samchain/econo-pairs-v1 huggingface dataset:
In a quarter of the cases, which were mainly countries with limited real exchange rate depreciation, annual GDP growth fell by 3½ percentage points on average. 11 There are dangers too for surplus countries. Large foreign exchange inflows are not easy to sterilise. They tend to contribute to asset price bubbles and higher inflation which itself can undermine economic and financial stability. The effect of such inflows into China and oilexporting countries have been compounded recently by their exchange rates being pegged or managed against the falling dollar. This has contributed not just to the build up of reserves and SWFs but also to the build up of inflationary pressures within these countries. No one would blame EMEs for the current turmoil in Western financial markets. It has been generated at home by the widespread mispricing of financial assets; this has been most obvious among the assets based on the US housing market but it is not confined to that sector. However the way that the boom developed did owe a great deal to global imbalances. The “savings glut”, to quote Ben Bernanke 12, that developed in the oil exporting countries and China contributed to the fall in real long-term interest rates. 13 In the UK, for example, real long-term interest rates, measured by the difference between the nominal 10-year government bond yield and the annual rate of inflation, fell from around 3.9% in 1997 to 1.6% in 2005. A similar pattern was also evident in the US (Chart 6).

I know SWFs themselves are often keen for more transparency from recipient countries on whether and how far they are welcome and the rules of engagement. The UK in recent years has been unusually open to foreign investors and foreign ownership both in comparison to our past and in comparison to most other developed (and emerging) countries today. We have relied on regulation of infrastructure industries and on competition law to prevent the abuse of market power and most of our utilities, much of the financial sector, as well as an increasing number of our leading football clubs have come into foreign ownership. In its latest survey of international direct investment trends, the OECD ranked the UK as having one of the least restrictive regulatory environment for foreign direct investment across all OECD member countries (Chart 5). And the UK has welcomed a number of SWFs to London as a base for international operations. 9  Note though that this distinction between foreign public and private sector owners is not cut and dried. Foreign private sector purchases of football teams or newspapers do not always seem to be driven by the profit motive. 10  Hedge Fund Working Group (2008), "Hedge Fund Standards: Final Report" and Walker Working Group (2007), "Guidelines for Disclosure and Transparency in Private Equity". The Large Report recommends a set of best practice standards for hedge funds in terms of disclosure, valuation, risk, governance and shareholder conduct.
The Ministry of Finance now assesses the value of the government’s share of the remaining petroleum wealth at NOK 3.6 trillion, which is about NOK 550 billion lower than the Ministry’s estimate one year earlier. Chart: Ownership interests In summer 2007, the Ministry of Finance decided to increase the allocation to equity from 40 per cent to 60 per cent and reduce the allocation to bonds correspondingly. Surging oil and gas prices, high oil production and favourable economic conditions for the Norwegian economy led to high transfers to the Fund in the course of 2007 and 2008. Equity prices fell sharply through 2008. It was against this background that the Fund purchased equities for more than NOK 1 trillion between summer 2007 and summer 2009. With a fall in value of 23 per cent or NOK 630 billion, it is understandable that the results in 2008 attracted considerable attention. The most important development for the Fund was perhaps a doubling of its global equity holdings. After earning high returns in the past year and a half, the Fund has also recovered the losses. Chart: Nominal interest rate level and cost of equity capital  7  See “Future management of the Government Petroleum Fund”, Norges Bank’s letter to the Ministry of Finance of 10 April 1997 and “An analysis of the Government Petroleum Fund’s equity allocation”, Norges Bank’s letter to the Ministry of Finance of 15 March 2001. 8  If 1997 is included, the figure is somewhat higher. The money-weighted average return is somewhat lower.

In ten years’ time the Fund is projected to be twice as high as annual GDP 6 . Total public expenditure accounts for somewhat less than half of GDP. The Fund may then become about four times as large as total government expenditure. With Fund withdrawals in line with the fiscal rule of 4 per cent, the return will be able to finance 15–20 per cent of government expenditure in ten years. A large share of government spending will thereby be financed without the functioning of the economy being exposed to tax disturbances. Chart: Time line Construction of the Fund The first capital transfers to the Fund were managed in the same way as Norges Bank’s foreign exchange reserves, which are invested in government bonds issued by our main trading partners. The purpose of the Fund, however, is entirely different from that of foreign exchange reserves and the operational management of the Fund must thus also be different. The main difference is the investment horizon. The Fund is meant to span a long period, preferably many decades. Through 1996, about NOK 40 billion was transferred to the Fund and it became clear that the Fund would be sizeable. It would be accurate to say that there were divergent viewpoints within Norges Bank when it was discussed whether the Bank should take on the assignment of managing the Fund. Three challenges were considered in particular. First: Norges Bank could risk impairing its reputation by accepting this assignment.
Ladies and Gentlemen: At this point, kindly allow me to call upon our Guest of Honour, Honourable Ms Chileshe Kapwepwe, MP, the Deputy Minister of Finance and National Planning to deliver the key note address and to officially open this Conference. Honorable Minister Sir! BIS Review 46/2009  3

Under Bond Connect, eligible overseas investors can settle and hold their Mainland bonds through CMU using nominee holding arrangement. Nominee holding arrangement is widely used by investors in international capital markets as it provides greater convenience and flexibility to investors and market participants. CMU also adopts nominee holding arrangement and provides nominee holding services for more than 200 local and international banks, trust companies and custodians through its linkages with Euroclear, Clearstream and other regional CSDs. The continued liberalisation of the Mainland’s capital account and RMB internationalisation will progressively raise demand from overseas investors for RMB asset allocation, while the Mainland has been proactively rolling out measures to facilitate overseas investors’ access to its bond market. We believe that Bond Connect would enhance overseas investors’ participation in the Mainland bond market. 5. I wish Bond Connect a great success. Thank you. 1/1  BIS central bankers' speeches
The  BIS central bankers’ speeches  7  business model must be simple enough that it can be shared with employees and understood at every level. Senior managers must lead by example, present a unified front and set the tone. The job of the leader is to encourage and foster the good and squash the bad. While many argue that it takes just “one bad apple,” firms must accept that it is rarely just one and that they always need to be focused on identifying the potential problems and addressing them early and quickly before they become outsized. Boards, whether as a whole or through a sub-committee, need to set direction and expectations on culture and behavior, and measure and monitor progress over time. Boards also need to hold senior management accountable for building and sustaining the appropriate culture and fostering the desired behaviors over time. Senior management must in turn hold employees accountable for their actions. Within the category of operations, I envision the development of industry standards on culture and behavior, enhanced communications, both within firms and across the industry, and clarification around success metrics. It’s important to realize that “one size does not fit all” when it comes to solutions and metrics. Employees should know what behaviors are expected from them and how their actions will be measured. The purpose, strategy and business plan need to be communicated to every level of the organization.

You don’t want board members so involved that they need to approve every policy and procedure. You do want them to be involved enough that they understand the organization,  BIS central bankers’ speeches  3  they are providing the right level of oversight and guidance, and they share a sense of responsibility for the actions of the firm. 2. Resources: In terms of talent, we see firms struggling to recruit and retain sufficient expertise in some areas, with firms competing for the talent needed to implement new standards and to address identified resource gaps. We also understand the challenges firms are having with filling many difficult leadership roles, such as risk management and compliance positions, where demand is higher than the supply of talented candidates. With regard to general population of eligible candidates, hiring managers must be willing to look closer at the 25 to 40-year-old cohort that makes up much of the workforce in the industry. There needs to be a better understanding of: 1) what incents and motivates them; and 2) why they fail to make long-term commitments to firms. The high turnover rates in financial services can be attributed in part to the competitive nature of the industry, the financial incentives to move, and the lack of repercussions for bad behavior. But, more importantly, the demographics of the workforce may also playing an important role.
borrow short term for funding longer term lending, it is irrational to assume plentiful liquidity to prevail at all times without treating liquidity as part of risk capital;  •  Increased financial pressures may lead financial institutions to shift their efforts away from focusing on the conduct of business requirements and from maintaining and strengthening business as usual;  •  Market participants and consumers may lose confidence in financial institutions and in the authority’s ability to safeguard the financial system;  •  A significant minority of consumers could experience financial problems because of their high levels of borrowings; and  •  Tighter economic conditions could increase the incidence or discovery of financial crime or divert the institution’s resources away from tracking financial crime. 2.3 In addition to these, there could also be institution specific risks, which may bring in potential disturbances. Conventional wisdom now is that the more recent episodes like Northern Rock were an accident waiting to happen as banking regulations have not been emphasizing on liquidity risks. The recent turmoil has exposed the vulnerability of a regulatory framework that places so much emphasis on how well capitalized a bank is, but makes little reference to whether it has an adequate cash cushion and liquid securities to see the institution through a period of market turbulence. In this instance, the Basel II regime also does not seem to offer much help.

Instead, they are based on misunderstandings about the importance of gold in monetary policy and would compromise the SNB’s capacity to act in pursuing its monetary policy, which would run counter to the objectives envisaged. In other words, these measures would, in certain situations, considerably hinder the SNB in fulfilling its monetary policy mandate and be detrimental to Switzerland. We therefore consider it our duty to point out the serious disadvantages of the initiative already at an early stage. Having said that, however, the SNB is interested in a dialogue on any questions connected with the initiative. With this in mind, allow me to make a few remarks. The SNB has the statutory mandate to ensure price stability, while taking due account of economic developments. The monetary policy operations that must be carried out in fulfilment of this mandate have a direct impact on the SNB’s balance sheet. In order for the SNB to fulfil its mandate at all times, its capacity to act in monetary policy matters must not be compromised by rigid rules on the composition of its balance sheet, which would be the case with the required 20% minimum share of gold and the ban on the sale of gold. It was precisely the latest crisis that demonstrated how important it is for the SNB to have the flexibility to expand its balance sheet, if needed. In future, the SNB will also need this flexibility to reduce the balance sheet again, if necessary. The demands of the initiative would considerably curtail this flexibility.
Today, however, I would like to focus on another discussion, one that I feel is at least as vital and, at the moment, perhaps even more relevant. This concerns whether the conditions for monetary policy have changed so much in recent years that central banks will be forced to abandon, or at any rate considerably modify, the inflation-targeting policy that has been the dominant monetary policy regime of recent decades. I would like to thank Mikael Apel for help with the text of this speech, Emelie Theobald for help with the slides and Claes Berg, Charlotta Edler, Rebecka Hallerby, Stefan Ingves, Cecilia Skingsley, Marianne Sterner, Ulf Söderström and Anders Vredin for useful suggestions. ∗  1 [20]  International debate on whether inflation targeting has become outdated On one side of the discussion are economists and observers who argue that the inflation process now is so different from before that it is very difficult, perhaps even impossible, for central banks to conduct traditional inflation targeting, at any rate with the targets of around 2 per cent prevailing today. More specifically, they argue that inflation faces such strong ‘headwinds’ in the form, for example, of globalisation and digitalisation that it is doubtful whether central banks can steer inflation in any meaningful way. Instead, it is argued, monetary policy should be focused on dampening financial cycles and maintaining financial stability. 1 On the other side are most central banks, who argue that rumours of inflation targeting’s imminent demise are significantly exaggerated.

This would make it more difficult for monetary policy to counteract recessions in the future. If average inflation is low, the nominal average interest rate will also be low. And the lower the interest rate is in normal conditions, the less scope there is to lower it before it reaches its lower bound. A more general problem is that the inflation target acts as a benchmark for price and wage formation – it forms what is usually called a nominal anchor in the economy. When economic agents have a collective picture of how prices will develop in the future, it becomes easier to plan for the long term. The absence of a nominal anchor could also lead to not just inflation varying more, but also output and  16 See, for example, Duy (2017) and Summers (2017). 11 [20]  employment. Assume that a negative shock impacts demand in the economy, causing inflation to fall. If there is uncertainty about the inflation target, inflation expectations may also fall in the slightly longer term. This will cause a rise in the real interest rate, i.e. the interest rate corrected for inflation expectations, if the nominal interest rate remains unchanged. The higher real interest rate amplifies the effect of the original negative shock on demand and weakens the economy even more, as it is the real interest rate that affects companies’ and households’ investment and consumption decisions. In a corresponding way, a positive shock to demand can make inflation and inflation expectations rise.
14  BIS Review 139/2009  Chart 3: Sterling liquid assets relative to total assets  Percentage of total assets (all currencies)  Broad ratio(a) Reserve ratio(b) Narrow ratio(c)  35 30 25 20 15 10 5 0  68  73  78  83  88  93  98  03  08  Sources: Bank of England and Bank calculations. (a) Cash + Bank of England balances + money at call + eligible bills + UK gilts. (b) Proxied by: Bank of England balances + money at call + eligable bills. (c) Cash + Bank of England balances + eligible bills. Chart 4: Return on equity for UK banks 35.0 30.0  μ = 20.4 σ = 6.9  Percen tag e  25.0 20.0 15.0 10.0  μ = 7.0 σ = 2.0  5.0 0.0 1921 1926 1931 1936 1941 1946 1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 Year Source: Capie, F. and Billings, M (2004), BBA and Bank of England calculations. Note: There is a definitional change in the sample in 1967. The latter period has a slightly larger sample of banks and returns on equity are calculated somewhat differently, including being pre-tax.

Ladies and gentlemen, there are small risks and big risks. There are risks that affect a single 1/2  BIS central bankers' speeches  bank and risks that affect the entire sector. And then there are risks that stretch across sectors and even countries. In that regard, there is one thing that comes to mind: Brexit. Right now, it is still very unclear how the world will look after the UK has left the EU. Still, banks and supervisors must prepare for any scenario. The worst case would certainly be a “hard Brexit”. In that scenario, the UK would become a “third country” from the viewpoint of the EU. As a result, UK banks might lose their European passport and, with it, access to the Single Market. This would affect many of the 40 UK banking groups that currently operate in the Single Market. They would then have to find another way in. Most likely, they would seek to obtain a banking licence in an EU country to regain the passport. In the euro area, these licences are granted by the ECB. We obviously don’t care whether UK banks move to Frankfurt, Dublin, Paris or some other location in the euro area. What we care about are safe and sound banks. We will therefore resist any supervisory or regulatory race to the bottom. Any bank that moves to the euro area will have to meet our standards – regardless of whether it comes from the UK or any other place.
The availability and quality of genuine euro area statistics – i.e. those which are more than just the sum of the national data of the Member States – has improved very substantially over the last ten years. Most notably, the ECB and Eurostat now regularly and jointly release quarterly real and financial euro area accounts that are both integrated and comprehensive. And yet, I would strongly favour an improvement in the timeliness of such releases, which would then be even more useful for the ECB’s monetary policy-making. The credibility of euro area and relevant national statistics is of key importance to the ECB, and this also requires that such statistics be effectively communicated. This applies in particular to the HICP. In view of the importance to the ECB of euro area monetary, financial and external statistics, the Governing Council has endorsed a strategic vision that should further increase the effectiveness and efficiency of the compilation of these statistics by the Eurosystem. This entails even more intensive cooperation not only among the statistics departments of the NCBs and the ECB, but also between those departments and external parties such as statistical institutes, supervisors and the financial industry. I hope that the gains resulting from these synergies will then be used to close some of those gaps in the ECB’s statistics that I mentioned earlier and to improve market transparency as regards the issues that have come to the fore in the ongoing financial turmoil.

Unlike many other central banks, the Riksbank did not buy any government bonds or covered bonds, but these possibilities were discussed. One important lesson from the crisis is that new measures require considerable preparation. After the crisis, we therefore decided that it is a good idea to make practical preparations for a crisis even during normal circumstances by supplementing the Riksbank’s toolbox with a limited securities portfolio in Swedish krona. This ensures that necessary systems, agreements, routines and knowledge are already in place if it becomes necessary to quickly implement extraordinary measures. Given that we now have a repo rate close to zero and we are discussing which unconventional measures might be appropriate if inflation does not rise towards two per cent, it is good that the Riksbank has created the possibility and knowledge to manage a bond portfolio. This means that we now can quickly and simply purchase and sell bonds, something that would previously have taken us much longer. So, in technical terms we are prepared to increase the size of the portfolio if and when it should prove necessary. The general public’s use of cash is declining One important item on the liabilities side of the balance sheet is outstanding banknotes and coins. The Riksbank has the monopoly on issuing banknotes and coins in Sweden and is responsible for supplying the country with cash. The size of this item depends on the demand from the general public for cash.
William C Dudley: Student loans and household finance Opening remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Convening on Student Loan Data Conference, New York City, 4 March 2015. *  *  *  Andrew Haughwout, Joseph Tracy and Wilbert van der Klaauw assisted in preparing these remarks. Good morning. I’m happy to welcome you to the New York Fed for this workshop that is intended to increase our understanding of student debt and how it affects individuals, their families and the economy. I am delighted to see such widespread and growing interest in this important topic. Making continued progress on understanding these issues will depend critically on efforts to identify and address existing data gaps that hamper its study. I am particularly happy to welcome Deputy Secretary Sarah Bloom Raskin, who has spoken frequently and eloquently in the past about the need for improvements in student loan servicing and debt collection, the macroeconomic consequences of increased student debt, and the need for better data and analysis. I look forward to her remarks today. Before I make some specific comments on student debt, let me take a step back and say a few words on household finance more generally. As always, what I say represents my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System.1 There are several reasons the New York Fed has increased its focus on household finance.

We need to link information on borrower decisions about the kind and amount of education they receive to long-run outcomes for them and for the overall economy. So I commend to you the work before you – finding new ways to get the information that policymakers need to answer important questions about how we finance higher education. I look forward to your insights and recommendations. BIS central bankers’ speeches  3