samchain/econo-pairs-v1 huggingface dataset:
The GFC has also undermined the belief that banks can look after themselves in efficient markets and that “de-regulation” and “light touch supervision” must be good as they promote financial innovation and diversity. As a result of these bitter lessons, a series of profound reforms championed by the G20 and the Financial Stability Board, of which the HKMA is a member, have been introduced to make the banking and financial system much more resilient to shocks. An informed banker will tell you that banks nowadays have to comply with a very long list of stringent standards in capital, liquidity, leverage, margining, risk management, derivative trading and reporting, etc. At the same time, there are new and strong measures designed to address misconduct risks, ranging from anti-money laundering and counter terrorist financing, front-running, insider trading, mis-selling of financial products, etc. 13. For those bankers who feel disappointed tonight because they cherish the hope that they would learn some clever tricks to get rid of bank supervisors, I owe them an apology. However, the consolation is that, in my view, banking supervision is not an “all or nothing” game. While it is true that the kind of “cozy” or “light touch” supervision that was prevalent before the GFC is now out of the question, there is still a great deal of space in how we calibrate the “intensity” or “intrusiveness” of banking supervision in order for the process to be effective while not creating an undue burden on banks.

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
This implies that sooner or later, if nothing were done, the rapid growth at present would lead to overheating and an acceleration of inflation. One factor behind the current trend has been monetary policy’s stimulatory direction ever since the repo rate cuts that were initiated in 1998. This illustrates that over a complete business cycle, the repo rate of 2.90% that applied up to last November is too low. GDP growth at the current rate of 3.5-4% implies an expansion of demand that clearly exceeds the rate of 2-2.5% that the economy can cope with in the longer run. It is only feasible in a limited, transitional period, that is, for as long as there is a supply of labour for the available jobs. The repo rate hike may not suffice; inflation prospects set the pace As monetary policy works rather like the helm of an oil tanker - it takes rather a long time to shift the economy onto a new course - it was necessary to make the adjustment to a more neutral monetary stance. Thus, GDP growth will continue at a higher rate for some time to come and then, after perhaps one to two years, successively slacken towards the economy’s long-term potential. The task the Riksbank is endeavouring to perform is to achieve an economic transition from a fairly normal upward phase to a growth trend that is more sustainable. This task, which is not simple, follows implicitly from our statutory function of “maintaining price stability”.

It is admittedly true that as the economy has been in an upward phase since the summer of 1993, it is hardly surprising that productivity growth is above the trend; but a comparison with the corresponding upward phase in the 1980s leads to the same conclusion: the rate of increase in labour productivity appears to be approximately half of a percentage point higher than before. This accordingly means that the Swedish economy’s potential annual growth rate is between 2 and 2.5%. It may be asked, however, whether one can simply project productivity’s historical path. This is where the discussion of what is known as the New Economy comes in. Productivity growth in the United States has risen appreciably in recent years. The investment boom in the 1990s has been one factor here; corporate investment has almost doubled since 1990 and a very large share has gone into new information technology. This has led to what the economic jargon refers to as capital deepening, which amounts to a higher capital input per employee. A notable feature of the picture is thus that the new information technology seems to be having knock-on effects in the form of enhanced productivity in other segments of the US economy. Many observers therefore consider that the American economy is now capable of expanding at a rate of 3-3.5% without encountering shortages and an acceleration of inflation. A similar change could well occur in other countries that reap the new information technology’s potential benefits.
The government is expected to rein in local government spending, tighten curbs on residential property purchases, and seek to reduce excess industrial capacity. But the slowdown is likely to be measured and the risk of a “hard landing” has narrowed. A Goldilocks economy but three grumpy bears may not be far away A striking feature of the global economy is how subdued inflation has been despite broad-based economic expansion and highly accommodative monetary policies. This benign inflation environment provides the runway for very gradual monetary policy tightening and credit conditions remaining accommodative for longer. Many analysts have characterised the current configuration of healthy growth, low inflation, and easy financial conditions as a Goldilocks scenario: a global economy that is chugging along, not too hot, not too cold. And financial markets see this happy scenario as self-reinforcing, sustained, and accommodated over multiple years. This has supported high equity valuations, low bond yields and narrow credit spreads. But as David Skilling reminded us recently, the Goldilocks story is not complete without the three bears. The absence of the bears does not mean they do not exist. They could return any time. There are unseen risks out there – that we ignore at our peril. Each of us will have our own list of three bears. Let me share with you what I see as the three bears that might return to spoil Goldilocks’ happy stupor. My “papa bear” is inflation; “mama bear” protectionism; and “baby bear” financial instability.

Part-time workers now make up about a third of the US work force, and many of them want to transit to full-time jobs. The labour force participation rate in the US remains near a cyclical low, at 63%. Even after accounting for the retirement of baby boomers, a meaningful segment of the population could re-join the workforce. If the labour market in reality is not as tight as the unemployment number suggests, then it is not surprising that wage growth has been weak. A second reason for low inflation has to do with the effects of globalisation. The integration into global production chains of workers from China, India, and the ex-Soviet republics during the 1990s and 2000s is estimated to have nearly doubled the size of global labour supply. This labour supply shock, facilitated by expanding global value chains, has exerted significant downward pressure on tradable goods prices. And the international outsourcing of production appears to have dampened the “pricing power” of labour and hence wage growth. A third explanation is technology. Industrial automation has exerted downward pressure on manufacturing wages. Likewise, advances in software programming and artificial intelligence are automating knowledge work and dampening wage increases in the services sector. More broadly, the spread of e-commerce has been eroding the monopolistic pricing power of traditional retailers and wholesalers of goods and services – the so-called “Amazon Effect”. I think it is premature to declare the Phillips Curve dead. Inflation will return when tightening cyclical factors outweigh the structural disinflationary forces.
For example, only about 20 percent of the respondents to the July NABE business conditions survey indicated their firms face shortages of skilled labor. 11 And if skills mismatch was a large ongoing problem, we’d expect to see wages rising much faster for those with the skills in excess demand. Here, there is evidence of larger wage increases in some occupations, but the degree of wage-growth dispersion does not appear to be unusual. Wages Indeed, wage growth in general continues to be very modest–at a bit over 2 percent per year. That is a long way from the 3 to 4 percent benchmark implied by productivity growth and our inflation objective. Indeed, over the past three years, the unemployment rate has fallen by a percentage point per year; yet real wage growth has barely budged. It’s hard for me to imagine a full labor market recovery without genuine improvement in compensation growth. But am I wrong? Has the wage Phillips curve completely broken down? Some claim the answer is no – you just have to look at the right measure of unemployment.

The regulation should allow for a wide range of banks and other financial institutions conducting their activities on a level playing field. The degree of regulation and supervision should be commensurate to the size, nature and complexity of their activities. I wish you luck in your endeavours to reform your banking and financial services industry. As you know, you may call on the IMF to assist you with advice or TA for capacity building or for other purposes. BIS Review 104/2006  7
Finally, and crucially, in the aftermath of the financial crisis, we are working with our colleagues in Washington, D.C., and at other agencies to help put the nation’s financial system on a firmer footing. Yet, much remains to be done and we are determined to keep at it. I recognize fully that there can be no return to pre-crisis business as usual – whether on the part of the financial sector or on the part of regulators like ourselves. All in all, there is a lot to keep my colleagues busy. 2  BIS central bankers’ speeches  National economic conditions Now, let me update you on national economic conditions. We stand here today several years after the worst financial crisis in modern times. The origins of the crisis are complex, but it had its roots in the bursting of a credit bubble that had grown to great size during the middle part of the last decade. Prior to the onset of the crisis, a combination of rapid financial innovation and imbalanced global economic integration resulted in a mispricing of risk worldwide. This was particularly extreme in certain markets such as U.S. housing and housing finance. This mispricing of risk led to a misallocation of resources and an excessive build-up of debt in many parts of the global economy. Many – though not all – U.S. households responded to the easy availability of credit and rising home prices by taking on more debt.

Although the market itself can manage most of the conflicts of interest, it may take some time before a common practice is established. Experience also shows that good practice and good ethics can be eroded rather quickly in certain market situations. This is where the supervisory authority can help to develop and maintain confidence  4  BIS Review 47/2004
The aim is to ensure the Spanish economy continues moving towards the income levels of the core European countries and that it is in a position to become successfully integrated into an increasingly competitive and globalised international environment. To do this, the potential for economic growth must be broadened, reinforcing the significant contribution made by the increase in employment in recent years with the attainment of real productivity gains. Under demand policies, monetary policy may be expected gradually to resume a more neutral stance and somewhat higher interest rates. The mild tightening of monetary conditions will contribute to some extent to containing consumer and residential-investment spending. But it is unlikely, in a setting in  BIS Review 60/2006  7  which cyclical divergences of some intensity persist between the countries comprising the euro area, that this will suffice to promote the necessary adjustment from the domestic standpoint. The contribution of fiscal policy is therefore crucial, and the room for manoeuvre available should be used to reduce the pressure of domestic demand, through the pursuit of more ambitious budgetary targets. In this respect, the sound fiscal figures obtained in 2005 – a surplus of 1.1% of GDP and a fresh cut in the public debt ratio, which has dipped to close to 40% of GDP – should be built on and improved in 2006. Indeed, the figures for the opening months of this year suggest the marked buoyancy of tax revenue will continue, raising the likelihood that public revenue will once again outpace budgetary projections.

Moreover, the ongoing rise in indebtedness levels and the prevalence of debt incurred at variable interest rates entails a greater sensitivity of the Spanish economy to monetary policy decisions, against a background in which the present generosity of monetary conditions may be expected to move to a more normal footing. The influence of interest  6  BIS Review 60/2006  rates on expenditure is undoubtedly sharper in the case of relatively more indebted households, which are in the lower strata of the income distribution. Along these same lines, the strong concentration of household wealth in property and the relative weight of productive activities related to the residential sector are resulting in a greater exposure of the economy as a whole to the changes in property-market activity and prices. Regarding the latter, 2005 appears to have marked the start of a slowdown in house prices, raising (all the more so the more firmly the deceleration becomes entrenched) the likelihood of the current overvaluation of housing being progressively reabsorbed, as in previous booms. Let me remind you, however, that some element of risk is always present in all scenarios involving the absorption of a phase of overvaluation. This is a consideration that all agents should bear in mind when deciding where to place their investments.
Some versions of these crypto-assets – so called ‘stable coins’, which aim to maintain the value of the asset – are intended to function as payment systems. They both replace the current bank to bank machinery for holding and transferring the settlement asset or ‘money’, and at the same time create a new form of ‘money’ – the stablecoin – to be transferred. Technological innovation in recent years has, in short, enabled and can further enable huge changes in the way we transact in the economy and in the types of money we use and how we are able to use them. Such change offers great opportunity. But it also poses some very important questions for the Bank of England, sitting at the centre of ‘money’ in the UK. The change also poses questions more broadly for the UK regulatory authorities, government and parliament. That is why HM Treasury are leading the Payments Landscape Review.9  This is not new; the great debates about money that we have had every couple of centuries have always involved the political authorities as well as the technical ones. The key questions are as follows. First, how do we ensure the availability and acceptability of physical cash for as long as people want to use it? Second, how can we ensure that the money remains reliable and stable while taking the opportunity offered by technology to improve the efficiency, effectiveness and functionality of payments – that is money as a means of exchange?

Legislators and other policymakers made substantial changes to the financial system to hold firms, and their managers and shareholders, more accountable. A great many of those changes have put both firms and the public sector in a better place. Today, regulators and supervisors expect systemically important financial institutions to be more resilient. They must be prepared for unanticipated losses and shocks to the financial system, including through rigorous (if not always popular) capital and liquidity standards. Supervised firms are also required to have a much greater understanding of the governance and controls supporting their critical operations. This includes, for example, governance frameworks, management information systems, and IT resiliency. This last point is particularly notable because, as many of you are now painfully aware from the data breaches at Equifax and Yahoo (and those are just the most recent ones), cybersecurity risk has increased dramatically in the last several years. Resilience goes a long way. It prepares firms to be ready to fight not only the last war, but also the unanticipated stresses of the next one. It prepares them not to rely on past performance as a guaranty of future performance. But, increased preparedness should not be cause for overconfidence. Supervision and regulation should not and cannot drive all risk from the financial system, and the probability of a systemically important institution’s failure will never be zero.
Since last November, the three-month Libor had been held at the desired level of 0.25%. However, from mid-May it began sinking rapidly and is currently well below that level. The fall in the rate is a sign that the banking system is currently holding a very large amount of liquidity. My colleague, Jean-Pierre Danthine, will talk about this in greater detail. Interest rates on the capital market have also fallen. In June, yields on 10-year Swiss Confederation bonds fell to a record level. The low capital market interest rates reflect a higher demand for Swiss government bonds. In addition, long-term inflation expectations continue to be firmly anchored. Private companies are also benefiting from low interest rates on capital markets. Credit risk premia have fallen further and rates of interest on bank loans are also at a very low level. Since the last monetary policy assessment, the Swiss franc has appreciated against the euro. It has simultaneously depreciated against the US dollar. As a result, the trade-weighted external value of the Swiss franc has only slightly increased. The expansionary monetary policy is also reflected in the monetary aggregates. Thus, the monetary base rose to a record CHF 128.6 billion in May, and growth of the monetary aggregates is continuing at a high level. For example, M2 was growing at 10.2% in May and M3 at 7.1%. Credit growth also increased further. After slowing to 2.7% in September 2009, the rate of growth increased to 4.1% in April.

This could affect the real economy via a loss of confidence on the part of households and companies as well as through an additional burden on banks. At the same time, there are upside risks for the global economy. Domestic demand in the emerging economies and the US could, once  BIS Review 85/2010  1  again, prove surprisingly robust. In Europe, export activity could increase more strongly than expected. Swiss economic outlook In Switzerland, the economic recovery has continued. In the first quarter of 2010, real GDP rose by 1.6% on an annualised basis, and was 2.2% above the year-back quarter. Economic activity was mainly driven by household demand and exports of goods and services. The firming of the economic recovery led to a renewed rise in the demand for labour, and short-time work fell significantly. Since the beginning of the year, seasonally adjusted unemployment has also fallen slightly. Leading indicators for labour demand are pointing upwards. The SNB anticipates a gradual improvement in the labour market. Despite the uncertainties in connection with public finances in many countries, global economic activity is still having a supportive effect. Consequently, capacity in the export sector is likely to be increasingly better utilised. Consumption and construction investment will be supported by the improved labour market outlook and the expansionary monetary policy. The SNB expects real GDP to increase by approximately 2% for 2010 as a whole. Monetary and financial conditions The expansionary monetary policy is reflected in monetary conditions.
The American dollar was appreciated in the first part of the year, as a consequence of expectations for a tightening of the United States monetary policy. But, during the second part of the year, the attention of financial markets mainly focused on the structural problems of the American economy, that of the budget deficit and current account deficit. These concerns brought about a quick decrease in the American dollar value, reaching the minimum levels against the common European currency. In face of these developments, both monetary policy and fiscal policy of larger economies maintained expansionist features. Notwithstanding the rise of US dollar interest rates, they remained at low historical levels while Euro interest rates remained unchanged. The fiscal policy has impacted the growth of domestic demand, either in the euro area or in the United States. The progressive integration of the Albanian economy in the international markets of products and capitals makes that this economy benefits from these incentive policies, in the form of lower interest rates for foreign currency and in the form of higher demand for its exports. Placed in this positive background, the Albanian economy growth continues to be generated from the dynamic development of the private sector, while maintenance of the macroeconomic stability and economic growth support through investments in the priority development fields: infrastructure, education and health, have been a priority to the public sector. BIS Review 38/2005  1  During 2004, investments in the economy marked the same level as during 2003, representing nearly 25.4 percent of GDP.

The work for implementation of this project was inaugurated on November 2004, with the participation of senior managers of the World Bank. During 2004, the Bank of Albania, together with the banking system and the Ministry of Finance designed a number of operations, which were intended to reduce cash in economy. In view of meeting these commitments during 2004, a number of concrete steps were taken, among which I would highlight the following: completion on January 2004 of the interbank payment system, initiation of the big project for building the Automated Electronic Clearing House and the transfer of wages of public administration personnel through a bank account. Both above projects are regarded as an essential infrastructure, connecting almost the whole banking system. The implementation of the systems is done in accordance with best international standards and principles, based on modern and up date technology. On the other hand, I would emphasize that we have also organized meetings with various groups and representatives of economic interest, who not only have helped us to better understand our weak points, but have also served for clarifying mutual benefits to the participants. We are determined to continue our efforts in this direction even during 2005. Therefore, we are working to complete the project on small-size payments in time, to start cooperation with the World Bank for creating a credit information register.