samchain/econo-pairs-v1 huggingface dataset:
However, independence does not mean isolation, which is why it is important for a dialogue between the central bank and the democratically elected institutions, as well as directly with the public at large, to be maintained. There is a third insight, which is related to the second. For independence to contribute to achieving a desired inflation target, it needs to be accompanied by a limited and clearly http://www.ecb.europa.eu/press/key/date/2017/html/sp170330.en.html[03.04.2017 15:53:14]  Central bank independence revisited  defined mandate for the central bank. As I will explain in a greater detail when talking about accountability, a clear and limited mandate is necessary for the parliament and the public to be able to monitor and evaluate the performance of the central bank. But, apart from that, a clear and limited mandate also reflects the insight, dating back to Tinbergen[5] , that institutions must not be overburdened with multiple goals without having the appropriate instruments to achieve them. These economic insights contributed to the rationale for providing the ECB with a high level of independence, in view of the primary objective assigned to the ECB of maintaining price stability. This rationale has also been recognised by the CJEU, according to which this independence is not an end in itself but serves to shield the decision-making process of the ECB from short-term political pressures in order to enable it effectively to pursue the aim of price stability.

Moreover, the President of the Council and Members of the Commission may participate, without voting  http://www.ecb.europa.eu/press/key/date/2017/html/sp170330.en.html[03.04.2017 15:53:14]  Central bank independence revisited  rights, in the meetings of the Governing Council (Article 284(1) TFEU) and the President of the Council may submit a motion for deliberation to the Governing Council (Article 284(1) TFEU). With regard to questions from Members of the European Parliament, it is interesting to note that during the 2004-2009 parliamentary term, 62 letters with questions from Members of the European Parliament were received. The number of letters more than doubled during the 2009-2014 term to 128 letters. In the current parliamentary term so far, between 2014 and March 2017, some 383 letters have already been received, of which 317 addressed to the President of the ECB and 66 to the Chair of the Supervisory Board. [22]Decision of the European Central Bank of 4 March 2004 on public access to European Central Bank documents, OJ L 80, 18.3.2004, p.42, as amended. [23]Article 127(6) TFEU prescribes that specific tasks concerning policies relating to the prudential supervision of credit institutions may be conferred on the ECB by the Council by means of regulations adopted in accordance with a special legislative procedure. Article 1 of the SSM Regulation states “this Regulation confers on the ECB specific tasks concerning policies relating to the prudential supervision of credit institutions”. [24]See para. 75 of the judgment in the OMT case. [25]See Article 4(3) of the SSM Regulation.
Real estate market indicators show an ongoing recovery in the sector which, albeit uneven in terms of market segments and geographical areas, is also contributing to the buoyancy of household spending and employment. Although investment has decelerated in recent quarters, it remains firm given the favourable situation of financial conditions and final demand. The Banco de España's projections anticipate that the current growth phase of the Spanish economy, dating back to the second half of 2013, will persist over the next few years and that it will continue to be supported by gains in competitiveness, the ongoing favourable financial conditions, and the expected positive performance of international markets. The foundations of the recovery in the Spanish economy are, in fact, the correction of certain macroeconomic and financial imbalances, which had built up previously, most notably the improvement in international competitiveness, the progress made in the financial position of households, firms and financial institutions, without forgetting the improvement in employment, with a significant decline in the unemployment rate in the last four years, although it still remains at very high levels. However, it should be noted that GDP growth in recent years has also received a significant boost from factors of a more temporary nature such as lower oil prices, the fiscal impulse which gave rise to an expansionary budgetary policy stance in 2015 and 2016, and the ECB's expansionary monetary policy. Lower growth of activity can be expected as the effect of some of these factors fades.

The projected growth in expenditure on contributory pensions in 2017 is rather higher (3.1%), as a result of the projected increase in the number of pensions and the substitution effect arising from the new pensions that replace those that are terminated, so that the weight of expenditure on pensions in total consolidated State and Social Security expenditure increases to 40.7% (as against 38.5% in 2016). Also, the reduction in expenditure on unemployment benefits, of 7%, should be noted. This is explained by the fall in unemployment and in the coverage rate of contributory benefits. On the revenue side, the main measures included in the draft budget are those that were approved on 2 December 2016 in Royal Decree-Law 3/2016. Notable among them is the amendment to corporate income tax in order to widen the tax base. As regards VAT, limits are placed on the conditions for granting deferrals, and a new system is set up for immediate supply of information. As for excise duties, the rates on alcoholic drinks and tobacco products are raised. In the case of Social Security system revenues, an increase in the maximum contribution base of 3% was approved in the above-mentioned Royal DecreeLaw.
Implications for the exchange rate  In principle, the following applies: the more the single currency proves to be a stable and strong currency, the greater will be its advantages for Switzerland, too. With the launch of the euro, the standard deviation of the trade-weighted exchange rate of the Swiss franc vis-à-vis the currencies of the European trading partners has narrowed considerably. The decrease in exchange rate volatility is due to the fact that the euro - as already mentioned - has to some extent replaced weak and extremely volatile currencies. This is a welcome advantage for the Swiss economy, which is closely interconnected with the EU. The volatility of the exchange rate is one thing; the level of the exchange rate is another. Since the beginning of 1999, the Swiss franc has appreciated by more than 9% against the euro. In the  BIS Review 60/2002  3  beginning, the development of the Swiss franc exchange rate against the euro was relatively stable. However, in the aftermath of 11 September, investors became increasingly risk-averse. This led to a further strengthening of the Swiss franc, which had already appreciated during the year 2000. The strength of the Swiss currency is a considerable challenge for our export-oriented economy. One has to put things in perspective, though. First, rather than on the nominal exchange rate, the competitiveness of the Swiss economy depends on the real exchange rate, which is corrected for inflation.

The institution's determination to achieve price stability may not be seriously doubted despite some minor initial inconsistencies in communication. Finally, a danger potential for Switzerland derives from the traditional notion that the Swiss franc is a safe haven currency. The events after 11 September have shown that this notion still plays a certain role. Nonetheless, a mere glance at the map of Europe, on the one hand, and at the integration of the Swiss economy in the euro area, on the other hand, should convince any investor that the Swiss franc could hardly remain immune to a major crisis in the euro zone. 3.3. Implications for the interest rate level in Switzerland  Both nominal interest rates and real interest rates, which are more important for growth, have been relatively low in Switzerland since the First World War. Averaged over the past twenty years, the interest rate spread on money market rates compared with Germany amounted to between 1 and 1.5 percentage points, while the differential between capital market rates came to approximately 2.5 percentage points. This interest differential represents an inestimable advantage for the Swiss economy. The reasons for this so-called "interest rate island" are manifold. First, a lower real interest rate may simply be seen as a reflection of the Swiss franc which appreciates over time.
It also allows firms to leverage existing capabilities and so avoid unnecessary compliance costs. There is no one size fits all approach for banks to demonstrate their resolvability; banks themselves are best placed to understand what they need to implement in order to ensure an orderly resolution process, keeping their preparations under review as they grow and change over time. We expect firms’ boards and senior management to take responsibility for their own resolvability, and to satisfy themselves that, if the worst were to happen, they could be resolved effectively. For resolution credibility means effectively executing what we say we will do. The presence of a credible resolution regime supports our aims, meaning that we can be more confident that if a firm does need to exit, it can do so in a way which minimises contagion and disruption. The RAF strengthens our confidence in these plans, by embedding increased accountability and setting strong expectations of firms and their boards. Firms which are already at, or aspire to reach, a level such that their exit would cause an unacceptable level of disruption should factor our resolvability requirements into their business plans – as with any other regulatory requirement.

The Bank is attuned to the ‘proportionality problem’ – we understand the need to balance the costs of operating in a complex regulatory environment with the benefits of having a diverse and competitive banking sector, as my colleague, Sam Woods, set out in his speech on the PRA’s ‘strong and simple’ approach to regulation.9 Indeed as someone who is both a member of the Prudential Regulation Committee and who has operational responsibilities of my own, I see both sides of this trade-off in action. As the Resolution Authority, our aim is to ensure firms can fail in an orderly way, whatever their size. To deliver that, we seek to ensure our policy requirements are proportionate and appropriate for the UK banking system: proportionate to the impact of failure, and appropriate to the institutions they are applied to. Readiness to execute an orderly resolution is an inherently flexible concept; to be effective it must be capable of adapting to wider circumstances as they evolve. In recognition of this, we undertake public consultations for our policies and have sought to provide more detail on our policy expectations as the resolution regime develops, and review the efficacy of our existing requirements to meet the objectives of the resolution regime, including supporting financial stability and protecting public funds. This allows us to listen to and understand different stakeholders’ experiences and perspectives; particularly important given that resolution is a relatively new part of the regulatory regime.
On top of that, the OTC derivative contracts had a daily turnover of $ trillion in 1998, and the notional amounts outstanding at end-June 1998 came to $ trillion. There is no doubt that the growth of foreign exchange and OTC markets, together with advances in information technology, has contributed to cross-border capital flows and enhanced risk management standards. It is, however, legitimate to ask what lies behind these vast numbers. What does it mean for the underlying markets if the financial derivatives trading continues to multiply? Do we understand exactly what these $ trillion worth of derivative positions represent? Do we really understand the nature of the fund flows generated from the financial derivative trading in the OTC markets? The problem is that we do not have the answers to most of these questions. To start with, there is not even an adequate statistical framework to capture capital flow data. The current data on balance of payments, international investment position, or flow of funds accounts have two major short-comings: (a) low frequency of quarterly data; and (b) limited breakdown of data by currency, sector, instrument, etc. The BIS, IMF and OECD are examples of institutions which have made some attempts to collate relevant statistics but they are far from complete or timely. This is not just a statistical issue for the data compilers but a major policy issue for the authorities and other users. The compilation of high-frequency and detailed data is going to be resource-intensive and there is keen competition for statistical resources.

I have mentioned two approaches, that of enhanced counterparty risk management and improved transparency and disclosure, which will hopefully help to address the concerns on excessive leverage and on opaqueness of HLIs. There remains the issue of aggressive trading practices, such as taking extreme measures to manipulate prices and to precipitate herding or panic selling by other market participants. Such practices undermine market stability. I therefore call upon the private sector market participants to review matters and devise a code of conduct to improve the standard of market behaviour and practices. For such a code to be effective, I believe it needs to be market specific and applicable to all market participants in that market. Conclusion Ladies and gentlemen, it has often been said that history, especially financial crisis, tends to repeat itself. In the last ten years alone, we have had the ERM crisis in 1992, the Mexican peso crisis in 1994/95 and the latest Asian crisis in 1997/98. Notwithstanding the disturbingly frequent occurrence of seemingly similar financial crises, I am inclined to believe that even though no two crises are exactly the same, if people do not learn from past mistakes, the market will continue to repeat its punishment. The only difference between the major financial crises in recent years is that the punishment is getting more and more severe, if not violent. I have cited three major challenges to learn from the mistakes in the last financial crises. First, domestic structural reforms. Secondly, monitoring and surveillance of capital flows.
Christian Noyer: The role of central bankers in today’s global capital markets 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 50th General Assembly and Annual Meeting of the World Federation of Exchanges, Paris, 12 October 2010. *  *  *  In May 2009, the ECB initiated a covered bond purchase programme and, in May 2010, it embarked on rounds of interventions in the public and private debt securities markets, actually the sovereign debt market, with a view to, and I quote, “ensure depth and liquidity in those market segments which are dysfunctional”. In fact, since 2008, the active presence of almost all central banks on a wide range of market segments could suggest that direct market intervention has become the general modus operandi of central banks. This is far from being the case and I would like to focus my talk today on the following two ideas:   Central banks require efficient markets to fulfil their mandates.   This can lead to massive direct interventions in markets but these interventions must remain exceptional. In order to examine the role of central banks in markets, we should start off by considering their mandate, which not only covers the tasks themselves but the way in which they are performed, i.e. in keeping with the principle of independence that governs them.

Even as regional economic integration increases in Asia and other parts of the world, these economies seem a long way from the point where economic, or political conditions, will make a compelling case for monetary integration. In Europe, of course, the political case for monetary integration to a large extent preceded the economic case. And the architects of the European Union integration worked consciously to induce a level of economic integration in Europe that would induce conditions that more closely met the economist's test for an optimal currency area. For most of the emerging markets today, in contrast, the challenge is to establish the conditions that will enable them to live more comfortably in a world where their exchange rates will adjust more freely in response to changing fundamentals. As these economies become more open to capital flows, they will necessarily find it more difficult to occupy the tenuous middle ground with an exchange rate regime that is neither fully fixed nor flexible, but managed in a way that closely tracks the value of the dollar or carefully constrains fluctuations against the dollar. This does not mean that these countries can be indifferent to exchange rate movements or that the exchange rate is irrelevant to the conduct of monetary policy. For many small open emerging economies, price stability and exchange rate stability are obviously intertwined, and a monetary rule that responds effectively to inflation pressure cannot afford to overlook the signals coming from the foreign exchange market.
That made no sense. The only possibility of a speedy pay-out of deposit insurance in order to contain contagion was for the authorities in the host countries to pay it and leave the issue of settlement with Iceland for a later date. And this was what they did. From the beginning, there were legal arguments about the merits of such claims. In spite of that legal uncertainty, the Icelandic Government took part in several good-faith attempts to reach a negotiated solution. However, it proved impossible to get ratification through the Icelandic political process, in two cases involving referenda. In retrospect, it is clear that the main reason for this was the Icelandic people’s unwillingness to shoulder financial liabilities that had not been clearly signed by those mandated to do so on behalf of the nation or  BIS central bankers’ speeches  3  proven in a court of law to be sovereign obligations. Instead, these were seen as the debts of reckless private bankers. Now the EFTA court has ruled that it was indeed not a sovereign liability. In any case, the recovery from the estate of Landsbanki will cover 100% of all deposits in foreign branches. Without the priority given to deposits in the Emergency Act of October 2008, the recovery to be paid to these depositors would be much lower. This case provides important lessons about the design of deposit insurance within the EU and the clarity of wording, or lack thereof, in EU directives.

Be that as it may, the direct fiscal costs of capital injections into domestic banks, losses on government guarantees, the blanket guarantee of domestic deposits, and the refinancing of the Central Bank are estimated to have amounted to onethird of year-2010 GDP. The net might turn out to be somewhat lower, however; for instance, there will be some recovery on the collateral of CB lending to failed banks. Gross government debt went from under a third of GDP before the crisis to a peak of one GDP, and net debt rose from around a tenth to two-thirds. As a result, there was no fiscal space to save banks 10 times GDP, and attempting to do so would have bankrupted the country. Indeed, Iceland had to embark on a medium-term fiscal consolidation programme even as output was still contracting, in order to stop government debt from reaching an unsustainable level and to rebuild the external confidence needed for the sovereign to regain market access. The overall fiscal effort (measured by changes in the cyclically adjusted primary balance as a percentage of potential GDP) amounted to 10 percentage points 2010–13, more than that of Ireland during the same period (although Ireland will overtake Iceland if the expected effort for 2014 and 15 is added).
Of course, as I noted in a speech earlier this year, we will have to monitor inflation expectations closely to ensure that they do not become unanchored. We also need to keep a close eye on the degree to which unit labor cost increases in EMEs and real exchange rate appreciation abroad are passed through into U.S. import prices and consumer inflation. Although the historic evidence is that pass-through has been limited in the United States, we cannot be complacent about this. Meanwhile, we have to recognize that monetary policy works somewhat differently in a world in which a large share of global GDP is part of a de facto dollar block. In particular, we must take into account the feedback loops this creates – how U.S. monetary policy influences financial conditions elsewhere and, how these changes, in turn, influence activity and prices in the United States. At the same time, other nations should recognize that we cannot and do not seek to make monetary policy for the world. Responsibility for ensuring that financial conditions in other nations are appropriate for their own circumstances appropriately lies with their national authorities, and they have a wide range of fiscal, monetary, exchange rate and other policy tools available for this purpose. I do not see any fundamental conflict between U.S. domestic economic objectives and the interests of the global system as a whole. But the existing system of global currency and monetary arrangements does render effective pursuit of these objectives more difficult.

William C Dudley: US economic policy in a global context Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Foreign Policy Association Corporate Dinner, New York, 7 June 2011. *  *  *  It is a pleasure to have the opportunity to speak here this evening and I would like to thank the Foreign Policy Association for inviting me. The Association has served for decades as a catalyst for developing awareness and understanding of global issues and for providing nonpartisan forums for informed discussion. Your mission is clearly a worthy one – now more than ever. In this discussion I will highlight how the recent financial crisis and its aftermath have accelerated the shift in the relative importance of the so-called developed and emerging market economies. I will then discuss how the global economic system needs to adapt in light of the growing relative importance of the EMEs in the global economy. I will explore the implications of these changes for U.S. economic policy and I will also touch on some of the challenges the EMEs face as they seek to consolidate their gains and sustain their success. I will argue that the developed countries and the EMEs need to adjust in mutually supportive ways. In my view, the current relationship between the EMEs and the United States is not sustainable for either side.