samchain/econo-pairs-v1 huggingface dataset:
Also, the direct exposures of U.S. banks to the countries in Europe that are facing the most intense fiscal challenges are actually quite modest. The bad news is that the exposures of the U.S. banks climb quite sharply when one also considers the exposures to the core European countries and to the overall European banking system. This means that if the crisis were to broaden further and intensify, this could put greater pressure on U.S. banks’ capital and liquidity buffers. Third, if the European situation were to deteriorate further, financial markets would likely become more stressed. This could tighten the availability of credit to U.S. households and businesses. It could also cause equity prices to fall and this would have a negative impact on Americans’ pension and 401(k) holdings. This tightening of financial conditions would damage the U.S. recovery and result in slower output growth and less job creation. At a time that U.S. unemployment is very high, this is a particularly unacceptable outcome. In the extreme, U.S. financial markets could become so impaired that this would dry up the flow of credit to households and businesses. III. U.S. dollar swaps  In terms of what actions the official sector in the United States has taken or could take with regard to Europe, I wish to emphasize that any and all such actions pursued by the Federal Reserve are motivated by the mandates Congress has given to the Federal Reserve to promote price stability and maximum sustainable employment here in the United States.

It is my opinion that we should run that risk only in the most dire of circumstances, and I presently do not see those circumstances obtaining. So much for forecasting and monetary policy. Let me now walk you through an overview of the Texas economy to set the stage for a broader discussion of what I believe continues to bedevil a lasting recovery and more efficient job creation in the United States. I will use some slides to illustrate key points. The National Bureau of Economic Research, the arbiter of when recessions begin and end, dates the onset of the Great Recession as December 2007. The economic performance of Texas since December 2007 can be summarized with the chart projected on the screen. It depicts employment growth in the 12 Federal Reserve districts. In the Eleventh Federal Reserve District – or the Dallas Fed’s district – 96 percent of economic production comes from the 25.7 million people of Texas. As you can see by the red line, we now have more people at work than we had before we felt the effects of the Great Recession. All told in 2011, Texas alone created 212,000 jobs.3  3  According to the National Bureau of Economic Research, the nation went into recession in December 2007 and came out in June 2009. According to the Dallas Fed’s Texas Index of Coincident Indicators, Texas went into the recession in August 2008 and came out in December 2009.
Aiming at a price level target may in some situations require a monetary policy that leads to a deflationary recession, which may be hard to turn due to the zero limit on nominal interest rates. In other situations it may require inflating the economy. A monetary policy leading to inflation or a deflationary recession will undermine confidence in the krone, thereby generating exchange rate instability. We also note that the present exchange rate range has more or less prevailed for more than 10 years, indicating that base drift may not represent a substantial problem in practical policymaking. How does Norges Bank operate? Forecasts of inflation and general macroeconomic development play a large role in the conduct of Norwegian monetary policy. Projections are presented in the Bank’s quarterly Inflation Reports. If the inflation forecast does not approach the level aimed at by the euro countries in 2 to 3 years for a given interest rate path, Norges Bank will consider adjusting the interest rate. In this narrow sense, one could say that the conduct of monetary policy in Norway has some similarities with “inflation forecast targeting”, in Lars Svensson’s terminology. In addition to economic forecasts, we aim to develop tools that can supplement the use of our large macroeconometric model. At the moment we are working on the construction of simple calibrated models that will be presented at this workshop. The calibrated models can be employed, for instance, to test the performance of simple indicator rules. How does the Norwegian system differ from inflation targeting?

The institutional arrangement for monetary policy in Norway does differ in some respects from that in countries with an inflation target. Some central banks with explicit inflation targets have to give an explanation to the Government or other authorities if the inflation target is not being met. Our mandate, however, refers to an exchange rate target as opposed to an inflation target. If a situation arises in which Norges Bank is not able to return the krone to its initial range, as defined in the mandate, without triggering inflation or a deflationary recession, the Bank will inform the authorities that measures other than those available to the central bank are required. One possibility could then be to recommend fiscal measures that make it possible to bring the krone exchange rate back to its initial range and stabilise it. Some observers have argued that the possibility that such situations can arise creates an uncertainty that may weaken the credibility of Norwegian monetary policy. However, Norges Bank has declared that it cannot with open eyes contribute to higher inflation or a deflationary recession. Financial market indicators show no evidence of monetary policy lacking credibility. Although the actual conduct of monetary policy is similar to inflation targeting, there are a number of institutional differences between the Norwegian system and inflation targeting regimes. BIS Review 101/2000  2  1. Norway has a long tradition of cooperation between the political authorities and the social partners.
Layard, R, Nickell, S and Mayraz, G (2008), ‘The marginal utility of income’, Journal of Public Economics, Vol. 92, pp. 1846-1857. Lipton, D (2014), ‘Fiscal Policy and Income Inequality’, speech at the Peterson Institute for International Economics. Lysenko, T, Glass, B and Six, J-M (2016), ‘QE And Economic Inequality: The U.K. Experience’, Standard & Poors Economic Research. Milanovic, B (2016), Global Inequality: A New Approach for the Age of Globalisation, Harvard University Press. Monnin, P (2017), ‘Monetary Policy, Macroprudential Regulation and Inequality’, Council on Economic Policies Discussion Note. Patinkin, D (1987), ‘Neutrality of Money’, in Eatwell, J, Milgate, M and Newman, P (eds), The New Palgrave Dictionary of Economics, Macmillan Press Ltd. Piketty, T (2014), Capital in the Twenty-First Century, Harvard University Press. Service, O et al (2014), ‘EAST – Four simple ways to apply behavioural insights’, Behavioural Insights Team. Sheffield Political Economy Research Institute (2015), ‘The UK’s ‘annual tax summaries’’, SPERI British Political Economy Brief, No. 16. Stiglitz, J (2013), The Price of Inequality, Penguin. Vermeulen, P (2016), ‘Estimating the top tail of the wealth distribution’, ECB Working Paper, No. 1907. 20  All speeches are available online at www.bankofengland.co.uk/speeches  20  Winkelmann, L and Winkelmann, R (1998), ‘Why Are the Unemployed So Unhappy? Evidence from Panel Data’, Economica, Vol. 65, No. 257, pp. 1-15. World Bank Group (2016), ‘Development Goals in an Era of Demographic Change’, Global Monitoring Report, 2015/2016.

The National Bank Romania’s experience As regards the National Bank of Romania, one key challenge to policy communication effectiveness concerns the apparent divergence between actual inflation and that perceived by the public. In a country that saw annual inflation running at 300 percent back in the 1990s and succeeded to tame prices in the single-digit zone for over more than a decade, this divergence has gradually declined. This issue has steadily been in our focus. In 2005, two years before Romania’s EU accession, the shift to a flexible inflation targeting strategy and redenomination of the local currency brought about more discipline in communication and transparency. Thus, regular media briefings  (almost every six weeks), more specialised publications, as well as educational materials, conferences and seminars, livestreams and online tools, dedicated outreach projects which put at good use our territorial network, increased social media presence with tweeting, videos, tutorials and educational games or blogging (actually, we were among the pioneers in blogging) became part of the National Bank of Romania’s standard communication practice. The diversification of instruments and audiences came in swiftly. Some steps came only recently (2016) – amid fears of misleading or misunderstanding by the general public that was yet to grasp the very essence of the banking and financial business, not to mention central bank activities –, such as publishing the summary of accounts of monetary policy meetings and the pay thresholds or even regular parliamentary presence.
How confident can we really be that the international monetary system can cope with the stresses and strains of a fast integrating global economy? Deep and liquid financial markets have made it possible to finance huge global imbalances, and may have helped to stabilise the world economy in recent years. But there must be a risk, even if it is fairly remote, that imbalances will unwind in an abrupt or disorderly way which could damage growth and push up inflation. Globalisation is raising the stakes for policymakers. Closer collaboration should help them to take better informed decisions. It can deepen their understanding of the impact of global developments and policy spillovers, and give them insights into the likely responses of other policy-makers to different scenarios. In a more closely integrated world economy, there is a greater shared interest in identifying the risks to international monetary stability and in discussing the policy responses that might help to mitigate them. The Fund and international monetary co-operation – the issues But even if we accept the case for intensified international monetary collaboration in today’s highly inter-connected world, does the Fund still have a central role to play? And if so, what is it? There are two main reasons why, in my view, it does. First, there is an important role for a permanent institution as a provider of internationally consistent information, impartial expert analysis, assessment and advice.

In the early days of the crisis, we saw biased actions which led to arbitrage of negative effects. Globalization requires the financial infrastructure to be everywhere similar in shape, contents, and human and technological capacities. It should operate under similar standards and practices and have the proper flexibility to precede the financial novelties. Second, the last crisis calls for the pre-emptive and forerunning nature of supervision and legal regulations in general. I believe a regulatory framework is genuinely effective and successful when it intertwines the simplicity and transparency of a rule-based approach with the flexible and far-sighted characteristics of a principle-based approach. At any case, this is indispensable to make banks accountable, to convince the supervision inspector on the risk characteristics and on the transformation of new different on- and off-balance sheet products, before they exceed a certain threshold in terms of magnitude and exposure. The Bank of Albania is making efforts in terms of identifying the aspects that need further improvement. In this undertaking, we will take into account the similar developments in the region and broader, to preserve the market competitiveness and the convergence in supervisory practices. Third, I believe that the crisis requires the existence of an international institution which should guide the financial stability, assess the systemic risk and determine the quantitative indicators measuring it. In this process, it is important that the regulatory norms be transparent to everyone.
The introduction of the Act did, though, formalise some of the basic supervisory activities carried out by the Bank as well as introduce some new conditions, not least the requirement for the Bank to authorise deposit-takers. In fact, the Bank did indeed withdraw licences and wind up deposit-takers on at least two 22  occasions following the Act’s introduction . In addition, there was an increased focus on the fitness and propriety of individuals running the banks, and an acknowledgement that “this emphasis on qualitative assessment has been born of experience, as 23  management problems and inadequacies have typically provided the first sign of difficulty” . Moreover, the Bank now received and reviewed on a quarterly basis returns which included a more detailed breakdown of assets and liabilities as well as profitability. The Act also contained powers for the Bank to commission third party expertise to review aspects of a firm’s business, a commonly-used tool by the Bank in a bid to make 17  http://www.bankofengland.co.uk/education/Pages/resources/inflationtools/calculator/default.aspx Ibid, p.74 Ibid, p.96 20 Ibid, p.77 21 Ibid, p.86 22 Ibid, p.107 23 Ibid, p.104 18 19  7  All speeches are available online at www.bankofengland.co.uk/speeches  7  the most of its resources – something akin to a modern-day section-166.

It is possible to view the development in itself as a risk in that it has created new, potent instruments and possibilities for speculation. If used incorrectly or carelessly, these instruments could destabilise the financial system or in other ways lead to inconvenience. It is therefore important that both the financial agents themselves and the authorities responsible in this field closely follow developments in both theoretical and practical work and are prepared to take action if they identify risks to stability. Of course, it is another matter in this context - as in others - that the costs of new methods of control must be weighed against the risks to be managed. Regardless of the fact that there are now outstanding issues to be resolved to improve risk management, my overall conclusion is positive. The development underway with regard to identifying, measuring and managing risks provides possibilities to improve stability in the banks and other parts of the financial sector. We still have some way to go, but the work is proceeding and is presently in an intensive phase in both the financial institutions and the authorities concerned. The Riksbank intends to continue to play an active role in this work. Thank you. 4  BIS Review 10/2004
Jean-Claude Trichet: Testimony before the Committee on Economic and Monetary Affairs of the European Parliament Introductory statement by Mr Jean-Claude Trichet, President of the European Central Bank, at the European Parliament, Brussels, 14 September 2005. *  *  *  Madame la présidente, Mesdames et Messieurs les membres de la Commission économique et monétaire, j’ai l’honneur de paraître devant votre Commission aujourd’hui dans le cadre de notre dialogue régulier. À cette occasion, je voudrais rendre hommage à Wim Duisenberg, qui est décédé à la fin du mois de juillet. Le premier président de la Banque centrale européenne a apporté une contribution considérable à la construction européenne. Il a joué un rôle décisif dans la mise en place des institutions monétaires en Europe, dans le lancement réussi de la nouvelle monnaie, dans l’affirmation de la crédibilité de notre monnaie unique – l’euro – et dans l’instauration de la confiance placée en elle. Nous le regrettons profondément. Je commencerai mon intervention aujourd’hui par une évaluation de la situation économique et monétaire actuelle. Ich möchte außerdem zu aktuellen Themen der Fiskalpolitik und zu den Fortschritten im Bereich der Strukturreformen Stellung nehmen. Abschließend möchte ich die Position der EZB zu den Folgeaktivitäten hinsichtlich des EU-Aktionsplans für Finanzdienstleistungen erläutern. Economic and monetary issues At the time of my last appearance before the European Parliament in July the underlying trend in real economic growth in the euro area remained modest.

Mervyn King: Monetary policy developments Speech by Mr Mervyn King, Governor of the Bank of England, at the Lord Mayor’s Banquet for Bankers and Merchants of the City of London, Mansion House, 15 June 2011. *  *  *  My Lord Mayor, Mr Chancellor, My Lords, Ladies and Gentlemen: In recent years, I have set the Mansion House audience a numerical examination. After a pleasant dinner, you will not want to listen to more numbers. A more literary style is appropriate. So my question to you tonight is: which aspect of financial regulation is most deserving of the adjective “tragic”? The answer comes later. A year ago, we met in the wake of a major sovereign debt crisis in Greece with market nervousness about how far that might spread. Since then, this crisis of external indebtedness has consumed Ireland and now Portugal, as well as Greece. Current account imbalances in the euro area remain large, should concern us all, and will certainly affect us all. Inexorably, the world economy is adjusting from an unstable disequilibrium to a new equilibrium. Trade imbalances and the associated levels of borrowing proved unsustainable. In more biblical language, failure to tackle the imbalances during the seven years of plenty before 2007 threatens seven lean years thereafter for at least part of the world economy.
Conclusion Mr. President, this evening I have argued that while the Maltese economy is headed in the right direction – a fact that has been recently confirmed by its 33rd place in the Human Development Index –, we must look beyond the current upturn to examine structural weaknesses that are preventing the economy from exploiting its full potential, and thus from closing the income gap with our European peers. I have therefore suggested that we need to raise labour force participation, improve the quality of the work force and increase the efficiency of public spending, particularly in education. We also need to invest more, to upgrade the capital stock. Here, monetary policy is playing an important role: interest rates are at historic lows and bank credit continues to flow. The Eurosystem’s commitment to deliver price stability in the medium term is also a key factor in sustaining investor confidence and supporting economic expansion. Market mechanisms, underpinned by appropriate legal frameworks, must be allowed to work better. In general, we need to open up domestic markets to an even greater degree of competition. In addition, fiscal tightening is necessary to correct current imbalances and begin to reverse the trend increase in public debt. This objective acquires added importance in the context of population ageing. Above all, durable consolidation requires a reappraisal of the role of the state and the tightening of fiscal rules. Finally, we need to further improve the economy’s resilience to external shocks.

Nonetheless, we believe that this treatment helps to align regulatory capital more closely with the underlying risks. Procyclicality Another general concern expressed is that the New Accord’s increased sensitivity to risk will reinforce behavioral patterns in banking organizations that may increase the cost of credit precisely at times when its supply is falling, namely during downturns in the business cycle. While we are working to address this concern about procyclicality, it is not a reason to shy away from creating better risk management tools. Here, supervisors must articulate the need for banks to assess risks on the horizon. If banks fail to develop and manage to reasonable expectations about how their risk profiles may change over time, they may take on excess exposures today that they cannot administer responsibly tomorrow. At the same time, we should remember that the New Accord sets out the minimum amount of capital necessary to comply with banking regulations. All supervisors expect their banks to operate at levels above the regulatory minima, and nearly all banks manage to their economic capital needs, not to their regulatory capital requirements. So although deteriorating credit quality might drive up the minimum capital requirement, a bank should already be operating above that level, which should dampen the effects of a sudden downturn in business conditions and asset quality. Along those lines, the Committee recently agreed that banks adopting the "internal ratings based" approach to credit risk will be required under Pillar 2 to conduct meaningfully conservative credit risk stress testing.
Both CPI-All Items inflation and MAS Core Inflation forecasts for 2015 were sharply down in Jan this year, compared to Oct 2014 when we last reaffirmed our monetary policy stance •  Oil prices had fallen sharply – from $ in Oct 2014 to $ in Jan 2015 – and assessment was that prices were likely to stay low for at least a year. •  Against backdrop of modest economic growth in 2014 continuing into 2015, wage growth was weaker than anticipated and so was pass-through into prices. 24. Waiting to adjust policy in Apr would have put MAS considerably behind curve and led to excessive speculation about a policy move. •  We decided to adjust both inflation forecast and policy stance in a timely and consistent manner. 25. In Apr, MAS affirmed monetary policy stance. •  This decision surprised some market observers, who had anticipated a further easing of $ policy. We made no change to policy stance in Apr because there was no change to forecasts 26. There was no ground for another shift in policy. •  No reason to reduce slope of $ policy band further, given that core inflation was projected to pick up from Q4 onwards and economy remained close to potential. •  No reason to shift level of policy band, as we did not envisage deflation or recession. •  No reason to adjust width of policy band, which remained sufficient to accommodate volatility in foreign exchange markets.

Ravi Menon: MAS’ Annual Report 2014/15 Remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at MAS’ Annual Report 2014/15 Media Conference, Singapore, 21 July 2015. *  *  *  1. Highlight six areas. •  Economic growth – weaker than expected but not likely to deteriorate further  •  Inflation – coming in at lower half of forecast range  •  Monetary policy – considerations driving recent decisions  •  MAS’ financial performance – stable investment gains amidst volatile currency translation effects  •  Consumer initiatives – helping Singaporeans manage their finances  •  Financial centre development – broad-based growth across all segments  Economic growth Economy clearly lost some momentum in Q2 2. Real GDP contracted by 4.6% in Q2 on QoQ SAA basis  •  Trade-related industries declined, dragged down by weakness in pharmaceuticals, marine & offshore engineering, and electronics. •  Domestic-oriented industries pulled back after strong performance in Q1. But growth momentum not expected to deteriorate further in H2 3. First, global and regional economic recovery remains broadly intact – should provide support for Singapore’s outward-oriented sectors. •  US economy has regained momentum. o  o o •  PMI readings show manufacturing and services sectors expanding. Consumer spending should be buttressed by strengthening labour market. In China, picture is mixed. o  •  Contraction in Q1 largely weather-induced. Excess capacity has been weighing on production.