samchain/econo-pairs-v1 huggingface dataset:
Perhaps the best indicator of their vigilance against money laundering is the number of reports of suspicious transactions made to the Joint Financial Intelligence Unit (JFIU). These numbers suggest that institutions are certainly improving, as both the number of reports, and the number of institutions making reports, has been increasing over time. The number of reports made to the JFIU rose from only 264 in 1992 to 4210 in 1997. Our own on-site examinations also suggest that the level of awareness, and the training of staff, is improving. So, overall, institutions are doing well. However, there is always room for improvement, and I would urge those with responsibility for this area not to relax their guard. This brings me to my concluding remarks. I started out today by talking about the important elements of a control system, and how banking supervisors assess the effectiveness of institutions’ controls. I discussed some of the common threads of recent “problem bank” cases, and the control issues they highlighted. Finally, I stressed the importance of controls in the area of money laundering prevention. While I hope this was of interest to you, and at least gave you a slightly different perspective on some familiar issues, I think I should end by saying that I certainly lay no claim to having all the answers. Please do not sit back and expect the banking supervisors to issue guidelines telling you exactly what you need to do.

Mr. Carse gives a banking supervisor’s perspective on control issues in financial institutions Speech by the Deputy Chief Executive of the Hong Kong Monetary Authority, Mr. David Carse, at the BanComp ’98 conference in Hong Kong on 25/5/98. I am pleased to be here this morning to speak to you at the start of this conference on internal controls and anti-money laundering. The advertised title of my speech is “Understanding the role and needs of the regulator in all authorised financial institutions”. This is a very broad subject and I have therefore narrowed it down to focus on the banking supervisor’s perspective on control issues in financial institutions. I am sure there are many compliance and audit professionals in the audience today, so I trust I should not have too hard a hard job persuading you that good internal controls are not only important, but crucial to the success of financial institutions. Just consider, for example, what poor internal controls did for BCCI, Daiwa Bank and Barings. So what advice can I offer you today to help you ensure that your institution will not meet the same fate? Well, what I will do is to share with you my thoughts on the key elements of a financial institution’s control systems, and highlight some of the areas where other institutions have gone horribly wrong. I will also talk about one of the key areas of a financial institution’s controls its controls against being used for money laundering.
Page 5  As ever, I will come to my own conclusions about Bank Rate on those occasions on the basis of my assessment of the data flow, with my decision focused on meeting the MPC’s price stability mandate through achieving the 2% inflation target on a sustained and lasting basis. Before opening up to questions, I wanted to conclude with a few comments on the title of my remarks this evening: ‘Inflation is a wicked problem’. The challenges posed by the cost-of-living squeeze are all too real for many households and businesses. This is especially true for those households towards the lower end of the income distribution, which spend a greater share of their income on food and energy – items for which prices have risen the most. Addressing these challenges – and containing the difficult implications of the cost-of-living squeeze – motivates the MPC’s actions to return inflation to target. But in talking about ‘wickedness’ this evening, I am referring to a different dimension of the inflation problem. This draws on the social science literature, where a ‘wicked problem’ is defined as one that – because of the complex web of interdependencies within which it is embedded – is resistant to resolution. [7] In particular, the effort to solve one aspect of a ‘wicked problem’ may reveal or create other related problems across other aspects. This literature describes a tendency to address ‘wicked problems’ by converting them into socalled ‘tame problems’ or ‘puzzles’.

The ratio of vacancies to unemployment – which we consider one of the more reliable summary indicators of labour market tightness in recent years – fell to 0.9, from a peak of 1.1 back in August. That chimes with recent intelligence from our network of Agents and their corporate contacts across the country, which points to some easing in recruitment difficulties. Nonetheless, while pointing to some easing in recent months, these indicators suggest the labour market remains tight in an absolute sense relative to historical experience. In turn, this is consistent with continued strength in UK wage growth. Annual private sector regular pay growth[6] was 7.3% in the latest report, 0.1pp higher than expected in the MPR, even if the momentum of wage growth may now be slowing. Turning to yesterday’s CPI data, inflation fell to 10.1% in January, from 10.5% in December. On the month, this mainly owed to an easing in services and fuel price inflation, although developments in historically very volatile components such as airfares counted for a large part of the former. Both the March and May MPC meetings represent points at which the Committee can again assess the implications of incoming data for the monetary policy stance, with the latter having the advantage of an updated comprehensive assessment in the form of the MPC forecasts.
Vítor Constâncio: Recent challenges to monetary policy in the euro area Speech by Mr Vítor Constâncio, Vice-President of the European Central Bank, at the Athens Symposium ‘‘Banking Union, Monetary Policy and Economic Growth’’, Athens, 19 June 2014. *  *  *  Ladies and Gentlemen, Seven years have passed since the financial market turmoil in the summer of 2007 marked the beginning of the financial crisis and the ensuing recession. These years have been challenging for all central banks. They have marked the end of a long period of remarkably stable, good macroeconomic performance. The widespread adoption of an explicit price stability objective had been conducive to low inflation outcome in an environment of prolonged economic growth. Existing monetary policy strategies – mostly variants of the inflation targeting model, though with notable exceptions at the ECB and at the Federal Reserve – appeared to be adequate and sufficient to attain this goal. Consistently with the Tinbergen principle, the primary objective of price stability was achieved everywhere through a single, conventional monetary policy instrument: a short-term interest rate. The global financial crisis changed this situation abruptly. Since then, some central banks have been endowed with additional macro-prudential instruments and a more explicit mandate to preserve financial stability. While no explicit change in monetary policy strategies has taken place, it is fair to say that there has been a generalised increase in the attention paid to banks’ balance sheet conditions and to the evolution of credit.

As previously mentioned, various empirical studies suggest that the large purchases carried out in the U.S. and in the U.K. were instrumental in decreasing yields by several tens of basis points, with spillover effects on other asset prices, including mortgage rates and exchange rates. In turn, GDP growth and inflation rates also appear to have been significantly affected. After all, even if they have to use new instruments, central banks cannot avoid their responsibility in ensuring price stability, as long as inflation continues to be determined by monetary policy. Broad-based asset-purchases would allow the ECB to continue pursuing its mandate even under more adverse circumstances. It is however important that other policies also play their part. An extreme adverse scenario that has recently appeared in the public debate is that of a “secular stagnation”.8 This is effectively a situation where the “natural” long run growth rate of the economy falls significantly and permanently, e.g. because of a fall in the growth rate of population or because of a fall in technological progress, or both. This scenario is only still a possibility, but it is illustrative of a broader need for structural policies to again unleash the growth potential of our economies. Public spending should be redirected towards public investment in infrastructures and education. International trade and labour mobility should be fostered. These are the best recipes to ensure that the secular stagnation will remain a purely academic hypothesis.
Figure 2  CPI inflation (*)  CPIEFE inflation (*)  (annual change, percent)  (annual change, percent)  6  6  6  6  5  5  5  5  4  4  4  4  3  3  3  3  2  2  2  2  1  1  1  1  0  0  0  0 11 12 13 14 15 16 17 18 19  11 12 13 14 15 16 17 18 19  Mar'17 Report  Jun'17 Report  (*) Gray area shows forecast as from the second half of 2017. Sources: Central Bank of Chile and National Statistics Institute (INE). 13  Figure 3 GDP (real annual change, percent)  8  8  6  6  4  4 Other  2  2  Total  0  0  -2  -2  -4  -4  -6  -6  N.R. -8  -8 14  15  16  17  Source: Central Bank of Chile. Figure 4 Economic activity (real annual change, percent)  10  10 8  Personal services  Construction  6  8 Trade  6  4  4  2  Manufacturing 2  0  -  -2  (2)  Business services  -4 14  15  16  (4) 17  Source: Central Bank of Chile.

At the same time, beyond recent episodes of volatility, financial conditions remain favorable in perspective, particularly for emerging economies. This, together with still low risk premiums, stock markets that have held on to positive returns, capital flows that are sustained, as well as the withdrawal of the monetary impulse by the Federal Reserve that has caused no major disruption in the markets. As shown in a box in the MP Report, volatility indicators have remained low during the period, contrasting with persistently high political and economic uncertainty indices. The gap between these indicators has caused some concern, as it could indicate that markets are not properly reading the risks associated with the present economic and political environment. However, the fact that the two indexes capture elements other than uncertainty, could justify this situation, so they must be taken as complements. China’s growth outlook remains stable, although incoming information has created doubts regarding its growth pace for the rest of the year and has increased preoccupation about the stability of its financial system, especially in a context of internal and external monetary normalization. It must be noted that in Latin America, several economies have seen activity weaken beyond expectations, but lower inflation has allowed to normalize monetary policies faster, which should help regain better numbers. Brazil, the main economy in the region, is still in difficulties. Although short-term indicators continue to show signs of recovery, solutions are expected to be slow.
These momentous developments place on both policy makers and the social partners a heavy responsibility for doing what is necessary to bring this promise to fruition. We must all re-double our efforts within the context of the Lisbon Agenda in order to enhance the economy’s competitiveness. With the cooperation of the social partners, the Government must pursue the targets set for fiscal consolidation, upon which sustained economic growth and the eventual adoption of the euro are premised. Equally importantly, a series of reforms at the microeconomic level are also overdue so as to enhance efficiency and productivity. These challenges are not being faced exclusively by the Maltese economy, but also by larger and more advanced countries who are meeting them by adopting measures - which often appear to be painful in the short run - to sustain the standard of living of their people over the medium term. It is up to all the components of Maltese society to rise to the challenge so as to defend the economic and welfare gains achieved in the past and improve on them in the coming years. 4  BIS Review 32/2005

Payments are vital to any real economy and in total nearly 40 billion payments were made in the UK in 2018.4 They are also at the heart of the financial system. This makes London the perfect location for a payments conference, which is focused on “thriving in a hyper-connected world”. Payments are innovating, fast. From the infrastructure and the messages that support each transaction, to new players entering the market and consumers seeking new ways to pay for goods and services. Future of Finance, Future of Payments  While the core mission for the Bank of England is maintaining monetary and financial stability, we also seek to enable innovation and empower competition in the financial system. To support our forward looking and dynamic approach we recently commissioned and responded to the Future of Finance report.5 It considered how financial services might evolve over the next decade, and what this could mean for each of us: for users, the system and the Bank itself. The report highlighted that a new economy and new demographics demand a new financial system. This system must be resilient, fair and dynamic. We have prioritised five areas of work: we are enhancing the payments system for the digital age; we will champion a platform to boost access to finance for small businesses; we will support the transition to a carbon-neutral economy; we will develop a world-class regtech and data strategy; and we will facilitate firms’ use of technology.
Finally, the price hikes began feeding back into inflation expectations. Facing the resurgence of inflation, we sped up the process of raising the monetary policy interest rate (MPR). Between June and September of 2008, we increased it 200 basis points. In September of that year, when we still thought we would continue to raise the interest rate in order to bring inflation back to the target – as we had said in Congress early that month – came the Lehman Brothers debacle, and the rest is history. Uncertainty and fear took over investors, consumers and entrepreneurs. Consumers postponed expenses; firms interrupted their projects and depleted inventories; manufacturing production collapsed; demand plummeted; commodity prices fell sharply and the global recession followed. Chile was not spared. Domestic demand also fell with unprecedented force. Sales came to a halt (figure 5). Although the inflation scenario was still complex – it peaked at 9.9% in October 2008 – , a slowdown was foreseen that suggested changing the orientation of monetary policy. Growth projections plummeted unusually fast in every region of the world, going from a moderation to a recession (figure 6). Chile was no exception. In November 2008 we modified our predictions and pointed out that the economic slowdown would entail a drop in inflation, not only because of the sharp fall in commodity prices, but mainly because of the sudden creation of output gaps. We then observed that most likely we would begin cutting down the MPR in the coming months, which set out the process of financial easing.

Preliminary document, Central Bank of Chile, March. 10  BIS central bankers’ speeches  Figure 9 Nominal exchange rates in the world (index 01/Jan/00-18/Oct/11=100)  Average  U.S. (2)  U.K.  Mexico  India  Russia  South Korea  Hungary  Philippines  Peru  China  July (3)  South Africa  Range (1)  Poland  40 Israel  40 Eurozone  60 Malaysia  60 Chile  80  Sweden  80  Norway  100  Thailand  100  Colombia  120  Japan  120  Canada  140  Brazil  140  N. Zealand  160  Czech Republic  160  Australia  180  Switzerland  180  Spot October  (1) The range shows highest and lowest levels posted by domestic currency during indicated period. (2) Uses Broad index. (3) At 27 July 2011. Sources: Central Bank of Chile and Bloomberg. Figure 10 Real exchange rate (index, 1986=100) 120  120  110  110  100  100  90  90  80  80  70  70 88  92  1991-2010 average  96  00  04  1996-2010 average  08 TCR  Spot (*)  (*) The observed exchange rate of 18 October 2011. Source: Central Bank of Chile.
Although the outlook for price stability is favourable, having allowed interest rates to fall to historically low levels, monetary policy cannot by itself generate lasting and sustainable growth and employment in the euro area. Part of the weakness in economic growth in the euro area may be linked to a lack of ambition in recent years in both fiscal and structural reforms to improve the conditions for investment and employment in the euro area. The euro area needs structural reforms which increase the flexibility of labour, financial and product markets and effectively increase potential output growth, job creation and investment. Although the extent and implementation of labour market reforms have been uneven across countries, the efforts made in the 1990s resulted in positive progress in two areas: first, in fostering employment growth across most sectors, which rose to 1.5% per year on average between 1997 and 2001, and second, in helping groups, such as women, the young and old and the least educated, to enter the labour market. Labour market reforms should now focus on reducing high structural unemployment and increasing participation and employment rates. Indeed, it is important that, alongside social considerations, the countries of the euro area give more weight to economic efficiency within labour markets. Capital market reforms can also play a major role in making the euro area economy more flexible. Much has been achieved, not least due to the introduction of the euro, and the bulk of the Financial Services Action Plan has been implemented.

BIS Review 85/2009  7  Chart 3: Return on assets and leverage for global banks, end-2007  Pre tax profit/Total assets 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% 0  10  20  30  -1.0%  40  50  60  Total assets/Tier 1 capital  Source: Bankscope  Chart 4: Tier 1 Leverage ratio and Total assets for global banks, end-2007  Tier 1 Ratio (%) 8 7 6 5 4 3 2 1 0 0.0  0.3  0.6  0.9  1.2  1.5  1.8  Total Assets £  Source: Bankscope  8  BIS Review 85/2009  Chart 5: Capital injections and balance sheet size, end-2007  Capital injections $ billions) 60 50 40 30 20 10 -  0.5  1.0  1.5  2.0 2.5 3.0 Total assets $ trillions)  Source: Bank of England  Chart 6: Probability Densities of UK GDP Growth  Density 1857-2007 1998-2007  -15  -10  -5  0 5 10 Annual GDP Growth (%)  15  Sources: Office for National Statistics and Bank calculations.
In my view, developments in forecasting over the last 15 years have played a decisive role in that shift. BIS Review 40/2006  1  Simultaneously, the ever-changing world map in terms of monetary policy regimes has also modified the role of forecasting at central banks. In the past, most countries had pegged exchange rates against the major currencies. Indeed, in the 1980s and the first half of the 1990s one could hardly imagine a macroeconomic stabilisation programme without an exchange rate anchor and, of course, under such a system, the role of forecasting is rather small. However, since the early 1990s the number of countries with floating exchange rates has increased dramatically, reflecting numerous currency crises and a growing consensus on the undesirability of conventional currency pegs. Moreover, the inflation targeting regime has gained much more weight among the group of countries with floating rates. Inflation targeting, or following Svensson “inflation forecast targeting”, has placed the forecasting process at the heart of monetary policy decision-making. Under inflation targeting, the forecasting process centres on future price developments. This does not necessarily mean, though, that central bankers are obsessed with inflation. In fact, inflation targeting requires us to assess all the available information, including real economic developments, monetary analysis and the external balance of the economy, in a systematic and complex way. It is hence more demanding from the point of view of consistency than the alternative monetary strategies. Of course, the latter require a consistent system for analysis and forecasting.

Professor John Taylor, currently a Treasury under-secretary in the Bush Administration, has formulated a simple rule for interest setting that has come to be named after him and been widely recognised. With the Taylor rule, the instrumental rate varies around an equilibrium rate with a correction for actual inflation’s relationship to targeted inflation and resource utilisation (GDP growth’s divergence from an estimated trend). Given that the economy is in equilibrium, inflation is 2 per cent and the output gap is zero, in Taylor’s version of the rule for the United States the nominal instrumental rate is 4 per cent. Divergences in resource utilisation or inflation prompt the central bank to raise or lower the instrumental rate, depending on the size and direction of the deviations. The Taylor rule is popular for several reasons; besides being relatively simple, it seems to give a relatively good account of monetary policy in many different countries. In that way it has contributed to a better understanding of how monetary policy is conducted. To date, however, no central bank has explicitly stated that it has chosen to base its monetary policy on the type of rule John Taylor advocates. BIS Review 24/2002  3  One result that a money supply target and the Taylor rule have in common is that monetary policy’s responses to the various shocks to which an economy is constantly being exposed are systematic and predictable.