samchain/econo-pairs-v1 huggingface dataset:
Concerning the macroeconomic environment, most of you will remember the deadly combination of high inflation rates and low or negative growth that characterised our economy from the mid-1980s way into the 2000s. Following the high levels of inflation, suppliers of finance inevitably sought to obliterate negative real returns on their investments by raising interest rates to levels of inflation and in many instances above. Furthermore, the low levels of economic growth exacerbated the adverse perception of borrower risks in the economy such that suppliers of finance only concentrated on servicing their existing small blue-chip customer base that survived the harsh economic environment. This environment, Ladies and Gentlemen, has played a very critical role in cementing the high cost of finance. At a micro-structural level, a poor credit culture is also another venomous factor that has had its own share of supporting the high cost of credit. Bad borrowers, who regularly borrow from several institutions with little or no intention to repay their loans, have also been cited as one reason for commercial banks’ relatively high non-performing loans, which in turn fuel high interest rates. Non-repayment of loans does nothing but muddying the waters for even good borrowers with profitable projects, and in order to stay afloat banks have responded by maintaining their loan rates high. Ladies and Gentlemen, in recognition of the shortcomings in the functioning of financial markets and the obtaining high cost of finance, the Government has instituted policy measures aimed at correcting imbalances in the economy and restoring macroeconomic stability.

If we look beyond uncertainties, we have also received positive news; in particular, recovery is underway in Europe. As you may know, a meeting of the ECB Governing Council will be held in three days, so I have to respect a silent period and I will not speak on monetary policy matters. But I can emphasize that, in response to weak inflation and heightened uncertainties, the Eurosystem, of which the Banque de France is a member, has acted decisively. In addition, several European countries have implemented structural reforms since the onset of the crisis and, at the same time, the EU and the euro area have taken significant steps to enhance economic and financial integration and stability. All these efforts have strengthened the euro area’s resilience as shown by limited reactions to Brexit or the US elections or by the unaffected, steady recovery in the euro area. 1/ Changes in economic conditions [Slide 2] In Europe, economic recovery is underway. Europe is continuing to recover, at 1.7% in 2016, and is expected to carry on recovering in 2017. Euro area growth is robust since it is supported by domestic demand, i.e. household consumption and corporate investment. New more detailed euro area growth and inflation projections will be published on 8 December. It is particularly important to note that labour market conditions are improving and unemployment is receding. In the euro area, on the past 4 years, the unemployment rate has dropped from 13% to 9.8% last October and is at its lowest level in four years.
It should be clear to employees how their work aligns with the purpose and strategy and how they contribute to the overall success of the firm. Finally, within the employee category, the remedies need to cover the entire employment cycle, from recruitment and onboarding to performance management, compensation and promotion. I have already spoken about the importance of hiring practices, so I don’t need to repeat myself here. It goes without saying that to be successful in strengthening hiring practices, you need to incorporate a process where you assess whether candidates are a strong fit with the desired culture of the organization and develop indoctrination programs whereby new employees are educated on strategy and vision, as well as the behaviors that are not tolerated. The goal is to convince all employees of three points. First, good behavior protects them as well as the firm. Second, all employees share the consequences of poor conduct. Third, it is therefore the responsibility of each employee root out bad behavior. The industry also needs to consider a mechanism to stop movement of “bad apples” from firm to firm. The current situation not only facilitates movement, but in many cases rewards it. By allowing employees to jump from firm to firm, the impact of unethical behavior is systemic and cannot be contained within one firm or a small section of the industry. We must address this challenge.

Speeches 29 Jun 2022  Opening Keynote Speech at ASIFMA Compliance Asia Conference 2022 : Building the right talent pool for Hong Kong Arthur Yuen, Deputy Chief Executive, Hong Kong Monetary Authority Ladies and gentlemen, Good Morning to all of you, 1. Let me start off by thanking ASIFMA for inviting me to this Compliance Asia Conference. With the COVID situation finally settling down, it’s the right time to re-direct some of our fire-fighting energy back to more forward looking topics. And I think revisiting some of the issues about talent pool for the financial industry is indeed a good starting point. 2. For many of us, the Global Financial Crisis of 2008 is already a distant memory. Most of us may have forgotten the main factors leading to such a painful experience. Just to name a few issues contributing to the crisis: risk takers were not facing the consequences of taking undue and excessive risks; and no proper mechanisms were in place for shaping or influencing the behaviour of financial practitioners. As a banking supervisor, the HKMA cannot afford to forget those lessons. Instead, we have been working hard, even throughout the pandemic in the past two and a half years, to close those gaps. More recently, the HKMA has made good progress in cultivating sound bank culture and preventing “bad apples” from rolling among financial institutions. I would like to take this opportunity today to share with the audience our latest developments on those fronts.
In contrast, under present arrangements, how long that period lasts will depend on macroeconomic conditions. The inflation target dictates that we should continue to buy gilts (or other assets), including reinvesting maturing gilts, so long as inflation is more likely than not to undershoot the inflation target in the medium term. And it also dictates that we should sell them when inflation is more likely than not to overshoot the target. Making gilt sales/purchases contingent on the economic environment must surely be the right way to set policy. 5 My first seven years at the Bank coincided with one of the most tranquil periods in British macroeconomic history. The past five years since the eruption of the global financial crisis have been anything but. It has been a challenging but humbling experience. We knew less than we thought. And we forgot some of the lessons of history. As a result of the crisis, we have found ourselves providing liquidity support in unexpected ways, deploying unconventional monetary policies in alien circumstances, and developing a whole new lexicon of macroprudential policies. Although it will be some time before the post-crisis adjustment is complete, normality will eventually return. Hopefully we will then be in a position to leave our successors both wiser and with a better toolkit to deal with similar challenges in the future. Thank you for your time.

On several occasions, the Eurosystem has voiced its expectations regarding SEPA for cards. In particular, the card schemes should offer consumer choice, operate in competitive markets  2  “The economic impact of the Single Euro Payments Area”, by Heiko Schmiedel, ECB Occasional Paper No 71, August 2007. 3  Payment and securities settlement systems in the European Union, Blue Book, fourth edition. 4  “The Costs of Paying – Private and Social Costs of Cash and Card Payments”, Mats Bergman, Gabriela Guibourg and Björn Segendorf, Working Paper No 212, Sveriges Riksbank (September 2007). BIS Review 134/2007  3  and avoid geographical segmentation. In doing so, the Eurosystem expects that the SEPA for cards offers high efficiency and low prices derived from current best practices. In my view, a clear long term strategy of a SEPA for cards is not yet developed. The Eurosystem expects at least one new European card scheme which can compete with the international schemes in the SEPA environment. I’ll address this issue more in depth in the following panel. What I would like to stress, however, is that the Eurosystem welcomes the progress that has been made towards standardisation for cards, which, when implemented, will lead to the creation of a European market for terminals and for cards acquiring. The Eurosystem also welcomes the efforts of the international card schemes in preparing for SEPA and the SEPA changes they have already announced.
But it remains to be seen how wages will react in the face of more buoyant domestic demand. Throughout 2006 the stance of demand-side policies was consistent with the pick-up in private agents’ spending. However, in the monetary policy realm, the strength of the recovery warranted a gradual adjustment in monetary conditions by the European Central Bank. Following the rise in official interest rates in December 2005, the ECB continued in 2006 progressively to withdraw the stimulus provided in recent years in the light of the observed risks to price stability in the medium term. Turning to budgetary policies, the improvement in the business cycle contributed decisively to tax revenue growing substantially above forecast in 2006 and to the euro area budget deficit declining by almost 1 pp. Given the persistence of high deficits in many countries, it is of paramount importance to harness the opportunity provided by the current boom to complete the ongoing restructuring of public finances and to push through measures to boost productivity and employment generation. Precisely in this latter area, the year 2006 saw progress – albeit uneven across countries and economic policy areas – in the application of the structural reform agenda. Undoubtedly, the favourable performance in 2006 in terms of employment and growth in activity is largely the result of the course of the business cycle.

Some of these liberalising measures are detailed in the National Reform Programme so that, irrespective of the need to design other new measures, it would be advisable to apply this Programme more resolutely. Also, advantage should be taken of the transposition of the Services Directive to define a more straightforward and competitive regulatory framework for these activities. Education, innovation, market liberalisation and, broadly, all reforms geared to increasing productivity are of the utmost importance looking ahead to the long term. In recent years the welfare of Spanish citizens has been increasing thanks to better use of the labour factor. This is worth celebrating since for a long time the Spanish economy’s main problem was in fact a persistently high unemployment rate. But as we draw closer to success in this area (the long-term unemployment rate is now around 2%), it will be more difficult to obtain additional welfare gains as a result of increases in the employment rate. Before it is too late, we should realise that productivity is the main source of welfare in the long run, and the policies that promote this are therefore decisive for shaping the future of the Spanish economy. The financial system The behaviour of Spanish households and corporations in 2006 once again posed fresh challenges to the financial system. Given that public and private investment continued to increase, the net borrowing of the economy rose from 6.5% to 7.8% of GDP.
I would thus like to thank BBVA for all its contributions over the years towards achieving this objective which, as I have said, is so important for society and its future. The organisation of this conference testifies to this. It allows us to learn from the experiences of others and, in that way, to better pursue the joint effort of raising citizens’ financial literacy. Thank you. 10  Specifically, pupils were asked to assign € among various present and future consumption options, with three different interest rates (0%, 100% and 150%) and three different time horizons (today as opposed to a week’s time, today as opposed to two weeks, and one week from now as opposed to two weeks from now). In recompense for the different options, USB memories with different capacities were used. In each class, a pupil was randomly selected to obtain, also randomly, one of the options chosen. 8/8

What is more, the Swiss franc has only seen a moderate rise against the euro. As Swiss households and companies are on a solid financial footing, they are shielded – so to speak – against a tightening in credit conditions. Lastly, the stronger Swiss franc vis-à-vis the US dollar has limited the impact of higher commodity prices. Several other factors, like a robust labour market and a competitive industrial sector, could cushion the negative repercussions of the financial crisis in Switzerland. Against this backdrop, the SNB is expecting real GDP to grow between 1.5% and 2% this year. Inflation should be below the 2% mark again in the course of 2008. These forecasts still involve substantial uncertainties. Given the present state of the economy, the current interest level seems to be appropriate. However, the SNB will keep a close eye on further economic developments and inflation so that it is able to identify when action needs to be taken and react in a quick and flexible manner. BIS Review 51/2008  1
Agricultural prices are set in negotiations between the agricultural organisations and the state (...) In these circumstances, it is almost meaningless to talk about the central bank’s special responsibility for inflation.”39 The diminished role of the institution, which persisted well into the 1980s, must be seen in the light of mixed experiences with par policy, ambitious aims of micromanaging the economy, and the conviction that lower unemployment could be achieved by accepting higher inflation.40 At the same time, major imbalances were building up in the economy. Fiscal policy, in conjunction with credit regulation and tight political control of business investment gradually undermined the monetary system as an institution. Later in the 1970s, these problems came to the surface. Growth declined, inflation surged and unemployment rose sharply. I should add that these problems were not confined to Norway. In 1971 the Bretton Woods system collapsed. Two year later the first oil price shock occurred. At the beginning of the 1980s, the problems in the Norwegian economy had reached a pinnacle. In May 1986, the Brundtland government decided to devalue the Norwegian krone by 10 percent. As was usual on such occasions, it was said that this would be the “last time”. Less usual was that it actually was the last time. Gro Harlem Brundtland, Gunnar Berge and Bjørn Skogstad Aamo had come to a decision. Devaluation policy was consigned to the past.

BIS central bankers’ speeches  7  At irregular intervals during the past 200 years, Norges Bank has faced defining moments – crossroads – that have defined the bank as an institution. At such defining moments, the central bank becomes what it is, both in its own awareness and in that of the general public. These are situations where it sometimes became bigger than itself or took on too much responsibility, or inversely became smaller than itself and did not fulfil its role. As is so often the case, it is only in retrospect that we can fully identify the defining moments and assess the wisdom of the choices made. Norges Bank faced its first defining moment early on. When it was first established, the Bank was unknown to the public at large. The new paper money, speciedaler notes, was linked by law to a specific amount of silver.29 Despite the fact that the silver tax had secured Norges Bank a considerable silver reserve, the authorities were afraid to permit free silver redemption. The fear was that the silver fund would be emptied quickly. The notes in circulation with the promise of silver redemption far exceeded the silver value of the silver forks and silver plates that had been collected. Confidence in the new notes waned, and in 1822 the Storting adopted a long-term strategy whereby the redemption rate in silver for the speciedaler would gradually be increased. The aim – the right to full silver redemption, i.e.
As I explained earlier, the SNB as the bankers’ bank ensures that there is a reliable foundation for the settlement of payments. In the retail payments space, financial services providers use this as a platform for delivering their services to customers, doing so in competition with one another. Operating on these two levels, this system ensures that the financial sector remains agile and safe, and that the best ideas can thus take hold in the market without this compromising the systemically important segment. Digital central bank money – few advantages, significant risks Ladies and Gentlemen, before I sum up I would like to say a few words on the subject of digital central bank money for the general public. A more prominent role for central banks in the end customer segment is currently being discussed, involving this and other associated terms such as ‘cryptofranc’ and ‘e-franc’. However, we are convinced that private sector solutions are better suited for meeting end customers’ needs in this area. Digital central bank  Page 7/8  money for the general public is not necessary to ensure an efficient system for cashless retail payments. It would deliver scarcely any advantages, but would give rise to incalculable risks with regard to financial stability by calling into question the tried-and-tested two-tier system. Instead of operating as the bankers’ bank as it does today, the SNB would be acting as a commercial bank for end customers. This would exacerbate the threat posed by bank runs in times of crisis.

Moreover, Switzerland would be alone in adopting such a solution: no other central bank has implemented such a solution to date. This brings me to the end of my speech. Please allow me to briefly sum up the key points. Conclusion I hope I have been able to demonstrate clearly why cryptocurrencies are not genuine rivals to conventional currencies. That said, the underlying distributed ledger technology does indeed have potential, especially in complex areas such as securities settlement and cross-border payment transactions. Nevertheless, the technology still has to prove itself in practice. As well as being efficient, DLT-based solutions must not give rise to any systemic risks in the financial market infrastructure. In the systemically important segment of cashless interbank payments, the SNB plays an active role by providing a reliable foundation. Any future DLTbased systems will have to be linked with the latter in some form or other. In turn, in the area of cashless retail payments, the private sector is better placed to address customers’ needs. The division of roles between the central bank (as the bankers’ bank) and commercial banks (as the interface to the end customers) has certainly proved its worth over the years. This brings me to an important conclusion: If cashless payment transactions are efficient and innovative, there is no need for digital central bank money. What is important is that we remain agile. Our existing set-up contributes to the stability of the financial system, while at the same time allowing sufficient leeway for innovation.
Moreover, yields on government and corporate bonds have declined since the negative interest rate was introduced, as did mortgage rates, albeit to a lesser extent. Overall, financing costs for households and businesses are lower today than they were before the introduction of negative interest. Along with the rise in the volume of bonds issued, this is evidence that negative interest is also having some impact via the credit channel, even though growth in bank lending has not risen as would normally be expected. 2  On 18 December 2014, the SNB decided to charge interest of –0.25% on sight deposits held by banks and other financial market participants at the SNB. With the discontinuation of the minimum exchange rate, the interest charge was lowered further to –0.75%. Page 6/16  Challenges posed by low interest rates In Switzerland, therefore, negative interest rates have had the desired effect. Yet low interest rates also present a number of challenges and potential side-effects, which I would like to look at now. One challenge is communication. At first glance, imposing a charge on deposits appears to turn the logic and laws of economics on their head. It seems unnatural to pay interest on deposits. Consequently, clear communication of monetary policy is especially important right now. In the earlier part of my presentation, I demonstrated that negative interest rates in Switzerland are the result of a decline in the equilibrium interest rate and the SNB’s expansionary monetary policy – a policy rendered necessary by global conditions.

Negative interest also puts a strain directly on banks, and indirectly on pension funds and life insurance companies, which worry about their profitability and about meeting their obligations. As I have mentioned, the SNB takes these concerns very seriously. Yet the challenges now facing pension funds are not caused first and foremost by monetary policy. Rather, their problems stem from the fact that pension funds have to achieve returns that are nominally fixed and were set when the equilibrium interest rate was higher. For banks, the negative interest rate undoubtedly represents a cost because they have to pay interest on their deposits at the SNB. However, the SNB grants a generous exemption threshold, which reduces the effective interest rate burden for the banking sector. These exemption thresholds give banks the freedom to decide whether – and to what extent – they should pass on negative interest to their customers. From a financial stability perspective, it is not negative interest per se which poses a challenge, but rather the low level of interest rates more generally. It is conceivable that low interest rates will lead investors to take greater risks. This can result in imbalances developing on the real estate and mortgage markets. In Switzerland, a variety of measures have been implemented since 2012 – the countercyclical capital buffer for instance – with the aim of reducing the associated financial stability repercussions. Since then, the pace of growth on the real estate and mortgage markets has slackened somewhat, although mortgages continue to grow faster than GDP.