samchain/econo-pairs-v1 huggingface dataset:
After we have determined this, then it is better for a small and open economy, such as the Macedonian, it to be fixed. Why? Because if we have a floating exchange rate, we will have higher inflation and higher interest rates for the real sector. So, I cannot understand those who stand for a floating exchange rate, though they are a minority, because the vast majority already agrees that the current exchange rate regime best suited our economy. And those who are most vocal about the floating exchange rate, are the same ones who claim that current interest rates are high. Well, then they would be even higher. Therefore, I do not see what would be the benefit, how it will contribute to higher growth. There are opinions that it is easier to be Governor of a fixed rate, that it requires less managing of the monetary policy. Is that so? It is true. It is easier to manage a fixed exchange rate than a floating one. However, regarding the advantage of a fixed exchange rate for the economy I would point out the experience of Serbia. Serbia has a floating exchange rate and since 2008 the exchange rate has depreciated some 50 percent. During the entire period, however, Serbia has had an inflation of over 10 percent, and the interest rates for the real sector have constantly been around 14 to 15 percent. Therefore, lately, the Serbian Central Bank stabilized the exchange rate, too.

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Last week the Riksbank presented a new assessment of economic and inflation prospects in this year's third Inflation Report, which led to our decision to leave the repo rate unchanged. Assessment of economic activity and inflation It is our assessment that there has been an improvement in the economic outlook for Sweden and the world economy since June. But the picture is neither clear-cut nor problem-free. Economic conditions in Europe have continued to be gloomy, with several countries experiencing a decline in GDP during the second quarter, in particular large countries such as Germany and France. Elsewhere, mainly in the US, expansionary economic policy appears to have had some impact. This has been reflected in high consumption and signs of a recovery in business investment. The positive signals have been mirrored in rising equity prices and long yields in the financial markets. Moreover, in the US labour market there are indications of a possible turnaround, which is a precondition for a sustainable upswing in economic activity. Asia has also been witnessing relatively favourable economic conditions, particularly in China, where economic growth has been approximately 8 per cent per year. In Sweden, GDP growth was somewhat more robust during the first half of this year than we previously thought, and the outlook for the economy appears now to be slightly brighter. Adding to this is the repo rate cuts totalling 0.75 percentage points during the summer. However, in the labour market, conditions remain weak.

The financial crisis has emphasised the close links between the health and behaviour of banks and the state of the economy. We are remembering a very uncomfortable lesson from history that should not have been forgotten. But, forgotten it was. We have a very big programme of reforms under way, with the central objective that we must not let a financial crisis of this scale happen again. At the heart of this programme we are trying to knit together monetary policy and financial stability in both its macro- and micro-prudential forms, something that has not been done properly for a long time. I say that quite deliberately, because such coherence was not present prior to the reforms of 1997, so this is more than a change to recent arrangements. The new macro-prudential approach to financial stability will see the establishment of the Financial Policy Committee (FPC), charged with the primary objective of identifying, monitoring and taking action to remove or reduce systemic risks with a view to protecting and enhancing the resilience of the UK financial system. In June, the Chancellor announced that the government would amend the Bill to give the FPC a secondary objective so that, subject to being content on the first objective, it should support the economic policy of the government, including its objectives for growth and employment. Currently, the FPC is acting in an interim capacity to undertake as far as possible the future statutory FPC’s macroprudential role.
A regulatory framework is clearly needed only if the present situation, or the outlook, requires it. E-banking is a rather generic term and we need to be clear what we are talking about. In the HKMA, we tend to separate e-banking into two streams: electronic money products, mainly in the form of stored value cards, and electronic delivery channel products. As regards electronic money, I think that it is fair to say that the progress so far has been somewhat disappointing as far as banks are concerned. There are two main stored value card schemes operated by banks, Mondex and Visa Cash. Both have been in the market place for some time now. However, it seems that these products have not yet gained wide acceptance. This is not unique to Hong Kong. In fact, the reaction to these products around the world has been lukewarm so far. It appears that the product is, for the present time at least, ahead of customer demand. This may change when the electronic purse function provided by a stored value card is integrated into a chip card and combined with credit and debit card functions. The other route to success is to link the electronic purse function more specifically to a particular type of purchase which people have to make in their everyday lives. That has been demonstrated in Hong Kong by the success of the Octopus card. As at end-September, 5.6 million Octopus cards have been issued, recording 3.8 million transactions per day.

Banks are of course already used to dealing with at least some of the issues that crop up in an electronic banking environment, and so have built up experience and expertise to deal with these. However, I do believe that the internet, because of its low cost, global reach and versatility raises the stakes for the banks – both in terms of the opportunities it presents as well as the risks. Strategic risk In talking about these risks, let me start at the top – with the issue of strategic risk. In other words, will the bank get it right? Will it make the right choices when it comes to investing in e-banking or will it waste money by going down a technological blind alley? Should it attempt to take the lead in new technology ahead of its competitors, or should it be a follower and adopt a “wait and see” approach? The latter may be the safer course of action for smaller banks, though it does create the risk of being left behind. The advantages of e-banking, and internet banking in particular, are quite clear – the ability, for example, to disseminate information widely and instantaneously at low cost and to cross-sell products in a much more effective way. But there are also strategic threats. The cheapness and global reach of the internet opens up the threat of increased competition from new entrants who will no longer need a branch network to operate effectively in any given market.
Most of the barriers to trade in services appear to be due to national regulations. Developments would be necessary for instance with regard to the further opening of the public procurement market. 2  BIS Review 60/2002  As regards the labour market, the European Council of Lisbon fixed as a central objective the rise of the employment rate of our populations from 60 to 70 % in 10 years. As a comparison, the same rate stands at 75 % in the USA. Continental Europe is therefore still experiencing levels of unemployment that are too high, although it has been declining in most of its economies over the past years. According to the IMF and the OECD and the constituency of central bankers, 75% of unemployment in the euro zone is of a structural nature, i.e. generated by an environment which handicaps job creation. It is thus necessary to put an end to the neo-Malthusian behaviour which is still anchored in our economies. Completing a fully integrated European capital market: In 1999, as soon as the euro was launched, one of the expected advantages was the prospect of deeper, larger and more integrated capital markets contributing to reducing the cost of capital for businesses and giving European savers a greater range of saving options. These expectations have become realities in both the money market and longer-term capital markets. However, there are still some barriers to further integration of EU capital markets.

•  Secondly, I noted that many accession countries have already expressed their intention to join ERM II as soon as possible after EU entry. This intention is to be welcomed, although it should be clear that ERM II membership needs neither to happen immediately after EU accession in all cases, nor to be limited to only two years. It would be misleading to consider ERM II as a mere “waiting room” before the euro. On the very contrary, ERM II would allow countries to retain some limited exchange rate flexibility during the catching-up process. ERM II membership offers a meaningful, flexible but credible framework for increasing convergence with the euro area, for tackling the challenges faced by accession countries on the road towards the adoption of the euro, for contributing to macroeconomic and exchange rate stability and for helping determine the appropriate level for the eventual irrevocable fixation of parities; and this, again, in the best interest of candidate countries themselves. •  Thirdly, a sound and efficient banking and financial system is key. Significant progress has been made over the past few years in rehabilitating the banking sector and encouraging foreign ownership. The latter has also contributed to greater integration into the EU financial system. Nevertheless, the improvement of financial technicity and banking practices is a process entirely in the hands of the accession countries. The intermediation role of the banking sector remains fundamental for the efficient use of capital and sustained growth.
In contrast, I think there are greater potential risks to central bank independence from the Fed’s large-scale asset purchase programs and the Treasury maturity extension program. These programs do create some budget risk for the Federal Reserve. The issue here is not that the Fed is taking credit risk because the Fed’s purchases are restricted to Treasuries and agency MBS. Instead, the budgetary risks stem from the fact that these asset purchase and maturity extension programs expose the Federal Reserve to increased interest rate risk that could affect the level of net interest earnings and therefore the amount of the Fed’s remittances back to the U.S. Treasury. If the Federal Reserve needed to raise short-term rates to attain its objectives, it would do so by raising the interest paid on its reserves. As a result, net interest earnings would fall due to the increase in interest cost. If the rise in rates were sufficiently large, the Federal Reserve’s net interest margin could turn negative, resulting in losses for the Federal Reserve. The Fed’s earnings could also be adversely affected by asset sales. For example, if the Fed determined that it needed to reduce the aggregate level of reserves through asset sales, the Fed might incur losses by selling these assets at prices below their amortized costs. Although this risk is real, I believe it is not a big threat to the Federal Reserve’s independence for two reasons.

Now some worry that a large balance sheet may cause the Federal Reserve to deviate from the monetary policy that is consistent with its dual mandate goals with respect to unemployment and inflation. The argument is made that concerns about the impact of policy changes on the level of remittances might constrain the conduct of monetary policy. In particular, some argue that the Federal Reserve might pull its punches and not raise shortterm interest rates in as timely or as aggressive a manner as needed to keep inflation in check. I think that the size and composition of the Federal Reserve’s balance sheet actually creates incentives that reinforce the pursuit of the Federal Reserve’s objective with respect to inflation. Consider what would happen if the Federal Reserve failed to tighten in a timely way. Inflation and long-term interest rates would rise, and this would necessitate a larger rise in short-term interest rates and even greater pressure on the Federal Reserve’s net interest margin and earnings in the future. In contrast, by tightening in a timely way, the Fed would prevent inflation pressures from emerging and this would limit the need for a larger rise in short-term rates in the future. The current size of the balance sheet would also discourage a premature interest rate hike. In the absence of solid improvements in labor market activity, a sharp increase in short-term rates would unnecessarily reduce the Federal Reserve net interest income without any benefits in terms of achieving its dual mandate goals.
And the euro area as a whole was shown to have no public and very little private risk-sharing. 2. Risk-sharing within monetary unions In the classical optimum currency area (OCA) literature, what makes membership of a monetary union work for all its members is a trade-off: what they lose in terms of national stabilisation tools is counterbalanced by new adjustment mechanisms within the currency area. These mechanisms are typically held to be labour and capital mobility, as well as fiscal transfers between different parts of the union.6 In other words, they are ex post and take place after a recession has set in. In the United States, which is a relatively well-functioning monetary union, ex post adjustment plays an important role. Fiscal transfers through the US federal budget are estimated to absorb around 10% of shocks7, while about half of the long-run response to a rise in unemployment takes place through labour mobility. 8 But the outcomes achieved in the US are not substantially different to those in the euro area. Though the euro area does not have a large central budget, national fiscal policies can still provide significant stabilisation, so long as countries can use fiscal policy freely.

in the case of block chains or distributed ledgers where the technology is still evolving. Sometimes, it means updating regulation to take account of new technologies and new risks e.g. in the case of cloud computing and robo-advisers, where we issued special guidelines. Sometimes, it means being specific about the risks we want to address and taking a targeted approach to regulation e.g. in the case of crypto assets where we focus on the crypto intermediaries for antimoney laundering purposes rather than the crypto assets. Sometimes, it means taking an activity-based approach to regulation, setting rules for specific activities rather than the entity as a whole e.g. in the case of the proposed Payment Services Bill, where licensees will be regulated according to the activities they conduct because different activities pose different risks. The trick is to identify the risks we are most concerned with and finding the most targeted way of regulating those risks so that the business has maximum latitude to innovate and grow. Now, there is one more approach in MAS’ tool kit and that is the “regulatory sandbox”. The regulatory sandbox facilitates live experimentation of innovative financial services and business models within pre-defined boundaries. MAS is probably the second jurisdiction in the world to introduce the regulatory sandbox and it is one of the most comprehensive ones around.
William C Dudley: Reforming the OTC derivatives market Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Harvard Law School’s Symposium on Building the Financial System of the 21st Century, Armonk, New York, 19 March 2012. *  *  *  It is a great pleasure to have the opportunity to speak here. Today I will focus on two related aspects of the regulatory reform agenda that are complex and global in nature. First, I will discuss the efforts underway to reform the over-the-counter (OTC) derivatives markets. This includes creating strong incentives to standardize trades and clear those trades through central counterparties (CCPs) and improving disclosure and transparency through mandatory reporting of all OTC derivative trades to trade repositories. Second, I will discuss the global program to establish tougher standards for the regulation and oversight of financial market infrastructures (FMI) – focusing particularly on CCPs for over-the-counter derivatives. Over the past two years, two important standard setting bodies – the Committee on Payment and Settlement Systems (CPSS) and the Technical Committee of the International Organization of Securities Commissions (IOSCO) have been developing a new package of standards called, Principles for Financial Market Infrastructures. The aim is to strengthen the resiliency and robustness of FMIs that are systemically important and are the backbone of the global financial system. I anticipate that the approval process will be completed and the finalized Principles document will be issued and broadly distributed sometime next month.

In addition to regulators of the country in which the CCP is headquartered, these include foreign regulators. These regulators may be interested parties for many reasons. For example, their currencies may be used in settling the obligations of the CCP, they may have counterparties to the CCP that are headquartered or do significant amounts of business in their country, or they may have FMIs that are linked to the CCP. I want to emphasize that effective cooperative oversight is essential. Otherwise, the risk is that the system will become overly fragmented, with a proliferation of national CCPs. In this case, many of the risk-reducing benefits from CCPs could be lost or severely attenuated. That is because fewer offsetting positions would likely be cleared through any particular CCP and this would reduce the scope for reducing large gross exposures into much smaller net positions. The second safeguard is to ensure fair, open and safe access to global FMIs around the world. It is important, for example, that global CCPs have rules that are not exclusionary or that unnecessarily entrench the position of whatever dealer, firm, or FMI is currently dominant in the market. The third safeguard is to establish rules to ensure that, if a major market participant were to fail, a CCP can liquefy its collateral quickly so that it can meet its obligations in a timely way. But this also needs to be done in a way that would not disrupt financial markets or the CCP’s participants.
GDP over 2020 held fixed at end-2019 level to prevent fall in output leading to denominator effect. Dotted line extends series to mid-2020, assuming completion of current asset purchase programme and further TFSME drawings. These figures reflect the June MPC minutes, which noted that lending under TFSME “was likely to exceed £ billion over the coming year.” For simplicity we assume the TFSME reaches £ at end-2020. 20  19  All speeches are available online at www.bankofengland.co.uk/speeches  19  Chart 17: Bank of England balance sheet relative to government net debt Per cent 60 Banknote convertibility to gold reinstated Banknote convertibility to gold suspended  South Sea bubble  Amalgamation of Treasury and Bank note issues  Covid-19 crisis  50 Failure of Lehman Brothers  40 WW1  WW2  30  20  10  0 1700  1750  1800  1850  1900  1950  2000  Sources: Bank of England (available here), OBR, ONS and Bank calculations. Note: Debt figures calculated on a fiscal year end basis. Red diamond shows end-2020 Bank of England balance sheet (consistent with Chart 14), relative to OBR projection for government net debt (excluding public sector banks) for FY 2020/21. These balance sheet actions by central banks globally have had their intended effect, improving financial and credit conditions to support households and businesses (Chart 18). Despite being tighter than at the start of the year, financial conditions have loosened significantly since mid-March.

Easy money is bad for you Slide 1: Landes quote In his book The Wealth and Poverty of Nations the historian David Landes describes how the Spanish empire went into a long period of decline when the flow of Latin-American gold dried up in the mid-17th century. According to Landes, the moral of this story is that “easy money is bad for you. It represents short-run gain that will be paid for in immediate distortions and later regrets.” 1 As a country rich in natural resources, Norway has shared and tried to learn from this experience. Perhaps the quotation from Landes also rings true for all those who borrowed cheaply during the boom before 2008, and who now have to face the consequences. Windfall gains, like large and unsustainable capital flows from abroad, are double-edged. They provide short-term relief from hard choices, but may carry with them hardship in the longer term. Slide 2: Output gap: A boom-bust economy After the discovery of oil in the North Sea in 1969, government spending and social programs expanded rapidly in anticipation of future petroleum revenues. We sought to build a bridge across the post oil-shock recession in Europe. But it was a bridge to nowhere. Fiscal policy had fuelled a boom-bust economy. Inflation soared to double digits. A deep recession started in the late 1970s. Slide 3: Current account balance: Large external deficits The non-oil tradable sector struggled as costs had increased. By 1977, Norway’s current account surplus had turned into a deficit of 12 percent of GDP.