samchain/econo-pairs-v1 huggingface dataset:
Chart 8 shows the correlation between UK forward interest rates and the UK and US data surprise series that I described earlier, split by time period. That the responsiveness of forward interest rates to data news was particularly low during the 2009–April 2013 period is not surprising as Bank Rate was constrained on the downside by the zero lower bound, so that the distribution of policy rates was truncated. That is still relevant today, but economic news has been more consistently to the upside recently, attenuating the impact of the constraint. Importantly, there is some evidence that the response of UK rates to US data surprises has declined since the introduction of the MPC’s forward guidance, although the small sample in the most recent period means that the coefficients are not that precisely estimated. A final piece of evidence, which is at least consistent with the central aim of the MPC’s guidance, is presented in my final chart. As I noted earlier, a prime concern was to convey the message that a return to growth did not imply an early withdrawal of stimulus. Rather, if slack was substantial, then it should be possible to maintain the highly stimulatory monetary stance for some while before price stability – as embodied in the inflation target – is threatened. Historically, and particularly in the pre-crisis period, there was a reasonably strong correlation between indicators of growth and the slope of the yield curve at the short end.

As experience with gender and ethnicity illustrates, measurement and, ultimately, publication of diversity metrics can be important first steps towards creating a more socio-economically and cognitively diverse workforce. Metrics hold a mirror up to us all. Sometimes that casts a reflection none of us much like – a reflection that then prompts us to do better. And the measurement task is far from impossible. Simple metrics of socio-economic background already exist, however imperfect, and are being used in some organisations to help recruitment. Psychometric and neuroscientific tests are being developed at pace which help paint a picture – sometimes quite literally, through MRI scans – of an individual’s cognitive skills. In this respect, I applaud the Diversity Project’s intention to develop multiple metrics of diversity and to share this information among its membership. Third, recruitment. The filters applied in many of our standard recruitment procedures are, to my mind, a big barrier to building a diverse workforce. Filters such as academic prowess (grades at school and university), work experience (internships and voluntary activities) and social skills (team-building and networking) are standard recruitment filters and sound perfectly sensible. Yet these filters may, inadvertently but unhelpfully, disadvantage certain cohorts of society. Those whose parental incomes, and hence school choice, may have held back their academic scores and work experience opportunities. Those whose personality-type or brain circuitry means they are not as socially skilled or who dread interviews or team interactions. Let me take a specific example - autism.
Page 7  The objective is to extend the current Bank of England and FCA regulatory regimes for e-money and payment systems to cover the use ‘stablecoins’ for payments[7]. The powers in the Bill will extend not only to the systems for transferring such coins between parties to make payments, but to the issuance and storing of the coins. The Bank will have responsibility for such payment systems which are systemic or likely to become systemic. This will apply whether such systems exist to make payments for real things or for crypto assets should the latter activity become systemic in scale. We intend early next year to consult in detail the regulatory framework that will apply to such systemic payment systems and the services, like wallets, that accompany them. In doing so, we will be guided by the principle of ‘same risk, same regulatory outcome’ set out above. In the case of stablecoins used as money to make payments, the regulatory outcome has been expressed by the Financial Policy Committee of the Bank as an expectation that stablecoins used in systemic payment chains should meet standards equivalent to those expected of commercial bank money. And that's in terms of stability of value, robustness of legal claim and the ability to redeem at par in fiat[8]. Some of the likely foundational features of the regulatory regime on which we will consult are already clear.

Assuming constant returns to scale, perfect competition (so that factors of production are paid their marginal products) and Hicks-neutral technical change (so that shifts in the production function do not affect marginal rates of substitution between inputs), output growth can be expressed as a weighted sum of the growth rates of inputs and an additional term that captures shifts over time in the production technology. The weights for the input growth rates are the respective shares in total input payments – the labour and capital shares. More specifically:  where A(t) is a multiplicative factor in the production function capturing technical change.  K ,  L represent respectively the capital and labour shares of income. Charts 8 and 9 look at the proportion of labour and physical capital employed by the financial intermediation sector in the UK relative to the whole economy over the past forty years. They follow a not dissimilar path, with both labour and capital inputs rising as a share of the whole economy for much of the period. The proportion of labour employed by finance rises by around 50% between 1977 and 1990, while the proportion of capital almost trebles from 4% to 12% over the same period. Financial liberalisation over the period drew factors of production into finance, both labour and capital, on a fairly dramatic scale. Perhaps the most striking development, however, is what happens next. These trends have not persisted during this century.
Since the monetary policy meeting of 18 April, some new statistics have become available for Sweden, including figures for unemployment, the retail trade and foreign trade in March and the tendency survey of the National Institute of Economic Research for April. By and large, these statistics do not indicate any significant changes in the course of development than that we saw ahead of us in the Monetary Policy Update in April. However, I think we should be cautious about reading too much into figures for individual months. I will therefore wait to make an overall assessment of the new statistics until our next monetary policy meeting in July. A factor that I think should be highlighted – although it did not directly determine my stance at the latest monetary policy meetings – is the link between monetary policy and financial stability. Let me explain this in more detail. The link between monetary policy and financial stability In my opinion there are links between monetary policy and financial stability. We should be careful to monitor the incentives that low policy rates can create over time (see slide 5). Both housing prices and household debts have increased dramatically in Sweden for some time  BIS central bankers’ speeches  3  now. This has been noted, for example, by the European Commission in an Alert Mechanism Report.4 These tendencies have slowed down over the last 12 months.

Evidently, the attractiveness for investors of issues of green bonds is a sign of the growing concern over the effects of climate change. Yet for the aforementioned transmission mechanisms to work properly, the volume of securities traded on these markets must reach a critical mass and be consistently catalogued. To achieve this, the initiatives developed within the European Commission are essential: these include most notably the taxonomy for determining the activities that contribute to sustainability in environmental terms, and the “ecological” labelling of financial products. We need a common language that can be used both by debt issuers and potential investors, so that these markets may be developed. On this point of financial investments categorised as “green”, it is worth recalling that we as central banks are also active investors in financial markets, both in monetary policy operations and in portfolio management relating to reserves. In this connection, as acknowledged in the report by the network of central banks and supervisors, and as recently indicated by Mario Draghi, we are aware that environmental risks are not yet being built into most of this portfolio’s ratings, whether internal or devised by rating agencies. Accordingly, in the Eurosystem, a thorough review of these risk valuation processes is under way. The aim is to ensure us that all the relevant factors, including environmental ones, for the prudent management of the portfolio held by the central banks are being taken into account.
The amount due to and due from such overseas banks amounted to RMB 128 billion yuan and RMB 146 billion yuan respectively, a clear indication that banks from around the world are using the robust platform and large liquidity pool to offer RMB services to their customers at home. Looking ahead, we in Hong Kong will seek to broaden and deepen our offshore RMB market further, by enhancing our RMB infrastructure and encouraging participation. In doing so, we will continue to cooperate with other places along the way. From the end of next month, the operating hours of our RMB Real Time Gross Settlement system will be lengthened to 11:30 pm Hong Kong time, giving financial institutions in different parts of the world an extended window to settle offshore RMB payments through the Hong Kong infrastructure. Moreover, the Hong Kong – London Forum for promoting cooperation on the development of offshore RMB business just convened its first meeting yesterday. I am very pleased to note that the group had a very productive discussion, with concrete joint action plans set forth for enhancing offshore RMB market activities in both places. Meanwhile, we at the HKMA will also be continuing our efforts to raise awareness about the developments of offshore RMB businesses and the comprehensive services provided by Hong Kong in this regard.

4  BIS central bankers’ speeches  Concluding remarks So, as I prepare to hand back to Mark (Johnson) for the panel discussion, I would just like to underline my points by summing them up very succinctly:   First, I would say that, given the scale and the pace of change I mentioned earlier, we are now at the start of a new era. An era in which we will see a much greater use of RMB, driven by both policy and market forces.   Second, we are only in the early days. The RMB started circulating outside Mainland China only in recent years, but is already starting to play a significant role in global trade and finance. It has the potential to go much further.   Third, as the RMB develops a more central role and acquires more features associated with an international currency, Hong Kong is very well equipped to service the RMB needs of businesses around the world. Let me just finally say that today’s forum is a most welcome opportunity to help prepare for the future. As at any time of historic transition, if none of us have all the answers, then at least each of us has a piece of the answers; and if we don’t have that, then perhaps we can contribute a better question. I look forward to hearing your ideas and to working closely with you in our common effort to develop the offshore RMB market in the future. BIS central bankers’ speeches  5
Towards the end of 1995 the growth of production slackened and the increase during 1996 probably stopped at between 1 and 1.5 per cent. However, the slowdown seems to have been relatively gentle. The demand situation appears to be good, particularly when one BIS Review 38/1997  -2-  considers that the growth of private sector production was held back by marked destocking in 1996. Stock adjustments are not uncommon after some years of rising output and they do not seem to have had negative effects on private consumption. In the second half of 1996 private consumption picked up and export demand went on rising. As the destocking comes to an end, domestic and international demand should therefore be able to generate an accelerating growth of production this year and in 1988. Considering the economy’s unutilised resources, I do not expect inflationary capacity restrictions to arise in the coming years. If inflation expectations also remain low and confidence in economic policy in general is stable, this, too, will contribute to a subdued development of future inflation. Since the autumn there have been some months in which the level of consumer prices was lower than a year earlier. In a price analysis, however, it is important to distinguish transitory effects on inflation from the underlying inflationary process. In January this year the level of consumer prices was 0.1 per cent lower than a year earlier. Strictly speaking, however, what Sweden is experiencing is not deflation.

The taxonomy will also pave the way for plans that will be announced soon to mandate the adoption of climate related financial disclosures by financial institutions. In addition, we are supporting efforts by the Government to strengthen the capacity of development finance institutions to enable them to play a more significant role in crowding in sustainable finance from the private sector, supporting the capacity building needs of businesses in transition, and scaling up innovative financing mechanisms. In light of the current challenges faced by businesses and individuals, we see a greater need and significant prospects for new forms of blended finance to support the recovery process and meet transition challenges. To this end, the Bank is engaging with the financial industry, including DFIs, and other key stakeholders on strategies to combine commercial lending with alternative funding sources such as philanthropic funds and social finance instruments. This includes upscaling existing pilot programmes. Such blended finance solutions will be important to reduce debt levels and future risks to growth and financial stability. During this period, the Bank has also established concessionary financing facilities dedicated to help SMEs automate and digitalise their operations. This will enable them to take advantage of new technologies to enhance income streams and build greater resilience. Thirdly, we believe collaborative partnerships will play a larger and more critical role in shaping financial policy going forward.
And in such a case, when confidence is lacking, additional public expenditure will not have a positive effect on growth. On the second question, following an episode in which the pricing of risks was, in general, too low, markets now have a tendency to overvalue risks. But it does not affect the euro as a currency. Rather, it is clear that the single currency has proved to be an anchor of confidence and stability during this crisis. If you think back to the European currency turbulence and its consequences in 1992 and 1993, you can imagine what consequences the crisis of recent months would have had for the euro area without the euro – both on the interest rate markets and on the exchange markets. China Finance: What challenges do the US quantitative easing policy pose for the Euro area? What's your assessment on the need for coordination on economic and monetary policies between the major economies in bringing about an early recovery of the global economy? Trichet: I believe that all central banks are doing what is necessary for the economic area they are responsible for and responding to the requirements of the specific conditions. I do not see the point in comparing one central bank’s actions with the other. As I said before, the ECB’s open market operations and collateral framework of today are already in a “nonstandard” mode and its measures can be interpreted as a way of additional “non standard risk taking”.

However, I do not see this as a matter of balancing – expansion can only take place while maintaining stability. The Maastricht criteria will not change and this is in the interest of both the euro area as a whole and the individual candidate countries. Let me only add that 2009 January did not only see the 10th anniversary of the euro, but also the joining of the 16th member state, namely Slovakia, to the euro zone. If you consider that we started with 11 countries in 1999, this certainly demonstrates that the euro area is open to newcomers. BIS Review 18/2009  1  China Finance: How effective is monetary easing measures by the ECB in mitigating the economic recession in Europe? Do you see more room to maneuver in case the economic prospects continue to get worse? Trichet: First, let me remind you that we have, in all circumstances, to deliver price stability in line with our definition “less than, but close to, 2%”. Secondly, the present unlimited provision of liquidity at a fixed rate and with a one-week, one-month, three-month and sixmonth duration can certainly be described as a non standard measure. The extension of eligibility in our collateral framework is also another non standard measure, particularly as it was already very broad and flexible. In particular, as a result of these decisions we have also expanded our balance sheet on a scale that would have been unthinkable before the crisis: around 55% in the last 12 months.
The International Monetary Fund came  6  BIS central bankers’ speeches  knocking at Norway’s door. Fiscal policy had to be tightened and many Norwegians experienced a decline in income. Norway was hit by oil price shocks in the following years and economic reforms were implemented in several areas. After some years, the deficits had been turned into surpluses and transfers could be made to the Petroleum Fund. Norway’s experience from its first 30 years as an oil-producing nation led to the introduction of the fiscal rule, which has been a key element of Norwegian economic policy for the past decade. In 2001, the Storting laid down guidelines for the phasing-in of petroleum revenues into the Norwegian economy, establishing two main principles: economic policy must contribute to stable economic developments and be sustainable over time. By linking petroleum revenue spending to the expected real return on the Fund – and not to current petroleum revenues – the fiscal rule provided for a gradual and sustainable phasingin of the revenues. If we can restrict spending to the return, the Fund will never shrink in absolute terms. Norway will also be less vulnerable to fluctuations in current petroleum revenues. The government has stated that the expected annual return on the Fund will be close to 4 percent over time. In the initial years, the actual return, adjusted for inflation and costs, was close to 4 percent.

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. We can never fully insulate the financial system from shocks. But we can increase our resilience. One of the most important things we can do is to keep our own house in order – by preventing major imbalances from building up in the economy or in the financial system, and by ensuring that the financial system in general is robust. Thank you for your attention. BIS central bankers’ speeches  13
Under this process, the system of burden-sharing among the national and mutualised funds will be gradually adjusted until the national compartments disappear completely around January 2025. The complex agreement reached has yet to be accepted by the European Parliament, so there is still uncertainty as to the final design of the mechanism. Moreover, the capabilities of the mechanism will foreseeably be limited at first, since the single resolution fund is constrained by its modest size and reduced mutualisation. Furthermore, for the time being, the agreement does not include common public mechanisms for the resolution of vulnerable banks after the available private funds have all been used up. 4  BIS central bankers’ speeches  In this respect, although the new resolution rules reduce the foreseeable scope of the required external funds, provision should be made for public financial support at EU level to ensure the orderly resolution of systemic banks if necessary. For example, following the example of the US, we could consider an arrangement in which the European Stability Mechanism could provide the resources needed to the common resolution fund with a charge to future contributions from the industry. Otherwise, the single resolution mechanism would, at least in the short-to-medium term, foreseeably be insufficient to prevent banking crises from continuing to be resolved with a charge to national funds, whether public or private. That said, the agreement reached should by no means be underrated.

The four Directors-General of the ECB responsible for supervision have already been designated, one of whom is the current Director-General of Banking Supervision of the Banco de España, which is a cause of satisfaction for our institution. The selection processes for the remaining management positions will continue over the coming months. Thanks to the work by several groups of experts, two essential pieces of the future mechanism are at an advanced stage. These are, namely: the Framework Regulation that will define the supervisory function, its internal organisation and the assignment of responsibilities among the various authorities making up the mechanism; and the supervisory manual, which will precisely set out the procedures to be followed by all the members of the mechanism, including naturally the supervisory personnel of the national authorities. The ECB and the national authorities are also working on developing the comprehensive assessment of credit institutions in the participating countries, which began last November and will be completed before the ECB assumes supervisory powers. This assessment will include an asset quality review, performed with the help of auditors or external consultants, and subsequent stress tests, which will be conducted in collaboration with the European Banking Authority (EBA).