samchain/econo-pairs-v1 huggingface dataset:
Hopefully, it can also shed some light on how the Bank of Uganda’s role will transform over the coming decades. Optimum currency areas – an illusive concept When discussing whether or not to join or form a monetary union, concerns are usually expressed that the countries in the union at some point will have different needs in terms of stabilisation policy. Consequently, this then casts doubts on the appropriateness of a common, supranational monetary policy. If one country experiences rapid growth while the neighbouring country is in a pronounced downturn, how should monetary policy respond? On the other hand, this type of problem does exist within countries as well, as different regions’ business cycles usually are not perfectly synchronised. Given these two observations, should we strive to create larger or smaller economic entities? In his famous article published almost half a century ago, Nobel laureate Robert Mundell concludes that “[t]he optimum currency area is not the world” (Mundell, 1961). Trying to establish what area would be optimal, it is from a practical perspective more fruitful to translate it into a question of whether or not a country should join a monetary union with other countries. 1 In order to do this, advantages need to be weighed against disadvantages. When forming a monetary union, the member countries in effect lose some of their economic policy flexibility as they no longer have the possibility to individually adjust either their exchange rate, or their short-term interest rate.

In turn, this means that a country-specific shock will be harder to handle for stabilisation policy. However, large asymmetric shocks occur fairly seldom, no more than a handful of times in the course of a century and as long as the shock – be it of internal or external origin – affects all countries within the monetary union, this poses less of a problem since the common monetary policy can respond to such a shock. If the monetary union also has a floating exchange rate, it will act as an automatic stabiliser. The principal gains to be anticipated from joining a monetary union come from an improved functioning of the economy and an increase in foreign trade. A common currency means greater price transparency and therefore stiffer competition in, primarily, markets for tradables. In a country with a floating exchange rate, small- and medium-sized companies often find it too costly to hedge against currency risk when exporting or importing. When joining a monetary union, the absence of currency risk provides a greater incentive to trade, an incentive that will grow with the size of the union. Also, a common currency means that transaction costs for currency trading disappear. 1  Already Mundell (1961) noted that “[e]xcept in areas where national sovereignty is being given up it is not feasible to suggest that currencies should be reorganized…” (p.664). BIS Review 73/2006  1  However, when a country is weighing loss against gain, both are difficult to quantify.
Following recent deliberations by the National Council's Control Committee, information was published to the effect that an additional part of the SNB's gold stocks might be liquidated to fund another extraordinary distribution of profits amounting to some CHF 10 billion. This created the totally mistaken impression that the National Bank was oversupplied with monetary reserves. Now that half our gold stocks have been sold and the proceeds distributed to the Confederation and the cantons, the SNB holds an appropriate level of monetary reserves in the form of gold and foreign exchange for the conduct of monetary policy. Bearing in mind the economic importance of our country, however, our level of currency reserves does not place us in a leading position amongst the group of the best endowed countries. Far from it, in fact. In 1950, our reserves amounted to 30% of GDP. This percentage has now fallen to 12.5%, situating us in a respectable middle position on the international scale – along with the Scandinavian countries. If we bear in mind that, unlike these nations, Switzerland is also an important international banking centre, we cannot reasonably conclude that our current monetary reserves are excessive. What is more, the law is perfectly clear on who has the final word in this matter. It is the Bank Council – not parliamentary committees – that is authorised to assess the SNB's reserves policy, including any augmentation or depletion of the bank's monetary reserves.

Central banks and financial supervisors can support this effort to varying degrees, depending on their mandates. The NGFS has launched a Blended Finance Initiative to contribute to this collective effort in two ways. We will use our convening power to raise awareness of blended finance for climate action and help to bring the relevant parties into the room. We will identify any potential market, policy or regulatory barriers that hamper the scaling up of blended finance. The NGFS aims to launch at COP28 a Handbook on Blended Finance. We will release next month a conceptual note on the Handbook which will serve as a preamble. The Handbook will be organised around three key themes. First, identify key elements needed to build a climate blended finance ecosystem. To scale up blended finance for climate adaptation and mitigation, we need financial instruments and vehicles that can align incentives in both the public and private sector and entice private capital with varying appetite for risk. 4/5  BIS - Central bankers' speeches  For example, green bond funds or outcome-based debt instruments such as sustainability-linked bonds can attract various types of private sector actors if key contractual terms are appropriately set. To attract investors with different expected returns, risk profiles, investment horizons and objectives, the investor base should be expanded. For example, we can aim for a higher level of participation by institutional and private equity investors as well as philanthropic capital. Second, highlight best practices and principles to scale up blended finance for climate adaptation and mitigation.
It is estimated that the growth of our economy will continue to be underpinned, above all, by national demand, but with a positive – though diminishing – contribution from the external sector. In particular, household consumer spending and residential investment will continue to be assisted by rising employment, the sector’s improved financial position, the fiscal impulse and favourable financial conditions. Also, the growth of demand and of corporate earnings, higher capacity utilisation and the aforementioned propitious financial conditions will continue to provide for significant increases in investment in capital goods. Nonetheless, the tailing off of some of the temporary factors that have supported the increase in activity in Spain in the most recent period would explain the moderation in growth expected in the coming years. This would be the case were there to be a reversal in the trend of oil prices, in the expansionary effect of monetary policy and in the momentum of external markets, following their significant dynamism last year. As regards prices, the latest data continue to show, as in the euro area as a whole, very moderate behaviour, with the year-on-year growth of the CPI standing at 1.1% in April. The Banco de España projections published in March augured an increase of 1.2% for the year as a whole; however, it might ultimately be higher owing to the impact of the recent rises in oil prices. In this respect, the current volatility on the oil markets adds further uncertainty to the evolution of prices in the short term.

8/9  As this is my last appearance before the Senate as Governor of the Banco de España, and to conclude, I should like to express my gratitude for the consideration that has always been extended to the Bank and to me in this chamber, and for the quality of the interventions and questions raised on which I have had to comment. I have always thought, and have said so on different occasions, that the lower and upper houses are the “natural fora” in which an institution such as the Banco de España should preferentially express itself, cooperating and contributing, as best it can, to parliamentary functions. Thank you for your attention. 9/9
In that event, the chances of the zero low bound constraint on interest rates coming into play would increase, potentially limiting somewhat the effectiveness of any monetary policy loosening. Bank staff have conducted simulations to assess the probability of this zero lower bound constraint binding in future, based on the likely constellation of future shocks to the UK economy. Given the MPC’s existing set of tools, this puts this probability broadly in the range 15-40%. So this is a material risk, for monetary policy and for the economy, which needs to be weighed in the setting of policy. My personal view is that this provides grounds for not proceeding too hastily with any tightening of the monetary policy stance. The Role of Industrial Policy  If monetary policy can provide only short-term support for economic activity, and can do little to shape the distribution of activity across regions, sectors and individuals, what other policy options are available? 13  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  13  The short answer is policies which act to improve skills, investment and productivity at source. This is one of the key aims of the Government’s Industrial Strategy and underlines its importance, nationally and regionally. 21  Last week’s Autumn Statement outlined a number of measures to boost investment, skills and productivity. For example, a significant increase in spending on infrastructure was announced, through a new “National Productivity Investment Fund”.

Comparing Charts 2 and 15, there is little correlation between levels of wages and the change in them over recent years. In other words, the regional distribution of incomes does not appear to have changed materially during the period of monetary loosening. The same is true of unemployment rates (Charts 9 and 12a). There is some evidence of the higher-wealth regions benefitting more than the lower-wealth regions over the period since the crisis (Chart 3 and 13a). (c) Recent Monetary Policy In August this year, in the light of the EU referendum result, the Bank’s MPC undertook a further round of monetary policy easing. Interest rates were lowered further, to 0.25%. And the MPC agreed to undertake a further £ billion of asset purchases, of which gilts comprised £ billion and corporate bonds £ billion. The Bank also introduced a Term Funding Scheme (TFS) to facilitate the pass-through of lower official interest rates to the retail interest rates facing households and companies. It is too early to assess what impact this further monetary policy loosening will have on activity and unemployment. Estimates from the Bank’s model suggest it could increase activity by around 0.5% over a three year horizon and support around an extra 100,000 jobs. In an environment of heightened uncertainty about future growth and jobs, these gains are not to be sniffed at. In the period since the MPC’s easing in August, there have been two pieces of material news about the performance of the economy.
This was a rare example of a flash event involving such a major, liquid, currency pair, and occurred during a G20 meeting in Washington DC, prompting our Governors to swiftly make contact with the Bank’s London dealing desk for an explanation. They say markets never sleep; neither did our staff on that particular night! In these episodes, prices moved sharply, before largely reversing – all within a matter of minutes, and to a degree that far exceeded changes in market participants’ perceptions of economic fundamentals. Of course, sharp movements in asset prices are nothing new in themselves. Just look at the tulip mania ending in 1637, and the equity crashes of 1929, 1987, and the bursting of the dot-com bubble in 2000. What is new is the speed, and the typical near-total reversal. And the Bank’s responsibilities for monetary and financial stability make it incumbent on us to keep up. What has happened? What is clear is that flash crashes are likely just one symptom of material changes in the structure of certain markets and the nature of their participants. Although these changes are ongoing, we need to understand them and their drivers, if we are to succeed in correctly identifying any implications for financial stability. One should be wary of over-generalisation, particularly with an audience such as this, given the substantial diversity in markets across both product types and geography.

9 Where a bank or broker matches clients’ buy and sell orders electronically. 10 Where buyers’ and sellers’ orders are matched anonymously and executed at an agreed-upon reference price. 11 Electronic platforms operating via a central limit order book but that are not regulated exchanges. 12 See Bank of England (2015), ‘Open Forum: Building Real Markets for the Good of the People’, June. 13 The available evidence is inconclusive. Some studies have found use of less transparent venues, such as dark pools, beneficial for pricing efficiency, but often only up to a certain share of the market. See Aquilina, A, Diaz-Rainey, I, Ibikunle, G and Sun, Y (2017), ‘Aggregate Markets Quality Implications of Dark Trading’, FCA Occasional Paper, No. 29. 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  the dysfunction in that market; the question of a similar intervention in equity or FX markets simply never arose. But fast markets, and associated changes in market structure, affect the nature and distribution of risks in ways we are only beginning to understand. Let me explore three examples: first, the implications of flash crashes; second, the changing distribution of risks across firms; and third the potential vulnerability of critical ‘nodes’ in fast markets. Implications of flash crashes  Though flash crashes are headline grabbing, and occasionally sleep-denying, they have so far had limited systemic impact. These episodes have been short-lived, and prices have stabilised quickly.
Sarah Dahlgren: Operating global, acting local Remarks by Ms Sarah Dahlgren, Executive Vice President of the Financial Institution Supervision Group of the Federal Reserve Bank of New York, at Institute of International Bankers Seminar on Risk Management and Regulatory/Examinations Compliance Issues, New York City, 7 October 2014. *  *  *  Introduction Thank you Sally. It’s great to be here again this year. I appreciate the opportunity to address this group and to continue the dialogue that we’ve been having over the past several years. As always, my remarks reflect my own views and not necessarily those of the Federal Reserve Bank of New York or the Federal Reserve System. Last year, I spoke to you about how far we had come since the crisis in addressing some of the most pressing issues. I also shared my thoughts on areas that still needed to be addressed and where I thought more concerted effort was needed. There were four areas I focused on: 1. Resolution planning;  2. Coordinating supervision across global organizations;  3. Compliance (specifically AML/BSA); and,  4. Culture (of both firms and the system). In general, the issues that keep me awake at night haven’t changed much – and I’ll touch on a few that remain at the forefront of my insomnia later in my remarks.

2/3  BIS central bankers' speeches  Lastly, I would like to underline that the Bank of Albania will make maximum efforts for the cooperation in the framework of this agreement to be concrete and have a direct impact. Concluding, on behalf of the Bank of Albania, allow me to thank once again the Central Bank of the Republic of Turkey for the continuous fruitful cooperation; I would also like to thank, in particular, Governor Çetinkaya, who has honoured us today with his presence at the ceremony of signing the Common Memorandum. Thank You! 3/3  BIS central bankers' speeches
To coincide with the release of the new Bank data sets, we want to see what novel insights they can yield. The visualisation could be a static description of an interesting pattern or relationship in the data or the creation of an interactive app. Entrants are free to focus on whatever they like, as long as it employs some of the newly available data in some way. The second competition is for the best research paper – the “One Bank research” competition. We are particularly keen to engage early career researchers across the academic world. For our inaugural competition, the paper should be on some aspect of “The interaction between microprudential, macroprudential, and/or monetary policy”. The winners of each competition will be decided by separate judging panels of Bank staff and external academics. The prize for both competitions will be £ Further details on how to apply are now live on our website. Conclusion Economies are complex, dynamic and constantly evolving systems, underpinned by social interactions and behavioural change; shaped by fundamental forces like technology and globalisation; and supported – or at times disrupted – by finance. Policymakers need research to help understand these phenomena and to craft our responses to them. And research can make some of its most effective contributions by addressing the priorities of policymakers.

24 of Keynes, J M (1936), The General Theory of Employment, Interest and Money, Macmillan Cambridge University Press. BIS central bankers’ speeches  1  Having monetary, macroprudential, and microprudential policy under one roof makes gains from trade possible. It is our duty to exploit complementarities, synergies and economies of scope to maximise our impact by working together. To do so, we need research. And to some extent, research needs us. The need for research The way central banks have sought to achieve their objectives – the practice of central banking – has frequently moved ahead of the theory of central banking. Theory, in turn, subsequently catches up, and enriches and refines practice. The history of central banking is replete with examples. Tacit knowledge has often been more instrumental in determining policy outcomes than insights from formal research. Sometimes this works, as in Bagehot’s “dictum” (to lend freely at a penalty rate against good Montague Norman’s “never explain, never excuse”. 2 Research has meant that some modes of operation, like Norman’s, have rightly fallen by the wayside. It has helped nuance others, like Bagehot’s. And it guides us as to which practices to retain, reinforce and enhance, and which should be discarded. The practice of monetary policy in the Great Moderation is another example. It informed theorising and research on Inflation Targeting. And, in turn, through trial, error and refinement, research has helped inform policy with empirical insights and workhorse models.
Last year, the number of work permits issued increased by 30 per cent. A large share came from the new EU member states. The waiter from Sweden, the Polish carpenter, the cherry-picker from Lithuania, the dentist from Iran and the physician from Sri Lanka are altering the capacity limits of the Norwegian economy. Nonetheless, many services are provided and must be delivered in Norway. Nor do we want to drive internationally exposed businesses out of the mainland economy. Language and cultural differences place limits on how quickly foreign labour can be absorbed, and the supply may diminish inasmuch as the economies of Sweden and Poland are now growing strongly. Norway’s skills requirements and authorisation procedures are also curbing competition. Laws and resolutions on minimum pay requirements may also restrict the flow of labour. Current evidence suggests that capacity utilisation is increasing in some sectors of the Norwegian economy. Norwegian industrial leaders report that they are nearing capacity limits with regard to labour, plant and equipment. Three of four enterprises in the construction industry report that they are operating at capacity limits. 6 The number of advertised vacancies is rising steadily. There are reports of shortages of craftsmen, project managers and supervisors, engineers and skilled workers. Even though capacity utilisation is rising, there are no visible signs of inflation. Intensified competition is exerting downward pressure on margins. Wage growth is still at such a low level that it is strengthening businesses and employment. However, we have experienced earlier that cost inflation can rapidly accelerate.

15/11/2019  Opening remarks 11th edition of the European SSM Roundtable/International Bankers Forum Margarita Delgado Deputy Governor  Good Morning and welcome to Banco de España for this 11th edition of the European SSM Roundtable, organised by the International Bankers Forum (IBF). The topic for today’s roundtable is the management of non-financial risk. This is an issue which is always in the spotlight and, at the same time, is quite hard to tackle. The concept of risk is continuously used in banking regulation. A quick search in the CRR1 or CRR2 text will reveal that it is mentioned nearly 1,500 times in each. Banks are certainly familiar with the regulatory requests to understand, measure, hedge, control, assess, address or mitigate risk. I believe it is fair to say that any firm that has survived the crisis and its long aftermath, without public support, has been largely successful in fulfilling these risk-related tasks. Of course, supervisors are also permanently concerned about risk; to some extent, it is what we are paid for. Still, I believe both banks and supervisors tend to feel rather comfortable when we assess financial risk. Don’t misinterpret me. We are perfectly aware of the consequences that a mismanagement of financial risk can entail, but we tend to look at financial risk in a more natural and intuitive way. Things get a lot stickier when we look at non-financial risk. What is the nature of non-financial risk? And what makes it different from more traditional financial risk?