samchain/econo-pairs-v1 huggingface dataset:
See ‘Lambda’, speech by Mark Carney at the London School of Economics, 16 January 2017. 16 Each observation shows the central projection for spare capacity or excess demand at the end of the second year of the forecast period (the 'Year 2' point) on the horizontal axis against the central projection for four-quarter CPI inflation at Year 2 on the vertical axis from successive Inflation Reports. The left-most observation (labelled "Aug. 2016 no stimulus") is a counterfactual version of the August 2016 Inflation Report forecasts with the effect of the MPC's Bank Rate cut, Term Funding Scheme and Asset Purchases removed. See ’Lambda’, speech by Mark Carney at the London School of Economics, 16h January 2017, for further details and discussion. 17 See Table 4.C in the May 2018 Inflation Report, available at www.bankofengland.co.uk/inflation-report/2018/may-2018. 12  All speeches are available online at www.bankofengland.co.uk/speeches  12  Chart 7: Trade-off in successive Inflation Report projections at Year 3 3.0  Inflation (%)  August 2016 2.5  November 2016  February 2017 August 2017  May 2017 November 2017 February 2018  2.0 -1.0  August 2016, no stimulus  -0.5  May 2018  Excess demand (%)  0.5  1.0  0.0  Preferred trade-off if λ=0.1  1.5  Preferred trade-off if λ=1 1.0 A Guidance Stocktake As the UK enters the most critical phase of the Brexit negotiations, it is useful to take stock of forward guidance and its potential role during the upcoming period.

8  For example, in the minutes of its policy meetings since mid-2014, the FOMC has repeatedly stated that “a gradual approach to raising the target range for the federal funds rate” was judged to be appropriate, while the minutes of the ECB’s policy meetings have noted that “prudence, patience and persistence with regard to monetary policy remained warranted”. 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  b) Median household Bank Rate expectations Per cent 2014 Q1  6  2015 Q1  Pre-crisis average level of Bank Rate (5.2%)  2016 Q1  5  2017 Q1  4  2018 Q1  3 2 1 0  0  1  2  3 Years ahead  4  5  6  Notes: Household expectations are from the Bank/TNS Inflation Attitudes survey and show how Bank Rate is expected to increase relative to the rate prevailing at the time. Pre-crisis average Bank Rate is calculated from 1997 to 2007 inclusive. c) Proportion of households and companies expecting an increase in Bank Rate within the next year Per cent 100  EU referendum  90 80 70 60 50 Households  40 30 20  Companies  10 0  Jan. 2016  July  Jan. 2017  July  Jan. 2018  Sources: Deloitte CFO survey and IHS Markit Household Finance Index (HFI).
4 More recently, supervisors have traditionally addressed firm’s management of misconduct risk by assessing the effectiveness of firms’ risk management and internal control functions, such as compliance and audit. Yet, despite regulations, supervisory focus, and firms’ own efforts, significant misconduct risk and bad outcomes continue. Why? What explains this persistence? One hypothesis is that recent problems are just a stream of idiosyncratic events, random draws of “bad apples.” Another hypothesis is that some firms have operational weaknesses, “bad processes,” that allow these outcomes to occur. I don’t believe, however, that either of these hypotheses tells the whole story. Root cause analyses of many recent cases of misconduct in the financial sector suggest that misconduct is not just the product of a few individuals or bad processes, but rather the result of wider organizational breakdowns, enabled by a firm’s culture. From both a prudential perspective and a financial stability perspective, misconduct risk threatens our core supervisory objective to sustain the efficient provision of financial services to the economy. This suggests that supervisors have an obligation to promote strong internal practices and behaviors that mitigate misconduct risk and create a healthy culture. Misconduct Risk and Cultural Capital One way to think about this is “cultural capital.”5 A firm’s cultural capital is a type of asset that impacts what a firm produces and how it operates.

Kevin Stiroh: Misconduct risk, culture and supervision Remarks by Mr Kevin Stiroh, Executive Vice President of the Financial Institution Supervision Group of the Federal Reserve Bank of New York, at the Culture Roundtable Session with Business Schools and Financial Services Industry, Federal Reserve Bank of New York, New York City, 7 December 2017. * * * Good morning everyone. Thank you for joining us at the New York Fed today and for your ongoing participation in the important discussion around culture and ethics in the financial services sector. This workshop and discussion are a critical part of our ongoing collective efforts on promoting financial industry culture reform. Business schools serve as a major supply source of the talent pool for mid-level management positions in the industry. This relationship makes aligning business education curricula and pedagogy with demands around improving industry culture a mutually beneficial strategy. While your conversation today has focused on the role of academia and industry, I want to take this opportunity to share with you how I’ve been thinking about the role of bank supervisors in the culture reform dialogue. I am the head of the Supervision Group of New York Fed, but my perspective and approach are influenced by my background and training as an economist. You’ll hear me talk about frictions and market failures; about production processes and intangible capital; and the conceptual rationale for a role for the official sector. There are, of course, multiple ways to consider the relationship between culture and bank supervision.
The shocks that we are seeing are restricting supply in the economy relative to the recovery of demand. This is important because monetary policy will not increase the supply of semi-conductor chips, it will not increase the amount of wind (no, really), and nor will it produce more HGV drivers. Moreover, tightening monetary policy could make things worse in this situation by putting more downward pressure on a weakening recovery of the economy. But what is crucial here is whether and how expectations of future inflation respond to these supply shocks, and thereby embed rising inflation. The most commonly talked about mechanism goes from higher inflation expectations, to companies feeling able to raise prices and employees asking for higher wages, to wage pressure and more persistent inflation. In this way, what start out as relative changes in price levels for some goods and services can  The hard yards ‐ speech by Andrew Bailey | Bank of England  Page 4  become generalised and turn into persistent inflation. I take this risk very seriously, it has form so to speak. That’s a world where people expect further price rises and thus seek to hold lower money balances relative to income than they otherwise would. But, in a world where people expect the price rises to be temporary and reversed, they will delay spending, and hold higher money balances relative to income than they otherwise would, and the growth of demand will be weaker. As a pertinent example, will second hand car prices stay elevated?

Some reforms underway represent efforts to ensure that our rules keep pace with the achievements that the industry has already made. On this note, I would argue that Basel II is just as much about aligning supervisory practices more closely with the industry’s latest advances as it is about promoting improvements in the management of risk within the industry itself. But I sympathise with the sense that the wide range of standards that are evolving in parallel represents a drain on the limited resources that firms have to keep pace with those changes. I agree that we must find a way to balance the dangers we are trying to ward off against the time and resources it takes to adapt to new circumstances and new rules. And I want to work with you to make sure that the labours you undertake are not merely exercises in compliance with new rules, but rather will represent honest efforts to strengthen your practices and your long-term prospects for growth and innovation. From my perspective as chairman of the Basel Committee, I can say that the Committee’s main focus in the near future will be on completing the current work and on implementing Basel II in a sound, consistent, and effective manner. This will allow us all a period to digest the framework we have designed. At the same time, we have always said that Basel II should be an evolutionary approach. This does not mean a moving target.
The UK’s sterling Real-Time Gross Settlement (RTGS) system is being developed to accommodate the euro, so that from the beginning of 1999 euro wholesale payments may be made in a safe, efficient and cost-effective way as sterling payments can now, even though the UK will not be a participant in the monetary union at the outset. That development remains on schedule, and it is encouraging that the UK system (CHAPS) has had expressions of interest recently from a number of overseas banks wishing to join. 23. The UK euro system -- CHAPS euro -- will allow payments to be made both between parties within the UK and cross-border from and to the UK through its link to TARGET. Using the knowledge and expertise we have acquired through developing and operating by far the largest RTGS system in Europe -- with average daily volumes of some 70,000 payments, worth some £ bn -- we are contributing a great deal to the technical development of TARGET. Because it extends the benefits of RTGS systems, in reducing the risk in payments, for the first time cross-border, it is a project we wholeheartedly support. 24. But we also want to see TARGET as efficient and effective as possible, so that it becomes the payment system of first choice for banks, in order to maximise its benefits in reducing systemic risk. We have to recognise that TARGET will be competing with alternative euro payments mechanisms, including correspondent banking and the European Banking Association’s net end-of-day settlement systems.

However, there are notable differences across the region: the Baltic states (especially Latvia and Estonia) and South-East European countries (especially Croatia and Bulgaria) seem to have approached or even reached the equilibrium by 2004 or 2005, whereas in the case of the Visegrad countries (especially the Czech Republic and Poland) the credit-to-GDP ratio seemed to remain below its estimated equilibrium level at that time. Of course, it might well be that some of the CEE economies have overshot the  1  Kiss, G., Nagy, M., Vonnák, B.: Credit Growth in Central and Eastern Europe: Trend, Cycle or Boom?, MNB Working Paper No. 2006/10, November 2006 and Egert, B., Backé, P., Zumer, T.: Credit Growth in Central and Eastern Europe: New (Over)Shooting Stars?, ECB Working Paper No. 687, October 2006. BIS Review 137/2007  1  equilibrium only recently, but one has to wait for a while until the relevant data become available before this overshooting can be captured in empirical analyses. The general upshot of these papers is that the rapid credit expansion in CEE economies has mainly been fuelled by demand factors: the buoyant economic growth and the ensuing increases in disposable incomes, rising expectations with regard to future income prospects related to EU accession, remarkable decreases in interest rates, and falling or low and stable inflation rates.
Important factors behind this development are the larger home-currency investor base and the better issuing conditions for international borrowers provided by the unified European money market, which is now more liquid and efficient than the markets in the individual countries before the introduction of the euro. Needless to say, European equity markets have also been affected by the disappearance of currency risk within the euro area. There appears to be a gradual shift from the domestic focus in the euro area countries to a euro area-wide, sector-related, view. Integration is likely to attract a broader range of potential investors and benefit the development of private equity and financing opportunities for new firms. In addition to these economic advantages, we must naturally also include what I consider to be the decisive political arguments in favour of Sweden participating fully in the political and economic cooperation with a view to attaining a position of influence in a strong and prosperous Europe. The fact that the Swedish krona has not been more negatively affected by the result of the referendum, despite the foregone advantages, could in turn be due to long-term factors that are independent of EMU. The political uncertainty ahead of the referendum should indeed have contributed to the somewhat weaker krona during the summer. However, the krona has been considered undervalued for a long time.

What have companies been using those cash piles for? Well, either they have been returning that cash in bucket-fulls to shareholders or using it to support their share prices through share buy-backs. It was reported in yesterday’s Financial Times that during the first three months of this year alone, the S&P 500 companies in the US spent a record $ billion to repurchase shares and pay cash dividends. While this may help to keep share prices high, they do not create new sources of growth. Meanwhile, capital spending by the S&P 500 companies has grown by an average of just 3.6 percent per year over the last five years. Ultimately, the quantity and quality of investment will determine the quality of growth now and well into the future. The second issue facing these economies is that despite the drop in unemployment, productivity growth has remained weak. The way we understand the recovery process, when demand picks up, companies will first try to meet it using its existing workers. Productivity increases. However, as demand continues to grow, the increase in productivity of existing workers will be insufficient and companies have to hire new workers to increase production. So employment increases. Therefore, an increase in productivity is accompanied by an increase in employment. We have not witnessed that phenomenon this time.
Myanmar and Malaysia has built a strong friendship based on mutual trust. In this regard, Malaysia was glad to have extended a helping hand to Myanmar when financial assistance was needed in the past. In return, Myanmar has reinforced this trust with good faith. A substantial amount of the assistance has been repaid in a timely manner commensurate with Myanmar’s steadily strengthening international financial standing. At the central banking level, Bank Negara Malaysia (BNM) and Central Bank of Myanmar (CBM) collaborate very closely. I am glad to say that the results of this collaboration have yielded tangible results. For instance, in October 2013, CBM and BNM signed an enhanced Memorandum of Understanding (MoU). 2  BIS central bankers’ speeches  The MoU affirmed commitments from the two sides to provide capacity building support in areas including financial and monetary stability and financial inclusion. I am pleased to say that since 2012, almost 200 officials from the government of Myanmar have attended and benefited more than 30 programmes and study visits organised by BNM. In the long run, these programs could contribute towards raising the internal capacity of CBM so that as a group, we can better enjoy the benefits and meet the opportunities and challenges of regional financial integration. As a member of the central bank fraternity, BNM alongside institutions such as the World Bank (WB) and International Monetary Fund (IMF), has facilitated the implementation of Myanmar’s Financial Sector Development Strategy.

On this note, I am encouraged to hear that Maybank’s Yangon office is already driving initiatives for the local community, through its Project H.E.A.R.T (Helping Every Asian Rise Together). Therefore, judging by Maybank’s by-line, with its stated aim of “humanising financial services”, I am confident Maybank will show a stellar example in making a difference in Myanmar. I also expect that as a good corporate citizen, Maybank will contribute to the development of the domestic financial sector, as over the long term and given the opportunity, they can meet the overall financial services needs of the low and moderate income households. I should also expect a meaningful participation and contribution of Maybank in Myanmar’s interbank and foreign exchange markets as well as the payment system. Conclusion As we speak, Myanmar is undergoing a profound shift. It stands at the cusp of something great. During this historic time, it gives us a great honour that Malaysia is actively involved and contributing to Myanmar’s transformation. For we consider Myanmar not only a partner, but a close friend. BIS central bankers’ speeches  3  With this, I wish Myanmar all the success in her future endeavours. Congratulations to Maybank again for the start of a new chapter in what I trust will be an enduring and productive presence in this great country. Truly, the future is bright and this is indeed, Myanmar’s moment. 4  BIS central bankers’ speeches
The rapid rebound in oil prices and a weaker krone provided a boost to the economy. The interest rate was lowered sharply to a historically low level and public spending increased markedly. The downturn was milder than we had expected when the interest rate was reduced – partly because oil prices proved to be higher than expected and partly because the policy measures were more effective than we had dared to assume. Therefore, we now expect to raise the policy rate at a gradual pace back to more normal levels. The emerging economies were hardest hit by the global crisis in the late 1990s. This time OECD countries were the most severely affected. But Norway largely escaped both crises. Overall, output fell less in Norway than in other countries and is recovering more quickly. Unemployment has remained low. 1  4  IMF Country Report No. 10/24. Norway: Staff Report for the 2009 Article IV Consultation. BIS Review 44/2010  Norway is not unique We cannot expect underlying forces to be as beneficial in the future. Real interest rates cannot be expected to fall. Another sharp boost to export prices is not likely. In addition, there are vulnerabilities in the Norwegian economy. Labour has never been as costly, and businesses may be at a disadvantage in tenders and competitions given the current high level of spare capacity in other countries. Moreover, it has never been more profitable to relocate activities abroad.

Situations may take unexpected turns. In the face of such uncertainties, being prepared and ready is always a good proposition. 2  BIS Review 74/2007  Reputation risk and fair dealing with consumers Moving on from macroeconomic and financial risks to something closer to home, there is another risk which banks should remain mindful of. Unlike the other risks I had raised earlier, this is a risk which is fully within your bank’s domain. This is reputation risk. You all appreciate the value of a good reputation in doing business. A good reputation takes years to build. It can also be damaged within a short period of time through incidents that undermine consumer confidence and that are not managed properly. You have read the newspaper articles in recent months concerning public unhappiness and questions about the transparency and fairness of practices concerning multiple home loan board rates and promotional fixed deposit rates. You might have asked yourself why these issues should concern you as they may not pose any significant impact on the financial standings of your banks. While of limited short term bottom-line impact, these issues can affect the longer term reputation of and consumer confidence in your banks. The internet has empowered consumers with unprecedented reach. A disgruntled customer can post his or her unhappiness on a forum or blog and quickly reach a wide audience. It has become more important for banks to incorporate good and fair consumer outcomes as integral parts of the way they do business.
One cornerstone of that integration is the creation of a permanent central fiscal capacity in the euro area to facilitate the economic policy response to severe shocks, such as the 4  current one and the pandemic-related crisis of the last two years, replacing the existing ad hoc agreements. The design of the common fiscal capacity must be informed by the very lessons that we learn from our fiscal response to the war and from the NGEU and SURE programmes. The financial realm is a second area of economic integration. Pan-European bond issuances to finance the NGEU programme, and any other issuances as part of the response to the invasion of Ukraine, are an important step towards creating a European safe asset. In addition, deeper capital market integration in the euro area would pave the way for greater risk-sharing in the face of asymmetric shocks. Lastly, a third necessary element to shore up the euro area’s institutional architecture is the completion of the banking union, establishing a European deposit insurance scheme and a common framework for resolving systemic crises. ECB monetary policy Last week the ECB Governing Council held its first meeting since the invasion began. Against a backdrop of high inflationary pressures in recent months, we decided to take a further step towards normalising our monetary policy. However, given the enormous prevailing uncertainty, we combined this with greater flexibility and optionality in our actions going forward to allow us to react to the incoming data. Let me explain these measures in more detail.

Prasarn Trairatvorakul: Economic transformation for sustainable economic growth in the Greater Mekong Subregion Speech by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the Euromoney Greater Mekong Subregion Investment Forum, Bangkok, 28 May 2015. *  *  *  Excellencies, Honorable speakers Distinguished guests; Ladies and Gentlemen 1. It has always been a great pleasure to be part of the Euromoney Greater Mekong Subregion Investment Forum. Let me first thank the organizers for inviting me to share with you my views and vision on the prospects of GMS during the last three consecutive events. Today, it is my last remark as the Bank of Thailand governor at this forum to highlight the way forward of our region, and today’s topic on “Economic Transformation for Sustainable Economic Growth in the Greater Mekong Subregion” seems to fit the current context and timing quite well. 2. My first talk here three years ago was on the Greater Mekong Subregion as the “rising star” of Asia. For its rich endowments and strategic locations, the GMS is now well recognized as a new gem that shines through the South East Asian economic frontiers. Over the past decades, I have witnessed the beautiful glory of the GMS. With its impressive economic growth and good prospect for trade and investment opportunities, the GMS has gained much interest from both regional and global investors. 3. According to the ADB, the foreign direct investment inflow to the GMS has increased steadily at the annual average of 8–9 percent.