samchain/econo-pairs-v1 huggingface dataset:
That immediately highlights two major problems of using this concept in real time: GDP figures are frequently revised; and our view of the economy’s capacity and its trend rate of growth has to be estimated as it cannot be measured directly. Both of these problems are particularly acute in the aftermath of a recession, when early estimates of GDP may be less reliable than normal and when we are more likely to see structural changes in the economy which may change our view of the level of capacity in the economy and its growth rate. On the question of GDP data revisions, I well remember the experience of the early 1990s recovery, when I was working as Economics Director at the CBI. Initial estimates of GDP growth were much weaker than the picture that we now have of that recovery. And we have already started to see something similar happening over this recovery too. The first GDP growth estimate which signalled the economy was coming out of recession – for the final quarter of 2009 – has already been revised up from 0.1% to 0.5%. For this reason, I would caution against putting too much weight on the initial estimate of GDP growth for the first quarter of this year which we will receive tomorrow. Such early estimates of GDP need to be interpreted alongside the other evidence we already have about the performance of the economy – including business surveys and employment data.

We could return to a system similar in spirit to that used before the financial crisis, in which the supply of reserves in the banking system was kept relatively scarce, and the interest rate was set by adjusting reserves on a frequent basis through open market operations. Alternatively, we could continue with the system that we’ve been using since the crisis, in which bank reserves are abundant and the federal funds rate target is achieved through adjustments to administered rates. This approach is working very well at controlling interest rates and has proven to be easy to communicate and adaptable to changing market conditions.8 The Fed will be looking closely at these options in the coming months and will subsequently make a decision on the future operating framework. And, as is our standard practice, we will be sure to communicate our thinking and decisions on this issue as soon and as thoroughly as practicable. Global Dimensions of U.S. Monetary Policy So far, I have described the economic and monetary policy outlook from the perspective of the U.S. economy and policy. This should not be surprising given that the Fed’s mandate—as defined by the U.S. Congress—concerns domestic economic conditions. Of course, that does not imply that one can view the U.S. economy and our policy actions in isolation from global economic and financial developments. Far from it. In today’s highly interconnected global economy and financial system, international developments affect the U.S. economy, and our policy actions in turn impact the rest of the world.
Christian Noyer: Financial stability in Europe and in the world – a French perspective Speech by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, at the Open podium debate on “The euro in the financial crisis – lessons and perspectives”, Copenhagen, 22 March 2010. *  *  *  It is a great pleasure to be here in Copenhagen at the gate of the euro area. This makes it all the more stimulating to discuss here with you issues related to the single currency, the financial crisis and the emerging new financial order. It allows for sharing experience and perspectives, which in and of itself is valuable for policy-makers. I would like to focus my remarks more on the emerging new financial order. More specifically, in the few minutes I have, I would like to share with you some thoughts, in a candid way, on three important policy questions. How can we make our financial systems more resilient? How can we reduce the procyclicality of financial systems? How can we best address systemic risk? Resilience Central banks have a strong stake in the resilience of financial systems. An environment of financial stability reduces the risk that monetary policy instruments become less efficient due to frictions and volatility in financial markets. Strong prudential standards are a certainly a prerequisite.

However, a not inconsiderable risk capital or guarantees from the owners have also been required. Capital adequacy in the Swedish companies is shown in figure 3. If – or rather when – the owners’ requirements for return on the capital contributed increase this can be problem. Mortgage banks capital ratio and tier 1 capital ratio 1998. Per cent Capital ratio  Tier 1 capital ratio  • Handelsbanken Hypotek  10,7  10,0  • Stadshypotek  13,1  12,7  • Spintab  16,0  11,1  • SBAB  10,6  6,9  • Nordbanken Hypotek  10,5  8,8  • S E B BoLån  8,4  4,3  During the financial crisis in Sweden, the balance sheets were for obvious reasons insufficient to enable the institutions to borrow at competitive prices in the international market. This uncertainty on asset values was all too great for a while. Since then, however, creditworthiness has been continually increased, which is reflected in a gradually improved international rating. The Swedish housing loan institutions have today around 13% of their borrowing abroad. Traditionally the Swedish insurance companies and pension boards have been large purchasers of housing institution bonds. A part of the international borrowing has taken place in Europe, in particular in London, while the major part has originated from investors in the USA and Japan. An interesting issue is whether the ability to borrow in euro will make the Central European investors more interested in Swedish risks than before? It remains to be seen.
As I explained earlier, the SNB as the bankers’ bank ensures that there is a reliable foundation for the settlement of payments. In the retail payments space, financial services providers use this as a platform for delivering their services to customers, doing so in competition with one another. Operating on these two levels, this system ensures that the financial sector remains agile and safe, and that the best ideas can thus take hold in the market without this compromising the systemically important segment. Digital central bank money – few advantages, significant risks Ladies and Gentlemen, before I sum up I would like to say a few words on the subject of digital central bank money for the general public. A more prominent role for central banks in the end customer segment is currently being discussed, involving this and other associated terms such as ‘cryptofranc’ and ‘e-franc’. However, we are convinced that private sector solutions are better suited for meeting end customers’ needs in this area. Digital central bank  Page 7/8  money for the general public is not necessary to ensure an efficient system for cashless retail payments. It would deliver scarcely any advantages, but would give rise to incalculable risks with regard to financial stability by calling into question the tried-and-tested two-tier system. Instead of operating as the bankers’ bank as it does today, the SNB would be acting as a commercial bank for end customers. This would exacerbate the threat posed by bank runs in times of crisis.

He attributes this not to the effect on the fiscal position but to the direct pressure of the extra spending on economic resources: in order to keep aggregate demand in line with supply real interest rates, including those at longer maturities, needed to go up to “crowd out” private spending. In general, however, swings in demand will tend to have less impact on forward rates – and therefore on longer-term bond yields – than on current, spot interest rates. 8  For more on the countercyclical impact of monetary policy, see for example Christiano et al (1999), Boivin et al (2010) and Ramey (2016). 9  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  9  In addition, capital markets are now very open and the UK a far smaller part of the world economy  Chart 7: Global factors much more important determinant of changes in gilt yields than domestic events  than it once was. So at least as far as real bond yields are concerned, it’s the future of the global economy that matters more than that of the UK specifically. Changes in real bond yields are tightly correlated across developed economies (Chart 7); news about the world economy has a greater impact on gilt yields than news about the UK specifically9. The fact that international capital markets are now very open – and that the UK is now only a small part of the world economy – also has a bearing on  12-month changes in 10-year yields.
In the long run, the result will only be higher inflation, not higher employment. Output and employment will return to their potential level. – The third factor is the special challenges to stabilisation policy posed by petroleum revenues. Norway’s export revenues and government revenues can be expected to be very high as long as production remains high and as long as the global market allows producing countries to extract substantial economic rent. At the same time, we know from experience that revenues may vary sharply from year to year. As a result of the high level of earnings and fluctuations in these revenues, the most important contribution fiscal policy can make to stabilising the Norwegian economy is to provide a sound, long-term strategy for the use of petroleum revenues. Attempts to use the central government budget to fine-tune economic activity may have a destabilising effect if these attempts are perceived as a breach in the long-term strategy for the phasing in of petroleum revenues. It is necessary to show that fiscal policy is applied symmetrically in periods of economic expansion and contraction. From the mid-1980s, during and after the credit bubble, it was recognised that a substantial revision of economic policy would be necessary and that the problems created by inflation had to be taken seriously. The exchange rate was chosen as the nominal anchor. Deteriorating competitiveness due to high wage growth would no longer be remedied by means of devaluations.

2016 has already got off to a volatile start: weakness in financial and commodity markets, originating in China and the Middle East; political uncertainty in Europe, in southern Europe, in Eastern Europe, in north-western Europe with the British referendum, and even in central Europe with the refugee crisis. It is our duty to be vigilant, but we have two other imperatives: on the one hand, to separate the reality from the hype, the real challenges – and there is no shortage of them – from the sensationalist and sometimes excessive statements made early this year; on the other, to stick to our medium-term objectives in the face of the current volatility. This evening, I will not speak of monetary policy, since we are in the silent period before the Governing Council meeting on Thursday. But this long-term strategy must apply to economic policy as a whole, including the need for reform. a) Today a confirmed recovery is underway, with growth of over 1% in France in 2015 and 1.5% in the euro area. In 2016, despite the uncertainties, all indicators point to higher growth.
One year on from reaching the effective lower bound of interest rates and starting a policy of quantitative easing, there is still much for academics and policy makers to learn. I hope today’s conference will mark another step in that collaboration. References Andres, J, Lopez-Salido, D J and Nelson, E (2004), “Tobin’s imperfect substitution in optimising general equilibrium”, Journal of Money, Credit and Banking, Vol. 36, No. 5, pages 665–90. Bernanke, B S, Reinhart, V R and Sack, B P (2004), “Monetary policy alternatives at the zero bound: an empirical assessment”, Brookings Papers on Economic Activity, Issue 2, pages 1–78. Brunnermeier, M K and Pedersen, L H (2009), “Market liquidity and funding liquidity”, Review of Financial Studies, Vol. 22(6), pages 2201–38. BIS Review 29/2010  7  Duffie, D, Gârleanu, N and Pedersen, L H (2007), “Valuation in over-the-counter markets”, The Review of Financial Studies, Vol. 20. Del Negro, M, Eggertsson, G, Ferrero, A and Kiyotaki, N (2009), “The great escape? A quantitative evaluation of the Fed’s non-standard policies”, Manuscript, Federal Reserve Bank of New York and Princeton University. Eggertsson, G and Woodford, M (2003), “The zero bound on interest rates and optimal monetary policy”, Brookings Papers on Economic Activity 1, 212–219. Fisher, P (2010), “The corporate sector and the Bank of England’s Asset Purchases”, Association of Corporate Treasurers Winter Paper. Gertler, M and Kiyotaki, N (2009), “Financial intermediation and credit policy in business cycle analysis”. Manuscript, New York University and Princeton University.

The growing importance of Islamic finance Indeed, Islamic Finance has grown most significantly in the last decade, posting double- digit rates since 2007, at close to 20%, compared with growth of 4% in the “conventional” financial sector. It has now reached a volume of $ 2 trillion, which is a very significant figure that represents around 1% of total global bank assets. The surge of Islamic Finance is apparent both in Islamic countries and also, in European markets, with the establishment of Islamic banks and the development of the Sukuk market for private and official issuers under some European jurisdictions. The prospects for Islamic finance are also positive, given the extensive scope for the financial inclusion of a population in a number of countries, with very low rates of bank access and usage. The regulatory challenge of Islamic finance The further development of Islamic finance will nonetheless depend on implementing the necessary financial reforms to ensure its integration into the wider financial system. Here, I think that the challenges are twofold: FIRST, in Islamic jurisdictions the challenge is to continue developing the architecture of Islamic finance in areas such as payment systems and supervisory and resolution regimes. In particular, it would seem vital to advance towards the standardisation of Islamic finance regulation, breaking the existing jurisdictional heterogeneity, in order to take advantage of a wider international market. The SECOND challenge refers to the integration of Islamic finance into the wider financial system.
In fact overall GDP growth in the year to the fourth quarter of 2001, at 1.9%, was by some margin, the highest among the G7 countries, and the rate of UK unemployment is currently the lowest, on a comparable basis, in the G7. And interest rates are the lowest they've been in this country in a generation. Of course we'd all have been much happier with better balanced growth. Stimulating domestic demand to offset the external weakness - the only option available to us - was very much a second best option, and not without its own risks, but it was better than doing nothing at all. That would have meant a much sharper slowdown, and probably recession, in the economy as a whole. And, given what was happening on the inflation front, it would have meant a quite unnecessary loss of overall output - and income and employment. In effect we took the view that unbalanced growth was better than no growth. The question now, of course, is where do we go from here. 2  BIS Review 10/2002  There have recently been encouraging, but tentative, signs that the worst of the global slowdown may now be behind us, and that the US and Eurozone economies are now beginning to bottom out and are likely to pick up as we go through this year, perhaps to around trend. And the euro, which has, as I say, been puzzlingly weak since soon after its introduction 3 years ago, still seems likely to strengthen eventually.

There are two main reasons for the pressures affecting the internationally-exposed sectors: the synchronised economic slowdown over the past year or so in all major industrial countries, on the one hand, and the puzzling persistent weakness of the euro in foreign exchange markets not just against sterling but even more against the dollar, on the other. What that has meant for the UK manufacturing sector is that output in the year to November (the latest month for which we have internationally comparable data) fell by 5.7% and employment fell by 153,000 people, or by nearly 4%. For what it's worth, we were not alone. Comparable figures show that manufacturing output fell by over 13% in Japan, by 6.7% in the US and by 4.3% in Germany, while manufacturing employment fell by 5% in Japan, over 6½% in the US and around ¾% in Germany. The frustrating thing is that, with the best will in the world, there was not much that either we at the Bank or the UK Government could have done to ward off the pressures on UK manufacturing, which had their origins abroad. That's fairly obvious where we are talking about the global slowdown - with negative growth last year of about 1¾% in Japan (fourth quarter on a year earlier) and roughly zero growth in the US and Germany. We can go to international meetings and encourage the respective authorities there to stimulate their economies, but there is nothing that we can do about it directly ourselves.
I’ve mentioned some of the most useful sources of information such as Supervision and Regulation letters that provide public guidance on specific topics to supervised firms, rules and white papers that outline and implement the underlying conceptual thinking on key issues such as the surcharge for systemically important banks or the expectations around CCAR, and public speeches by policymakers. Of course, we engage regularly in private communications with supervised firms. This is both to provide feedback on a firm’s progress relative to supervisory expectations and to gain information about the developments in the financial industry and the efficacy or our supervisory programs. We do this on a regular and continuous basis through both formal and informal channels, and this is a key part of the supervisory program for firms of all sizes. 2  4  Calibrating the GSIB Surcharge, July 20, 2015, Board of Governors of the Federal Reserve System. BIS central bankers’ speeches  I also want to highlight three specific developments that are relevant for us as we execute our supervisory responsibilities. I expect these topics – cybersecurity, fintech and reputational risk – will be familiar and I’ll provide a supervisory perspective on each. •  Cybersecurity The Federal Reserve, in its supervisory role, collaborates with the Federal Financial Institutions Examination Council (FFIEC) to coordinate work on enhancing cybersecurity supervisory programs. We are also interested in working with the industry on a coordinated approach for cybersecurity to strengthen the resiliency of the financial services sector against cyberattacks.

They can also be seen through less direct linkages such as confidencerelated behaviors that are manifest in higher haircuts and margins or reluctance to do business with certain firms or types of firms, uncertainty about the true health of a firm, or the impact of fire sales on the valuation of a broad class of assets held by a broad range of investors. The fact that these costs are external to a given financial firm can lead to excess risk-taking. BIS central bankers’ speeches  3  The realization of these externalities during the financial crisis has had a profound impact on the Federal Reserve’s approach to supervision. Most specifically, they provided the practical experience to support the conceptual case for tightened prudential requirements for the largest, most systemically important institutions. This focus is seen in the mandate from the Dodd-Frank Act for the Federal Reserve to implement enhanced prudential standards, including higher capital standards, to mitigate the risks posed to financial stability by systemically important financial institutions. For example, both the Basel Committee for Banking Supervision and the Federal Reserve System have identified factors that contribute to a financial firm’s systemic importance through these types of externalities. These mechanisms are proxied for by observable metrics such as the size of the balance sheet, interconnectedness between firms, complexity of the business, cross-jurisdictional activity, short-term wholesale funding, and substitutability of certain activities.
Bandid Nijathaworn: Risk management and Pillar II implementation Opening address by Dr Bandid Nijathaworn, Deputy Governor of the Bank of Thailand, at the FSI-SEANZA Regional Seminar on the Implementation of the Supervisory Review Process (Pillar II) of Basel II, Bangkok, 21-24 April 2009. *  *  *  Distinguished Speakers; and colleagues from SEANZA central banks and regulatory authorities, Let me begin by extending a warm welcome to all of you to Bangkok, and on behalf of SEANZA members, I would like to express our appreciation to all the speakers, as well as the FSI, for their contributions to make this FSI-SEANZA Regional Seminar on the Implementation of the Supervisory Review Process possible. This is all the more so as this seminar had to be rescheduled from last year, and in this regard, let me express our commitment that the Bank of Thailand stands ready to facilitate you and ensure that your experience here will be a fruitful and enjoyable one. Ladies and gentlemen, The current global financial crisis underscores the need to strengthen risk management and risk-based supervision, so that we can deal more effectively with the increased complexity arising from both financial product innovation and increased interconnectedness between financial institutions. As for the current crisis, while many causes have been identified, what has become very clear is that financial institutions, capitals were not adequate given their risks, and this had allowed over-leveraging by financial institutions as well as by their customers, leading to over-indebtedness and asset price bubbles.

Overall, we are on track with the implementation of Basel II, thereby reaffirming our commitment to international best practice. With this brief initial remark, it is my hope that this seminar would provide the needed knowledge and skills to supervisors from SEANZA countries for the challenges posed by Pillar II. 2  BIS Review 56/2009