samchain/econo-pairs-v1 huggingface dataset:
However, as I mentioned earlier, we see increasing volumes of less liquid and more complex assets for which firms have themselves to assign a CQS. Given firms’ judgements play an important role in determining the CQS we need to be confident that their internal rating processes are robust. We have set expectations for firms in Supervisory Statement 3/17: “Solvency II: Illiquid assets”8, that where ratings are a significant driver of technical provisions and capital requirements, we expect those ratings assigned by firms to be broadly consistent with public ratings that could be obtained from ECAIs. Consistency with ECAI public rating methodologies, including any allowance for rating caps, are key points to distinguish from opinions ECAI only provide privately, based on other assumptions. Rating consistency remains a key area of PRA engagement with firms, and to demonstrate consistency firms need to show that they understand what ECAIs do, and then to internalise this in their own processes. Secondly, the fundamental spread sector. As well as credit rating, the sector that an asset comes from is a key driver of the FS. Chart 9 compares at year-end 2020 the FS for A-rated assets depending on whether the financial or non-financial FS is used.

For this reason, it would make sense in my view for us to remain fully committed to developing and implementing effective macro-prudential policies, but at the same time not to blindly pin all our hopes on them. Ultimately the best defence against any conflicts between financial instability and unconventional monetary policy is for that policy to last for no longer than is strictly necessary. This means that we need to maintain the pace and volume of our interventions, as we have communicated, so that inflation rises back towards 2% as quickly as possible and that monetary policy can begin once more to normalise. But it also means something more: if interest rates are low because the natural rate is low, then for interest rates to rise back to more normal levels the natural rate will have to rise as well. And insofar as a low natural rate reflects weak investment demand caused by diminishing labour supply and low productivity growth, this may only be possible in a context of structural reforms aimed at boosting supply capacity. This brings me to the second risk of unconventional monetary policy: that it could in principle delays the very reforms that are necessary for monetary policy normalisation. Let me say upfront that the evidence we can see in the euro area at the moment suggests that this is not necessarily the case. Some countries have recently taken steps in the right direction – but more can and needs to be done.
I see this as necessary because there is a risk that the Federal Reserve could be changed in ways that might impair our ability to achieve our primary objectives – namely, full employment and price stability. As always, what I have to say today reflects my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System. The current debate surrounding this nation’s central bank is not new, but rather dates back to our nation’s independence from Great Britain. The notion of a central bank in the United States has nearly always been controversial – in concept, design and practice. So much so that the charters of the first two U.S. central banks, the First and Second Banks of the United States, were allowed to lapse. The United States, in contrast to many of our European counterparts, had no central bank from 1836 to 1913. During this period, the economy was prone to financial panics. The rapid development of the 19th century American economy, including the westward expansion made possible by railroads, outstripped the ability of the private banking system to satisfy the nation’s needs for an elastic currency and a stable supply of credit. Ultimately, the Panic of 1907 – in which J.P. Morgan, the leading financier of the day, played an outsized role in responding to the crisis – was the catalyst that turned the tide back in favor of establishing a central bank.

Structural shifts are also taking place at the national level in most of the emerging economies. These include the demographic shifts which are transforming the workforce. The demographic structure has an increasing component that comprises a young population and a growing middle income segment. This trend is exemplified by consumers that have become more discerning, with higher expectations. This is also reinforced by increased longevity. The workforce is also progressively affected by the growing urbanisation which is becoming an important feature in most emerging economies. The international, regional and national financial landscape also continues to be significantly transformed. At the international level a growing number of new financial centres will emerge. BIS central bankers’ speeches  1  There will also possibly be new international reserve currencies and a greater network of financial institutions that originate from an increasing number of emerging economies from different parts of the world. This will facilitate greater inter-linkages between financial systems, especially among the emerging economies. These evolving developments will result in an increased interconnectedness of financial markets with the consequence of increased contagion and interdependence. Increasingly financial systems have also become prone to crisis. The recent global financial crisis has prompted the international community to respond with wide-ranging fundamental reforms that is also transforming the international financial system. At the regional level, the Asian region has become more cohesive with regional financial integration intensifying to facilitate a more efficient allocation of financial resources in our region.
The Treasury can take note of this proposal, but can also ignore it, publishing a response. If the Treasury takes the advice, then the Office for Budget Responsibility (equivalent to the Swedish Fiscal Policy Council) will assess whether the measure is compatible with a sustainable fiscal policy. The idea is thus that discretionary fiscal policy measures shall replace the monetary policy stimulation that is not brought about because of the lower bound. Some argue that this would be a more effective and economically more reliable  19 Soon after the turn of the millennium, a committee investigated how stabilisation policy should be conducted in the event of Sweden introducing the euro (Swedish Government Official Reports, 2002). The committee considered that under normal economic fluctuations it would be enough to allow the automatic stabilisers to work and that discretionary fiscal policy would only be used in the case of unusually large disruptions. The reason the committee reached this conclusion was because of this type of problem. 20 See Yates (2017). 10 [24]  mechanism than trying to achieve the same effect through, for instance, the purchase of financial assets. 21 It is an open question whether a similar solution might function in Sweden. One condition that one should bear in mind, as the British proposal emphasises, is that the use of discretionary fiscal policy always entails a balancing act. Sweden's currently strong public finances provide protection against shocks.

Thus, emerging market central banks must be prepared for policy contingencies ahead. At the core, monetary policy must continue to safeguard price stability, while taking into account concerns about economic growth and financial stability. The Bank of Thailand, on our part, will do our best to steer the Thai economy and financial system through the global turbulences, to ensure the continued well-being of the Thai people in years ahead. Thank you. BIS central bankers’ speeches  1
Oversimplistic rules such as raising nominal interest rates until inflation returns to target would fall in this category. But this approach ignores the fact that monetary policy is subject to time lags - of up to two years to pass through fully to inflation - and that other factors can affect future inflation. It would put us at risk of overreacting. Making decisions on a meeting-by-meeting basis and the latest available data does not mean that we should be short-sighted, on the contrary forward-looking. At a bit of a stretch of my definition, another example of the “empiricist approach” would be to simply follow the US Federal Reserve, perhaps with a gap to reflect different long-term neutral rates. This is obviously what countries with exchange rates pegged to the dollar do. Of course central banks are aware of what their peers are doing and there are undoubtedly some spill-overs from the actions of the Fed, not least through the effect on the exchange rate, on which I will have more to say later. But it would not make sense for the ECB to blindly follow the Fed: although inflation has dramatically accelerated in both economies, the underlying causes are not the 4  Page 5 sur 14  same and hence the monetary policy stance should be different too. On the one hand, the energy supply shock is considerably more intense in the euro area which is a large energy net importer while the US is a net exporter.

That said, I wouldn’t conclude that we are not at risk of coordination failures. Let me share two reflections in this regard: 1. Our collective “doctrine” on monetary policy, in the G7 and G20, remains valid: that we central banks target domestic price stability and not exchange rates. But it implies as a counterpart an in-depth and confident dialogue, in Washington, Basel and elsewhere, on our intentions: there should be mutual predictability of policy making. We will achieve the closest to a cooperative solution if we avoid significant surprises between policy makers. As Jay Powell rightly said in 2019 in Paris “Pursuing our domestic mandates in this new world requires that we understand the anticipated effects of these interconnections and incorporate them into our policy decision making.”ix Lael Brainard reiterated this welcome statement no later than yesterday: “The combined effect of concurrent global tightening is larger than the sum of its parts. The Federal Reserve takes into account the spillovers of higher interest rates, a stronger dollar, and weaker demand from foreign economies into the United States, as well as in the reverse direction”. x  2. But there can be market misperceptions of policy intentions or overshooting, and exchange rates can become fundamentally misaligned. Under such circumstances, there were G7 interventions in the past. Several of them were 12  Page 13 sur 14  effective, which we shouldn’t forget.
  In Texas, 38 percent of the population is Hispanic versus 16.3 percent in the U.S.    “Jose” has been the top male baby name in Texas every year since 1996, when it replaced “Michael” and “Christopher.” We are the only state in the union with a Latino baby name ranked number one. Those are some basic facts. Here are some others for you to consider: For the past 20 years, the Eleventh Federal Reserve District – in which 96 percent of the economic output is generated by Texas – has outgrown the rest of the Federal Reserve districts and the United States by significant margins. We have grown our real – or inflationadjusted output (real state gross domestic product) – by 3.6 percent compounded over 20 years, whereas the rest of the U.S. (real gross domestic product) has grown at 2.5 percent compounded; annual job growth in Texas has outpaced the nation by 1 percentage point a year; population growth within Texas has compounded over the past two decades by 2 percent per annum, versus 1.1 percent for the rest of the nation. We now have the second-largest Congressional delegation in the country behind California. But the growth dynamic here is vibrant, whereas that of California is stagnant. This is why we are picking up population and Congressional seats, while the recent U.S. census apportioned no additional seats to California. In sum, we are a vibrant and strong economy.

The economic tenor in California and the rest of America is weary, if not downright weak: Somos fuerte; los otros son flojos. Since the recent economic recession ended, Texas has been responsible for 48 percent of all the jobs created in America. And yet, the Hispanic population is not participating in our economic prosperity in proportion to its weight in the Texas census. BIS central bankers’ speeches  1  The unemployment rate among Latinos here is substantially higher than it is for non-Hispanic Texans. Hispanics earn 36 percent less in hourly wages than non-Hispanic whites; median household income of Latino-headed households in Texas is about 60 percent of median household income of non-Hispanic households. For the U.S. as a whole, Latino-headed households earn about 73 percent of non-Hispanic white household income. Pia Orrenius and our other economists are hard at work in deciphering what accounts for the differences between the economic status of Texas Hispanics and Latinos elsewhere in the U.S. Already, one factor is clear: Hispanic educational achievement in Texas is abysmal. In Texas, as anywhere else in the United States and in all capitalist societies, “you earn what you learn.” Every study known to man, and plain common sense, tell you that income is directly correlated to educational attainment. High school graduates earn significantly more than high school dropouts; a college degree results in greater lifetime earnings than a high school degree; the highest income groups are those with graduate degrees.
From the international perspective, it seems that the overall situation is increasingly more supportive. Advanced economies, together with large emerging economies are in a phase of full recovery, underpinned mainly by the boost in aggregate demand. Interestingly, the euro area, which includes most of our trading partners, is experiencing an overall positive momentum concerning economic growth, and forecasts are optimistic. There is a broad consensus that the economies of the South East Europe region, in the first half of 2017, registered a satisfactory performance in terms of recovery; in the meantime, according to key indicators, such performance is expected to strengthen further in the third quarter of this year. Albania is no exception to the regional context. In the previous quarter, the economic and financial situation in Albania was set on a path of constant improvement. Growth and employment indicators followed an upward curve and expectations for 2018 remain positive. Consumption and foreign investments have contributed positively to economic activity and are expected to generate further increase in productivity and competitiveness. At the same time, income from the export of goods, and especially of services contributed to the reduction of the current deficit and the strengthening of the external position of the economy. The effects of the monetary policy have maintained the stimulating trend, aiming at closing the negative gaps of prices and output. Financial stability is also characterised by a positive situation.

The methodology document provides specific criteria for evaluating and implementing each Core Principle. One set of criteria focuses on issues deemed essential for the minimum implementation of the Core Principles; the other focuses on those issues deemed to represent “best practice”. The IMF and the World Bank currently use the new methodology to assess the banking sectors in individual countries. It should be stressed that the most important efforts to implement the Core Principles are occurring in individual countries and, with this in mind, I am pleased to say that approximately 120 countries including many here in Asia - have now endorsed the Core Principles. Without the support and backing of national authorities to follow through with the implementation of these principles, our broader efforts simply cannot be effective. In this connection, the Basel Committee has long recognized the need for effective training of participants in the global supervision community, and over the years has sponsored numerous programs which have been beneficial in allowing supervisors from different countries to share experiences and exchange ideas for improved practices. In 1998, the Basel Committee, along with the Bank for International Settlements, jointly established the Financial Stability Institute, which conducts leadership training of supervisors in emerging market countries and facilitates technical assistance. This May, the Basel Committee plans to bring together supervisors from emerging market countries and representatives from the IMF and World Bank to discuss the lessons learned from this initiative.
The second point I want to raise is that if mistakes cannot be avoided, at least we should learn from them. It is the sovereign prerogative of any state to deal with that issue within its own borders, and I shall not elaborate on that. The Fund, on the other hand, is an international public institution and is constantly confronted with the need to justify its actions. Though strictly speaking it remains accountable only to its members’ authorities, in reality, the legitimacy bar has been raised in recent years. A wider section of society is more and more eager to engage the Fund in the various aspects of its activity. I think this is a most welcome development: the Fund has become an institution much more ready to listen than before. A milestone in this respect has been the institutionalization of the process of evaluating Fund activity with the creation of an Independent Evaluation Office in 2001. This office is now fully operational. It has already produced very valuable analyses, and I am sure that its evaluations will greatly contribute to improving the future way of doing business of the Fund. The prerequisite for a constructive enlarged debate is of course transparency. And transparency has taken a “quantum leap” in the last decade, to use the words of the Managing Director Rodrigo de Rato. Switzerland has always pushed to help the IMF in opening up and overcoming its questionable reputation of being a secretive institution. We are happy with the results.

In a globalized world, it is even more imperative for the Fund to focus on promoting stability as a global public commodity. We have enough experience to know how costly it can be if things go wrong. Saying that Switzerland treasures a stable international environment is in many respects an understatement. Given the openness of our economy and the fact that we host an important financial centre, international financial stability for us has all the connotations of a vital national interest. To put things into the right perspective, allow me to mention a few figures that show how interconnected our economic well-being is with global developments. In 2003, Swiss exports of goods and services amounted to 44 percent of GDP. The GDP contribution of our heavily internationally oriented financial sector reached 10 percent. This figure rises to 14 percent if we also include the insurance sector. Swiss banks occupy a leading international position, particularly in the area of wealth management. The value of total assets managed in domestic banks as at the end of 2003 amounted to $ 2.7 trillion. According to various estimates, this corresponds to about one-third of the world’s total private wealth managed abroad. Last, but not least, the banking and the insurance sectors combined employ approximately 185,000 people, the equivalent of 6 percent of total Swiss employment, whereas the fiscal contribution of the banking sector alone amounts to about 13 percent of total tax revenues.
As you can imagine, the panel has been a great resource, accessible by staff at all Federal Reserve banks through a fast and easy-to-use interface. It has already been used in several 2  BIS central bankers’ speeches  Federal Reserve Board and Treasury reports, Federal Open Market Committee presentations, speeches, and congressional testimonies, and in about 100 research papers and policy analyses. It also has value for our community outreach, as we can profile specific geographical regions. Particularly impactful have been our releases of the Quarterly Report on Household Debt and Credit, containing a comprehensive summary of households’ access to and use of credit. Several of our research findings have influenced policy debates. For example, an important question regarding recent household deleveraging has been to what extent the decline in aggregate household debt was attributable to delinquent debt charge-offs as opposed to active debt paydowns by consumers. Our research found that while charge-offs played an important role, a huge change in consumer behavior had taken place. While consumers extracted home equity and took on more debt during 2007, they reverted to actively paying down debt during 2009, creating a remarkable $ billion reversal in cash flow available for consumption in just two years. In our most recent report we are seeing signs suggesting that the deleveraging period has reached its end. The availability of borrower-level data has been key to our ability to analyze consumer behavior.

The first challenge is what we might think of as data innovation, and the second is data stewardship. With data innovation, the big challenge is to use our imagination and to think hard about what data may be able to say about a particular problem. This includes both novel uses of existing  BIS central bankers’ speeches  1  data as well as the collection of new data. To illustrate what I mean by this, let me describe one effort, among many, here at the New York Fed. Consumer Credit Panel I’ll describe our Consumer Credit Panel, which we created in 2010. At the onset of the financial crisis, it became apparent that our knowledge of the liability side of household balance sheets was inadequate. At that time, the main data sources on consumer debt consisted of loan-level data sets on specific categories of loans, such as mortgages, as well as aggregated data on household sector debt from the Board of Governors’ Flow of Funds statistical release. While providing a useful aggregate overview of household debt, the Flow of Funds release defines the household sector as a residual sector that also includes nonprofit organizations, such as schools, hospitals and churches, as well as hedge funds and private equity funds. Furthermore, the overview it provides is limited to outstanding balances and lacks important information on the origination, repayment, and delinquency status of household debt.