samchain/econo-pairs-v1 huggingface dataset:
Another important piece of our bank culture efforts is the Mandatory Reference Checking Scheme (or in short, MRC Scheme). We and the industry both realise that no matter how hard one tries to encourage desirable staff behaviour through a proper incentive system, and as much as we hope that bank staff will always behave with integrity, we cannot naively assume that this will always happen. And we all know that there have been cases where staff, having engaged in misconduct at one bank, may move to another one without disclosing the earlier episode to the new employer. And in that manner, the risk of misconduct is transmitted within the system. Many banking supervisors around the world want to tackle this “rolling bad apples” phenomenon. But this matter can hardly be dealt with by individual banks working alone. Instead, the banking community needs to work together. 11. For this, the banking industry has been working closely with the HKMA over the past two years. And it is encouraging to see that the MRC Scheme was finalised in May this year. 12. Since there is a panel session to talk about this Scheme later today, I won’t go into details here. Just briefly, under the MRC Scheme, all banks will share and obtain conduct-specific reference information about prospective employees using a common protocol. The protocol will cover seven years prior to the application for the position, so that the recruiting institution can make a more informed employment decision. 13.

I would not deny that this is a convenient short-term solution. But since Fintech and Green Finance are longer term trends, I firmly believe that the most effective solution is to nurture more home-grown talent. That’s why the HKMA is currently working on two fronts. On the one hand, we are working hard to upskill existing practitioners to ensure that they keep pace with developments of the industry. On the other hand, we are actively reaching out to universities and secondary schools, seeking to attract more new blood for the industry and better prepare those interested young talent for a long-term banking career. 18. So let’s talk about existing practitioners. Our Enhanced Competency Framework (in short, ECF) comes in handy here. The ECF has been playing a key role in enhancing the competency level of our banking practitioners, through providing systematic training as well as industry-recognised qualifications. To date, more than 16,000 practitioners have obtained certifications in various professional areas under the ECF. At the end of last year, we added a new “Fintech” module into the ECF family. And we are now working hard on other new modules covering “Compliance” and “Green and Sustainable Finance”. I’m sure the speakers in the last panel today will share more insights about the changing roles and skills required of compliance officers in the face of the fast changing operating environment. 19. Now, making available systematic training programmes for practitioners is one thing. But getting them to actually take those training will depend on many factors.
Typically, when the source of an inflationary shock is stemming mainly from demand, monetary policy will respond proactively to prevent the economy from overheating. And when faced with supply shocks, to the extent that such shocks are seen to have no lasting impact on inflation, central banks will “look through” and extend the medium-term policy horizon if necessary. But such a neat categorisation does not adequately capture the situation we are facing in the euro area today. We are not seeing the type of demand-led overheating that is visible in the United States and, despite a tight labour market, the risk of a wage-price spiral so far seems to remain contained. Instead, the euro area is seeing an increase in inflation driven by two unprecedented shocks. These shocks have constrained global supply, but they have also shifted demand and led to a large and persistent inflation response. The first shock was the pandemic. Pandemic-related supply bottlenecks and rising prices have reinforced each other, with firms reacting to the threat of shortages by ordering more and earlier. This “bullwhip effect”[1] has driven up prices along the pricing chain. At the same time, the fiscal and monetary policy response to the pandemic has succeeded in protecting nominal incomes, thereby supporting a fast recovery of demand when our economies reopened. The resilience of incomes has, in turn, triggered large swings in demand across sectors. During the lockdown period, and thanks notably to e-commerce, consumption was concentrated on durable goods.

Wider exchange rate band The attempt to shift from the mini band to the wider band lasted for 48 hours. We knew that it had limited chances of success. Within four days we had lost almost $ 6 billion in international reserves. And the free floating exchange rate regime, supported by a solid fiscal stance, has become our new objective. The idea of widening the band under the model designed and issued as of January 13th was good, but unfortunately it came too late. Centralisation of Foreign Exchange Transactions Suggestions about centralising exchange market operations shock me. Because centralising exchange market transactions in the central bank amounts to having no foreign exchange regime, it leads the country to the moratorium, with the re-negotiation of debts. Credit lines to Brazil would be cut. It means violating the rules of the game. It would be a completely arbitrary act which would have terrible consequences. Economic Growth The first semester of this year will be hard. But I believe that from next year we will achieve high rates of growth - maybe spectacular rates of growth. Interest rates Interest rates will be kept high at first, but not for a long time. Dollarisation I do not see any case for dollarisation in Brazil. It is a little bit strange for a country to be without its own currency. There will come the day when the adoption of a single currency within the MERCOSUR will be taken into account by its member countries.
That, in turn, would have provided some offset to the global inflationary pressures we have been experiencing over the past year. Instead, as Chart 5 shows, sterling has remained relatively weak, both against the full trade-weighted basket of the currencies of our trading partners, and particularly against the euro – which is the most important currency for UK trade, with the euro area accounting for around half of our total exports and close to half of total UK imports. Chart 5 Sterling depreciation since 2007 Rebased to 100 in January 2005 110 105 100 95 90 Euro-Sterling exchange rate  85  Sterling EER *  80  Average EER *, 97-07  75 70  2005  2006  2007  2008  2009  2010  2011  *: Effective exchange rate Source: Thompson Datastream and Bank for International Settlements  This weakness of sterling is one of the key reasons why UK inflation has been much higher than our peer group of European economies. As Chart 6 shows, the differential between inflation in the euro area and the UK is closely associated with the relative strength and weakness of the sterling/euro exchange rate. And there are good reasons for this. While the  BIS central bankers’ speeches  7  UK has an independent monetary policy, it is a member of the Single European Market which covers all European Union economies.

Overall, as of January of this year, we are down nearly 10 million jobs from the pre-pandemic level, a greater shortfall than we saw even at the worst point of the aftermath of the Great Recession. Locally, we’ve experienced considerable strain, given that much of New York City’s economy hinges on the leisure and hospitality industry. Job losses have been dramatic: New York was hardest hit at the start of the pandemic, and almost a year later the data still show a city under stress. While national employment was 7 percent below pre-pandemic levels at the end of 2020, employment in New York City was 12 percent lower.1 I hope that as workers return to their offices and the weather turns warmer we will start to see people frequenting the small businesses that are the lifeblood of our city. Unfortunately, job losses have not been only highly concentrated in particular industries, but also more concentrated among certain demographic groups. The pandemic and the ensuing economic downturn have done disproportionate harm to women, communities of color, younger workers, and the lowest paid.2 The data are particularly sobering when we look at communities of color. Recent research by my colleagues at the New York Fed shows that more Black and Hispanic workers lost jobs compared to white workers, and Black workers have been more likely to drop out of the labor force entirely, making it more challenging to rejoin in the future.
On the other hand, the contagious nature of financial turmoil with globalized financial markets is such that the possibility of further attacks on our currency, unsuccessful as they inevitably would turn out to be, could not be dismissed. The banks have therefore been somewhat reluctant to lend longer term money in the interbank market since the October shock, even though they are flushed with liquidity, as reflected by the clearing balance of the banking system being at a high level. This perhaps reflects a lack of depth in the debt market which we have been separately trying to address. As a result, while the short term interest rates of the Hong Kong dollar, for example for overnight money, have fallen to quite low levels, significantly below corresponding US dollar interest rates, the yield curve has become sharply upward sloping, with one-month and longer term money commanding a significant premium over corresponding US dollar interest rates. 25. But I believe the Hong Kong dollar yield curve will in time flatten further, as it has done so after the sharp hike on 23 October 1997. There will, nevertheless, be occasional jumps, as sentiment continued to be affected by events in other economies in the region and possibly beyond.

Eric S Rosengren: A look inside a key economic debate – how should monetary policy respond to price increases driven by supply shocks? Remarks by Mr Eric S Rosengren, President and Chief Executive Officer of the Federal Reserve Bank of Boston, to the Massachusetts Chapter of NAIOP, the Commercial Real Estate Development Association, Boston, 4 May 2011. *  *  *  Of course, the views I express today are my own, not necessarily those of my colleagues on the Board of Governors or the Federal Open Market Committee (the FOMC). I would like to thank David Begelfer and his colleagues at NAIOP Massachusetts for inviting me to join you today to discuss the economy and monetary policy. I am happy that financial markets and the economy have made significant progress since the depths of the financial crisis, but I am far less happy that the recovery to date has been so undesirably slow and anemic. In my reading of economic history this is, unfortunately, typical of economic downturns that are accompanied by severe financial disruptions. The debate I’d like to focus on today is the one over the likely impact of recent increases in the prices of food and energy, and how monetary policy should respond. The Fed’s policy stance, as you know, is currently very accommodative – a stance that I believe is appropriate given the tentative recovery and still-high unemployment.
50% of the global market in swaps and 43% of forex trading takes place in London.1 Around 2.5 times as many USD are traded in the UK as in the US. It is the world’s second largest centre for asset management. And its role as an innovator in global financial services looks set to continue. It is a global leader in FinTech.2  The EU is of course of major significance to these pools of global capital, liquidity and risk. But London is much more than just a financial centre for the EU. And in the same way, while one should be careful not to overestimate it, London is important to the EU. It is the major financial centre in which the EU meets the rest of the world. The UK’s exit from the EU will of course change some of this. But it will not change the fact that if the EU economies want to be part of global pools of capital and liquidity, if they want to hedge their risk in the broadest possible markets, trade in the deepest possible markets and establish a global role for the Euro, they will need to meet the rest of the world somewhere. That may of course be in the EU for some markets and products. And it is conceivable that the global markets in London will transfer to EU jurisdictions. But I suspect that will not be likely and if it did happen it would not happen quickly.

As a third country, the UK is no longer involved in the development of EU legislation and regulation. As new challenges emerge, as EU regulation no longer needs to cater for the greater complexity and scope of risk and activity in London, and as the complex processes and structures needed to manage the regulatory framework within the EU are no longer needed in the UK, there may well be divergence. The issue, from a financial stability perspective, is how we will manage that to provide the necessary assurance on the import and export of risk on both sides. The EU needs assurance on financial stability risk once the UK is no longer subject to the EU framework. Indeed, as an importer of risk from EU jurisdictions, the UK regulatory authorities have the same need. And the degree of assurance is related to the degree of risk. Equivalence assessments are, in the words of the EU/UK Political Declaration, ‘autonomous’ matters for each side. But if we want the relationship to work, the following considerations matter. First, and I think self-evidently, the UK cannot outsource regulation and supervision of the world’s leading complex financial system to another jurisdiction. That argues against a relationship built on textual alignment of our regulatory frameworks.
Despite this excellent record of performance during a period of unprecedented stress, there still is room for improvement. First, future stresses could be more severe or might come in different forms. This could expose vulnerabilities in FMIs that have, up to now, not been visible. Also, extraordinary interventions in the crisis to backstop market function or rescue key financial intermediaries may have prevented the stress level from reaching the point where FMIs couldn’t perform their functions. Because there can be no assurance that such interventions will necessarily occur in the future, it is important that the stability of the FMI architecture not depend on timely extraordinary interventions. Second, under the new regime of central clearing for standardized OTC derivatives trades, the role of FMIs will become even more important in the future. Moreover, the new regime will lead to the development of new types of FMIs. CCPs for OTC derivatives will become widespread – and trade repositories will be established. Principles are needed to underpin these new institutional arrangements. Third, for FMIs to be resilient they would undoubtedly need to have some ability to access central bank services, including the lender of last resort function. But, if FMIs had access to such services, this would create moral hazard. The best way to address this conundrum is to hold the FMIs to tougher global standards.

We foresee a transition period that will last until the end of 2018. Are you still worried about the capacity of certain countries, such as Ireland and Greece, to reduce their public debt levels? What is certain is that it is very important for all countries, and not just Ireland and Greece, to take measures to ensure medium-term fiscal stability. This is necessary in advanced economies, in the European Union in general and, of course, in the euro area in particular. A feature that is shared by the industrialised countries after the very significant recession triggered by the financial crisis is that they find themselves in a vulnerable fiscal position. The European Central Bank has always defended the Stability and Growth Pact, even when large countries such as France and Germany wanted to relax its rules. BIS Review 154/2010  1  The Federal Reserve System decided last week to inject massive amounts of dollar liquidity into the economic system, a decision which has the effect of reducing the value of the US currency. Has the currency war started? That is, of course, a totally inappropriate expression to use. There are two main topics that need to be tackled seriously. On the one hand, there is the relationship between the major floating convertible currencies of the industrialised countries, such as the dollar, the euro, the yen and the pound sterling.
This finding is consistent with our observation that wording based on “prices” causes respondents to focus more on price changes in their own consumption basket and to report expectations that are more correlated with gas and food price changes.36 Finally, we have been exploiting the rotating panel nature of the SCE to better understand the changes in medium-term consumer inflation expectations that has occurred since July 2015. As I mentioned earlier, the panel structure of the SCE enables us to analyze the changes at the individual level, that is, for the same respondent – thus abstracting from  32  This financially incentivized experiment provides a joint test of our question’s success in measuring a respondent’s inflation expectations, and of whether consumers act on their expectations according to theory. 33  Armantier et al. (forthcoming). 34  Before providing the information, we also asked respondents for their expectations about the information provided in each treatment (e.g., what they thought past food price inflation had been), in order to control for respondents’ priors about the information that they would receive. 35  See, for instance, Mankiw and Reis (2002) or Carroll (2003). 36  In our research, we have also been studying the extent to which subjective expectations in the SCE are associated with individual outcomes.

The drift towards bilateral- and trade-focused international economic policies which bypass existing channels of trade conflict resolution severely undermines global governance of international trade. On their own, EMs have little bargaining power, and engaging in bilateral relationships with large countries could result in trade distortions and uncertainties that lead to inefficient allocation of resources. In addition to the direct impact on trade, this bilateral- and trade-focused thinking could lead to another serious implication, especially from the perspective of macroeconomists who are well-represented in this room: the distortion of macroeconomic policy framework. The global imbalance analysis illustrates this issue nicely. The existing framework that was developed by the IFIs prior to the GFC and was adopted internationally has been pivotal in the way we made policies to address global imbalances in the past. I have talked earlier about how the current framework based on current account balance alone needs to progress with the changing environment, the excess liquidity in the global financial system, and take a broader view that includes capital flows. I am afraid that the current geopolitical environment will not allow us to progress forward in our thinking. Even the existing current-account based framework of global imbalances is being challenged by the bilateral worldview that focuses on bilateral trade. A currency intervention assessment framework that focuses narrowly on current account and bilateral trade balances and disregards other types of fund flows like portfolio flows is an example of thinking that distracts us from macroeconomic reasoning.
For example, a card-based payment ecosystem can process around 65,000 transactions per second, while blockchains such as the one underpinning bitcoin do not usually support more than seven in their most basic configuration.27 Finally, their decentralised governance together with the realization of potential cyber threats could give rise to instances of fraud that end up compromising agents’ confidence both in digital assets and in other areas of the ecosystem. The consequences of such a scenario would be compounded owing to the lack of safeguards protecting customers’ interests and property rights. Given its potential scope, this scenario could become a serious problem. For example, a recent Chainalysis study shows that up to $ billion was stolen from digital wallets and platforms during the first quarter of 2022. Nearly three-quarters of said amount pertain to DeFi activity, a rise of 72% compared with the previous year.28 Bearing in mind there are an estimated 200-300 million crypto-asset users across the world, it is fair to call this a nonnegligible impact.29  The regulatory response In view of the extent of the challenges I have outlined, a number of regulatory initiatives are taking shape. It combines public warnings on the risks of buying and/or holding virtual currencies, and both national and international regulatory initiatives that are of the most importance, given the global nature of crypto-assets. Regarding the international initiatives, what started out with the regular monitoring of such initiatives became, in 2020 and at the behest of the G20, a multilateral regulatory response from the FSB30.

I am confident that these issues I shared with you provide a summarised vision of some of the main directions of our work during this period. BIS central bankers’ speeches  3  Looking forward to a productive exchange during the proceedings of the conference, I thank You for your attention! 4  BIS central bankers’ speeches