samchain/econo-pairs-v1 huggingface dataset:
Incoming information, while somewhat weaker than expected, remains overall consistent with an ongoing broad-based expansion of the euro area economy and gradually rising inflation pressures. The underlying strength of the economy continues to support our confidence that the sustained convergence of inflation to our aim will proceed and will be maintained even after a gradual winding-down of our net asset purchases. At the same time, uncertainties relating to protectionism, vulnerabilities in emerging markets and financial market volatility remain prominent. Significant monetary policy stimulus is still needed to support the further build-up of domestic price pressures and headline inflation developments over the medium term. This support will continue to be provided by the net asset purchases until the end of the year, by the sizeable stock of acquired assets and the associated reinvestments, and by our enhanced forward guidance on the key ECB interest rates. In any event, the Governing Council stands ready to adjust all of its instruments as appropriate to ensure that inflation continues to move towards the Governing Council’s inflation aim in a sustained manner. Let me now explain our assessment in greater detail, starting with the economic analysis. Euro area real GDP increased by 0.4%, quarter on quarter, in both the first and the second quarter of 2018. Incoming information, while somewhat weaker than expected, remains overall consistent with our baseline scenario of an ongoing broad-based economic expansion, supported by domestic demand and continued improvements in the labour market. Some recent sectorspecific developments are having an impact on the near-term growth profile.

The implementation of structural reforms in euro area countries needs to be substantially stepped up to increase resilience, reduce structural unemployment and boost euro area productivity and growth potential. Regarding fiscal policies, the broad-based expansion calls for rebuilding fiscal buffers. This is particularly important in countries where government debt is high and for which full adherence to the Stability and Growth Pact is critical for safeguarding sound fiscal positions. Likewise, the transparent and consistent implementation of the EU’s fiscal and economic governance framework over time and across countries remains essential to bolster the resilience of the euro area economy. Improving the functioning of Economic and Monetary Union remains a priority. The Governing Council urges specific and decisive steps to complete the banking union and the capital markets union. We are now at your disposal for questions. 2/2  BIS central bankers' speeches
If unchecked, it may only be a matter of time, before terror groups in other parts of the world also emulate these dastardly attacks. It is therefore, vital that all countries quickly assist Sri Lanka to eradicate this threat, as otherwise, it may only be a matter of time, before this too becomes a new tool in the armoury of terrorists. Today, combating terrorism cannot be considered the sole responsibility of single governments or of single sets of soldiers who fight at the front at the risk of their lives. We must all get involved in an international effort if we are to defeat this menace. In these efforts, financial institutions and all other corporate entities, especially, NGO’s must also actively help prevent the funding and the flow of goods and services to terrorist organizations. We must all be wise to the type of trade we are engaged in, and be mindful of the impact it can have in facilitating terrorist activity. It therefore becomes imperative that any loopholes in banking which can be identified as facilitating the financing of terrorism and strict adherence to regulations to prevent such financing, receive the immediate attention of the regulatory institutions. The aftermath of natural disasters also often provide happy hunting grounds for money launderers and terrorists. Sri Lanka’s experience post-tsunami is ample testimony to this reality. Organisations and individuals emerged from nowhere after the Tsunami, with absolutely no track record of humanitarian work, to descend on us in the guise of humanitarian relief.

They attempt to harmonize legislation and the regulatory tools which become imperatives, worldwide, against financial crime and terrorist financing. At the same time, let us not forget that terrorists too, learn from each other. Sometimes the learning and co-operation may be direct. At other times, it could be indirect. Perhaps they too, have workshops like what we are having today. On 31st January 1996, Tamil terrorist suicide cadres drove a 500 kg. explosive laden commercial truck into the Central Bank of Sri Lanka building. About 5 ½ years later, on 11th September 2001, Al Quaeda terrorist suicide cadres piloted 2 jet fuel laden commercial air crafts into the WTC Twin Towers in New York. The scale and the means employed may have been different, in the two instances. But the method was similar. So, let us remember that terrorists and terrorist financiers will also surely learn from each other and wreck havoc in our respective societies, and they too, must be, obviously trying their best to be ahead of us. Regulators need, therefore, to be constantly abreast of these methods, if not be ahead of them. We need to equip ourselves for this purpose by enhancing our capacity and processes to effectively meet the challenges of terrorism and terrorism financing. I am happy to say that Sri Lanka has made considerable headway in this regard.
At the same time, over 1,100 renminbi correspondent accounts were maintained by overseas banks with banks in Hong Kong. The amount due to and due from such overseas banks amounted to RMB 128 billion and RMB 146 billion respectively. This is a clear indication that banks from around the world are using Hong Kong’s robust platform and large liquidity pool to offer renminbi services to their customers at home. As more and more companies and financial institutions conduct business and transactions in the renminbi, we will see an increasing number of financial centres offering offshore renminbi business in different parts of the world. These centres can benefit significantly from having an access to the offshore renminbi platform and liquidity pool in Hong Kong. The HKMA is taking proactive steps to aid the private sector in this endeavour. The private sector led Hong Kong – London Forum is an excellent example of this effort. The Forum just held its first meeting in Hong Kong in May this year, and agreed on a number of joint actions in the areas of renminbi liquidity, payment and settlement arrangements and development of products and services, to bring mutual benefits to the growth of offshore renminbi business in Hong Kong and London. One of the key action points agreed at the Forum is to expand cross-market renminbi funding activities through the cross-border collateral management arrangement that will be launched jointly by the HKMA, Euroclear and J.P. Morgan on 25 June.

The Federal Reserve exists to serve Main Street, not Wall Street. The dual mandate objectives established by Congress – full employment and price stability – are clear on this point. There is no mention of Wall Street. At the same time, it is broadly recognized that without a well-functioning financial system it would be difficult, if not impossible, for the Federal Reserve to achieve those objectives. The Federal Reserve has evolved considerably since its inception in 1913. This evolution has been informed by lessons from past financial crises. The goal has been to make the Federal Reserve even more effective in carrying out its mission. This process of learning from experience is as critical for institutions as it as individuals. To paraphrase Winston Churchill: People always make mistakes, but only wise ones learn from their mistakes. Thank you for your kind attention. I would be happy to take a few questions. 20  8  In the case of the European Central Bank, the member national central banks are involved in policy implementation. BIS central bankers’ speeches
The NGFS will facilitate the upskilling of central bankers and supervisors, especially from emerging and developing economies, in climate-related and environmental risks. We will develop a training and capacity building strategy for central banks and supervisors, mapping training needs to supply. We will develop a training curriculum, to help central bankers and supervisors build up their capabilities in a progressive manner, from foundational knowledge to more advanced and specific skillsets. As a final remark, let me stress: climate change is a shared crisis, and the efforts to fight it must be a shared responsibility. Inclusivity is the key to our success. And inclusivity is at the heart of what the NGFS does. We have a diverse membership, across geographies, across stages of economic development, and across a variety of climate related risks and transition challenges. The NGFS will continue to ensure that our work on greening the financial system is inclusive – uncompromising in our ambition to support a Paris-aligned pathway to net zero while meeting the economic and social development needs of our members. In short, a just transition to a sustainable planet. Inclusivity is also a feature of the NGFS when it comes to partnering the financial industry, academia, and standard-setting bodies in charting policies and strategies on how the financial sector can support decisive climate action. We will cast our net wide and tap on the ideas of a range of stakeholders. Given the magnitude and complexity of the challenge before us, nothing less will do.

And this is why, as I have said many times, I believe there is a strong case for governance of structural reforms to be exercised jointly at the euro area level: to help each country to achieve the necessary level of resilience; and to ensure that they maintain that resilience permanently. 4 Since structural reforms in any euro area country are a legitimate interest of the whole union, there needs to be stronger ownership of reforms not just at the national level, but at the European level as well. Several countries have however made significant progress with structural reforms during the crisis, and we can already see how this has altered the relationship between inflation and unemployment. Various estimates of the euro area Phillips curve show that, while the slope has varied over time, it has steepened in recent years. In particular, there is evidence that inflation has become increasingly responsive to cyclical conditions in countries that have reformed their product and labour markets, such as Spain 5 and Italy 6. Raising potential growth Besides this issue of resilience, as the central bank of the euro area we also have another, equally direct interest in structural reforms. This is related to their effect on growth – or more specifically, the challenges posed by a period of low potential growth. International institutions currently estimate potential growth to be below 1% in the euro area, compared with above 2% in the US (Chart 3).
Such new businesses are also more demanding in terms of managerial skills and smaller banks may find it difficult to attract the right talent. Consolidation by means of M&A is not the only way of grappling with these issues, as the Bank Consortium Trust has shown, but it is an option that the local banks in Hong Kong should keep very much in mind. This should be done as part of an ongoing process of strategic planning that looks ahead to the medium-term rather than simply the next year. The outcome of this process may be that the bank opts to stay as a stand-alone entity. This is a valid commercial decision if taken in a conscious and considered manner rather than by default. However, it should be kept under regular review in the light of the changing financial landscape. BIS Review 49/2001  3  Against this background, the position of the HKMA on bank consolidation can be summarised as follows: -  We continue to believe that we cannot, and should not try to, force healthy banks to merge or be acquired against their will. As noted above, this has to be a matter of commercial judgement by the banks concerned. It would be difficult for the HKMA to form a better view than market participants of how they should partner themselves, particularly since the success of individual mergers is by no means assured. Forced marriages between banks are even more unlikely to be successful.

Least of all should the impression be given that it is somehow possible to have all the gain without any of the pain. We all know, for instance, that virtually all public sector expenditures are in the nature of fixed charges to revenue in the form of wages, social benefits and other handouts, subsidies and debt-servicing costs, leaving relatively few discretionary items of expenditure. This probably explains why we hear many calls for cuts in Government spending, but no specific proposals on where and how much to cut. Likewise, the rigidities which pervade the labour market and work practices have become so fundamentally ingrained in the behavioural patterns of society that they have assumed the status of acquired rights. A number of institutions remain characterised by outdated cultures and practices, while a sizeable part of the population remains stubbornly dependent on subsidies and artificial protection. Under such circumstances it is clear – and recent electoral experience has underscored the fact – that the quest for competitiveness cannot, and indeed should not, be attempted by the Government alone. The change in culture and behaviour that this requires can only be successfully undertaken through the joint efforts of all the interested parties. Faced with similar circumstances, other countries have successfully injected a new dynamism into their economies on the strength of a broad consensus on reform measures among the political and social forces.
Furthermore, government finances are solid and are not affected to any great extent by shortterm exchange rate movements, allowing the exchange rate to play an important role in absorbing shocks to the economy. Particularly in periods of falling oil prices, a weaker krone has had a stabilising effect on the business cycle. With confidence in the inflation target, monetary policy has been able to underpin such movements. At the same time, in a world of high capital mobility and extensive trade, monetary policy’s room for manoeuvre is constrained by the exchange rate channel. In a small open economy with a floating exchange rate, the domestic interest rate can differ from interest rates abroad. However, an interest rate differential that becomes too wide can lead to considerable exchange rate volatility, which will in turn feed through to inflation, output and employment. Thus, the domestic interest rate cannot be set without regard to the level of external interest rates. The room for 2/8  BIS central bankers' speeches  manoeuvre in monetary policy is further constrained in periods when external interest rates are close to or below zero. Under an inflation-targeting regime, a numerical target is set for the inflation rate, either in the form of a point target or a target range. In its conduct of monetary policy, the central bank aims to keep inflation close to the point target or the midpoint of the target range over time. Inflation can impose costs on society if it is too high and if it is too low.

The Bank has been able to take on these tasks by further developing the governance structure and the organisation. If responsibility for the management of the GPFG remains with the Bank, the existing investment mandate could serve as a basis for the future development of the GPFG. Norges Bank is well equipped to continue to carry out this task. The future organisation of the GPFG should be assessed in conjunction with the future development of the investment strategy. As noted by the Commission, a number of strategic 6/8  BIS central bankers' speeches  decisions can be left to the manager while at the same time expanding the investment strategy to include new unlisted asset classes. Prospective developments along these lines could suggest that the management of the GPFG should not be organised within the central bank. In addition to proposing that the management of the GPFG should be placed in a statutory entity separate from the Bank, the Commission also proposes substantial changes to the Bank’s governance structure. These changes include the establishment of a committee for monetary policy and financial stability that would be responsible for the use of instruments in these areas and would be chaired by the Governor of Norges Bank. Moreover, the Commission proposes the establishment of a board of Norges Bank solely comprising external members. The Commission proposes that this board should be responsible for central banking matters that do not fall within the remit of the committee and for operational, budgetary and administrative matters.
This comprises a programme to purchase public debt on secondary markets, subject to compliance with specific conditions, as part of the financial support programmes of the European Financial Stability Facility and its successor, the European Stability Mechanism. Since the start of this crisis the ECB has adopted a series of conventional (short- and medium-term liquidity provision, changes in the deposit rate) and non-conventional measures (long-term liquidity provision, debt purchases) aimed at preserving the sound functioning of monetary policy, which is tantamount to saying the transmission of the policy rates the ECB wishes to maintain at all maturities. These measures have also been useful in buying time for governments to correct the macroeconomic imbalances and the shortcomings in the institutional design of the euro which are, in part, at the source of the current fragility. The Outright Monetary Transactions are a further example of this type of non-conventional measure. The new initiative is aimed at making sovereign debt markets work normally again, as their yields bear indirectly, but significantly, on households’ and firms’ financing costs. The aim is fully compatible with the ECB’s mandate, as the President of this institution has stressed on various occasions. Evidently, the announcement of this programme has had a stabilising effect.

There is general agreement that in order for countries to enjoy sustained and stable growth, the following are crucial: •  a sound and stable macroeconomic environment, and  •  well-functioning and robust financial systems in both capital exporting and capital importing countries. Moreover, both of these are most effective when supported by a dynamic and adaptive policy regime. There is considerable agreement on many of the elements needed to achieve these goals, for example the importance of attaining and sustaining price stability. This agreement has been reflected, in part, in the development and promulgation of globally accepted codes and standards for best practice in areas ranging from transparency in fiscal policy and in monetary and financial policy, to public debt management, and core principles for bank supervision. Guiding themes across these various standards have included the importance of transparency—indeed the whole New Architecture initiative has been as much about putting in more and better windows as about laying in sturdier foundations—and of building stability up from the firm and sector level. The latter is accomplished by encouraging sound risk management and stronger balance sheets, and creating efficient systems of market, legal, and regulatory discipline. Unfortunately, there is no comparable degree of consensus on how best to handle international financial crises once they do erupt, or the proper roles of public institutions and the private sector in containing and resolving such crises.
Simon M Potter: The supply of money-like assets Remarks by Mr Simon M Potter, Executive Vice President of the Markets Group of the Federal Reserve Bank of New York, for the American Economic Association Panel Session "The Balance Sheets of Central Banks and the Shortage of Safe Assets", Philadelphia, Pennsylvania, 6 January 2018. * * * Today, I will discuss some of the differences between safe and money-like assets, with a focus on the central bank’s unique ability to produce money-like assets. I will highlight the risks that can accompany the private provision of money-like assets and describe how regulation and supervision can mitigate many of these risks. I will then examine how the central bank could complement regulation and supervision in mitigating these risks by providing overnight moneylike assets, with a focus on changes in the Federal Reserve’s liabilities in recent years.

Although during the 2008 MMF run, investors also fled from prime to government MMFs, the characteristics of the run differed substantially: outflows were large but quickly reverted following the guarantee; they largely occurred across—and not within—fund families as investors became wary of particular counterparties; and investors moved to the safest sub-segment of the government MMF industry, that is, funds investing only in Treasuries and Treasury-backed repos. 19 These contrasts further illustrate a difference between investors’ demand for money-like assets in normal times, when regulation changes, and their demand for safety in non-normal times. Public sector provision of money-like assets There is a view that regulation and supervision alone are not sufficient to fully mitigate the financial stability risks associated with private maturity and liquidity transformation, and thus, the official sector should consider providing more money-like assets.20 The argument is that when the official sector increases its supply of money-like assets, it reduces the convenience yield on very short-term securities, thereby weakening the private sector’s incentives to create short-term runnable securities.21 Some recent market pricing helps to illustrate this characteristic.