samchain/econo-pairs-v1 huggingface dataset:
George Rae, an Aberdonian who became a prominent banker during the 19th century, feared that “men of wealth and position would gradually sell out” such that unlimited liability was reduced to “a husk without its kernel” (Rae (1885)). 7 The tide was gradually turning. In 1849, only the five original joint-stock banks set up by state charter – the Bank of England, the Bank of Scotland, the Royal Bank of Scotland, the Bank of Ireland and the British Linen Bank – were statutorily permitted to operate with limited liability. By 1869, roughly a third of British banks had limited their shareholders’ liability. 8 But it was the failure of the City of Glasgow Bank in 1878 that precipitated a decisive shift away from unlimited liability. 9 Such a large proportion – 86% – of its shareholders were wiped out that a public relief fund was set up to support them. As The Economist reported at the time, “the share lists of most of our banks exhibit a very large – almost an incredible – number of spinsters and widows” (Button et al (2015)). The Companies Act 1879 introduced a different liability concept – reserve liability – under which a shareholder was liable to meet a bank’s debt up to a fixed multiple of their equity investment in the case of its failure. This was analogous to the double-liability system adopted for US bank shareholders at the time.

This legislation has successively defined and redefined these purposes, rights and obligations among stakeholders. This legislative path has been long and winding – Table 1 provides a summary. It has been shaped importantly by the social, legal and economic climate of the day. And it is the interplay between these contextual factors that, through an evolutionary process, has delivered today’s corporate governance model. Moving to incorporation Tracing definitively the origins of what today are called companies is not straightforward. It is possible to sketch a timeline stretching back at least to Rome around 700BC to find something resembling a company (Shelton (1965)). Certainly, by the sixth century AD a number of corporate entities were codified in Roman Law (Moyle (1913)). Modern concepts of tradable “shares” in companies appear to have emerged in the mid-thirteenth century in continental Europe. In England, early methods of incorporation were set out in a common law case in 1615: incorporation was a privilege bestowed by the state, either by a Royal Charter or a private Act of Parliament. 3 At least in principle, this meant a company was incorporated with public good objectives in mind. A prominent early example of such a company was the Bank of England. It was established in 1694 under both a Royal Charter 4 and an Act of Parliament. 5 The Charter establishing the Bank made clear that its purpose was “to promote the public good and benefit of our people”. And so it remains today. But this incorporation process was costly, lengthy and cumbersome.
10  All speeches are available online at www.bankofengland.co.uk/speeches  10  TABLE 2 BANK OF ENGLAND FINTECH ACCELERATOR PROOFS OF CONCEPT Cohort  Project area Cybersecurity  Cohort 1  Data analysis Distributed ledger technology Machine learning  Cohort 2  Cohort 3  Cybersecurity  PoC  Status  BitSight  We wanted to understand if we could get a view of a firm’s cyber resilience based on publically available data. Completed  Privitar  This PoC explored a tool to desensitise data with the aim of being able to share data more widely within the Bank. Completed  PwC BMLL Anomali ThreatConnect  We built a multi-node scalable distributed ledger environment in-house that enabled the transfer of ownership of a fictitious asset. Experimented with the alpha version of a machine-learning platform that used cloud computing to evaluate patterns in data from a number of trading exchanges. Both firms were asked to create a searchable database where intelligence on cybersecurity threats could be optimised and stored. They helped enable the automation of what was a very labour intensive analysis process. Completed Completed Completed  Data analysis  Enforcd Limited  In this PoC we wanted to understand the benefits in viewing publically available enforcement action from different perspectives and the high level trends. Machine learning  Mindbridge Analytics Inc  The firm was asked to prove the value of their analytical tools for detecting anomalies in anonymised regulatory data collected from a sample of credit unions.

The PoC will examine the extent to which DLT based systems can be configured to enable privacy amongst participants, whilst keeping data on a shared ledger: one of the holy grails of DLT design. RegTech: data storage and analysis (4 PoCs)  As central bankers, we have always needed to process, store and analyse data to inform our policy and operational responsibilities. But that need has grown enormously in recent years, reflecting the increased reporting requirements on supervised firms since the financial crisis, greater availability of high frequency and qualitative data from public and private sources, and new policy responsibilities (eg for macro-prudential supervision). Making sense of such large and diverse data sets is not straightforward. But central banks need to do so to discharge their responsibilities, whilst respecting increasingly demanding data protection requirements. Of course regulated firms face a similar challenge marshalling all of these data in the first place – and a sub-branch of FinTech, sometimes known as ‘RegTech’, has grown up to facilitate the associated monitoring, compliance and reporting demands. More recently, that term has expanded to cover the use of similar technology on the regulatory side, and a good number of the Accelerator’s PoCs have been in this space, looking either at data analysis or the more advanced field of machine learning.
To be clear however, QE asset purchase operations were not designed to tackle a liquidity problem in the financial system. Rather, the impact on liquidity was one of the channels through which QE has affected the real economy and thus has had its intended effect in monetary policy terms. While estimates of the impact of QE are inherently uncertain, one of the desired outcomes of central bank asset purchases is to lower yields thus affecting longer term interest rates and creating a positive economic effect. In doing so, QE can improve the functioning of financial markets by reducing liquidity premia. The third post-crisis development is the impact of the growth of automated trading in financial markets, and the challenges this poses for maintaining continuous market and liquidity. Over the last year volatility in many financial markets has picked up from a low base and we have seen some acute but short-lived incidents of extreme volatility and impaired liquidity in secondary markets. On 15 October last year there was unprecedented volatility in the US Treasury market, and on 15 January this year there was substantial volatility in the Swiss Franc exchange rate following the unexpected decision by the Swiss National Bank to remove its Europe/Swiss Franc floor. Now, central banks are known for their powers of understatement, so what do I mean by words like “unprecedented” and “substantial”. On 15 October, 10 year US Treasury yields moved intra-day by around 8 standard deviations of preceding daily changes.

In doing so, it has blurred the information content of many important variables or indicators relevant for the monetary policy maker, making monetary policy probably more complex in a context of increased uncertainty. Economic theory usually distinguishes between parameter and model uncertainty. In the presence of parameter uncertainty, i.e. when the policy maker is uncertain about the impact a policy instrument has on the economy, economic theory suggests that it is optimal to respond more cautiously than would be the case in the absence of uncertainty (this is the well-known Brainard conservative principle). By contrast, model uncertainty would require more active monetary policy, the idea being to insure oneself against particularly bad outcomes. I will leave it to your wisdom to guess in the present circumstances which of these two approaches would be preferable. Thank you for your attention. 5  Bordes, C., Clerc L. and Marimoutou V. (2007): “Is there a break in equilibrium velocity in the euro area?”, Banque de France, Notes d’Etudes et de Recherche n° 165, February. 4  BIS Review 103/2007
They have translated into a substantial easing in borrowing conditions for euro area companies. Since June 2014, the cost of borrowing for businesses has fallen by 80 basis points. Without non-standard measures, we estimate that we would have had to lower key rates by around 100 basis points in June 2014 to achieve a similar effect on bank interest rates. This has also helped to stimulate lending to the real economy: in the euro area, outstanding loans to businesses have gone from a contraction of -2.5% in June 2014 to growth of 0.6% in January 2016. The impact is even more marked in France, where outstanding business lending grew by 4.8% year-on-year in the first month of 2016 - the highest pace of growth in the euro area and, what’s more, with the lowest rates of interest. Convergent estimates from the ECB and the Eurosystem indicate that, all other things being equal, the measures introduced since June 2014 should add 1 percentage point to inflation over the period 2015-2017, with a similar impact on growth. In France, they helped to boost 2015 growth by 0.3 percentage point, and estimates from INSEE even put the  BIS central bankers’ speeches  3  impact slightly higher at +0.4 pp. That represents about 80,000 additional jobs for the economy - although only structural reforms can generate lasting gains for a country’s growth and employment.

Some inflation targeting central banks – Norway, New Zealand and Sweden – are now publishing charts which show how they expect to change policy rates to achieve their targets 6 . Should the MPC follow this trend? If you follow press reports of our regular Inflation Report forecasts, you might be forgiven for thinking we already have. But actually no: our forecasts take market expectations for interest rates as their starting point, and we leave commentators to draw their own inferences. We have maintained the position that we do not give hints about future interest rate changes. Naturally we are looking closely at what happens elsewhere and we will want to learn from their experience – though of course, since the MPC is not a consensual body, it would be a significant complication to get it to agree an explicit path for interest rates. 6  In addition, the Bank of Canada now includes text in its monetary policy report which indicates whether or not rates will have to change from their current level to meet the inflation target. BIS Review 20/2007  5  Have we become prisoners of our past success? Let me come, finally, to the biggest, and most difficult of the issues I want to raise tonight – namely the extent to which the stability of the past decade has conditioned expectations of what the MPC can and should do, in ways which may be both helpful and unhelpful to its ability to do its job.
It is important for mobile payments to use the same underlying solutions, such as the industry’s own instant payment solution or an enhanced BankAxept system. This will provide cheap and accessible solutions for customers, regardless where they hold an account, and entails economies of scale. In some cases, this will also result in faster payments. Norges Bank will seek to initiate a dialogue with the industry on this matter. I have also noted that there are many operators that are now working to develop common terminal solutions for mobile payments. Time will show what the concrete solution will be. For the system to work efficiently, users must have good information about the services. Optimally, the prices charged to users should reflect costs. 2  BIS central bankers’ speeches  A more decentralised financial infrastructure? Today’s financial infrastructure is largely centralised. Transactions pass through one or several intermediaries before final approval and settlement in a central bank or a central securities depository. At the core of a centralised payment system is the account system in the central bank. Each bank holds an account with the central bank and settlement between banks is effected by moving funds between these accounts. At the level below the central bank, the payment system consists of several layers of accounts. Banks that hold an account with the central bank have their own account system for customers. A payment between customers in different banks therefore passes through many stages, and they are verified at each stage.

Jon Nicolaisen: Digital challenges for the payment system Speech by Mr Jon Nicolaisen, Deputy Governor of Norges Bank (Central Bank of Norway), at the Financial Industry’s Digital Services Conference, Oslo, 9 June 2016. *  *  *  Introduction Technology advances rapidly, giving rise to opportunities and challenges. Norges Bank will actively promote efficient solutions for payments and financial transactions. I presume that the participants at this conference have the same goal, so we have common interests in this area. The Norwegian banking industry was among the first to adopt digital solutions. The giro systems were integrated and a common debit card system was put into place. The first internet bank giro was available already 20 years ago. Internet giro payments and BankAxept card payments in shops are cheap, efficient and widely used. Payment system costs in Norway have been considerably lower than in most other countries for a long time. Common solutions do not impede competition. Banks and other operators have their own customer interfaces, services and prices. But underlying that are a common infrastructure and common standards. This provides economies of scale and accessible solutions for customers, regardless of where they hold an account. Cooperation has rendered the payment system efficient and robust. New operators and new technology are now entering the payment market. This can, in principle, strengthen competition and improve efficiency. But it is important that the competition is rooted in a robust and cost-efficient common infrastructure.
In addition, higher education is an important export industry in which the US holds a significant comparative advantage. This produces a better understanding among foreigners of the US and vice versa. All of these social benefits mean that there is an appropriate role for the public sector in helping to finance higher education. The best policy would align the social and private benefits of attending college, and would find a way to relieve the liquidity and credit constraints that families face. Finally, the best policy would direct scarce educational resources toward those matches between student and institution that are likely to yield the best educational outcomes. The best matches avoid regrettable dropouts or degrees granted with little to show in the way of educational attainment or career prospects, or similar bad outcomes. In considering what the proper public role should be, it’s useful to think about an extreme case. In Europe, higher education has traditionally been essentially 100 percent publicly funded. This result is big subsidies for people – mostly wealthy people – who would have gladly paid for college if they had to. Making college free also means that there will likely be excess demand for the fixed number of seats at high quality institutions. Either this demand has to be rationed, or quality will have to fall. Neither choice is particularly attractive.

I’m an economist, so I’d like to start by discussing the economics of higher education finance as I see them. The first thing to make clear is that the evidence strongly supports the view that a college degree, while expensive, is a worthwhile investment not only for the individual receiving the education but also for society as a whole. For individuals, the expected benefit-cost ratio of a college degree is well over 1.0 and growing. Indeed, while more people are attending college over the last thirty years, college graduates on average earn 80 percent more than those without a college degree, and are far less likely to be unemployed, regardless of the phase of the business cycle. Of course both effort and what we might call academic acumen are likely to play a role in a prospective student attending a better college, and whether the student completes a degree, and so this figure may overstate the value of college itself to any particular prospective student. But careful work in economics has demonstrated that even after we control for talent, college is worth it for most, but not necessarily all, students. Part of the reason for the increasing importance of college is a result of what economists call skill-biased technological change. The idea is that the kinds of technologies that are increasingly influencing the workplace tend to favor people with more education.
This was followed by regulatory capital requirements additional to those applicable to the rest of the sector. The latest FSB list, which includes two Spanish banks (Santander and BBVA), establishes different tranches, depending on the capital surcharges they must meet, which range between 1% and 2.5%. Under the Basel III framework, these additional requirements will begin to be applied in 2016 and full implementation must be attained by 2019. The need for effective resolution frameworks Another key ingredient of the new framework for the treatment of systemic banks is the obligation for them to draw up effective recovery and resolution plans, and the introduction of legislative arrangements that allow their effective application. In 2011 the FSB published a set of so-called Key Attributes with which the resolution regimes of each jurisdiction must comply. 2  BIS central bankers’ speeches  In Spain, Law 9/2012 of 14 November 2012 on the restructuring and resolution of credit institutions introduced a regime which brings forward several of the resolution-related elements required by the FSB. More recently, just some days back, the Ecofin reached agreement on the draft Directive on the resolution of credit institutions, which marks a crucial advance towards the implementation across Europe of the FSB’s resolutions. This draft Directive, which is still pending approval by the European Parliament, seeks to give national authorities the powers and instruments for heading off banking crises and for the orderly resolution of any credit institution.

The second reason is the strength of the sterling exchange rate, or more particularly the weakness of the euro for most of the time since its introduction some 3½ years ago. The frustrating thing for us has been that that there was very little that either we at the Bank or the UK Government could do directly to address the problems at source. That's fairly obvious when we are talking about the weakening of domestic demand in other major countries. It's perhaps less obvious that we couldn't have done more to affect the exchange rate. It's not that we didn't care - as has sometimes been suggested. In fact we've repeatedly made it clear that we'd welcome a stronger euro because that could help to restore a better balance to the UK economy. The problem has been that we didn't know how to bring it about, certainly without destabilising the overall economy. Many people think it's simply a question of reducing our interest rate by more than the ECB reduced theirs. But it really isn't as simple as that makes it sound. We did indeed do precisely that last year but sterling continued to strengthen - though it has in fact fallen back somewhat against the euro since as the euro has staged a moderate recovery. What we were able to do - given that inflation was somewhat below target - was to try to compensate for the external weakness by stimulating domestic demand here in the UK.
35  27  For example, Gürkaynak et al (2005), Hendry and Madeley (2010), Ranaldo and Rossi (2010) and Hayo et al (2010). Ehrmann and Fratzscher (2007). 29 Carvalho and Nechio (2014). 30 Dräger et al (2016). 31 Sturm and de Haan (2009). 32 For example, Joyce et al (2010) and Gürkaynak et al (2010). 33 Berger et al (2011) find that press reports of ECB decisions are more critical when the decision is a surprise, or when made under a backdrop of high inflation. The reception is more positive when press conferences are informative or if the ECB president has recently been active in giving statements. 34 For example, van der Cruijsen et al (2015). 35 See Dräger et al (2016) for the US and Lamla and Lein (2014) for Germany. 28  8  All speeches are available online at www.bankofengland.co.uk/speeches  8  As the number of central bank publications has expanded, a new strand of research has begun analysing the words and phrases used by central banks, using semantic-modelling and other text-mining techniques. 36  For  example, these methods can be used to extract from written central bank material the key themes and issues that have been the focus of central bank deliberations and communications. Academics Stephen Hansen and Michael McMahon have used semantic techniques to identify particular monetary policy topics. These can be used to quantify how much emphasis an issue has had in committee deliberations.

In their classic Elements of Style (1979), William Strunk and E B White write: “Write with nouns and verbs, not with adjectives and adverbs. The adjective hasn’t been built that can pull a weak or inaccurate noun out of a tight place.” 66  19  All speeches are available online at www.bankofengland.co.uk/speeches  19  The behavioural dimension to public language involves speaking in ways which best connect the receiver with the sender. Behavioural science has given us plenty of insights into how to do that. 67  Messages  wrapped in real-world narratives are more likely to stick than those wrapped in numbers. Messages which are personalised are more likely to stick than those that are anonymous. And messages that are local are more likely to stick than those that are national. These maxims have been borne out in real-world experiments. Personalising and localising messages has been found to increase their reach, and their chances of being acted on, in a wide variety of public policy settings: in everything from encouraging tax payments to discouraging carbon emissions; from encouraging school attendance to discouraging crime; from encouraging charitable giving to discouraging sugar consumption. Linguistic “nudges” appear to work. 68  Yet localised and personalised messages often flow less easily from the mouths of central banks. For understandable reasons, they have tended to have a national rather than local focus, to weigh the objective over the emotional, to be fact rather than anecdote-based. That is all well and good. But it does carry a cost.