samchain/econo-pairs-v1 huggingface dataset:
Thomas Jefferson believed that the US Constitution should be rewritten every 20 years or so at a new constitutional convention.7 Second, we cannot fully describe an optimal monetary arrangement because we do not know all possible states of the world and hence the policy rule to which we would like to commit. Those two aspects of the technology of collective decisions create a role for institutions. But they differ in important ways. If there were only a commitment problem, then we could describe an optimal state-contingent monetary policy reaction function. Mechanisms could then be devised to make it less likely that policy would deviate from this optimal plan - perhaps by writing the optimal rule in the form of a constitutional provision which could be overturned only by a substantial majority, or financing deficits by issuing index-linked debt. Such mechanisms would make it incentive compatible collectively to stick to the optimal plan. None of this would have come as a surprise to the authors of the American Constitution. In Federalist Paper No.10 James Madison points out that “our governments are too unstable” (p173) and in No. 37 he writes: “the people of this country, enlightened as they are with regard to the nature ... of good government, will never be satisfied till some remedy be applied to the vicissitudes and uncertainties which characterise the State administrations” (p243). Outside observers agreed.

Ladies and Gentlemen, in recognition of the need to provide a conducive regulatory environment which promotes sustainability, accountability, transparency and growth of the building society industry in Zambia, the Building Societies Act was amended in October 2005 to harmonise it with the Banking and Financial Services Act pending the modernization of the Building Societies Act under the Financial Sector Development Plan law reform programme. Ladies and Gentlemen, Bank of Zambia is concerned about the levels of lending interest rates charged by most financial institutions in Zambia, building societies included. With the achievement of relative macroeconomic stability in the recent years as evidenced by a significant reduction in the inflation rate to 11.1 percent as at June 2007, it is the expectation of the Bank of Zambia that all prudent lending institutions would make downward adjustments to their lending interest rates to make financial services accessible and affordable. It is also important to note that high lending interest rates can lead to high levels of delinquency. Ladies and Gentlemen, it is in this light that we anticipate that credit referencing services will help in reducing credit risk through the provision of widely accessible information on the loan repayment profile of borrowers. This should also provide another incentive for lowering of interest rates. Ladies and Gentlemen, in conclusion I wish to state that the Bank of Zambia is committed to broadening and deepening the financial sector through effective implementation of the Financial Sector Development Plan.
It was with the intention of clarifying some of the issues surrounding banking consumer protection that we recently undertook a comparative study of the practices in the UK, Australia and Hong Kong. The report on this study has been presented to the LegCo Panel on Financial Affairs and has been made available to the general public, and, of course, to the banking sector. The study examines the different approaches to this subject in Australia and the UK, but it notes that, in contrast to Hong Kong, the regulators in both places have been given a specific mandate in relation to the protection of consumers of financial and banking services. Two further major differences between Hong Kong and the overseas regimes are highlighted: first, in the setting, monitoring and enforcement of standards of business practice; and, secondly, in the investigation, resolution, and arbitration of customer complaints. With regard to the former, Australia and the UK both, like Hong Kong, have a non-statutory Code of Banking Practice, which sets the standards. But both Australia and the UK take this a stage further, with the formal monitoring of compliance by a specialist agency, which, in the UK case at least, has the power to impose sanctions against institutions that breach the Code. For the resolution of customer complaints, both the UK and Australia have a formalised Ombudsman scheme, with powers to arbitrate in disputes.

* * * These questions aside, one thing is clear in the case of France – and 2016’s too-feeble growth of 1.1%, as published yesterday, confirms it: estimates from national and international institutions all point to low levels of potential growth, at around 1.2%, and relatively high levels of structural unemployment (the equivalent of the NAIRU in English-speaking countries), at around 9%. Clearly, we cannot be content with these levels. All of which brings us back, overwhelmingly, to our four key focuses for reform: Enterprise, Education, Employment and Expenditure reduction (public sector). Our northern European neighbours have shown by example that these reforms 2/3  BIS central bankers' speeches  are not incompatible with our shared European social model. Studies by the Banque de France show in particular that reforms to the goods and services market could boost the productivity of the French economy by between 3% and 5% in the long-term. Without further ado then, let me pass the floor to Fabrice Lenglart, and I wish you all a fruitful and enjoyable conference. 1 www.banque-france.fr/en/secular-stagnation-and-growth-measurement-conference-organised-banque-de-  france-and-college-de  3/3  BIS central bankers' speeches
But I do think there are some lessons that can be learned from the overhaul of central bank liquidity facilities that could be applied to the provision of liquidity insurance to sovereigns. What would the equivalent enablers be for sovereigns? (i)  Better surveillance, particularly of the vulnerabilities to sudden stops;  (ii)  Stress testing countries’ balance sheets through better debt sustainability assessments; and  (iii)  Better mechanisms for reducing disorderly spillovers. Surveillance The Bank of England’s Sterling Monetary Framework 11 is available to banks and building societies on a presumptive basis – banks with a genuine short-term liquidity can rely on it when a shock hits. A key part of that access is the agreement of supervisors that firms meet micro prudential standards. By contrast, there is no system of pre-qualification for the IMF’s precautionary liquidity facilities, at the margin discouraging sovereigns from relying on the IMF  9  Although I note the governance implications of capital market borrowing need further thought. 10  See Winters (2012). 11  Further information on the Bank of England’s Sterling Monetary Framework can be found here: http://www.bankofengland.co.uk/markets/pages/money/default.aspx. BIS central bankers’ speeches  5  as a form of insurance. One potential means of giving countries greater incentives to rely less on self-insurance could be to offer pre-qualification on the basis of strong economic fundamentals and policy track records as part of the Article IV process of surveillance, on a confidential basis.

The domestic financial safety net  Before turning to the global safety net, let me first say a few words about how the financial regulatory reform agenda in the UK has enabled the strengthening of the domestic safety net – the provision of liquidity insurance to the financial system by the central bank. Since the onset of the financial crisis, to keep the financial system open for business, central banks have used their balance sheets as never before. At the Bank of England, for example, new published liquidity facilities have been introduced that extend liquidity for longer durations against expanded sets of collateral to new counterparties. 5 As with any kind of insurance, however, liquidity insurance creates incentives to take more of the insured risk. The extent of this moral hazard and how best to tackle it was a key concern for the Bank of England when making these changes – it is not the role of the central bank to lend to insolvent institutions. 6 To that extent, the expansion of the provision of liquidity insurance was enabled by reform to the regulatory framework for banks, including: (i)  Micro prudential supervision that raised the levels and quality of capital and liquidity banks are required to hold;  (ii)  Regular, transparent stress testing to ensure an ongoing assessment of solvency under different scenarios;  (iii)  A credible resolution regime for insolvent banks that reduces contagion to the wider system and the need for taxpayer support.
However, in the euro area, all the available evidence so far points to the existence of a stable relationship between M3 and price developments over the medium term. M3 and other monetary and credit aggregates also demonstrate leading indicator properties for future price developments. In the end, it is this evidence which makes us confident that monetary and credit aggregates are an important indicator for assessing risks to price stability. The second pillar of the strategy is associated with a complementary, but more eclectic, approach, which implies that a wide range of indicators is of relevance for monetary policy. While inflation is a 3  BIS Review 44/2000  monetary phenomenon over the medium term, at shorter horizons it will be influenced by many other variables. Changes in international commodity prices, such as the price of oil, will influence developments in consumer price inflation. Demand and cost pressures can also influence price developments in the shorter term. Moreover, policymakers will generally need to tailor their actions to the prevailing economic circumstances, since the impact of monetary policy on the future evolution of the price level at any specific time will depend on a host of factors which are not captured by monetary data. Analysis under the second pillar is intended to reveal this information, giving policymakers greater insight into shorter-run price dynamics and their implications for monetary policy. Monetary policymaking in the euro area has to reflect the complexities and uncertainties which surround the transmission mechanism of monetary policy in a wholly new economic entity.

These uncertainties imply that no single approach is likely to be entirely reliable. The inherent uncertainty faced by the central bank cannot simply be wished away. Reliance on a single indicator or forecast, or a single model of the economy or view of the world, would, in these circumstances, be extremely unwise. The strategy needs to incorporate the full range of relevant indicators and assess them in the context of a variety of different models. In this respect, the two pillars complement one another. They allow for a structured cross-checking of the evidence and analysis underlying policy decisions, encompass all information and allow for various views of the structure of the economy. The academic literature and other external commentators are slowly coming to recognise the importance of “robustness” in monetary policymaking - something which I believe has been understood by central bankers for some time. A successful monetary policy is not one that performs “optimally” in the context of a specific model or given a particular view of the world. In the light of our limited understanding of how the economy works, no single model is reliable enough. Rather given the great uncertainty faced by central banks - a successful monetary policy should perform well in a broad range of possible situations and across a variety of models or views of the world, each one of which may capture important aspects of actual economic behaviour or may, ex post, turn out to be close to reality. Monetary policymaking is therefore complex.
We have also required banks to improve their corporate governance by setting up a Board level committee, chaired by an INED, to oversee corporate culture and to ensure that their compensation arrangements are aligned with the culture and values of the bank. These efforts are ongoing and I am afraid that it is not a mission that can be accomplished overnight. So for the time being, there is still a need for supervisors to be around and so you don’t really have to worry that I will be out of a job any time soon. 19. Again, my apologies to those of you who have been attracted to this dinner because of the title and did not get too much joy from what I have said. But don’t lose hope yet, as some of you may still be able to find or invent a time machine that can turn the clock back to the “good old days”. I am sure that bankers in Hong Kong would be very willing to pay a high price for such machine. 20. Thank you very much. 1 Charles Goodhart, (2017) “Has regulatory reform been misdirected?”, Journal of Financial Regulation and  Compliance, Vol. 25 Issue: 3, pp.236–240. 5/5  BIS central bankers' speeches

Norges Bank only has one instrument, and the interest rate alone is too crude an instrument. Hence, financial regulation, the tax system and fiscal policy have to contribute more to promote other economic policy objectives. In the past year, very low key rates have been necessary to prevent inflation from falling too far. Over the past decade, inflation has remained at around 2 per cent, or close to, but somewhat below the target of 2.5 per cent. Division of roles in economic policy The division of roles in economic policy will now be put to the test: •  Monetary policy steers inflation in the medium and long term and can contribute to smoothing fluctuations in output and employment. •  The central government budget – growth in public expenditure – influences the krone and the size of the internationally exposed business sector in the medium term. This is important because the growth capacity of the economy – the fundament for learning, innovation and development – can be undermined if the portion of the business sector exposed to intense international competition is reduced. •  Wage formation and economic structures and incentives lay the basis for the effective and efficient use of labour and other real economic resources, and for economic growth. With concurrently lower inflation and activity prospects, Keynesian demand management was an appropriate policy response to the crisis in autumn 2008. Norway has room for manoeuvre since there is confidence in state finances and inflation expectations are firmly anchored.
This has largely contributed to the emergence of an environment favorable to price stability and low unit production costs, strengthening the competitiveness of our European economy. Finally, all countries have experienced significant fiscal consolidation in the 1990s Enhanced European performances are also evidenced by the significant fiscal consolidation pursued in Europe in the 1990s. The general government deficit for the euro area fell by 3.5 percentage points between 1993 and 1997 and was brought back below the 3% threshold. Since then, deficits have continued to fall. The most recent data point to a public deficit of 1.2% of GDP for the euro area in 1999, down from 2.0% in 1998. Four countries of the euro area have managed to achieve a fiscal surplus since 1999. The fact that European member states have made significant efforts in order to improve their public finances does not mean that the process of fiscal consolidation is over. In fact, some member states, including France, still have some way to go to meet the Stability and Growth Pact goal of budget positions which are close to balance or in surplus. In addition, there is a need to further reduce government debt levels, which remained above 70% of GDP for the euro area.

We will start with the presentation of Professor Khalsa for about 40 minutes or so, which will be followed by a questions and answers segment. I would like to invite Professor Khalsa to take the floor. Thank you! 2/2  BIS - Central bankers' speeches
Central banks can do this by anchoring inflation expectations through establishing a good track record and by demonstrating that the central bank adjusts its policy rates appropriately in response to the changes in the inflation outlook. This behavior is known as the central bank reaction function. That is to say, in order to keep the inflation in line with the target, the central banks react to economic news in a more or less predictable manner. As economy changes over time, the available data set also changes. We get some of our guidance from the analysis of these data by using models or econometric tools. Models are useful but they are not sufficient; in formulating our decision we do and must put some weight on judgments as well. This is known as the art side of the monetary policy. Central Bank of Turkey has been able to bring down inflation from 70 % in 2001 to 7.7 % at the end of 2005. Although the structural reforms over the last five years have been critical in the fight against inflation, the new monetary framework of inflation targeting also played an important role. Inflation expectations have somewhat been successfully anchored to the target, notwithstanding some deviations and deteriorations lately. At the end of May 2007, the Central Bank of Turkey is faced with a considerable credibility gap.

It was enacted on June 11, 1930 as the Law on the Central Bank of the Republic of Turkey. Accordingly, the Bank started to operate on October 3, 1931 and Mr. Selahattin Çam was appointed as the first General Director, or as we now refer to, as our first Governor. The Law did not involve any explicit provision for the independence of the CBT. However, this did not mean that Lawmakers then did not have any idea about the relationships among money, politics and price level. On the contrary, the founders of the Republic were fully aware of the idea that a central bank should be independent in order to get the best outcome from its policies. Let me quote, for example, _smet _nönü, the Second President of the Republic, in one of his various speeches on the establishment of the Central Bank; “I knew from the very start that the Central Bank had to be an independent institution, operating with the integrity and robustness that would be required against even the Government and the Ministry of Finance, let alone its relations with other private banks”. The law did not stipulate any provisions for granting short term advances to the government to prevent the use of the Central Bank resources for financing government expenditures, and thus to avoid inflation and to maintain fiscal discipline. These are enough evidence that despite no formal provisions for the independence, the CBT was de facto an independent authority in conducting monetary policy.
Preventative mitigation is obviously very important, but having impact tolerance means acknowledging that disruptive events will happen, and that firms need to be able to recover within their set tolerance. I’m talking about planning for scenarios that are severe but plausible – we expect firms to be resilient against a wide range of scenarios, but not against Armageddon. I think it likely that the ordering of these impact tolerances between firms and the PRA will often be the opposite way round from capital. On capital, inserting the public interest means that as a general matter we will require firms to hold more capital than they would if left to their own devices – hence, a battleground. For operational resilience, a firm is likely to experience significant private costs – for instance, impact on their profits or damage to their brand – before their safety and soundness is at risk. The exception to this may be a subset of operations whose failure might pose a systemic risk to financial stability. But in most cases, I think interests are likely to be aligned – we all just need to get better at managing this set of risks, as some recent events have illustrated all too painfully. In this context, I will expand briefly on the PRA’s particular focus in this important area. Our general statutory objective is safety and soundness, with policyholder protection on the insurance side and a secondary objective to facilitate competition.

But nested within these objectives is an instruction that our objectives are to be advanced by avoiding adverse effects on the stability of the UK financial system. In other words, although our work is primarily microprudential we have an important role to play in ensuring financial stability. What does this imply for how the PRA should take an interest in operational resilience? It implies that we are interested in operational resilience for its own sake, not just because its absence can have a financial consequence for firms. But we are interested only to the extent that it could have a negative impact on safety and soundness and/or the stability of the UK financial system. That is a fairly high bar. In practice this is likely to mean that we put more emphasis on operational resilience for larger firms doing activity whose disruption could have a financial stability impact. For smaller firms we are only strongly interested where something is going on that is big enough to threaten the firm’s safety and soundness. So for example: if you are a big bank you can expect us to take an interest in your ability to process payments; if you are an insurer with a large annuity book, we will want to know what the operational risks are to your ability to supply people’s retirement income; and if you are a smaller firm spending huge sums on a 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  major IT project, we will be interested in that.
Over 60% of respondents thought that the balance of MPC communication was “about right”, although around 20% felt that too much commentary was devoted to the central view of prospects rather than to the balance of risks. Given the emphasis which the MPC places on the fan chart as a means of conveying information about forecasts, it is striking that there is a demand for even more information about the risks surrounding the central projection rather than the central projection itself. There is, perhaps, a lesson here in the need to redress the balance of discussion in the Inflation Report towards the risks and away from the central projection. The view of respondents – largely City economists – in this respect seems to me entirely rational, but in marked contrast to the pressure on us from the press. Some of the words of respondents to the survey convey the flavour of their views. Several commented on the benefits of more information about the range of views on the Committee. For example, “MPC members could do more speeches, interviews and meetings to explain their individual views on the macroeconomic outlook”. And “the key difficulty in framing the communications is that they are clearly meant to convey the views of a group of people rather than one individual.

In a speech on economic prospects in July 1957, the former Chancellor of the Exchequer, who had recently become Prime Minister after the resignation of his predecessor following an unsuccessful military excursion in the Middle East, said: “Indeed, let us be frank about it: most of our people have never had it so good. Go around the country, go to the industrial towns, go to the farms, and you will see a state of prosperity such as we have never had in my lifetime – nor indeed ever in the history of this country. What is beginning to worry some of us is, is it too good to be true? – or perhaps I should say, is it too good to last? … Our constant concern today is, can prices be steadied while at the same time we maintain full employment in an expanding economy? Can we control inflation? This is the 3 problem of our time”. Some of you may think that it is the problem of our time too. CPI inflation has now risen above 3%, the highest rate since the MPC was set up. Although I believe we are better equipped to maintain stability now than fifty years ago, largely because we have a monetary framework based on an inflation target and clearly defined responsibilities for the Bank of England, we should perhaps look in more detail at how the MPC has worked before coming to a final judgement on the likelihood of continued success.