samchain/econo-pairs-v1 huggingface dataset:
It is certainly not easy to eliminate, otherwise we wouldn't see the same phenomenon in the US and in Europe, but at least we are progressively attenuating the problem. FT: You said last week that you have an opportunity next week to view the operational framework, liquidity regime. You seem to contain a hint that maybe changes might be planned. Can you tell us about that without…? I don't expect you to tell us what you decide, but what would the aim be? Would it be perhaps to apply more whip on banks to encourage…? Trichet: I can say nothing at this stage. FT: What about buying debt, though; buying government debt? Would you consider such a move at the ECB? Trichet: Again, I have said that experience has demonstrated that we had to prepare for unexpected exceptional situations, and I would say that I would not eliminate anything ex ante, and equally I will not pre-commit to anything ex ante. We'll always look at the situation on the basis of our own analysis, taking everything into account. Today, we will certainly not consider that it will be appropriate at all. You were speaking of quantitative measures. There is a measure of quantity, which is impressive today – I'm speaking of both sides of the Atlantic, and both sides of the Channel – which is the size of the balance sheet of the central bank.

You know, there are some key intermediate inputs that are produced in only three factories in the world. This is not reliable. We have this just-in-time system, with minimum inventories, which in case of a shock might make the full body of the real economy more immediately vulnerable. In the financial system we have eliminated a number of cushions and shock-absorbers that we had here and there. This morning, I was telling our staff, that this is as if we had been keen on eliminating a number of air bags from the [global finance] “car”. So now that we have an accident, we are surprised to see that we have a lot of scars. The scars of the current crisis on the global financial system are significant. All investment banks in New York have either been purchased, or gone under, or changed by their legal framework. That is saying something. A new concept of resilience for the market economy is of the essence. BIS Review 159/2008  7
It is unclear what the net impact will be, but if all firms pursue the same strategies in search of higher risk-adjusted returns, greater similarity could result. This pressure is potentially stronger now than in the past due to the highly competitive nature of banking and this is an area for further study. Technology A third theme is the emergence of “fintech”, which I think of as the intersection between technological innovation and the provision of financial services. While innovation has always been a competitive driver in banking, there is a sense that both the pace of change and the potential impact have become more pronounced. As prices for technology services and capacity continue to fall and technological opportunities expand, more firms are able to adopt and leverage the latest technological breakthrough. Scale is likely to remain a relevant factor in the deployment of the latest technology, but, at least among the largest firms, the playing field may be leveling as firms have the opportunity to benefit from direct investments, consultants, and third-party vendors offering the latest services. If the largest financial firms are responding to the same technological forces and pursuing the same opportunities, one might expect their resultant strategic choices to contribute to greater similarity over time.8 Again, this is an empirical question that deserves further inquiry. Next Steps An important next step is to look at the data to assess whether recent industry trends are consistent with the premise that large banks are becoming more similar.

The UK is the largest magnet for tech talent in Europe. This creativity and entrepreneurship is reflected in business start-ups. Over 1,100 new businesses start up in Britain each day – roughly, one every 75 seconds. 12  And when started, a disproportionately large number  succeed, with the UK home to half of the top 10 fastest-growing companies in Europe. 13  Financing them is a  venture capital industry which, in 2017, invested more in the UK than in Germany and France combined. The upper tail of UK companies, then, is large and thriving. It more than holds its own relative to international competitors. Although there is ample scope for improvement, the upper tail is fairly well-spread, sectorally and geographically. Its success is built on world-leading education, innovation and research. The UK is, genuinely, an innovation hub, with companies to match. Let us now reduce altitude and take a closer look at the lower tail. As Chart 7 also illustrates, there is a materially larger lower tail of UK companies, productivity-wise, than there are in Germany and France. 14  The  bottom 25% of UK companies have levels of productivity around 80% or more below the UK median. Their Germany and French counterparts have productivity around 60% or more below the median. If we look more closely at this lower tail, what is striking is both its scale and longevity. Table 1 shows growth in average productivity among the bottom 99% of the productivity distribution.
The dollar lost some of the strength it had gained during the first months of the year, while the market has pushed back its expectations regarding the beginning of the US monetary tightening process. Nevertheless, long-term rates rose in the US, as in most developed markets. The prices of most commodities rose, especially oil. In this context, the Board has held the monetary policy rate (MPR) at 3 percent, maintaining a significantly expansionary monetary policy stance. Let me now describe our baseline scenario and the main risks we have identified in the two reports I am presenting today. Macroeconomic scenario In recent months, core inflation (i.e. the CPIEFE, which excludes the prices of energy and foodstuffs) has brought no major surprises and its behavior continues to be largely determined by the effects of the peso depreciation and the usual indexation of the economy. However, annual CPI and CPIEFE inflation is still above 4% and, the same as in March, the baseline scenario of this Monetary Policy Report assumes that it will hover around 4% for some months. After the publication of the previous Report, private inflation expectations for this year increased in line with that Report and have remained at a higher level since then. At one to two years’ term, expectations remain at or around 3%, which is the target set by the Central Bank (figure 1). In the first quarter, domestic output and demand grew slightly more in annual terms than was expected in March.

Encourage banks to improve their management of risk  We’ve also attained the third goal: to go beyond a rules-based structure and instead encourage banks themselves to improve their abilities to identify, measure, and manage their risks appropriately. As you know, the most sophisticated approaches to credit or operational risk in the New Accord will permit banks to rely increasingly on their internal assessments of risk when determining how much capital to hold. At the same time, the New Accord will be flexible enough for banks to build their risk management functions on the best practices available in the industry, even as those practices evolve in the future. By promoting the improvement of the management of risk across the industry, I believe that we are laying a foundation for more stable markets. The milestones achieved square with banks’ and supervisors’ long-standing efforts All of us can take great pride in meeting the goals that the Committee set out to embrace: the three pillars of capital adequacy, enhancing the risk-sensitivity of the capital framework, and creating incentives for banks to improve their management of risk. And we should recognize that these proposed revisions square well with the efforts that banks and supervisors themselves have undertaken, independent of the Committee’s work. The banking industry has done much over the years to adopt a forward-looking approach to risk management – one that emphasizes flexibility in, and improvements to, the measurement and management of risk over time.
It should be borne in mind that the adaptation to the new information technology does not occur automatically. It is not the case that one day we suddenly find the new technology has begun to be implemented in ways that are leaving their mark on economic developments in general. During recent decades economists have increasingly highlighted institutional aspects in a broad sense as an explanation as to why some economies grow more rapidly than others. This approach underlines that the rate of economic growth is related to the system of rights and incentives that is adopted in a country and the determination to maintain this system in a credible way. In economic jargon, it is usually asserted that the incentive structure and its impact on economic growth is formed by the existing institutional structure. The late 19th century provides important lessons about the necessary conditions for this good circle. At the beginning of the 1800s, as I said before, Sweden was still a poor country with an unstable form of government, a chaotic monetary system and a general shortage of credit facilities. Ninety years later the Swedish economy had undergone a dramatic transformation. Inflation was low, with an orderly monetary system. The nation was bursting with vitality in every field. An impressive range of products, many of them world leaders, were being developed on the basis of Swedish inventions. Swedish financial experts were engaged in the exploitation of the inventions at an early stage.

Svein Gjedrem: Monetary policy in Norway  Opening remarks by Mr Svein Gjedrem, Governor of the Norges Bank, to Norges Bank workshop on “The Conduct of Monetary Policy in Open Economies”, held in Oslo, on 26-27 October 2000. *  *  *  Introduction I am happy to welcome you to this workshop on “The conduct of monetary policy in open economies”. The workshop brings together researchers and practitioners of monetary policy from a wide variety of countries. The aim is to stimulate exchanges both across countries and between researchers and monetary policymakers on a topic of common interest. Research on monetary policy is an international field. We thus find it tremendously useful to be a part of an international network of researchers and practitioners concerned with monetary policymaking. Contact across central banks does represent an important source of inspiration to the policy discussions in Norges Bank. Norwegian monetary policy The papers presented at this workshop address topics that are highly relevant to monetary policy in general and Norwegian monetary policy in particular. Some of you may be familiar with the Norwegian system. For others it may be unknown that Norway has a monetary policy regime that is unique in an international context: it is a system of neither a fixed exchange rate nor an inflation target. Let me explain in more detail: The political authorities formulate Norges Bank’s mandate for the conduct of monetary policy.
Second, the decline in short-term real interest rates has been accompanied by a similarly steep fall in longer-term real interest rates. The yield on the 10–20 year portion of the indexed gilt curve, for example, was 4% in the mid-1990s; by the end of that decade it had dropped to barely 2%; on the eve of the financial crisis, in mid-2007, it was less than 1%; today it is –0.3% (Chart 4). This is significant because, just as a matter of principle, it’s hard to see how pure monetary disturbances – including any independent decisions of monetary  (Woodford (2003)). Occasionally people distinguish the short and longer-term level of this rate (using “natural” and “equilibrium” respectively). Neutral is the term usually reserved for the rate that would keep the economy cyclically stable over the longer term – the intercept in the Taylor rule – though in many settings this is the same as the natural rate. BIS central bankers’ speeches  3  policy makers – can have very enduring influences on real things, including real interest rates (that’s particularly true for monetary authorities in relatively small and open economies like the UK). So they’re unlikely to have had much bearing on real forward rates. Third, even if you doubt these basic principles, the data show that, where we’re able to isolate autonomous (or at least unexpected4) shifts in official interest rates, they don’t seem to produce any reaction in longer-term real forward rates (Chart 5).

When economic developments are instead mainly driven by changes in demand, the conflict between the price stability target and the ambition to subdue fluctuations in the economy is not as clear. If, for instance, demand falls, the result will normally be that inflationary pressures also decline. An expansionary monetary policy can in this situation contribute to stabilising both inflation and activity in the real economy. There may then be justification for aiming to attain the inflation target within a shorter period than two years. Of course, in practice it is not always easy to distinguish what shocks the economy has suffered and with an active monetary policy there is always a risk to reinforce, rather than subdue, fluctuations in the real economy. The fact that it also takes time before the full effects of monetary policy have become visible and that it is uncertain how much scope there is for monetary policy stimulation also makes it more difficult to implement the policy. One therefore should not expect monetary policy to be able to fine tune economic activity to any great extent. This description of what monetary policy can and cannot achieve is currently an accepted view that is well documented in the research field of flexible inflation targeting 1 . However, it is not possible to justify theoretically that the central bank should aim to bring inflation on target within a particular set  1  See, for instance, Svensson, Lars E.O.
Project Greenback 2.0 is indeed an experiment which allows us to seek answers to the questions that we never understood before. These include the motivation behind the migrant workers for not choosing the formal remittance channels and their propensity to use digital financial services. We have made good progress in understanding these issues. But that is not enough. We wish to understand more about how remittances can be further leveraged to fight poverty. This includes developing greater understanding into: How remittances can be linked to insurance and investment products which would help to break the vicious cycle of poverty; How digital payment and remittances can be used as a tool to support the needs of small rural businesses; From education perspective, how to channel remittances to support provision of quality education for poor children; and From gender perspective, how we can use remittances to drive women entrepreneurships particularly in the era of digital economy. Moving forward, these are the areas that we will continue to explore; and in doing so I have no doubt that there will be more opportunities for all of us to work together again. 3/3  BIS central bankers' speeches

In order to strengthen its powers in the conduct of monetary policy, its supervisory role and to ensure financial stability especially with the multiplicity of banks, the Bank of Sierra Leone Act is being reviewed with technical assistance from the IMF. The Banking Act 2000 is also being reviewed to protect the interests of depositors and shareholders and to further strengthen the Bank’s supervisory and enforcement powers. The Bank of Sierra Leone has broadened its regulatory and supervisory frameworks to include a number of “other financial institutions” in accordance with the provisions of the Other Financial Services Act 2001, which is also being amended to ensure compliance with international regulatory standards. The Bank has issued revised prudential guidelines governing the operations of commercial banks. These guidelines have clearly specified requirements to address issues relating to capital adequacy, asset quality, liquidity, corporate governance, market risks, etc, which will be strictly enforced. The Bank has also adopted the International Financial Reporting  6  BIS central bankers’ speeches  Standards (IFRS) as its financial reporting framework and has requested the commercial banks to do likewise. Furthermore, the Bank of Sierra Leone has adopted two complementary approaches to address governance and risk management issues. Firstly, the Bank has focused on risk factors originating within the financial system and secondly, mechanisms are being adopted and implemented to address risks originating mainly from unlicensed financial institutions. Therefore, the Bank’s supervisory strategy is shifting from compliance – based to risk – focused supervision.
Nevertheless, the differences between recent developments in the UK and the US are more significant than the similarities. Perhaps the most striking difference between the US and UK economies has been the remarkable resilience of business and consumer confidence in the UK in recent months. Of course, further weakness of the world economy, emanating perhaps in emerging markets, could change the outlook. Nevertheless, Mr President, I am confident that the British economy can withstand the storms and vicissitudes of the international economic weather. But it is in the interests of all of us to work to ensure a prosperous international economy. No country is an island. As John Donne expressed the thought so vividly in his aptly-named Devotions upon Emergent Occasions "all mankind is of one author, and is one volume." BIS Review 16/2001  3

But regulation is there to serve the British public, and that should guide us as we aim to strike the right balance in this important set of reforms. Chart A: Comparison of MA and FS for different asset classes as at YE20  Source: MA Asset & Liability Data submissions by firms as at YE20. The chart on the left is ranked by spread in bps (lowest to highest); the chart on the right is ranked by MA as a percentage (%) of spread (lowest to highest). Assets classified as ‘quasi government’ and ‘other’ have been excluded as these contain derivative exposures which distort the comparison. Asset classes – agricultural mortgages and sale and leaseback - where firms have reported limited holdings are also excluded. 1. Like other bits of financial regulation, Solvency II was imported into the UK upon Brexit – parts of it into legislation which is the domain of government and Parliament, and parts of it into the regulator’s rulebook. Because of this structure the review is led by HM Treasury on behalf of government but with strong involvement from the PRA. 2. In more technical terms: the MA reduces firms’ exposure to interest rate and reinvestment risk. It also allows a buy-andhold investment strategy which enables a firm to access the liquidity premium which has historically been observed in spreads on fixed interest assets. 3. Estimate based on regulatory data on annuity contracts collected by the PRA.
16  See, for example, the main report and sub-reports from the Commission on the Measurement of Economic Performance and Social Progress headed by Professors Stiglitz, Sen and Fitoussi: “Report by the Commission on the Measurement of Economic Performance and Social Progress”, September 2009. BIS central bankers’ speeches  5  shortages and the RU indicator17 – and CPI inflation.18 The correlation is highest for a lag of 4–6 quarters. Also take into account credit expansion and asset prices We should take credit expansion and asset prices into account more when we formulate our monetary policy. And we should develop and formally integrate the forecasts for credit growth and asset prices into the base for the monetary policy decisions, as well as reporting the uncertainty of the forecasts. Far too many countries have allowed their expansion in credit to be too high for too many years and this has led to very large problems when the bubbles have burst. The low interest rates have been a contributory factor to this trend.

Central banks took greater, though not total, mastery over their monetary destinies. With increased global integration of capital, goods, and labour markets, inflation stabilisation has faced powerful countervailing forces. Perhaps as a result, advanced economy inflation rates have moved more closely together under Inflation Targeting than under Bretton Woods. The correlations between inflation rates in major economies grew in the wake of the crisis (Chart 5 (d) – see annex). As they have written their monetary scripts, central banks have at the very least had an editor. If they are not careful, they could become ghost writers. 7  First identified by Irving Fisher (1933), “The debt-deflation theory of great depressions”, Econometrica. 8  See IMF (2013), World Economic Outlook, Chapter 3, April. 9  In the UK, “the framework for monetary policy was, at best, opaque”, according to King (1997), “The Inflation Target five years on”. 4  BIS central bankers’ speeches  3. Why is inflation low globally? Of course, an important global factor behind current low headline inflation has been the sharp fall in the price of oil, which has been driven primarily by large increases in its actual and potential supply. This means that while it’s been a short-term drag on inflation, it’s good news for growth. The Bank estimates that lower oil prices will boost the level of UK-weighted global GDP by a little under 1 percentage point over the next three years, with a consequent boost in demand for UK exports of around 2 ½ %.