samchain/econo-pairs-v1 huggingface dataset:
However, as Beck and Gros stressed in an article from 2012, with the rise of macro-prudential regulation as an additional tool, it is not clear whether price and financial stability still conflict with each other. 4  BIS central bankers’ speeches  Another disadvantage is that the reputation and/or the independence of the central bank might be undermined: if its decisions and actions in the area of supervision and resolution are perceived as wrong or suboptimal, this may negatively affect the credibility of the monetary policy, as it is conducted by the same institution. Moreover, the temptation of politicians to capture the central bank may rise, as it has much more power than in the case when its only mission is to deliver price stability. The various arrangements on assigning banking supervision also have a bearing on the design of the national macroprudential authority. Depending mainly on who conducts the supervision of banks, different institutional solutions are adequate for this authority: it may be represented by a committee or board comprising representatives of the relevant institutions, by the central bank or by another authority tasked with financial market supervision. Boards are in place or envisaged in 13 EU countries, the central bank is – or is projected to be – the national macroprudential authority in 13 other EU countries, whereas two opted for – or are considering – entrusting this role to the national supervisory authority.

Mr. George weighs up the pros and cons of European Monetary Union Speech given by the Governor of the Bank of England, Mr. E.A.J. George, at the Bankers Club Annual Banquet held in London on 3/2/97. I’ve been a follower of Jim Wolfensohn for the past 20 years, and it is a great pleasure to follow him again this evening. I first came across him when he was an extraordinary investment banker reputedly flying the world with his cello strapped securely in the adjacent seat. His eventual appointment to the Presidency of the World Bank was inspired. He brings to it an outstanding professionalism. But - as you have heard this evening - he brings to it also a broad humanitarian vision and total commitment to the World Bank’s task of improving the lives of people in those parts of the world that still need outside official help with their reconstruction and development. President Wolfensohn’s canvas tonight has been global. My own focus will be on Europe, and in particular on European monetary union - though it’s fair to say that EMU could well have significant consequences for the global economy. This country is widely regarded elsewhere in Europe as being bloody-minded and even obstructive about monetary union, largely because there is indeed an intense, and often impassioned, debate going on here about the pros and cons. And so there should be. It’s a momentous enterprise, with potentially enormous implications for Europe’s political and economic future.
Reinventing the Wheel (with more automation) Speech given by Andrew Bailey, Governor of the Bank of England  Brookings Institution, Virtual Event 3 September 2020  I am grateful to Josh Sadler for his assistance in drafting these remarks and Paul Brione, Nicholas Butt, Alice Carr, Ellen Caswell, Victoria Cleland, David Copple, Michaela Costello, Jas Ellis, Chris Ford, Lee Foulger, Sarah John, Louise Johnston, Cordelia Kafetz, Barry King, Jeremy Leake, Manisha Patel, Francine Robb, Christina Segal-Knowles and Michael Yoganayagam for their input. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  Introduction Even central bankers can sometimes be accused of overusing language. So, the world is always more uncertain than ever – except that at the moment it really is. And, innovation is all around us except in the productivity numbers. One area where innovation really is around is the world of payments, the focus of my remarks today. Innovation is a good thing. As authorities and regulators it is not in our interest – the broad public interest – to stop innovation. Moreover, when supported by clear standards and expectations, innovation can support the pursuit of public interest objectives such as greater inclusivity and network resilience. Making such standards clear early is much preferred to attempting to claw back the ground later, and particularly if that comes after things go wrong. This is the backdrop to innovation in payments, particularly in the area of so-called digital currencies, developed to offer new forms of “money”.

Long-term interest rates (variation in basis points) May 2006(1) Argentina Australia Brazil Chile Eurozone Hungary Indonesia Japan Malaysia Mexico New Zealand Philippines Poland Russia South Africa South Korea Turkey United Kingdom USA  February 2007 (2) -4 15 25 11 108 118 -9 30 50 9 -72 -11 122 -679 4 8  --18 35 -7 -8 6 7 -4 -3 -6 -12 --5 0 20 -75 -9 -13  August 2007 (3) 382 Argentina -36 Australia 90 Brazil -8 Chile -26 Eurozone 53 Hungary 112 Indonesia -33 Japan 23 Malaysia 27 Mexico -60 New Zealand -- Philippines 12 Poland 26 Russia 3 South Africa -- South Korea 161 Turkey -34 United Kingdom -33 USA  (1) Shows variation between 10 May and 27 June. (2) Shows variation between 26 February and 5 March. (3) Shows variation between 19 July and 17 August. Source: Bloomberg. Something very simple reflects the proper functioning of our economy: in a moment where the world has seen a major retraction of credit operations, in Chile companies have continued to place long-term bonds in the private market. 8  BIS Review 97/2007  Conclusions It follows, then, that the Chilean economy has resumed a strong growth after the unexpected slowdown in the third quarter of last year. In parallel, due mainly to a different supply-side shocks, inflation has risen considerably. In this setting, monetary policy must, aside from anticipating the inflationary consequences of the business cycle, prevent second-round effects related to these shocks.
Yves Mersch: Law, money and market – the legal dimension of monetary policy Speech by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the Information Club Meeting, Luxembourg, 31 May 2014. *  *  *  Ladies and gentlemen, Thank you very much for inviting me to speak at this event. What I would like to address in my remarks is what went wrong with the governance of the euro area and how to fix it. But as this has been much discussed in the past, I want to come at the question today from a slightly different perspective: that is, to go back to the first principles of what makes a market economy function, and then to look at the situation in the euro area from there. 1. Law, money and the market  A well-functioning free market is a socio-economic construct. It is created by a consistent accord of rules, instruments and institutions. As economies develop, what this accord entails changes. But at the most fundamental level there must be a harmony of law, money and freedom. This is because the rule of law guarantees the freedom of the individual by defining the scope and boundaries of his or her action. And in turn, it is the freedom of the individual that creates the agency and choice which is essential to produce a free market to the benefit of the whole society.

Governance of the euro area can be imagined like a set of interlocking cogs wheels: they do not all need to be of similar size – that is, we do not necessarily need the same degree of centralisation in each area – but they need to all move in the same direction. If one cog moves in the other direction, the whole machine grinds to a halt. There were several inconsistencies between policy areas in the euro area that had such a countervailing effect. To begin with, the frameworks for economic and financial policies pulled in different directions. Increasing financial integration encouraged capital to flow from core to periphery, but this was not accompanied by increasing integration of product and services markets to ensure that this capital was allocated efficiently. In fact, as competitive pressures remained weak, in particular in the non-tradable/services sector, certain industries were able to maintain excessive rents and distort price signals. This meant that the low marginal product  4  BIS central bankers’ speeches  of capital in these industries was offset by rising profit margins, leading capital to become misallocated. The fiscal and financial frameworks also interacted negatively with one another. In particular, policy-makers underestimated the extent to which financial integration depended on the false perception of relatively homogenous sovereign credit risk. As euro area banks were heavily exposed to own governments’ debt, when perceptions of sovereign creditworthiness diverged, so did confidence in their respective banking systems.
I need only mention, in this regard, the brief but rapid ascent of the Swiss franc in October, or the surge in credit risk premia on the bond markets. These movements have since been partly reversed, but tensions remain. These remarks serve to illustrate a more general observation: unfavourable economic developments combined with a financial crisis can impair the transmission of monetary policy, and hence compromise its effectiveness. The expansionary effect of an interest rate cut can be diluted. When confronted with such a risk, monetary authorities have to take rapid and decisive action in order to exert the desired influence on final demand. This is what we have done over the past few months. In order to monitor lending conditions since the outbreak of the financial crisis, the SNB has been conducting regular surveys of the 20 major Swiss banks. By providing us with information on these banks’ intentions and expectations, the survey complements the analysis of lending volumes. In the vast majority of the institutions surveyed, no lending restrictions were announced in the third quarter. Only 15% of the banks reported that their lending practice had become slightly more restrictive. Data for October on lending volumes in Switzerland confirm this picture. Mortgage lending is growing steadily, most recently at a rate of 3.4%. Growth in other lending remains strong, albeit advancing at a slightly slower pace. Large companies have increasingly drawn down their lines of credit, owing to difficulties in sourcing financing on the capital markets.

During those years, in its analyses on the Spanish economy and in its supervisory tasks, the Banco de España identified the main problems that were building up and signalled aspects such as the growing vulnerability of households’ and non-financial corporations’ financial position, associated with their growing and sizeable debt; the big increase in house prices; the excessive concentration of credit in the real estate sector; the excessive dependency on external funding; and the accumulation of losses in competitiveness in the Spanish economy. That said, as the Report states, they were considered to be downside risks, in a scenario that foresaw a move towards lower growth rates and a gradual correction of the imbalances. The Bank did not anticipate such an acute recession as that which took hold from late 2008, which would reveal the scale and gravity of the imbalances that had built up in our economy. The Bank adopted regulatory and supervisory measures which, over time, have been acknowledged internationally as advanced and innovative, even though they were questioned at the time by various national and international institutions, and by the Spanish banking sector, the latter understanding that they placed our banks at a competitive disadvantage.
Budget norms are not new. The norm during the first 25 post-war years – and it was adhered to – was that the annual budgets should show a surplus. The surplus was sufficient to finance an increase in loans to state banks. At the beginning of the oil age in Norway, in the early 1970s, the norm had to be assessed. The relationship between the use of petroleum revenues and changes in industry structure was highlighted. Report no. 25 to the Storting from 1973-1974, “The role of petroleum activities in Norwegian society” stated: “A transfer of production and employees between enterprises and industries can occur as a result of higher domestic cost pressures” … and further … “Inflationary pressures will depend in particular on the extent to which the Norwegian business sector is involved in petroleum activities and the share of revenues that are used domestically”. The implications for economic policy were also clarified: “The risk of excessive inflationary pressures must be given considerable weight when decisions are to be taken here”. The government budget was at that time used to steer the activity level in the economy. The interest rate was to be low – and kept unchanged. Today, with an inflation target, inflationary pressures will be steered using the interest rate, while the value of the krone will fluctuate. Today, this sentence would have to read: “The risk of an exchange rate that is too strong must be given considerable weight when decisions are to be taken here”.

Higher demand for companies’ goods provides scope for increasing prices. Experience shows that inflation is directly influenced by the level of capacity utilisation in the Norwegian economy. Some of the rise in prices for domestically produced goods and services can be attributed to higher margins in the business sector. If there is confidence in monetary policy, economic agents will expect inflation to be close to target over time. This will provide a basis for company budgets. This will then contribute to stabilising inflation. Many companies change their prices only once or twice a year. When they change prices, they probably take into account the expected rise in other prices. It has been important to prevent inflation expectations from falling and becoming entrenched at a low level. Surveys of inflation expectations nevertheless indicate that expectations are well anchored around the inflation target in the long term. 4  BIS Review 10/2005  The interest rate is a powerful instrument. The effects come through growth in private consumption, higher house prices, increased residential construction, higher investment in various business sectors, business start-ups, improved corporate profitability, higher employment and wage growth, higher profit margins and higher imported inflation. The effects of the interest rate decline on demand, output and employment have been pronounced. It has taken time for inflation to pick up. This partly reflects low external interest rates and high oil prices, which have moderated the impact on the krone exchange rate.
See also Ampudia, M., H. van Vlokhoven and D. Żochowski, (2016), “Financial fragility of euro area households”, Journal of Financial Stability, forthcoming; see also: ECB Working Paper Series No. 1737. 17  For details, see the Household Finance and Consumption Network webpage, https://www.ecb.europa.eu/pub/economic-research/research-networks/html/researcher_hfcn.en.html. 6  BIS central bankers’ speeches  remarks. Since March this year, the ECB started publishing a Macroprudential Bulletin 18 that will inform about the analytical work being done, the policy decisions adopted and assessed, as well as analysis of relevant regulatory developments. This will further contribute to enhance transparency in our assessments. We look forward to maintaining a lively dialogue with the community of people in official institutions, in the financial sector and in academia who are interested in the new important field of macroprudential policy. Thank you for your attention. This is the full text of a speech delivered in abridged form at the ECB on 26 April. 18  ECB Macroprudential Bulletin, (2016), Issue 1: http://www.ecb.europa.eu/pub/pdf/other/ecbmpbu201603.en.pdf?f584ec27e20fd378bdca2d6f68d5d7b9. BIS central bankers’ speeches  7

Christian Noyer: Monetary and financial research – its impact on policies and society Opening and closing 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 Conference for the 20th anniversary of the Bank of France Foundation, Paris, 14 September 2015. *  *  *  Opening speech Ladies and Gentlemen, I will now switch to English, given the international audience and speakers that we are quite lucky to have today. I would first of all like to express the great pleasure I have to open this conference for the twentieth anniversary of the Banque de France Foundation for Monetary, banking and financial economic research. I welcome the prominent speakers who made us the honor of joining us today – Yann Algan from Sciences Po in Paris and Luigi Zingales from the University of Chicago Booth School of Business – and all our chairs and discussants who also are renowned economists in their respective fields. A few words about the topic of this conference now. The idea of this conference is to take a step back and some time to reflect on monetary and financial research in general, and its impact on policies and society. We will thus evoke the role of economics and economists within our society. The two provocative papers discussed today provide a very nice opportunity for such a discussion. They both point out several concerns about economic research and finance.
27 For this reason, I believe that to alleviate fears about excessive meddling of governments in private companies, a SWF code of conduct will have to set the limit for individual stakes at a level significantly below the typical threshold of a controlling minority, let alone an absolute majority. As long as a recipient country can be confident that a particular SWF operates in accordance with these two paramount guidelines, there is no reason to demand intricate levels of portfolio transparency from SWFs. Transparency is an attractive answer to intractable problems. But it is unlikely to solve the problems I have tried to outline here. Indeed, I fear that, in some cases, extensive transparency requirements for SWF portfolios could actually end up triggering protectionist reactions in mature markets. It is also important to remember that most stock exchanges already impose various disclosure requirements for large equity holdings in listed companies. There are, of course, a host of reasons why SWFs should, over time, become more transparent. Many of these reasons have to do with the presumed desire of the citizens of a SWF country to demand accountability. Once again, the history of central banking may provide some valuable insights here. The more independent central banks have become, the  November, 2007. McCormick moreover stressed that the US remains open and welcoming to investment from Sovereign Wealth Funds. 26  Truman (2007a). 27  As far as I know, Larry Summers has coined this term.

However other, well-known transmission channels from portfolio adjustments to the real economy are wealth effects on consumption and Tobin´s q on investment. Evidence in industrial countries suggests that the semielasticity of consumption to a permanent 2 increase in stock prices is of the order to 0.04 after two years . In emerging economies, where only a limited number of households own stocks in asset markets, the effect of changes in stock prices on consumption is substantially lower than in the developed world. In addition, as asset prices become more volatile it becomes more difficult to differentiate between permanent and transitory components. There is another channel through which the new economy may affect real activity levels, and that is 3 productivity . Several academic studies have examined the factors behind the spur in U.S. productivity during the last decade, assigning particular attention to the new economy and the effects of the 4 computer revolution. This issue is still under debate . The fact is that the internet revolution has increased the speed of information transmission, making information cheaper and more widely available. This acceleration is quickly changing the business environment, leading to significant savings in the business-to-business supply chain. One of the implications of this increase in the availability of information is a great improvement in inventory management. The optimal level of inventories is becoming smaller, so that the real economy reacts faster to demand and/or supply shocks, reducing both the length and the width of the cycle.
Fixed income investment should primarily contribute to reducing the fluctuations in the Fund’s value. In addition, the Fund should be exposed to credit premiums. The financial crisis taught us that different types of fixed income investments have very similar qualities when market liquidity declines. There are limited gains from holding a large number of diverse securities. Norges Bank therefore recommends simplifying the indices by substantially reducing the number of fixed income instruments. The most commonly used benchmark indices for bonds are market-weighted. Borrowers are assigned weights according to the level of debt they hold. Increased debt can reduce debt-servicing capacity. A market-weighted index is probably not the best approach for diversifying the risk of loss given default. Norges Bank has therefore proposed the use of GDP weights instead of market weights for government debt in the Fund. Under the fiscal rule, central government spending is to correspond to the expected real return on the Fund, estimated at an annual average of 4 per cent. As manager, Norge Bank must invest with a view to achieving a return in line with this objective. Estimating the expected return over the Fund’s long-term horizon is challenging. Some models now suggest that return requirements in equity markets are fairly normal, in spite of low yields7. This may imply a real return of 5–6 per cent in equity markets. With positive contributions in active management, property investment and fixed income management, a total return of 4 per cent is not unreasonable.

Chart: Market value of the Fund The Fund is among the world’s largest funds. Performance fluctuates in step with developments in global financial markets. Nevertheless, the most conspicuous feature (see chart) is not the fluctuations, but the sharp, virtually continuous rise in the Fund’s market value. The stable growth of recent years is due in part to large transfers from the Ministry of Finance in autumn 2008 while equity markets declined. The krone exchange rate also weakened through the crisis, serving to mitigate the impact on the value of the Fund, as measured in NOK. Chart: Return on the Fund Returns over the past two years have been good. After a return of more than 25 per cent in 2009, the return in 2010 was about 10 per cent. This must be seen in the context of weak performance in 2008. Following substantial losses during the financial crisis, the Fund has more than recouped these losses. Chart: Excess return on the Fund  4  Rising Prices on the Menu, Finance&Development, Mars 2011, Vol. 48, No. 1, IMF (Hebling, T and Roache S.)  BIS central bankers’ speeches  5  The figures for excess return – the return on the Fund in excess of the benchmark indices – also reflect the financial crisis. Substantial losses in the second half of 2008 have been more than made up for by the Fund’s favourable performance since then. Since 1998 the annual excess return on the Fund has been above 0.3 percentage point.