samchain/econo-pairs-v1 huggingface dataset:
After a thorough assessment of all the trade-offs, the MPC judged that policy normalization was warranted as the balance of risk has changed: the recovery is intact and resilient, financial stability remains sound overall, but inflation risk has increased. 1. The recovery is intact and resilient a. Economic recovery gaining traction supported by a strong recovery of tourism and domestic demand given improved labor market, household income and economic activities. Although Q2 GDP headline is lower than expected, we reaffirm the growth trajectory and economic recovery underpinned by strong domestic demand growth. Consumption has recovered well with not just pent-up demand but supported by real improvements in income. Recovery of the tourism sector is key to ensuring a smooth and sustained income recovery as the sector accounts for 12% of GDP and employs over 20% of total employment. • GDP growth = 1.5% in 21, ~3% in 22, ~4% in 23; 2.3%/2.5% for Q1/Q2 this year • Consumption growth = 3.5%/6.9% for Q1/Q2 this year vs. 3.3% pre-covid • Non-farm income grew 10.4%/13.5% in Q1/Q2. Farm income grew 10.7%/16.4% in Q1/Q2  2  • Unemployment/underemployment = 0.5 mill/2.4 mill (Q2/22) vs. 0.4 mill/2.5 mill pre-covid (Q4/19) • Tourist numbers = 3.2 mill YTD, 8.5/21 mill for 22/23 vs. 40 mill pre-covid b.

But the difference is that, prior to the crisis, the net capital flow problem was there for everybody to see, in the form of global current account imbalances – or, in my country, huge capital inflows, a double-digit current account deficit, excessive credit growth, and an asset price bubble. But the gross capital problem was hidden and not much talked about. To take an example, the euro area as a whole had a more or less balanced current account position. A factor that garnered little attention before the crisis, however, was that European banks had built up huge USD-denominated balance sheets that were also balanced to a large extent – except, of course, in maturity. This became a major problem when there was a run on such dollardenominated bank liabilities post-Lehman, and many big European banking names might not still be with us were it not for the USD swap lines granted to the ECB, the BoE, and the SNB. The gross capital problem is basically a financial stability problem that can turn into a macroeconomic problem. So the financial crisis revealed a major fault line in cross-border banking, in the form of large foreign currency balance sheets featuring significant maturity mismatches, but with limited lender-of-last-resort (LOLR) facilities in terms of foreign currency.
The financial accounting rules for balance sheet netting for repo transactions are spelled out in Financial Accounting Standards Board (FASB) Interpretation No. 41, “ Offsetting of Amounts Related to Certain Repurchase and Reverse Repurchase Agreements” (FIN 41). For other derivatives contracts, FASB Interpretation No. 39, “Offsetting of Amounts Related to Certain Contracts” (FIN 39) states the relevant requirements. 23 I discussed the foreign repo pool in my 2016 remarks. See Potter, “Money Markets after Liftoff: Assessment to  Date and the Road Ahead,” February 22, 2016. It is also discussed in the annual report. 24 See “The Recent Increase in the Effective Fed Funds and Overnight Bank Funding Rates,” Wrightson ICAP,  October 17, 2016. 25 See “Factors Affecting Reserve Balances,” March 10, 2016 and January 5, 2017. 26 Duffie and Krishnamurthy, “Passthrough Efficiency in the Fed’s New Monetary Policy Setting,” 2016. 27 In constructing this time series, Darrell and Arvind combine two things: before mid-2009, they use a now-  discontinued secondary market rate for tradable certificates of deposit. This is a wholesale market rate, and during normal times it generally tracked the federal funds rate. However, after mid-2009, they use a primary market deposit rate (i.e., rates offered in bank branches to customers) that did not rise after the December 2015 tightening. This low responsiveness of primary market rates to tightening of monetary policy is consistent with similar behavior during previous tightening cycles, as documented by Driscoll and Judson, “Sticky Deposit Rates,” October 1, 2013. The OECD’s dataset includes a 90-day interest rate series.

The Paris financial centre and French public and private players have a recognised lead here, but they must consolidate it in a context of active competition. We will publish the scenarios by the end of March, and conduct the tests by December. I should point out that the results of this ground-breaking exercise will be published on an aggregated and anonymous basis. ** A word of conclusion on the Banque de France. Like you, we need to adapt, from payments to digitisation or cybersecurity. Our determined approach to innovation allows us to improve our performance and responsiveness. 2020 is the final year of our current strategic plan, through which we have reduced our headcount by more than 20% and our current expenses by more than 10% in five years. We will continue our transformation through 2024. We owe it to the people of France; but we also owe it to you, who are the leading players in the financing of our economy. Happy New Year to you, your staff, and our country. 3/3  BIS central bankers' speeches
–  Second, to avoid any loophole basically due to an international failure to apply the debtor principle in withholding taxation, we are ready to reshape our system in line with the EU directive, i.e. to apply the payment agents principle in withholding taxation whenever a client of a Swiss bank is fiscally domiciled in the EU. –  Third, and this must not be forgotten, Switzerland grants full judicial co-operation to fight tax fraud. Thus, our position is fair. With these measures - which are fiscally equivalent to the exchange of information - Switzerland cannot be accused to be a fiscal paradise attracting foreign money like an offshore centre. With capital being extremely mobile internationally, it is evident that co-ordinated taxation policy makes sense only if it covers all the main financial centres. The EU regulation will not have to be only implemented in the member countries, but also in their many dependent and associated territories. Furthermore, it is crucial for Europe that similar measures are taken on a world-wide basis. Without a fully watertight solution, offshore centres around the globe will expand their business at the expense of Europe and this with an increasing lack of transparency and with higher global risks. One last point about fiscal harmonisation. I live in a country that counts nearly three thousand different tax regimes. In Switzerland, every town, every canton and, of course, the federal government, all have the authority to levy taxes and to set the rates.

Our financial centre has been built on a wide range of comparative advantages: a financially sound country, a stable political and monetary framework, a long tradition of banking and an internationally oriented economy. All these points are also valid for the United Kingdom. There is a major difference in terms of specialization, however: the City is “the” market place for investment banking and a number of other financial activities in Europe, whereas Switzerland plays a dominant role in asset management. Despite different realities and market positions, Switzerland and the United Kingdom share many common values vis-à-vis their financial centre: –  both countries believe that financial activity requires professionalism, high standards and efficient supervision;  6  BIS Review 13/2002  –  both countries consider money laundering and the financing of criminal activity as major threats for the long term development of their financial system and act decisively against them;  –  both countries favour market competition in general and have a liberal attitude toward tax competition in particular;  –  both countries are reluctant to accept over-regulation and see in the mushrooming of offshore centres a source of risk for the global financial system. I come therefore to the conclusion that there are more converging interests than rivalries between our financial centres. Some diverging views are due to misunderstandings. With its traditions and its experience in asset management, Switzerland attaches great value to financial privacy.
Michael Gondwe: Islamic commerce and finance Opening remarks by Dr Michael Gondwe, Governor of the Bank of Zambia, at the workshop on “Islamic commerce and finance”, Lusaka, 24 March 2013. *  *  *  The Guest Speakers, Mufti Shafiq Jakhura and Maulana Bilal Jakhura; Distinguished invited guests; Participants; Ladies and gentlemen; On behalf of the Bank of Zambia and indeed on my own behalf, I would like to extend a very warm welcome to you all to this important workshop on Islamic Commerce and Finance. To our Guest Speakers, Mufti Shafiq Jakhura and Maulana Bilal Jakhura, I wish to extend a special welcome to you to Zambia and in particular to Lusaka. Ladies and gentlemen, the Bank of Zambia is honoured and delighted to be invited to give a keynote address at this workshop. This Workshop on Islamic Commerce and Finance could not have come at a more opportune time than now, when the Bank of Zambia has embraced financial inclusion on its policy agenda as a way of increasing access to appropriate financial products and services to all segments of society in Zambia. Ladies and gentlemen, Islamic commerce and finance have expanded significantly in the last few decades globally both in terms of size and the number of players. For Instance, Islamic finance is currently practiced in more than 50 countries worldwide. In many countries, Islamic finance co-exists with conventional finance and is not limited to Muslim countries.

Thank you for your attention. 1 European Central Bank (2018), A quantitative analysis of the size of IMF resources, IRC task force on IMF  issues. 3/3  BIS central bankers' speeches
Basel III notably strengthens the capital framework: its quality has been enhanced, insofar as new, stricter definitions were agreed upon; capital ratios were raised; and two new buffers – a capital conservation buffer and a countercyclical buffer – were created. One notable singularity in the configuration of this latter buffer is that it also offered a response to macro-prudential objectives. That is, admittedly, something new and positive in the regulatory paradigm which, until then, had essentially been micro-prudentially geared. The second novel feature of Basel III has been the design of a common prudential framework for liquidity risk, both in the short term (the liquidity coverage ratio) and the long term (the net stable funding ratio). It is worth stressing that this is the first time an agreement has been forged internationally for the prudential treatment of this risk. The combined tightening of liquidity and capital requirements advises prudent application of such requirements. In this respect, it was agreed the new standard should be gradually phased in, with a transition period running to 2019; however, market pressure will in practice speed up this phase-in. Other new features of Basel III relate to the strengthening of capital requirements for certain banking business risks. This is the case with securitisations, the trading book and counterparty risk.

On the contrary, Basel III has many important components, including completely new requirements concerning the banks’ liquidity management and limits for debt levels. The new regulations will be implemented over a period of six years, starting in 2013. 5 In some cases, however, the banks may be forced to meet the requirements earlier due to the demands of the market and individual countries. I  4  Basel II states the liquidity risk is a central factor in the banks’ risk management and that risk management should comprise adequate systems and calculation methods for the correct assessment of the extent of the risk. 5  For a detailed schedule for the implementation of Basel III see Financial Stability Report 2010:2. 4  BIS central bankers’ speeches  will discuss all of the components of Basel II in more detail, but let me begin with perhaps the most fundamental change, the revised capital regulations. Higher capital levels and a new definition of capital The changes in the new regulations mainly affect Tier 1 capital and Core Tier 1 capital. I will therefore focus on these two components. An important new feature is the stipulation of a minimum level for Core Tier 1 capital. In contrast to the present vague wording about the role of equity in the capital base, Basel III makes it clear that all banks must have at least 4.5 per cent of their risk-weighted assets in share capital and retained earnings.
Paul Samuelson, however, has pointed out the restrictiveness of assumptions which are required to obtain the above-mentioned result.2 He draws attention to the fact that the long-term impact of innovation abroad in a world of free trade and mobile capital is not  2  P. Samuelson (2004), “Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization”, Journal of Economic Perspectives, 18, 3, pp. 135–146. 2  BIS central bankers’ speeches  unconditionally welfare-enhancing. His observations have not given rise to much debate. Maybe it’s time to revive such a debate. There are several ways in which faster growth in EMEs may have a negative impact on advanced economies and dampen their production potential, at least for some time. One way is through the classical side-effect of comparative advantage. If the dislocation phenomenon is long and sizeable enough, the transition to the new steady state is bound to take a long time, during which growth will be subdued.3 There may be reasons for believing that the adjustment process we are currently experiencing, with hundreds of millions of people gaining access in a very short time to the market economy, is not necessarily consistent with the simplified trade models that we used in order to analyse changes in comparative advantage. Some of these issues linked to globalisation have been considered from the perspective of technological change.

This is clearly not the case in reality as the US rate is affected by capital flows from the rest of the world which are evidently not easy to “sterilise”. The effectiveness of monetary policy is affected by such influxes. Given that the US interest rate is nevertheless the reference for global financial markets, the reflow of funds produces second- and third-round effects on EMEs and on advanced economies (Chart 9). We are witnessing a paradox: EMEs as a whole are being inundated with short-term capital inflows, and yet they are net capital exporters. We have also failed to understand how these capital flows have increased the liquidity in the financial system and influenced the behaviour of economic agents. For instance, the impact that the pre-crisis low interest rate level had on the propensity of financial institutions to relax credit standards, to increase leverage and to pursue carry trades was underestimated (charts 10, 11, 12). Policy-makers not only ignored it but considered that this had nothing to do with risks to price stability, that it was related to financial stability and had to be addressed through prudential regulation. Another issue which requires further discussion is the role that the financial industry has played in advanced economies. The conventional wisdom is that financial innovation and financial deepening promotes growth. However, the evidence is controversial and it is not clear to what extent the industry has benefited the long-term growth potential of these economies.
Concluding remarks In short, we are in the midst of a highly complex macro-financial situation, characterised by high inflation, a tightening of financing conditions and greater uncertainty, which has already triggered a slowdown in economic activity in Q3 and a widespread downward revision in the growth outlook for the coming quarters. Against this backdrop, although the banking sector’s starting point is positive, it is necessary to exercise the utmost prudence and to closely monitor risks, which may rapidly take a turn for the worse, making it necessary to consider new stress scenarios. All of this leads us to recommend that banks be very careful in their provisioning policy and their capital planning over the coming quarters. 6

Given the changes in the structure of the financial system, maintaining financial stability requires us to look beyond just the stability of individual banks. It requires us to look at market developments more broadly, at the infrastructure that is critical to market functioning, and at the role played by other leveraged financial institutions. Over the past four years, the Federal Reserve has led a number of initiatives with our supervisory colleagues in the United States and in the other major financial centers to improve the OTC derivatives infrastructure, to strengthen the systemically important payment and settlement systems, to improve counterparty risk-management practices with respect to hedge funds, and to place greater emphasis on ensuring robustness to low probability, high severity instances of stress. This forward-looking, cross-institution approach, integrating prudential supervision with market oversight and payment system expertise, offers the best model of broad financial oversight focused on systemic risk. I want to emphasize in conclusion that we are working now, in close cooperation with the SEC, other U.S. bank supervisors, our international counterparts and market participants to improve the capacity of the financial system to withstand stress. These initiatives include joint efforts with the SEC to bolster consolidated oversight of the investment banks, formalized in our recent Memorandum of Understanding. These institutions have made substantial changes over the past several months to bring down overall leverage and risk-weighted assets and to reduce liquidity risk.
Timothy F Geithner: A view from the Federal Reserve Bank of New York Remarks by Mr Timothy F Geithner, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Business Council of Fairfield County’s Economic Luncheon, New York, 19 January 2005. *  *  *  Thanks for giving me the opportunity to speak to you today. I want to talk about the American economic agenda. And I want to start by looking back at the last decade or so, and the exceptional economic performance of the second half the 1990s in particular. What were the fundamental underpinnings of those achievements, and what are the principal challenges we face to sustaining those achievements? Let me begin by reviewing quickly what distinguished that period of U.S. prosperity, relative to the past in the United States and relative to the other major economies. There are four things in particular worth highlighting: •  First, over this period of the past decade the U.S. sustained very solid growth in the range of 3.5 percent. This was not particularly exceptional relative to the preceding decade, but impressive relative to the other major economies, most of which saw a sustained slowdown in growth. Japan, for example, saw GDP growth slow from above 3.5 to just over one percent. Europe slowed from just under 3.0 percent to about two percent. •  Second, we achieved very moderate inflation.

The cost of this political shift is more evident so far in new trade expanding opportunities forgone, more than in a broad and major increase in the level of protection or barriers against imports of foreign goods and services. 2  BIS Review 4/2005  This is a difficult political challenge. Success depends in part on how creative we are in equipping our citizens with the skills that offer higher returns in the future. It depends in part on what you might call our commitment to the quality of equality of opportunity in America, for people are likely to be more accepting of change if they are confident of the opportunity for mobility and advancement. And it depends in part on confidence people have in the transitional safety net that is available to bridge the transition to future employment. The last challenge I want to emphasize involves education. The education imperative has always been compelling. It is more so today for several reasons. First, we are seeing a significant erosion in the traditional premium accorded higher education in the United States and in some dimensions of the relative level of educational achievement in America. This cannot be good for the cause of improving the odds of sustaining this productivity surge. Second, U.S. citizens now face the prospect of bearing a much larger share of the risk of paying for health care and preparing for retirement.
There is a case for debating whether it should be a regulatory requirement. The information I outlined is not needed just when a bank does actually go into liquidation and the FSCS makes a payout to depositors. It is also needed by the Bank of England to assess whether any of the Special Resolution Regime (SRR) tools could meet the statutory objectives of the 2009 Act more effectively than liquidation. Indeed, that is why the Bank has a clear interest in the information provided to the FSCS. In fact, even more information is needed when we employ the SRR instead of liquidation. Using the new Act, the Bank, working the FSA and HMT, can split up a bank or building society into a number of pieces: deposits going to one buyer; some assets possibly to another; parts going into administration. Effective execution of an operation of this kind is very information intensive. For example, it requires banks to have up-to-date, coherent management accounts for all parts of the business. One might think that would be a good idea anyway. It should certainly be a requirement now. Execution also requires detailed information on how the business is run. Just a few examples. First, on the services that different parts of the group provide to each other, because if split up they may have to agree so-called Transitional Service Agreements. Second, on which essential services have been outsourced. Third, on details of netting and derivative contracts, so that the Bank can apply various statutory safeguards for creditors.

Jean-Pierre Danthine: Does cash have a future? Summary of a speech by Mr Jean-Pierre Danthine, Vice Chairman of the Governing Board of the Swiss National Bank, at the Assemblée Générale de l’Association des Alumni HEC, Lausanne, 8 May 2014. *  *  *  The complete speech can be found in German on the Swiss National Bank’s website: www.snb.ch. One of the traditional tasks of the Swiss National Bank (SNB) is to provide the economy with banknotes and coins. Since the establishment of the SNB, banknotes have constituted the most visible link to the population. As an everyday article of use, but also symbolically, banknotes embody the quality, security and stability of the SNB, and of Switzerland in general, not least of all also for the rest of the world. It is therefore of key importance that the SNB undertake the task of cash supply and distribution conscientiously. The role that banknotes play in the public’s trust in the institution and its decisions is not to be underestimated. In turn, this trust is an important prerequisite for the SNB to be able to fulfil its core monetary policy mandate, and thereby ensure price stability. Due to technological developments in the post-war period, the significance of cash declined, as measured in terms of economic performance. Since the beginning of the 1990s, however, the demand for cash has hovered at a stable level, and since 2008, in the wake of the financial crisis, there has even been a marked increase.