samchain/econo-pairs-v1 huggingface dataset:
Sensing his options will improve in future, and rather than switching spending to some other, imperfect substitute today, he’ll instead want to shift it to tomorrow. Spending on these other things would probably still go up, but by less than the decline in the taxed activity. Aggregate consumption would therefore decline. The way to understand this is to recognise that the amount you save involves a decision about how to allocate your spending over time. And for that decision to change, the future has to look different in some way from the present. Unless it affects your income, a permanent change in relative prices won’t do much to overall spending. Temporary changes, which shift the relative attractiveness of spending at different points in time, can have much more powerful effects. 6  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  6  The cut in VAT in late 2008, for example, enacted at the height of the financial crisis, was by design in place for only a year. It improved households’ real incomes and therefore their capacity to spend. But the more important thing was that it was an explicitly temporary policy. If you know something’s going to cost more in future there’s an added incentive to buy it now. The same is true of the various policies designed to boost spending in 2020: the VAT cut for the hospitality sector, the “Eat Out to Help Out” scheme and the reduction in Stamp Duty.

Normally these things carry on uninterrupted during recessions: output of public services is in general less volatile than private-sector output (Chart 3). But on this occasion, sweeping all before it, the pandemic curtailed many of these more standard activities, even after the full lockdown was ended in the summer. In the third quarter of this year, for example, real healthcare output – as estimated by the ONS – was still more than 20% lower than in 2019Q3. Taken together, measured declines in measured health and education output accounted for a quarter of the near-9% drop in aggregate GDP during the course of that year. Note that there’s been no decline in nominal spending on public services, or the collective incomes of people who work in them. Employment in public services has continued to rise and so have average wages. It’s just that, at least as measured in the national accounts, productivity in that sector has declined and the implicit price of those services – the so-called “deflator” – has risen. The result is an additional wedge, relative to any normal downturn, between (measured) real GDP and household incomes. Chart 3: Drop in GDP partly reflects a steep fall  Chart 4: Households protected from fall in  in measured output of public services. This has  national income  no impact on household incomes  Sources: ONS and Bank calculations. Sources: ONS and Bank calculations.
The Code’s content reflects good practices where clarity is needed, and applies to all wholesale market participants, including sell-side, buy-side, trading platforms and other market infrastructure. The Code incorporates the principle of proportionality, given the diverse nature of market participants. The Code is now owned and maintained by the local Foreign Exchange Committees (or FXCs), through the Global Foreign Exchange Committee (or the GFXC). The GFXC is chaired by Mr Simon Potter, Executive Vice President of the Federal Reserve Bank of New York, and has two newly appointed Co-Vice Chairs from the private sector – Mr Adrian Boehler, Global Co-Head of FX Local Markets & Commodity Derivatives at BNP Paribas, and Mr Akira Hoshino, Managing Director and Head of Global Markets Trading at MUFG Bank. FX Global Code: A Look Back 5 Since the launch of the Code, we have been fully committed to promoting adherence in our respective markets by market participants, from both sell- and buy-sides, to the Code. One year on, the GFXC has done a “stock-take” of our achievements, and I will share some of these with you today. 6 First, on awareness and commitment to the Code. On this front, the GFXC, together with the FXCs in each jurisdiction, has made good progress. A key part of the Code is the Statement of Commitment. This is a single, common basis by which each market participant can demonstrate that it commits to adhere to the Code.

And this is an important element to keep the Code relevant over time. Over the past year, the GFXC has also consulted on a particular aspect of Principle 17 on “last look”. Through that consultation process, the Code has been updated. Feedback from market participants has indicated that the consultation process in place is an appropriate one to update the Code going forward. It has also been heartening to hear feedback from many FXCs at the recent GFXC meeting that the Code is “fit for purpose”. There is also general acknowledgement that the Code provides a credible platform to further strengthen good practices and market behaviour. 2/5  BIS central bankers' speeches  9 Having looked back on our achievements over the past year, the GFXC is committed to build on the momentum to further promote the Code. 10 I will share briefly on the GFXC’s key priorities in the year ahead. FX Global Code: Looking Forward 11 First, to step up outreach efforts to the buy side. To those in the audience from the buy-side, you are important participants in the global FX market whom we will engage further. The Code is intended to promote a more transparent, liquid, fair and sustainable FX market for all FX market participants. It is not a Code for the sell-side only, nor is it for only select groups of the market. It is single Code that has relevance to all who have a stake in the global FX market.
4  BIS central bankers’ speeches  Federal Reserve’s role in financial intermediation – particularly if it were permanently in place – by expanding the Federal Reserve’s presence in short-term funding markets or potentially altering the structure and functioning of money markets in unanticipated ways. 10 These risks are likely small given the sizable level of excess reserves currently in the system, which establishes the Federal Reserve’s large footprint in money markets. However, the risks associated with offering a perfectly elastic supply of ON RRPs at a fixed rate could increase as the level of excess reserves declines over the course of normalization and an ON RRP facility becomes less important to support interest rate control. These risks inform the Committee’s desire to phase the facility out when it is no longer needed to control the federal funds rate. Indeed, money market rates should become more closely aligned with the IOER rate as the quantity of reserve balances in the system approaches greater levels of scarcity, likely reducing the need for supplementary support from an ON RRP facility. And since ON RRPs just swap one Federal Reserve liability for another – reserves for reverse repos – demand for RRPs should recede as the asset side of the Fed’s balance sheet shrinks.

European DORA regulation published at the end of 2022, whose implementing decrees are currently being drafted, will allow for a better management of cyber risk, which has been particularly significant in recent months. Page 8 of 9  France was ranked first in the fight against money laundering and terrorist financing by the FATF in its May 2022 assessment report. We must pursue our efforts to remain exemplary and play a leading role at international and European level, in particular in connection with the French bid to host the new European authority (AMLA) in in this area. As regards climate risk, despite major advances in terms of transparency and disclosure standards, the first dedicated stress tests - including the one pioneered by the ACPR - showed that preparation for physical and transitional risks could still be improved. As regards the insurance sector, EIOPA has conducted a first stress test on European supplementary occupational pension schemes. The ACPR has continued its work with insurers to prepare for the next exercise, which will take place in 2023 and whose results will be published in the first half of 2024. Lastly, and perhaps most importantly, as a number of recent episodes of market volatility have shown, non-bank finance poses an increasingly important systemic risk and needs to be better regulated, both at the microprudential and macroprudential levels, in order to control leverage and contain liquidity risk.
Jean-Claude Trichet: Completing the creation of a fully integrated European capital market Speech by Mr Jean-Claude Trichet, Governor of the Bank of France, at the Finance Foundation, Venice, 19 June 2003. *  *  *  Ladies and gentlemen, It’s a great pleasure to be here with you today. Let me start by expressing my thanks to the Finance Foundation for inviting me to speak at this conference in Venice. I would like to take this opportunity to share with you some thoughts on the creation and the completion of an integrated European capital market. One may first recall all the rewards of this march towards a truly integrated European capital market. The creation of this market is indeed the third layer of a process that began at the end of the eighties, with the Single European Act which formed the basis for the establishment of the internal single market for persons, goods, services and capital. The second layer was obviously the creation of the euro and the launch of the Monetary Union. And it is not a coincidence that the ambitious Financial Services Action Plan, which serves as the framework for conducting this integration, was launched precisely in 1999. Clearly, achieving a full integration of financial markets will allow our countries to reap the full benefits of these initial steps through a reduction in the cost of capital for businesses, a wider range of investment opportunities, an increasingly efficient allocation of capital. Ultimately, the positive contribution to economic growth can be hardly disputed.

The main reason is that the single currency has made corporate debt financing more attractive by creating a much larger home-currency investor base than it was the case for any single country of the area before EMU and encouraged international underwriting business for euro-denominated corporate bonds, driving down issuing costs. In 2002, corporate issuance represented about half of the overall bond issuance in the euro area, that is four times more than its share in 1998. In 2002, the gross issuance of eurodenominated bonds accounted for more than a third (38%) of all bond issues (US dollar issues: 47%). Not only have the size of the bond market grown, but also did its liquidity, transparency and standardisation. An increasingly competitive environment, and the development of electronic trading systems, contemporary to the launch of the euro, are among the factors that contributed to these improvements, on the secondary market for government debt initially, and increasingly nowadays on the corporate segment. In that regard, it is worth reminding the success story of the MTS group, an original Italian concept which has translated over a few years into a true pan European electronic platform for fixed-income products with offshoots throughout the continent. Developments witnessed on the short term securities market may appear somewhat uneven and less dynamic. And indeed, efforts remain to be done as regards for instance products characteristics, issuers’ information memoranda settlement practices in order for cross border activity to effectively develop and market integration to gather momentum.
Our economy is undergoing fundamental structural changes, which are expected to provide us with a robust new platform on which the nation can build up a sustainable economy to continue its drive forward. In line with the medium-term policy framework of the Government, per capita GDP is targeted to surpass USD 4,000 by 2016, entering the economy into an upper middle income category country. Further, our medium-term economic strategy projects surpassing USD 7,000 per capita level by 2020. The Governor of the Central Bank and the Secretary to the Treasury highlighted the potential of our economy to achieve this target at the “Sri Lanka Economic Summit” held in August 2014. We know that this would require greater efforts in  2  BIS central bankers’ speeches  all fronts – the Government, the Central Bank and the private sector – that would support the economy in the transition to drive through the middle income path towards the higher end of the upper middle income category. This new economic model should be able to overcome the rising “economic gravity”, which would otherwise pull the economy into the “Middle Income Trap”. With the renewed acceleration in economic growth, we need to focus our attention on the next phase of economic development beyond 2016 and transforming the economy to achieve a sustained, inclusive and balanced growth. Sri Lanka’s drive beyond 2016 will largely depend on the strength and the dynamism of the financial sector.

The plan is underpinned by a political commitment to spend only the expected real return of four per cent over the business cycle. Nevertheless, we should not underestimate the risk that extraordinary economic circumstances could turn a surplus into a deficit. The accumulation of capital in the Fund reflects the depletion of a non-renewable resource, which is exchanged for financial assets through the Fund’s investments. Sound returns on  BIS Review 68/2009  1  these investments will help us cope with future financial commitments linked to an ageing population. But at the same time as the wave of an ageing population flows towards us with its demand for public services and increased consumption, we also should ask if investments in Norway could be an alternative to those we make in international financial markets. And clearly, a good argument could be made for investing more in schools, universities and research to develop our human capital. But that should be possible in any case, given the increased spending the fiscal rule already allows for. It could also be argued that we should invest more in our domestic infrastructure, for example roads and highways. This may be important for regional reasons. But on the margin, these investments are probably not adding very much to our economic growth. To illustrate this point, the net present value of road projects in the new 10-year national investment plan is estimated at some minus NOK 20 billion after positive effects on road safety and the environment have been taken into account.
In the area of transparency, commercial banks since August this year have had to announce at the end of each month their NPL level, penalties and fines imposed by the authorities and the related lending. Public and stakeholders’ opinions are thereby used to augment the new supervision and examination process we are installing with the help of the OCC and the FDIC. In terms of bad banks, I expect that by the time I get back, or soon after I get back, the disposal of all intervened banks will be complete. In terms of bad clients, since on the afternoon I left for the Annual Meetings of the World Bank and IMF, the contract for the transfer into the government-run Asset Management Company of some 12 billion dollars of assets was signed and the Cabinet had also approved the covered asset pool arrangement for another intervened bank for a further 5 billion dollars. I expect that the NPL at the end of this year will be in the teens - a quite manageable level compared to the high of 48% at the beginning of the year. On the average, banks are now back into the positive spread, actually of 1.28% last month, which is low by traditional standards and still not profitable but still over half of the spread that we expect banks to be operating in under the new competitive and transparent conditions that we will see in the future.

The bottom-up approach used in the context of the EU-wide stress test relies on banks’ own reporting of projections based on common scenarios and gives national supervisors and the ECB an important role with regard to quality assurance. Recent research provides tentative evidence that “supervisory scrutiny” relating to quality assurance has a disciplining effect on banks’ risk-taking. [6] We also need to understand how banks will react to the policy measures that are applied to them. A dynamic micro-founded structural model of bank behaviour examines changes in capital and liquidity requirements and confirms considerable heterogeneity among banks’ reactions. [7] Moreover, our 3D model, with default modelled in the household, non-financial corporations and banking sector, has been successfully used in various policy exercises and exemplifies how cutting-edge research can help inform policy decisions. [8]  The role of macroprudential policy So what is the role of macroprudential policy in the current environment? The financial crisis showed that macroprudential policy is needed to complement supervisory scrutiny by accounting for system-wide macro-financial feedback loops. Macroprudential policy is called to act countercyclically, tightening requirements when we see excessive risk-taking and loosening them to avoid a credit crunch when risks materialise. Since the crisis, the resilience of euro area banks has improved significantly and their capital level is currently considered to be adequate. However, in addition to the level of capital, also its composition deserves appropriate consideration.
Carney (2015), ‘From Lincoln to Lothbury: Magna Carta and the Bank of England’. 6. On this point see also Feroli et al. (2017), “Language after liftoff: Fed communication away from the zero lower bound”, Research in Economics 71, 452–490; and Swanson and Williams (2014), “Measuring the effect of the zero lower bound on yields and exchange rates in the U.K. and Germany”, Journal of International Economics 92, Supplement 1, S2–S21. 7. Remember that the nominal rate of interest is the real rate plus expected inflation (πe). So the “neutral” nominal rate is something like i* = R*+πe. Broadly speaking, policy will be contractionary (expansionary) if the official interest rate is higher (lower) than i*. 8. Woodford and others have argued that QE works mostly because it signals something about future interest rates. See, for example, Woodford (2012) ‘Methods of Policy Accommodation at the Interest-Rate Lower Bound’, presented at Jackson Hole. For an overview of the transmission channels of QE see Broadbent (2017) ‘The history and future of QE’ and Bailey et al (2020) ‘The central bank balance sheet as a policy tool: past, present and future’, Bank of England Staff Working Paper No. 899. 9. There’s a formal description of the model, and how Charts 4-6 were generated, in an appendix at the back. 10. In this simple model, monetary policy affects inflation pretty much immediately. In the real world it takes time. Lags between policy and its effects are another reason why perfect stabilisation isn’t possible. 11.

Some years later, by 2012, the FOMC was indicating not only a time horizon for low rates but had added two important extra ingredients – first, the recognition that policy was “highly accommodative” and second, that it would remain so even after a fuller economic recovery had taken hold: “The Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens. [It]…currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015.” I suppose you could still quibble about how committed this language really is. But the clear dovish skew puts it more firmly in the Odyssean camp than the earlier statements. This is also the view of Del Negro and co-authors, in a 2015 paper looking at the effects of this guidance. [11] In any event, to my mind it’s hard to find guidance from other central banks that has come as close as this. If you squint a bit you could perhaps see some of the same in the ECB’s new strategy, published last autumn. The ECB said that, when rates were close to the lower bound, policy should respond “forcefully and persistently” and that “This may also imply a transitory period in which inflation is moderately above target”[12]. But this is about the ECB’s general strategy, not a particular path for policy. Even a “red”, discretionary policymaker would in practice recognise that the proximity of the lower bound can affect appropriate policy.
This is in addition to international migration, which is still high but has decreased from where it was before the crisis. This is what I see for Mexico. Structural reforms – handled judiciously, especially as U.S. economic growth accelerates and Europe recovers – can pay off in spades for the Mexican people, who deserve it many times over. While Mexico has somewhat reduced its dependence on the U.S., 80 percent of exports still go to El Norte. In a strange twist of fate, it may be helpful in the near to medium term to be exporting manufactured goods to a slowly recovering U.S. and Europe rather than maintain the last decade’s shipments of raw materials to China as in the case of Brazil. 6  BIS central bankers’ speeches  Mexico has emerged I began my talk tonight by running through the events, institutional backdrop and the thinking behind the Fed’s quantitative easing efforts. I clearly have not been onboard with all the decisions the FOMC has taken during the economic recovery. I fear that we are feeding imbalances similar to those that played a role in the run-up to the financial crisis. With its massive asset purchases, the Fed is distorting financial markets and creating incentives for managers and market players to take increasing risk, some of which may result in tears. And all this is happening in uncharted territory. We have aided creation of massive excess bank reserves without a clear plan for how to drain them when the time comes.

Institutions to Cushion the Blow and Speed the Transformation In past industrial revolutions, the actions of public, private and third party institutions have helped shrink the duration, impact and cost of the transition. It is worth reflecting on these interventions as we think about how to manage the transition to the Fourth Industrial Revolution. 25  The skills bases of workers were fundamentally transformed by a series of reforms to enabling institutions including primary, secondary and tertiary education. 26  New insurance institutions were created to support  those left behind in the transition, including unemployment insurance and universal health care. 27  And  labour market institutions – cooperatives, trades unions, and the introduction of a minimum wage and private company pensions – plugged gaps in provisions. 28,29  Throughout these periods, many employers helped create an environment in which employees could thrive. From charitable support in the First Industrial Revolution; to the Ford era of self-interested paternalism in between, and the GooglePlex, self-contained communities of today, business has shaped the welfare of many. 25  My colleague Andy Haldane has also discussed these issues. See ‘Ideas and Institutions – A Growth Story’, speech given at The Guild Society, Oxford, 23 May 2018. 26 In the UK in the late 18th and early 19th century, a mix of public, private and religious institutions – largely driven by charitable motives – brought education to children working in mills. In the second and third revolutions, the state established formal primary, secondary and tertiary education.