samchain/econo-pairs-v1 huggingface dataset:
UK monetary policy  Measures to make the system safer, fairer and to operate with more integrity are re-founding a more resilient, open global financial system. This sets the stage for monetary policy to support a supply side recovery. Ben Bernanke once said to Milton Friedman and Anna Schwartz, “You [were] right, we [the Fed] did it [caused the great depression]. But thanks to you, we won’t do it again.” Thanks in  BIS central bankers’ speeches  3  part to Chairman Bernanke’s leadership, central banks have pursued the opposite strategy to the 1930s to great effect. While the human cost since 2008 has been considerable, it is dwarfed by the experience of the Great Depression. Central banks haven’t done it again, but that doesn’t mean they should be satisfied. There remains still considerable, if uncertain, slack in their economies. I say uncertain because obvious measures of slack, such as unemployment, are much lower than we would have expected given the scale of the fall in demand. Supply side performance in advanced economies has been surprisingly poor. Before the crisis, the growth in potential supply was largely predictable (technically a stationary trend). As a consequence, central bankers responded to movements in demand around that trend. The issue now is the extent to which the fall in demand has itself eroded potential supply and whether that could be reversed as economies recover. In the US, the question is whether labour force participation rates will pick up.

In the UK, the question is whether labour productivity will reverse any of its poor performance. These questions mean it makes sense for policy to test the extent to which supply performance is “endogenous” to demand.1 This is one of the main advantages of the forward guidance employed by both the Bank of England and the Federal Reserve. Last August the Bank’s Monetary Policy Committee made an easy call: we wouldn’t even begin to think about raising interest rates until the unemployment rate fell to 7%. Given the weakness of the UK recovery and the flexibility of the labour market, we could expect that considerable slack would ensure that the MPC was not taking undue risks with inflation as policy encouraged faster output and employment growth. To be clear, the Bank continues to be mindful of the risks posed by sustained exceptionally loose monetary policy. In some advanced economies like the UK, these risks relate mainly to housing markets. In emerging market economies, they centre on the volatility of capital flows. Across the financial sector, a low for long environment risks complacency, excessive risk taking and undisciplined underwriting. In all cases, authorities can and should look to macroprudential policy tools to manage these risks so that monetary policy can remain focussed on its objective of establishing the conditions for a sustained recovery while maintaining price stability. Given the powers and remit of the Financial Policy Committee, the Bank of England is exceptionally well-positioned to coordinate macroprudential and monetary policies.
But central banks around the world are also called upon to engage, to a greater or lesser extent, in the supervision of financial institutions. Unlike monetary policy, where in large part a common framework prevails around the world, there is no uniformity in the roles played by central banks in the supervision of the financial system. The supervision of financial institutions is sometimes regarded as part of the functions of a central bank and sometimes given to one or more other regulatory bodies. It is striking how varied are the arrangements in different countries. In the United Kingdom, an important ingredient in the 1997 reforms which took banking supervision away from the Bank of England and handed it to a single regulatory body, the Financial Services Authority, was the view that it was no longer sensible to try to distinguish commercial banks from investment banks, and banks from securities companies. A common regulatory framework was needed. There are, however, important differences between prudential supervision and “conduct” of business regulation, so some countries have adopted a “twin peaks” solution in which the central bank is responsible for prudential supervision and conduct of business regulation is given to a different body. This is evidence that the appropriate division of responsibilities will depend on local circumstances. One of the most important of those is the number of institutions which merit supervision.

The central projection in our February Inflation Report is for it to rise further, to around 3%. That pronounced pickup stems from sharp rises in commodity prices around the world. Food prices on world markets are more than 50% higher, and oil prices two-thirds higher, than they were a year ago. To some it might seem odd that an inflation targeting central bank has not tried to offset those inflationary pressures. That is because we operate “flexible” inflation targeting within a framework that recognises that it is not, in practice, always possible to keep inflation at target. The remit for our Monetary Policy Committee states that: “The framework takes into account that any economy at some point can suffer from external events or temporary difficulties, often beyond its control. The framework is based on the recognition that the actual inflation rate will on occasions depart from its target as a result of shocks and disturbances. Attempts to keep inflation at the inflation target in these circumstances may cause undesirable volatility in output”. BIS Review 36/2008  1  The time lag between changes in interest rates and their impact on inflation means that the MPC can have little effect on the short-term path of inflation. What is crucial is that the pickup proves to be temporary, just as the rise in inflation last year was. As commodity prices stabilise, inflation will fall back towards our target next year. But that does not mean we can ignore the pickup in inflation that is now underway.
The changing face of talent, the new generation of talent coming on stream and its different nature and character also presents new challenges for human capital management. It calls for a transformation of human resource strategies. Given that in this new environment human capital has become a key factor that will drive results, it is therefore not only the investment in talent that has become key, but also their management. Human capital management therefore needs to be a top priority in organisations. Certainly this is the case for financial institutions for which the demands and expectations are high. New approaches and strategies for human capital management will be required. These strategies need to be aligned with the strategic objectives of the organisation. A vital part of this is the capacity building of the human capital management team itself to ensure that they will best serve their organisation. There also has to be strong engagement between the leadership and the human capital management team. There has to be an acute awareness of how the forces of change and the new environment is reshaping the demand and supply of talent and how the existing talent needs to be transformed to meet the objectives of the organisation in a highly dynamic environment. Human capital management is no longer about the efficient delivery of support services. It is now about the management of talent in the organisation to strengthen and enhance its performance.

It has the necessary fundamentals to actively participate in the financing of the economy and in particular of SMEs and VSEs, whose activity is mainly financed by bank lending. The return of growth in France and the health of the financial sector depend on this. It is a fact that rigorous risk management in each institution is indispensable to ensure financial stability. These past few years have also shown the full scope of the role of the supervisory authorities and have proved that the interventionist nature of their activities is a crucial element that regulation, however exacting, cannot replace. The forthcoming developments in prudential regulation in the banking and insurance sectors will only be fully effective if the efforts made by the institutions in 2011 to prepare and adapt are followed through. One of the ACP’s main tasks in 2012 will be to help them to do this. 4  BIS central bankers’ speeches
It starts with data, unconstrained by axioms and hypotheses, and then uses this to inform choices about models of behaviour. Data, in other words, precedes theory. Indeed, some data scientists have suggested such an approach could signal the “End of Theory”. 8  So where some economists have tended to see the pitfalls in Big Data, data scientists have seen promise. Where some economists have tended to see the ecological threat it poses, data scientists have seen the economic potential. I am caricaturing a little, but only a little. So who is right? And does the era of Big Data signal an oil-rush or an oil-spill? The truth, as often, probably lies somewhere in between. Both deductive and inductive approaches can offer insights into understanding the world. They are better seen as methodological complements than as substitutes. Put differently, using one approach in isolation increases the risk of making faulty inferences, and potentially serious mistakes, in understanding and policy. Let me give a couple of examples to illustrate. During the global financial crisis, it is now fairly well accepted that the workhorse Dynamic Stochastic General 9  Equilibrium (DSGE) model of the macro-economy fell at the first fence. It was unable to account for business cycle dynamics, during or after the crisis. While theoretically pure, it proved empirically fragile. That empirical fragility arose, I would suggest, from a methodological over-reliance on deductive methods. Or, put differently, from too little focus being placed on real-world data from the past, including on crises.

Discussions are ongoing among central banks as to what the significance of low interest rates will be for monetary policy and how the scope for monetary policy to act in economic slowdowns can be increased. One conclusion is that complementary monetary policy measures of the type used by many central banks in recent years, such as the purchasing of various assets, may become more common in the future. Other feasible measures in the monetary policy toolbox are loans directly to companies via banks, and foreign exchange interventions. 11 [13]  The new environment also affects other policy areas Another possibility is other policy areas being used more actively to stimulate the economy in times of recession. In the international debate, it has, for example, been said that the limitations imposed on monetary policy by the low interestrate environment mean that fiscal policy may need to contribute to stabilisation policy to a greater extent than before. 13 I think, to start with, that it is important to point out that monetary policy has not be exhausted as a result of the policy rate being lowered as far as is practically possible. As I just mentioned, there are several tools in the monetary policy toolbox that can be used if need be, in order to stimulate the economy. That said, there are obviously feasible tools in other policy areas as well.
The Fund now has holdings in almost 8000 companies and owns approximately 0.77 per cent of global equity markets. In the long run, and even though many companies have now folded, investing in companies may perhaps be at least as safe as extending loans. Thank you for your attention. BIS Review 42/2009  7  8  BIS Review 42/2009  BIS Review 42/2009  9  10  BIS Review 42/2009  BIS Review 42/2009  11  12  BIS Review 42/2009  BIS Review 42/2009  13  14  BIS Review 42/2009  BIS Review 42/2009  15  16  BIS Review 42/2009  BIS Review 42/2009  17  18  BIS Review 42/2009  BIS Review 42/2009  19

Structurally, many studies 3 suggest that the Phillips curve, i.e. the relationship between inflation and fluctuations in economic activity or unemployment, appears to have flattened since the 1980s [slide]. Inflation seems less responsive to changes in economic activity in advanced countries, notably because of globalisation,4 which appears to exert downward pressure on inflation via the decline in imported goods prices and competition from low-wage countries. But a flatter Phillips curve does not call into question this relationship: we are in no doubt about the way we are heading: the recovery and job creations will lead to higher wages and, ultimately, more inflation. But we nevertheless remain less certain as to the speed of this adjustment. We are both confident about the effectiveness of our monetary policy and willing to be patient regarding the time it will take. II. What prospects for the future? Let me now turn to the consequences for our monetary policy. You are well aware that we at the ECB’s Governing Council will decide this autumn on the re-calibration of our policy instruments beyond the end of the year – and, I quote Mario Draghi, “probably the bulk of these decisions will be taken in October”. We are now faced with a simple requirement, in line with our mandate to maintain price stability, and the progress towards our inflation target: we have to reduce the intensity of our net asset purchases, while maintaining overall a substantially accommodative monetary policy.
For a household considering buying a house and financing the purchase with a $ 30-year fixed-rate mortgage, this rise in mortgage rates would increase their annual payments by more than $ The increase in financing costs and the rise in home prices has made housing considerably less affordable than it was earlier in the year. This is illustrated by the National Association of Realtors’ affordability index which has declined by 25 percent over the six months ending in July. Second, housing activity has already been contributing significantly to growth. For example, over the past two years, real residential investment swung from a drag of 1.1 percentage points of GDP to a contribution of 0.4 percentage points. Together, this suggests that the impetus to growth from housing may moderate rather than strengthen. Perhaps, the economy can get a boost from business fixed investment. After all, most of the evidence points towards further improvement. First, as I noted earlier, profit margins and cash flows are high, and credit availability is improving. Thus, those businesses with successful track records should be able to readily finance new investments. Second, business fixed investment is not very high as a share of GDP and overall industrial capacity has been expanding only slowly. This suggests that this sector is not over extended. Third, the drop in U.S. energy costs relative to the rest of the world should spur more investment in the U.S. in energy intensive activities such as petrochemicals manufacturing. However, there are also some negatives here as well.

Second, the recent data suggest that the downtrend in the inflation rate may be coming to an end. For example, the core personal consumption expenditures deflator rose at a higher rate over the past three months than during any other 3-month period since mid-2012. Third, measures of longer-term inflation expectations, whether discerned from financial asset prices or from surveys of households or professional forecasters, remain well anchored at levels consistent with our 2 percent objective. This is important because inflation expectations are a major determinant of the inflation process. As long as inflation expectations stay well-anchored, it will be hard for inflation to fall further. Putting these factors together along with my forecast of a gradual pickup in real economic activity, my outlook is for inflation to drift back toward our 2 percent objective over the medium term. However, much like the case of the real growth outlook, there is significant uncertainty around this forecast. Monetary policy So what does this all imply for monetary policy? As you are aware, at last week’s FOMC meeting we made no changes to our monetary policy. In particular, the Committee decided to continue to purchase long-term Treasury securities and agency mortgage-backed securities  4  BIS central bankers’ speeches  at a monthly pace of $ billion and $ billion, respectively.
At the same time, those employed are working, on average, fewer hours, and this has negatively affected labour utilisation. Moreover, despite the relative improvement in the unemployment and labour force participation rates over the past few years, the unemployment rate in the euro area is currently still around 3 percentage points higher, and the labour force participation rate around 6 percentage points lower, than the corresponding figures for the United States (see Chart 4). So although significant progress has been made in raising labour participation and in reducing the unemployment rate, there is still room for increasing the rate of utilisation of the labour force. As I stated earlier, euro area growth has been adversely affected by a continued decline in average hours worked per person employed. Data for the business sector show that in 2005, Europeans worked, on average, 300 hours less per year than Americans, and less then they did in the early 1980s (see Chart 5). This gap between the United States and the euro area, which has been widening, reflects the shortening of statutory full-time working weeks and a rise in part-time employment in the euro area (see Blanchard, 2004). Finally, the more dynamic demographic developments in the United States account for a substantial fraction of the real GDP growth gap over the past ten years. Since the mid-1990s, population growth has been on average about four times higher in the United States than in the euro area.

Timely collaboration between Malaysia and Bahrain to strengthen interlinkages The collaborative effort we are witnessing today is expected to strengthen the liquidity management framework between Malaysia and Bahrain, thereby enhancing the financial interlinkages between the two countries. Bursa Suq Al Sila’ is a purposefully designed  BIS Review 8/2010  1  exchanged-traded platform to facilitate commodity murabahah transactions. It is the first internet based platform in the world with crude palm oil (CPO) as its underlying base commodity. The establishment of Bursa Suq Al Sila’ in August 2009 is a collaborative initiative of the Central Bank of Malaysia, the Securities Commission, Bursa Malaysia and the market players that was conceptualised some three years ago. Bursa Suq Al-Sila’ will provide a viable alternative to the well functioning of liquidity management in Islamic financial system. The platform will provide another dimension to the liquidity management infrastructure of the Islamic banking industry; thus providing market players with greater tools to manage their assets and liabilities. It is expected to unlock a vast potential of opportunities for the Islamic financial industry by providing a wider range of new instruments. Not only can it be used for liquidity management and risk management purposes but players can derive additional linkages by utilising the platform to facilitate the creation of financing and deposit products. It creates a more transparent and streamlined commodity transaction practices based on the concept of murabahah or tawarruq.
Henrique Meirelles: Good governance in the Brazilian financial system Speech by Mr Henrique Meirelles, Governor of the Central Bank of Brazil, at a seminar organized by the International institute of Studies of State Law (IIEDE – Instituto Internacional de Estudos de Direito do Estado), Sao Paulo, 5 September 2008. *  *  *  1. It is my pleasure to take part of this event dealing with an important and often overlooked topic: corporate governance in the Brazilian financial system. This is an especially dear issue for the Central Bank and particularly for me. 2. To start, I would like to mention that monetary stability is a precondition for good corporate governance. In the inflationary environment Brazil experienced for decades, the requisites for good governance vanished under the prevailing unpredictability and monetary confusion. There is no room for a transparent, disciplined and fair relationship among parties involved in a firm when predictability and stability are absent. In this sense, the main contribution of the Central Bank to corporate governance is to reaffirm its permanent commitment to inflation targeting in the conduction of monetary policy. 3. The Brazilian Institute of Corporate Governance defines governance as “the system by which corporations are managed and monitored, involving relationships between shareholders, board, management, independent auditors and statutory audit committee”. Good practices of corporate governance focus on increasing the company’s value, facilitating its access to capital and contributing towards its stability and soundness.

•  Equality, which is translated into a fair and equalitarian treatment to all minority groups, either of capital or of other stakeholders, where discriminating policies or attitudes shall be deemed unacceptable. 8. Based on the foregoing principles, the Central Bank, in its supervising role, follows the best international practices, materialized in the standards defined by the Basle Committee of the Bank for International Settlements, according to which corporate governance represents a critical issue in the banking environment. Management shall monitor the establishment of corporate objectives, performance of the day-byday operations, defense of stakeholder interests, conformity to applicable laws and regulations, and care for the interests of depositors. 9. Therefore, the directive applied by the Central Bank reaches beyond the mere relationship of the institution with external stakeholders or the concern with the truthfulness of its financial statements, since it considers all aspects related to the institution’s management and to its internal control systems. 10. In fact, the key to secure efficacy in governing financial institutions necessarily implies an effort to build an effective system of internal controls, able to support stability and continuity of individual activities and, consequently, the systemic stability of the financial system itself. 11. Ladies and gentlemen, I referred above to the fact that Brazil faces more challenges to consolidate good governance in corporate practices compared to more mature economies.