samchain/econo-pairs-v1 huggingface dataset:
Most regulatory reform initiatives applied since the Banking Act of 1864 have missed the mark. They looked good on paper and appeared to solve the problems of the day but later proved not up to the task. This is especially true with efforts to solve the “too big to fail” problem, in which an unwillingness to follow through on prior policy commitments to actually close down large failures and impose losses on their uninsured creditors has led to what economists call “time inconsistency” in policy. Let’s hope this time will be different, that regulators will make their commitments credible and consistent with future rather than past needs.6 Having come from the financial industry, I take a keen interest in these issues, and I hold some strong opinions as to how we should proceed. I believe there are leverage points for effective reform. There are areas where, if regulators act decisively, they might have profound positive effects and avoid time inconsistency. Conversely, there are other areas where regulatory action would at best generate small benefits and, in the worst case, might actually be counterproductive. 5  See “Regulating Systemically Important Financial Firms,” address by Governor Daniel K. Tarullo at the Peterson Institute for International Economics, June 3, 2011. 6  See “Financial Reforms or Financial Dementia,” keynote address by Richard W. Fisher to the Southwestern Graduate School of Banking, June 3, 2010.

Richard W Fisher: Containing (or restraining) systemic risk – the need to not fail on “too big to fail” Remarks by Mr Richard W Fisher, President and Chief Executive Officer of the Federal Reserve Bank of Dallas, before the Market News International Seminar, New York, 6 June 2011. *  *  *  The views expressed by the author do not necessarily reflect official positions of the Federal Reserve System. Thank you for that kind introduction. This discerning audience no doubt noted that despite being overeducated, I am not a formally trained economist. I do not have a Ph.D. in economics; those who do will correctly deduce that I am somewhat “dismal” in comprehending the arcana of “the Dismal Science.” After my undergraduate education in economics and my studies at Oxford, I took a different path. I earned an MBA and then went to Wall Street and into funds management before cashing out and taking to public service. My perspective on monetary policy and regulation is shaped less by theory and more by my experience as a market operator. I confess that in matters of monetary policy and regulation, I am often in the minority. This does not make me the least bit uncomfortable. The majority opinion is not always right; indeed, my experience as an investor has biased me to conclude that more often than not, the consensus view is the wrong view, even among the most erudite.
But these effects are longer-lived in a secular stagnation world. It is quite possible that we are in some combination of both worlds. But I think it is important, especially when thinking about policy, to distinguish the different forces that drive these respective stories about the world. The UK picture Which brings me to the UK. When I joined the MPC over two years ago, the data seemed to point quite firmly towards the healing story. The UK was experiencing a burst of growth, driven by the return of credit and confidence and pent-up demand from the recession and slow recovery. Many commentators were arguing that the Bank was in danger of getting behind the curve; these arguments grew louder as unemployment fell at its fastest rate for 40 years. The Bank’s forecasts two years ago suggested that growth would fall back a touch, but only a touch, to around its pre-crisis average of 0.7% per quarter. Our forecast for growth in 2014,15,16 was 3.4%, 2.7% and 2.9% respectively. The reality has confirmed part but only part of that story. Over the course of 2014 and 2015 growth drifted down, slowly but consistently and by more than forecast. The economy grew at around 2% annualised in the last quarter of 2015 – around 0.7 percentage points lower than the February 2014 forecast; growth in 2015 was 0.2 percentage points lower. The Bank’s most recent forecast is for growth to pick up slowly over the next few years to 2.5%.

We are in a “secular stagnation” world but have not fully woken up to it. There are different hypotheses as to why we might be in such a world. One is that we are stuck in an era of very low demand because there are more savers than opportunities to invest. This is due to fundamental factors such as demographic changes, inequality and preferences for low-risk assets. When the supply of savings exceeds demand for borrowing the price – i.e. the natural real interest rate – goes down. If this natural real interest rate is pushed down below zero and held there by this imbalance between supply of savings and demand for borrowing, central banks can’t push demand back up and economies remain stuck. In this world, neither central banks nor the private sector can easily break the cycle; the government has to step in to borrow massively to invest thus correcting the imbalance of savers and borrowers and pushing the natural interest rate back up. Another, somewhat different take, is that we are stuck in an era not of low demand but of low supply growth. In this view, productivity growth slowed in the 1970s after the benefits of the Second Industrial Revolution had finished working through. And, despite the manifest technological developments, such as ICT, technological change has not since had an equivalent impact on productivity. Or, as Peter Thiel said: “we wanted flying cars, instead we got 140 characters”.
The idea was to find an environment that fostered learning for learning’s sake. So, in a small act of rebellion—after all, it was the early 1970s and I was a teenager—I decided to transfer to New College in Sarasota, Florida. New College provided a strong liberal arts, cross-disciplinary, and flexible education program that relied—as it does today —on an unstructured format of evaluations, study programs with individual professors, and contracts rather than grades. I like to call it “graduate school for undergraduates,” because it really is a place that encourages students to engage intellectually, read and think critically, and communicate effectively. This experience made me a strong advocate of a liberal arts education, which I believe is now more valuable than ever, given the greater importance of synthesizing and evaluating the vast array of information we have at our fingertips. The cross-disciplinary approach of a liberal arts program is also vital to understanding and solving complex problems. I believe that training— combined with the excellent education in economics I got at Berkeley—helped me to better diagnose what was going wrong in 2007 and 2008, and how the Federal Reserve could be most effective in our response to the crisis. Economic and monetary policy outlook Turning to the economic outlook, the damage wrought by Hurricanes Harvey, Irma, and Maria has imposed immeasurable hardship on many. And, the damage will undoubtedly disrupt commerce for some time. However, these effects are likely to be relatively modest in the context of the national economy.

Andrew G Haldane: Control rights (and wrongs) Text of the Wincott Annual Memorial Lecture by Mr Andrew G Haldane, Executive Director, Financial Stability, of the Bank of England, Westminster, London, 24 October 2011. *  *  *  The views are not necessarily those of the Bank of England or the Financial Policy Committee. I would like to thank Evangelos Benos, Fergus Cumming, Jonathan Grant, Sam Harrington, John Lane, Iryna Kaminska, Priya Kothari, Fiona Mann, Vasileios Madouros, Roland Meeks, Joseph Noss, Peter Richardson, Victoria Saporta, Rhiannon Sowerbutts, Mervyn Tang, Matthew Willison and Peter Zimmerman for comments and contributions. Introduction It is a great pleasure and privilege to be presenting this year’s Wincott lecture. Banks are special. That has long been recognised in the design of their ownership, governance and regulation. This special status can have strange consequences. The historical distribution of risks and returns in banking is one. For a century, both risks and returns have been high. But while the risks have typically been borne by wider society, the returns have been harvested by bank shareholders and managers. The experience of the past two decades illustrates well this imbalance. In 1989, the CEOs of the seven largest banks in the United States earned on average $ million. That was almost 100 times the median US household income. By 2007, at the height of the boom, CEO compensation among the largest US banks had risen almost tenfold to $ million.
A corollary to the increase in the number of person-hours worked is partly reduced sickness absence and partly three more working days in 2004 compared with 2003. An increase in available person-hours and increased competition and rationalisation in many sectors led to higher-than-normal growth in potential output last year. The economy has therefore been able to grow fairly rapidly for a period without the emergence of bottlenecks in the labour market. In the business tendency survey, manufacturing industry reported rising output volumes and capacity utilisation. Average capacity utilisation in the manufacturing sector is now close to its historical average. Information from Norges Bank’s regional network also indicates an approximate balance between supply and demand in the economy, and that capacity utilisation is close to normal. A normal level of capacity utilisation is consistent with an output gap – the percentage difference between actual output and potential output – that is close to zero. Growth in demand and output is expected to remain high in the near term. Unemployment may fall somewhat more quickly than has been the case over the past year. The output gap is expected to be positive in 2005. BIS Review 27/2005  3  Higher demand for companies’ goods provides scope for increasing prices. Experience shows that inflation is directly influenced by the level of capacity utilisation in the Norwegian economy. Some of the rise in prices for domestically produced goods and services can be attributed to higher margins in the business sector.

Home refurbishment is probably also rising sharply. Overall, the supply of capital to households has increased sharply. Debt accumulation was somewhat more than 11 per cent in 2004 and is now considerably higher than growth in household disposable income. This largely reflects the sharp rise in house prices since the mid-1990s. According to TNS Gallup’s consumer confidence indicator for the first quarter of 2005, households are still highly optimistic with regard to their personal finances and the domestic economy. Our regional network confirms this impression, with reports of strong growth in companies that provide goods and services to households. On the whole, household consumption and housing investment are projected to show fairly strong growth over the next few quarters. Even with a strong upturn in the mainland economy, the increase in the number employed has been relatively modest. Productivity rose fairly sharply in the first few quarters after economic growth picked up. Normally, when productivity growth is strong, enterprises again begin to hire new staff. The current upturn has lasted about two years. The fairly low level of growth in employment, as measured by the number of employed, must be seen in the light of the sharp decline in sickness absence through 2004 after rising for several years. The decrease in sickness absence has increased companies’ supply of labour and reduced the need for new employees. Measured in person-hours worked, employment growth was solid last year. The number of person-hours worked rose by 2.2 per cent from 2003 to 2004.
It just cannot be acceptable that the downside from excessive risk across the financial system as a whole falls to the general taxpayer, to households and firms throughout the economy, if the upside is enjoyed by a narrower group of shareholders and managers. This is not just an issue of economic efficiency – of the allocation of resources – and of leaning against the risk of even bigger crises down the road, but also of social justice. That is why the debate has attracted so much interest. But I hope I can persuade you that the Too Big To Fail problem matters to bankers too. Because the Lehman case demonstrates that in a democracy, political constraints are uncertain and so even Too Big To Fail firms can sometimes be allowed to fail. Banks need a system in which they are better protected against mismanagement by their peers. The debate calls for technocratic solutions to be laid out, but choice amongst those solutions should be understood and accepted by society at large. And the solution needs to be an international one. It is therefore good news that the G20 has commissioned work from the Financial Stability Board on the Too Big To Fail issue. So the stakes are high. By the lights of our successors, we are bound to get it wrong, but can we get to the right ballpark?

A similar view is substantiated in the company talks conducted by the SNB’s delegates for regional economic relations. Inflation expectations are in the range that is consistent with the SNB’s definition of price stability. Monetary policy outlook  Ladies and gentlemen, let me summarise my key points. Inflation remains very low and capacity utilisation continues to be unsatisfactory. The Swiss franc is significantly overvalued. In periods of uncertainty, it is still subject to increased upward pressure. The two elements of our monetary policy ease this pressure. The negative interest rate makes Swiss franc investments less attractive, by at least partially restoring the traditional interest rate differential against other countries. Interventions in the foreign exchange market supply the market with additional Swiss francs when demand for our currency is particularly strong. Page 3/4  Berne, 15 June 2017 Thomas Jordan  News conference  Our expansionary monetary policy remains necessary in order to ensure price stability, while taking due account of economic developments. Newly designed ‘Business cycle signals’ report  To conclude, I would like to draw your attention to an additional document in the media pack. It is the preprint of the ‘Business cycle signals’ report. The SNB’s delegates for regional economic relations regularly conduct talks with managers of companies throughout Switzerland. These talks provide us with a first-hand account of the latest cyclical and structural developments in our economy and are an extremely valuable source of information for the Governing Board in its assessment of the economic situation.
Adhering to this principle is the key to how monetary policy can support the correction of economic discords. BIS central bankers’ speeches  3

This is a joint initiative by the Association of Banks in Malaysia and supported by the Royal Malaysian Police and Bank Negara Malaysia. To coordinate and expedite actions against the operators of financial scams, a taskforce led by the Attorney-General’s Chambers has also been established under the National Coordination Committee to Counter Money Laundering. Our regulatory approach will continue to strike a right balance between innovation and the stability of the system. We are ready to adapt regulations to support emerging technologies and changing business and operational models when they bring clear benefits to our financial system and economy, and when the risks are well-understood and managed. New requirements for eKYC solutions that were recently released for industry feedback are an example of this. We will also be releasing guidelines for digital currencies by the end of this year to address risks associated with money laundering and terrorism financing. Last but not least, let me state that Bank Negara Malaysia values our cross-border partnerships with financial intelligence and law enforcement agencies. We will continue to cooperate constructively with our counterparts, including through our membership in the Financial Action Task Force (FATF), to safeguard the integrity of the global financial system. This partnership at the international level is increasingly critical as money laundering and terrorism financing transcend borders. More importantly, our efforts are to secure the future of our economy and the trust of our people by effectively preventing abuses of the financial system for criminal purposes.
Through a series of large-scale asset purchase programs (LSAPs), the Federal Reserve’s balance sheet expanded to include more longer-term Treasury securities and two additional asset classes, agency debt and agency mortgage-backed securities (MBS).1 Agency MBS currently represent more than 40 percent of the System Open Market Account (SOMA) domestic portfolio.2  Furthermore, in order to maintain the size of the SOMA’s agency holdings, the New York Fed’s Open Market Trading Desk (the Desk) continues to reinvest principal paydowns on agency MBS and agency debt into agency MBS each month.3 In my remarks today, I will share some reflections on LSAPs at the ZLB and the flexibility that access to the agency MBS market gives the Federal Reserve to execute such programs. Before I begin, however, let me remind you that the views I express are my own and do not necessarily reflect those of the Federal Reserve 1 / 10  BIS central bankers' speeches  Bank of New York or the Federal Reserve System. Large-Scale Asset Purchase Programs Currently, all the major advanced-economy central banks are either at or close to the zero lower bound.

With the scorecard, remuneration of intermediaries will be more closely aligned to the suitability of products for prospective customers and the overall quality of service. I believe that such a shift in incentive structures will encourage advisers to build more enduring relationships with customers. More can be done beyond the realm of regulation. In other countries – such as Australia, United Kingdom and India – financial advisers are voluntarily adopting a fee-based model. The combined effect of increased customer awareness and bargaining power are also pushing financial advisers to reduce their commission-based income. In India for example, several firms have successfully shifted to largely fee-based models. This is, however, not a painless transition. In doing so, some have parted ways with customers who were unwilling to pay these fees. I believe that the move towards a fee-based model is an important signal that the advisers’ incentives are aligned with those of their customers. To ensure a successful transition to a feebased model, financial advisers will need to enhance their value proposition to ensure that customers receive the standard and breadth of advisory services that would be worth paying for. 3/5  BIS central bankers' speeches  This is no easy undertaking, but I am confident that it is one that our financial advisory firms will be able to achieve. Adaptability to change At the beginning of my remarks, I had highlighted three key trends affecting the industry. How well financial advisers respond to these developments will determine the industry’s relevance in the years to come.
Unlike the post crisis period when policy rates would have needed to be deeply negative to follow the natural rate, monetary policy is now more able to be close to the natural rate and so to keep demand and supply in balance. But it can only do so with very low interest rates or, in the case of some advanced economies, with slightly negative rates and QE. There is a simple cross check on the model estimates of the natural rate – the actual evolution of inflation, output and interest rates over the past few years. The natural rate as John H Williams observed in response to Keynes and with some despair, is:  5  See Figure 1 at the end of the speech for an illustrative breakdown of some of the factors affecting the appropriate real policy rate. 6  For example, see http://bankunderground.co.uk/2015/08/11/an-estimate-of-the-uks-natural-rate-of-interest/. 6  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  6  “an abstraction; like faith it can only be seen by its works. One can only say that if the Bank policy succeeds in stabilizing prices, the bank rate must have been brought into proper line with the natural rate, but if it does not it must not have been.”  7  In the period since the UK recovery gathered pace in 2013 and the August Inflation Report this year, Bank rate was at ½% and the stock of QE unchanged.

In particular, governments need to foster innovation by providing the right framework to encourage experimentation and risk-taking in new and growing sectors, and to support the transition to new jobs for people working in “sunset” sectors. In parallel, they need to ensure that the conditions are in place to direct investment towards the technologies and sectors of the future. 2/4  BIS central bankers' speeches  This requires sufficient financing. The European Commission estimates that the investment needs for delivering the digital transformation as well as the green transition will be at least € trillion over the next two years.2 But in a number of countries – Italy among them – mobilising investment requires above all a business-friendly economic environment, with efficient and agile public and private services, adequate physical and digital infrastructures, a well-functioning judicial system and a strong financial sector. If such actions are taken, this crisis can engender a period of positive transformation. It offers an opportunity to policymakers to take a decisive step forward towards more inclusive, greener and more digital growth.