth  Annual percentage change  GDP  Inflation  Quarterly change in per cent calculated as an annual rate, Seasonally-adjusted data. Annual percentage change  6  CPIF excluding energy CPIF CPI  4  6 4  2  2  0  0  -2  06  08  10  12  14  -2  Note. Forecasts from April 2011. Sources: Institute for Supply Management (ISM), Swedbank, Statistics Sweden and Sveriges Riksbank  18 [20]  Figure 3. Troubling situation at turn of year 2014-2015 Inflation  Annual percentage change  Inflation expectations Annual percentage change  Note. Measured using the CPIF (left) and the CPI (right). Sources: Statistics Sweden and TNS Sifo Prospera  Figure 4. 2015–2017 – inflation rises towards target again Inflation  Annual percentage change  Inflation expectations Annual percentage change  Note. Measured using the CPIF (left) and the CPI (right). Sources: Statistics Sweden and TNS Sifo Prospera  19 [20]  Figure 5. The development of services prices indicates that the Phillips curve works Annual percentage change  Note. Broken lines represent mean values since 2000. Source: Statistics Sweden  Figure 6.
With inflation too high, we are focused on restoring price stability, while maintaining a strong labor market. Before I go any further, I should give the standard Fed disclaimer that the views I express here are my own and do not necessarily reflect those of the Federal Open Market Committee (FOMC) or anyone else in the Federal Reserve System. Shared Impacts It's striking to think that just two years ago, the U.S. economy was reaching the trough of the COVID-19 recession. Back then, we were living through unprecedented lockdowns. And we had no way of knowing that this would be the shortest recession on record, or that the rebound would be so dramatic. If we think about the global pandemic as a common factor, shutdowns, contractions, and rapid rebounds were the shared impacts across countries around the world. But so were supply-chain bottlenecks, shortages in semiconductors, and backlogs at portsissues we grapple with today. And just like the United States, other countries have experienced imbalances in demand. Since the initial lockdowns, people have spent more of their money on electronics, cars, and furniture-and less on entertainment, travel, and restaurants. 1/5  BIS - Central bankers' speeches  Many nations also showed considerable resilience of economic activity through the Omicron wave. But global risks remain. The BA.2 variant is now fueling a rise in cases in some countries, including China, Hong Kong, and the United Kingdom. Their experiences bear close monitoring.

With low unemployment, solid wage growth, and ample job openings, all indicators show that the strength of the labor market is at a level consistent with my view of maximum employment. Inflationary Pressures The other side of our mandate is price stability, and this is where our greatest challenge now lies. Inflation is far too high. In February, inflation-as measured by the personal consumption expenditures (PCE) price index-was nearly 6½ percent. And high inflation is a key concern in many countries around the world. Even before Russia's invasion of Ukraine, the rapid global economic rebound had driven up prices for oil and many other commodities. Higher inflation is especially detrimental for those who are least able to meet the growing cost of essentials like food, housing, and transportation. The war in Ukraine and the global response present even greater challenges and uncertainty. For example, Russia and Ukraine are large exporters of key materials, including neon, palladium, and platinum. Those materials are used in the production of a wide array of products, from auto parts to computer chips. Even before the war,  2/5  BIS - Central bankers' speeches  manufacturers were confronting shortages of important inputs. Further disruptions to these key products could create spillovers to economies across the globe. But there are differences in the ways in which countries are experiencing inflation. In the United States, we are now seeing elevated inflation across many categories of goods and services.
It is the product of three decades’ work in building strong foundations for the sector to thrive and grow. In reflecting on our journey of developing a vibrant Islamic financial system, imperatives in three areas stand out – Infrastructure; Players; and Talent. Allow me to briefly elaborate on these three areas. First, infrastructure. Similar to developing a conventional financial system, having a robust regulatory and supervisory regime is critical for the development of a strong, resilient and inclusive Islamic financial system. What is unique about Islamic finance is the need for a clear Shariah governance framework to ensure Shariah compliance. In Malaysia, the Islamic Financial Services Act 2013 sets out a regulatory framework for end-to-end Shariah compliance. Bank Negara Malaysia is vested with comprehensive legal powers under this Act to regulate and supervise the Islamic financial system. Complementary to this is the role of the Shariah Advisory Council in ensuring greater certainty in Shariah. While our Shariah Governance Framework has met its intended objectives, we are now in the midst of reviewing and strengthening the framework in response to the evolvement of the industry. The Securities Commission Malaysia and the Labuan Financial Services Authority are also vested with similar powers, and are equally committed to building a robust and comprehensive framework for Islamic finance in Malaysia. Our policies also strive to be forward looking and responsive to the needs of the world.

Peter Praet: Interview in Knack Interview with Mr Peter Praet, Member of the Executive Board of the European Central Bank, in Knack, conducted by Mr Ewald Pironet and published on 6 January 2016. *  *  *  For over a year now, the European Central Bank (ECB) has been printing heaps of money, pumping it into the economy and pushing interest rates down to almost 0%. When may this policy be deemed a success? You may label that ECB policy a success if inflation, the rise in the cost of living, stays below, but close to, 2% over the medium term. That is our mandate. I admit that our policy has not yet been successful enough: inflation rates in Europe have been at the very low level of almost 0% for quite some time now. That is why we are continuing to take the necessary measures to drive inflation up to 2% over the medium term. However, the point at which we think we will reach 2% is constantly postponed, because all kinds of things are happening that are dampening inflation, such as the decline in oil prices or lower economic performances in the emerging countries. We have decided to maintain our policy until March 2017. But we need to be careful not to jeopardise the ECB’s credibility by shifting that horizon. It is up to the ECB to keep inflation at just below 2%, but it is failing to do so.
Liberalisation and integration into the EU have underpinned the rapid growth of the Maltese financial sector. The number of banks rose from 16 in 2004 to 23 in September this year. During the same period, the total assets of the banking system more than doubled to EUR45.1 billion. Nor was growth restricted to the banking sector. The number of local and foreign-based collective schemes climbed from around 70 in 2004 to nearly 400 today, partly reflecting legislative changes that spurred the formation of professional investor funds. Total assets under management have also increased exponentially to over EUR8 billion. More moderate growth was recorded in the insurance sector, though the captive insurance business is growing fast. These developments in Malta mirrored, to a certain extent, those abroad. Financial liberalisation, deregulation and the expansion of cross-border capital flows have driven the rapid growth of the financial sector globally. Indeed, until the start of the turmoil last year, the global financial system had benefited from a long period of economic expansion, relatively easy monetary conditions and innovation. As a result, the size of the financial industry relative to the economy increased considerably. In the United States it grew to a point where it represented nearly 25 per cent of the stock market capitalization, while financial assets in Britain in 2007 were equivalent to almost nine times the GDP. Such a favourable combination of circumstances could not last.

Conversely, our financial institutions gained access to the single European market, a factor which encouraged additional inward foreign investment into the sector. At the same time, the last exchange controls were removed. The adoption of the euro last January was a further step in the integration process into the single market. Financial transactions across the euro area can now take place without incurring exchange rate risks. Furthermore, Maltese banks now have access to the Eurosystem facilities available to credit institutions within the euro area. These include a variety of instruments designed to provide short-term liquidity, as well as standing deposit and lending facilities. At the same time, euro adoption entailed a reduction in the minimum reserve requirements that Maltese banks had to comply with, resulting in the release of additional funds into the banking system. Euro adoption also led to improvements in the financial infrastructure supporting the Maltese economy. In November 2007, Malta formed part of the first group of countries that joined TARGET2, the payment system used by the Eurosystem for the settlement of large value  BIS Review 155/2008  1  interbank transfers in euro. Maltese banks can use TARGET2 to carry out transfers with other banks in Malta and throughout the euro area rapidly, safely and effectively. The Single Euro Payments Area (SEPA), launched in January this year, is a further step towards closer financial integration and aims at making retail payments across the euro area as easy as they currently are within national boundaries.