samchain/econo-pairs-v1 huggingface dataset:
And it proves that the concept of Europe is popular as long as it stops being abstract and takes the form of concrete projects. 2/6  BIS central bankers' speeches  However, during the past 20 years, the euro area has essentially forged ahead through crises, with the creation of the European Stability Mechanism – located in Luxembourg – to help Member States following the Greek crisis in 2012 or the Banking Union in 2014 in response to the Spanish or Irish crises. As it appears that a financial crisis is increasingly distant, general European interest has now waned. This is a serious problem: until now, we have not been able to properly take advantage of the more favourable economic climate in order to prevent a new crisis. And this takes me to our challenges for 2019. II. Our challenges in the face of 2019’s uncertainties A - A slowdown rather than a downturn, in a more fragile environment A word first on the economic environment. At both the global and European level, activity is decelerating, but we are still a long way from experiencing a downturn. In 2019, global growth should at best be in line with 2018’s level – 3.7% according to the IMF – subject to a downside risk. In the euro area,5 according to our latest projections, growth should come out at 1.7% compared with 1.9% in 2018. Although revised downwards, our baseline scenario remains relatively favourable. That said, at the start of 2019, we face three challenges: uncertainty, impatience and isolationism.

1 See Article 127 of The Treaty on the Functioning of the European Union. 2 Jean-Claude Trichet, 2014: “Central Banking in the Crisis: Conceptual Convergence and Open Questions on  Unconventional Monetary Policy” Business Economics, Palgrave Macmillan; National Association for Business Economics, Vol. 49(2), pp. 74–84, April. www.perjacobsson.org/lectures/101213.pdf 3 Kydland, F. and E. Prescott (1977) “Rules rather than discretion: The inconsistency of optimal plans”, Journal of  Political Economy, 85(3), pp. 473–92. 4 Alesina, A. and L. Summers (1993) “Central bank independence and macroeconomic performance: Some  comparative evidence”, Journal of Money, Credit and Banking 25(2), pp. 151–162. 5 December 2018 Eurosystem staff macroeconomic projections for the euro area. 6 OECD Economic Outlook, November 2018. 7 Bank for International Settlements: Credit to non-financial corporations from all sectors at market value –  Percentage of GDP. March 2006 – June 2018 (unconsolidated data). 8 “The cost of deficiencies in euro-area economic policy coordination” Quarterly Selection of Articles No. 46,  Banque de France, summer 2017. 9 Address given by Pierre Werner, Luxembourg Prime Minister and Foreign Minister, on 30 September 1965 to the  Belgian Chamber of Commerce in New York. 6/6  BIS central bankers' speeches
This was the case with the Swedish krona and several other European currencies at the beginning of the 1990s. With regard to inflation targeting, I am of course somewhat biased and for obvious reasons find it easier to point to advantages than disadvantages. One advantage is that a central bank which conducts inflation targeting is not tied to maintaining a particular exchange rate relationship, but can be more directly aimed at focussing on what is happening in the domestic economy. Another, partly related advantage – which I believe has been very important in Sweden’s case – is that inflation targeting means that one specific authority is given a clear responsibility for maintaining price stability. During the 1970s and 1980s it was not entirely clear where the responsibility for this lay in Sweden. One could say that the responsibility in practice had been delegated to the social partners, but that the total economic policy tended at the same time to be so expansionary that it became difficult to maintain wage and price increases at reasonable levels. A further advantage of inflation targeting is that the task of monetary policy, in the same way as with a fixed exchange rate regime, is easy for the general public to understand. If I am to try to find a disadvantage with inflation targeting, it could be that it is more difficult from a purely operational point of view for a central bank to steer inflation towards a particular level than to maintain a particular exchange rate relationship.

2  BIS Review 52/2006  Perhaps the foremost advantage of having a fixed exchange rate regime as a means of keeping inflation under control is that it makes the task of monetary policy simple and straightforward: it shall set the key rate in a way that enables the exchange rate relationship to be maintained. This task is also easy for the general public to understand. At the same time, it may be a disadvantage that monetary policy is tied to this single task. It cannot then be used to subdue domestic disruptions that have no equivalent in the country to which the currency is tied – the anchor country. At the same time, disruptions in the anchor country will immediately affect the targeting country as interest rate adjustments in the anchor country will lead to corresponding interest rate adjustments in the targeting country. If, for instance, the interest rate in the anchor country is raised because demand in that country is increasing, the interest rate in the targeting country must also be increased in order to maintain the exchange rate relationship, even if the country is in a recession. A fixed exchange rate regime thus means that it is not possible to conduct an independent monetary policy. The task of keeping the economy in balance and of steering inflation more directly cannot thus rest with the central bank. A fixed exchange rate relationship can also be exposed to speculative attacks if it is not entirely credible.
The current low interest rate environment and the mildly expansionary fiscal stance on aggregate in the euro area provide a good opportunity for governments to minimise the short-run costs of labour market reforms. Finally, there are reforms in other areas of the economy that can compensate for some of short-term loss in disposable income that households might suffer in bad times[23]. Indeed, having the right sequence is a point often made: if you have to implement product and service market reforms as well as labour market reforms, then hold back with the latter[24]. The underlying reason is partly that the short-term negative macroeconomic effects are much greater when a liberalisation of, say, employment protection leads to a spike in unemployment than when product market reforms decrease excessive rents margins, to the immediate benefit of consumers. Another argument made is that product market reforms should be prioritised since they boost output regardless of the overall economic situation, and because they do not weigh on public finances. Why then have we seen exactly the opposite sequence in the euro area countries that have gone through significant reform in recent years, that is, labour market reforms before product and service market reforms? It’s because, unlike in the labour market, where a few changes can often produce major results, product and service market reforms are in practice made up of a huge array of small reforms.

Thus, we need to solve the “fairness/subsidy” issue, but do so in a way that ensures that the resulting regime is more stable, resilient and robust. The fairness/subsidy issue There is considerable debate about the size of the funding advantage of large banks that is due to too big to fail and how much this funding advantage creates incentives to become larger and more complex. One reason is that it is difficult to measure the size of these effects. For example, consider funding costs. We can document that larger banks’ unsecured debt funding costs tend to be lower than those for smaller banks. But the funding costs for larger firms across a broad range of industries also tend to be lower than for smaller firms in the same industries. This reflects, in part, the fact that the debt issues of larger firms tend to be more sizeable and more liquid. In addition, larger firms may be more diversified on average and thus less prone to failure, everything else equal. The measurement challenge, then, is to identify what portion of the lower funding costs at the largest financial firms, after accounting for these other factors, is due to a perception among investors that such firms are too big to fail. Despite these measurement difficulties, most of the evidence is consistent with a too big to fail funding advantage in banking.
Total turnover on the foreign exchange market was 162 billion kronur in 1997, and had doubled since 1996. In addition, the participation of the Central Bank in foreign exchange market transactions fell from 82 percent of turnover in 1996 to 37 percent in 1997. So far this year turnover has continued to increase and the share of the Central Bank has declined to 13.2 percent. Average daily turnover has been about 2 billion kronur this year. Daily fluctuations in the exchange rate increased as a result of last year’s change, but not much when compared to what is common among other countries. Since mid-1993, or for almost 5 years, the exchange rate of the krona has never deviated more than 2.1 percent from the central rate. Yields on Domestic Markets Money market yields declined in the course of the year until the Central Bank raised its rates in November after which they rose. Yields on 3-month Treasury bills rose to 7.22 percent where they stood at year-end. A low Treasury borrowing requirement at times caused a shortage of Treasury bills. Demand for Treasury bills was also boosted because of increased interest in them for liquidity management. Yields on indexed bonds changed little during the first half of 1997 but during the second half the yield on government bonds and housing bonds fell sharply, albeit unevenly. This decline was partly the result of the low Treasury borrowing requirement. The yield on non-indexed government bonds also declined sharply in 1997, although also unevenly, to 8.3 percent at year-end.

A new overnight facility for credit institutions subject to reserve requirements was established at the Central Bank. Collateral for overnight loans will be provided by government guaranteed securities held by the credit institutions. The next step in these changes will take place on April 1 when new rules governing reserve requirements will take effect. The reserve base will be widened to include the foreign borrowing of credit institutions while the reserve requirement ratio will be lowered as the change is intended to be broadly neutral with respect to required deposits, thus making the change neutral from a monetary policy perspective. The reserve requirement ratio will be 4 percent on obligations under 1 year to maturity but 1.5 percent on obligations tied for longer than 1 year. Also, the reserve requirement will cover more institutions than before, and only institutions subject to reserve requirements will have access to facilities at the Central Bank. It will be possible to meet the reserve requirement more flexibly than has been the case. Indexation of required deposits will be abolished but the interest rate on them will initially be set on the basis of prevailing yields. BIS Review 42/1998  -5-  The last step in these changes will be taken on May 21 when the first calculations based on the new rules concerning reserve requirements will be done. At the same time, the so-called discount quota, which is a facility that the Central Bank has offered to deposit banks, will be abolished.
The first step is to build the skills required at the tertiary level to ensure that the curriculum at our universities and colleges equip graduates with the relevant knowledge and skills that meet the needs of the industry. In this respect, closer cooperation between the industry's training institute and the academia will help to develop a new breed of graduates who will be much better prepared to enter the workplace. At the post-employment stage, we need incentives for continuous learning and upgrading of skills and an infrastructure that delivers the appropriate training. For the development of banking sector workforce, the International Centre for Leadership in Finance (ICLIF) was established to pave the way for the development of future leaders in the industry, while Institut Bank-Bank Malaysia (IBBM) provides the avenue for competency building among the various levels of staff. With the onset of financial liberalisation, the traditional lines of business are likely to expand into new areas and new business models. As a consequence, the skills requirements have also evolved with the growing diversity and complexity of businesses in which banks are engaged, the increasingly sophisticated customer needs, technological innovation, and the expectations for sound risk management. In this context, there is a need to analyse the essential competencies for current job functions and to anticipate future skills requirements, with a view to building a competency framework for banking and finance that is relevant to the changing financial landscape.

Since coupon rates on  7  Fed funds equivalents are calculated by comparing the change in the 10-year Treasury yield due to asset purchases to the change that historically occurred following movements in the target federal funds rate. This is a simple framework, so the uncertainty around this measure is likely large. 8  For more information on the TBA market, see Vickery and Wright (2013). 4  BIS central bankers’ speeches  agency MBS are offered in 50 basis point increments, the originator might choose to sell the remaining cash flows to investors in the TBA market in the form of an agency MBS with a coupon rate of 3 percent and retain the remaining 25 basis points.9,10 In this case, the 3 percent TBA contract would be the production coupon.11 The Desk focuses its purchases in production coupons because these securities are the most liquid segment of the TBA market and their yields are closely tied to the primary mortgage rate through the dynamics I just described. Purchases are distributed across different agencies, maturities, and coupons in amounts that are roughly proportional to anticipated gross issuance of those securities. Purchases lower the yield on these securities relative to where they would otherwise be, which should enable originators to offer lower mortgage rates to borrowers.12 Lower borrowing rates should in turn help stimulate demand in the housing market, support home prices, and increase mortgage borrowers’ purchasing power. As I mentioned before, asset purchases affect interest rates in part by removing risk from investors’ portfolios.
We do know that as of now many people expect working from home to remain more common after the Covid pandemic is over. Half of new remote workers say they would like to continue to work from home all or most of the time even when lifting restrictions permits a return to normal working patterns (Felstead and Reuschke, 2020). Employers in some sectors also expect the proportion of staff that regularly work from home to more than double (Chartered Institute of Personnel and Development, 2020 and DMP, 2021)1, and many contacts of the Bank’s Agents expect a hybrid model of two to three days a week spent in the workplace to become the “new normal” for office workers. What is the evidence so far for the impact of Covid on productivity and investment? Here we can turn to the information that comes from the regular surveys of the Bank’s Decision Maker Panel (DMP) (Bloom et al., 2020). Labour productivity in the UK tends to be pro-cyclical. This does not appear to be the case in the Covid shock. So far during the pandemic labour productivity per hour appears to have risen, but with a tendency to reduce over time (Chart 2). There is, however, a lot more going on under the surface. There The February 2021 Decision Maker Panel survey asked businesses for the first time about what proportion of their employees’ time was spent working remotely, both pre- and during Covid, as well as their long-term expectations.

A minority of regimes, of which Hong Kong is one, focus on a stable external value of the currency - in Hong Kong's case through the particular mechanism and discipline of the currency board. The more externally oriented an economy is, the greater is the weight which may need to be attached to exchange rate stability within the overall concept of monetary stability. There are various pros and cons of each approach. Inflation targeting is less precise, in that it is necessarily based on forward projections, and verifiable indicators of success are only available after a timelag. It also requires a reasonably accurate forecasting process, which may be simpler to realise in a relatively closed than in a highly open economy. Nevertheless, experience of several countries shows that inflation targeting is capable of delivering good results. An obvious advantage of a fixed-rate regime is that compliance can be monitored very directly and unambiguously in real time; and, in the currency board version, the regime operates by automatic mechanisms rather than by the discretion of a central bank. It may, however, result in a less stable inflation rate, although, assuming that monetary policy in the country of the anchor currency is conducted responsibly, extremes of hyper-inflation or deflation will be avoided.
Market standards can be effective if they:  -  Articulate clearly the market’s collective view of best practice, with worked practical examples to clarify grey areas;  -  Are grounded in, and are reinforced by, relevant regulatory frameworks and requirements;  -  Are kept current; and  -  Are given teeth by incentives that foster adoption and adherence. An Early Assessment of the FMSB’s work  So how is the FMSB doing in establishing common standards of market practice that are well understood, widely followed dynamically relevant? The FMSB is already making an important contribution. 7  “Hard infrastructure” refers to the way in which markets are organised. “Soft infrastructure” refers to the standards and norms, including regulation, market standards and codes, by which markets operate. 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  Drawing on the expertise of its members, the FMSB has finalised standards that codify best practice with respect to: reference price transactions, commodity binary options, and new bond issues. A standard on risk management transactions for new bond issues is nearly final, and an earlier draft standard on FX stop-loss orders has been absorbed into the FX Global Code. In each case, potential conflicts of interest are mapped to high-level principles designed to mitigate them. For reference price transactions, emphasis is placed on transparency with clients on mechanics and potential conflicts, and on mitigating the risk that the wider transactions of dealers could be market moving.

And under the related Certification Regime, firms must also annually assess and certify the fitness and propriety of a wide range of risk-taking employees. To help meet all of these expectations, Senior Managers can draw on market standards in order to explain and promote good practice, assess their risk-takers, and build a strong culture. 9  See the BIS Press Release on the FX Global Code , available at: https://www.bis.org/press/p170525.htm. 6  All speeches are available online at www.bankofengland.co.uk/speeches  6  There are encouraging signs that the SMR is already beginning to make a difference. For firms, it is clarifying and improving governance, accountability and decision-making processes. Senior Managers are increasingly focusing on building cultures of risk awareness, openness and ethical behaviour. In the words of one chair “responsibility for culture has moved to the top of my agenda.”  10  For supervisors, the regime is helping identify weaknesses in governance and accountability, and to assess the fitness and propriety of senior managers and others in positions of responsibility, and whether the firm has an appropriate culture, and is encouraging the necessary changes. In the first instance, consistent or widespread shortcomings would have consequences for compensation. More persistent failings could increase the capital that must be set aside for operational risks, and in the extreme, could influence our judgements regarding the fitness and propriety of senior managers. Over time, market codes may become more firmly embedded still, something on which the FCA is currently consulting.
It should be a given that the euro area’s monetary and budgetary policies should be shaped by the underlying trends and political objectives in Europe. So it is on the basis of those trends and objectives that the policies should be judged. That does not mean that the economic policies adopted on either side of the Atlantic cannot be compared. But for such a comparison to be reliable, its control variable needs to be precisely the underlying trends and policy objectives in the two areas. In other words, there must be a symmetrical comparison conducted on an equal footing, capable of allowing us to explain any differences encountered, including on the basis of the distinct characteristics of the two economies. 1  My thanks to Roberto Motto and to Adina Popescu for their help in preparing this lecture. BIS Review 135/2008  1  Today I would like to present an analytical model that should help us to understand whether, and why, economic policies – with particular reference to monetary and budgetary policies – have been different in the euro area and in the United States. This may prove useful to those, especially in Europe, who wonder why certain decisions are made on our continent, and the reason why they sometimes differ from those reached in the United States. 2. Monetary policy  It does not take a huge number of graphs or tables to show that monetary policies in the euro area and in the United States have partly differed over the past ten years.

The discretionary component of budget policy, by contrast, can be measured by the variations in the primary balance adjusted to account for cyclical effects. According to the OECD’s figures, the budget balance in the United States, adjusted for the economic cycle, as a percentage of GDP shifted from a break-even situation in 1998, to a 0.9% surplus situation in 2000, and then to a 4.5% deficit in 2003 (and a 3.2% deficit in 2007; Figure 2). The aggregate deficit in the euro area adjusted for the cycle fluctuated between 2.7% in 2002 and 0.7% of GDP in 2007. The budget balance fluctuation range has thus been significantly 23 narrower than in the United States. To summarise, automatic budget stabilisers are more important in the euro area, while in the United States there is greater recourse to discretionary policies. 3.3  Shocks  As with monetary policy, the difference in the shocks hitting the two economies may explain the varying degrees of fiscal activism. In theory, an economy which is hit principally by demand shocks should make greater use of anti-cyclical budget policies than an economy hit mainly by supply shocks. This is a topic on which, as far as I know, no empirical studies have been conducted to date and it is thus a particularly interesting field of research. A hypothesis worth examining is the extent to which the greater frequency of demand shocks in the United States has justified greater fiscal activism in an anti-cyclical direction.