samchain/econo-pairs-v1 huggingface dataset:
Assuming that this process begins later this year and continues uninterrupted, the balance sheet size would likely normalize in the early part of the next decade.4 There is uncertainty about the exact timing for several reasons. We don’t know how fast our agency MBS holdings will pre-pay, how quickly currency outstanding will grow, how many bank reserves will be required for the efficient execution of monetary policy, or the evolution of other liability items on the Fed’s balance sheet that affect the amount of bank reserves. Against that backdrop, one major issue that remains outstanding is whether the Fed will continue to operate with a “floor” system, in which the Fed maintains a relatively abundant supply of reserves and the effective federal funds rate is managed by periodic adjustments to the interest rate the Fed pays on bank reserves. Or, whether the Fed will move back to a “corridor” system, in which reserves are relatively scarce and the effective federal funds rate is managed by frequently adjusting the supply of reserves to meet demand at the desired federal funds rate level. In this type of regime, it is the quantity of reserves, rather than the interest rate the Fed pays on reserves, that is the primary driver of the federal funds rate.5 Having managed the System Open Market Account during the financial crisis—a period during which the demand for reserves was very volatile—I very much favor a floor-type system. It is much easier to manage on a day-to-day basis.

This judgment is supported by the fact that financial conditions have eased, rather than tightened, even as the Fed has raised its short-term interest rate target range by 75 basis points since last December. For example, equity prices have risen, credit spreads have narrowed modestly, longer-term interest rates have declined, and the dollar has weakened. On balance, these movements have been large relative to the upward drift in short-term interest rates. The easing in financial conditions is important because monetary policy does not directly influence the trajectory of economic growth and inflation. Instead, as I have noted in previous remarks, shortterm interest rate changes are an important factor that affects broad financial market conditions.2 Financial conditions, in turn, influence the demand for goods and services by households and businesses. But, if financial conditions ease even as we are removing monetary policy accommodation, this may have implications for further policy adjustments. All else equal, an easing of financial conditions may warrant a somewhat steeper policy rate path. Conversely, if financial conditions were to tighten unduly, then this might necessitate a shallower rate path to temper that tightening. To be clear, this does not mean that the Fed should mechanically target a particular set of financial conditions. That is because the set of financial conditions appropriate to achieving the Fed’s statutory objectives of maximum employment and price stability will evolve over time as the economic outlook changes. Financial conditions are just a means to an end—the achievement of the Fed’s employment and inflation objectives.
TABLE 1 THE BANK AND PRIVATE SECTOR ACCELERATORS COMPARED  Purpose  Duration of firm engagement Business model  8  Private sector  Bank of England (BoE)  accelerators  accelerator  To help ventures define and  To work with innovative firms,  build initial products and  helping them to understand  identify consumers and  the BoE’s needs, and the BoE  investors  to understand the technology  3-6 months  1-3 months  Investment in successful firms (can also be non-profit)  Non-profit, no equity taken  Selection  Competitive, in cohorts  Competitive, in cohorts  Venture Stage  Early  Generally later stages  Structured programme  PoCs structured according to  similar for all firms in the  central bank use cases and  cohort, culminating in a  success criteria. No  demo day  comparison between firms  Programme  Resourcing and Mentorship Venture location  Primary resourcing from start-up staff but with support from mentors  Start-up staff work with BoE subject matter experts  On-site  Mostly off-site  In other respects, the Bank’s Accelerator operates in a similar way to traditional accelerators (Table 1). We undertake structured Proofs of Concept (‘PoCs’), organised in cohorts to ensure appropriate resource allocation and focus. Firms are chosen through an open, competitive selection process on the basis of a well-defined central banking use case. They work closely with the Bank’s subject matter experts for a time-limited period.

Overall, factors that affect inflation showed low activity intensity and prices of other goods of the basket do not signal for inflationary pressures on the economy. From the macroeconomic perspective, the downtrend of annual inflation is dictated primarily by rapid decline of pressures on the supply side, notably: slowdown of commodities price rise in international markets and low inflation in our main trade partner countries; cancelling out of the administered price rise effect; and stability of the national currency. Although these developments had been factorised by our analyses and projections, their influence was higher than expected. On the other hand, inflationary pressures originating from the aggregate demand continued to be low, in the context of below-potential economic growth and anchored expectations on inflation. Figures on real economy developments in early 2012 are scarce. Indirect statistical data, available for the monetary, fiscal and trade sectors of the economy, signal for slow economic growth in the first quarter of the year. As expected, aggregate demand was sustained less by the fiscal stimulus, in response to the prudent fiscal behaviour for 2012. Similarly, the contribution of foreign demand, during this period, is assessed as low, owing to economic activity slowdown in our partner countries. Moreover, despite signals for its recovery, the domestic private demand remains slow, given the consumers and private business hesitation to spend and invest. Fiscal sector data for January reveal positive budget balance for this year, about ALL 1.6 billion.
Despite the significant distance covered in the fight against inflation, price stability has not been achieved yet and there is still a long way to go. Recent inflation developments also confirm this fact. At this point, I would like to summarize the inflation and monetary policy developments of the recent period. The increase in inflation in the first quarter of the year was an expected development, which has been stated in the Bank’s reports since January. In April and May, the increase in inflation was above the expected level due to unforeseen developments in seasonal pricing behaviors. Compared to March, consumer prices increased by 1.34 percent and 1.88 percent in April and May, respectively. As of May, annual inflation became 9.86 percent, which is obviously above the target path. In May, the direct effects of exchange rate movements on inflation started to be observed through the channels of fuel oil, gold and durable goods. During this period, the upward pressure exerted by the  2  BIS Review 68/2006  depreciation in the New Turkish lira on inflation reached 0.5 points. Adding the exogenous movements in gold and oil prices, the total impact amounts to 0.65 point. In other words, some of the direct effects of exchange rate movements on prices became evident in May. However, these effects are expected to be high in June, too.

In terms of performance evaluation comparison of actual and benchmark portfolios returns are going to be monitored daily and reported to the top management periodically. For credit risk management side, a transaction limit is assigned to each counterparty, covering all types of credit risks and market risks. The limits are marked to market daily and reflect the amount of exposure that the bank is willing to take with each counterparty. The credit limits are set by employing an internal scoring model that incorporates the counterparty’s external credit ratings, financial information, and some other qualitative information such as the quality of relationship with our bank and the support status, ie the possibility of getting help from the government in case of financial difficulty. The credit rating of the country in which the bank operates is also considered. Reports about limit monitoring are produced regularly. I would like to conclude my remarks by underlining once again how important it is to have an efficient risk management to protect our reserves from financial instabilities all over the world. We need to watch the rapid changes in reserve management in terms of technological developments and in terms of economic conditions very closely and adapt our institutions to these changes right away. 3  BIS Review 38/2000
But many economists in this stream of literature, most prominently Alex Cukierman, stress that it is not enough to have independence enshrined in the central bank’s charter. Legal independence is a necessary condition for actual independence, but not a sufficient one. I would say that actual independence is a state of mind of central bankers. This state of mind, then, determines the outcome of monetary policy and is imperative for providing price stability. So how can actual independence differ from legal independence? The key condition for actual independence is the de facto impossibility to dismiss central bank board members. In fact, the charters of almost all central banks around the world (including the National Bank of Ukraine and the Czech National Bank) allow for board members to be dismissed under some very specific conditions. But the applicability of these conditions varies widely, depending on custom and – crucially, I believe – the central bank’s standing in society. This observation brings me to an important point I want to make. Even if a central bank is actually independent from the government, it cannot over the long term act in direct contradiction to the preferences of society. For example, if the population is not averse to modest inflation, the central bank will have a hard time imposing an ultra-low-inflation environment, with all the associated costs and benefits, over the long run. The experience of the Czech National Bank, perhaps, serves as a case in point, although in the opposite direction.

Then, and provided that precedence is respected, the ECB can support the economic policies of the EU on a broader scale. The legal formulation of the Treaty is an abstract determination of priorities. To define the objective precisely and establish a relationship between the objective and the policy – consistently conducted and communicated – a strategy is needed. 1  I wish to thank Tobias Linzert, Stefano Nardelli, Massimo Rostagno and Arthur Saint-Guilhem for their contribution to this speech. I remain solely responsible for the opinions contained herein. 2  Michel Aglietta: “Money: a matter of credit and trust”, Journées internationales d’économie monétaire et bancaire, Lyon, 6–7 juin 2002. BIS central bankers’ speeches  1  The strategy of the ECB makes the Treaty mandate more precise in three respects. First, it provides a quantitative definition of “price stability” by indicating a range for year-on-year changes in the harmonised index of consumer prices which the ECB considers consistent with conditions of stable prices. That does not necessarily mean zero inflation. The price stability range that the ECB considers equivalent to “stable prices” covers positive inflation rates lower than 2%. Second, the strategy identifies, within that range, inflation levels which the Governing Council of the ECB aims for, in its monthly policy decision. We aim at inflation rates that are below, but close to, 2%.
Under the leadership of Tan Sri Azman Mokhtar as the Chair, it is envisioned that the Council will also evolve into a fully industry-led structure that will be better able to respond to - and capitalise on - global opportunities in Islamic finance. We are confident that with stronger industry stewardship, we will be able to foster greater market dynamism. We are also seeing greater industry leadership in many areas. In particular, I wish to acknowledge the work of AIBIM and MTA for their efforts to further advance VBI implementation, including the VBI report by AIBIM and the VBIT roadmap by MTA that will be launched today. I would also like to mention that we are delighted to see many action-oriented leaders in Islamic finance. The Royal Award for Islamic Finance recognises outstanding contributions in Islamic finance. I wish to take this opportunity to congratulate Tan Sri Dr. Mohd Daud Bakar – the 2022 winner of the Royal Award for Islamic Finance. He is an eminent Shariah scholar, recognised for his instrumental role as the Chairman of the Shariah Advisory Councils for both Bank Negara Malaysia and Securities Commission Malaysia, and in developing the first Shariah standard on gold issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), among other achievements. I would also like to congratulate in advance the winners of the Emerging Leader Prize and Impact Challenge Prize – two additional new prizes introduced this year in conjunction with RAIF – that will be awarded later today.

Only 4.2% of investment accounts intermediated by Islamic banks are suitable to finance transformation, such as in supplying growth capital to industries of the future or new business models. 3. We have also yet to make the most out of the full range of Shariah contracts in finance application today. Benevolent contracts, risk sharing contracts and other asset-based contracts have yet to be fully utilised to offer a broader spectrum of funding, investment and protection solutions. This means that we are not realising the full potential of value-based finance to address contemporary economic and social needs. This also points to a continued need to foster appreciation of the fundamental values of Shariah among market participants and its embodiment in financial solutions, services and conduct. Changes to the way Islamic finance operates cannot happen overnight. But what the industry does today will be crucial in bringing to life the fundamental values of Islamic finance, and showing how it is relevant to address contemporary challenges. In my view, to elevate the values of Islamic finance to the next level, the industry must seek to embody and exemplify the value of ihsan, continuously striving for attainment of excellence. A hadith narrated in Sahih Muslim reported that Prophet Muhammad (peace be upon him) said, "Verily, God has enjoined excellence (ihsan) with regard to everything." Manifesting ihsan in Islamic finance, thus, calls upon all stakeholders to steadfastly find ways to transform and deliver the highest standards in all aspects of its business.
Given their sometimes rapid and dynamic nature and the difficulty in differentiating between temporary and structural flows, it is difficult to envisage a determinate response path at the outset. Hence, the policy toolkit ought to entail a range of measures, not precluding any one option ex ante, with the flexibility to make adjustments over time. Recent experiences of emerging market economies – including several members of our region – attest to the capacity for policymakers to respond in a pragmatic and timely rather than strictly rules-based and sequential manner. 6. In this connection, the Fund’s framework for managing inflows should serve only as an empirical study on country experiences in using capital flow management measures. It should not become an obligation for member countries as was the case with the 2007 Decision on exchange rate surveillance; otherwise the Fund will risk straining its relations with the membership. We also note that the above framework is part of a broader reform agenda on capital flows, which would entail examining both push and pull factors, as well as both source and recipient dimensions of flows. Moreover, the longer-term solution to managing capital inflows lies in developing deeper and broader financial markets, which would enhance absorptive capacity and facilitate efficient use of capital. We therefore call on the Fund to further study this aspect to help members develop their capital markets. 7.

Prasarn Trairatvorakul: Global challenges, global solutions – IMFC issues Statement by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the International Monetary and Financial Committee (IMFC) Twenty-Third Meeting, International Monetary Fund, Washington DC, 16 April 2011. * * * On behalf of Brunei Darussalam, Cambodia, Fiji, Indonesia, Lao P.D.R., Malaysia, Myanmar, Nepal, Philippines, Singapore, Thailand, Tonga and Vietnam. Introduction 1. We thank Mr. Youssef Boutros-Ghali for his contributions to the IMFC, especially his leadership in completing the 2010 Quota and Governance reform. We congratulate Minister Tharman Shanmugaratnam on his appointment as the new Chairman. With his rich experience in understanding the interests of advanced and emerging market countries, we have full confidence that Minister Tharman will be able to make significant progress in fostering a global consensus on many challenging policy issues. 2. Although the global recovery has gained strength since the last IMFC meeting, its prospect remains fragile as several downside risks continue to prevail. Having been successful in coordinating policies to contain the catastrophic damage from the global financial crisis, policymakers are now facing a more difficult task in forging a consensus on multilateral commitments for countries to take into account the impact of their policies on other members and the international monetary system (IMS). Such an agreement will not be easy to reach against the current backdrop of a multi-speed recovery and asymmetry in domestic policy requirements.
Direct pricing for payment services is much more widespread in Norwegian banks than in banks in most other countries. The price of the services is charged per transaction to the payer and the public may choose the services that cover their needs at the lowest possible price. Since the Act relating to Financial Agreements came into force on 1 July 2000, the float in the Norwegian payment system has been removed. Prices that reflect the relative differences in production costs have had a positive affect on efficiency in the payment system. The economic impact is so substantial that it is visible in the national accounts. The revised national accounts show that GDP growth and productivity growth in the 1990s have been considerably stronger than assumed earlier. The new figures show that annual productivity growth for mainland Norway was 2.4 per cent in the 1990s. Financial services, with annual productivity growth of 6.3 per cent in the 1990s, is the sector that contributed most to this increase. This contributed 0.2 percentage point of the rise in productivity for mainland Norway. This is partly because of a general increase in efficiency after the banking crisis, but is also because of sharp productivity growth in the payment system. The productivity growth is a result of more cost-effective production of various services as well as increased use of payment services with low production costs. As a result of banks’ direct pricing of payment services, the most cost-effective services have shown the strongest growth.

Risks in the payment system  • Legal risk - Uncertainty in agreements and division of responsibility  • Settlement risk – credit and liquidity risk - Credit risk is the risk of loss when the payer is unable to meet his obligations  - Liquidity risk is the risk that the counterparty is unable to meet his obligations at the agreed time  • Operational risk - Problems or interruptions in computer systems or communication lines or insufficient routines  Risk in the payment system is often divided into four categories. Legal risk is related to uncertainty about agreements and the distribution of responsibility. The Payment Systems Act shall contribute to an organisation of the systems that promotes financial stability. The act also transposes the EU Directive on settlement finality into Norwegian law. The Directive protects approved payment and securities systems against legal risk associated with the insolvency of a participant. Norges Bank has notified all important settlement systems to the EFTA Surveillance Authority, ESA, thus providing them with legal protection. The legal risk as defined above should therefore be eliminated for these settlements. Settlement risk consists of credit risk and liquidity risk. The banking industry’s transition to crediting after settlement has eliminated most of the credit risk. Liquidity risk is also limited because Norges Bank offers liquidity through the day which is only limited by the collateral furnished by the banks.
Each year, they engage in between 6,000-8,000 projects, large and small, with companies. The Fraunhofer have been found to play a vital role as both innovation hubs and diffusion spokes, boosting productivity in the German economy. 76  Since they first become operational in 2011, the UK now has around 10 Catapult centres, modelled on the German Fraunhofer. These are smaller in number and scale than their German counterparts and have far less project experience. Their focus, to date, has primarily been on acting as innovation hubs rather than diffusion spokes. This means the UK does not currently have the diffusion infrastructure for its companies enjoyed by Germany. This is not unimportant in explaining its longer lower tail of firms. The UK’s university network, repurposed, could potentially provide that diffusion infrastructure. Conclusion The story of growth is a story with two “i”s – ideas and institutions. The Fourth Industrial Revolution will expand the range of ideas, perhaps more than any of its predecessors. It may also expand the range of  75 76  https://www.fraunhofer.de/en/about-fraunhofer/profile-structure/facts-and-figures.html Comin, Trumbull and Yang (2011). 21  All speeches are available online at www.bankofengland.co.uk/speeches  21  workers who suffer its side-effects, perhaps more so than any of its predecessors. In the past, new institutions have emerged to cushion this painful transition, limiting the recessionary hit to societies. Historically, doing so appears to have held the key to sustainable growth.

To be successful, these spokes would need to be repositories of knowledge and expertise on technologies and their application to companies. And, ideally, these repositories would have regional and sectoral reach to enable them to touch the long tail. The UK’s existing university network would be one institutional solution to this spoke problem. They have regional and sectoral reach. They also have embodied expertise and knowledge. By working in partnership with local businesses, they could serve as repositories of expertise on good company practices – in management, organisation, logistics, robotics, AI and the like. A new set of business parks attached to these universities could serve, not so much as innovation incubators for new companies, but as diffusion clinics for existing ones. This idea goes with the grain of the earlier proposal; it would broaden the scope and purpose of universities. In future, these would develop a broader set of capitals – beyond human capital (in people) to include physical and intellectual capital (in firms). And they would do so throughout the lifecycle of companies, not just in their early years. As it happens, this would also be consistent with Newman’s original conception of universities as diffusion-engines, every bit as much as innovation-engines. In Germany, a network of applied research institutes, run jointly by universities and industry, has been in place since 1949. The Fraunhofer institutes now total 72. 75  Their extensive project work means they can  apply technological solutions quickly to a wide variety of firms.