samchain/econo-pairs-v1 huggingface dataset:
SIFMA (2017) “2017 Fact Book”. 8  All speeches are available online at www.bankofengland.co.uk/speeches  8

The constantly increasing employment of digital strategies by banks which has been boosted further by the pandemic and the banks' increasing dependence on IT infrastructures raises the need and the requirement to constantly enhance their protection against cyber threats. According to the Bank of International Settlements as well as the International Monetary Fund the financial sector ranks high in frequency of cyber security events when compared to other sectors and these events have tripled over the last decade. The interconnectedness of the financial system means that a successful attack on a major  2/5  BIS - Central bankers' speeches  financial institution may spread rapidly through the financial system with potential adverse effects on the stability of economies. In addition to the risks mentioned above, banks are also facing increasing competition emanating from new entrants in the market. For example in Cyprus, there are currently 15 authorised electronic money institutions and 10 authorised payment institutions. But that number is likely to change dramatically. There are currently at the Central Bank of Cyprus 44 pending licencing applications (33 EMIs and 11 PIs), which is twice the figure compared to the applications pending only a year ago. Notably, this number is significantly higher than the 11 local and foreign authorised banks and subsidiaries in our country. In the last few years, payments services regulation has allowed a number of payment institutions to make use of the banking industry's interfaces for accessing payment service users' accounts online.
The fact that many people have entered the stock market in a short time is not entirely a good thing. Besides the losses they may incur and thereby run into financial difficulties, there is a risk of the stock market functioning less well because prices bolt from more fundamental levels. An example of this is the IT bubble in recent years. The ease with which firms attract capital in an over-valued market leads to misinvestment which, if it becomes too prevalent, can be harmful for society in general when the economy and the stock market both turn downwards. The behaviour of inexperienced investors is thus a general economic issue. The American study argues that firms, banks and analysts had incentives to talk inexperienced people into investing in new enterprises on grounds that were not entirely sound. Many new technology companies were not generating a profit and had to rely instead on paying for wages and equipment by issuing shares. For this to be feasible, stock markets need to be high. In this sense there were incentives for managements to trim reports and statements about their firm’s future profits. At the same time, analysts and investment banks, with potential earnings from launching share issues, lacked incentives to take a critical look at these reports and statements. Inexperienced investors did not get the assistance and support they needed. As a sign of this, the paper mentioned that in summer 2000 professional analysts were summoned to Washington for a congressional hearing on their market recommendations.

The results showed that in the period before the Nasdaq index fell as much as 60 per cent, less than 1 per cent of the recommendations had been to sell. The media subscribed to the exuberant mood with reports of rapidly rising share prices and the notion that quick money could be earned in the so-called new economy became the conventional wisdom. In retrospect we know that while share prices for IT and other new companies did rise rapidly for a number of years, they could also fall very quickly. Could there be a better illustration of a financial market bubble? Here I want to call for studies like those in the United States to throw more light on whether and, if so, to what extent there were also similar tendencies in Sweden. For the time being we shall have to make do with occasional observations and more anecdotal information. There is little doubt about the Swedish stock market also being feverish in the late 1990s, with many inexperienced newcomers. As far as I know, a good many companies were operating at a loss and issued shares. Neither did I detect a massive increase in sell recommendations before the IT bubble began to collapse. So a cautious 14  D’Avolio, G., Gildor, E. & Shleifer, A. (2001), Technology, information production and market efficiency, paper presented at the Federal Reserve Bank of Kansas City Symposium in Jackson Hole (August).
capital gains (left scale)  550  0.28  450  0.26  350  0.24  250  0.22  150  0.20  50  95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16  Note. The Gini coefficient is a measure of statistical dispersion of, for instance, incomes. The Gini coefficient can be between 0 and 1, where a higher value entails greater inequality. The figures are from Statistics Sweden’s surveys Household finances 1995-2011 and Income and tax statistics 2011-2015. Sources: Macrobond and Statistics Sweden  As I mentioned earlier, there is nothing unusual in asset prices rising during periods when monetary policy is stimulating the economy. On the other hand, it is 3 [14]  of course unusual that monetary policy has stimulated the economy to this extent and that the Riksbank has not eased up on the accelerator as economic activity has continued to increase and asset prices have risen. So a natural first question is: why has monetary policy been this way? The short answer is: because the inflation target is worth defending. You have heard my colleagues on the Executive Board and I say it many times before, but it is worth repeating. From my perspective, the inflation target of 2 per cent has played a central role in the Swedish economy – and I am sure I share this opinion with many of you here today.

Egil Matsen: US Senate Democrats’ Special Committee on the climate crisis Opening remarks by Mr Egil Matsen, Deputy Governor of Norges Bank (Central Bank of Norway), at the meeting, Washington DC, 17 October 2019. * * * Chairman Schatz, I thank you for inviting Norges Bank, together with other NGFS-member central banks, to the U.S. Senate Democrats’ Special Committee on the Climate Crisis. I appreciate the opportunity to discuss climate-related economic and financial risks and relevant central bank strategies to address those risks. Norges Bank’s mission is to promote economic stability by conducting monetary policy and monitoring the financial system. Our central bank also has the responsibility for managing Norway’s SWF, the Government Pension Fund Global (GPFG), in accordance with a mandate issued by the Ministry of Finance. A feature common to both of these mandated responsibilities is the identification and management of risk. In addressing these risks, we should always work within our mandates. For central banks that means taking a comprehensive view of factors impacting the economy and the risks we face, while upholding market neutrality and preserving our independence. Climate risk, the economy and financial stability The scientific basis for climate change is widely accepted. The physical impacts of climate change and measures to mitigate its impact, will affect all parts of the economy and have consequences for the financial system. Consequently, climate risk is a relevant consideration for central banks.
Norman T L Chan: When markets fail Speech by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the 6th Caixin Summit 2015, Hong Kong, 6 November 2015. *  *  *  1. The topic of my speech today (“When markets fail”) is a little controversial as there are some who do not accept the premise that markets can fail. They believe that markets are capable of self-correcting and will eventually achieve the most efficient price discovery and resource allocation. However, I have some reservations about this notion because our experience tells a slightly different story. Markets do sometimes fail to perform their price discovery and resource allocation functions. In some more serious cases, market failures have even led to destabilising financial shocks and crises. 2. Indeed, the 2007–08 global financial crisis, which ravaged the US and Europe, clearly repudiates the general belief that market failures and financial crises will only occur in third world countries or underdeveloped economies. On the face of it, the bursting of the US property bubble triggered the collapse of the subprime mortgage market, which in turn led to the financial crisis in the US. However, if we look more deeply, we find that prior to the crisis, the banking and financial systems had been churning out a great number of subprime mortgage-backed securities. In addition, various derivative instruments using subprime mortgage-backed securities as underlying assets, like CDO2 and CDO3, added layers of risks like snowpack.

Looking at the post-war period, whenever the unemployment rate has increased by more than 0.3 to 0.4 percentage points, the economy has always ended up in a full-blown recession with the unemployment rate rising by at least 1.9 percentage points. This is an outcome to avoid, especially given that in an economic downturn the last to be hired are often the first to be fired. The goal is the maximum sustainable level of employment – in other words, the most job opportunities for the most people over the long run. Some of you may be wondering whether the risk of a recession isn’t already quite high? And, if so, doesn’t this imply a need for special care in adjusting monetary policy? After all, the current economic expansion is more than six years old – a bit long in the tooth by post-war standards. Even so, recession risk did not play a major factor in my thinking. Economic expansions don’t simply die of old age. They primarily end either because monetary policy is kept too loose for too long, thereby necessitating a subsequent sharp tightening in monetary policy to prevent a significant inflation overshoot, or because some large adverse shock hits the economy that the central bank cannot easily offset. Mitigating the first risk of being forced to choke off the expansion argues for getting started with policy normalization now rather than holding off. With respect to the second risk of unanticipated shocks, this is obviously very difficult for the central bank to insulate the economy from.
It is difficult to include all such factors, but calculations show that we should expect a given interest-rate increase to subdue consumption for mortgage holders more now than in the mid-1990s. 8 At least for certain groups, monetary policy therefore has a greater impact on the real economy now than previously. This could justify slower rate hikes than has been the case in similar economic situations in previous years. For other groups of households, on the other hand, the impact of rate hikes is not as great. There is hence an intrinsic tension here. The Riksbank has only one policy rate and it is adapted to aggregate demand and the economic outlook in general, and above all to how inflation will develop. Higher interest-rate sensitivity and the extent to which it affects the impact of monetary policy will, in other words, be a source of uncertainty. It will, after all, be a challenge to have a situation for a number of years in which interest rates rise – albeit slowly – while debt is higher than ever before. The supply of labour is greater From household consumption and the demand side of the economy, I would like to go on to the labour market and the supply side and my third and final example of the transformation of the economic landscape.

And it is reasonable to evaluate the costs and benefits of using all these different tools so that economic policy is as efficient and effective as possible for the economy as a whole. But how the various tools are used is a matter for those responsible for the different policy areas and as regards fiscal policy, it is of course the Riksdag and the Government that determine how and on what grounds it is to be conducted. Price stability still the basis for monetary policy In conclusion – the decade we are emerging from was characterised by crises and a deep, long-lasting recession. In that perspective, it is difficult not to describe the future as brighter – to refer back to the question which is the title of today’s seminar. As always, there are uncertainty factors, but the Riksbank’s assessment is that the economic outlook is still good both in Sweden and abroad. For monetary policy, it is a question of ensuring that inflation continues to develop in line with our inflation target. Monetary policy therefore needs to remain expansionary so that the strong economy can have an impact on inflation and so that the Swedish krona does not appreciate too rapidly. In the near term, we also need to be pay particular attention to current downside risks. When normalisation of monetary policy is under way, it will happen in an environment that is, in many ways, different from the one we have operated in over the last ten years.
So, it raises the “signal-to-noise” ratio, which reduces uncertainty faced by private agents and strengthens the pass-through from communication to market expectations. Second, transparency is a mechanism for democratic accountability, in a world of policy discretion and central bank independence. Transparency makes it easier to judge whether a central bank is committed to its announced policy, and acts as a check on possible temptations to base policy on short-run or political considerations. In short, communication demystifies and democratises monetary policy. The empirical literature finds that better information about central bank actions can lead markets to do the central bank’s work for it. Blinder et al. (2001) was an early study which found that the US bond market’s ability to forecast Fed actions improved from around 1996 onwards, a few years after the Fed started announcing policy changes and publishing minutes of its meetings. Relatively small changes in the Fed’s policy rate were amplified by complementary movements in the bond market, which helps to stabilise the 1/5  BIS central bankers' speeches  macroeconomy.

The projections are based on the assumption that interest rates in Norway and abroad will rise somewhat faster than may be implied by today’s forward rates. Since the previous Inflation Report, the upward movement in Norwegian and international long-term interest rates has become more pronounced. Exchange rate movements are difficult to project. In Inflation Report 1/06, the path for the interest rate in Norway and abroad was assessed to be consistent with an approximately unchanged krone exchange rate. The high rate of economic growth implies that price and cost inflation will edge up after a period. Inflation measured by the CPI-ATE is projected to increase from today’s level of around 1¼ per cent, up to almost 2 per cent at the end of 2007. There are prospects that inflation will increase further and be close to the target of 2.5 per cent three years ahead. With a gradual reduction in unemployment, Norges Bank expects wage growth to edge up. At the same time, it will probably be easier for enterprises to pass on cost increases to prices in pace with the rise in demand and capacity utilisation. Capacity utilisation is now projected to be somewaht higher than its normal level. Mainland GDP is still growing strongly in 2006. Capacity utilisation in the economy is expected to rise over the next two years. Even though a gradual increase in the interest rate will result in somewhat weaker growth impulses after a period, monetary policy will still be expansionary.
10  See, for example, Blinder (2004), Blinder and Morgan (2000) and Lombardelli et al (2005). 11  The arguments for delegating decisions on interest rates to a committee of experts were discussed in my May 2002 lecture to the Society of Business Economists. See King (2002a). BIS Review 43/2007  5  Second, members of the Committee are individually and publicly accountable for their votes. Disagreement among the Committee is inevitable; it is also desirable because it represents the individual judgements of members, rather than an attempt to create a false consensus. It is a source of strength. Over the past ten years, there have been 153 dissenting votes, on average more than one per meeting. This institutional encouragement of open debate is in contrast to many other central banks. We don’t “do consensus”, as one former member put it. Dissent is more frequent than on other central bank committees which publish individual votes, and is not just token. Table 2 reports the proportion of dissenting votes in four central banks during the period since the MPC was set up. Not only is the number of dissenting votes greater on the MPC, the frequency of more substantive disagreement – where one quarter or more of the voters dissented – is markedly greater. Voting patterns on the MPC reflect the distribution of views about how to interpret the economic data, not a hint about where rates will go. Voting is certainly not used as a signal by the Committee.

Structural improvements in the labour market are, however, unlikely to explain the full improvement in the stability of inflation and output. They cannot explain the low and stable level of inflation expectations. Changes in the yields on government bonds indicate that investors’ expectations of inflation over the medium-term – and the premium they require to compensate them for the risk of future inflation – have also fallen significantly. Chart 5 shows the sharp fall in expected inflation that resulted from the actual announcement of independence for the Bank of England in 1997. It seems to me likely that the new framework for monetary policy has been a key, though not the only, driver in moving the frontier inwards. By eliminating uncertainty about the inflation target and ensuring that the objective of low and stable inflation is well understood and credible, the change in the framework in 1997 helped to anchor expectations of inflation in the medium term. By doing so, it has made it possible for the MPC to keep inflation closer to target with smaller changes in monetary policy, and hence fluctuations in output, than would otherwise have been the case. The anchoring of inflation expectations has changed the way businesses respond to unexpected shocks. Faced with changes in their costs stemming from, for example, changes in import or energy prices, businesses can respond in two ways, each consistent with the necessary change in employees’ real take-home pay. They can pass those cost changes forwards to prices or backwards to money wages.
The economies were affected by factors such as swings in commodity prices, significant oil price adjustments, and the slowdown in the major economies. While the impact of these trade - related shocks on the domestic economies of the East Asian countries involved costs, in terms of slower growth and dampened domestic economic activity, these economies were able to adjust to the sudden changes. In such an environment, there was also greater predictability in the direction of the economic trends, providing the basis on which appropriate policy responses were implemented to manage the economic adjustment process. Emerging economies in particular, in the East Asian region participated in this globalisation process and benefited from the enhanced trade activities. In the recent decade however, there has been a distinct change in the nature of the globalisation process. Globalisation is no longer confined to trade and direct investment, but increasingly involves large cross- border financial flows. Over the recent decade, these financial flows have dominated the global market place. An emerging concern is that this trend would result in a widening of the divide between the developed and emerging and developing economies. In a world in which the magnitude of the financial flows are significant, in which the financial transactions have instantaneous implications, in which the flows are unconstrained by any regulatory framework, then size, the degree of development and the degree of resilience of economies will matter.

Ladies and gentlemen, An important transformation in the international financial landscape is the introduction of the euro which has indeed been a defining event. The objective was clearly to facilitate trade and investment within the region by removing the distortions in economic relationships introduced by exchange rate volatility. As a result, where there were previously 12 currencies, there is now only one. Corporations dealing with the 12 euro countries are now able to keep their books in one set of accounts and make operating and investment decisions without having to be concerned about exchange rate changes. For the rest of the world, it has been described as “island of price stability” in addition to the dollar area, to which capital can flow. Four factors are important in determining a currency's international role: relative stability, which would reduce the risk of holding assets in that currency; a strong exchange rate; so that capital losses can be avoided; deep and liquid financial markets for that currency, to enable holders to diversify, liquidate and adjust their investment portfolios; and finally, a strong regulatory support to minimise the possibility of crises. Indeed, the international success of the euro in coming years would depend on the extent to which these criteria are met. The introduction of the euro has of course given impetus to other regional initiatives to pursue similar efforts to unify national currencies into a single regional currency. Such initiatives are being pursued in Latin America, Africa and the Middle East.