samchain/econo-pairs-v1 huggingface dataset:
A mandate provides a regulator with legitimacy in two ways. First, it ensures there is democratic control over the shape of the regulatory regime; e.g., the objective or objectives of the prudential regulation, the types of firm in scope, the issues the regulator must have regard to in making policy. Second, it makes possible to hold the regulator into account. Figure 1: Links between the principles of ‘stylish’ regulation and ideal features of the institutional structure of prudential regulation  Alternative models for the institutional structure  There are broadly four alternative models for the institutional structure for prudential regulation. The first model is that prudential regulation is specified in primary legislation. The approach to prudential regulation that the EU takes is an example of this model since for example regulatory requirements are mostly specified in the Capital Requirements Regulation and Capital Requirements Directive. This means that many of the technical details that make up prudential regulation are included in legislation. This would include, for instance, the mathematical formulae used to calculate risk weights. I would like to thank Matthew Willison, Hugh Burns, Nicolo Fraccaroli and David Swallow for their assistance in preparing these remarks 4  This model provides legitimacy because the legislation in which the prudential regulation is set out has been passed by a parliament. It is also time consistent, because a deviation from regulatory standards would require a change to legislation.

We currently hold equities worth around CHF 65 billion, which is three times more than at the end of 2011. In this regard, we have widened our scope to include shares of companies with relatively small market capitalisation, as well as those in advanced economies not previously considered, with the result that our equity portfolio now covers all advanced economies. Since we have invested relatively little in these new markets, our currency allocation has hardly changed in recent months. The proportion of gold in the currency reserves amounted to 10% at the end of the first quarter of 2013. From an investment viewpoint, gold is important for a good diversification of the currency reserves. Historically, gold often moves in an opposite direction to other assets. In contrast to equities or bonds, however, gold does not yield interest or dividends. And as the recent months have shown, gold is also among the most volatile and therefore most risky investments, with a noteworthy example occurring in April, when the gold price fell by about 15% in less than a week. Last December, the SNB announced it would be opening a branch office in Singapore. This will enable us to more efficiently manage our foreign currency investments, which have risen sharply, to expand our market coverage in Asia, and to position ourselves closer to key market participants. Singapore is one of the most significant trading centres for bonds in Asia. At the same time, the branch office in Singapore will facilitate the enforcement of the minimum exchange rate.
And over 2018 it fell for four consecutive quarters by a total of 2½% - the first time this has ever happened outside a recession, and completely outside the range of recoveries from previous recessions (Chart 8). Chart 9: Business investment in the May Given all this, while the ½% increase in investment in the  2019 Inflation Report  most recent data is welcome if it can be sustained, so far Percentage change on previous year  it offsets only a tiny fraction of the investment weakness of the previous three years. And likewise the recent quarterly strength in GDP appears to have been driven more by stockbuilding ahead of the initial 29th March Brexit deadline, as well as by further rises in consumer spending, than by underlying strength. 15 10 5 0 -5 -10  The main driver of the investment weakness is the uncertainty generated by the Brexit negotiations, which  -15 -20 2000 2003 2006 2009 2012 2015 2018 2021  is discouraging businesses from investing. We hear that 8  All speeches are available online at www.bankofengland.co.uk/news/speeches  8  message clearly both from our Agents’ and our own conversations with business leaders such as yourselves and through our formal Decision Maker Panel survey of over 7000 firms. That uncertainty intensified as the March Brexit deadline approached, explaining the further weakening in investment in 2018. If the government is able to agree a transition deal ahead of the new October deadline, that should lead to some easing in uncertainty.

If this continues it will drag still further on the economy’s already weak productivity trend, over and above the drag from reduced economic openness that I highlighted earlier. I’ve talked so far from a whole UK perspective. And that’s right because the MPC and FPC set policy for the whole country. But regional resilience is also an important aspect of resilience.5  And Scotland, like the UK, has been resilient in a number of ways. The Scottish economy has become increasingly diversified over time. I already mentioned Scotland’s relatively robust performance in the financial crisis. And while the falls in the oil price weighed on growth in 2015-16, more recently GDP growth has broadly kept pace with the UK as a whole – although Brexit uncertainty is having the same negative effects in Scotland as elsewhere. Scottish labour productivity, while slower than pre-crisis as in the rest of the UK, has been better sustained, perhaps because there has been less of an impact from the financial sector. And unemployment is at 3.2%, even lower than the already record-breaking UK rate of 3.8%. In the Highland region it was 3.0% in the most recent data. Andy Haldane’s speech “Is all economics local?”, available online at https://www.bankofengland.co.uk//media/boe/files/speech/2019/is-all-economics-local-speech-by-andy-haldane.pdf, gives a sense of the kind of new ways the Bank is using regional data to get a better understanding of the economy.
However, we expect growth rates in China and India – the most important countries in emerging Asia in economic terms – to remain below potential in the near term, due to prior monetary policy tightening, high inflation, and sluggish external demand. Looking at the US, recent data suggest that the situation has improved slightly. However, this should not hide the fact that economic growth in the US is likely to remain sluggish. As you may know, unemployment is still high and the fiscal environment remains contractionary. For the euro area – Switzerland’s most important trading partner by far – the economic outlook has deteriorated since last autumn. Uncertainty  BIS central bankers’ speeches  1  about an escalation of the sovereign debt crisis is undiminished. As a result, the euro area is likely to face a mild recession in early 2012. This short overview shows quite plainly: we still live in a world with substantial downside risks. Thus, the global economic situation might turn out to be worse than described above. One possible risk is a more pronounced slowdown in emerging market growth. This would reinforce the downturn in European countries. Another risk is that fiscal consolidation in the US may exert a greater drag on growth than projected today. But the main risk is – without doubt – a further escalation of the European debt crisis. Were such a risk to materialize, the consequences for the international financial and banking system – and in turn for global activity – would be severe.

We—the central bankers, credit rating agencies, and everyone in this room—must continue to be vigilant. We must maintain good buffers and build immunity. Despite many immediate challenges ahead, we also need to look at our long-term goals. Let me end by talking about something I like to do when I have some free time: hiking. There are two types of hiker. The first likes to admire the scenery, birds, trees, and the majestic mountain range far beyond, while the second only focuses on the path in front. The first inevitably trip on rocks or fallen branches, and the other sometimes looks up to find themselves lost. We cannot complete our journey only looking up or only looking down, and we need to pay as much attention to the short-term risks as we do to our long-term aspiration. I wish you all a fruitful conference this morning. Thank you very much. 6
Those powers are limited and their effects often take a long time to emerge. I began by mentioning that I would like to refer to two points from last year’s address by the Chairman of the Board of Governors, and use them as headings for my discussion here of the Bank’s two most important tasks at present, and in fact at all times. The first concerns the inflation target and figures connected with it. The second is the position and performance of financial companies. As it happens these two issues are generally interlinked, because decisions by financial companies have a strong impact on the first task, and imbalances in the Icelandic economy can affect international analysts’ assessments of the position of the financial sector. But be that as it may. I was interested to note that my cautious predecessor as Chairman of the Board of Governors described in his last address to the annual meeting how the strong growth in lending by the banks showed that they have overstepped the mark. Those were the words he used. He was discussing the impact on growth, overheating and inflationary pressures in the economy.

It must be recognised that structural reforms, and specifically financial sector reform, is of crucial importance if this recovery is to be turned into sustainable economic growth. A bank with the mandate to promote development in Asia must surely have a role to play in all this and I look forward to greater involvement of the Bank, in whatever capacity, in maintaining the momentum of structural reforms in Asia. Mr President, the efficiency of financial markets in the region in performing the important function of financial intermediation has been found lacking. There has been notably little disagreement about the desirability of developing domestic and regional bond markets. But there has also been little progress. And there has been no lack of explanation of why this is the case. The often quoted impediments include the lack of clearing and settlement infrastructure, the absence of a broad institutional investor base, the lack of a benchmark yield curve, low liquidity, and so on. While these impediments are recognised and are being tackled earnestly by national authorities, there is one problem that has attracted relatively little attention so far. The problem relates to the generally low credit ratings of the Asian issuers, including the sovereigns, granted by the international rating agencies. 1  BIS Review 38/2000  I do not wish to provoke a debate on the objectivity and reliability of the ratings and the rating process of the international rating agencies.
So if I were to predict the direction of the market movement correctly for five successive weeks you might think that I knew something you didn’t. Indeed, you might be willing to subscribe to an investment service with that sort of track record. So let me explain to you how one might create the illusion of clairvoyance. Select around 6000 or so names and addresses from the London telephone directory. Divide the names into two groups. To the first write predicting that the market will rise over the coming week. To the second write predicting a fall in the market. At the end of the week keep the 3000 or so names who were given the correct prediction and discard the others. Divide those names in turn into two groups. To the first predict a rise in the market and to the second a fall. Repeat this process for five weeks, at which point there will be around 200 people to whom we could write the following letter. “You may well have been sceptical when you received our first letter, but by now you will know that we have worked out the secret of predicting successfully the direction of movement of the stock market. You know that our method really works. To subscribe to our investment service please send £ by return”. Quite what our President, as the former Deputy Chairman of the Financial Services Authority, would make of this scheme I do not know.

An example is the Risk Management & Corporate Governance Programme, conducted with SPRING Singapore. 2  BIS Review 164/2010  19. SID can do much more in this respect. SID should be sensitive to the current needs of directors and fine-tune the content of its courses accordingly. In addition, SID can better engage experienced directors, and tap on their expertise through putting together relevant case studies. Conclusion 20. Ladies and gentlemen, with increasing expectations on directors, companies will come to place a premium on well-trained, ethical directors who look out for the interests of all stakeholders, and are not rubber stamps for management decisions. This presents an opportunity to directors who are proficient and professional. 21. It is in companies’ and directors’ best interests to “Get it Right” by having effective and committed directors who pursue good corporate governance practices, as this will result in a premium for shareholders. Grooming such directors will help to encourage new ideas, better practices and encourage leadership renewal for company boards. 22. On this note, I would like to end by thanking SID for its efforts in the area of corporate governance. I hope that the discussions arising from this conference will help directors gain a better understanding of how they can carry out their duties more effectively. 23. Thank you and have a pleasant day ahead. BIS Review 164/2010  3
The SNB reacted swiftly to the deteriorating economic situation, and many people hoped that the monetary policy adopted could shield our country from the turmoil experienced elsewhere. However, it was not in our power to meet these expectations. We did all we could within the framework of our legal mandate. 2009 will be a difficult year for our economy, and the signs are that 2010 will be so too because, even if the downward trend is halted, the under-utilisation of our production resources will still be considerable. Dear Shareholders Dear Guests In such a challenging environment, we shall once again need the support of everyone, in particular our shareholders. We thank you for the unfailing trust you placed in us throughout the year and the interest you have shown in the SNB’s activities. BIS Review 48/2009  5

Facilitating also means helping players in the ecosystem to engage with each other and find solutions without necessarily resorting to regulatory measures. It is in this spirit that we run the ACPR-AMF FinTech Forumand that we have created working groups or task forces in order to make concrete progress on important issues for the ecosystem, such as the access of digital asset service providers to the bank accounts and banking services they need. Admittedly, dialogue does not solve everything, but we very often find that many difficulties can be ironed out through improved dialogue and a better understanding of the practices and technologies used by the various stakeholders. Second objective: experiment. Here I would like to give two different illustrations of this approach. The exploratory workshops conducted by ACPR on the use of artificial intelligence in the financial sector are an example of what experimentation can bring not only to a supervisory authority but also to the entire ecosystem. Indeed, these concrete experiments have enabled the ACPR, based on specific use cases, to examine the code of the algorithms, their intrinsic performance, their integration into operational processes, and their control and governance environment. Drawing on this experiment, in order to share widely the lessons it has learned, the ACPR published astudy last June outlining what the framework for the proper use of these future tools could look like.
Access to other institutions like the European Investment Bank is also possible. (viii)  Development of the capital markets has also made it possible for corporates to raise long term finance. Stock markets enable firms to acquire much needed capital at relatively lower cost, hence facilitating capital allocation, investment and growth. (ix)  Other innovative financial products introduced on the international capital markets include diaspora bonds and carbon credit financial instruments. There is need for Zambian businesses to take advantage and understand these financial products in order to access funding from multilateral institutions. 5.0  Competition in the Zambian financial sector  The BoZ recognises that competition is an essential element in the effective and efficient operation of a market economy. In this regard, the licensing regime encourages entry of players that will foster integrity, innovation and competition while deepening and widening the financial sector. 4  BIS central bankers’ speeches  The presence of reputable financial intermediaries is expected to increase competition, which in turn would lead to an improvement in the quality of domestic financial services and allocative efficiency, reflected by lower operating costs and narrower margins. The increased efficiency of financial intermediation would eventually be translated into higher returns for domestic savings and greater efficiency in the pricing of credit and other risks and in the allocation of credit. However, despite the growth in number of financial institutions in Zambia, this development has not had a very significant impact on promoting competition, as most of the banks are small in terms of size.

It is essential to realise that for the most part, the financial system is not an end in itself but a means to an end and the measure of the success of the financial system must relate to its success in accomplishing broader societal functions. Innovations in the financial system that help it perform these tasks better and at lower cost almost surely lead to increased societal well-being, and to the extent that our GDP measures capture these benefits, in higher measured growth. Notwithstanding the benefits of innovation, it is important to note that the opening up to new activities and products, particularly the expansion of the credit portfolio, brings in a myriad of new risks associated with the new activities. Studies have shown that increasing financial innovation and deepening of financial markets brings with it challenges and risks, which if not well addressed, can threaten the health of the financial system and may cause havoc to the stability of a financial system. 2  BIS central bankers’ speeches  4.0  The role of the Bank of Zambia in promoting innovation and competition  The Bank of Zambia (BoZ) acknowledges that a stable, sound and efficient financial sector has to be underpinned by infrastructure development. The BoZ achieves this by creating an enabling environment through the legal and regulatory frameworks that promote financial systems stability and development.
As I noted earlier, that reflects the preponderance of adverse cost shocks, which we have largely accommodated, whether by accident or design. But the concentration of such shocks runs the risk that the MPC is no longer seen as taking the target seriously. Having a target in which the acceptable deviations from target are in effect hardwired in might reduce that risk. 6  See, for instance, the forecast errors box on pp.48–9 of the August 2010 Inflation Report. 7  See Bean (1998). BIS central bankers’ speeches  3  Against that, a nominal income growth target has two drawbacks. The first is that the data for nominal income is less timely than that for inflation and subject to revision, sometimes significantly so. Chart 2 shows the first estimate of nominal income growth, together with the current vintage of data; one should not take comfort from the concordance between the two series in the recent past, as the recent data have not yet had much opportunity to be revised! The average absolute revision over 1993–2009 is a full percentage point. Now the susceptibility to revision is hardly a knock-out blow. After all, the data on growth and employment are also subject to revision and recognising that the data are an imperfect guide to reality is part and parcel of setting policy. But the susceptibility of the data to revision would make it somewhat harder for the public to understand the MPC’s objectives and for Parliament to hold us to account.

James Meade advanced the idea in his 1977 Nobel Prize lecture,2 and my MPC colleague, Martin Weale, spent much of the early part of his career working with Meade to develop the idea.3 Samuel Brittan, coming from a slightly different perspective, wrote an important IEA pamphlet in 1981, which argued that controlling nominal spending was what monetarists were really seeking to achieve. I even wrote my PhD thesis4 on the topic over thirty years ago. There is an important distinction between targeting the level or the growth of nominal income. The recent revival of academic interest in the issue relates to the scope for a target for the level of nominal income to provide additional traction for monetary policy when policy rates reach their zero lower bound. Some of the recent public commentary, however, has centred on the possible virtues of switching to a target for nominal income growth, so let me deal with that case first. In a normal environment, nominal income growth and inflation targets generate similar responses to aggregate demand shocks. But a nominal income target is more “forgiving” than a narrowly-defined inflation target in the case of cost shocks. An adverse cost shock simultaneously tends to raise the price level and reduce output. Stabilising nominal income requires a one-for-one trade-off in the response, whereas stabilising inflation, or the price level, requires that all the burden of the shock is transferred onto output. That is the basic case put forward for the superiority of a nominal income target over a strict inflation target.