samchain/econo-pairs-v1 huggingface dataset:
Any hasty behavior, or, on the contrary, being complacent and ignoring the severity of the crisis, could have eroded the effectiveness of the policies and deepened the recession. There will be plenty of time to analyze the phenomena that deepened the crisis, but what is clear is that the confidence crisis exacerbated the effects of the world turmoil on global economic activity. The upside is that the reaction of policies and the responses of firms have set us on the right foot for the recovery of the local economy. The adjustment of demand has put households and firms in a healthy financial position to resume demand growth. The various indicators of demand, expectations and production suggest that the Chilean economy has begun the process of recovery we foresaw for this half. The monthly index of economic activity, Imacec, seasonally adjusted, has been rising since May and the unemployment rate, which at some point was thought to be headed to exceeding 12%, has stabilized under 11%. Also, monetary policy will continue to be expansionary for a prolonged period of time and, as we stated in our last Report, in the most likely scenario, the slow withdrawal of the monetary stimulus will begin during the second quarter of next year. Meanwhile, the Chilean peso has remained somewhat more depreciated that the currencies of other commodity exporters. There are several hypotheses to explain this, including the effect of the monetary policy stance.

In four meetings we raised the MPR by 200 basis points, to 8.25%. The purpose was to limit the propagation effects, via reducing the demand through a more restrictive monetary policy. Just as we then stated, although a deceleration of global growth was expected, we did not see that it would have the necessary force to contain inflation and therefore monetary policy had to be tightened. As a matter of fact, our Report of September 2008, before the economic plunge and when Consensus Forecasts estimated 2.6% growth for the world this year, we announced that the MPR would probably be raised above 9%. But the world changed again, and very strongly. What at first seemed just as a deceleration of global activity, resulted being the first drop in world growth in over sixty years (figure 4). This led to a change in policies with no precedent in Chile’s monetary history. The drop in world demand would result in a larger slowdown in domestic demand than the one we intended to cause via monetary policy. In this new setting, the obvious reaction was to change the sign of monetary policy. The first important signal was revising our projections – in November 2008 – and announcing that the increases that had been forecast in September would not occur. Such an announcement had an immediate impact on financial conditions. This way, the CBC initiated the most aggressive interest rate cut ever implemented in Chile, and one of the sharpest in the world (figure 5).
It would hardly be consistent for us on the one hand to be promoting greater competition and on the other to seek to determine or influence fees and charges. However, the public concern about the effects of deregulation, coupled with the recognition of the importance of banking services to people’s daily lives, suggest that we should be paying more attention than we have in the past to the question of consumer issues. This is the subject to which I should now like to turn. Consumer protection First, I think it needs to be understood that the changes now going on in banking services, including the restructuring of fees and charges, are not solely the result of interest rate deregulation. There are a number of factors – global as much as local – that are driving banks into refocusing their business. These include: increased competition from both within and outside the banking industry; pressure to increase shareholder value; the need to develop new income streams amid a shortage of conventional lending opportunities; and globalisation, which is inducing banks to specialise in forms of business in which they have a competitive advantage. These various factors are forcing banks to innovate - through new products and new technologies – in order to diversify their income. They are also forcing banks to become more cost-efficient: to scrutinise the profitability of their various services, and to rationalise cost structures.

Before I turn to that subject, I should like to address, very briefly, two broad interconnected subjects: first, the theme of competition, particularly in the context of the current programme of banking sector reform; and secondly, the question of consumer protection, in the light of increasing competition and other trends. Competition and banking sector reform We are now two years into our programme of extensive banking sector reform. In fact, the first measure under that programme was my clarification, at your dinner in June 1999, of the HKMA’s policy on the question of Lender of Last Resort. It was a pretty heavy-going speech for an after-dinner occasion, and I still recall the drooping eyelids and stifled yawns. But at least those of you who sat through it can take satisfaction in the fact that you were witnessing a minor historical event. Since then, the reform programme has made a great deal of progress. In 1999 we relaxed the “one building” condition on foreign banks licensed since 1978. Last year we expanded access to Real Time Gross Settlement and implemented the first phase in the deregulation of the remaining Interest Rate Rules. We also completed a study and a public consultation on the case for establishing a commercial credit reference agency. Earlier this year, a similar public consultation was completed on the case for a deposit insurance scheme. The general view in these consultations was that the two schemes should be pursued, although we fully recognise that there are dissenting opinions on the question of deposit insurance.
Our philosophy is to stimulate ownership of decisions and empowerment in the investment process – and that is appreciated by our managers. Moreover, the mere importance of the mission, as formulated by our Board, "... to safeguard and grow financial wealth for future generations through highly professional management coupled with strict integrity", is attracting resources in and of itself. To wed a business culture to a central bank, with its civil service responsibilities, has posed a challenge in terms of adapting the Bank's governance system to the increased importance of professional investment management. Elements in addressing this include a strengthened focus on accountability by a clear division of responsibilities and a system of checks and balances. Maybe the most important element in our governance system is the establishment of a high degree of transparency for the public by providing open information on performance, risks, costs and investments on a timely basis. All in all, we feel the challenge of managing the Fund has enriched the organisation by forcing the central bank to think outside of the box. And perhaps the central bank perspective and values have added to the depth and long-term horizon of the investment organisation. Let me round off this presentation by recapitulating some of the main insights we have gained in the decade the Fund has existed.

There have been adjustments in credit spreads and other risk assets, which in some areas had fallen to historically low levels, but these reversals have been tempered by what it still overall a favorable view of corporate credit fundamentals. And it is worth drawing attention to the fact that the average duration of the mortgage market has increased significantly over the last nine months to the point where the amount of hedging pressure on interest rates related to extension risk is likely to be contained even as interest rates rise. The fact that these adjustments have begun ahead of any change in monetary policy probably will help diminish the strains in the financial system that might otherwise be expected to accompany this type of transition. Even so, risk managers need to be attentive to, and react appropriately to, the pressures that could emerge following this extended period of low interest rates and a steep yield curve. The agenda for the supervisory community remains dominated by the following broad priorities: •  We are moving ahead with Basle II to bring a more sophisticated assessment of capital adequacy and risk management techniques to the supervisory framework. •  Our ongoing supervisory examinations continue to concentrate on strengthening the internal management and control infrastructure across the various dimensions of risk management and compliance. •  We are supporting the important efforts underway to better align U.S. and international accounting standards and to improve the quality and integrity of public disclosure.
Fiscal policy followed a cautious line during 2010, aiming to keep budget deficit and public debt in check. Budget deficit until November of this year was 23.1 billion Lekë, marking a reduction of 64%, year-on-year. Reduction of the budget deficit by 4 percentage points of the GDP during 2010 demonstrated a fiscal consolidation both in public revenues, which increased by 9.6% until November, and budget spending reduced by 4.8% during the same period. In particular, budget deficit reduction and public borrowing control in domestic financial market contributed to improved banking system liquidity and reduced interest rates in the financial market. Continuation of this tendency during 2011 would be a welcomed development for the Albanian economy. The Bank of Albania deems that the philosophy of caution pursued in 2010 in budget expenditures and public borrowing should be present for the current year as well. Foreign demand continued to support economic growth even during the third and fourth quarters. January – November 2010 recorded a narrowing of the trade deficit by about 9.2% in annual terms, which came as a result of growth in exports by about 58%. On the other hand, imports marked a more moderate growth – around 6.4 per cent – during the first eleven months. Improvement of trade deficit was favoured by an underestimating tendency of the exchange rate, moderate growth of domestic demand as well as climate and global market structures supporting Albanian exports.

However, one of its significant features is that the uncertainty surrounding the “true” value of complex financial instruments has undermined the confidence of global markets, increased uncertainty about counterparty risk and led to contagion across asset classes, financial markets and economic regions. The crisis has highlighted the fact that the valuation of financial instruments is not only a question of accounting. It raises issues about risk measurement and management by financial institutions, prudential issues via the definition of capital requirements and, more widely, financial stability issues. However, valuation is also without any doubt an accounting issue. It is therefore hardly surprising that the debate about the application of accounting standards to financial instruments is a highly topical one. I think it interesting to note that the crisis has occurred in a financial system that has seen two far-reaching developments. I am referring first of all to the rapid growth in securitisation and products whose valuation is complex. I will not dwell on this aspect as it is not the subject of today’s meeting. The aspect I would like to focus on is the transition to the “fair value” accounting of financial instruments. The rationale behind this accounting development is understandable and can be summarised as follows. The aim is to enable investors and financial system participants, which include supervisors, to have a better understanding of the risk profile of financial institutions in order to better assess their position.
The Union institutions, bodies, offices or agencies and the governments of the Member States undertake to respect this principle and not to seek to influence the members of the decision-making bodies of the European Central Bank or of the national central banks in the performance of their tasks. https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=OJ:C:2016:202:FULL&from=EN  4/9  Regarding micro-prudential supervision, the importance of independence in this field, besides its relevance in monetary policy, is actually a worldwide recognised standard enshrined in the Basel “Core Principles for Effective Banking Supervision”5. The Basel Core Principles are part of the “Key Standards for Sound Financial Systems”6 determined by the Financial Stability Board (FSB) that deserve priority implementation depending on countryspecific circumstances. Moreover, implementation of these principles is generally assessed through the IMF/World Bank Financial Sector Assessment Programs (FSAP7). In the Euro area setting, the creation of the SSM in 2014 added this dimension of independence.8 However, building a system of banking supervision in the euro area in parallel with the monetary union posed challenges from the perspective of central bank independence. In particular, it could raise concerns of potential conflicts between the prudential supervision of European banks and the primary goal of price stability. This was foreseen in the institutional design of European supervision, assigning to the Supervisory Board – a new body within the European Central Bank – the planning and execution of the supervisory tasks. In consequence, separation between monetary policy and supervision was a key pillar for the conferral of supervisory tasks on the European Central Bank.

Not only has inflation been low, but we have avoided the large swings in output and employment that have characterised previous periods in UK economic history. We have seen employment grow from around 56% of the population at the trough in 1993 to over 60% now and unemployment fall back to levels not seen since the mid-1970s. GDP growth has been between 1% and 4.5% per annum throughout. To someone like me who was in the Treasury in the 70s and 80s when we experienced real booms and busts, the last 10 years have looked like a golden age (Chart 1). Of course we hoped that the reform of economic policy would bring greater stability, but the speed and extent of that success has been unexpected. When the MPC was created in 1997 and given responsibility for meeting the inflation target, it was told that whenever inflation was more than one percentage point away from the target the Governor would have to write a letter to the Chancellor explaining why this had occurred. The Bank’s current chief economist estimated that the Governor would need to write a letter on average one month in every two. 1 Even the current Governor thought that ‘given past experience of inflation volatility it is likely, even allowing for the change in policy regime, to restore the lost art of letter writing to British life’. 2 It is remarkable that not a single letter has needed to be written – yet.
This came as a surprise because realized GDP growth rates in 2013 and 2014 were about 0.5 percentage points lower than forecasts made in 2012.3 Our analysis suggests that this economic slack contributed substantially to low inflation. For example, in the fourth quarter of 2014, if we assume no economic slack, HICP inflation would have been higher by around 0.8 percentage points. Such a counterfactual exercise is however surrounded by a large uncertainty. First, potential output is hard to estimate. That said, if potential output and domestic slack were lower than assumed, the weakness of inflation would be all the more puzzling. Second, some observers argue that the Phillips curve of the euro area is steeper than before,4 partly explaining the low level of inflation. Although we do not share this diagnosis for the recent past,5 a stronger sensitivity of prices to slack might be observed in the future as a result of labor market reforms and lower unemployment in several countries. Third, downward nominal wage rigidity may blur the relationship between inflation and domestic slack. Nominal wage inflation, which remained persistent during the crisis, is likely to stay subdued during the recovery, thus leading to a lower inflation. One caveat specific to the euro area is the asymmetric adjustment process currently at work among jurisdictions. Member countries that experienced large capital inflows in the years preceding the financial crisis experienced significant reductions in price competitiveness.

But the currency board regime rules out such a choice, and in this sense it cannot escape from being ascribed some significance in the explanation of Hong Kong's price deflation. Does price deflation matter? In addressing this question, some attention tends to focus on the fact that negative inflation may in certain circumstances imply undesirably high real rates, and that, in particular, it rules out negative real interest rates (at least when measured simplistically by adjusting nominal rates for immediate past price movements), which may be deemed appropriate during a period of deflation. But it is not obvious that real rates of themselves have much of an influence on the intertemporal consumption decision for example, there is little evidence of people having abstained from purchasing electronic goods over the past several decades despite fairly certain knowledge that prices would be lower tomorrow, and there is a limit to the extent that one can delay buying food or clothing. And, as regards the investment spending, it is not the real interest rate calculated by reference to the CPI which is relevant, but the user cost - the nominal interest rate relative to the expected future net yield from the asset in question, adjusted for depreciation. Prices of different asset classes adjust according to market forces and the user-cost arithmetic, which may not be particularly sensitive to changes in the broader price level per se. In this light, it is at least questionable whether mild overall deflation would be a material impediment to investment decisions.
This body of work reflects the emergence of ISO 20022 as the global standard in payment systems, and seeks to achieve greater efficiency and interoperability in cross border payments for financial institutions and end users. Moreover, the structured and robust nature of the ISO 20022 message format provides an opportunity to enhance the information content carried in a payment message, including remittance information to support straight through processing of corporate payments, and to promote greater innovation across a common message suite. Finally, for both the long term competitiveness of our financial institutions and end users, and for the primacy of the dollar as a global settlement currency, it is imperative that the anchor element of our nation’s payment system remains well integrated in an increasingly global marketplace. With detailed planning well underway, by the end of 2017 we expect to announce ISO 20022 message format specifications and an implementation timeline. While I recognize that I am speaking principally to an audience of securities professionals, I appreciate your indulgence of these critically important and strategic payment themes, especially given the inter-connectedness and mutual dependencies that exist across payment, clearing, and settlement infrastructures. Closer to your world, and as previously mentioned, we migrated the Fedwire Securities Service 3/5  BIS central bankers' speeches  in November 2015 to a new hardware and software platform. This undertaking was, by far, the largest element of the Fedwire Modernization Program and the most significant change to the Federal Reserve’s wholesale services in a generation.

If all the conditions for resolution are met, the Board will adopt a resolution scheme for the institution or group in question, which is thereafter transmitted to the Commission. This may be fairly straight-forward if the scheme is based on agreed and adequate ex-ante resolution planning for the institution or group in question, and preparations for resolution had been taken prior to the triggering point. The Commission can approve the resolution scheme from the Board in two ways: approving it upfront or raising no objections within 24 hours. After this, the resolution scheme is adopted and can be implemented by the national resolution authorities as instructed by the Board. It is an important feature of the final text that the European Council only becomes involved in the decision-making at the explicit request of the Commission.11  9  The plenary session will take decisions by simple majority when it discusses issues of a general nature, such as the annual work programme, the budget, or the rules of procedure. Each member will have one vote, and in case of a tie the Chair will have the casting vote. The executive session will prepare all decisions concerning resolution procedure and adopt those decisions. When deliberating on the resolution of a bank or group, the executive session will also involve the members of the directly concerned Member States in the decisionmaking process. Each member, including the Chair, will have one vote. In neither session will the observers have a vote.
I think it would be good to try and learn from past errors and to attempt to put this climate of customer-bank confrontation behind us. We are ultimately all in the same boat, and we should exit this crisis together. Thank you. 4

Because my analysis suggests that recent food and oil price increases have their roots in concerns about wheat harvests in Russia and oil production in Libya and the like, I do not believe that monetary policy is the appropriate tool to respond to these disruptions. While many observers see food and energy prices rising and assume the Fed should tighten policy – raise the cost of money and credit – to head off inflation, I would suggest taking a step back and recognizing that tighter U.S. monetary policy will do nothing to stabilize Libyan oil production, reduce uncertainty about political stability in the rest of the Middle East, or increase the wheat harvest in Russia. BIS central bankers’ speeches  1  In fact, tightening monetary policy solely in response to contractionary supply shocks would likely make the impact of the shocks worse for households and businesses. To see why this is so, it is important to keep in mind how supply shocks affect the economy.1 First, supply shocks can lead to increases in food and energy prices that slow economic growth. For example, because a person’s need to drive may not be very flexible, spending on gas consumes a bigger portion of their budget. So an oil shock tends to force consumers to reduce their spending on other goods and services as they absorb higher oil costs.2 Second, while the prices of goods directly affected by the supply disruption increase, other prices in the marketplace may be unaffected – at least initially.