samchain/econo-pairs-v1 huggingface dataset:
11 The key policy rate was kept at a lower level through 2013 than projected at the end of 2012. At the same time, the forecasts for 2014 and 2015 were revised downwards. The primary reason for the revision was weaker-thanexpected developments in the Norwegian economy. Capacity utilisation and cost growth were both lower than projected. At the same time, there were prospects that growth ahead would be lower than previously assumed. Moreover, growth among Norway’s trading partners and interest rates abroad were lower than projected, and banks’ lending spreads were higher than expected. Conversely, a substantial depreciation of the krone through the  11  This setup is from Norges Bank Annual Report 2013. In each monetary policy report, we present a decomposition of the contribution from different factors to the change in the interest rate path in relation to the previous report. The most recent report shows the change in the interest rate path through 2016. BIS central bankers’ speeches  5  year, which was viewed mainly as due to an increase in the risk premium, kept the interest rate forecast from falling further. A decline in premiums in the money market also pulled in the same direction. Experiences So far I have discussed the motivation for forward guidance and how we implement it in Norges Bank. Let me now share some of our experiences with you. As a starting point, let me again address the preconditions for forward guidance to enhance the effect of monetary policy that I mentioned previously.

To quote Mr David Bailey, “data and Regtech go hand-in-hand and data must be at the heart of any Regtech conversation”. Good quality data means Regtech can be used to build effective models and generate decision-making insights. It is vital to build trust with your customers if you want to acquire sufficient quality data. You then need to store and transform that data according to a solid set of data governance rules, identify data which is relevant, and use it in an intelligent and responsible way. Third, proper risk management remains as important as ever. In Hong Kong, we are proud of our banks with their long histories, but we recognise that their legacy infrastructure can potentially hold back Regtech adoption. One key takeaway from today is the reminder that Rome was not built in a day. Banks can start on a small scale, for example by conducting a Proof of Concept (PoC) in a business unit or implementing Regtech in a Cloud-based environment in a newly established part of their business. As a regulator, I must point out that when navigating technologies and determining how to put Regtech to use, it is essential that banks adopt a robust risk assessment framework to evaluate and manage the associated risks. This resonates with Ms Jane Fraser’s suggestions that banks should be mindful of risks such as data security and third-party operational risks that come with new technologies, and that the sandbox provides a valuable means to test new Regtech solutions.
As you may have experienced, one of the problems in finance can be bonus cultures based on selfpromotion rather than objective metrics, a culture of presenteeism over flexible working, and de facto penalties imposed for maternity leave. Let me explain how the Bank addresses each of these in turn. First, the Bank has implemented a performance management process that promotes objectivity. Colleagues are invited to have conversations with managers ahead of performance evaluation meetings. The Bank has also disposed of fixed distribution curves for performance ratings, making the process less adversarial. We also published clear guidelines internally on what is used to assess and reach a judgement on performance and how pay is awarded against different measures. Second, an inclusive culture recognises that work can be done in many ways; and that our best ideas can occur at any time and in any place. 14% of our staff are employed on a formalised flexible working arrangement, including remote working. And more men and senior management (almost one in five) than ever before have taken up flexible working arrangements at the Bank. We have also recently completed a technology update to enable more ad-hoc flexible working arrangements for all colleagues. This approach has proved its worth as two thirds of colleagues at the Bank agreed in our survey last year that there was a good balance between their work and personal life, five percentage points higher than the national average.

This is especially important as nearly two fifths of university graduate cite good work life balance as the main thing they look for in an employer. Third, the Bank encourages shared paternity leave and over the last year, 59 colleagues took up the offer, compared to 187 people on maternity leave. We have a generous pay package of six months at full pay and 6  All speeches are available online at www.bankofengland.co.uk/news/speeches  6  three at statutory pay. Colleagues are given ten Keep In touch (KIT) days and are offered IT equipment to take home during maternity leave to enable them to maintain contact with the Bank and ease their eventual return to work. The Bank has been successful in retaining female talent, with the Bank’s maternity returner rate at almost 90% over the past few years. What gets measured gets managed: be transparent about progress Building an inclusive culture is impossible without transparency.10 In recent years, important strides have been made on transparency around the gender pay gap. Transparency delivers accountability and in making this information public, the sector must acknowledge the work it has to do to close the gap. In the financial sector, the average mean pay gap at banks and building societies is 35% and 31% in insurance companies. For the Bank, the mean gender pay gap is better than the industry average at 20%. The gap is driven by the difference between male and female representation at senior levels. This is not an excuse.
Scope of monetary policy and acting within the ECB’s mandate I will now come to the first of two points to which the rapporteur has requested we pay particular attention: the “scope of monetary policy”. This includes the question of whether we are acting within our mandate. Our mandate is clearly formulated in Article 127 of the Treaty on the Functioning of the European Union: to maintain price stability. According to primary EU law, the ECB and the national central banks of the Eurosystem are already permitted to purchase government bonds in the financial markets in the context of their monetary policy tasks (Article 18.1 of the Statute of the European System of Central Banks and of the European Central Bank). While the Treaty clearly states the objective the ECB has to pursue, it describes just as clearly what the ECB is not allowed to do. Article 123 of the Treaty prohibits monetary financing. In particular, we are not allowed to buy any government bonds directly, i.e. on the primary market. Government bonds can only be purchased if they are already on the market and traded freely. The market mechanism – the basic principle Member States have to follow to finance themselves independently – should apply. We therefore also interpret the prohibition of monetary financing as being comprehensive insofar as ways to circumvent it are addressed. It is not possible to purchase newly issued government bonds at certain times.

As for households, despite a reported rise in household debt by the National Statistical Office, the current level of household debt in Thailand is still much lower than average levels of both industrial and regional economies. While the Thai household debt to GDP ratio stands at 33 percent, the corresponding figures for Australia, Singapore and South Korea are 84, 85, and 63 percent respectively. If we look at the components of household debt, we see that mortgage loans increased by a reasonable rate of 15 percent, while we see an increase of over 30 percent in credit cards loans. Therefore, as a precaution, the Bank of Thailand has implemented a number of prudential measures to curb possible build-up of imbalances in the credit card loans. In November 2002, we have raised the minimum income levels for credit card qualification. And later on in April 2004 we have raised the rate  2  BIS Review 58/2004  of minimum monthly payments from 5 percent to 10 percent. These proactive measures so far have yielded desirable and positive results. Let me now move to the financial sector Stability of Thailand’s financial system, in particular the banking sector, has improved remarkably in the past few years. The 1997 crisis has weakened our financial system. Commercial banks’ returns on assets were persistently negative, and NPLs stood at a record high level. Since 2001, the Bank of Thailand has tackled these problems in two steps.
In Malaysia, the efforts to enhance the international dimension of our Islamic financial system have been intensified in the more recent period to facilitate greater international trade and cross-border investment flows. The new initiatives that have been announced allow the establishment of new International Islamic financial institutions that will be permitted to offer the full range of Islamic financial services to residents and non-residents in international currencies. These initiatives also aim to serve as a catalyst for the development of the domestic financial markets as well as the development of talent and knowledge in Islamic finance. Collaboration with other emerging regional centres in Islamic finance will be an important part of this process that will contribute towards greater international financial integration. The establishment of the Islamic Financial Services Board in 2002 represents a major structural enhancement in building the international financial architecture for Islamic finance. The achievements thus far by the Islamic Financial Services Board in developing the prudential standards that can be universally applied have been very encouraging. The efforts represent a testimony of the collective capacity for greater international collaboration which has contributed towards strengthening the fabric of Islamic finance. While the legal framework and rules are constantly being reviewed to ensure that they remain relevant for the new areas of financial activity, it should not only be undertaken for the domestic Islamic financial system but also in the context of the international financial system.

Over the same period, to the fourth quarter of last year, GDP growth averaged just under 3% a year which is well above most estimates of our trend rate of 2¼%-2½%. GDP has in fact grown for 38 successive quarters which is the longest period of sustained quarter-by-quarter growth we have enjoyed since quarterly records began in the UK in 1955. BIS Review 10/2002  1  Employment has increased steadily from a low point of 25 ½ mn people in the Spring of 1993 to its current level of 28 mn. And the rate of unemployment fell from a peak of over 10½% on the LFS measure to around 5% last summer; while on the claimant count measure it fell from some 10% to just over 3%, which meant that the number of people claiming unemployment benefit, at under 950,000, was the lowest for 26 years. Now some of you - given what's happening to your own businesses - are probably thinking that I must come from a different planet. And yes, we do have a problem. Once you look beneath this apparently benign surface of the economy as a whole, you find very substantial differences between many internationally-exposed sectors of the economy - including particularly many manufacturing businesses - which have recently been having a really tough time, and other businesses largely serving our domestic market which have been doing pretty well.
Earlier this month we published a Supervisory Statement and Policy Statement3 that together set out our expectations for banks and insurers regarding their governance, risk management, strategic resilience and disclosure of climate-related financial risks. To support the capacity building and the development of best practice, the PRA has just established the Climate Financial Risk Forum to work with firms from across the financial system. The Bank of England is also working with central bank and supervisory colleagues from around the world in the Network for Greening the Financial System (NGFS) to improve climate risk management in the core of the global financial system. Our priorities include the development of a small number of high-level climate scenarios that can be used in future system-wide stress tests.4 Next month, the PRA will require insurers, as part of market-wide stress tests, to consider how their businesses would be affected in different climate risk scenarios. By adapting our soft infrastructure in these ways, the Bank will help ensure that the financial system is not only resilient to climate-related risks but also can take full advantage of the enormous opportunities in a new low carbon economy. Applying New Technologies to Increase Resilience My final example of how the Bank is building a platform for FinTech innovation, considers how general purpose technologies, including advanced analytics such as AI, can increase the resilience of the financial system. As much of life moves online, a trail of data is created.

New Economy – New Finance A new economy requires a new finance. A new finance to serve the digital economy, a new finance to support the major transitions underway across the globe and a new finance to increase the sector’s resilience. A new finance with products that are more cost effective, better tailored, and more inclusive. The UK’s FinTech companies are creating this new finance. We have just heard from Charlotte Crosswell of Innovate Finance how the UK FinTech sector leads in talent, drive and investment. But you cannot do it all on your own. Your efforts will be even more effective if you have the right conditions in which to innovate and the level playing fields on which to compete. New Finance - New Bank That’s why a new finance demands a new Bank of England. 2  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  2  In this spirit, last year at Mansion House, I announced that Huw van Steenis would lead a review of the future of the UK financial system, including recommendations for how the Bank should respond. In two months, Huw will publish his conclusions and the Bank will announce a number of concrete steps to create an environment for a more resilient, effective and efficient financial system. To preview our general approach I want to highlight some recent measures the Bank has been taking. The Bank’s strategy is to enable innovation and empower competition, while ensuring monetary and financial stability.
This problem of socially excessive risk-taking is particularly damaging in the case of large interconnected institutions whose failure would endanger other institutions, with adverse consequences for the broader economy. Finally, the issue is further exacerbated if an implicit or explicit guarantee of state support is extended to such institutions. The chain of distorted incentives which has just been described, and, in particular, the moral hazard issue implied by the guarantee of state support, is now well recognised and is being addressed energetically by the various regulators.3 The second source of systemic risk has a cyclical dimension (slide 2). This is the aspect on which I would like to focus today. Here, systemic risk arises from the procyclicality of financial agents’ behaviour, leading to the amplification of financial cycles.4 Procyclicality can arise, for instance, from the tendency to underprice risk during booms and to overprice it in downswings. Sometimes exacerbated by regulatory requirements, it causes agents to take similar actions in case of an adverse shock, namely to dispose of risky assets when prices fall. While this behaviour may be individually rational, the outcome can be socially devastating. Indeed this collective reaction tends to amplify an initial price movement, thus leading to another round of asset selling, in particular if the boom is mainly financed through credit. A financial system facing such strains is forced to retrench further from risk-taking and eventually from credit intermediation, leading – in extreme cases – to an outright credit crunch.

Obstfeld, M. and K. Rogoff (2005). Global Current Account Imbalances and Exchange Rate Adjustments, Brookings Papers on Economic Activity, Vol. 36, No. 2005–1, pp. 67–146. Obstfeld, M. and K. Rogoff (2007). The Unsustainable U.S. Current Account Position Revisited. In: G7 Current Account Imbalances: Sustainability and Adjustment, in NBER Chapters, National Bureau of Economic Research, Inc., pp. 339–376 5 Berthou, A. «A strong euro is less harmful to the most productive exporters », Eco Notepad (Bloc-notes Eco),  Banque de France, December 2017. See also : Exchange rate movements, firm-level exports and heterogeneity, Banque de France WP #660 6 Obstfeld, M. (2012). Does the Current Account Still Matter?, American Economic Review, American Economic  Association, vol. 102(3), pages 1-23. 7 Bussière, M., J. Schmidt & N. Valla (2016). International Financial Flows in the New Normal: Key Patterns (and  Why We Should Care), CEPII Policy Brief 2016–10, 2016 , CEPII. 8 Albuquerque, R. (2003). The composition of international capital flows: risk sharing through foreign direct  investment. Journal of International Economics, 61(2), 353–383. 9 Fahri, E., G. Gopinath and O. Itskhoki (2014). Fiscal Devaluations, Review of Economic Studies, 81(2), pp. 725–  760. 10 Chinn, M. (2017). The once and future global imbalances? Interpreting the post-crisis record, Speech at the  Jackson Hole Symposium, August 2017  5/5  BIS central bankers' speeches
BIS central bankers’ speeches  1  There are two objectives: first, to review the principles and refine the criteria that guide the choice of historical characters for banknotes; and second, to establish a process to ensure that potential candidates are consistently and transparently judged against those criteria. The review will be led by Chris Salmon, the Bank’s Chief Cashier, who will be meeting with interested parties as well as inviting feedback from members of the public via our website. The conclusions will be announced by the end of the year. Now let me introduce a real expert to tell you a bit more about Jane Austen and her time at Chawton. Elizabeth Proudman is Chairman of the Jane Austen Society, and I would like to thank her, along with Ann Channon and staff here at Jane Austen’s House Museum, for hosting today’s event. Elizabeth, over to you. 2  BIS central bankers’ speeches

Conversely, our financial institutions gained access to the single European market, a factor which encouraged additional inward foreign investment into the sector. At the same time, the last exchange controls were removed. The adoption of the euro last January was a further step in the integration process into the single market. Financial transactions across the euro area can now take place without incurring exchange rate risks. Furthermore, Maltese banks now have access to the Eurosystem facilities available to credit institutions within the euro area. These include a variety of instruments designed to provide short-term liquidity, as well as standing deposit and lending facilities. At the same time, euro adoption entailed a reduction in the minimum reserve requirements that Maltese banks had to comply with, resulting in the release of additional funds into the banking system. Euro adoption also led to improvements in the financial infrastructure supporting the Maltese economy. In November 2007, Malta formed part of the first group of countries that joined TARGET2, the payment system used by the Eurosystem for the settlement of large value  BIS Review 155/2008  1  interbank transfers in euro. Maltese banks can use TARGET2 to carry out transfers with other banks in Malta and throughout the euro area rapidly, safely and effectively. The Single Euro Payments Area (SEPA), launched in January this year, is a further step towards closer financial integration and aims at making retail payments across the euro area as easy as they currently are within national boundaries.
Arnór Sighvatsson: The logic behind the capital account liberalisation strategy Speech by Mr Arnór Sighvatsson, Deputy Governor of the Central Bank of Iceland, at a meeting of the Iceland Chamber of Commerce, Reykjavík, 15 December 2011. *  *  *  Ladies and gentlemen On 25 March 2011, the Central Bank published a capital account liberalisation strategy allowing for removal of the capital controls in two phases. Phase I would focus on channelling unstable króna assets, particularly those held by non-residents, into the hands of investors willing to take a long-term exposure on the króna. In Phase II, other controls would be lifted. The strategy is relatively terse as regards Phase II, as a number of things could change before it can be launched. As a consequence, Phase II will be drafted in greater detail at a later stage. Therefore, in my presentation today, I will focus on Phase I and attempt to explain why the individual steps within it are being taken in the order specified in the strategy. The main problem the strategy is attempting to solve is lack of confidence: in the domestic economy, the currency, and the Government’s capacity to service its debt. Confidence between individuals and between firms, domestic and foreign alike, is a precious commodity whose true value is only realised when lost. The reason confidence plays such a vital role in the mechanics of the economy is that each party’s confidence depends on the confidence of all the others.

Recent runs on short-term bank liabilities and the fiscal crisis in the euro area are a clear example of this. No one wants to be the last one to withdraw his deposits from a tottering bank, sell bonds issued by a country heading for insolvency, or rid himself of the currency of a country facing an imminent balance of payments crisis and potentially unsustainable debt burden, even though it may only be unsustainable provided that other investors think it is. The capital controls stopped a run on Iceland’s currency. In a sense, they also undermined confidence for the long term – that is, investors’ confidence that Iceland’s economy and public sector finances could achieve balance and sustainability in the absence of controls, knowing that the fragile balance created by the controls is based on coercing many investors to hold króna assets. Ultimately, confidence can be established only under conditions of free trade, not through coerced transactions. Fortunately, however, investors’ view on the Icelandic economy is diverse. Some understand quite well that behind the cloud of dust swirling in the wake of Iceland’s financial collapse is a country fraught with opportunity. When the dust has settled, Iceland’s net international investment position may turn out to be lower than it has been in decades, and in spite of sizeable gross debt, the Treasury’s net debt position indicates that it will be possible to reduce gross debt rapidly, if the programme of fiscal consolidation set forth is followed strictly.