samchain/econo-pairs-v1 huggingface dataset:
Nor are taxes on capital movements or currency trading a realistic or effective alternative. Taxes will not prevent substantial short-term speculative waves. A tax system would have to have broad international support, because without it currency trading would only shift to countries without taxes. The benefit of remaining outside would increase with the number of countries that participate. What can be done to improve a system that is functioning poorly? If a country is to benefit from a free capital market, it must draw up legislation providing for regulations and supervision that ensure stability. Countries with poorly developed capital markets may benefit from some limitations. They should exercise some caution in opening these markets too suddenly. The flow of capital is like electricity. Adequate insulation should be in place before turning it on. When the Nordic countries liberalised credit markets in the 1980s, we experienced considerable problems because supervision and rules were not adequate. The same has been witnessed in the crisis in Asia and Russia. Inadequate and ineffective legislation and supervision resulted in weak control of financial sectors in the beleaguered countries. The crisis is not only due to an unsuccessful policy in the countries concerned. Banks and funds in industrial countries accounted for the sharp growth in capital inflows to emerging market economies in the years prior to the crisis. Those who invested in these countries based their decisions on insufficient and, in part, misleading information.

The oil companies have therefore enjoyed stable operating parameters over the last 15 years, although this sector is also faced with the challenge of finding new solutions in response to the sharp shifts in market conditions that we have witnessed recently. This will once again require forward-looking strategies and willingness to compromise. 5  BIS Review 20/1999  The government’s supervisory tasks are substantial. Confidence in the banking system in critical situations may also be contingent on the government’s willingness to provide financial backing. There is a fundamental conflict between these two roles and the government’s role as bank owner. People must be confident that the government does not conceal its own mistakes when intervening in the face of a crisis in the banking system should this again prove necessary. It is virtually impossible to establish such confidence if the government is also responsible for the crisis through its ownership. State ownership in the banking industry has been maintained with a view to ensuring stable national ownership. It seems that, in practice, most comparable countries attach importance to having large financial institutions with a national anchor, but most of them avoid state ownership and the associated conflicts of interest. We should also be able to do this. However, I would like to stress that a greater number of foreign financial institutions could also be advantageous. Foreign institutions will normally be larger and more diversified than Norwegian institutions. This could generate better and cheaper services in the Norwegian market.
The pre-positioning drive has gathered pace in the last year or so – there is now over £ of collateral pre-positioned for use in the DWF. After applying appropriate haircuts to each piece of collateral pre-positioned, this means the Bank could, subject to solvency and viability assessments and repayment plans, lend around £ in the DWF without the complications of further detailed collateral checks. 11 Although not a substitute for firms  9  Further details on how central banks can use their money market operations to implement monetary policy and provide liquidity support to banks are set out in Clews, Salmon and Weeken (2010), “The Bank’s money market framework”, available in the Bank’s Winter 2010 Quarterly Bulletin. 10  Further details are available at http://www.bankofengland.co.uk/markets/marketnotice100719.pdf. 11  That is around 10% of annual nominal UK GDP in 2011 – slightly higher than that in the United States, where the lendable value of collateral pledged by all depository institutions in the Discount Window (around $ in January 2012) is equivalent to around 8.5% of nominal US GDP in 2011. BIS central bankers’ speeches  5  building up their own holdings of high quality liquid assets to a more satisfactory level, that represents a very substantial “war chest” of potential liquidity in the event of significant adverse shocks. There is limited cost to the counterparty of pre-positioning, as collateral can be withdrawn on demand for use in other operations or market transactions.

During periods of stress there may be large shifts in the demand for reserves and so the Bank’s market operations need to be designed to meet both our monetary policy and financial stability objectives without conflict. In normal times, Bank Rate is set within a reserves averaging framework, in which commercial banks choose their own targets for reserves balances held at the Bank but are then required to meet those targets on average over the monthly maintenance period and are remunerated at Bank Rate. The Bank of England supplies just enough cash to the system so that banks can collectively meet their targets, and a combination of the Operational Standing Facilities and the inter-bank market should guide short-term market interest rates towards Bank Rate. This framework relies on the Bank ensuring the amount of sterling cash in the system is in line with that demanded, given Bank Rate. The liquidity swap structure of the DWF does not involve an extra injection of cash and so helps to avoid any direct impact on the setting of Bank Rate. The Bank may, however, decide in exceptional circumstances, to lend cash instead. That might be required if, for example, the gilt repo market was not functioning properly, or the size of the required draw is sufficiently large that the Bank deemed it unlikely that the counterparty will be able to repo the gilts without causing undue volatility in the markets.
We must create a banking community that does not tolerate imprudent business practices and lax systems and control. These are the sins of the past. Thailand, for instance, is carefully fostering a new business culture with the right values. On our part, the Bank of Thailand has since March 2002 announced guidelines supporting the practice of good corporate governance of banks' Board and management to ensure that they look after the interests of their stakeholders in an effective manner. These rules are not ground-breaking; they are just simple common sense. But we need to communicate clearly to the private sector what our expectations are and what the consequences are if the efforts fail. Ladies and Gentlemen, The cost of financial restructuring in Thailand was, after all, too enormous in figures and too painful in real terms to allow us to continue with our old way. In addition to changing the corporate culture, we are also amending a few key laws to solidify the foundation of our financial infrastructure. The new Financial Institutions Businesses Act will empower banking authorities with the necessary power to supervise financial institutions on a consolidated basis and to take appropriate actions against weak banks, with the provisions of prompt corrective actions. The Deposit Insurance Act will support a deposit insurance system to limit the loss of public money and reduce the moral hazard inherent in the current guarantee system.

I hope that over the course of this two-and-a-half days' conference, the deliberations, emerging from the experts and audience on a wide array of supervision-related issues, will shed more light on how best to deal with weak banks and systemic crisis. All banking supervisors and central bankers seek the “Holy Grail” aspiration for a stable financial system which is resilient and capable of returning to a balance after a shock. To fulfill this common goal, let me repeat a golden principle of sound banking supervision - prevention is fundamental to avoiding a banking crisis. We all know that handling a crisis is always very difficult and painful; therefore, supervisors and bankers have a shared responsibility and accountability to prevent banking problems. Supervisors must create a sound framework, foster a robust and effective system, and establish clear procedures to identify and deal with weak banks. This means the supervisors must be equipped with the legal power to effectively carry out their duties and have the necessary tools, resources and capacity to solve the problems. These are the necessary infrastructure or building blocks of a sound and stable financial system. Equally important, the Board and management of individual banks must shoulder the responsibility of monitoring and addressing bank weaknesses. They cannot fail in their oversight and risk managerial duties, just as supervisors cannot fail in their on-site and off-site supervision. In this respect, I am a strong believer that good governance is the corner stone of a stable financial sector.
Remote communication has not yet displaced human contact completely as the medium for doing business; indeed, face-to-face contact has survived much more extensively than some had predicted; and, to the extent that it is necessary or desirable to get people round a table in order to expedite some project, Hong Kong, because it is small, is one of the easiest places in which to do so. •  A third factor supporting the "can do" culture is the general quality and spread of people who are on tap to help get things done: Hong Kong has a good critical mass of expertise in all areas of financial and related services. Of course, I am not deaf to the difficulties sometimes expressed about finding extra people at a particular time with particular skills, but this is almost inevitable in a growing economy. Even then, some relief is normally available through drawing in temporary resources from outside Hong Kong if the occasion demands. •  Finally I would cite the work ethic. People work for long hours and with much loyalty in Hong Kong. Of course, this is not enough in itself. It is productivity that counts, but that is probably where Hong Kong scores; I don't have the impression that many people are passing the day gazing idly out of the window. The corollary of high productivity is that, as I noted earlier, by international comparison a lot of people here receive high salaries, but they certainly earn them. Otherwise they would not hold onto their jobs.

Mario Draghi: ECB press conference - introductory statement Introductory statement by Mr Mario Draghi, President of the European Central Bank, and Mr Vítor Constâncio, Vice-President of the European Central Bank, Frankfurt am Main, 27 April 2017. * * * Ladies and gentlemen, the Vice-President and I are very pleased to welcome you to our press conference. We will now report on the outcome of today’s meeting of the Governing Council, which was also attended by the Commission Vice-President, Mr Dombrovskis. Based on our regular economic and monetary analyses, we decided to keep the key ECB interest rates unchanged. We continue to expect them to remain at present or lower levels for an extended period of time, and well past the horizon of our net asset purchases. Regarding non-standard monetary policy measures, we confirm that our net asset purchases, at the new monthly pace of € billion, are intended to run until the end of December 2017, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim. The net purchases will be made alongside reinvestments of the principal payments from maturing securities purchased under the asset purchase programme. Our monetary policy measures have continued to preserve the very favourable financing conditions that are necessary to secure a sustained convergence of inflation rates towards levels below, but close to, 2% over the medium term.
However, the time lag and the extent of the impact of the policy measures may vary depending on developments beyond the control of the monetary policy. Therefore, the CBRT will closely monitor the effects of the policy measures and take further actions should the credit growth rate or the inflation rate deviates from desired levels. Developments regarding the global economy remain central for the domestic inflation and monetary policy outlook. Under current conditions, we employ several instruments to maintain both price stability and financial stability. Therefore, unlike previously, global developments would affect not only the direction, but also the composition of our policy. Accordingly, global developments will be assessed with respect to their effects on the growth rate of aggregate demand as well as its composition. Although there has been some improvement in the expectations pertaining to the US economy, uncertainties driven by debt sustainability problems across the euro area peripheral economies still persist. Ongoing problems in credit, real estate, and labor markets across advanced economies and uncertainties regarding the impact of potential fiscal consolidations continue to pose downside risks to the pace of global economic recovery. The possibility of a longer-than-anticipated period of anemic global growth and the likelihood of a  14  BIS central bankers’ speeches  long period of quantitative easing by advanced economies not only creates downside risks regarding foreign demand but also suggests that capital inflows to Turkey may continue at a faster pace.

I would like to elaborate on these factors to enable a better understanding of the forecasts. The October Inflation Report envisaged food inflation to be 10.5 percent at end-2010, to fall gradually to 7 percent at end-2011 and to remain at these levels throughout the forecast horizon. As I stated at the beginning of my speech, the sharp decline in unprocessed food inflation during the fourth quarter resulted in lower-than-expected food inflation. However, the potential impact of the recent upsurge in agricultural commodity prices on processed food prices led to an upward revision in the assumption for food inflation from 7 percent to 7.5 percent, which had around basis points upside impact on 2011 inflation forecasts (Table 2). BIS central bankers’ speeches  11  In the October Inflation Report, oil prices were assumed to be USD 85 per barrel for 2011 and USD 90 per barrel for 2012 and beyond. Moreover, import prices were assumed to rise gradually over the forecast horizon, increasing by an average percent year-on-year in 2011. Commodity prices have accelerated further since the release of the October Inflation Report due to the ongoing quantitative easing in advanced economies and the strong growth in emerging economies. In this context, in view of the commodity futures prices for the first half of January, we raised our oil price assumption to USD 95 per barrel for 2011 and thereafter (Table 2). Furthermore, again considering the commodity futures prices, we assume that import prices will increase by about 10.9 percent in 2011 (Figure 23).
My time at the IMF gave me an insight into the fantastic quality of its staff and the political constraints they often operated under. As for Tim, I often wonder what he went on to do next. On return to London I produced another book, on the design of the international financial system.15 This too failed to make the bestsellers’ list. In the period since, fault-lines in the international financial system have continued, periodically, to cause global tremors. They will continue to do so until the international financial architecture is strengthened. With hindsight, I think Stan Fischer was right on the need for a better-resourced IMF, alongside the international equivalent of a resolution authority for nation states. Alas, it may take another bout of emerging market crises to instigate this change. Back in London, I was reassigned to lead a Division working on domestic rather than international financial stability issues. This was something of an anti-climax. The domestic financial system was, by comparison with the violent seas of emerging markets, a millpond of tranquillity at the time. Moreover, the prevailing consensus was that this tranquillity was set to last. In response, the Bank slimmed the resources it devoted to financial stability by around half. The timing was unfortunate. The financial system was riding a credit wave as banks’ balance sheets and leverage ballooned. Every major financial crisis in the past has been presaged by credit waves of this type.16 But this time, it was said, was different.

But if activity were rather to show signs of freshening, there is a risk of the existing high inflation continuing and being incorporated in our  2  BIS Review 15/2002  perceptions of inflation in the longer run, with possible effects on, for example, future wage negotiations. That of course must not happen. A scrutiny of the current cyclical picture reveals a growing number of signs that activity abroad, above all in the United States, is on the way to improving. This is something that also affects conditions for the Swedish economy. A majority of leading indicators point in that direction. Although the upward phase does contain risks to which I shall be returning, there is still a good deal of evidence that a recovery in the rest of the world as well as in Sweden may be on the way to materialising later this year. A factor that often contributes to a cyclical swing is movements in stocks. When stocks are plentiful and sales are falling, firms often cut back production so that this falls more than demand. In this way, stock adjustments initially accentuate the cyclical downturn. When the reduction of stocks ultimately comes to an end, firms may step up production again even though demand has not yet started to recover. This drives a cyclical upturn and perhaps it is just such a positive effect that may be on the way. There are signs of this in the United States in particular but also in Sweden.
This would provide a foundation that is both more resilient and has lower barriers to entry; helping private sector innovation to flourish. To achieve these goals, we are reviewing our data strategy to ensure we embrace new technology. We have already started work to deploy proof of concepts to see what potential benefits AI/ML could have for identifying regulatory issues. We are also looking to make our regulatory rulebook machine-readable, providing a platform on which firms can develop innovative methods to ensure their compliance. This principle of openness does not just apply to operational matters. We also need to reflect on the appropriateness of our rules and regulations for the digital economy. For example, traditionally only large banks could be a participant in the UK’s High Value Payments System. We reviewed this rule given changes in the digital economy and the maturity of non-bank payment providers – we now have five such non-banks who have direct access to settlement accounts at the Bank of England. These changes increase competition but have been determined with a strong focus on appropriate safeguards. Similarly, next year, we are holding a consultation on widening access to our balance sheet, to gather evidence on whether this could further support competition and stability in the UK financial sector. I have spoken about how fintech offers possibilities for more openness, and more integrated markets at a national level.

We believe improving our credit provision infrastructure in this way can improve credit allocation and support firms to get the credit they need to grow, primarily by reducing information asymmetry between the creditor and the lender. Typically in the UK, it is only an SME’s bank that has ready access to the data needed to price a loan. This makes it difficult for firms to shop around and get the best rate. Our approach 4  All speeches are available online at www.bankofengland.co.uk/news/speeches  4  prioritises using technology to more accurately and competitively identify creditworthy borrowers, as a means to increasing aggregate credit flowing to SMEs. Open to changing the way we work  My third theme is the importance of the Bank of England being open to changing the way we work. Of course, it is not just the private sector who should be embracing change. We, as central banks, need to reflect on our own way of working. In particular, if we are going to regulate the digital economy effectively we will need to equip ourselves with appropriate digital tools. Central Banks ingest and analyse huge volumes of data in the course of our regulatory activity. This is necessary for our surveillance, but comes at a cost to the firms we regulate. The bill for regulatory reporting in the UK is estimated at between £ and £ a year. We want to leverage modern technology so that the way we collect and analyse data becomes cheaper, faster, and more effective.
In economic terms, the early debt systems and the debts themselves, painstakingly recorded in the ledger systems of the temples of bronze age Mesopotamia, appear to be primarily about what we would now call working capital and overdraft facilities in agrarian societies that produced little economic surplus – credit to tide farmers over until the harvest or through bad harvests with the debt repaid in standardised units of agricultural produce.2 1  See chapter 4 of Hudson (2018) See Graeber (2011). An interesting example is Mesopotamian alehouses which seem to have been run on a seasonal credit system that would put to shame the average pub’s willingness the run a tab. See also, Item 15, ‘clay writing tablet’ in MacGregor (2010). 2  2  All speeches are available online at www.bankofengland.co.uk/speeches  2  This stock of debt periodically got beyond society’s willingness or ability to repay.3 We know this because of the practice of Mesopotamian rulers declaring debt amnesties to wipe the debt slate clean.4 Much has been written on the debt amnesties and Jubilee mechanisms of ancient near eastern societies. That such reset mechanisms existed and were used is clear. The motivation may have been a moral one. It may have been a way of rulers preventing large numbers of the population falling into destitution and debt bondage and as result being unable to fulfil other necessary societal functions. Or simply a way to reset the balance of economic power in society before it was reset in a more violent way.

At the same time, productivity in Sweden has not increased as quickly as in other countries. The development of unit labour costs reflects the difference between wage increases and growth in productivity. Unit labour costs, measured in the respective currencies, are shown in the column on the far right of the table. Sweden is here on the same level as Germany, but higher than the euro area as a whole and also higher than the OECD aggregate. Inflation towards the target – in an orderly manner Let me round off. One main purpose of my speech is to show how important the inflation target has been as a benchmark for price-setting and wage formation in Sweden. It is an important task for the Riksbank to create confidence in the inflation target. This is why we are worried over the current low inflation rate. The Riksbank wishes to safeguard the inflation target. We can do this by formulating monetary policy so that the current low inflation rate rises towards the target. During the spring we have therefore cut the policy rate further on two occasions and moreover decided to buy government bonds. We are prepared to do more than this if it proves necessary. At the same time, it is important that the journey back towards the inflation target is a smooth one and does not pose any threat to production and employment. We are now on the verge of very extensive wage bargaining rounds.