samchain/econo-pairs-v1 huggingface dataset:
Adopting a more systematic and rigorous approach to assessing trust in the central bank may not only help address these shortcomings but also to acknowledge the full diversity of its responsibilities. I have already noted research stressing the relevance of credibility for the effectiveness of monetary policy, but credibility and public trust may be equally important for financial stability, the issuing of currency, or the generation of statistics. Moreover, one can conceive that trust across these functions could be somewhat connected. Loss of trust from a misconceived financial intervention or from distorted statistics may spillover to the way stakeholders assess the credibility of monetary policy. To foster trust, a central bank must go beyond the conduct of monetary policy to focus on how to develop reliability, adaptability, integrity, openness and fairness in its different areas of work. In the context of central banking, reliability is not equivalent to a dovish monetary policy giving priority to shortsighted demands to stimulate the economy, but to do the proper balancing of risks to align monetary policy with long-run social welfare. It means acting in a coherent way, showing thorough decision-making, carefully explaining reasons and arguments behind every action, conducing predictable decisions, and running efficiently the central bank as an organization. For this, I consider essential a clear framework for monetary and financial policy, data-driven decision making, unquestionable technical capacity and statistics, and skillful crisis management.

In sum, after recognizing credibility as the main asset of a central bank, especially an independent one, we can conclude that drawing on parallel work on trust in institutions may provide a useful Page 6 of 8  Central Bank of Chile July 2019  framework to assess the current situation and to guide action to address existing gaps and vulnerabilities. Trust in the Central Bank of Chile The experience of the Central Bank of Chile can illustrate some of the ideas above. The IMF study on the importance of credibility for monetary policy underscored anchoring of inflation expectations in Chile as key to the effectiveness of its monetary policy and macro resilience in the face of external shocks. Deviations of long-term forecasts of headline inflation from target have been less than 0.1%–being the lowest for a sample of emerging countries, and even lower a benchmark group of advanced economies. This is remarkable considering that inflation volatility in Chile has not been particularly low relative to other emerging economies. Yet we do not see credibility as an immutable attribute, given the dynamism of trust in institutions in the public opinion and market perceptions. We believe that a positive past record helps, but trust can deteriorate in a number of ways, some of them pretty fast, in the face of new standards and developments. Therefore, trust needs to be protected and enhanced in a systematic way with different stakeholders in the different dimensions of activity of the Bank.
This concerns a quite substantial segment of the European banking sector. Consider that almost 70% of banks supervised by the SSM have not issued listed shares, 59% have not issued convertible bonds and 18% do not have subordinated debt on their balance sheets (see Chart 5). Many of these banks will foreseeably have to make adjustments to their business model, to align it to the change in size and composition of bank balance sheets required under the new regulations. Chart 5 SSM SIGNIFICANT INSTITUTIONS BY OWNERSHIP STRUCTURE 100% 90% LISTED  80% 70% 60%  COOP. and SAV.BANKS  • 59% have not issued any AT1 instrument (e.g. convertible bonds)  50% 40%  STATE OWNED  30% 20%  NON-SSM PARENT  • 18% have not issued any T2 instrument (e.g. subordinated debt)  10% OTHER  0% SOURCE: Banco de España  3. Possible responses by the banking sector  Macroeconomic and regulatory developments support the increasingly widespread perception that there is excess capacity in the European banking industry that will heighten competition and jeopardise the viability of those institutions least able to adapt to the new environment. BIS central bankers’ speeches  5  3.1  Efficiency  Naturally, credit institutions’ first line of defence is to gain in efficiency. In recent years, as observed in Chart 6, cost-to-income ratios across the European industry have not appreciably improved in the different banking systems and they remain significantly heterogeneous. That suggests there is considerable room for improvement.

Total new lending to households in 2021 amounted to € which is higher than the € credit that was granted during the pre-pandemic year of 2019 and well above the € granted during 2020. The momentum has been maintained in the first two months of 2022 as well, since the new lines of credit amounted to € against € last year. Total new lending to businesses in 2021 accumulated to € which is higher than the € granted in 2020 but subdued when compared with the € granted in 2019. It is evident that the banks' financial position, the regulatory measures and initiatives taken by both the European Central Bank and Central Bank of Cyprus are the factors that contributed to this positive post-Covid development of the banking sector providing support to the economy. However, banks must, for their own good and profitability as well as for the good of the Cypriot economy, become better and more efficient at serving their clients. I have made this point to the CEO's and Chairmen of the banks a number of times and I also called a meeting between the CBC, economy stakeholders like KEBE, Institute of Certified Public Accountants of Cyprus, the Cyprus Bar Association and the Cyprus banks to promote and facilitate better and more efficient ways of doing business with the banking sector. Whereas as agreed, follow-on meetings have subsequently taken place  3/5  BIS - Central bankers' speeches  between the stakeholders, I'm forced to say that I have not seen practical progress.
Cold comfort because the UK’s productivity slowdown appears to have been larger than in almost any other country. Given its seriousness, it is no surprise there has been no shortage of words written, and proposals made, on how to understand and solve the productivity problem. 2  If productivity was measured by words written and  spoken on the subject, it would have long-since been solved. The UK government has issued its own green and white papers, setting out an industrial strategy. 3  These policy proposals hold, I believe, real promise. For today, I thought I would begin by providing some diagnostic evidence on the UK’s productivity problem, 4  focusing on the long and lengthening tail of lower-productivity firms. This is not the only lens through which to view the UK’s productivity problem. Looking at the problem by sector, by region or by city all have merit  1  Recent references to the ‘UK productivity problem’ include Macpherson (2018) and Wren-Lewis (2017). For example, Aghion et al (2017), Jones (2016), Jacobs et al (2017). HM Government (2017) and Department for Business, Energy & Industrial Strategy (2017). 4 Haldane (2017), Berlingieri et al (2017), Andrews, Criscuolo and Gal (2015), Andrews, Criscuolo and Gal (2016). 2 3  2  All speeches are available online at www.bankofengland.co.uk/speeches  2  5  too. But I find the distributional lens a useful one for identifying the source of the UK’s “productivity gaps” – its gap with competitor countries and its gaps with its own past performance.

Chart 6: Change in firm-level productivity dispersion since 2001 Services (indexed)  Manufacturing (indexed) Index, 0=2001  Denmark Finland France Italy Japan Norway New Zealand UK  2001  2003  2005  Index, 0=2001  0.7 0.6 0.5 0.4 0.3 0.2  2007  2009  2011  2013  0.7  Denmark Finland France Italy Japan Norway New Zealand UK  0.6 0.5 0.4 0.3 0.2  0.1  0.1  0.0  0.0  -0.1  -0.1  -0.2 2015  2001  2003  2005  Year  2007  2009  2011  2013  -0.2 2015  Year  Sources: OECD and Berlingieri, Blanchenay and Criscuolo (2017); ONS Research Database and Bank calculations. Notes: Chart show log difference between 90th and 10th percentiles indexed to zero in 2001. UK data only available from 2002, so UK base year = 2002. 30  All speeches are available online at www.bankofengland.co.uk/speeches  30  Chart 7: UK, Germany and France firm-level productivity (data for 2013) Percentage of firms 12 Expected value of productivity in country  UK  10  Germany 8 France 6  4  2  0 -220 -200 -180 -160 -140 -120 -100 -80 -60 -40 -20  0  20  40  60  80  100 120 140 160 180 200  Productivity (difference from expected value as a percentage of peer group median)  Sources: McKinsey and Orbis (2013). Notes: Data kindly provided by McKinsey Global Institute.
“Before” are the closing rates on the day before the repo rate path was published and “After” are the closing rates on the day it was published. Prospera’s survey covers money market participants. Sources: Reuters EcoWin, TNS SIFO Prospera and the Riksbank. A recurring phenomenon during the three years with our own repo rate path has been that market expectations of the repo rate have from time to time deviated from the Riksbank’s repo rate forecast. Allow me to comment further on this. 6  In addition to the repo rate cut of 0.25 per cent, the Riksbank has granted loans at a fixed interest rate for the purpose of bringing down actual interest rates paid by companies and households. BIS Review 85/2010  5  Market expectations and the repo rate path As I mentioned earlier, one important purpose of publishing a repo rate path is to influence expectations among the participants in the economy. The established view at present is that monetary policy has its main impact by influencing expectations of future interest rates. A natural question here is if the Riksbank’s repo rate path has differed from other agents’ expectations of the repo rate, and how large the deviations have been. What role do the differences between market expectations and the Riksbank’s forecasts play? How large are the deviations… As we have seen, the Riksbank, the market and other economic agents can have different views on how the repo rate will develop. Sometimes the differences are small, and sometimes they are large.

This borrowing was in turn channelled via domestic banks into projects with long-term funding. When foreign and domestic investors began to show concern over uncertainty regarding the growth potential of these countries, the course of events moved rapidly. This development shows how a misdirected economic policy can soon have devastating consequences for a country. However, instead of focussing on the content of the economic policy, many critics have singled out the open capital markets as culprits. Some of these critics have therefore considered capital controls to be a good means of avoiding future crises. Yet the experiences of the 1970s and 1980s show that these controls cannot counteract the effect of an inadequate domestic economic policy in the long term. Sooner or later it will be necessary to adapt the exchange rate. It is also very doubtful whether capital controls have contributed to increasing monetary policy independence during these decades, which was one argument put forward in favour of the controls. In practice, it was probably the case that the arguments for keeping the controls were often used to postpone necessary macroeconomic adaptations and structural reforms. Nevertheless, while financial deregulation creates opportunities for increased welfare, it is important not to ignore the problems in the financial system. Over the years, authorities and organisations have tried to minimise these by producing various international standards and codes, and have continued to debate what more needs to be done to prevent as far as possible the emergence and spread of any new financial crises.
The implication, as my colleague Silvana Tenreyro emphasised in a recent speech[13], is that it makes more sense to think of the impact of the policy through the lens of prices – what it does to bond yields – than quantities. This was also the recommendation of the Bank’s Independent Evaluation Office in a report issued a couple of years ago: “Rather than explaining QE in terms of ‘injecting’ or ‘printing’ money, QE could be framed as a continuation of conventional monetary policy that pushes down long-term interest rates …Framing QE as a change in an interest rate rather than the creation of a quantity of money may also reduce the perception that QE is a transfer of wealth to the rich or to banks.” I think this makes a good deal of sense. The demand for commercial bank money: If desired holdings of central bank money can move around (even for given levels of aggregate spending and economic activity), the same appears to be true of commercial bank deposits. As we’ve seen, the supply processes aren’t the same: in the case of broad money it’s the commercial banks themselves (not the central bank) that directly create the deposits, and effectively accommodate such shifts in demand[14]. But the basic intuition is the same.

5/5  BIS central bankers' speeches
Philipp Hildebrand: Thoughts on asset management in Switzerland Summary of a speech by Mr Philipp Hildebrand, Member of the Governing Board of the Swiss National Bank, at the Swiss Funds Association, Berne, 28 March 2006. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch)  *  *  *  Summary Asset management is an important source of earnings for banks in Switzerland. The financial industry, in turn, is the largest sector in the Swiss economy and of crucial importance for economic development. Assuming that the world economy stays on its expansionary course, global assets will continue to grow strongly. Moreover, the rapid increase in the volume of accessible information means that clients are often better informed. It is also giving rise to a broader product range and generating tougher competition and cost pressure amongst providers. These trends will bring about far-reaching changes in asset management over the medium term. Money market, equity and bond investments managed on a moderately active basis often fail to pay the consistently above-average yield that would warrant their costs. They will probably lose ground to passively managed, inexpensive products. Substantially better performance will be essential for the traditional products that remain. Alternative investments, too, will benefit from the structural changes. However, this area will continue to be affected by the limited supply of exceptional portfolio management expertise. Asset management in Switzerland compares fairly well on an international scale in terms of performance and operational efficiency.

This guideline is unlikely to stand in the way of market development, as the $ is not a currency commonly used for transactions abroad, and non-resident entities would in any case wish to swap or convert the $ proceeds into a currency of their choice for overseas use. With this liberalisation, the following will now be possible. a. First, MAS will exempt all individuals and non-financial entities, which includes corporate treasury centres, from the $ lending restrictions of the non-internationalisation policy. This recognises that such entities are not usually the prime drivers of destabilizing currency speculation. b. Second, for non-resident financial entities that continue to be governed by the $ policy, we will lift restrictions in the following financial activities: i. Asset swaps, cross-currency swaps and cross-currency repos can now be transacted freely. MAS had hitherto treated such transactions as forms of $ lending. It will no longer do so. ii. Securities Borrowing and Lending (SBL) – Financial institutions in Singapore may now lend any amount $ securities in exchange for both $ or foreign currencydenominated collateral. MAS will lift the requirement that any lending of $ securities exceeding $ million has to be fully collaterised by $ collateral. BIS Review 19/2002  3  iii. $ FX options – Financial institutions may also freely transact $ FX options with nonresident entities. FIs no longer need to maintain documentary proof showing that $ FX option transactions with non-resident entities are for hedging purposes. iv.
The US central bank, the Federal Reserve, noted at its most recent monetary policy meeting on 10 August that the recovery has slowed down and that inflation has fallen in recent months. The Federal Reserve’s assessment was therefore that the recovery will be slightly weaker during the coming period than was previously anticipated. At the same time, the Federal Reserve repeated that it would hold its policy rate low for a longer period of time. They also notified that – unlike the ECB and the Riksbank – they will be holding the size of their balance sheet unchanged by reinvesting the funds the central bank receives when its holdings of securities mature in long-term government bonds. The Federal Reserve is thus postponing the start of its normalisation of monetary policy, compared with earlier indications. (Figure: Central banks’ balance sheets). Weak but rising growth in Europe According to the Riksbank’s forecast in June, GDP growth in the world as a whole will be strong. However, growth in our own region will be modest. The Riksbank’s assessment was that GDP growth in the euro area will be 0.8 per cent this year, but that it will increase in 2011 and 2012. (Figure: GDP growth in the euro area). The factor behind the upturn in the euro area is exports. Exports benefit from the strong growth in Asia and from the fact that the euro has weakened in relation to other currencies.

Monetary policy is still aimed at supporting the recovery in the economy, but a normalisation has begun. According to the assessment we made in June, the normalisation process will continue gradually through interest rate adjustments and the maturity of fixedrate loans. The new information we have received over the summer largely supports the picture of the recovery in the world economy continuing. There are some signs of weakness in the United States and Asia, while Europe looks slightly stronger than expected. The unease on the financial markets has waned, but the situation is still not normal. The new information also points to a continued recovery in the Swedish economy. However, the Riksbank will not make any new overall assessment of economic developments until the next monetary policy decision, which will be made on 1 September. By then we will have received more information and we will update our forecasts. Thank you! 8  BIS Review 109/2010  Global GDP growth Annual percentage change 7  7  6  6  5  5  4  4  3  3  2  2  1  1  0  0  -1  -1 70  75  80  85  90  95  00  05  10  Sources: IM F and the Riksbank  Note. Striped bars represent the Riksbank’s forecast.
15  I will return to the Fourth Industrial Revolution when discussing future growth. A Different Growth Story  As appetising as this growth story sounds, a reading of the history books make it difficult to swallow whole. It is certainly plausible to think that a divine coincidence of Hargreaves, Watts and Arkwrights, in roughly the same place at roughly the same time, resulted in a white-hot crucible of creativity. Indeed, we might be seeing that self-same crucible of creativity in Silicon Valley today. But the Industrial Revolution was hardly the first firing of that crucible. We have, through history, seen many episodes of furnace-hot crucibles of innovation, spanning most continents and most centuries. 16  Successful  cities, regions, countries, continents and empires of the recent and distant past were often built and sustained on ideas and innovation and accompanying investment in machines and people. The Roman Empire is a case in point. Some of you will remember the sequence from Monty Python’s The Life of Brian which begins with the rhetorical question: “What did the Romans ever do for us?” The sketch concludes: “But apart from better sanitation and medicine and education and irrigation and public health and roads and a freshwater system and baths and public order...what have the Romans done for us?”  You do not need to go that far back for examples of big ideas which had a transformative impact on industry and society.

Norman T L Chan: Bond Connect – enhancing Hong Kong as an international financial centre Remarks by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the Bond Connect Launch Ceremony, Hong Kong, 3 July 2017. * * * The Honourable Carrie Lam Cheng Yuet-ngor, Deputy Director Huang Liuquan, Deputy Director Qiu Hong, Financial Secretary Paul Chan, Deputy Governor Pan Gongsheng, Mr CK Chow, distinguished guests, ladies and gentlemen, 1. Good Morning. 2. I am very pleased to join you today for the launch of Bond Connect. Bond Connect marks another milestone of mutual access of capital markets between the Mainland and Hong Kong, following the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect. It is also another important measure of the Central Government to support Hong Kong’s development as an international financial centre. 3. A key function of Hong Kong as an international financial centre is financial intermediation, providing efficient and safe conduits for fund flows. The establishment and smooth operation of these conduits shall be underpinned by suitable and sound financial infrastructures. Over the years, the Hong Kong Monetary Authority (HKMA) has endeavoured to build our financial infrastructures, from the Real Time Gross Settlement system to the Central Moneymarkets Unit (CMU) for debt securities settlement, which have laid a solid foundation for Hong Kong’s development as an international financial centre. 4. Bond Connect is a new financial infrastructure established through the connection between HKMA’s CMU and the relevant central securities depositories (CSDs) on the Mainland.