samchain/econo-pairs-v1 huggingface dataset:
They’re number one in the state a couple of times. President Dudley: I agree with your concern. Is there a question? Audience Member: Yes, what can you do to set up financial resources for minority and women-owned businesses to become involved in the economy? Whether that’s establishing a bank – we’ve asked the controller to control this, let him set up a funding source for us using pension funds, and there’s a way to do that, if you look at it. But we need you to be an advocate for us in that area, but help us come up with an ingenious idea for how we can develop access to capital. President Dudley: Well, I certainly agree with the importance of access to capital, and I certainly agree with you in the importance of having minority work enterprises have the ability to participate in economic development and bidding on contracts. We don’t have the legal authority to do anything direct, but we have a lot of convening authority. One thing that we do do is we do continuing workshops, conferences, symposiums. We’ve had a number of things with small businesses on how small businesses can get access to credit, how small businesses can figure out how to export their goods and services. And so this is something that for you to talk to our regional development people on how we could be helpful.

But unfortunately people offer these things, and it’s really quite tragic, because the people who fall for these things often are people that are not so sophisticated, of not so large means, and they can’t afford to be sending money to fraudsters hoping that there might be a big prize from the Federal Reserve Bank in New York or somewhere else down the road, which of course there’s not. Dr. Olajide Oladipo: Thank you. I think we have – I just have time to take only one more question. Audience Member: Actually, the question I wanted to ask is for the students. Why do you refuse to ask questions? Dr. Olajide Oladipo: Somebody wants to ask now. Thank you. Audience Member: How are you, sir? My question for you today is what are, or were, your daily habits or rituals that helped you get to the level of success that you have today? President Dudley: Oooh, I can’t think of any rituals. Habits. I guess what I would say is I’ve always just tried to learn more. So basically, it’s always about trying to find opportunity to, what I call, grow my human capital. So, I think – my view of the way to success is find a job that’s interesting to you, because you need that passion about what you do. If you don’t have passion about what you do, it’s not going to feel like a lot of fun and you’re not going to do it with a great enthusiasm.
In practice, it can be difficult to reconcile the numerous national laws regulating the services sector with the ambition of creating free competition. Nevertheless, whatever happens, many of the new jobs created in the future will be in the services sector, in both the private and public sectors. Final remarks - some political reflections Globalisation has not merely liberated production capacity; it also limits the national state’s influence over the terms for production and employment. There are two possibilities available to compensate this loss: One is to increase the power of attraction in relation to capital and competence on the international markets, which can lead to new businesses being established in, or moved to, Sweden and thereby to new jobs and increased growth. Attractiveness can refer, for instance, to stable rules for economic policy and entrepreneurship, well-educated labour and spearhead competence, good quality of life, access to risk capital, good infrastructure, internationally pioneering technology and research environments as well as efficient incentive and taxation systems. The other possibility is an international political cooperation to balance market forces. This entails, among other things, creating the conditions for taking responsibility for the environment, fairer distribution of income policy and investments in infrastructure, research and development. For Sweden, the EU is the arena closest to hand for cooperation between countries in ensuring that the long-term perspective, social conditions and the best interests of society are taken into account in economic developments. 6  BIS Review 21/2004

The stock of British foreign investments in Albania shows low rates, whereas the impact of emigration and remittances indicators is somewhat higher, but still a non-determinant factor. On the other hand, indirect effects would depend on Brexit’s impact on the European economy and banking system. Brexit may also translate into institutional developments that will affect the rules of European economic and financial market development, as well as European integration processes. In other words, implications for Albania and the region potentially exist, but still remain difficult to identify. I would rather not dwell very long on this topic; however, I do believe that today’s discussions will help us understand these processes and assess in advance the potential political and economic implications and consequences for our countries. I would like to stress that all of us in the Western Balkans remain hopeful that Brexit will not generate centrifugal forces, which harm our European integration processes, initiate setting barriers to free trade and movement of people, and encourage further fragmentation of the European financial system. 3. Monetary policy and financial stability in the post-Brexit period The coordination of the monetary policy with the necessary measures for safeguarding financial stability remains a challenging issue for policy makers even in better days. The challenges to this coordination may only strengthen, if Brexit implications assume the negative dimensions listed above.
Economies of scale appear to operate among banks with assets less, perhaps much less, than $ billion. But above that threshold there is evidence, if anything, of diseconomies of scale. The Weitzman marginal private cost curve is U-shaped. 31 Experience in the US following the McFadden Act suggests size in banking can bring benefits. Over 9,000 US banks failed during the Great Depression, the majority of which were unit banks. Friedman and Schwarz (1963) blame the absence of bank branching for the high failure rate among US banks. The costs of limited branching were also felt well after the Great Depression in higher-cost provision of banking services, in particular for larger companies using lending syndicates to finance large-scale investment. 32 US experience after McFadden chimes with cross-country evidence drawn, in particular, from developing countries. For example, using a dataset of 107 countries, Barth et al (2004) assess the effects of restrictions on the efficiency and stability of the financial system. They find evidence that restrictions are damaging to both, in particular barriers to foreign bank entry. Do those arguments resonate within advanced country banking systems today? Two comprehensive studies in the mid-1990s found that economies of scale in banking are exhausted at relatively modest levels of assets, perhaps between $ billion. 33 A more recent 2004 survey of studies in both the US and Europe finds evidence of a similar asset threshold.

There are many examples from other industries where modularity in organisational structure has been deployed to enhance systemic resilience. Computer manufacture is one. During the late 1960s, computers were highly integrated systems. Gradually, they evolved into the quintessential modular system of today, with distinct modules (CPU, hard disk, keyboard) which were replaceable if they failed without endangering the functioning of the system as a whole. This improved resilience and reliability. In the computing industry, modularity appears to have had an influence on industry structure. Since the 1970s, the computer hardware industry has moved from a highly concentrated structure to a much more fragmented one. In 1969, IBM had a market share of over 70%. By this century, the market share of the largest hardware firm was around a third of that. Modularity has meant the computer industry has become less prone to “too-big-to-fail” problems.
What this means for the Riksbank’s balance sheet is that when the liabilities item banknotes and coins declines, the item monetary policy liabilities increases by the same amount. Over the past ten years, the item banknotes and coins has declined by SEK 25 billion, and the monetary policy liabilities  3  The Swedish retail payment market, Riksbank Study, June 2013 (page 8). BIS central bankers’ speeches  5  item has thus increased by the same amount. In this way, the Riksbank misses out on interest-free funding, as the Riksbank pays interest on the monetary policy liabilities. Although this is not so relevant at present when the repo rate is at zero, in the long run the Riksbank’s profits will shrink in line with the decline in the use of cash. I should perhaps take the opportunity to say here that the Riksbank is in general positive towards developments on the payments market that in many cases lead to both safer and more efficient payments. But one cannot disregard the fact that a decline in the use of cash will also reduce the Riksbank’s opportunities for interest-free funding. The Riksbank borrows instead of lending The changes in the Riksbank’s balance sheet that I have mentioned here have led to a major change in the liquidity position of the banking system towards the Riksbank. Ten years ago, the banking system had a structural deficit of liquid funds with regard to the Riksbank. This means that the Riksbank had to regularly lend money to the banking system.

12 Having said this, it may be worth adding that monetary policy and a policy for financial stability usually go hand in hand, more or less automatically. Moreover, problems with financial stability only arise under certain limited periods. On the other hand, one may claim that the crisis and its effects show that we actually should worry about it slightly more often than we have done. If we are successful in formulating and using regulations and supervision, the central bank can receive assistance with both of the monetary policy problems I mentioned earlier. The central bank can hold the policy rate low when the economic outlook calls for this, without being afraid of risks building up through a monetary policy risk-taking channel. And if regulation and supervision can be used to prevent credit-driven bubbles arising, the central bank need not fear a balance sheet recession where monetary policy has little effect. Regulation with monetary policy motives With regard to coordinating the interest rate lever and the regulation level, I would like to return to a question I raised when I talked about balance sheet recessions. As I noted then, a fall on the property market could lead to a weak performance in the economy if households become uncertain about the future and feel they must consolidate their balance sheets. I also noted that this does not mean that the banks will experience problems that could threaten financial stability.
The forecasters would not have known about these subsequent revisions. Nevertheless the results were certainly better than expected. Let me give you a couple of examples. In December 2015 the Central Bank projected real GDP growth for 2017 at 3.2%. Two years after, we believe economic growth has reached 6%, or nearly double what we had originally projected. Back in December 2015 we had anticipated 2017’s unemployment rate as 5.4%. Now we know it will be closer to 4%, or a quarter less. More striking is the divergence in fiscal projections. Back in December 2015 we thought Government would close 2017 with a deficit of 1.1% of GDP. Today we believe there will be a surplus of 0.9%. Two years ago we thought our national debt-to-GDP ratio would be 64% of GDP in 2017. Now we think it will be nearly ten percentage points less than that. Page 2 of 10  Malta’s current economic performance Two weeks ago, in the concluding statement following their annual official staff visit to Malta, the IMF said that “Malta’s economic growth remains one of the strongest in Europe” and projected that this robust performance will continue on the back of rising incomes and historically-low unemployment, complemented by buoyant services exports. They also concluded that Malta will remain a surplus economy, both in terms of government finances and external transactions. This is, broadly speaking, the same assessment as that made by the European Commission in their Autumn 2017 forecasts.

Secondly, even if we believe that the recent disintermediation process was a matter of choice, reflecting firms’ current liquidity, this nevertheless begs the question as to what would happen when the economy slows down and internal funds diminish. We believe that if the disintermediation process goes too far, our resilience to future shocks could be hampered. Whenever activity slows down, firms will tend to cut back on investment and innovation. Moreover as a Central Bank, we have to be concerned that in such an  environment, the transmission of monetary policy, which mainly occurs through the banking channel, could be impaired. This would make it harder for policymakers to react to economic needs. The current situation, with a lot of savings lying unutilised at the Central Bank, seems to me to be a wasted opportunity to leverage our current success in order to build a better future. At a time when everybody agrees that we need to invest strongly in infrastructure and to upgrade the competences of our workforce – both of which are long-term investments –, it is painful to note that we opt instead to pile our savings in what is essentially the most short-term of investments: deposits with the Central Bank. The fact that, despite overall excess liquidity, some smaller banks continue to borrow from us through regular monetary operations, is an indication that the domestic interbank market still faces some structural inefficiencies. A more efficient financial system would facilitate the allocation of capital to its most productive uses.
As a consequence, the minimum bid rate on the main refinancing operations of the ECB - the most important among our key interest rates - reached 3.25% in November 2001. The key ECB interest rates have remained unchanged since November and short and long-term real interest rates have been, in a historical perspective, very low. The average annual inflation rate in 2001, as measured by the HICP, was 2.5%. Inflation in 2001 was affected by the lagged effects of the increases in import prices in 2000, and by the new impact of livestock diseases on unprocessed food prices. We are not satisfied with such an outcome, which is not in line with price stability. However, it has to be recognised that the factors which contributed to shaping this outcome could not be controlled by the ECB. In fact, monetary policy only affects inflation with a lag and cannot control it in the short term. We are satisfied that our policy in 2001 was very well understood by our observers and by the markets. In fact, the level of bond yields, as well as various other indicators of inflation expectations of economic agents, pointed to continued confidence throughout 2001 in the ECB maintaining price stability in the medium term. There were some concerns about the possible impact of the cash changeover on euro area inflation, which have also been echoed in the draft resolution on the ECB Annual Report prepared by your Committee on Economic and Monetary Affairs.

The draft resolution also suggests that the balance of votes within the Governing Council should be published anonymously. As I stated in my last testimony, I have some doubts whether this would give more clarity to the markets or more transparency than is the case now. In any event, I believe it is crucial that we continue to place the emphasis of our communication on the economic rationale behind monetary policy decisions, rather than on a pattern of differing views in the Governing Council. To conclude my statement, I should like to briefly refer again to the euro cash changeover. With a single currency, our citizens now have a common symbol of European identity which they use in their daily lives. Indeed, the euro has created the foundations that may stimulate further integration - in both the political and the economic and financial fields. In this sense, “the euro, our money” can provide a new and more solid basis on which to build an “ever closer union”. BIS Review 40/2002  3
And even though the pressure to spend even more oil revenues has been considerable, it is likely that future generations will hold the view that we could have saved even more. Another important issue is what should be done to prevent further crises in financial markets. The global financial crisis has revealed weaknesses in the financial system. It has become clear that supervision must encompass the financial system as a whole, and not be limited to the individual financial institution or financial market. The term used to refer to this supervision of the financial sector is macroprudential policy. The financial crisis is a topic that will probably hold the attention of economists for several decades to come. In my introduction, I commented briefly on the subject economics. Economics is a wideranging field and is clearly related to sciences such as mathematics and statistics, but also to other social sciences such as political science, sociology, philosophy, psychology and law. As economists, we often operate in the borderland between economics and politics. In a speech to his students introducing a series of lectures on economic theory about 60 years ago, Ragnar Frisch describes the economist as a servant, albeit an important servant. He says the following about the challenges we have to face: “In this confusion of fundamental social welfare concerns, conflicting economic interests and complex causalities – big and small – the economist is supposed to  BIS Review 109/2010  7  try and find a kind of path.

The fiscal rule is a binding commitment policymakers have imposed on themselves and is intended to foster long-termism and predictability in fiscal policy. Norway’s floating currency, which normally appreciates in good times and depreciates in bad times, also has a stabilising effect. The advantage of this effect is most evident when economic developments are weak. For example, many southern European countries that have adopted the euro are currently facing considerable challenges. To improve competitiveness, wages in these countries must fall or at least rise much more slowly than in other European countries. This only occurs when unemployment is high. With a flexible exchange rate, competitiveness can also improve when the domestic currency falls in value. A flexible exchange rate can thereby reduce fluctuations in employment and output. On the other hand, the foreign exchange market can be mistaken, driving the exchange rate away from the path indicated by fundamental conditions. Herd behaviour and market psychology can contribute to fluctuations and instability. In spring 2001, the Norwegian government and parliament defined a formal inflation target for monetary policy. The task of achieving the target was delegated to Norges Bank. Norges Bank sets the interest rate on banks’ deposits and loans from the central bank. This interest rate determines banks’ lending and deposit rates and the level of interest rates in general, as well as the price of the loans you take out as students. The interest rate is set with the objective of ensuring low and stable inflation.
The total amount of our loans more than tripled, climbing from CHF 31 billion at the end of 2007 to CHF 101 billion at the end of 2008. In parallel, as a way of enabling banks to place their liquid means with the SNB in a form other than sight deposits, and of introducing a tool which would allow us to absorb large amounts of liquidity if need be, we issued SNB Bills for the first time on 20 October 2008. By the end of the year, the sum of SNB Bills issued had reached CHF 24.4 billion. Active Swiss franc liquidity management enabled us to hold the three-month Swiss franc Libor at the level targeted by our monetary policy. I shall return to this point later. Consolidating UBS In autumn 2007, the National Bank realised that Switzerland’s two big banks would be particularly badly affected by the financial market turbulence. At that point, we intensified our contacts with the Swiss Federal Banking Commission (SFBC) (now the Swiss Financial Market Supervisory Authority FINMA) in order to ensure ongoing monitoring of the situation at these two institutions. From spring 2008 on, in view of UBS’s growing vulnerability, we drew up a number of solutions to protect it from the consequences of a large volume of illiquid assets on its balance sheet. In autumn, after the collapse of Lehman Brothers in the US led to liquidity drying up completely on the interbank market, UBS encountered increasing refinancing difficulties and was facing a substantial loss of funds.

It is simply a case of adapting the implementation of this strategy to an environment characterised by interest rates close to zero and a Swiss franc once again in the role of a safe haven. Contrary to certain reactions aired in the media, the action to counter the rise of the Swiss franc against the euro is not a form of competitive devaluation, which would inevitably work against the interests of our country in the long run. Rather, it is a key operational tool which, under the given circumstances, helps us perform our mandate with regard to price stability, in other words to preserve our economy from both inflation and deflation. The outlook for 2009 The year 2009 will see the steepest decline in Switzerland’s GDP since 1975. Exports, normally the driving force of our economy, will continue to be weak, and the lack of confidence in the corporate sector will weigh on investment demand. Moreover, all signs point to a further slackening of consumption in view of growing uncertainty about households’ purchasing power. All in all, the outlook for the near future is anything but bright. Switzerland does not constitute a special case – all industrialised countries are faced with a similar downturn, especially those with high exposure to foreign trade.