samchain/econo-pairs-v1 huggingface dataset:
4  Tier 1 capital is taken to be capital intended to ensure operational continuity. This capital enables a bank to pursue its activities and maintain its solvency. The highest-quality tier 1 capital is called common equity tier 1 (CET1). Tier 2 capital is considered to be capital intended to absorb losses in the event of liquidation. This capital allows a bank to reimburse depositors and preferential creditors in the event of its insolvency. 7  In short, when a macroprudential capital buffer is activated or increased, banks5 might consider the following options to comply with these new requirements: a) increase the net interest income arising on customer charges, generate more profits and retain a portion of them; b) maintain profits, but reduce dividend payments; c) issue new shares and raise additional funds, or d) reduce risk-weighted assets. The first three alternatives would tend to exert upward pressure on the interest rates on loans granted by banks. These higher interest rates mean that fund-seekers will resort to a lesser extent to financing in their spending decisions, whereby the volume of lending and, therefore, the risks borne by the financial system will diminish. Moreover, this increase in interest rates will reduce household consumption, and firms will also invest less, which will further reduce the demand for credit. In parallel, real and financial asset prices will adjust downwards, reducing the value of the collateral for credit transactions.

Galán J. E. (2020). “The benefits are at the tail: uncovering the impact of macroprudential policy on growth-at-risk”, Journal of Financial Stability, forthcoming. 20  Galán, J. E., and M. Lamas (2019). Beyond the LTV Ratio: New Macroprudential Lessons from Spain, Working Paper no. 1931, Banco de España. Galán, J., and J. Mencía (2021). “Model-based indicators for the identification of cyclical systemic risk”, Empirical Economics, forthcoming. Jiménez, G., S. Ongena, J. L. Peydró and J. Saurina (2017). “Macroprudential Policy, Countercyclical Bank Capital Buffers, and Credit Supply: Evidence from the Spanish Dynamic Provisioning Experiments”, Journal of Political Economy, vol. 125, no. 6. Jordà, O., B. Richter, M. Schularick and A. M. Taylor (2021). “Bank Capital Redux: Solvency, Liquidity, and Crisis”, The Review of Economic Studies, Vol. 88, no. 1, pp. 260-286. Martínez Miera, D., and R. Vegas (2021). “Impact of the dividend distribution restriction on the flow of credit to non-financial corporations in Spain”, Analytical Articles, Economic Bulletin, 1/2021, Banco de España. Mencía, J., and J. Saurina (2016). Macroprudential policy: objectives, instruments and indicators, Occasional Paper no. 1601, Banco de España. Rey, H. (2015). Dilemma not Trilemma: The Global Financial Cycle and Monetary Policy Independence, NBER Working Paper no. 21162, revised in February 2018. Tinbergen, J. (1956). Economic Policy, Principles and design, Books (Jan Tinbergen). NorthHolland. Tzur-Ilan, N. (2017). The Effect of Credit Constraints on Housing Choices: The Case of LTV limit, Bank of Israel Working Paper, 2017/3. 21
We should be exceptionally patient in adjusting the stance of U.S. monetary policy – even to the point of allowing a modest overshooting of our inflation target to appropriately balance the risks to our policy objectives. Conflicting signs in the labor market Of course, to judge the success of policy, you have to know when you’ve actually reached your targets. Knowing when we hit our inflation target is straightforward. After all, a 2 percent increase in PCE prices is an easily identifiable number. But full employment is a far more nuanced concept. As the FOMC’s annual January “Statement on Longer-Run Goals and Monetary Policy Strategy” recognizes, maximum employment can be influenced by a large number of structural factors that can change over time and may not be directly measureable. In light of this uncertainty, the Committee considers many factors in gauging maximum employment. As the extremely relevant research presented at this conference makes clear, judging the degree of slack along these many dimensions is a difficult and complex task. But it is one that is critical for the conduct of monetary policy – we must have a good idea of what constitutes achievement of our full employment target. Our Chicago Fed research staff has been working long and hard, and in my remarks today, I will briefly talk about some of our results that touch on several of the most contested labor market issues on the table today. These involve labor force participation, job openings and wages.

As a result, the ECB recently lowered policy rates to the ZLB, has started undertaking additional unconventional monetary policies, and is now encouraging fiscal expansion among eurozone countries that are able to do so. These lessons from monetary history strongly suggest that there are great risks to premature liftoff from the zero lower bound or near-ZLB conditions. Unless economic conditions are fundamentally strong and the previous impediments to growth have receded sufficiently, the odds remain high that monetary authorities will need to retreat right back into the ZLB. And the costs of being mired in the zero lower bound are simply very large. I have already talked about how the ZLB prevents using our very best policy tools to address negative shocks. The constraint also means that interest rates cannot fall low enough to equate the supply of saving with the demand for investment. This, of course, significantly impedes capital formation, future economic growth, and further employment expansion. Furthermore, the ZLB often comes hand in hand with undesirably low inflation or even a falling price level, carrying with it the associated costs of debt deflation on the real economy. The risk of too-high inflation What about the other risk to our policy goals that I mentioned – the risk that the U.S. economy could face pricing pressures that accelerate rapidly and ultimately leave inflation far above our 2 percent target for an unacceptably long period?
In particular, we need to define a regulatory framework addressing the risks posed by large and complex financial institutions, and to discuss possible measures aimed to ensure a smooth winding-up of ailing systemically important financial institutions. It is crucial that a consistent framework is agreed at international level to avoid conflicting national regimes applied to multinational institutions and regulatory arbitrage. In this context, I strongly support the current work being carried out by the Financial Stability Board and the Basel Committee. 4  BIS Review 58/2010

I would like to draw attention to three main aspects of ongoing work in this area: First, stricter capital adequacy and liquidity coverage standards are in the offing. Higher and better-quality capital will increase banks’ resilience to pronounced fluctuations in the economy without their having to tighten lending abruptly. Second, the new framework includes macroprudential tools. One such measure is the countercyclical capital buffer. Banks may be subject to additional capital requirements if credit growth in the wider economy is excessive. This will smooth out lending growth and better equip banks to bear potential losses during downturns. Third, the authorities must acquire tools that allow banks to be wound up in an orderly manner. The structure of banking groups should be transparent, and thus enable differentiated government interventions in case of a crisis. Plans must be drawn up for the recovery or resolution of banks in the event of difficulties. Owners and creditors – not taxpayers – must bear the losses. The interest rate on banks’ funding will then reflect the risk they take rather than an implicit government guarantee. This will in itself have a preventive effect. Politicians have the overriding responsibility for financial stability. It can be demanding to restrain credit growth in times of strong optimism and confidence in the future. Well defined mandates and a clear delegation of responsibility in the field of monetary policy has worked well. Similarly, the legal authority to implement macroprudential measures to safeguard financial stability should be delegated.
The UK has periodically experienced episodes where the exchange rate is strong, the external balance deteriorates and, on the production side of the economy, the traded sector gets “crowded out”. One often hears that all this is the “consequence” of an “over-valued exchange rate”, as if that were some arbitrary, unexplainable thing. Chart 2: Stronger domestic demand tends to push up the exchange rate  Chart 3: UK data bear this out  Source: ONS and Thomson Reuters Datastream  But in these situations the exchange rate is more symptom than cause: the underlying driver is relatively 5  strong growth in domestic demand . And it’s this that jointly pushes up both the value of currency and the 6  trade deficit . Indeed I think this helps explain to explain why sterling appreciated so strongly after 2012 (and until last year): relative to their respective incomes, domestic demand grew much more strongly in the UK than among its main trading partners in continental Europe. There’s a limit to the duration of financial deficits, at an aggregate as well as an individual level. It was always unlikely that the UK could finance a 5%-of-GDP current account deficit indefinitely and the market would presumably have anticipated a closure at some point, partly via weaker growth of domestic demand. But one possibility, regarding sterling’s recent behaviour, is that the foreign exchange market believes that leaving the EU will hasten the correction of these imbalances.

This is slightly higher than the national average of 3.9 per cent. Even though the region has somewhat higher unemployment than the national average, the rise in unemployment in Northern Norway has been relatively low in the last year. Finnmark is one of the four counties in Norway to record the sharpest fall in unemployment over the past year. This snapshot report on the current situation in this part of the country and similar reports from the other regions provide information that is important to interest-rate setting. The labour market has improved. The number of persons employed in Norway began to increase in summer 2003 and unemployment stabilised. Employment in distributive trades has increased. There are also signs that employment is rising in service sectors such as education, the public sector and health and social services, from the weak levels recorded in the first six months of last year. Manufacturing employment remained well below the level one year earlier in the fourth quarter of 2003, but is falling at a slower pace. Unemployment has been fairly stable. Adjusted for seasonal variations, LFS unemployment stood at 4.4 per cent of the labour force in January. Growth in household demand, petroleum investment and increased activity in the business sector are paving the way for a rise in employment in the period ahead. On the other hand, intensified competition and continued rationalisation in the business sector may have a dampening impact on labour demand.
As the interest rate differential had hardly changed, and these countries’ currencies were less sought after as safe havens than the Swiss franc, they were subjected to considerably less upward pressure against the euro than the Swiss currency. The situation in Switzerland was made even more difficult by the fact that, as a result of the minimum exchange rate, both the Swiss franc and the euro lost value against the US dollar and the pound sterling. This put the broad overvaluation of the Swiss franc that had led to the introduction of the minimum exchange rate into perspective. Both of these factors, i.e. the disappearance of the interest rate differential and the reduction of the overvaluation, finally led to rapidly increasing pressure on the minimum exchange rate. At the beginning of 2015, it became clear that the minimum exchange rate of CHF 1.20 per euro was no longer sustainable from a monetary policy perspective, and would require everlarger foreign currency purchases to enforce it. If the SNB had ignored the changing reality and attempted to maintain the minimum exchange rate, the extensive interventions would have led to the bank losing control over its balance sheet and thus over longer-term monetary conditions in Switzerland. Putting this decision off would also not have helped the economy. The minimum exchange rate was introduced as an instrument against widespread and extremely pronounced Swiss franc strength. In this new phase of general euro weakness, it was no longer the right tool.

Your Honour, This conference follows a similar one held in Botswana hosted by the Botswana Central Bank from 5 to 6 February, 2007 and supported by the BIS Governance Forum and the IMF. It also comes shortly after our very successful conference held at this same venue in November last year on the theme, “Central Bank Independence, Does It Hurt the Treasury?” All these activities are part of the building blocks to a bigger project we have been undertaking in the SADC region aimed at developing a Model Central Bank Act. For us in Zambia, efforts at perfecting the governance as well as the operational efficiency of the financial sector are being done through the Financial Sector Development Plan (FSDP). Under the Plan we have already developed Corporate Governance Guidelines for the financial sector as a whole. Many of these have a lot of relevance to the Central Bank as well. Through the FSDP, even issues such as who should chair the Board of the Central Bank are being discussed. Lastly, let me say that we expect to learn from what other central banks have done, and what challenges they have faced in their quest for enhanced central bank governance. However, it should be noted that each country should establish a legal framework for its central bank governance, which best fits that country’s own history and institutional evolution. This should also take into account international best practice.
Findings on Important Business Services identification On IBS, our current view is that firms have generally made positive progress against our expectations for identifying these services. This is good to see and reflects well on the sector as a whole. We also know that firms have taken a wide variety of approaches to the granularity with which they have identified their IBS. To illustrate this I will use a couple of examples of different approaches we have seen. These represent only a small subset of the IBS that firms’ submitted but I think illustrate the point. So, taking payment services as one example, we saw that some firms have identified all types of payments as a single business service, whilst others have split out different types of payment (for example payments made via individual systems including BACS, CHAPS and Faster Payments). Others have gone in a different direction, for example differentiating services for credit card payments versus debit card transactions. We have seen similar themes in other areas, such as services to do with lending. Here some firms have taken a granular approach – for example listing services such as “obtaining a loan” and separating different types of loan – while other firms have kept their IBS at a higher level or gone in different directions by identifying different types of products and/or the split between preand post-trade execution.

While theoretically feasible through issuance of central bank bills, large-scale sterilisation proves problematic in practice, especially in emerging economies, which are not always fully equipped with market-based policy instruments. In order to effectively control exuberant credit expansion, emerging economies have often had to recourse to large increases in reserve requirement ratios or even non-market policy instruments such as the rationing of credit. In a context in which credit and interest rates are largely administered, the fiscal cost of sterilisation can effectively be transferred to the banking sector, and ultimately to bank customers and stockholders; but that does not remove the opportunity costs of sterilisation for the private sector or the monetary risks of incomplete sterilisation. The bottom line is that in economies where largescale foreign asset accumulation needs to be sterilised, it is very likely that capital allocation efficiency will be reduced, especially if non-market instruments have to be used. Foreign reserves and international competition A second risk is that reserve hoarding may exacerbate trade competition and emphasise regional tensions. Emerging economies compete in their exports towards developed economies, as much as they compete with developed economies. As noted by Aizenman 4 “in a world with symmetric emerging markets competing in similar industries, competitive [reserve] hoarding tends to dissipate most competitive gains, leading to a “beggar-yourself” [outcome] and excessive hoarding”. By contrast “in an asymmetric world, an emerging market with low enough cost of sterilisation may win the hoarding war […] akin to the “beggar-thy-neighbor” outcome of asymmetric Tariff Wars”.
The merits of such interventions need to be judged on a case-by-case basis. For tonight’s discussion I just want to argue that such decisions should be undertaken with the support of the democratic political system and should be implemented as a fiscal operation. Indeed, during this crisis, the UK Government has made a number of such interventions – such as the Enterprise Finance Guarantee Scheme and the Vehicle Discount or “Scrappage” Scheme. The Special Liquidity Scheme Now, as an aside, some keen watchers of central banks may want to argue that the Bank of England’s Special Liquidity Scheme (SLS) appears to have provided £ funding for the UK banking sector. The SLS, supported by a Government indemnity, was probably the single most generous liquidity support scheme introduced by a central bank during the crisis. 4 Its  2  In the past, when financial markets were less well developed, the Bank of England has played a part in selected industrial or financial market interventions (see Sayers, 1976), but that is not a role we have now. 3  The Bank of England issues banknotes of course, but these are monetary liabilities or “central bank money” which impact on the monetary stance. They are backed only by the highest quality assets, in order to maintain confidence in the integrity of the currency. 4  This was required given the relatively small capital base of the Bank of England – around £ ½ bn at end-Feb 2009.

That is the largest recorded quarterly fall in output since 1958. In the wake of the financial dislocation of Autumn 2008, there was a collapse of confidence and elevated uncertainty which had a profound effect on consumer demand and investment intentions. There was also an intensification of the “Credit Crunch” which had been in train since the start of the crisis in mid-2007. A range of policies had been introduced in the United Kingdom to prevent an economic meltdown. That included action to re-capitalise some of the banks; guarantee some of their funding; expand liquidity assistance and to set appropriately accommodative fiscal and monetary policies. Governments around the world took very similar steps. Asset purchases were one part of the policy response. At its peak, the Bank of England bought nearly £ of commercial paper and corporate bonds (Chart 2). This is sometimes compared with the eventual total of £ gilts purchased, prompting the question why the Bank didn’t buy more private sector assets? This question reflects a – perhaps natural – misunderstanding of the different purposes of these interventions. The gilt purchases were intended as a monetary policy operation to inject a substantial amount of money into the economy. The consequences of that policy have been addressed in Bank publications (Bank of England, Quarterly Bulletin, June 2009 for example), speeches and elsewhere. There has been much less discussion about the private sector asset purchases.
John C Williams: Diversity and inclusion - we are not where we need to be Remarks by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the OPEN Finance Forum, New York City, 25 June 2019. * * * As prepared for delivery Good morning. I’m an economist, so I’m going to start with some numbers. The unemployment rate for lesbian, gay, bisexual, and transgender people is nearly double the national average.1 And the unemployment rate specifically for transgender people is three times the national rate.2 As President of a Federal Reserve Bank, I am focused on two vital economic goals: maximum employment and stable prices for the U.S. economy. These statistics paint a clear picture of why conferences like this one are so important: We are not where we need to be. Before I go any further, I need to give the standard Fed disclaimer that the views I express today are mine alone and do not necessarily reflect those of the Federal Open Market Committee or others in the Federal Reserve System. Let me say, as an ally, that it’s a genuine honor to be invited to open today’s Forum. This Pride Month marks 50 years since the Stonewall uprising. We’ve come a long way since the 1960s, but we still have far to go. It was also a great honor to be able to fly the Pride flag outside the Federal Reserve Bank of New York for the first time this June.

But, given that it is 50 years since Stonewall, it’s clear we have more catching up to do. And this is where we owe OPEN Finance a great debt of gratitude. OPEN Finance gives us the tools we need to assess how we’re doing, and where we need to make progress. With the support of OPEN Finance, and the dedication of the Open Network at the New York Fed, we’ve introduced a number of new policies and measures that drive our efforts to make the Bank the open and inclusive employer we aspire to be. I’d personally like to thank David Ignell and Gil Carroll, presidents of our Open Network, for their work moving us forward. These efforts are important because they send a message to LGBT employees and the organization as a whole about our values and culture. I’d like to share one specific example. We recently created the option to add gender pronouns to our official e-mail signatures. This is a part of an organization-wide effort to raise awareness around the use of pronouns. On its own, it may seem like a small change, but it sends a loud message that part of respecting one another is using the correct pronouns. This effort has been well received, and a big part of that is because it’s created spaces for conversations that just weren’t happening before. But policies can only go so far.