samchain/econo-pairs-v1 huggingface dataset:
This is a very serious objection, and it is indeed behind the recent drive towards macroprudential instruments and regulation, as opposed to the adoption of “leaning-against-the-wind” monetary policies aimed at countering asset price bubbles exclusively via interest rate hikes. Third, the historical experience of the period since the mid-1980s appeared to validate the “mopping up” position: in particular, aggressive rate cuts had succeeded in shielding the U.S. economy from the aftershocks of both the 1987 stock market crash, and the implosion of the dotcom bubble. In the light of the crisis, however, a new view of the experience of the last two decades and a half has gained prominence. According to this view, cutting rates aggressively in the aftermath of the bursting of a bubble (the so-called “Greenspan put” on asset prices) creates a moral-hazard problem by providing investors with a liquidity safety net. In the absence of any additional policy that could react to asset prices, as they gradually recover, over and beyond their effects on future inflation, this moral-hazard problem sows the seeds of the next crisis, raising the risk that the policymaker is induced to inflate bigger and bigger bubbles. A key lesson of the crisis for policymaking is therefore that, in order to reduce inefficient and disruptive asset-price booms and busts, monetary policy should be complemented by other policies of a macro-prudential nature. Further, recent research has investigated other channels through which monetary policy can contribute to sowing the seeds of future financial instability.

Such a consensus – which is today dominant within both academia and the policy-making community – developed in the wake of the major economic disruptions associated with the so-called Great Inflation of the 1970s. This world-wide monetary crisis cemented the contemporary agreement that pursuing price stability ought to be the fundamental goal of monetary policy. A third key principle is a logical consequence of the first two: since inflation reflects, to a large or even dominant extent, the economic agents’ inflation expectations, it follows that in  1  See Phelps (1968), Friedman (1968), and Lucas (1972a, b). BIS central bankers’ speeches  1  order to keep inflation under control it is of paramount importance to keep inflation expectations firmly anchored. As I will discuss later on, our success in firmly anchoring Euro area inflation expectations throughout the crisis proved very helpful in allowing us to fight the crisis’ contractionary shock. As I will argue, if inflation expectations had not been so firmly anchored, the management of the crisis would have been much more difficult and our policy responses much less effective than they were. The fourth principle of monetary policy not invalidated by the crisis is the ultimate monetary nature of inflation.
A measure of success is not how much paper we buy, but whether providing a backstop assists the functioning of the market. The Bank’s second facility is in some ways more interesting in the context of the debate about MMLR. We are acting as a back-stop buyer of sterling corporate bonds, by regularly holding auctions in individual securities. To protect against risk, the Bank sets (and updates)  24  Many of them by Willem Buiter. 25  Cecchetti S G (2009), “Central Bank Tools and Liquidity Shortages”, Federal Reserve Bank of New York Conference, 19-20 February 2009. The quote is from the slides used at the conference. BIS Review 67/2009  11  reserve prices, which draw on CDS spreads, models of risk etc as well as qualitative information. The amounts we offer to buy in each auction are small. The objective is explicitly catalytic. It is to reduce the inventory risk run by bank market-makers in the securities, and to reduce liquidity risk for market participants more generally. Perhaps the best way to think about it in the abstract is that it is akin to our stepping into the market with a narrower bidoffer spread than private sector intermediaries would otherwise offer, with a view to those very same dealers bringing their bid-offer spreads inside ours and to investors reducing the liquidity premium they require.

Domestic default rates, while beginning to rise, are still low by historical standards, despite the fact that we are more than a year into the crisis. Those differences reflect the most important distinguishing feature of this downturn, namely its roots in global imbalances not just in trade but in the financial system. The growth and savings in emerging economies led to an extraordinary flow of funds back to the developed world and to the US in particular. That in turn kept interest rates low, allowing the rapid growth of credit and fuelling a sharp rise in asset prices and an increasingly risky search for yield – for example in sub prime housing in the US. The impact in the UK was different but no less marked. Here too the low cost of credit fuelled a spectacular expansion of bank balance sheets (Chart 3) and with it a growth in leverage (Chart 4). And, as Chart 5 shows, while savings rates fell in the UK, limiting the growth of  BIS Review 132/2008  1  retail deposits, banks financed that lending by tapping wholesale markets. The gap between customer lending and deposits moved from zero at the turn of the century to over £ billion in 2008 H1. Much of that funding was ultimately sourced overseas. In particular, the United States acted as an intermediary, attracting capital inflows from the rest of the world and exporting these funds to other countries.
Mervyn King: Trusting in money – from Kirkcaldy to the MPC Speech by Mr Mervyn King, Governor of the Bank of England, delivering the Adam Smith Lecture 2006, St Bryce Kirk, Kirkcaldy, Scotland, 29 October 2006. I am indebted to Alex Brazier, Chris Salmon, Morten Spange and Tony Yates who have worked closely with me and are effectively co-authors. I am also grateful to Charlie Bean, Tim Besley, Iain McLean, Mark Cornelius, Andrew Hauser, James Proudman and Peter Rodgers for their helpful comments and to Kath Begley for valuable research assistance. *  *  *  My Lord Lieutenant, Chancellor, My Lords, Ladies and Gentlemen, In June 1767, Adam Smith wrote from Kirkcaldy to his dear friend David Hume: “My Business here is Study in which I have been very deeply engaged for about a Month past. My Amusements are long, solitary walks by the Sea side. You may judge how I spend my time. I feel myself, however, extremely happy, comfortable and contented. I never was, perhaps, more so in all my life”. 1 There is more wisdom in that remark than most busy people would ever care to admit, and it was perhaps that contentment which allowed his mind to wander far and wide – across the sea by which he walked – to imagine a society and an economy very different from the one in which he lived. Last year I was in the audience when Alan Greenspan delivered the Adam Smith Lecture.

Coase understood the existence of firms to be a manifestation of how market based exchange between employers and employees was not efficient (see his 1991 Nobel lecture, for example). More recently, economists like Kiyotaki and Moore (an example is their 2002 paper) and many others have built models in which debt markets are incomplete because it is costly to enforce contracts, and which constrain the amount individuals can credibly borrow and pay back. These models can also be used to explain how money comes to exist, as I discuss below. Another body of work that seeks to study the institutions that underpin market exchange is the subject that has come to be known as 'law and economics'. Scholars in this field study the economic origins and consequences of the legal system. See, for example, many works by Gary Becker, Ronald Coase and Richard Posner. BIS Review 102/2006  3  laws, and to abolish the unhelpful ones. And it is that challenge of institutional design to which I now want to turn. As Governor of the Bank of England, you will not be surprised to learn that money is a social institution close to my heart. It is crucial in facilitating exchange and therefore, in allowing the division of labour.
Today, four years after the Lehman crisis, more work remains ahead of us. At this critical juncture, it might come down to policy action, which entails clarity, commitment and credibility, to progress onwards. Indeed, there are always benefits from looking back to the do’s and don’ts in the rear mirror but it is of greater importance to be looking forward in the windshield. As such, for Asia and other non- crisis country, in this era of growing uncertainties, complacency is a luxury we can ill afford. Thank you. 4  BIS central bankers’ speeches

William C Dudley: US and regional economic conditions Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Economic Press Briefing on Private For-Profit Institutions in Higher Education, New York City, 20 November 2013. *  *  *  Good morning and welcome once again to the New York Fed’s Regional Economic Press Briefing. I am pleased to have this opportunity to speak with you – and, through you, to the people in our District. I am going to discuss conditions in the national economy and then on conditions in our region, with a focus on private, for-profit institutions, which have become more visible in the U.S. higher education market. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee (FOMC) or the Federal Reserve System. National economic conditions Let me begin by taking stock of where we are at the moment. Then I will address my expectations for the performance of the economy in 2014 and 2015. Since the end of what is now called the Great Recession in mid-2009, the U.S. economy has experienced 17 consecutive calendar quarters of positive growth of real GDP (gross domestic product). However, the compound annual rate of growth over that period has only been around 2¼ percent, close to prevailing estimates of the economy’s potential growth rate.
In 2006, a single digit inflation level was attained. Although inflation rose to double digit levels at the end of 2008 owing to the effects of the global economic crisis, we have since seen it return to single digit levels;  iii. The financial sector has also recorded tremendous growth since the commencement of liberal economic and financial policies in the early 1990s; and  iv. Equally, positive developments have been registered in the payment systems. I must caution, though. that sustaining macroeconomic stability remains a key challenge in the face of limited resources, infrastructure and financial inclusion. Ladies and gentlemen, as you participate in this workshop, allow me to underscore the importance, we in Senior Management attach to capacity building programmes for all Bank employees. I am reliably informed that during the workshop you will cover a number of important topics including the following: i.  Self awareness;  ii. Time management;  iii. Action or goals required to achieve a vision;  iv. Emotional intelligence and values;  v.  Power to take action; and  vi. Ability to manage direction successfully. BIS Review 107/2010  1  I am fully aware that some of the topics that you will be dealing with may not be entirely new to you, but I firmly believe that they may be necessary for purposes of reinforcing what you already know. You are all therefore implored to take keen interest in all the topics if you are to realise the full benefit of the workshop.

Denny H Kalyalya: High performance leadership Opening speech by Dr Denny H Kalyalya, Deputy Governor of the Bank of Zambia, at the Opening of the High Performance Leadership Workshop, Lusaka, 9 August 2010. *  *  *    Chairperson    Workshop facilitators from MCA International    Directors and Assistant Directors    Other Participants    Ladies and gentlemen  On behalf of Bank of Zambia Senior Management and indeed on my own behalf, I wish to welcome you all to this important workshop, on High Performance Leadership, organized by our Human Resources Department in conjunction with MCA International. I commend the Human Resources Department for taking the initiative to organise this workshop, which is intended to facilitate exchange of information and views on appropriate leadership attributes to help us enhance our performance as leaders in our respective positions. Ladies and gentlemen, as you are aware, our key role as a central bank is to deliver low and stable prices and maintain financial system stability. In spite of the global economic downturn, our country is enjoying relative economic stability, with good prospects for the future following the recent and on-going significant economic transformation of our economy. Due to implementation of appropriate macroeconomic policies: i. The country has registered positive real GDP growth for the past 10 years and over the last five years, real GDP growth rate has averaged 6% annually;  ii. Inflation and exchange rates developments have also been favourable.
However, this is not a sufficient condition for ensuring financial stability, which demands other additional measures. These include, for instance, fiscal discipline, and the design of exchange rate policies that ensure the consistency of the exchange rate system chosen with domestic policies, and that contain vulnerabilities associated with exchange rate instability in the different sectors of the economy. Macroeconomic policies must also be consistent and sustainable over time. Indeed, unstable macroeconomic settings are one of the main causes of excessive volatility on financial markets. Secondly, an appropriate institutional framework is also needed. In particular, a set of mercantile and civil laws must be in place, including the treatment of bankruptcy situations; accounting obligations that ensure the uniform representation of economic events; external auditing requirements; guarantee funds providing appropriate safeguards; independent supervisors with operational capacity, etc. The legal structure and its application by the judiciary should ensure the respect of property rights and equality before the law; in sum, legal security. BIS Review 8/2005  3  The need for this set of minimum prerequisites is reinforced by the "Core Principles for Effective Banking Supervision”, which are invaluable as a tool for the evaluation of supervisory systems. In this respect, let me mention also the excellent work of the Financial Stability Forum over the last years in bringing together various standards issued by a number of bodies.

I was tempted by this flight of the imagination to frame my remarks today as the views of that author looking back at the work we are undertaking in 2005. In truth, though, I thought it might depart too much from the usual field of play of central bankers and supervisors. Instead, I’d like to share my views on how the elements of Basel II take us “back to the future,” not unlike the journey of Mr Wong’s author in 2046 from the future to the past. In many ways, Basel II brings us back to a traditional focus on risk, but with the benefit of the most advanced techniques emerging today and into the future. 2. Overview  Specifically, I would like to try to address four key points. Firstly, I would like to consider the current framework for promoting financial stability. I will argue that, despite significant progress, our policy and decision-making framework for financial stability is still incomplete, especially if we draw a comparison with the framework for monetary stability. That said, there are a number of lessons we have learned in recent years that can be useful for the future, and which we have taken into account in designing the new Basel II capital framework. One of the most important of these is the very real and positive contribution that sound risk management practices can make to promoting financial stability.
Unlike any of the ratios we are used to handling, there is no minimum level of governance that banks should reach. Governance is a means of doing things and a culture. And attaining it is an objective that takes some time to be implemented. All this makes it difficult to transmit a sense of urgency. Yet without proper governance, the conflicts of interests that arise daily at banks cannot be managed. When a conflict of interest arises, the bank must create a control function. Evidently, the control function will only work if it is independent and strong; otherwise, it will be neutralised or absorbed by the pressure of daily business. We have seen how, without proper governance, control functions are lacking in weight and effective power. This gives business units excessive influence and even, occasionally, exclusive influence over day-to-day bank management. Ultimately, then, it is governance that allows banks to manage the conflict in question which arises between the search for short-term profit and the bank’s sustainability and viability in the long-run. 9/13  Regrettably, we have seen how, as the crisis was brewing, a good number of banks behaved just as Keynes had predicted they would. Others, in contrast, decided not to emulate their competitors or to do so to a much lesser extent. I believe the quality of governance structures had much to do with this uneven behaviour. But there is always room for improvement.

There are no definitive rules or prescriptions when it comes to monetary  5  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  5  policy tools, and no such thing as a manual for monetary policy makers.5 I’ll start by looking at QE, then come on to forward guidance, and finish with some thoughts on the possibility of negative Bank Rate.6 a. QE – plenty of headroom QE has been an effective tool for stimulating demand through the 11 years of its use in the UK. Even though we are well on the way to purchasing £ billion between March and December 2020, we have QE “headroom” remaining. And while it is increasingly clear its implementation and impact is state contingent7, to my mind it is a tried and tested tool and for me it is the MPC’s marginal policy tool at present. The headroom point is worth expanding on because it is one that isn’t always appreciated. There are £ of conventional gilts in “free float” by market value (as well as another £ of index-linked gilts which are out of scope)8. The Bank’s Asset Purchase Facility holds approximately £ of those9: so there is a further £ remaining in the market that could potentially be available for purchase. In practice the Bank does not buy very short maturity gilts. And to avoid distorting the market it avoids specific gilts where it holds more than 70% of the free float, and attempts to buy evenly across three maturity “buckets”.
This includes adopting the European Commission’s risk reduction package which, among other things, implements some of the remaining Basel III reforms and further strengthens prudential rules in the banking sector. At the same time, we need to establish a European deposit insurance scheme and a common backstop to the Single Resolution Fund. Ambitious progress towards a fully fledged capital markets union would also create more effective channels of private risk sharing in the euro area and reduce the need for fiscal stabilisation. The Five Presidents’ Report3 also emphasises the need to strengthen our union from an economic, fiscal and legitimacy perspective. And in a world tempted by protectionism and ring-fencing, completing Economic and Monetary Union is perhaps more urgent than ever before. Conclusion Allow me to conclude. The euro area has certainly faced its fair share of challenges in recent years. But things are clearly improving. In the euro area, the economic recovery has evolved from being fragile and uneven into a firming, broad-based upswing. The ECB’s monetary policy measures have been supporting this recovery. We have established four criteria to confirm a sustained adjustment in the path of inflation consistent with our definition of price stability in the medium term that would warrant a scalingback of the current degree of monetary policy accommodation.

Similar to what we have observed at the euro area level, the economic expansion in the Netherlands has also strengthened. GDP grew at 2.2% in 2016, driven by strong domestic demand on account of improving business and consumer confidence and positive wealth and real-income effects. In addition, unemployment has steadily decreased, registering at 5.1% in March 2017, and the Netherlands has more jobs than before the crisis. Supported by low interest rates and a strengthening recovery, the Dutch government ran a 2.9 billion euro surplus last year, its first surplus since 2008. And, as an export-oriented country, the Netherlands is currently benefiting from the recovery in other euro area countries, especially as growth in global trade remains tepid. The side effects of our policies I am aware that these very accommodative financing conditions have raised various concerns, also in this House. Monetary policy measures always have side effects. So far, the potential negative side effects have been limited. We are monitoring these various effects carefully, taking into account our price stability mandate. 2/5  BIS central bankers' speeches  To ascertain the overall impact of our measures on citizens, it is important to differentiate between the various ways in which they affect economic actors, such as households, pension funds and banks. Let me start with households. An accommodative monetary policy means households accrue fewer nominal returns on their savings. However, an accommodative policy supports the economic recovery, which in turn bolsters employment, income, returns on investment and tax revenues.