samchain/econo-pairs-v1 huggingface dataset:
But at the same time, this may be a strength compared with the macroprudential tools, simply because it is difficult to “avoid” a policy rate increase. I am also convinced that quite regardless of what formal responsibility the central bank bears for financial stability, it will always receive a large share of the blame if a financial crisis arises. When all is said and done, the interest rate is the price of credit and as the central bank controls this price, at least regarding shorter maturities, I believe that the general public will hardly absolve the central bank of blame if a financial crisis arises after a period of  5  The comparison with fiscal policy, which is regarded as a foregone conclusion in monetary policy discussions, falters somewhat, as I see it. Fiscal policy is formulated by politicians with varying goals and we are probably wise to regard it as a foregone conclusion. However, regarding the relationship between monetary policy and macroprudential supervision in a similar way may function as a conceptual model, but would not work in practice. 6  For a recently-published study of the importance of credit and debt for the economic cycle, see Jordà, Ò, M. Schularick and A.M. Taylor, “When Credit Bites Back: Leverage, Business Cycles, and Crises”, NBER Working Paper No. 17621. 4  BIS central bankers’ speeches  cheaper credit. It will probably therefore be difficult in practice to conduct a monetary policy that does not take into account financial stability.

A somewhat higher cost for the provision of market liquidity during the more benign stages of a financial cycle might be worthwhile if it were accompanied by less volatility and stress when the cycle inevitably turned down. In fact, even if market liquidity costs are now going to be higher on average, this might be a small price to pay for a much more stable financial sector. Also, it is important to recognize that market liquidity conditions a few years from now may be very different from the situation today. If the cost of providing liquidity services has increased, this creates strong incentives for innovators to find better ways to match buyers and sellers. In my view, this innovative response is already underway. For example, in both the Treasury and corporate bond markets, firms are being established to more efficiently match buyers and sellers of less liquid bonds in order to reduce search costs and the need to carry inventory. Furthermore, execution algorithms have been developed that divide large trades into smaller sizes, thus reducing the costs of moving large blocks of securities. Market liquidity conditions could very well improve over time as innovation occurs in response to this new regime. Let me now turn to the topic of funding liquidity. I think this issue deserves as much attention as market liquidity. After all, during the financial crisis the demise of several major financial institutions resulted from their inability to finance their long-dated illiquid assets. The  5  Mizrach, B. (2015).
This would not be problematic if nominal rates could fall as far as necessary; for example, with expected inflation of 1%, to achieve a real interest rate of, let’s say, -2%, the nominal rate would have to be lowered to -1%. The problem is that nominal interest rates cannot drop as far into negative territory as sometimes would be necessary. Were central banks to set interest rates of -5%, for example, commercial banks would endure negative yields on a large part of their assets, which would adversely affect their profitability and, ultimately, their financial intermediation  2  The concept, determinants and implications for monetary policy of the natural rate of interest are discussed in Galesi et al. (2017). Holston et al. (2017), for example, estimate that in 2016 the natural rate was positive, but very close to zero, in the United States. 4 See, for example, Fiorentini et al. (2018). 3  7  capacity. This would have an attendant negative impact on credit supply, economic activity and inflation. There is therefore a lower bound on nominal interest rates. Should central banks lower interest rates below this bound, the effect on the economy may be contractionary rather than expansionary, owing to the adverse effects on the financial system as a whole.5 The level of this lower bound on interest rates is not directly observable and varies over time based on the financial sector’s situation. In any event, it represents the floor for central bank interest rate cuts.

I consider that both the ongoing review of monetary policy strategy and the strategy to address the challenges arising from the growing digitalisation of the financial system are two sound exponents of this way of working. They will allow us to continue adding the maximum value to the European economy and, by extension, to Spanish society. Thank you. 14  References Aguilar, P., Ó. Arce, S. Hurtado, J. Martínez-Martín, G. Nuño, and C. Thomas (2020). “The ECB monetary policy response to the COVID-19 crisis”, Occasional Papers, No 2026, Banco de España. Arce, Ó., M. García-Posada, S. Mayordomo and S. Ongena (2018). “Adapting lending policies in a “negative-for-long” scenario”, Working Papers, No 1832, Banco de España. Arce, Ó., R. Gimeno and S. Mayordomo (2017). “Making room for the needy: the creditreallocation effects of the ECB’s corporate QE”, Working Papers, No 1743, Banco de España, forthcoming in Review of Finance. Arce, Ó., I. Kataryniuk, P. Marín and J. J. Pérez (2020). “Thoughts on the design of a European Recovery Fund”, Occasional Papers, No 2014, Banco de España. Bernanke, B.S., M.T. Kiley and J.M. Roberts (2019). “Monetary Policy Strategies for a LowRate Environment”, AEA Papers and Proceedings, No 109, pp. 421-426. Brunnermeier, M. K., and Y. Koby (2018). “The Reversal Interest Rate”, NBER Working Paper Series, No 25406. Fiorentini, G., A. Galesi, G. Pérez-Quirós and E. Sentana (2018). “The rise and fall of the natural interest rate”, Working Papers, No 1822, Banco de España. Galesi, A., G. Nuño and C. Thomas (2017).
This provides an opportunity for banks and businesses to leverage on, to improve the coverage of Point-of-Sale Terminals to facilitate the use of the debit card as means to reduce the need for cash, as well as, to increase tourist spending at more merchant outlets. With higher broadband and debit card penetration rate, coupled with increased payment innovation and strengthened security measures, businesses should consult their banks and take advantage of the various electronic payment solutions to reap the benefits of cost savings and productivity gains. 6  As at end-Sept 2013 – Total broadband subscriptions = 4.5 mil. With the additional 2.8 million household, total broadband subscriptions will increase to 7.3 million. Penetration rate = 7.3/6.7 mil household = 108%. 4  BIS central bankers’ speeches  I hope you will continue to provide your support in making this national electronic payments campaign a success for the benefit of the country. Conclusion I hope that all of you will benefit from today’s program. Please do take time to visit the exhibition booths to inquire about the latest promotional offers on electronic payment services and sign up to experience electronic payments at an affordable cost. On this note, it gives me great pleasure to open the Payment System Forum 2013. BIS central bankers’ speeches  5

I would like to reiterate that we will not allow these developments to affect medium-term inflation expectations and the medium-term inflation outlook adversely. Indeed, we have already started the necessary monetary tightening to keep inflation under control and to ensure that inflation realizations remain in line with the target set for 2012. Details on this issue can be found in the Inflation Report that I will summarize shortly. Secondly, I will talk about our interest rate policy. After the last Committee meeting, banks’ funding costs from the Central Bank were set within the interest rate corridor, in other words, between 5.75 and 12.5 percent on average, or at a level that the Central Bank considers appropriate. In cases where funding is effected at 12.5 percent, the Central Bank will meet banks’ demand with no upper limit and against eligible collateral. Tightening or easing to be achieved via the funding channel will be implemented even on a daily basis depending on the course of economic and financial developments. In the event that risks to price stability are observed, the Central Bank will allow banks’ overnight borrowing rates to hover around 12.5 percent for some time. Thirdly, I will provide you with some information about our reserve requirement policy. Depending on the outcome of the EU Leaders Summit and the foreign markets’ perception of this outcome, the Central Bank may introduce a limited reduction in the Turkish lira required reserve ratios if deemed necessary.
One reason for greater circumspection today in monetary policy is that the trade-off between growth and inflation may have changed. During the 1990s the paths of inflation and real economic activity in many countries, Sweden included, have not followed the pattern that their earlier relationship suggests. This has started a discussion, in the United States and elsewhere, of whether macroeconomic structures have changed so that higher growth is now feasible without inflationary tendencies. It is BIS Review 106/1999  2  sometimes argued, for example, that one of the forces behind today’s improved economic performance in the United States is the rapid advances in computer technology and telecommunications; this has led to more efficient processes for production and distribution and thereby paved the way for higher productivity growth. Productivity in the United States does appear to have been rising more strongly. Some observers consider that the potential annual growth rate may have moved up from 2% to up to 3%, perhaps even more. In Sweden, too, there are many indications that the growth of labour productivity in the 1990s has been higher than in the 1980s. The upward shift may perhaps amount to half of a percentage point. It is this that has prompted the common, but not entirely certain, estimate that the Swedish economy can now sustain an annual growth rate between 2 and 2.5%. But Swedish statistics do not yet confirm that productivity and thereby potential growth have increased fairly appreciably, as has been the case in the United States.

In time, however, the pace of developments in computerisation and telecommunications will probably also have a major impact on production and distribution systems in Sweden. Sweden is well to the fore in the use of the Internet. Still, it is not yet clear when these developments will exert a more general effect on growth. A point worth noting is that the upward shift in US productivity growth occurred fairly late in the business cycle. The Swedish economy has not reached that stage. Over a normal cycle, without any impulses from an improvement in potential growth, statistics show that productivity gains tend to slacken towards the end of the upward phase. That was the case in Sweden, for example, in the late 1980s. Now that low inflation has been established, it is conceivable that the Swedish economy functions differently, so that productivity growth might also be better here in the coming years. The example of the United Kingdom, however, suggests otherwise. Activity there has been relatively stronger than in most other European countries but clear signs of better productivity growth are still not discernible. If there is no direct evidence that it is appreciably higher productivity that lies behind the decreased inflation propensity in Sweden in the 1990’s, where should we look for an explanation? I want to discuss two possibilities: the inflation process as such and the level of unutilised resources. At the same time I shall consider their significance for future inflation. Has the inflation process changed?
William C Dudley: Worthy of trust? Law, ethics and culture in banking Panel remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Banking Standards Board Panel "Worthy of trust? Law, ethics and culture in banking", London, 21 March 2017. * * * Sarah Bell, Stephanie Chaly, James Hennessy, Thomas Noone, and Joseph Tracy assisted in the preparation of these remarks. First, let me thank Governor Carney, the Lord Chief Justice, and Dame Colette for including me in today’s discussion. It is an honor to be here. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System. I also want to thank the Banking Standards Board for its important work on improving standards of conduct in financial services. The effects of this work will, I think, be felt throughout the industry, not just in the City of London. We learned from the LIBOR and FX scandals that poor conduct can proliferate quickly throughout the global marketplace. That’s because short-term thinking—maxing out this year’s compensation bonus or this quarter’s accounting profits—is a catalyst for poor conduct. In contrast, good conduct may take longer to catch on. Good conduct depends on a longer-term frame of reference. It is building a viable career that one can be proud of, and, at the firm level, building franchise value and reputation that takes decades to accomplish.

2/3  BIS central bankers' speeches  I mentioned earlier that we also need to reform incentives in order to encourage people to speak up. This is hard. I’ll share with you some of the change we have made at the New York Fed, recognizing that we do not have a monopoly on good ideas, nor can we claim to have a perfect culture. Skip-level meetings are common, and occur for the purpose of providing forums for sharing ideas. They are also a signal that escalation of problems matters to us. We offer training for new employees that emphasizes the importance of cognitive diversity and speaking up. We evaluate employees on their level of engagement with colleagues and their willingness to share insights. So, part of getting promoted is contributing diverse views and raising your hand. We have created programs to encourage peer recognition of good ideas, including backing for actionable initiatives selected by staff. This resulted, for example, in ideas like a “share your story” series to create institutional memory of past experiences and lessons learned. None of these ideas is a panacea. And, I know that we have not yet achieved our goal: a culture in which employees perceive that, by raising their hands and challenging what may be an orthodoxy or conventional wisdom, they are contributing to the mission of the New York Fed. I hope, however, that with the right incentives and good leadership models, we can move closer to that ideal state: an organization characterized by fresh ideas and open dialogue.
Average earnings have been growing at around 4.5% per year, house prices have been rising by between 10-15%, and total consumer borrowing is the highest in real terms since 1988. But, even given these factors, consumption growth has been strikingly strong. There are, of course, downside risks to the outlook for consumption in the UK. Consumer confidence fell in September, even before the terrorist attacks. Despite the recent rally, equity prices are still much lower than their peaks eighteen months or so ago, and that will have reduced consumers' financial wealth. And there may be the first sign of easing in the labour market which, if it persists, will reduce disposable incomes. Despite this, however, there is little sign yet of any sharp reduction in consumer spending. Retail sales volumes grew by 5.9% in the year to September. That picture of continued strength is corroborated by the CBI Distributive Trades Survey measure for September (gathered largely after the 11 September attack), which was the highest since October 1996. And the higher frequency British Retail Consortium survey suggested that sales volumes by the end of September had returned to pre-attack levels. I focus on the continuing strength of consumption because it - together with its partial correlate on the output side, the retail service sector - is absolutely key to understanding why UK interest rates have fallen less far than in other countries. But, of course, elsewhere in the economy, things have been looking less bright for some time.

Philipp Hildebrand: The virtues of flexible financial markets - a central banking perspective Summary of a speech by Mr Philipp Hildebrand, Member of the Governing Board of the Swiss National Bank, at the CFA Institute Annual Conference, Zurich, 22 May 2006. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch)  *  *  *  Summary Rapid technological change and market liberalization have been the driving forces behind the remarkable evolution of global financial markets over the past three decades. The consequences of this development include a geographic rearrangement of global capital markets, a fast pace of product innovation and changes in the nature and composition of financial market participants. The benefits associated with today’s flexible financial markets are manifold. Financial markets have become much more efficient in allocating capital. New products enable a better distribution of risks and the liquefaction of previously illiquid assets. They have also increased market transparency. As a result, modern financial markets facilitated innovation and likely enhanced economic growth. Moreover, they have contributed to make economies more resilient to shocks. These extensive benefits notwithstanding, modern financial market also entails new risks. These risks tend to elicit calls for increasingly far-reaching regulation. While some regulation may indeed be required to guarantee the integrity of financial markets, the threshold for such regulation should be set high.
Minimum regulatory requirements for banks’ “core” (common equity) capital have been raised from 2% under Basel II to 4.5% under Basel III, even for the smallest banks. And allowable deductions to core capital have been reduced. On quality of capital, the types of financial instrument eligible as loss-absorbing capital (including for Tier 1) have been tightened considerably. For example, certain hybrid capital instruments are no longer eligible, as they were shown during the crisis to be incapable of absorbing loss in situations of stress (Tucker (2013), Moody’s (2010)). These reforms to capital standards have, encouragingly, been implemented in full by nearly all countries internationally (FSB (2017a)). Comparing regulatory capital, pre- and post-reform, is not straightforward. But taking together changes in both the quantity and quality of capital, it has been estimated that Basel III raised risk-based capital standards for globally systemic banks by a factor of around ten (Cecchetti (2015)). One of the new elements of the Basel III package was to supplement risk-weighted capital standards with a risk-unweighted leverage ratio. Because this measure does not require banks or regulators to form a 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  judgement on the riskiness of banks’ assets, it is in principle simpler, more transparent and less subject to risk-weight arbitrage (Haldane and Madouros (2012)).

Capital adequacy rules and the risk-seeking behavior of banks: A firm-level analysis. Swiss Journal of Economics and Statistics (SJES), 132(IV), 709-734. Sheppard, D. (1971). The growth and role of UK financial institutions 1880-1962, Methuen, London. Shiller, R (2017). ‘Narrative economics’, Cowles Foundation Discussion Paper, Number2069. Stein, J. (2013). Overheating in Credit Markets: Origins, Measurement, and Policy Responses. Speech at Research Symposium sponsored by the Federal Reserve Bank of St. Louis, 7 February. Svensson, L. E. (2017). Cost-benefit analysis of leaning against the wind. Journal of Monetary Economics, 90, 193-213. Tarullo, D. K. (2016). Next Steps in the Evolution of Stress Testing. Speech delivered at the Yale University School of Management Leaders Forum, New Haven, Connecticut, 26 September. Taylor, A. M. (2015). Credit, financial stability, and the macroeconomy. Annu. Rev. Econ., 7(1), 309-339. Thanassoulis, J., & Tanaka, M. (2017). Optimal pay regulation for too-big-to-fail banks. Journal of Financial Intermediation. Tinbergen J. (1952). On the Theory of Economic Policy, Amsterdam: North Holland, 2nd edition. Tracey, B., Schnittker, C., & Sowerbutts, R. (2017). Bank capital and risk-taking: evidence from misconduct provisions. Bank of England Staff Working Paper No. 671. Tucker, P. (2009). The Debate on Financial System Resilience: Macroprudential Instrument. Speech at Barclays Annual Lecture, London, 22 October. Tucker, P. (2013). The reform of international banking: some remaining challenges. Speech at the Oliver Wyman Institute Conference, London, 1 October 2013. 60  All speeches are available online at www.bankofengland.co.uk/speeches  60  Tuckett, D., & Taffler, R. (2008).
These attributes are complemented by a competitive tax regime. In the 2008 Forbes Tax Misery and Reform Index, Malta was classified as the fifth most tax-friendly country worldwide for companies and the most attractive in the EU. In addition, Malta has an extensive network of almost fifty double taxation treaties, and income earned overseas may be exempted from double taxation even when no bilateral treaty exists. Malta’s development as an international financial centre is reflected in the range of financial services available. Complementing the traditional retail functions, banks are increasingly offering private and investment banking, project finance, treasury services and syndicated loans. Malta also hosts a number of institutions specializing in trade-related products such as structured trade finance, factoring and forfeiting. At the end of last year, the number of banks stood at 22, up from 17 in 2004. The assets of the banking system, including both the domestically and the internationally-oriented banks, totalled € billion at the end of 2008, an increase of 10.5% over 2007 and nearly double the total in 2004. Other areas, too, have experienced rapid growth. These include fund management and collective investment schemes, captive insurance, asset management, back office  2  BIS Review 65/2009  processing facilities and call centres. Following the recent legislation on professional investment funds, considerable interest has also been shown by the hedge fund industry.

It is really a great honor to have representatives from the central banks of the EU member states as well as from the candidate countries attending this conference, especially having in mind that on the last day of the conference some of them will have presentations and share their experiences in the domain of payment systems. Ladies and gentlemen, Now, allow me to declare the seventh conference on payment and securities settlement systems open! I would like to wish the chairman Mr. Michiel van Doeveren and his colleagues a successful conference. I hope the weather will be fine and you will enjoy the beauties of Lake Ohrid, and in the afternoon and in the evening, you will have the opportunity to visit the city of Ohrid, which is one of the best preserved material and spiritual legacies witnessing the millennial existence of our culture and historical heritage. BIS central bankers’ speeches  3