samchain/econo-pairs-v1 huggingface dataset:
The steering system has been successful in the sense that overnight loans between the banks are arranged as a rule at the repo rate. A potential drawback of the fine-tuning operations is that the operational risks grow with the volume of these operations. We therefore make a weekly offer of one-week Riksbank certificates at the repo rate. As this withdraws liquidity, the fine-tuning operations do not have to be so large. BIS Review 153/2008  5  The way in which we implement monetary policy means that we are active at two time horizons or, as we usually say, at two points on the yield curve. One is for overnight loans or deposits, where our fine tuning helps to keep the overnight rate at the repo rate; the other is for one-week certificates, likewise at the repo rate. As we are active in the market only once a week, with one-week certificates, we cannot steer the one-week rate as effectively as the overnight rate, which we steer on a daily basis. Neither do we intend to do so. Our operational goal is precisely to steer the overnight rate. Which measures should be said to be connected with the implementation of monetary policy and which should instead be seen as more directed at assisting the performance of markets and promoting financial stability? There is no simple answer. Something that a financial crisis makes clearer is how monetary policy and financial stability interact. Neither of them can evidently function without the other.

For example, output growth could be hindered by a number of factors: a setback in global recovery, further delays in the energyintensive industrial projects that have been on the drawing board, or cutbacks in household consumption resulting from consumers’ deciding to save more and improve their net asset position more quickly than in the baseline scenario. The negative effects of the last of these will subside over time, however, and in a small, open economy like Iceland’s, the longterm effect should be positive. On the other hand, output could grow more than in the baseline forecast, particularly if risk premia on Icelandic financial assets decline significantly in the near future, foreign credit markets open up to Iceland again, foreign direct investment increases, and overall business investment becomes stronger. But these are big “ifs.” The roughly 3% output growth currently forecast for 2012 and 2013 is quite acceptable in the average economic climate. But projected growth for 2011 and 2012 is weak in view of the sizeable slack in the Icelandic economy. Furthermore, the foundations are not strong enough, as the contribution of external trade to output growth is negative and investment will be far below the historical average, even if it increases significantly from current levels. According to the forecast, exports of goods and services will increase by a scant 1% in 2011, followed by 2% annual growth in 2012 and 2013, even though the real exchange rate will be notably below its historical average throughout the period.
They establish the “framework conditions” for the actions of economic agents, and also define the objectives and scope of public policies. The final – and fundamental – layer of this structure underlying both markets and institutions is the set of “human values” which potentially influences and interacts with both. I will use the term “human values”, or simply “values” in a broad sense: to include social and cultural values which are reflected in people’s preferences and attitudes and which influence their behaviour, including their actions as economic agents and market participants. Edmund Phelps (2006), in a very recent paper, uses the term “economic culture” to describe the set of “cultural values, attitudes, morals and beliefs”. His concept is similar to the one I have defined as “values” and it seems to relate more to cultural attributes than pertain closely to economic behaviour. In principle, values can affect markets and economic performance both directly and indirectly, that is by shaping the features, objectives and functioning of institutions. There can also be interactions and feedback effects. The history of economic and political thought reminds us that great philosophers and economists, starting with Aristotle and including the Enlightenment thinkers like Adam Smith, David Hume, Immanuel Kant, and later on Max Weber (1905) and Joseph Schumpeter (1911), emphasised the role and influence of a society’s values or culture for the functioning and performance of the economy.

A characteristic and important example is the set of institutions, fiscal rules and provisions enshrined in the Treaty on European Union which lay the foundation for the maintenance of price stability and the pursuit of sound fiscal policies. The preservation of price stability in a modern economy with fiat money is the responsibility of central banks. Their monetary policy can ensure control of the price level over the medium and longer term. The effectiveness with which monetary policy can attain and maintain price stability depends on various factors pertaining to the way monetary policy is formulated and conducted. An essential condition for the effective conduct of monetary policy is the central bank’s independence so that it can take decisions on the appropriate policy to achieve its objectives without being subject to any pressure or interference by the government and any other political authorities. There are strong theoretical arguments why the central bank should be independent. But the most convincing reason, which has led many governments to de-politicise monetary policy and grant independence to the central bank as an economic institution, is past experience and the empirical evidence.
In a situation with a high level of activity in the Norwegian economy, petroleum revenue spending in the period ahead will be consistent with the fiscal rule if it increases at a slower pace than the expected real return on the Fund. In the next few years, growth in the structural, non-oil budget deficit is assumed to be somewhat lower than implied by the 4 per cent rule. However, public sector demand is still expected to make a positive contribution to total demand and production. The enterprises in the regional network report continued growth in demand and production. Growth picked up towards the end of 2006 and has remained stable into 2007. Suppliers to the petroleum industry report the strongest growth, but there is also strong growth in manufacturing and the service sector. The market outlook for the next six months is favourable, even though enterprises as a whole expect growth to slacken. A lack of spare capacity is an important factor behind expectations of slower growth. Enterprises in both Hordaland and Rogaland report that the cyclical upturn is continuing. However, many industries still reported slightly slower growth than in the previous round. This is true of manufacturing supplying the domestic market and the petroleum sector, the export industry and suppliers of services to the household and business sector. Retail trade, on the other hand, stands out with very high growth rates. Growth in building and construction is on a par with that prevailing toward the end of 2006.

In some municipalities, the number of vacancies is higher than the number of job-seekers. There are also reports of shortages of other factor inputs. There are shortages of drivers, pre-school teachers, supervisors, engineers, carpenters, architects, auditors, accountants, IT personnel and health workers. It has probably not been since the 1970s that we find such widespread reports of purely physical production constraints, for example now in the form of shortages of rigs and other equipment in the petroleum industry or shortages of plank, concrete, insulation and scaffolding in the construction industry. New national accounts figures show that activity in the Norwegian economy increased at a faster-thanprojected pace in the period 2004 – 2006. The figures also indicate that productivity growth has been higher than expected. We interpret this to mean that the permanent level of production capacity has also increased. An alternative interpretation is that favourable cyclical developments are fuelling productivity growth. If that is the case, it may show a marked decline when economic growth slows. BIS Review 34/2007  1  Unemployment has fallen sharply in the past few quarters. The rate of decline and level of unemployment are reminiscent of two previous cyclical peaks, the one in the mid-1980s and the other that started in the late-1990s and continued into this decade. Both expansions culminated in a sharp rise in wage and cost inflation. Employment growth was for a long period lower than in the cyclical upturns in the 1980s and 1990s.
A plan provides the necessary clarity of mind by focusing efforts and uniting people around a common goal. Even a strategy that is half-baked but gets you out of immediate danger is better than waiting for the perfect answer and being annihilated. Part of the plan to end the financial panic had to include reducing uncertainty over objectives. Some fretted that actions to save a crumbling system would encourage reckless behaviour in the future. Ben Bernanke was clear that invoking moral hazard in the middle of the U.S. financial crisis was misguided and dangerous. 20  Using the power of narrative, he challenged the arguments of the ‘moral hazard  fundamentalists’ in his oft cited and simple hypothetical example: do you let the man who smoked in bed die in the burning house to teach him a lesson? Or do you save him, stop the risk of surrounding houses catching fire and then reprimand him for reckless behaviour? 21  4. Humility The final essential leadership quality is humility. Recall what I said about this speech being a target-rich environment? Good leaders combine personal humility, self-knowledge and the ability to learn. That means admitting mistakes, seeking and accepting feedback and sharing the lessons you have learned. When leaders become over confident (or turn to writing books), they stop learning.

And major UK banks are on track to complete by January next year the separation of their domestic high street businesses into ‘Ring Fenced Banks’. *********** Ambition. Purpose. Clarity. And Humility. Not all of these qualities are ever visible in any leader, certainly never at the same time. But if you keep them in mind, they will be seeds that the exercise of leadership will germinate. And their growth will benefit both you as the leader and those you lead. IV. Conclusion: Leadership in a Disruptive Age Your opportunity is enormous. You will assume the mantle of leadership at a time of unprecedented globalisation of trade, capital and ideas; and at the dawn of the Fourth Industrial Revolution. The deepening of the symbiotic relationship between global markets and technological progress has already lifted more than a billion people out of poverty, while a series of technological advances have fundamentally enriched our lives. Globally, since 1960, real per capita GDP has risen more than two-and-a-half times, average incomes have begun to converge, and life expectancy has increased by nearly two decades. 24  Despite such immense progress, many citizens in advanced economies are lamenting a loss of control and losing trust in the system. To them, measures of aggregate progress bear little relation to their own experience. Rather than a new golden era, globalisation is associated with low wages, insecure employment, stateless corporations and striking inequalities.
In wealth management, competency standards have been established for the full range of job families – from relationship management to product development to trusts and estate planning. More than 1,500 wealth management professionals have been trained to-date. A key partner is the Wealth Management Institute, set up by GIC and Temasek in 2003, to expand and develop the pool of talent and expertise for the wealth management industry in  2  BIS central bankers’ speeches  Singapore. More than half of the wealth management professionals trained under the FICS framework came through WMI’s programmes. A more recent initiative to raise competency levels for the private banking industry is the introduction of the Client Advisor Competency Standards, or CACS. This industry-led initiative provides an independent mode of assessing the private banking professional’s competency before he is allowed to provide financial advice to clients. I am pleased that WMI has given strong support for CACS. The Institute of Banking and Finance (IBF), which administers the CACS, tells me that there is already steady interest by private banks and individuals. The CACS, despite not being a regulated examination, is now being seen as a requirement for those interested in getting into the wealth management industry. This is a good sign. As Chairman of the Institute of Banking and Finance, let me set a target. In three years’ time, let us aim for all new entrants in the wealth management industry to have gone through either the industry-endorsed CACS or some formal certification programme under FICS.

Institutional capability and independence  On the institutional side, the question is whether a central bank has the institutional status and necessary independence to carry out any action it sees necessary to fulfil its task. The Governing Council has the unfettered capability to take and implement appropriate policy decisions whenever circumstances warrant, given the ECB’s strong institutional independence. This reflects the maintenance of a clear dividing line in the euro area between the central bank and the fiscal sphere of responsibilities. The fact that the ECB has refrained from purchasing government bonds is in line with this institutional framework. This approach avoids any possibly intricate interaction with other policy actors on decisions relevant for exit, and maintains a clear separation of responsibilities between the central bank and fiscal authorities. 4. Reputation to act when appropriate  Any strategy will only be credible if there is no doubt about the ex ante determination of the institution to implement the required actions. This is the fourth cornerstone. From this perspective, the ECB’s determination to act in a consistent way is beyond any doubt. Over the past decade, our institution has established a clear track record of vigilance and reputation for acting in a timely fashion. Let me give only two examples: in December 2005 the Governing Council, on the basis of its monetary policy strategy, acted promptly to address mounting risks to price stability.
But let me be clear: There is a natural tendency for policymakers to pull back on accommodation too early before the real rate of interest has fallen to low enough levels. Such errors happened in 1937 when the Fed prematurely withdrew accommodation. This was documented in Milton Friedman and Anna Schwartz’s 1971 book, A Monetary History of the United States. More recently, the Bank of Japan made the same mistake. Therefore, it is essential that the Fed clearly commit to a policy action that is measurable against our goals. Policy projections and a monetary policy framework Regardless of whether such explicit forward guidance is adopted, the effectiveness of monetary policy can be enhanced by clear communication of the Fed’s ultimate goals and of the strategies that it will use to achieve those goals. The minutes from the December FOMC meeting, which were released last Tuesday, noted that the Committee discussed two initiatives to enhance our communications about monetary policy. First, we agreed to begin publishing participants’ projections for the appropriate path for the federal funds rate and qualitative information about their outlooks for the Fed’s balance sheet in our quarterly Summary of Economic Projections (or SEP). Second, we discussed formulating a consensus statement on the Committee’s longer-run goals and monetary policy strategies. Until now, participants have provided forecasts for real GDP growth, the unemployment rate and inflation, but not the policy assumptions that underlie these projections.

Another welcome development to the capital market is the recent B+ sovereign rating assigned to the country, as well as, the reclassification of Zambia as a low middle income country. These developments reflect the country’s recent strong economic performance. As  BIS central bankers’ speeches  1  you may be aware, GDP growth has averaged above 6% over the last five years, supported by low inflation and a positive external sector performance. These favorable developments put the Zambian business community and Government in a strong position to access finance for sustained economic growth and improved living conditions of all citizens. Ladies and Gentlemen, in the medium to long-term the prospects for Zambia’s economy are bright. The robust GDP Growth momentum is expected to be maintained premised on favourable growth performance in mining, agriculture, construction, tourism, manufacturing among other sectors. This will be supported by favourable commodity prices on the international market, Government’s investment in infrastructure and expected increases in foreign direct investment. Further, inflation is expected to remain in single digits owing to prudent macroeconomic policies and the bumper harvest recorded during the 2010/11 harvest season which is expected to dampen any negative effects on overall inflation through the food component. Accordingly, interest rates are expected to decline further. In addition, the macroeconomic environment is expected to remain favourable due to a projected strong external sector performance. In this regard, the capital market has an important role to play.
Banks in Hong Kong made great strides in BCP during the preparations for the onslaught of the Y2K bug. Although the onslaught never came, we were soon reminded of the importance of BCP by the 9-11 attack, which alerted us to the need for robustness in payment, clearing and settlement systems, among other things. Then the outbreak of SARS last year put the BCP capability of banks in Hong Kong to a real test. I am pleased to say that the contingency arrangements of banks - whether of a technical or personnel nature - performed very well during that difficult time. Nevertheless, the recurrence of disasters and their unpredictable nature should always be a feature of BCP and its continuous review. Indeed, the probability of occurrence of these events seems to have increased, along with heightened geo-political tension and the trend of globalisation, not just of trade and markets but also of terrorism and disease. BIS Review 37/2004  3  A further area that falls broadly under technology risk comes from outsourcing. Continuing pressure on profitability will no doubt result in more banks seeking to outsource their operations to lower-cost centres outside of Hong Kong. This will in turn give rise to additional operational risks for banks, including the risks of service outage and leakage of confidential customer data.

In contrast, there are also concerns about the effects of continuing easy monetary conditions within Hong Kong. During the past few months, economic recovery has resulted in inflows of funds into the Hong Kong dollar to the extent that the Aggregate Balance of the banking system has become  BIS Review 37/2004  1  extraordinarily high (despite some outflows recently associated with the corrections in the financial markets). As you know, under the Currency Board system there is not much that we can do to dampen easy monetary conditions: this is a question that the Sub-Committee on Currency Board Operations of the Exchange Fund Advisory Committee has given a great deal of thought to. If there continue to be capital inflows on the back of sustained growth and confidence in Hong Kong’s prospects, the current account surplus and continuing talks about a possible revaluation of the renminbi, the risk of overheating in the economy and in asset markets will increase. I am not suggesting that this will happen soon, or making a warning. But banks in particular will need to keep the situation under close watch and adopt appropriate risk mitigation measures if the market situation warrants it. Overheating is, after all, something of an unfamiliar risk after such a long period of economic difficulty, and we do not wish to be caught off our guard. Longer-term risks So much for the more immediate risks and potential risks, which both you as banks and we as supervisor must pay attention to.
In view of the interdependence among all economic sectors, it is also essential to bolster this segment against fallout from other sectors affected by the current circumstances. Like other segments, the banking sector was affected by the lockdown, which caused a reduction in its capacity to extend financing, and we can also sense some reluctance to offer loans. Two factors are at play and are reducing efficiency of current measures regulating granting of financing; the first is banks’ preference – amid the current conditions – for granting financing to big companies with a strong financial position. This excludes a great number of companies affected by the crisis, which are in dire need of financing. The second is the continued gradual drop in banks’ willingness to grant financing as the crisis worsens and the cashflow problem escalates, as does its impact on companies’ solvency. All this comes as companies face an increasing need for financing. This scenario calls for taking the initiative and introducing comprehensive approaches to bolster this segment’s resilience and to incentivize it to extend more financing, which would guarantee sufficient cash flow across economic sectors and guarantee recovery through a comprehensive and integrated approach. In light of all of the above, the CBK had since March 2020 started to use its policy instruments to strengthen the sector’s resilience and to enable it to play a bigger role throughout this crisis; initiating macro-prudential measures and reducing regulatory requirements, thus expanding banks’ lending capacity to the range of KD 8-9 billion.

Mojmír Hampl: Central bank independence in practice - the case of the Czech Republic Speaking points by Mr Mojmír Hampl, Vice Governor of the Czech National Bank, at the Annual Research Conference of the Central Bank of Ukraine, Kiev, 1 June 2018. * * * Ladies and Gentlemen, Before I begin my talk in earnest, I would like to thank the organizers for inviting me to this inspiring event. It is an honor to participate in such a distinguished panel. And it is a particular pleasure for me to visit Kiev, one of the great historical pivots of Europe and also a city with immense economic potential. The latter, I believe, can be said about Ukraine in general. The topic of this panel and the entire conference is monetary-fiscal interactions. This is an important issue, and I am convinced that a good working relationship between the central bank and the government is imperative for the proper counter-cyclicality of economic policy. My intention today, however, is to offer a related but cautionary tale. I will talk about central bank independence, with an emphasis on the experience of my own country. Few economists nowadays doubt the importance of central bank independence for achieving price stability. For example, the latest meta-analysis of this research question summarizes 300 empirical estimates from dozens of studies and finds strong evidence that independence is crucial for delivering low inflation (Iwasaki and Uegaki, 2017). This finding holds for both developed and emerging economies, as the authors clearly show.