samchain/econo-pairs-v1 huggingface dataset:
The first concerns the low inflation rate, the second the significance of inflation expectations and the third the expansionary monetary policy. Inflation below target – several reasons for this Let’s start with inflation: Why is it so low now and therefore also far below the target? What are the reasons for this? 2  The Figure shows the period 2010–2012 as a whole, although there were several wage bargaining rounds during this period. 3  For natural reasons, there are no wage data available for 2015 yet. BIS central bankers’ speeches  3  On an overall level, one can say that the low inflation is explained by the weak international demand in recent years and the weak domestic activity. This development reflects the fact that the recovery following the financial crisis has been unexpectedly sluggish – perhaps less so in Sweden than in many other countries. The low inflation is not just a Swedish phenomenon. It has also fallen or developed surprisingly weakly in many other countries in recent years, and other central banks have also found it difficult to attain their inflation targets. In Sweden, companies appear to have found it unusually difficult to pass on their cost increases to prices. There are also signs that inflation may have been held back by increased competition and uncertainty over the development of the economy. Furthermore, electricity prices have been unexpectedly weak over the past year. In addition, the oil price fell heavily during the second half of 2014.

John C Williams: Diversity and inclusion - we are not where we need to be Remarks by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the OPEN Finance Forum, New York City, 25 June 2019. * * * As prepared for delivery Good morning. I’m an economist, so I’m going to start with some numbers. The unemployment rate for lesbian, gay, bisexual, and transgender people is nearly double the national average.1 And the unemployment rate specifically for transgender people is three times the national rate.2 As President of a Federal Reserve Bank, I am focused on two vital economic goals: maximum employment and stable prices for the U.S. economy. These statistics paint a clear picture of why conferences like this one are so important: We are not where we need to be. Before I go any further, I need to 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 or others in the Federal Reserve System. Let me say, as an ally, that it’s a genuine honor to be invited to open today’s Forum. This Pride Month marks 50 years since the Stonewall uprising. We’ve come a long way since the 1960s, but we still have far to go. It was also a great honor to be able to fly the Pride flag outside the Federal Reserve Bank of New York for the first time this June.
Scarce resources would be used less efficiently and trade protection would likely lessen the level of competitive pressure that helps drive innovation. Moreover, lower productivity growth would likely lead to a slower improvement in a nation’s living standards over time. This negative consequence of higher trade barriers can be illustrated most starkly by the estimates of the costs per job saved through protectionist measures. Researchers that have studied this closely estimate that the costs per job saved from protectionist measures in the United States typically run into the hundreds of thousands of dollars per year. To illustrate, consider the case of import restrictions on Chinese tires. The cost of a job saved was estimated at $ per year while the measures were in place, or more than 20 times the average worker’s compensation.5  Better Approaches to Deal With Globalization Rather than protectionism, a better policy would be to help domestic workers and companies compete more effectively, rather than compete less. We need additional mechanisms that allow us to more fully capture the benefits from liberalized trade and to more proactively mitigate its costs. Ideally, policy should also better address job losses and income inequality from automation and other technological advances. How we respond should depend on regional and industry circumstances. These include the nature of trade impacts, the skill sets and location of the workers that have been affected, and 5/6  BIS central bankers' speeches  the amount of resources that can be mobilized to facilitate adjustment.

William C Dudley: Benefits and challenges from globalization Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Bombay Stock Exchange, Mumbai, India, 11 May 2017. * * * Thanks, Ashish, and thanks to the U.S.-India Business Council, the Confederation of Indian Industry, and the Bombay Stock Exchange for organizing this event. As always, what I have to say reflects my views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System.1 It is a pleasure to have the opportunity today to talk about the issue of globalization. Although the debate about the benefits and challenges of globalization is not new, it has recently come into sharper focus. This debate is important to all of us, and I think it is particularly relevant to India given its growing role in the global economy. Globalization means different things to different people. In my remarks today, I will focus on the role of globalization as a force for international economic integration and economic development. I will highlight three themes: First, the important role that trade plays in promoting higher standards of living globally. Second, how changes in trade can create challenges for industries that become less competitive. We have not adequately considered and remedied the very large costs this can impose on certain communities and households. Third, the answer to those challenges is not greater protectionism.
On his initiative, on December 19, 1991, the Government adopted a Decision which obligated the National Bank to start printing value coupons. This Decision, adopted in greatest secrecy, was a legal basis for all operational actions that allowed the new currency, the Denar, to be presented to the public on April 26, the following year, 1992. On this day, also on the initiative of the academician Kljusev the systemic laws were adopted, as well as the document on the Anti-inflationary program, which, unfortunately, did not survive the fall of his Expert Government. On this day, besides recollecting the past, we are called to look towards the future. Here we look at the importance of low inflationary expectations for the efficiency of the economy and the role of the National Bank in maintaining these expectations. In fact, academician Kljusev had devoted his entire scientific work to the issue of efficiency of economic policies. For the central bank, as well as for the commercial banks that the central bank closely cooperates with, basically there is only one true treasure on which the effectiveness of its policies is based and that is the confidence of the public. It is impossible to imagine a stable bank without having to imagine the confidence of citizens who are its customers. Also, it is impossible to imagine confidence in a central bank without simultaneously having confidence in its objectives.

Dimitar Bogov: Republic of Macedonia – celebrating monetary independence Opening address by Mr Dimitar Bogov, Governor of the National Bank of the Republic of Macedonia, at the gala event on the occasion of the 20th anniversary of the monetary independence of the Republic of Macedonia, Skopje, 26 April 2012. *  *  *  Honorable President of the Parliament of the Republic of Macedonia, Honorable fellow Governors of central banks, Distinguished guests, ladies and gentlemen, Let me wish you all a very warm welcome and thank you for accepting our invitation to attend this gala event on the occasion of our landmark anniversary – twenty years of the monetary independence of the Republic of Macedonia. On this day, April 26, we recall the numerous challenges that we faced, the numerous difficulties we have gone through in the past twenty years exactly. On this day, we are reminded that the beginnings were not easy and that those beginnings emerged in a period of, I can say without false exaggeration, huge enthusiasm of all individuals involved in creating our own independent state with all attributes that this state should have. In this reminiscence of the persons who were involved in the monetary independence, I especially feel the need to point out the name of the first Prime Minister of the independent Republic of Macedonia, the academician Nikola Kljusev, who played one of the leading roles not only for the monetary independence, but also for many other decisions of that time, important for the completion of statehood.
Writing back in 1848, John Stuart Mill captured well the societal benefits of diversity: 15 “It is hardly possible to overrate the value, in the present low state of human improvement, of placing human beings in contact with persons dissimilar to themselves, and with modes of thought and action unlike those with which they are familiar…Such communication has always been, and is peculiarly in the present age, one of the primary sources of progress” More recently, Scott Page (2011) has encapsulated the positive social externality of diversity more formally. Economists love an equation, so here is one: Collective Ability = Individual Ability + Diversity Recent evidence, drawn from a range of disciplines and settings, has tended to confirm Mill and Page’s conjectures. Diversity generates a positive social externality, helping the collective far exceed the sum of its individual parts. Diversity is synergy. This has been found at almost every scale of social grouping, from small communities and organisations, to large economies and nation states. The benefits have been found, too, in non-social settings, such as ecological and logistical systems. 16 One channel through which diversity may improve societal outcomes is by fostering innovation and creativity. If different raw ingredients are added to the intellectual melting pot, the final dish is likely to be richer and more innovative. 17 Psychologists believe that divergent thinking is the cradle of creativity. That is why creativity is often found to be greatest among very young children whose thinking is unconstrained by convention.

The euro-area sovereign debt crisis: some thoughts on its origins, its implications, and the challenges ahead  The origins of the euro-area sovereign debt crisis are twofold: the real cost of the overall financial crisis and the excesses of the pre-crisis period have jointly contributed to the gravity of the current situation. While this is not specific to the euro area, the consequences have turned out to be particularly harmful here. Indeed, by not internalizing the policy requirements associated with the participation in a monetary union, several euro-area countries entered the global financial crisis in a particularly vulnerable position. One of these policy requirements is fiscal discipline. Within the Stability and Growth Pact, fiscal discipline was associated with pre-agreed quantitative ceilings for the deficit and debtto-GDP ratios. In practice, many euro-area countries did not take advantage of expansionary periods to reduce the probability of reaching these limits in recessionary phases. BIS central bankers’ speeches  1  Unfortunately, an exceptionally hard recession, by all historical standards, hit the euro area in 2009, as a consequence of the financial turmoil initiated in the US in 2007–2008. The tax revenue went down and the large fiscal stimulus packages that were then required to contain the real consequences of the crisis and to avoid major disruptions in the financing of the economy also resulted in swift increases in public debts across the board.
Therefore, perception mismatch among frontline staff about what really represents “good customer outcome” is something that banks must be careful to avoid. 8. Another interesting observation from the exercise is about perception of performance gauges. An area that banks have been putting a lot of emphasis in the past few years is reducing the weight of financial performance in incentive systems. Nevertheless, our review found that the perception of incentive structure differs greatly among different staff levels. More simply put, while senior management and supervisors think that the incentive systems are more balanced among business targets and non-financial factors such as compliance and customer outcomes, frontline staff generally still take financial  performance and business targets as the highest assessment priority. This possibly reflects that some other forces maybe at work, such as social interaction and recognition among bank staff. 9. The HKMA published the final report of this review last month. We highlighted in the report the above observations and a number of other interesting points which, I think, is definitely worth a read. In the report, we also put forward incentive system design principles and useful practices identified from the review. We are in the meantime collating the observations on individual participating banks, and will communicate the useful findings to them individually. I truly hope that banks will make good use of the review outcome to assist in their ongoing risk culture journey. Mandatory Reference Checking Scheme 10.

Speeches 29 Jun 2022  Opening Keynote Speech at ASIFMA Compliance Asia Conference 2022 : Building the right talent pool for Hong Kong Arthur Yuen, Deputy Chief Executive, Hong Kong Monetary Authority Ladies and gentlemen, Good Morning to all of you, 1. Let me start off by thanking ASIFMA for inviting me to this Compliance Asia Conference. With the COVID situation finally settling down, it’s the right time to re-direct some of our fire-fighting energy back to more forward looking topics. And I think revisiting some of the issues about talent pool for the financial industry is indeed a good starting point. 2. For many of us, the Global Financial Crisis of 2008 is already a distant memory. Most of us may have forgotten the main factors leading to such a painful experience. Just to name a few issues contributing to the crisis: risk takers were not facing the consequences of taking undue and excessive risks; and no proper mechanisms were in place for shaping or influencing the behaviour of financial practitioners. As a banking supervisor, the HKMA cannot afford to forget those lessons. Instead, we have been working hard, even throughout the pandemic in the past two and a half years, to close those gaps. More recently, the HKMA has made good progress in cultivating sound bank culture and preventing “bad apples” from rolling among financial institutions. I would like to take this opportunity today to share with the audience our latest developments on those fronts.
China is now a key part of both global and regional supply chains for the production of low-cost manufactured goods. China now produces 80% of the world’s photocopiers, 50% of the world’s textiles and 50% of the world’s computers. These developments will tap the labour of hundreds of millions of people who were previously effectively outside the global market place. They are also triggering urbanisation – and infrastructure investment – on a scale, and at a rate, which makes our own Industrial Revolution look sedate, even puny. The Chinese Government expects 300 million people to migrate from the countryside to urban areas over the next 20 years. China had no motorways in 1988, now it has 41,000 kms, second only to the US. It is adding the equivalent of the UK’s total power generating capacity every year. Beijing alone plans to build 15 new metro lines by 2020, to create a network larger than the London Underground. No surprise, then, that China consumed 50% of the world’s cement last year. Third, and more tentatively, there seems to have been an increase in the international mobility of labour. This is the area where the continuing, largely political, barriers to free movement are most apparent, and where, partly in consequence, it is hardest to assemble reliable information.

If the Bank aims for a low but positive rate of inflation, and imported goods prices are falling, the prices of other goods and services will have to rise faster to compensate. So for example, the prices of imported goods and services fell by 13% between 1995 and 2004, while the prices of other consumer goods and services rose, on average, by around 20%. To produce this result, and keep overall inflation close to target (as it was), the Bank was probably able to keep interest rates lower than they might otherwise have been. That’s why people sometimes say that the falling world prices resulting from globalisation have acted as ‘favourable tailwinds’ for central banks over the past decade. And why, over the last couple of years, there have been worries that high and volatile energy prices would provide ‘strong headwinds’. Second, there have been important innovations in the practice of monetary policy over the past decade. These have not been confined to the UK - there is an international traffic in good monetary policy ideas, as in almost everything else. So while the UK was a pioneer in some respects, our current approach to policy is more fairly described as close to international best practice. There’s been a widespread move to give central banks more independence, with clear objectives and a strong commitment to transparency and accountability.
BIS central bankers’ speeches  1  *** Lie I: “This time is different” The first lie is the four most expensive words in the English language: “This Time Is Different.” 2 This misconception is usually the product of an initial success, with early progress gradually building into blind faith in a new era of effortless prosperity. It took a revolution in macroeconomic policy to help win the battles against the high and unstable inflation, rising unemployment and volatile growth of the 1970s and ‘80s. In no small part due to my predecessors, particularly Lord King, the stagflationary threats in the UK were tamed by a new regime for monetary stability that was both democratically accountable and highly effective. Clear remits. Parliamentary accountability. Sound governance. Independent, transparent and effective policy-making. These were the great successes of the time and their value endures today. But these innovations didn’t deliver lasting macroeconomic stability. Far from it. Price stability was no guarantee of financial stability. An initially healthy focus became a dangerous distraction. Against the serene backdrop of the so-called Great Moderation, a storm was brewing. Debt was building rapidly, with total non-financial debt in the G7 doubling to 300 per cent of GDP between Prime Ministers Thatcher and Brown. In the US and UK, this was led by massive increases in household debt, the likes of which were last seen during the Great Depression. Several factors drove this debt super-cycle including demographics and the stagnation of middle-class real wages (itself the product of technology and globalisation).

Yet efficient market forces “should” eliminate these disequilibria by having wages adjust to ensure full employment always and forever. Monetary Policy is not only a response to these rigidities; it is made effective by them. In capital markets, there is ‘momentum everywhere’. From bonds to equities to currencies and commodities, past winners seem to enjoy further winning streaks, while past losers persist in trailing behind. 4 Yet efficient market forces ‘should’ eliminate these predictable movements before they become apparent. *** The belief that markets always clear had two dangerous consequences. 5 First, if markets always clear, they can be assumed to be in equilibrium; or said differently “to be always right.” If the received wisdom is that the market is efficient, then bubbles can neither be identified nor their potential causes addressed. Such thinking dominated the (non)reaction to US subprime and housing booms. Consider that many market participants find it more profitable to anticipate each other’s behaviour than to divine the fundamentals. 3  For a review of this broader phenomenon, see Padoa-Schioppa, T (2010), “Markets and government before, during and after the 2007-20xx crisis”, The Per Jacobsson Lecture, June. 4  Asness, C, Moscowitz, T and Pedersen, L (2013), “Value and momentum everywhere”, Journal of Finance, LXVIII, No. 3, June. 5  See also Turner, A (2010), “Market efficiency and rationality: why financial markets are different”, Lionel Robbins Memorial Lectures, London School of Economics.
And at the other extreme are those who consider that the evidence available is not sufficiently conclusive as to do away with internal models, since, from their standpoint, the differences in RWAs would essentially be in response to the different levels of risk assumed under different business models. In our view at the Banco de España, risk sensitivity should continue to be at the heart of the capital framework: if a bank assumes more risk, more regulatory capital should be required of it. If this nexus were to disappear, there would then be a disconnect between the bank’s internal risk management and regulatory requirements; and perverse incentives might arise, potentially leading banks to take on greater risks than they could properly manage. That said, internal risk management models undoubtedly pose problems that need to be analysed and resolved. First, their growing complexity means there is a risk they may ultimately become black boxes accessible to only a handful of experts. Second, the elements integrated into models (such as probability of default or loss given default) are difficult to estimate, especially in certain cases characterised, for example, by the absence of sufficient data. And finally, given that the higher the risk calculated by the model, the greater the capital required, banks might be tempted to underestimate the risks in order to save on capital. To sum up, we believe it is necessary to continue to use the internal models, insofar as they provide for credible and consistent risk measurement.

In 2004, the Basel II accord established a new capital framework aimed at improving risk measurement, enabling banks to use their own models while providing a more detailed and risk-sensitive method than that of Basel I. The in-house measurement models, which were assumed to be more advanced, were under supervisory authorisation, available to the banks with the greatest internal risk management capacity. These models were deemed to reflect best market practices and the shared objective was to promote their use. The search for risk sensitivity prevailed over other considerations of simplicity and comparability. That said, following the international financial crisis that broke in 2008 and the lessons drawn from it, shortcomings have been identified in the Basel II framework relating to the ability of the models to correctly measure risks. Moreover, questions have been raised about the actions of banks, which might have been able to benefit from incentives to develop new models that tended to reduce the risk calculated and, therefore, the capital consumed. And this not to mention the doubts raised about supervisors’ capacity to validate increasingly more complex models. In sum, the validity of risk-adjusted capital ratios as a measure of banks’ solvency has, in some cases, been questioned, along with the usefulness of this metric to compare the relative position of each bank.