samchain/econo-pairs-v1 huggingface dataset:
–  The public finances should be managed with an eye to the nature and extent of risk exposures elsewhere in the economy. –  It is the precise pattern of capital flows, and the resulting composition of the resulting balance sheets, that matter to the stability of the financial system. All macro policymakers – monetary, macroprudential and fiscal – should, therefore, pay attention to the national balance sheet; and to the pattern of gross as well as net capital flows. –  But, in doing so, we and our peers must avoid financial protectionism just as a previous generation learned to oppose trade protectionism. And we must not leave anyone thinking that we can eradicate economic problems. 26  The IMF’s most recent spillover report on the UK can be found at http://www.imf.org/ external/pubs/ft/scr/2011/cr11225.pdf. That report concluded: “the size and interconnectedness of the UK financial sector make it a powerful originator, transmitter, and potential dampener of global shocks. The stability and efficiency of the UK financial sector is, therefore, a global public good requiring the highest quality supervision and regulation”. 10  BIS central bankers’ speeches  Conclusion Around the Western world, excess indebtedness became legion during the opening years of the last decade. US subprime mortgages, perhaps the most egregious although by no means the largest example, became the straw that shattered the camel’s back. In this metaphor, both the “straw” and the “camel” are balance sheets.

This provides a telling example of the perverse incentives that the Draghi Report had highlighted a decade earlier. Booking practices and pricing were distorted by lax overall regulatory capital requirements, a zero-weighting on 364-day committed lines to shadow banks, accounting regimes that recognised unearned profits on highly illiquid securities, and an implicit state subsidy to housing finance from public agencies that were themselves over-levered and profit-maximising. Policy responses and lessons Looking back, armed with these conjectures, what could or should have been done as our economy and others accumulated debt? A few years ago, a couple of us discussed this in the margins of a regular gathering of economists in London.21 One thought was that Western governments should have “gone on the biggest infrastructure splurge since Victorian times”, spending the inflows on investment rather than consumption. I can’t help wondering whether all the investment would have been well judged. Another thought was that the UK and others should have tightened fiscal policy, in order to raise national saving and so improve our external position. That would have added to global saving, possibly pushing the world real rate lower, asset prices higher, and so possibly further fuelling private sector borrowing. But were we trying to answer the right question that evening?
With this in mind, let me start out by stating my main message but before doing so let me stress that these are my personal views and do not represent the official opinion of any institution. In my view we need to plan for a special body – let us call it a European Organization for Financial Supervision (EOFS) – to gather information and produce a coherent and consistent assessment of the risks in the major cross-border banks in Europe. As you all know, a separate regulatory framework for banks is based both on consumer protection arguments and on financial stability considerations. Banks provide fundamental services to the economy but could be subject to bank runs. There are also large contagion risks in banking activities so that problems in one bank could easily spread to other banks. Here, I will concentrate on the financial stability perspective. Banking developments in the EU Until not so long ago, most banks had a clear national (or local) character with most of the activities limited to one country. Sure, many banks have had international operations for many decades but that has typically been limited to wholesale markets and services to large corporations. Financial services to retail customers and small and medium sized companies (SMEs) have been provided on a national or local basis. In this setting the national character of the regulatory framework has been appropriate. Now this is rapidly changing, especially in Europe – but also elsewhere.

7  Investments of this kind would enable banks to face up to any major potential competitors –not necessarily financial institutions– that might venture into the credit market with greater guarantees of success. Allow me to end this address with a final reflection on the need to persevere with a European response to this crisis in the financial sphere as well. The response from the prudential authorities, along with the monetary and fiscal policy measures adopted, has so far enabled the initial impact of the shock to be absorbed and prevented the materialisation of a systemic risk in the financial system that would have further exacerbated the crisis and made it more persistent. However, some of the shortcomings that continue to exist have also been revealed. In this respect, the completion of the Banking Union with the approval of a fully mutualised European deposit insurance scheme would make a decisive contribution to ensuring financial stability in the euro area, both over the coming months and in the medium term. Further deepening of the Capital Markets Union project is also essential. Moreover, priority must be given to analysing how appropriate the European resolution and winding-up regulations are for a hypothetical systemic crisis, and the possible role of asset management companies in the event of severe impairment of European financial institutions’ balance sheets. To sum up, if we are to continue to address this crisis effectively, persevering with a European response - in the financial sphere as well - is essential. Thank you very much. 8
China, the rest of Southeast Asia, Eastern Europe, India, most of Latin America and significant swathes of Africa are eager to improve the lot of their people through full participation in the global economy. In doing so, they have become serious competitors for capital, including that plentiful and affordable capital we at the Federal Reserve have created. In a cyberized, globalized world, those with the means to create jobs will gravitate to those places that provide the best prospect for a return on the investment of the abundant capital on business’ balance sheets or available to them in the marketplace or from eager bankers. Just as many people and firms within the United States have relocated to Texas from other states, investment will flow to countries anywhere in the world where it is most welcome. Our fiscal authorities must not only figure out the way to contain the nation’s runaway deficits and public debt accumulation, but they must do so in a manner that is competitive with others who seek access to our money, and do so in a manner that does not pull the rug out from under the meager recovery we are experiencing. The Committee of 12 and the president have an awesome task. Essentially, they must reboot our entire system of economic incentives and come forward with an updated tax and spending and regulatory regime that incentivizes businesses to invest in the United States and create jobs for American workers rather than gravitate to foreign shores.

I am not appointed by a president of the United States or subject to confirmation by the U.S. Senate. I, along with the 11 other Federal Reserve Bank presidents, operate the business of the Federal Reserve as efficiently as any bank in the private sector. And as Kirk mentioned, we make money for the U.S. taxpayer: We returned over $ billion to the U.S. Treasury in 2009 and 2010. You are looking at one of the few public servants that make money from its operations, rather than just spending taxpayer money. This wouldn’t be possible without a first-rate staff, led by my chief operating officer, Helen Holcomb, and the other senior officers that Kirk introduced. I love and admire these folks and too rarely get to single them out for public praise. So, please join me in applauding them. Two matters As Kirk has already said much of what I planned to say today about how the Fed works, I would like to address two non-operational matters. First is the record of job creation in Texas. For obvious reasons, this has become a subject of intense interest to the national media; my staff and I are being hounded by the national press corps for data and commentary. Today I will try to separate fact from fiction, with a heavy focus on the data. The second matter I wish to address is why I dissented from the consensus at the last meeting of the Federal Open Market Committee (FOMC).
If the uncertainty applies to the long-term inflation expectations or to the lower bound of the policy rate, one should act more aggressively. There is thus an on the one hand case where one should act less aggressively and an on the other hand case when one should act more aggressively. In other words, when it comes to monetary policy it can be an advantage to be a two-handed economist. Conclusion and summary Let me conclude by summarising my main messages today. Firstly, long-term trends play an important role in monetary policy. There are above all two trends that are of special significance; the long-term real interest rate and the long-term sustainable level of resource utilisation. The long-term real interest rate abroad has shown a falling trend for a long time and this is one reason why interest rates in Sweden and many other countries are unusually low. Secondly, the period following the financial crisis was special in Sweden in several ways, but also so in other parts of the world. Both inflation and wage increases have been lower than expected, at the same time as resource utilisation has on average been largely normal and the central banks’ policy rates have been low. Commonly recurring explanations for the low and slow development in prices and wages are globalisation and digitalisation.

Information technology  My second worry is about the broad area of information technology – and this has really a couple of dimensions to it. The first is legacy: that most firms still have so much “clean-up” to do to fix longstanding technology and data issues that have built up over the years: systems don’t talk with one another; data aggregation takes days or weeks, when the needs are really more immediate; and data quality isn’t what it needs to be. So, there is still a significant amount of basic blocking and tackling that needs to be done. The second dimension that concerns me is the competitive landscape for financial institutions in the digital world. As more and more non-financial entities are entering the financial arena, like Amazon, Apple, peer to peer lenders, and others, I worry that financial firms lack the agility and ability to compete at the level that they need to – particularly with the constraints of regulation. At the end of the day, will financial firms be able to compete in the same way – or will these largely unregulated players be the future of our financial system? The final dimension I’m certain won’t surprise you – and that’s cybersecurity. I’m sure I don’t have to explain too much why this keeps me awake at night, but suffice it to say that as I think about the kinds of risks that might cause the next crisis, cybersecurity is the one that worries me the most.
Before implementation, we can never know with absolute certainty how our economy or society will react to changed framework conditions – there is therefore always an element of doubt. For instance, one objection to the package of measures is that the cost of taking such drastic action to achieve the transition to a more stable system would be too high. In addition, doubts have also been expressed concerning the rapid pace and the impact of the proposed reforms. Although we can understand such criticisms, the SNB believes them to be exaggerated and largely unfounded. Allow me to explain. I would like to begin by making three general preliminary observations. Firstly, regulation is never free of charge for every participant. However, analysis of the possible costs of regulation must always differentiate between the private and the social costs: in practice, regulation is bound to lead to additional costs for those regulated. This is part of the plan and makes economic sense provided that these additional costs are smaller than the benefits that regulation brings to the entire economy. If regulation leads to the elimination or reduction of market distortions – such as subsidies, for example – then an economically more efficient result is obtained. Secondly, regulation can be formulated in a more or less cost-efficient manner. Particular attention was paid to this element in Switzerland. For instance, the additional capital required here by systemically important banks can largely be held in the form of more cost-efficient convertible capital.

Ardian Fullani: Economic and political challenges of regional cooperation Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the round table entitled “The economic and political challenges of regional cooperation”, Tirana, 8 September 2010. *  *  *  Honourable guests, Dear participants, I feel honoured to open today this roundtable. Before anything else I want to welcome our colleagues from Oxford University, who have undertaken an important mission for Albania and the region: contributing to the growth of research capacity, of sapience, and to building of a sustained long-term response to the growth challenges we come through on our common ways, similar but unique, towards the European Union. It is a great pleasure for me and for the Bank of Albania to have the opportunity to begin a series of studies about the domestic and regional economic policy, which will assist the scientific debate about the economic growth model, also backed by a regional point of view at social, economic and political level. You may ask yourself, why Bank of Albania is so much interested in the economic growth and the economic policies overall, as the main target of the central bank is the stability of prices. In the following minutes I shall try to deal with some of the main points of the Bank of Albania’s agenda in recent years.
BIS Review 11/2007  1  Ladies and Gentlemen, On the regulatory front, allow me to share with you what the future holds for the regulatory developments that would predominantly shape the future direction of the life insurance industry. The Bank's future regulatory orientation will be characterized by a heightened focus on, and alignment, with risk; anticipatory, rather than reactionary interventions; a clear goal to promote efficiency, innovation and competition by ensuring that regulation is proportionate in relation to its costs and benefits; greater use of incentive approaches to achieve desired institutional behaviours and outcomes; an expanded regulatory toolkit that leverages more extensively on the inherent checks and balances built into the system; and an increased focus on market conduct and harnessing active consumerism to reinforce prudential regulation and supervision. In this regard, I wish to emphasise that in the course of designing any regulatory framework, the Bank will continue to involve all stakeholders particularly the industry for better appreciation of new policies introduced. The insurance industry is expected to continue its positive growth momentum in the near term. Growth in the life sector should continue to receive support from the encouraging demand for savings and investment-driven products such as endowment and investment-linked insurance. The increasing awareness among the consumers of the importance of risk protection, relatively low penetration level and large mortality protection gap also underpin strong future growth opportunities for life insurers in the more traditional risk product lines such as term (including credit-related term) insurance.

The ongoing work of the Committee The ongoing work of the Committee is noteworthy. It includes an evaluation of the scientific bibliography on financial literacy, as well as a review and assessment of international initiatives for the promotion of financial literacy. The Committee, with the help of CBC staff, has also conducted an in depth econometric analysis of the results of the CBC's sampling survey in order to representatively assess the level of financial literacy in Cyprus, as well as to identify the groups that are in greater and urgent need of financial education. For instance, people who studied financial subjects at high school scored higher in the survey than those who focused on classical studies with 5.2 out of 7, compared to 4.5 out of 7 in knowledge questions; 5 out of 7 being the minimum score for adequate knowledge as set by the OECD. The CBC had carried out a sampling survey in 2018 to better identify the extent of the financial literacy problem, covering all groups of the population at a national level. This survey followed another similar survey, which focused on university students, namely, a survey by Andreou and Phillips (2018)1 which showed that the low level of financial literacy among university students appears to be a major problem in our society. The CBC survey, which as I mentioned covers all segments of the population, is instrumental in deriving useful results on financial literacy in Cyprus.
Summer – Supporting the expansion By the end of 2014, the challenge for the MPC had become to keep the economy on this path to a long economic summer by setting policy to return the level of output to potential and total CPI inflation sustainably to the 2% target. The MPC recognised that achieving this trajectory as the headwinds to demand following the crisis continued to fade would likely require some tightening in monetary policy. But how much? During the pre-crisis inflation targeting era, Bank Rate had averaged 5¾%, and the equilibrium real interest rate was generally thought to be around 3¾%. Early in 2014, the Committee concluded that the equilibrium interest rate – the level of the real policy rate that, if allowed to prevail for several years, would place economic activity at its potential and keep inflation low and stable – had fallen significantly.11 This equilibrium rate, r*, is determined not by central banks, but by the real, fundamental factors driving desired savings and investment. For an open economy like the UK, those factors will reflect global influences as well as domestic ones.12 Both long and shorter-term factors have contributed to the fall in equilibrium interest rates. In recent decades, a set of powerful structural forces has been pushing down global r* – including demographic change, slower potential growth, a larger left-hand tail in the distribution of economic outcomes, and the increased cost of financial intermediation. The financial crisis added to this downward pressure.

Decreasing value of the debt necessitated write-offs and eroded bank capital; (ii) lower market value of government bonds also strained liquidity, given the widespread use of these bonds as collateral for funding in the private repo market, a prime source of non-retail financing for banks; (iii) faced with a fragile banking system, some governments had to spend public money on keeping otherwise insolvent banks afloat. This was a full-blown twin banking and sovereign debt crisis. But it did not affect all euro area countries in the same way. Instead of the convergence and financial integration we want to see in a monetary union, we were witnessing increasing heterogeneity and financial fragmentation within the euro area. Moreover, many countries neglected the need for structural reforms. They faced severe competitiveness deficiencies and therefore built up substantial current account deficits. Tensions in financial markets made the financing of these deficits more difficult. And this set the stage for hopefully the last layer of the iceberg. In the summer of 2012 the hitherto loose talk of a possible break-up of the euro area translated into investors’ fears, then panic, and manifested itself in what we call a perceived redenomination risk, or in other words: an exorbitant widening of the spreads in yields on government bonds issued by stressed countries as opposed to those issued by the hard core of the monetary union. Monetary policy response to the crisis  Let me now describe in more detail how the ECB has responded to these crisis elements.
Svein Gjedrem: The economic outlook Address by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), to invited foreign embassy representatives, Norges Bank, Oslo, 18 March 2004. The address is based on the assessments presented at Norges Bank’s press conference following the Executive Board’s monetary policy meeting on 11 March and on previous speeches. Please note that the text below may differ slightly from the actual presentation. The Charts in pdf-format can be found on the Norges Bank’s website. *  *  *  Your Excellencies, ladies and gentlemen First of all, I would like to thank you for taking the time to attend this event, which provides me with an opportunity to present Norges Bank’s view of the economic outlook. Growth in the Norwegian economy is rising. Unemployment has stabilised. An economic turnaround has occurred, with a soft landing after a long period of high cost inflation. Monetary policy has contributed to stabilising output and employment - but inflation is low. The interest rate level is in line with the level among our trading partners. Short-term interest rates in other countries have been unusually low over the past 2½ years, and there is little prospect of a sharp increase in the near term even if the world economy is expanding. Activity in the Norwegian economy is expected to pick up in the coming years. The past and ongoing rationalisation in the business sector may enable enterprises to increase production considerably in the short term without strong employment growth.

And fourth, since 2014 the ECB has been implementing a quantitative easing programme entailing the large-scale purchase of private and public assets which, in its first two years of application, will reach an amount equivalent to 17% of total euro area GDP. At present the purchase of assets under this programme covers nearly the whole range of marketable securities eligible as collateral in Eurosystem operations: secured bonds issued by banks; securitisations whose underlying assets are loans to the non-financial private sector; public debt of the central and regional governments; supranational agencies and institutions; and, more recently, non-bank corporate bonds. Since April this year the ECB has been purchasing € billion per month of these securities and the total amount of the portfolio built up for monetary policy purposes now exceeds € trillion. I think it pertinent to add three additional comments on the measures set in train by the ECB: The first is that they are no different from those adopted by other large central banks. Thus, for example, the key policy rate is now also negative in countries like Japan, Sweden, Denmark and Switzerland. Also, asset purchase programmes and the strengthening of liquidity provision are instruments shared with other G7 central banks, while the publication of forward guidance also forms part of the Federal Reserve’s toolkit. The second comment relates to potential undesirable side effects which these non-standard policies may have on financial stability, such as the overvaluation of certain assets or downward pressure on banking sector profitability.