samchain/econo-pairs-v1 huggingface dataset:
2 Dir.2016:114  2 [14]  unfortunately be disappointed. My somewhat more modest aim is to make a contribution to the discussion by examining the distributional effects of the policy and adding shades of meaning to these effects. What I hope to convince you of today is that monetary policy also affects household income and wealth in ways that are more indirect, but probably more meaningful, than via asset prices. While an expansionary monetary policy entails rising asset prices in the short term, this is compensated by lower unemployment, higher employment and stronger growth. A monetary policy that succeeds in the task of attaining price stability also counteracts the negative distributional effects of inflation. An expansionary monetary policy to defend the inflation target But, as I said, rising asset prices have been an element of the economic upturn in recent years. And during periods when stock prices are rising, the income distribution is more uneven between households – this can be seen from standard measures of dispersion of the income distribution, such as the so-called Gini coefficient (see Figure 1). Figure 1. Gini coefficient for disposable income and stock market movements 0.32  Stock index (right scale)  650  Gini, excl. capital gains (left scale) 0.30  Gini, incl.

People who receive unemployment benefit are mainly found in the lower part of the distribution, as are those with sickness benefit and other benefits such as activity compensation and financial support. 9 It is also clear that the group with the lowest income includes people who according to the Swedish Public Employment Service have a vulnerable position on the labour market, for instance, those born outside of Europe. The strong economic activity in recent years has meant that demand for labour has increased, which has meant that employment has shown a rising trend. Unemployment has also fallen, which is impressive given that the number of people in the labour force has at the same time increased. This development has reasonably, all else being equal, had a levelling effect on the distribution of income. An observation supporting this argument is that employment among those born outside of Europe has actually also begun to increase, albeit from a much lower level than for the other groups. Of course, it is not possible to ascribe the whole of this distributional effect to monetary policy – in the same way as it cannot account for the whole distributional effect of rising asset prices. But it is quite clear that the expansionary monetary policy has contributed to the strong development of the labour market in recent years. Another aspect of the improvements in the labour market that is relevant here is the link to future pensions.
No longer will the Central Bank of Samoa stand on the sidelines and play only a promotional role, and hoping for the desired economic and financial results to eventuate. The adoption of Financial Inclusion, as part of our mandate will ensure that the Central Bank takes on a more holistic approach to promoting and maintaining financial and economic stability in the country. Moreover, it would lend support to Government’s efforts to facilitate the achievement by Samoa of the Millennium Development Goals, on a timely basis. Here at the Central Bank of Samoa, Financial Inclusion is tasked to the Financial Research and Markets Development Area, headed by Deputy Governor Losefo Bourne. The Financial Markets Department assumes the role of Financial Inclusion Secretariat, supported by a  BIS Review 9/2010  1  financial inclusion team comprising of selected staff from the Research and Statistics, Banking and Corporate Services and Financial Institutions Departments. Financial Inclusion is not a completely new concept, as some elements of it (particularly Micro Credit Schemes) have already been implemented in some countries of the Pacific, including here Samoa. And, these micro-credit schemes have been promoted mostly through private Non-Government Organisations. In the Pacific Region, Financial Inclusion is being spearheaded by the Pacific Financial Inclusion Program of the United Nations Capital Development Fund (UNCDF), with their Head Office located in Fiji.

But we need to make sure that digital solutions are crafted for clients who may have difficulties to read on a computer or mobile screen, or whose cognitive abilities could be declining. There is also a need to ensure sufficient protection against new fraudulent and deceptive strategies in the use of digital tools. Let me conclude in stressing that making a difference for financial inclusion is about finding what works to help those who need it. It means looking for innovative solutions while making  sure nobody is left out. To achieve this, innovation and support from the financial sector and public authorities go hand in hand. As a central bank, this forces us to think and act “out of the box” and to explore new ways of doing things. For Fintechs, this means you can count on our support for ideas that work toward a more inclusive and sustainable financial world. 4/5  BIS central bankers' speeches  On that note, I am looking forward to these afternoon’s discussions to help us find new solutions for financial inclusion, together, and I wish you all very fruitful discussions. Thank you for your attention. 5/5  BIS central bankers' speeches
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.

To further develop the operational framework for financial stability, and following the implementation in 2010 of the new accounting rules, in line with international standards, as well as those related to the assessment of the risks associated with new financial products, a regulation on the identification, measurement, and management and control of the liquidity risk was enacted by the Council on Money and Credit in May 2011. This regulation introduces a minimum short-term liquidity ratio which must be met by banks and financial institutions at all times. In the same vein, the Council on Money and Credit has also enacted in May 2011 a second regulation establishing an internal surveillance system and a ceiling by counterpart regarding interbank outstanding lending and borrowing, especially those occurring in the money market. The assessment made by the Bank of Algeria for 2013 suggests that all banks meet the liquidity ratio requirements (169.87% at the end of 2013), despite the relative stabilization of banking liquidity over the past year. In terms of banking sector depth, it is worth noting that the ratio of collected resources (demand and term deposits excluding hydrocarbon deposits) to nonhydrocarbon GDP increased in 2012 and 2013 (62.73%) after a stabilization at 61.44% in 2011. The upward trend between 2008 and 2013 of the credit to the private sector as a proportion of private sector deposits in local currency, in a context of increased financial transformation, is another relevant indicator of the banking system depth.
This morning I'm going to talk about the uncertainty that high inflation poses to the economic outlook. I'll also share more about the labor market, both here in Puerto Rico and in the country more broadly. Then, I'll describe how the Federal Reserve's monetary policy actions are aimed at bringing down high inflation and restoring balance to the economy. Before I continue, I should give the standard Fed disclaimer that the views I express today are mine alone, and do not necessarily reflect those of the Federal Open Market Committee (FOMC) or others in the Federal Reserve System. Dual Mandate I know many of you here are studying economics, so you may be familiar with the Fed's dual mandate, or the two goals Congress has set for us: to promote both maximum employment and price stability. To better understand what affects our mandate, we look at data—lots of it. We study everything from food and gas prices to retail sales and inventories, from labor costs and employment figures to semiconductor inventories and shipping expenses, and from the demand for goods and services to readings on public health. Slowing Growth So, I'll start with the data that we are seeing as it relates to one half of our dual mandate: maximum employment. Although there are some signs that job growth has slowed in recent months, the labor market remains incredibly tight. During the first six months of this year, the economy added 2-3/4 million jobs, as businesses added staff to keep up with demand.

Workplaces are being relocated in search for employees – outsourcing and off-shoring For the purpose of this speech, a simplified definition may be adopted, under which outsourcing means relocating orders, services, production, employment or, in broader terms, a business process to another company (irrespective of its location), whereas off-shoring means relocating a business process abroad (irrespective whether to another company, or within the same enterprise). 9 There are, however, not too many hard data which would allow for an assessment of the scale of outsourcing/off-shoring. Until now, there have been only estimates and fragmentary research results available on this subject, limited to some countries only. However, the data on global trade in goods and services and foreign investment proves the growing scale of this phenomenon. Over the past 15 years, there were significant changes in the share of particular regions in the global trade, with the decline of the UE share accompanied by increasing shares of the developing countries, including Asian countries. In global terms, foreign trade as percentage of the GDP increased from the average 19% of the GDP in the period from 1980 to 1989, to 25% between 2000 and 2004. 9  6  Where off-shoring takes place within the same company, the English name captive o ff -s h o ri ng is used. BIS Review 64/2006  Table 3. Shares of individual regions in global trade.
This year should mark the historic new chapter for the nation’s payment system, where we would see the transfer of the  BIS Review 25/2006  1  payments operation function from the Bank of Thailand to the private sector. This would provide greater flexibility for the system to adapt to the fast changing modern payments system development. Moreover, the recent announcement by the Thai Bankers Association of a major reform in the price structure of various payment media, including cheques, provides an important milestone towards a more efficient payment services. The move reflects a pricing based on the cost of various means of payments which would quickly eliminate inefficiency and costs to commercial banks. Another major achievement that calls for celebration is the significant reduction in the NPL last year. Thai banks have succeeded in bringing NPL down from 556,998 million baht, or 11.82 percent of total loans at the end of 2004, to 461,439 million baht, or 9.05 percent of total loans at the end of last year. In all, the NPL was brought down by a net amount of 95,559 million baht, the largest such decline since 2001, as a consequence of the recovery of the economy and improvement in business conditions. I am confident that this year will see an even more decline in NPL than last year. Moreover, the Financial Institution Development Fund has just completed the merging of Bangkok Asset Management Company, or BAM, with Asset Management Corporation or AMC.

The high productivity figures in Sweden were partly connected to the rise in the telecommunications products industry, but a rise in total factor productivity has also been seen in other parts of Swedish trade and industry, mainly in the engineering and pharmaceuticals industries. Despite the fact that the importance of IT is now being played down, the extensive use of computers, networks and the Internet in Sweden will make a positive contribution to productivity. Efficiency gains should arise, for instance, when tax authorities, social insurance systems, municipal services, etc. move over to Internet-based self-service. The connection between IT use and internationalisation of trade and industry appears particularly strong, with increasingly advanced networks of specialised sub-contractors. It appears that the countries which had good productivity growth during 1995-2000, such as the USA, Finland, Australia and Sweden, all had trade and industry that opened up to international exchange more quickly than other OECD countries, parallel with an increase in IT use. Challenges The question is whether these improved conditions are enough to provide Sweden with stable, good growth over the next five to ten years. Can we trust that the problems of the 1970s, 1980s and 1990s are definitely over? Or are there other institutional or structural changes which the economy need to undergo? Some of the growth during the 1990s was probably a temporary effect of the economy making a recovery after having been so hard pressed at the beginning of the 1990s.
Second, since foreign banks are active in more than one market they usually hold a more geographically diversified credit portfolio. Therefore they are less likely to be affected by stress in the local market. Third, as affiliates of foreign-owned banks generally have better access to international funding they contribute to less volatile lending over the local business cycle. For this reason they can serve as a countervailing force to the local business cycle. Finally, as I have already touched upon, foreign bank entry can have a positive impact on the host country authorities, which in turn may induce stricter regulation and improved financial supervision. For all these reasons foreign banks have the potential to contribute to the overall soundness of local banking systems. Having said this, I am of course aware that there are also problems associated with cross-border banking. First of all, as has become evident during this crisis, the increasing globalisation of financial markets can create strong contagion effects across markets. Problems in one country tend to spill over to other countries very fast, generating a snowball effect where problems grow along with the costs of handling them. Furthermore, it has become clear that it can be extremely difficult and costly to deal with distressed banks in a cross-border setting. The reason for this is that there are many stakeholders involved and that the resolution of failing institutions is even more poorly defined at the international level than at the national level.

Barba Navaretti G. and Venables A. (2004), Multinational Firms in the World Economy Chapter 3, Princeton University Press. Bank for International Settlements, Consolidated banking statistics, End September 2009. Banking Supervision Committee at the European Central Bank (2010), “Mapping of large European banking groups with a significant cross-border banking activity for the year 2008”, Restricted edition. Buch, C. (2000), “Information or Regulation: What is Driving the International Activities of Commercial Banks?” Kiel Working Paper No. 1011. Brevoort P. and Wolken J. (2008), “Does distance matter in banking?”, Finance and Economics Discussion Series 2008–34, Federal Reserve Board, Washington, D.C. Dunning J. H. (1977), “Trade, location of economic activity and the multinational enterprise: a search for an eclectic approach”, in B. Ohlin, P. O. Hesselborn and P. M. Wijkman (eds. ), The Allocation of Economic Activity, London: Macmillan. Distance Between Cities Places On Map, provided by Google, http://www.distancefromto.net. Goldberg, L. (2002), “When is Foreign Bank Lending to Emerging Markets Volatile?” in Preventing Currency Crises in Emerging Markets, ed. by S. Edwards and J. Frankel, National Bureau of Economic Research and University of Chicago Press, pp. 171–96. BIS Review 82/2010  23  Goldberg L. (2004), “Financial Sector FDI and Host Countries: New and Old Lessons”, Economic Policy Review, Federal Reserve Bank of New York, pp. 1–17. Goldberg L. (2008), Understanding Banking Sector Globalisation, IMF Staff Papers, 2009, vol. 56, issue 1, pp. 171–197. González-Páramo J.M.
Financial and monetary conditions As we tighten monetary policy, market interest rates are rising further and credit to the private sector is becoming more expensive. Bank lending to firms has decelerated sharply over recent months. This partly stems from lower financing needs for inventories. But it also reflects weakening demand for loans to finance business investment, in the context of a steep upward move in bank lending rates and a considerable tightening in credit standards, which is also visible in our most recent bank lending survey. Household borrowing has continued to weaken as well, reflecting rising lending rates, tighter credit standards and a sharp fall in the demand for mortgages. As  3/4  BIS - Central bankers' speeches  loan creation decelerates, money growth is also slowing rapidly, with a marked decline in its most liquid components, including overnight deposits, only partially compensated by a shift to term deposits. Conclusion Summing up, the Governing Council will stay the course in raising interest rates significantly at a steady pace and in keeping them at levels that are sufficiently restrictive to ensure a timely return of inflation to our two per cent medium-term target. Accordingly, we today decided to raise the three key ECB interest rates by 50 basis points and we expect to raise them further. In view of the underlying inflation pressures, we intend to raise interest rates by another 50 basis points at our next monetary policy meeting in March and we will then evaluate the subsequent path of our monetary policy.

Household saving is negative and over time households must be expected to seek to redress their financial imbalances. Interest rate developments and a weaker housing market will probably have a dampening impact on demand for goods and services and push up saving. On the upside, we expect sharp growth in government spending, with a marked increase in government purchases of goods and services. Petroleum investment is projected to remain high. Current information nonetheless points towards somewhat slower growth further into 2008. In the monetary policy reports, the results of this assessment are presented in the form of this chart, which shows the baseline scenarios for the interest rate, inflation and capacity utilisation in the economy. Monetary Policy Report 1/08 noted that the outlook and the balance of risks suggest that in the near term the interest rate should be set somewhat higher than projected in Monetary Policy Report 3/07. The prospect of higher price and cost inflation will in the short term more than outweigh the effects of weaker growth in the world economy. There is considerable uncertainty surrounding the projections. The projections for inflation, output, the interest rate and other variables are based on our assessment of the current economic situation and our perception of the functioning of the economy. The uncertainty surrounding the projections for the interest rate, inflation and capacity utilisation is illustrated by fan charts. The wider the fan charts are, the more uncertain the projections are.
We have an internationally agreed definition of the leverage ratio and we are implementing a leverage related capital requirement in the UK. But an international standard on such a requirement has not yet been agreed ahead of planned implementation in 2018. And there is still major construction work underway on the denominator of the risk based capital adequacy requirement – the Basel Committee work to update the standardised approach for those firms that do not use internal models and to review the role of internal models in the framework. This work is important; in order to have confidence in the risk based capital regime, one has to have confidence in the denominator of the ratio as well as in the numerator. My expectation, however, is that this will not lead to a major change in the aggregate level of global bank capital requirements, as some have claimed. If we are to trust the use of internal models in the approach we need to be sure that models are only used where there is adequate data to support them. And although we will I hope have an internationally-agreed leverage, non-risk based, requirement alongside the risk-based one, we will need more constraints on modelling assumptions and inputs in order to reduce variability of capital outputs between banks to an acceptable degree. I imagine this work will lead to a redistribution of capital within  BIS central bankers’ speeches  1  the system and to changes in requirements for some institutions.

Assets that tend to be traded primarily by “buy-and-hold” investors may require greater warehousing of risk to facilitate the matching of trades at or close to prevailing market prices. By way of illustration, there is a sharp contrast between the frequency of trading in equities and corporate bonds. For example, McKinsey estimates that NYSE and NASDAQ-listed equities trade around 3800 times per day, compared to around 85 times per day and 65 times per day for the most liquid US investment-grade and high-yield corporate bonds respectively. Assets exposed to tail risks tend to exhibit larger price falls and become less liquid in times of stress. Examples of such assets include high yield/EME bonds, financial debt and OTC derivatives. Complex and/or opaque assets are less well understood and the risks can be more difficult to manage, so reducing the pool of potential buyers. Finally, assets with relatively news-insensitive cash flows like investment-grade corporate bonds may be less attractive to more active investors seeking to profit from information, but more attractive to buy-and-hold investors seeking predictable long-dated cash flows. And the related issue of how assets are traded matters. The costs of liquidity on order driven electronic platforms is much lower than in markets that depend on voice quotes from market makers. Against that backdrop, I’d like to make two observations. First, funding and monetary liquidity can exacerbate the illusion of market liquidity.