samchain/econo-pairs-v1 huggingface dataset:
In such a hypothetical case, we would thus not “give up the inflation target” and suddenly start conducting an entirely different policy and, for example, raise the interest rate. There would still be reason to conduct a policy that is as expansionary as we deem possible, to avoid taking longer than necessary to attain the target. However, one consequence might be that the Riksbank’s communication becomes even more central. The damage in a situation where monetary policy is not made more expansionary, despite inflation being expected to undershoot the target for a long time, will be much less if the general public can be convinced that the target has not been abandoned, but that it is merely a question of taking longer than normal to attain it. Clarifying this would be a difficult but hopefully not impossible task. Often unclear whether the criticism applies to monetary policy or the target Having gone through how I view the current situation and discussed a few related aspects, I would now like to widen the perspective a little and talk about more fundamental issues. More specifically, I thought I would go into why we have the framework we have, with an inflation target and a floating exchange rate, and what benefits this system provides. This is not the first time I have done so, but I  8 Jansson (2016). 6 [17]  believe it is useful and important to remind people of this now and then.

They are evolving rapidly, they are highly automated in key market segments, and information on trading activity is not widely available. As a result, it is challenging for the official sector, market participants, and members of the public to effectively analyze these markets, understand the sources and risks of flash events, and evaluate how liquidity is changing. Given the role of the Treasury market as the deepest and most liquid fixed income market in the world, it is clear that both the official sector and the public need improved access to transactionlevel data, and I am pleased that we are making real progress on this front. Greater transparency into Treasury market activity is necessary in maintaining the market’s many important roles: as a risk-free benchmark for financial instruments; as a liquid investment and source of safe collateral; as a channel for the implementation of monetary policy; and, of course, as a tool to help finance U.S. government activities. As the Treasury market continues to evolve, several complex questions lie ahead. How should data reporting gaps be closed to ensure that as many relevant Treasury transactions as possible are collected? What is the proper scope and best process for sharing Treasury market data with the public? How can the Joint Member Agencies and private stakeholders best collaborate to ensure Treasury market stability and efficient market function, even as market structure evolves and new technologies emerge?
For example, we have seen difficulties from banks in arranging promotion of risk culture and cascading the “tone from the top” to different levels of staff, simply because of the lack of F2F interactions. This has tremendously reduced the opportunities for staff to build rapport and foster a common culture, which is an important element in the culture promotion efforts. 5. Secondly, the pandemic disruptions have effectively put bank culture under stress test. Against the new mode of banking operation with significantly reduced F2F interactions, both amongst banking staff and between banks and their customers, there are signs of increasing hurdles in maintaining a sound bank culture. 6. On one hand, there are challenges in ensuring robust controls in a non-F2F environment. 1/4  BIS central bankers' speeches  Reduced physical oversights of staff activities by supervisors could greatly reduce the effectiveness of conventional control mechanisms and practices that worked well in the past, and thereby increased the risk of poor customer outcomes. 7. At the same time, the pandemic is driving changes in customer behavior. Customers have tried to avoid visiting bank branches in person as much as they can. If we look deeper at the statistics, the customer behavior of investment activities registered a significant change in the past two years. The proportion of online investment transactions out of all channels of retail banks has increased from 37% in the first half of 2019 to over 50% in the first half of this year.

I understand that this is a very good participation rate when compared to similar exercises done in other jurisdictions. 19. Given the scale and breadth of the Focused Review, the exercise is expected to complete around early next year. After that, we plan to share with the industry the identified insights as well as practices that lead to good customer outcomes. Through this exercise, we also aim for better alignment of incentive systems whilst preventing potential misconduct behaviour. We trust this would advance bank culture development in Hong Kong to the next level. Accountability 20. While a proper incentive system will encourage desirable staff behavior, we should not lose sight of the other side of the coin, which is accountability framework. In the past few years, the HKMA has been making greater use of accountability reviews as a tool to identify those responsible for misconduct incidents. The idea is that those who have pursued undesirable behavior have to face the consequences of their own misconduct. Another aspect of accountability that banking supervisors in several jurisdictions have been trying to tackle is how can we effectively address the problem of “rolling bad apples”. 21. As this phrase literally means, “rolling bad apples” refer to individuals who have committed misconduct behaviour, but are able to obtain subsequent employment elsewhere without disclosing their earlier misconduct to the new employers. 22. When “bad apples” tried to “roll” from one institution to another, this cannot be easily dealt 3/4  BIS central bankers' speeches  with by individual banks working alone.
3  The full implementation of this phase will require a political agreement that is up to the scale of the challenge we face and that will foreseeably run for several legislatures. The rest of my address today is structured in three major sections. In the first, I shall provide some details on the scale of the economic shock we are undergoing, including its effect on financial stability. Next, I shall review the role the different economic policies are playing in this shutdown phase of our economy. Finally, I will offer some thoughts on the function that, in my opinion, economic policies should perform once we are over the worst of the crisis. 4  Short-term developments and reference macroeconomic scenarios  Globally, the expansion of the pandemic and the necessary containment measures have sharply disrupted the world economy. The evidence coming to light in recent months reveals a marked slump in activity and employment, acutely so in the services sectors and in those countries which, affected by a more severe outbreak of the epidemic, have pursued more stringent containment measures. In China, the first economy to be hit by the illness, the first quarter of the year saw a fall-off in GDP close to 10% quarter-on-quarter. In the United States, the decline was smaller, around 1.2% quarter-on-quarter. Admittedly, though, the spread of the disease was belated.

I would like to finish with the structural projects, on which I hope we will be able to make progress this year: the efficient firefighters of the crisis must gradually hand over to the architects. This is what I would like to see for France, centred around our two major medium-term economic challenges: insufficient potential growth, associated with the lack of skills and workforce available to businesses; and excessive public debt and current expenses. We must also strengthen our architecture in Europe: this year we must finalise regulations for traditional players (banks with Basel III, insurance with Solvency II), but also regulate new activities: cryptoassets and decentralised finance. The Banque de France and the ACPR will actively contribute to this within the framework of the French Presidency of the European Union. This French Presidency will have served the euro well in its 20th year if it also makes progress on two as yet unfinished imperatives, the Banking Union and the Capital Markets Union. They are indeed a prerequisite for better channelling European savings towards the ecological and digital transformations, as I mentioned earlier. Indeed, happy New Year 2022 to Europe, to our dear country and especially to each of you! 2/2  BIS central bankers' speeches
Jon Nicolaisen: Responsible investment and active ownership Speech by Mr Jon Nicolaisen, Deputy Governor of Norges Bank (Central Bank of Norway), at Norges Bank, Oslo, 19 November 2019. * * * The graphs can be found on the Norges Bank’s website. Introduction In 1990, visionary politicians decided to establish the Government Petroleum Fund, later renamed the Government Pension Fund Global (GPFG). On Tuesday of this week, the value of the fund passed NOK 11 000 billion – or over 3½ times Norwegian mainland GDP. The fund is now among the largest shareholders in many of the world’s listed companies. Chart: From natural resources to financial wealth What started as oil wealth in the ground has been transformed into savings and financial wealth abroad. Under the fiscal rule, we should only spend the expected real return on the fund. As long as we only spend the return, we ensure that the fund will benefit future generations. In 2020, withdrawals from the fund accounted for more than one krone in five in the central government budget. This means that the fund indirectly finances tens of thousands of public sector employees and ensures that taxes are lower than they would otherwise be. We might say that Norway has moved from being an oil nation to being an investment fund nation. The assets in the fund belong to the Norwegian people. The most important decisions, such the choice of the fund’s equity share, are anchored in the Storting (Norwegian parliament).

We determined not to take any action because of the fact that oil prices had attained  2  BIS Review 86/2005  record heights just before our monetary policy assessment. It was not possible at the time to fully assess the impact on the economy and on inflation. If monetary policy had remained the same at this assessment, the medium-term inflation outlook would once again have been unchanged. In the meantime, however, the room for manoeuvre available to monetary policy has declined. Our inevitable concerns with respect to the high price of oil in September have been dissipated by the favourable developments in the economy. As a result, we have decided to increase the target range for the three-month Libor by 0.25 percentage points. Consequently, this decision is in line with the statements we made at the last monetary policy assessment. Inflation forecast graph I now turn to the current inflation forecast, which is based on the assumption of a change in the threemonth Libor, to 1.0%. The graph depicts the current and the previous forecasts. The dashed red curve represents the new forecast, which covers the period from the fourth quarter of 2005 to the third quarter of 2008. It summarises the inflation outlook, following today’s increase in the rate of interest. The dash-dotted green curve shows the inflation forecast at the time of the last monetary policy assessment and is based on a three-month Libor of 0.75%.
We must take into account the potential growth rate, even if we do not influence this by means of monetary policy once price stability has been established. Correspondingly, we must take into account changes in conditions for competition, as such changes can influence inflationary trends both directly and indirectly. Any measures taken to strengthen potential growth come under other economic policy than monetary policy. Such measures can include avoiding limits to competition that would lead to a poorer allocation of resources. The Swedish economy was showing very favourable growth until last winter. Today, now that growth has slowed down, it may be worthwhile to remember that it is from this starting point that growth was subdued. We can put it even further into perspective by comparing with the situation in the beginning of the 1990s. Conditions then were very difficult and characterised by rising unemployment, a high inflation rate and poor public finances. The situation was so strained that the government turned to the academic world for advice and a report from the Economics Commission was delivered in spring 1 1993. This report, which is usually referred to as the Lindbeck Commission, contained no less than 113 proposals – many of them were controversial, which stimulated the debate of the day. The Lindbeck Commission took the view that the crisis was based on problems in three fundamental areas; stability, efficiency and growth.

I am referring to the deregulation of the financial markets and the development of these in recent years. A number of international studies indicate that a deregulated and well-functioning financial market clearly stimulates the development of factor productivity. With regard to a more efficient use of the labour force, several changes have been implemented that have probably stimulated development. These include reforms in the pension system, the tax system and the social insurance system. The burden of taxation has been subdued and the economic return on higher education has increased - in particular in technical education. In addition, wage formation has been improved, which should have been facilitated by the monetary policy focus on price stability. At the same time, the pressure on companies to use resources efficiently has increased during the 1990s. Tougher competitive pressure as a result of both increased internationalisation and deregulation in a number of sectors has increased the need for companies to economise with scant resources. Less wastefulness with resources means that labour force and capital are employed in other areas, where they can better contribute to the national economy. The development of investment is another factor that may have contributed, even if capital intensity has increased at a very slow rate. One factor that has not contributed to a long-term improvement in resource allocation is the development of the exchange rate. The devaluations in the 1970s and 1980s have been followed by a floating exchange rate, but with an undervalued Swedish krona.
Christian Noyer: The euro area perspectives Keynote speech by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, at the Paris Europlace International Financial Forum, Paris, 10 July 2013. *  *  *  Ladies and Gentlemen, I am very pleased to have this opportunity to speak to such a distinguished audience and I thank Paris Europlace for the invitation. As Arnaud de Bresson just mentioned it, I take this opportunity to express, again, my strong support to the ongoing development of financial activities in off shore RMB out of Paris. In that regard, let me also commend the work undertaken by Paris Europlace to federate and coordinate the variety of initiatives that we have seen develop over the recent months. We are lucky, here in Paris, to benefit from the presence and the dynamism of the major Chinese banks, which are among the main international banks. This is an asset for Paris. Similarly, the main French banks are active on the Chinese markets, out of Hong Kong and out of mainland China. This is another major asset for Paris as a financial center. Both will benefit Chinese corporates in France, and French corporates in the Chinese markets. Both these assets will guarantee that liquidity in RMB does and will flow smoothly from China to Paris. Furthermore, Paris ambitions to serve as a hub for the development of yuan denominated business throughout the euro area.

A number of elements support this view: •  Our accommodative monetary policy stance – which will remain so for as long as necessary – should contribute to underpinning this recovery;  •  Recent developments in economic sentiment survey data have shown some improvement from their low levels;  •  Looking ahead to later in the year and to 2014, euro area export growth should benefit from a recovery in global demand, while domestic demand should be  BIS central bankers’ speeches  1  supported by our accommodative monetary policy stance and by the recent real income gains due to lower oil prices and lower overall inflation. •  Furthermore, the significant improvements in financial markets seen since last summer boost confidence and generate wealth effects and should work their way through to the real economy, as should the progress made in fiscal consolidation. Nevertheless, the Governing Council continues to see downside risks surrounding the economic outlook for the euro area. They include the possibility of weaker-than-expected domestic and global demand and the slow or insufficient implementation of structural reforms in euro area countries. Overall, the June 2013 Eurosystem staff macroeconomic projections for the euro area foresee annual real GDP declining by 0.6% in 2013 and increasing by 1.1% in 2014 thanks to three main drivers: export growth, accommodative monetary policy and low inflation. 2. How can we boost growth further in the euro area? A strong fiscal stimulus obviously appears unfeasible, given the necessity to rebalance public finances.
To illustrate their importance, it is estimated that the guarantee programme would translate into an improvement in the CET1 ratio of 1.5 pp in the baseline scenario and of 1.7 pp in the adverse scenario, under an intermediate assumption about the quality of the guaranteed lending.4 This resilience has enabled the stock of lending provided by the banking sector to the private sector in Spain to increase in 2020 (3.5%), interrupting the declining trend  3  The main reason behind the rise in ratios is the decline by almost 5% in risk-weighted assets, which is largely due to the measures adopted by the authorities to mitigate the effects of the pandemic (guaranteed loans, the CRR quick fix, etc.) and to exchange-rate effects. 4 Additionally, TLTROs give rise, under specific assumptions, to an improvement in the CET1 ratio of 0.37 pp under the baseline scenario and of 0.38 pp under the adverse scenario; and, finally, the effect of the dividend restriction adds a further 0.45 pp and 0.56 pp in respect of the CET1 ratio under the baseline scenario, and between 0.32 pp and 0.53 pp more in this ratio under the adverse scenario. For further details, see the autumn Financial Stability Report, Banco de España, 2020. 3  observed since the global financial crisis. Moreover, total new lending granted last year to households and to businesses exceeded the level attained in 2019 (4.1%).5 The role of the various measures applied has, once again, been very important in explaining these dynamics.

The adjustment problems, after undue optimism among households and firms in the late 1990s had given rise to the imbalances, will lead to the recovery being more sluggish than usual. Some even consider there could be a more drastic correction that breaks a global upswing in the coming years. Those who are more optimistic point instead to the U.S. economy’s productivity growth; if this remains high, there is less cause to be concerned about the imbalances because a higher potential growth rate permits higher incomes with which to service the debt burden. The Riksbank’s current analysis does not envisage a quick correction of the imbalances. Still, there are grounds for supposing that growth in the American economy in the coming years will not be as high as in the late 1990s. And if the imbalances were to be adjusted more quickly, the Riksbank would, of course, have to take that into account in the formation of monetary policy. Turning now to Europe, we see fewer signs of a recovery. The prospects for Germany, the largest economy in the euro area, are still uncertain. However, a look at the leading indicators does show that firms have become more positive. Imbalances like those in the United States have not accumulated in the euro area and this may benefit a recovery. Moreover, economic policy is also markedly expansionary in Europe, although the scope for fiscal measures is not as great as on the other side of the Atlantic.
When an indirect tax is raised, it is assumed that the price of the product concerned increases by the entire amount of the tax. But in practice the company or shop selling the product can rarely increase the price by the full amount; usually only by a part of it. Demand would otherwise decline too much. But when the CPIX is calculated, the entire tax increase is deducted. An increase in indirect taxes can thus have the paradoxical effect that the CPIX falls. Another complication is that excise duty is normally written up by some measure of price movements. This in turn is because the tax on, for instance, alcohol is not expressed as a percentage of the price but as SEK per litre. Correspondingly, the taxes on energy and tobacco are stated in terms of SEK per kilowatt-hour and SEK per gramme. If all prices rise by 2 per cent a year, then the excise duty's share of the consumer price would fall over time. To prevent this from happening, excise duties are indexed. The excise duty on, for instance, petrol is written up by the annual rate of increase in the CPI in June of the previous year. But when the CPIX is calculated, each increase in excise duties is deducted from the CPI, even if it is only due to indexing. This means that the indexing of excise duties also contributes to a difference in CPI inflation and CPIX inflation in the long term.

The recent global financial crisis serves as a reminder that status quo is never good enough. Financial development is therefore a journey that should never end, with milestones along the way. BIS central bankers’ speeches  1  As we move on to the next stage of our journey, it bodes well with a saying that “Yesterday was a walk in the park. But tomorrow is a step in the dark.” While I would not exactly call our past events a walk in the park, there are approaching challenges that depict dark clouds above our path. The contextual trends and challenges that I am going to highlight tonight derive from technological developments, the ageing society, urbanization, and regionalization. Firstly, with technological developments, traditional barriers to entry were brought down, allowing non-banks such as fintech companies and cross-border players to the market, and helped reduce operating costs. At the same time, consumers expect better and more timely services. Banking is something that customers want to do “anytime and anywhere”, and they want to do it cheaply as well. While technology may help us reach our destination faster, it also dictates that we be more adaptive and responsive to changes. Banks that get stuck in the past will lose out quickly. A second challenge that put banks’ adaptability to the test is the shifting demographic structure of Thai population.