samchain/econo-pairs-v1 huggingface dataset:
But if we were to step in, we would have to be very attentive not to disturb the way the market values the various risks and spreads. One way to avoid this would be not to buy too many bonds in the same market segment. Has the French government done enough do reduce the fiscal deficit and to improve the conditions for growth? C.N. Social contributions must be reduced, which is currently being achieved through the Social Responsibility Pact. The “Macron Act”, which allows working on Sundays, for example, is certainly a positive step. However we have not done enough on the labour market, and I hope that the other reforms will see the light. We need a more flexible minimum wage and more room for negotiated arrangements in firms and branches, like in Germany. Public finances will only be sustainable and credible if the reduction in the structural deficit continues, in particular through a downsizing of the public sector. Structural reforms must gain momentum in order to support growth. Interest rates will eventually rise and the governments that have not implemented the necessary reforms will find themselves in a difficult situation. Your second term as Governor is coming to the end. What were the highlights? C.N. Naturally, the financial crisis. The most important event has been the creation of the Banking Union.

With the sustained budget surplus and accumulated surplus on the Exchange Fund and Land Fund assets, the actual amount of foreign reserves in Hong Kong amounted to $ billion at the end of September, the third largest in the world. This is more than seven times Hong Kong dollar cash in circulation or over three times $ M1. 30. The currency board system has an automatic adjustment mechanism to maintain exchange rate stability. When there are outflows of funds from the Hong Kong dollar, the Hong Kong Monetary Authority (HKMA) will sell US dollars to banks for Hong Kong dollar. On settlement day, the HKMA will debit the clearing accounts of the banks for the necessary amounts of Hong Kong dollars in return for the US dollar that will be credited to the New York accounts of the same banks. Since banks may have sold more Hong Kong dollars than they have in their clearing accounts with the HKMA, they can only obtain Hong Kong dollars by borrowing from other banks, by bidding up the interbank rates, or selling back the US dollars to the HKMA, that is, by reversing their short position. In fact, the banks do not hold excess Hong Kong dollars because they are generally long in foreign currency. The latest data at the end of July shows that the Hong Kong banking system is short roughly $ billion or $ billion. 31.
Birgir Ísleifur Gunnarsson: Monetary issues in the European Union and Iceland Speech by Mr Birgir Ísleifur Gunnarsson, Chairman of the Board of Governors of the Central Bank of Iceland, at a seminar organised by the Iceland Trade Council, Euro Info office in Iceland and the EU Commission on the theme: Does the Euro affect Iceland?, Reykjavik, 31 October 2001. *  *  *  Ladies and Gentlemen: The evolution of European integration during the second half of the last century is remarkable in many ways. This process began soon after the end of World War II and represented an effort to forge stronger bonds between European nations and thereby, among other things, reduce the likelihood of further conflict on the continent. Although I shall not go into its history here, many notable milestones can be cited along the course that has been taken. One of the most notable was the formal establishment of the Economic and Monetary Union in the beginning of 1999. Now the abolition of the individual member nations’ separate currencies is in sight. As of next year they will be replaced by Euro notes and coin. Not only will prices of goods and services be calculated and stated in a single currency in the twelve EMU countries, but the same notes and coin will be used for business in them all.

Our strong reaction in 2006 have contained inflation expectations and we predict that inflation expectations will continue to move towards the medium term target of 4 percent as the headline inflation comes down in the next couple of months. However, it should be noted that there are also other important factors in determining the inflation expectations, such as incomes policy and the course of fiscal policy, or political aspects, etc. Apart from short-term interest rates, communication skills are also critical tools in guiding the expectations towards the target. What we do is important, but equally important is how we convey this to our target audience. That is not only what we communicate but also to whom we communicate. Of course the target audience of central banks are financial markets in particular and the public in general. When communicating we try to make our messages simple and straightforward. However this is easy said than done. Again this is the art side of monetary policy. Ladies and gentlemen, before concluding, I would like to note that the existence of independent and autonomous institutions along with the practice of good governance principles is vital for Turkey. An independent central bank has constituted and will continue to constitute a cornerstone for structural transformation towards good governance and good institutions in Turkey.
Notably, none of these recent episodes had anything to do with capital  1  William C. Dudley, Enhancing Financial Stability by Improving Culture in the Financial Services Industry, Remarks at the Workshop on Reforming Culture and Behavior in the Financial Services Industry, October 20, 2014. 2  Cf. William C. Dudley, Opening Remarks at Reforming Culture and Behavior in the Financial Services Industry: Workshop on Progress and Challenges, Federal Reserve Bank of New York, November 5, 2015, (“The banking scandals that followed the financial crisis are evidence that something fundamental is wrong. I would encourage each of you to consider not just specific examples of misconduct, but the patterns within them that point to underlying causes. I suspect we will see a strong overlap with those factors that contributed to the financial crisis.”). 3  SeeThomas C. Baxter, Jr., Reflections on the New Compliance Landscape, Remarks at The New Compliance Landscape: Increasing Roles – Increasing Risks Conference, July 24, 2014. 4  See Order Approving Stipulation and Consent Agreement, In re Make-Whole Payments and Related Bidding Strategies, No. IN 11–8-000, IN 13–5-000, U.S. Federal Energy Regulatory Commission (July 30, 2013). 5  See Baxter, supra n.3. BIS central bankers’ speeches  1  levels or liquidity ratios. The many post-Crisis reforms to bank balance sheets – including the Dodd-Frank Act and new standards developed by the Basel Committee on Bank Supervision and the Financial Stability Board-provided necessary bulwarks against systemic risks.

Capital and liquidity requirements, and the enhanced testing surrounding them, have made banks and the financial system more resilient to stress. But those new laws, regulations, and standards have done little to curb banker misconduct. Each post-Crisis episode demonstrates a narrow cultural focus on short-term gain and disregard of broader social consequences. Last year the New York Fed challenged the industry to consider many factors that have contributed to recent, widespread misconduct. There are no simple answers and that discussion is continuing. This year, by contrast, our focus has been more on solutions-what’s working, and what is not. In both years, we have offered three messages to the industry. First, cultural problems are the industry’s responsibility to solve. The official sector can monitor progress and deliver feedback and recommendations. In fact, many individual supervisory findings are often symptoms of deeper cultural issues at a firm. But the banks themselves must actively reform and manage their cultures. Second, a bank’s implicit norms-especially those reinforced through incentives-must align with the public purpose of banking. Gerald Corrigan, more than three decades ago, presented a theory of banking based on the principle of reciprocity.6 Banks receive operating benefits unavailable to other industries because they provide important services to the public. For example, financial intermediation is enhanced through deposit insurance and access to the discount window. Public benefits, though, are not a gift. They are part of a quid pro quo.
The IMF's objective and instruments The IMF's mandate is still valid in the main – in spite of the enormous changes that have taken place in the international financial system since the IMF was created. We still need an organisation with the task to foster trade, employment and growth by promoting international monetary cooperation as well as macroeconomic and financial stability. On the other hand, there is always reason to consider whether the Fund’s instruments to reach this overall objective should be modified. The IMF’s main instruments today are surveillance, lending and technical assistance. Allow me to say something about each of these. Surveillance The IMF's key instrument for reaching its overall objective should be its preventive activities, which are primarily carried out within the scope of its surveillance function. The IMF's primarily role is not to treat illnesses but to prevent them from breaking out. Much can be done to bolster the IMF's surveillance function, both as regards individual countries but also, to an increasing extent, by way of a stronger regional and global focus. This change in emphasis can, among other things, be motivated by the fact that globalisation and increased integration has resulted in a situation where more and more countries’ national policies give rise to externalities. A strong ‘multilateral’ surveillance function could contribute, more clearly than today, to creating a broad international discussion of global imbalances, incorrectly valued exchange rates, etc., which generate risks to stability both in individual countries and in the international financial system as a whole.

The problems are not a consequence of shortcomings in the borrowing instruments. I do not see any immediate need for new types of lending instruments, such as non-borrowing programs or a reintroduction of Contingency Credit Lines. There are already surveillance methods in place to deal with such situations, and today's borrowing instruments are sufficiently flexible to meet the existing requirements (and demand). Nor do I believe that the problems to any great extent are due to incorrect analysis or erroneous assessments, even though the situations faced by the Fund are often difficult and the advice given has been open to question from time to time. Nonetheless, there are a number of things that can be done in this area. Shortcomings still exist, as I mentioned earlier, as regards the Fund's participation in crisis resolution. There is scope for further development of those instruments that exist today. The reason why this has not happened is because some countries oppose it for political reasons. This brings me into the role that “political considerations” play for the IMF to work well. In my view, the central problems of the IMF are often political in nature. These problems exist at several different levels: •  Individual countries are sometimes for political reasons not willing to take the sometimes bitter medicine prescribed by the IMF’s staff and Executive Board and engage in serious dialogue.
It therefore was natural to communicate policy in terms of factors that are relatively easy to measure and comprehend, and to do so according to concrete, relatively simple principles that could serve as a guide for monetary policy and that could contribute to stabilising inflation expectations. Moreover, from the point of view of explaining policy it is good if the overall objective of price stability that has been adopted by elected bodies in many countries can also be used in the implementation of policy and be allowed to play a prominent part in the debate. That the communication still tends to focus so strongly on inflation, despite the considerable confidence in low-inflation policies today, could reflect a perception that it is not all that easy to make substantial changes to the policy rhetoric. Personally, however, I think the problem runs deeper than that. It is quite simply difficult to clearly communicate the kind of varying, subtle deliberations that are involved. Of all inflation-targeting central banks, Norges Bank is perhaps the one that has come furthest in terms of the ambition to clarify the way policy takes the real economy into account, regularly publishing estimates of the output gap parallel with inflation forecasts as well as discussions of how policy takes account of it. It seems an interesting path to take, but at the same time it is evident - on the basis of my ten years’ experience - that far from all the considerations we have faced would be captured by this model.

One of the examples of this is the fact that we did not utilise the scope for rate cuts that - according to a stricter interpretation - deregulation and other supply factors had created during the last few years of the 1990s. The clearest example of how we attempted to convey that our inflation targeting policy was flexible rather than strict was the clarification of monetary policy that the Executive Board published in 1999. In that, we explained that it may be appropriate in some situations - e.g. in the event of large shocks and deviations from target - to refrain from bringing inflation back to target too quickly in order to mitigate the adverse consequences for output and employment.1 We expressed this in terms of there being reasons to occasionally depart from our simple policy rule - that the repo rate is normally raised if inflation one to two years ahead is forecast to be above 2 per cent, and vice versa if inflation is forecast to undershoot the target. Explicit framework as basis The strategy that we in Sweden have chosen for dealing with the “flexibility problem” could, in simplified terms, be described as that we, when we have found it necessary, have in various ways modified and adapted a framework - mainly represented by an explicit symmetric target, regular publication of detailed decision-support data including forecasts, and a simple policy rule for how the repo rate is normally adjusted against the background of the forecasts.
Its implementation would entail far-reaching implications on a wide range of issues relating to areas such as legal, regulatory, policy, financial stability, privacy, cybersecurity, and interaction with existing payment methods. We also understand that e-HKD would be a critical and complex financial infrastructure project that may take years to complete. Therefore, we announced in September last year that we would adopt a three-rail approach to pave the way for possible implementation of e-HKD: Rail 1 aims to lay the technology and legal foundations for supporting the implementation of e-HKD. Rail 2 focuses on application research and pilots, and it runs in parallel with Rail 1. Rail 3 is concerned about launching e-HKD, which will depend on the actual progress made under Rail 1 and Rail 2, as well as the pace of relevant market development. This comprehensive three-rail approach will ensure that Hong Kong continues to play a leading role in the global financial landscape by getting ourselves ready as best as we can in terms of implementing retail CBDC. 1/3  BIS - Central bankers' speeches  e-HKD Pilot Programme Today's event marks the commencement of the e-HKD Pilot Programme, which is a key component under Rail 2. It is a tremendous opportunity for the HKMA to work with the industry to consider different use cases and design choices, and co-create new payment functionalities and infrastructures that could add value to society. We look forward to this public-private partnership in shaping the future of money in Hong Kong.

It is determined by the calibration of, and interaction between, the whole array of instruments we have introduced: the level of policy rates, the pace of asset purchases, and our forward guidance on both. It is the combination of all these tools that sets a given stance. The different elements have complementary effects on preserving the very easy financing conditions that are necessary for generating sustainable inflation convergence. Our current interest rate policy and our forward guidance on the future path of rates affect the risk-free term structure of interest rates, which is the benchmark for the pricing of all other assets and interest rates. Our asset purchases complement these interest rate policies by directly compressing the term premium and other risk premia, both via portfolio rebalancing effects and by underlining the central bank’s commitment to keep interest rates at a low level – i.e. signalling effects. And since the Governing Council deems the current stance fully appropriate, it confirmed at its last meeting that net asset purchases will continue until the end of December 2017, or beyond, if necessary, and in any case until we see a sustained adjustment in the path of inflation consistent with our inflation aim. It also confirmed its expectation that key ECB interest rates will remain at present or lower levels for an extended period of time, and well past the horizon of our net asset 5/6  BIS central bankers' speeches  purchases.
It had been clear for a relatively long time that if the share of human labour in output was only one-third, Solow’s model would provide a very good picture of reality in international comparison. To overcome this inconsistency, however, it was necessary to come up with the idea of introducing a new variable in the model that would represent human capital. Although this may seem obvious today – as such things always seem to be as soon as someone else thinks of them – it was a novelty in the late 1980s. It was another Nobel Prize Laureate in economics Robert Lucas who divided human labour into a part reflecting people’s general capacity for work, and the contribution of human capital that was a result of previous investment in education. What Lucas did was very simple from today’s point of view. Using the extensive structure of US economic data, he chose the average wage of people with basic education as a basic remuneration of people’s capacity for work. Then he gradually added the average wage of  BIS Review 81/2008  1  other people after each finished year of education. The results showed that every additional year of education up to the level of a bachelor’s degree increases the wage by 8% on average.

In fact, I would only like to reinforce the conclusion you have no doubt arrived at – that you made a good choice when you invested in your further education. In 1987, when Robert Solow was awarded Nobel Prize in Economics for his contributions to the theory of long-term economic growth, it was already clear that his model of long-term economic growth had certain shortcomings in its description of reality. On the one hand, this is by no means unexpected, as all economic models suffer from a similar syndrome to a certain degree. On the other hand, the causes of the empirical problems surrounding Solow’s model are very inspiring from our point of view. The whole issue revolves around determining to what extent long-term economic growth is aided by human labour and capital measured as the sum of all previous investments that are still in use. In practical calculations, the contribution of human labour is always simplified as the ratio of wages paid to output. This ratio is about two-thirds for the developed world. Therefore, two-thirds of output in developed countries are used to remunerate labour and the remaining one-third to remunerate capital. Problems occur if the contributions of human labour and capital calculated in this way are applied to two countries at a different level of development. In such cases, there is a significant degree of divergence between the characteristics of these economies observed in reality and predicted by the model.
In other words, what happens when certain assets that are considered relatively safe, and in some cases are used as safe havens, are not considered as being that safe any more? The crisis has shown the importance of financial markets relying on liquid and safe assets to protect against systemic risk. Traditionally, the government bonds of advanced economies  4  BIS Review 126/2010  have played this role. What scenarios open up if advanced economies’ sovereign debt assets are no longer perceived as risk-free assets? How would this affect the functioning of financial markets? There is no doubt that there would be some direct spillover to all other assets. The riskiness of the global portfolio can be expected to rise more than proportionately. Indeed, if the public sector is itself over-leveraged, who can back up the public sector? 2 It can be expected that higher yields and lower asset prices would exert downward pressure on economic activity through increases in the costs of external finance, negative wealth effects and negative effects on confidence. 3 A world without default-free assets would have further implications for economic activity because these are the prototype of “information-insensitive” instruments, i.e. they serve as “money” and provide the basic functions of money when the opportunity cost of holding money becomes too high. 4 For instance, information-insensitive assets are an important source of collateral in financial markets. The disappearance of “good” collateral would reduce credit supply and thus impair economic activity.

I see this as a reasonable possibility, and therefore I think it might be possible that the decline in reserve balances has pushed up overnight rates a bit over time. 17 At this point, I see no evidence that we are at, or close to, the “steep” portion of the demand curve. 18 Let’s run through some places where evidence of such a possibility might be found. To begin with, if we were closing in on the “steep” part, I might have expected to see more above-IOR lending in the unsecured overnight markets, as at least some banks each day found themselves short of reserves and had to borrow them from another bank. In fact, the amount of such above-IOR lending remains low as a share of the overnight bank funding market, as shown in Figure 9. 19 I might also have expected to see shifts in bank payments behavior—for example, more daylight overdrafts or more effort by banks to “optimize” their payment flows— but I have not seen this either. But, most fundamentally, I might have observed a day-to-day relationship between shifts in the stock of reserves and overnight interest rates. Figure 10 shows a scatterplot of daily changes in reserve balances against daily changes in the spread between the IOR rate and the effective federal funds rate; there is no visible relationship. 16  The classic paper on this topic is Poole (1968).