samchain/econo-pairs-v1 huggingface dataset:
That was very different a year ago. Financial conditions were actually tightening quite sharply a year ago. And it wasn’t really clear how far that was actually going to run. Maureen O’Hara: There we go, question? Audience Member: Can you talk a little bit about balance sheet normalization, how you think about that in the context of monetary policy? In the September FOMC, you guys talked about thinking about balance sheet normalization in terms of when your rate hikes are well under way. What does “well under way” mean, how are you thinking about that? President Dudley: I’m sure “well under way” means different things with different people. I think the — we made it pretty clear in terms of our statements that we sort of want the active tool of policy to be shortterm interest rates. And the balance sheet to be sort of in the background. We’ve also said that we wanted to get some room off the zero bound before we actually start to normalize the balance sheet, to end the reinvestment. Now I think my own personal view is, how soon you want that process to start depends not just about how much margin you have between the current federal funds rate and zero, but also how confident you are that you’re actually not going to need to reduce the federal funds rate in the near-term.

You know people talk about, well, it’s hard to know where to operate in a gray area, I think a lot of the behavior was way over the line. When people are getting together in chat rooms trying to talk about how they can collude to rig a market, that’s not in the gray area. That’s way over the line. When people are consciously doing things to evade any money laundering rules and sanctions, that’s not in a gray area, that’s way over the line. So I feel that most of the things that have resulted in fines can be tied to things that are not in a gray area. They’re just way over the line. Now the question of whether the fines are excessive – I mean it’s hard to know how you take the behavior and then map it back onto the fine. I think the important thing, though, is to make the fines big enough so that the senior management of these institutions doesn’t just say, “Well, I can just write a check, accept the bad behavior, and move on." If the fines are substantial, then it actually gets some senior management’s attention, and I think that’s one of the reasons why banks are working harder on the issues of culture in their institutions. I’ve actually been very – you know, you asked me the question, is bank bad behavior over?
21.03.2019  Closing remarks Event on the “Impact of the new law on real estate credit”/PWC Margarita Delgado Deputy Governor  Good afternoon, I would like to thank PWC for kindly inviting me to speak at the close of today’s event on the new real estate credit law. I shall try to speak about the most innovative features of the new law from the supervisor’s standpoint, not dwelling too long on the details of the legal changes introduced, as I am sure that they have been widely discussed over the course of the morning. Specifically, I shall focus on the three features of the new law that strike me as particularly important from a supervisory viewpoint: (i) the emphasis given to customer protection, (ii) the need to ensure legal certainty for the mortgage market to function properly and (iii) the growing importance of credit conditions. I shall also refer to the potential short and mediumterm consequences of this law for access to owner-occupied housing, and shall conclude with some thoughts on how the new macroprudential tools may shape the way we supervise certain banking businesses, notably real estate lending. Introduction  As we know only too well, access to home ownership is an issue of great concern to Spanish society. Worldwide, Spain has traditionally been among the countries with the highest owner-occupancy rates. Although this rate has declined from the peak reached in 2002, it is still higher than in other European countries.

That is, that we know the range of outcomes that might happen and how the economy works and, insofar as is possible, given uncertainty, that we correctly analyse the available information to weight the probability of those. A famous corollary of this is the efficient markets hypothesis – that it is not possible to systematically ‘beat the market’. The stronger form of the hypothesis posits that market prices fully reflect all available information – that the price reflects the likely future revenue streams. But even if the price does deviate from that fundamental level, it may be rational for investors to remain in the market – as Chuck Prince famously put it, to keep dancing so long as the music is playing. The rewards of the game may be worth the risk of being stuck without a proverbial chair at the end. And even if they are not, sitting on the sidelines may not be a winning career move if promotions and funding flow to those with a reputation for high returns. It may be rational to stay with the herd, as Keynes said “it is better for reputation to fail conventionally”.11 Rational expectations do not mean that the future matches expectations and corrections are avoided – when new information arises, agents react to that. If the information is material for a financial asset, for example a change in Roman property ownership laws in AD 33, the adjustment can be large.
Labourers might receive partial payment for their efforts in kind, or at large mills, in scrip that could only be used for purchases in the company store. The monetisation of the economy, based on secure monetary values, severed many of these ties of dependency. With money in their pockets, accepted as legal tender everywhere, the farmer or labourer was able to choose. This is also freedom. Nor did the party receiving payment, e.g. the town merchants to know more about the customer than that he had money in his pocket and could pay for the goods. Eitrheim, Ø. and L.F. Øksendal (forthcoming): On secure monetary values and freedom. 6  BIS central bankers’ speeches  In Norway, the aim of shielding the monetary system from the government was already embodied in the Constitution of Norway adopted on 17 May 1814. The drafters of the constitution formulated the following in Article 75(c): “It devolves upon the Storting ... to supervise the monetary affairs of the Realm”. This provision strongly censured the Danish King’s monetary policy during wartime. In future, representatives appointed by citizens, not the Crown, were to have final responsibility for the monetary system.27 The King’s scope for taxation by means of inflation was curtailed. The Storting, which was supposed to meet every third year, was not equipped to assume day-to-day responsibility for the monetary system. “Someone” had to do this on behalf of the Storting. That “someone” became Norges Bank, which was established in 1814.

This is probably due to the modernisation of the functioning of the economy through the 1980s and 1990s, which resulted in more efficient markets. In addition, growth in labour productivity reflected a marked fall in sickness absence in 2004. The outlook for the Norwegian economy Monetary policy influences the economy with a lag. Norges Bank therefore has to be forward-looking in its interest rate setting. Developments in prices and capacity utilisation in Norway are influenced by both domestic conditions and economic developments in other countries. Since the end of June, global money and credit markets have been characterised by sharp fluctuations, liquidity shortages and reduced risk willingness. The turbulence stems from problems in the US mortgage market. Defaults on subprime mortgages in the US began in the second half of 2006. Securities portfolios had been developed around these mortgages. Uncertainty arose among banks and investors that were directly or indirectly exposed to losses on subprime mortgages. Expected losses on mortgage-backed securities rose. Investors became gradually less willing to take risk. The premium on corporate securities increased markedly. The credit premium has been highest on the lowest rated securities, i.e. securities backed by subprime loans. Another effect of the turbulence is credit migration, i.e. that the rating of securities has changed as the consequences of the unrest have become apparent. For example, a security that had an AAA rating, may now be rated AA or lower. The turmoil spread rapidly to other parts of the financial markets.
Over the years, Bank Negara Malaysia working together with the insurance associations has invested significantly in informing the public about insurance through our financial literacy initiatives. We have come a long way in this process. Today, schoolchildren as young as 10 years of age will already be introduced to insurance through subjects taught in the formal school curriculum. By 2021, we expect to complete the process of integrating financial education content in the formal school curriculum at all levels of primary and secondary education. We have also continued to expand the ways in which we reach consumers, through different mediums and leveraging in particular on social media. We have adopted a life cycle approach to guide education initiatives, so that education content is more targeted and delivered when consumers are most responsive to receiving information. And we continue to adapt our education content so that it remains relevant and current to the issues and experiences that consumers face. In parallel with these efforts, agents will have a more important role going forward. With greater proliferation of online avenues for consumers to obtain information, contacts between agents and consumers are likely to be more targeted and specific in nature. Consumer needs and appetite for advice will also be greater in a more diverse insurance landscape.

It will improve incentives for safe driving behaviours and better risk management practices by both risk owners and insurers. And it will address market distortions which have threatened access to motor insurance, particularly for higher risks. This is also a time when businesses and households are facing rising costs and more uncertain conditions which can adversely affect discretionary spending on insurance. At the same time, the exposures of households and businesses which insurance is designed to protect, have actually increased as evidenced by more frequent and severe incidents of natural and man-made disasters. All of these developments raise critical questions for insurance agents. One question that comes up time and again is: Will insurance agents continue to be relevant? If you are in this room today, then I assume you will agree with me that the answer is clearly ‘yes’. But I believe you are also here because there is a recognition that agents will have to evolve. Even if some of you were not completely convinced of this before, that reality surely can no longer be ignored or dismissed. So the more important question then is how agents can be a meaningful part of this change in order to advance the important benefits of insurance for the economy and the wider society? Today in Malaysia, the general insurance penetration level measured in terms of premiums as a share of GDP stands at less than 2% (1.68% as at end 2015).
Last year, the Mainland of China ran a trade surplus of $ billion, equivalent to 4.5% of GDP. Foreign direct investment amounted to $ billion. Its foreign reserves are the second highest in the world. Its foreign debt amounted to only about 14% of GDP and consisting of mostly long-term loans from official sources such as the World Bank and the Asian Development Bank, and the debt service ratio at well below 10% of exports. The fiscal deficit in 1997 was small at below 1% of GDP and the monetization of such deficits is now prohibited. My contacts in Beijing have told me that even on the basis of very extreme assumptions with the amount of foreign direct investments and the growth rate of exports being halved in 1998, there will still be a balance of payments surplus. In the circumstances there really is no pressure to devalue the RMB. 17. The stability or otherwise of the RMB, understandably, would appear to some observers to have implications for the Hong Kong dollar’s link with the US dollar, particularly given the economic closeness between Hong Kong and the Mainland of China. But this does not necessarily mean that the Hong Kong dollar will need to move in sync with the RMB, in the highly unlikely event that the RMB is devalued. The Hong Kong dollar is linked to the US dollar and not to the RMB. The economic relationship has always been very close between Hong Kong and the Mainland of China.

Ardian Fullani: Monetary policy, from the past to the present Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the 10th international conference on “Monetary policy, from the past to the present”, Tirana, 26 October 2012. *  *  *  H.E. Prime Minister, Your Excellencies Ambassadors, Honourable Minister of Finance, Honourable Governors, Distinguished Guests and Participants, I am very honoured and privileged to open the proceedings of the Tenth Conference of the Bank of Albania. This conference is particularly important this year as it is organised in the framework of activities for the 100th anniversary of the Declaration of Albania’s Independence and the 20th anniversary of the Bank of Albania. While retaining the scientific approach, the conference pays tribute to the endeavours made over the years in the monetary and finance aspects. In Bank of Albania’s view, the past is an essential element for the analysis and decisionmaking, and a requisite for theoretic or empirical research. At present, this is a necessity, a challenge that the economics world is facing. To scan, diagnose and cure the situation of the economy, a successful scholar would have to be able to read the human thought. Unfortunately, such a doctor does not exist. Therefore, in our days, the economic science is turning its attention to individual characteristics such as: history, ethnography and other national traits, considering them as substantial determinants for the stochastic process that leads the behaviour of economic agents.
Low short-term interest rates in the US, Japan and euro area countries have been inducing investors to shift into more long-term securities, with an attendant fall in long-term interest rates. Supply and demand factors may also have contributed to pushing down long-term rates. New regulations for European life insurance companies have also led to an increase in their share of investments in debt instruments with longer maturities. BIS Review 21/2005  1  Economic developments and prospects Norges Bank’s key rate, the sight deposit rate, is at a historically low level. Real interest rates are also low. Between December 2002 and March 2004, the key rate was reduced by a total of 5.25 percentage points. It takes time for an interest rate reduction to have an impact on inflation. We are now seeing the effects of previous monetary policy decisions, some of which were taken two years ago. The first signs of the effects of the interest rate cuts appeared in the foreign exchange market. The interest rate differential against other countries narrowed. It became more attractive to borrow and less profitable to invest in the Norwegian krone. The movement in the krone was reversed, and it depreciated through 2003 and into 2004. The nominal krone exchange rate, measured by the trade-weighted index (TWI), is now approximately back to the level prevailing in the mid-1990s. However, the impact on the krone exchange rate has been considerably dampened because external interest rates have remained low.

Hence, labour mobility can eliminate bottlenecks in the labour market. Employment is also strengthened by local wage negotiations. Some of the newer industries apply performance-related pay to a greater extent. This allows firms to reduce costs more easily while retaining employees when earnings decline. More traditional industries also seem to be making use of wage flexibility. Differences in productivity growth and wage growth across Norwegian manufacturing enterprises show that workers tend to accept lower pay increases in enterprises with low productivity growth.3 This can provide companies with more time to adapt and curb the impact on unemployment. Even though Norway fares favourably in relation to many other countries, the Norwegian labour market also has its weaknesses. Wage growth now probably accelerates at a higher level of unemployment than it would have ten or twenty years ago. Many unemployed are also channelled from unemployment to social security benefits, and benefits may be an obstacle to returning to the labour force. Sickness absence also rose for a long period, but has declined markedly over the past six months, partly reflecting tighter requirements concerning individual follow-up. The Petroleum Fund The Government Petroleum Fund was established in 1990 with a view to promoting an even distribution of wealth across generations. The idea behind the Petroleum Fund is to channel cash flows from petroleum production to the Fund, with the capital being invested abroad. Consequently, changes in oil prices have little effect on the mainland economy.
In the US, there are now expectations that the rate tightening cycle is nearing an end, and that the policy rate will be lowered in the course of next summer. A rise in key rates is expected over the next year in the euro area, Sweden, the UK, Australia, Japan and Switzerland. In the June Inflation Report, Norges Bank assumes that money market rates among our trading partners will gradually increase over the next three years. The path for domestic and external interest rates does not imply considerable changes in the krone exchange rate. Since the first quarter of 2004, the import-weighted krone exchange rate (I-44) has shown a rising trend, albeit with some degree of fluctuation. Since end-May this year, the krone has depreciated from strong values. So far in the third quarter, the krone exchange rate has been about 3 per cent weaker than projected in the June Inflation Report. 4  BIS Review 92/2006  Monetary policy assessments and strategy According to the monetary policy strategy in Inflation Report 2/06, the sight deposit rate should be in the interval 2¾ - 3¾ per cent in the period to the publication of the next Inflation Report on 1 November, conditional on economic developments that are broadly in line with projections. The analyses in Inflation Report 2/06 were based on a gradual increase in the interest rate towards a more normal level. In the first six months of 2006, the key rate was increased in two increments of 0.25 percentage point.

However, over time as the financial system get more complicated and expanded exponentially, its supervision and regulation has been partially transferred to other institutions, which is also the case in Turkey. The challenge faced by central banks is to establish a framework that combines both price stability and financial stability as primary mandates even at times they conflict with each other and identify the policy instruments to target both. As you know central banks have typically used short-term interest rates as their primary policy instrument. However, the “Tinbergen Rule” suggests that this one instrument could be deployed to achieve only one target, which is conventionally recognized as price stability. Addressing both price stability and financial stability simultaneously necessitates a second set of policy tools. This second instrument may be in the form of the supervision and regulation of financial activities. The question is that whether these responsibilities should be assumed solely by central banks. The downside of this option is that central banks may turn out to be too big, inflexible and in conflict with themselves, which eventually led to failure in both objectives. Dear Participants, Prior to the global financial crisis, central banks were conducting monetary policy through conventional banks and use government bonds in open market operations. However the  BIS Review 73/2010  3  financial crisis led central banks employ a wider range of securities, ranging from corporate bonds to asset backed securities and mortgages. The reason behind this transformation was obvious.
Christian Noyer: Financial regulation-stability versus uniformity, a focus on non-bank actors Speech by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements and President of the ACPR (Autorité de contrôle prudentiel et de resolution/French Prudential Supervisory Authority), at the ACPRBank of France Conference “Financial regulation-stability versus uniformity, a focus on non banks actors”, Paris, 28 September 2015. *  *  *  Ladies and Gentlemen, It is a great pleasure for me to introduce this Conference on a particularly topical issue: “Financial regulation-stability versus uniformity, a focus on non-banks actors”. The title of the conference invites all the participants to reflect on the puzzle policy makers are facing these days: –  on the one hand preventing regulatory arbitrage and ensuring a consistent approach to financial regulation between sectors  –  and on the other hand taking into account the idiosyncratic business models and risks of each actor or sector of the financial system. To explore further this question, I would like first to thank Professor Jean Tirole, the 2014 Nobel Memorial Prize in Economic Sciences who will deliver the keynote address today. I am also honored to welcome the distinguished speakers, academics, policy makers, industry representatives who agreed to share with us their views on how best to regulate non-banks actors. Other the past few years, the Banque de France has developed a close cooperation with Jean and his colleagues from the Toulouse School of economics.

Next, I shall discuss how uncertainty and the degree of credibility with which monetary policy is associated influence policy formulation. These two factors play an important role in practice. The third issue concerns the exchange rate. For small open economies this issue is one of the most important determinants of inflation at the same time as it is also an important measure of how stable economic policy is seen to be. How changes in the exchange rate ought to be handled when monetary policy decisions are taken has been an important monetary policy issue in Sweden in recent years. Finally I shall discuss the issue of how the monetary policy goal has been defined and should be interpreted. The Inflation/Growth Connection The Riksbank’s chief task is the achievement and preservation of price stability, which should be interpreted as keeping the rate of inflation at a low and stable level. Behind this view of the role of monetary policy lies the understanding that growth and employment cannot in the long run be achieved via an inflationary policy. There are other factors that determine growth: technological development, the way in which the economy functions, human resources development, etc. Attempts to stimulate the economy in the short run by allowing higher inflation tend to rebound in the long run. Swedish experience in the last decade, and also experiences in other countries, demonstrate this. Participants in the economy see through the policy, revise wage demands upwards and raise prices.