samchain/econo-pairs-v1 huggingface dataset:
If the trilemma is in fact a dilemma, then countries will have to choose between monetary independence and closing their capital accounts. 2/4  BIS central bankers' speeches  I would question the generality or starkness of this dilemma. For example, I do think that the euro area can determine its own course. Our asset purchase programme has contributed to a spread exceeding 250 basis points between the 10 year yields in the US and in Germany. Likewise, the gap between policy rates in the US and the euro-area is the widest since 2009. More technically, an estimated Taylor rule for the euro area that includes US monetary policy as one of the explanatory factors finds only a very modest co-movement between the two. What is more, countries seem to be arranged along a continuum, with some exhibiting total independence at one end to those with exchange rates pegged to the US dollar at the other. So they don’t have to choose one of the two polar positions but can pick an intermediate position. For example, putting some temporary restrictions on cross-border movement of capital could give some but not complete independence of monetary policy. But is there more that central bankers can do to manage the tensions created by this economic divergence? Put another way, how do we reconcile yet another paradoxical couple: independence and co-operation? In my view, we can and should act to enhance co-operation between central banks, based on four building blocks: Mutual predictability of policy making.

For our guidance to be reliable, we need to be as clear, credible and consistent as possible. We cannot be clear like a train timetable but more like how a captain sets a course and adapts to the wind and the waves. So our sequence of steps for policy normalisation is very predictable: First, we halved our net asset purchases to 15 billion this month and will very probably end them in December; 1/4  BIS central bankers' speeches  Second, we set down a guide post with our long-dated forward guidance: we will maintain interest rates at current levels until at least through the summer of 2019; And third, we will retain our stock of assets for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation. Let me insist on this: the end of the net asset purchases will not be the end of our monetary stimulus, far from it. Moreover, this sequence doesn’t depend on the fiscal uncertainties that can appear in member states. The Governing Council is clear about the fact that there is no fiscal dominance in the euro area and no influence of any national fiscal policy on our common monetary policy. In addition, our past consistency forges our credibility for the future. Since March 2016, we took decisions on the evolution of our net asset purchases at intervals of approximately 9 months.
Ajith Nivard Cabraal: Ensuring stability and integrity of the world’s financial system over the next few years Keynote address by Mr Ajith Nivard Cabraal, Governor of the Central Bank of Sri Lanka, 27th International Symposium on Economic Crime, Jesus College, University of Cambridge, Cambridge, 5 September 2009. *  *  *  Chairman, Professor Barry Rider, Distinguished Delegates, Ladies and Gentlemen; I am delighted to be here this afternoon at the historic University of Cambridge to deliver one of the closing addresses at your 27th International Symposium on Economic Crime. Thank you very much for your invitation, which I am honoured to accept. I am also happy that this year, 2009, marks the 800th Anniversary of this great institution. Therefore, I would like to take this opportunity to congratulate the University of Cambridge on reaching this amazing milestone, and extend my best wishes for the centuries ahead. Mr. Chairman, at your invitation, I would, today, discuss the ways and means of ensuring the stability and integrity of the world’s financial systems in the future. As in the case of all serious and complex reviews, our starting point should necessarily be to critically examine the basic and underlying reasons for this crisis.

Jean-Pierre Roth: The position of the Swiss franc exchange rate in the Swiss National Bank monetary policy strategy Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the University of St. Gallen, St. Gallen, 19 December 2007. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The exchange rate is an important factor in determining the domestic price level in Switzerland. Nevertheless, it is not a monetary policy goal for the Swiss National Bank and is only relevant insofar as it has an impact on future inflation. Our concerns about our currency's weakness should not be read as a hidden form of exchange rate policy but rather as genuine concern about future price stability. A sustained tendency to weakness on the part of the Swiss franc could trigger inflationary effects that – sooner or later – would have to be countered with monetary policy instruments taking the form of interest rate measures. In the medium-term, this could lead to a reduction in the interest spread between the Swiss franc and the euro. BIS Review 151/2007  1
Luis M Linde: “The New Hegemon or Last Country Still Standing” Speech by Mr Luis M Linde, Governor of the Bank of Spain, at the Frankfurt Finance Summit 2014, Panel IV: The New Hegemon or Last Country Still Standing, Frankfurt am Main, 20 May 2014. *  *  *  As a result of the crisis, the institutional and intellectual setup of European Monetary Union is being deeply revised. Fresh views on the role of stability across several dimensions – including fiscal and macro-financial – have emerged and taken over the old approach of the Maastricht Treaty. Several players, including, indeed, the ECB, are contributing to this overhaul. I would like to review the main elements of the old institutional setup, the weaknesses revealed by the crisis and the way a reinforced culture of stability is contributing to their repair. The monetary union designed in Maastricht included, in addition to the ECB and the single monetary policy, a relatively loose governance framework for the euro area based, first, on a fiscal discipline device – the Stability and Growth Pact – and, second, on coordination for the remaining economic policies – the Broad Economic Policy Guidelines –. The setup also relied on governments, households and firms being able to internalise the stability patterns required within a monetary union and counted on financial markets penalising those who would not do so.

What we observed before the crisis, and what we became painfully aware of when it erupted was, however, that public and private agents in some countries did not change their behaviour, that financial markets did not play any disciplining role and that the loose application of the Stability and Growth Pact and the Broad Economic Policy Guidelines rendered them ineffective as stabilisation devices. The Pact and the Guidelines were not strong enough to prevent the accumulation of a series of imbalances. We also discovered two other gaps during the crisis: too little attention had been paid to how financial markets work within a monetary union and no crisis management mechanism was available. To be stable, the European building needed operational repairs. The stability principles, as conceived in Maastricht, were insufficient and a new culture of stability had to take over. The ECB acted on several occasions to curb the so-called “tail risks” – the risk of the monetary union breaking up – and to gain the time needed for others’ actions to bear fruit. It is worth noting, however, that monetary action can hardly go beyond this as the cracks detected in the building were not of a monetary nature. At the Member State level, fiscal consolidation policies and structural reforms were needed and are being implemented to better accommodate domestic behaviour to the patterns of stability required within a Monetary Union. As for euro area governance, a deep process of reform has been undertaken.
Thus Hong Kong will adopt Basel II at the same time as other major international financial centres, such as London, Frankfurt and Tokyo. From a regional perspective, the implementation timetable in Hong Kong is broadly similar to that being adopted by Australia and Singapore. For several years now the HKMA has been developing its supervisory approach along Basel II lines, and this is leading to some significant changes in how supervision is conducted. Central to this is the issue of "process versus rules". Process versus rules The original Basel Capital Accord was developed when risk management was still very much in its infancy. It reflects what might be called a "rules-based" approach to regulation in the sense that it sets prescriptive standards that banks are required to follow. It relies largely on the application of simple, mechanical formulas for assessing how much capital a bank should hold. The essence of the old Capital Accord was that it represented an attempt to monitor the prudential soundness of banks by using a standardised risk measurement framework, which was applied to all institutions and which employed data based on a snap-shot of their balance sheets at certain specified reporting dates. The approach was standardised since regulators specify the precise form in which the calculation of capital adequacy is to be performed - for example, the specific risk categories into which assets are to be assigned.

Efforts are now underway in a variety of contexts to try to secure better coordination in these various initiatives, but it has to be admitted that in an ideal world they would not be quite so clustered together. That said, I would be the first to acknowledge that Basel II requires heavy investment in risk management systems and IT infrastructure, as well as radical changes in the risk management culture at some banks. However, this is a healthy development. I suspect that banks would have in any case needed to make most of the so-called "Basel II-related" investment if they wanted to stay at the top of their game. By agreeing to accept banks' internal risk management systems as the basis for the calculation of regulatory capital requirements, the Basel Committee has provided a powerful incentive for banks to upgrade their risk management systems. But this is only what they otherwise would have needed to do to be able to compete with the best. There are, however, some quite specific challenges for Asian banks in using the more advanced approaches under Basel II. One of the most important is the availability of data. Historically, many Asian banks have not collected the data needed to develop the type of models needed for IRB purposes. Some are only now starting to do so, and it will be several years before they have sufficiently rich data that it can begin to inform their credit risk management processes.
These actions all add to the firm’s stock of cultural capital. Like other forms of tangible and intangible capital, cultural capital grows and shrinks over time – purposeful investments and managerial focus can add to it, while neglect or misconduct can reduce it. Depletion of cultural capital can adversely impact the firm’s productive capacity and value. This reflects, for example, changes to employees’ attitudes and practices (“how we do things”), as well as their beliefs and values (“the way things should be done”). In the Whitepaper, mthey need to recognize the importance of this critical asset, be able to measure it, and understand the types of investment needed to sustain it and the forces that may cause it to depreciate. Since the New York Fed began to highlight the need for a focus on culture reform in financial services, measurement has consistently been raised as a challenge. While measuring culture may not be as straightforward as measurement approaches for more traditional assets and risks, it is possible to gain valuable insights through a multi-layered and patient approach. Through the use of surveys, interviews, focus groups, behavioral analytics, network analyses, and board effectiveness assessments, firms can triangulate from multiple inputs and develop a view of how high or low their cultural capital is, both in an absolute and relative sense.

Before going into the specific refinements, I would like to elaborate the background of the arrangement for the conversion of RMB conducted by Participating AIs through the Clearing Bank in Shanghai: (1)  First, RMB funds flowed into Hong Kong through trade payments or other channels will become RMB deposits in Hong Kong, and these RMB funds can be used, deployed or exchanged freely into other currencies in the market in accordance with the applicable laws and regulations in Hong Kong. This is the main premise of developing an RMB offshore market in Hong Kong. In other words, the exchange rate and interest rate of RMB are to be determined by the supply and demand of RMB funds in the Hong Kong market. As the offshore and onshore markets are segregated, it is not unusual that the pricing may be different between the two markets. BIS Review 175/2010  1  (2)  Secondly, we should look at the actual supply and demand of RMB funds in the Hong Kong market this year. At the end of November, the total amount of RMB deposits in Hong Kong reached RMB 280 billion. This means that Hong Kong has accumulated a substantial pool of RMB funds which can meet the market’s daily demand.
Karolina Ekholm: Dealing with cross-border banking without rolling back financial integration Speech by Ms Karolina Ekholm, Deputy Governor of the Sveriges Riksbank, at the Bank of Greece, Athens, 11 June 2010. *  *  *  It is an honour for me to have been invited here to the Bank of Greece. Little did I know when I originally planned this visit that Greece would be the country on everyone’s lips by the time I got here, given that it is now at the centre of a fiscal crisis in the European Union. Considering that Sweden is one of the European countries that has previously carried out fiscal consolidation of the same order of magnitude as Greece is planning for the next few years, I might have chosen to talk about fiscal consolidation today. But it appears that there is no lack of good advice from the outside world on this topic. I will therefore talk instead about another issue that the financial crisis has revealed to be of some urgency – how to deal with problems arising from cross-border banking. The global financial crisis and the bailout and failure of several cross-border institutions have raised serious concerns regarding the regulation and supervision of such institutions and crisis management regarding institutions in distress. Possible policy responses to the problems arising from cross-border banking include various ways of limiting banks’ abilities to expand abroad. However, such responses would also reduce the potentially positive effects arising from financial integration.

Recent bank surveys also show that following clients abroad is still an important element in banks’ internationalization strategies. 14 Another issue is what determines the location choice of a bank that has decided to expand abroad. From what has already been said it is quite clear that we see a similar pattern as in all international transactions – geography matters. Presumably this is mainly due to the fact that geographical proximity is related to familiarity with language and customs, which puts foreign bank at less of a disadvantage vis-à-vis local banks. But it could also be due to the higher costs associated with operating activities that are located very far apart. 15 One might expect, however, that recent advances in communication and information technology would change the premises for cross-border banking. New technology allows banks to provide financial services over the Internet and would therefore seem to reduce the advantages of local presence, at least for certain services. Take for instance the online savings accounts by which banks can attract retail deposits from foreign markets without any physical presence at all. At the same time, improvements in communication technology may lower the costs of operating activities located far apart and therefore reduce the advantages of geographical proximity between headquarters and the foreign branches or subsidiaries. Whether this is likely to lead to more or less local presence by foreign banks is difficult to say, but it clearly is a factor that contributes to making banking more globalised.
Looking at these patterns over time paints a somewhat more optimistic picture (Chart 4). There is clear evidence of economics having become more cross-disciplinary during the course of this century. Once finance is taken out of these estimates, however, economics continues to lag. And alternative metrics, such as the degree of rigidity in hierarchies and gender diversity, paint economics in a less favourable light (Fourcade, Ollion and Algan (2015)). Despite progress, it is difficult to escape the conclusion that economics remains an insular, self-referential discipline. 9  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  9  The economics profession’s intellectual bloodline is purer than in most other disciplines. In some respects, it is a source of strength that the workhorse economic model is a thoroughbred. That quest for purity also contributed importantly, however, to this workhorse falling at the first meaningful fence put in its path. This suggests it is probably as good a time as any to consider mixing the intellectual bloodline, just as physics and other of the natural sciences have done. Agent-Based Models (ABMs)  Against this backdrop, what other disciplines and approaches might be productive alternative lines of enquiry? One potentially promising strand is so-called agent-based modelling. Agent-based models (ABMs) are interconnected systems of individual “agents” who follow well-defined behavioural rules of thumb. What makes these models interesting is that these agents are heterogeneous and interactive. In other words, these models relax one of the key assumptions of the standard model – a single, representative agent.

Other complementary policy actions in housing, fiscal policy and structural adjustment or rebalancing of the economy will be essential if we are to achieve the best available recovery. Regional economic conditions Turning now to the regional economy, growth slowed in late 2011 in New York City and New York State, whereas New Jersey has seen a modest pickup. As attendees at previous regional press briefings may recall, the New York Fed produces economic activity indexes to help monitor the performance of the regional economy.2 Based on these measures, economic activity has leveled off in both New York State and New York City since the summer, following above-average growth in the first half of 2011. In contrast, New Jersey’s economy, which was sluggish throughout 2010 and into the first half of 2011, has picked up noticeably in recent months. We monitor Puerto Rico using an index produced by the Government Development Bank for Puerto Rico. This index suggests that the island’s recession, which started back in 2005, may finally be ending. After bottoming out last August, activity has risen fairly sharply – reaching a one-year high in November. Still, Puerto Rico’s recovery has had a number of “false starts” before and this measure is noisy. Thus, the recent improvements will need to be sustained for longer before we can confidently declare that the island’s recession is over. Turning to the employment situation, our region finished 2011 on a mixed note.
It has been estimated that once an FTA between ASEAN-China is signed, a collective 1.7 billion consumers with a combined GDP of almost $ 2 trillion will be a powerful force supporting sustainable growth, especially as per capita incomes continue to rise and trade barriers continue to fall in the region. Finally, a move of regional exchange rates towards greater flexibility will continue to support this increase in trade, with more market-oriented exchange rates sustaining further growth in intra-regional trade. In the past, despite the various exchange rate regimes adopted in Asia-9 economies – which have included both fixed and flexible exchange rate regimes – intra-regional trade has nonetheless grown at a substantial rate. The recent move by the Chinese and Malaysian authorities in the middle of last year to introduce greater flexibility to their exchange rates will help to further support this increased trade. The managed float exchange rate system will allow the exchange rate among Asia-9 to move in close alignment with one another which will make it conducive to trade within the region. You may be wondering why I have focused on developments in China and Asia-9 and how that is relevant to this audience today. I think this is extremely relevant. Allow me to elaborate further. As one coming from East Asia to this esteemed gathering, I would like to invite our hosts to “Look East”, in the same way that the East Asian region has embraced the policy to “Look West”.

I believe that Asia-9’s experience of growth, or more specifically, intra-regional trade and production, can provide an interesting case study for our South Asian counterparts. The emergence of the Asia-9 economies To bring this perspective even closer to home to this audience, let us look at these developments from India’s perspective. Traditionally, India’s trading partners have been the G3 countries, with the US, the EU and Japan accounting for 52% of India’s total trade with the world in 1990. At that time, India’s trade with Asia-9 accounted for only 8.3% of India’s total trade. Fifteen years later, the structure has changed remarkably. The share of trade with the G3 countries, in terms of India’s total trade, has fallen to 33.9%. During the same period of time, India’s trade with Asia-9 has risen from 8.3% to 23.3% - an almost three-fold rise. From the perspective of Asia-9 themselves, intra-regional trade among themselves has risen from 29.1% of their total trade in 1990 to 41.4% in 2005. More striking, the share of intra-regional trade  BIS Review 7/2006  1  among the Asia-9 economies has outgrown the share of their trade with the G3 countries over the same period, which has in fact fallen from 52.6% to 39.2%. In terms of growth, trade among Asia-9 economies has grown at an average 23% in the past 3 years, exceeding the average 17% growth in trade with G3 countries. What message can we draw from these developments?