samchain/econo-pairs-v1 huggingface dataset:
Nor do I have any claim to originality – Milton Friedman and Anna Schwartz wrote in their monetary history of the US that the most notable feature of the revival of the US economy after 1933 was not its rapidity but its incompleteness[1]. I, and other MPC members, have also used the analogy of a bridge to describe the role of economic policy in the age of Covid, the bridge to the other side of Covid. We are still on that bridge. The rate of recovery has slowed over recent months, and that slowing is continuing. Relative to the fourth quarter of 2019, on the latest data to July, the level of GDP was 3.5% lower. That’s around one percentage point below the level consistent with the August Monetary Policy Report. There is a crucial distinction here between growth rates and levels of activity. It is inevitable in a bounce-back that the growth rate will slow as the recovery nears its end-point. It is not though inevitable – or desirable – that the previous level is not regained. Recovery in some consumer-facing services appears to have been delayed. We had seen a recovery in activities such as eating in restaurants, but activity is levelling off, notwithstanding our contribution this evening. Consistent with the impact of supply bottlenecks and disruption, construction output fell in July, and manufacturing output stalled. Surveys and the reports of the Bank’s Agents, suggest the impact of these supply-chain issues is broadening out.

Mario Draghi: Hearing at the Committee on Economic and Monetary Affairs of the European Parliament Introductory statement by Mr Mario Draghi, President of the European Central Bank, at a hearing before the Committee on Economic and Monetary Affairs of the European Parliament, Brussels, 18 February 2013. *  *  *  Madam Chair, Honourable members of the Committee on Economic and Monetary Affairs, It is a pleasure to be back here in Parliament and in front of your Committee for our regular exchange of views. We enter 2013 in a more stable financial environment than in recent years. This has been achieved through concerted reforms by governments and parliaments and decisive actions by European institutions. But considerable further efforts are needed to ensure that Europe continues emerging from the crisis, re-creates confidence among investors and citizens, and re-establishes stability and growth. This house has a key role to play in the reform agenda. I am thinking in particular of the adoption of the legislation for the Single Supervisory Mechanism. This is of crucial importance for progress towards financial union. Today, I will first review economic and monetary developments in the euro area since December. I will then address the two topics that you have selected for our discussion: the impact of a low interest rate environment; and the establishment of a Single Resolution Mechanism.
Let me now wrap up my presentation and add a few words about our current monetary policy. 5. Concluding remarks  Switzerland has a long history of political independence. At the same time the country has consistently pursued prosperity via strong integration in the world economy in general and the European economy in particular. Through this active international integration into the global economy, the country has achieved and maintained a high level of affluence. However, the notion that Switzerland is a sheltered island in the midst of a stormy sea could not be further from the truth. For a small open economy like Switzerland, the international environment is source of both opportunities and large destabilising shocks. The unavoidable discontinuation of the minimum exchange rate against the euro is a powerful example. It provoked a strong reaction on international financial markets and, as a result, the Swiss franc appreciated sharply. The significant overvaluation of our currency means that the Swiss economy, notably the sectors exposed to international competition, is currently facing strong headwinds and a number of challenges. The SNB has lowered interest rates to unprecedented levels to cushion the effects of the currency appreciation. The lowering of interest rates means that holding Swiss francs is significantly more costly than holding foreign currency. The negative interest rate is set to have a corrective effect on the Swiss franc’s valuation. Moreover, the SNB will continue to take the exchange rate situation into consideration when formulating its monetary policy.

As the ability to generate great ideas in the CEE region is limited, it seems that in the transition period the most important modernization channel in the region was through foreign direct investments. Indeed CEE became a very large recipient of FDI, with FDI stock to GDP ratio topping 40 percent in CEE-4 region. Only NIEs economies managed to attract higher FDI stock in relation to GDP and enjoy higher FDI annual inflows. 2  BIS Review 138/2007  However, in the global knowledge economy it is important to attract foreign direct investments to sectors that can become globally competitive, in particular to these sectors that export high-technology, i.e. high value added goods or services. While CEE-4 significantly improved the structure of exports, the high-tech goods account for only 12 percent of manufactured exports, which is the world worst result, lagging even behind Latin American countries. NIEs are world leaders and China is about to take over the second post from the United States. Above data suggests that in the long run low ability to generate innovation combined with low value added FDI may harm the CEE ability to improve productivity. On top of above-mentioned factors I should also add that in the last few years we have witnessed very fast growth rates of asset prices in CEE. The amount of loans granted to households increased 3.5 times since 2004 and almost 10 times since 2000.
But for system wide financial stability, we also need to think about the effects not just on individual banks, but collectively on the financial system. In this context I would like to touch briefly on four issues: procyclicality; overall capital; financial consolidation; and consistency of the capital framework for other financial intermediaries. (a)  Procyclicality  On the first I will be very brief indeed; the implications of risk sensitive capital requirements over the financial cycle is a subject which I and other commentators have raised on a number of occasions. But it is extremely relevant to a debate on systemic risk. It is a clear example of how rational and indeed prudent behaviour by individual banks – raising capital, including cutting back on credit granted if no other route is possible, in the light of perceived heightened risk – could collectively be damaging to the system. Some academics are indeed criticising the risk-sensitive capital requirements that we already have for market risk, on similar grounds. In the Asian crisis, for example, VaR measures of market risk, and their associated capital requirements, increased extremely sharply, leading banks to enforce loss limits which in turn exacerbated price falls. But I am not aware that anyone is suggesting that risk insensitive capital measures are the answer – they are associated with much more obvious and damaging pitfalls. Rather we need to ensure that, in so far as we can, we avoid sudden perceptions of changed risk.

Bandid Nijathaworn: Meeting security and risk challenges in the finance and infrastructure sectors Opening address by Dr Bandid Nijathaworn, Deputy Governor of the Bank of Thailand, at the seminar on “Meeting Security and Risk Challenges in the Finance and Infrastructure Sectors”, Bangkok, 11 February 2008. *  *  *  Distinguished guests Ladies and gentlemen, It is a great pleasure to be here this morning, to give this opening remark for the seminar on “Meeting Security and Risk Challenges in the Finance and Infrastructure Sectors”. And those of you who come from abroad to join the seminar, let me also welcome you to Bangkok. Today, risk management and security concern are important management issues for all businesses, as companies increasingly operate in an evolving global environment of rapid technological change and innovation. Great advance in information technology has brought about radical changes in the way modern businesses are conducted and managed, and in the way new products and delivery channels are created. Yet while these changes have imparted important benefits to businesses in terms of profitability and efficiency, they also pose greater challenge in terms of the risk exposure and the management of risks. In this regard, I think financial services and banking is of no exception. It is one industry that continues to face this important challenge. Banking business, basically, is about risk-taking, managing risk and profiting from risk.
This also means that the flattening of the US yield curve is unlikely to signal a looming recession, as it may have done in previous business cycles. The question, then, is what has caused the US term premium to fall to such an extent since the start of last year. In answering this question, I will distinguish between two broad factors. The first relates to international portfolio rebalancing considerations and the second to investors’ views of the risks surrounding the medium to long-term inflation outlook. International capital flows and long-term yields I have already examined the first factor in other speeches.3 Today I would like to shed some more light on the direction and extent of cross-border spillovers that might currently contribute to keeping long-term yields compressed. To recall, from mid-2014 onwards we observed a striking turnaround in capital flows in the euro area from net inflows to net outflows, just when the ECB had announced its first credit easing package and when expectations were gradually growing among market participants that we would also soon begin purchasing government bonds. You can see this on my next slide. Since then, capital outflows have remained substantial, peaking at nearly 5% of euro area GDP. What has happened is that bond investors, both inside and outside the euro area, have 2/7  BIS central bankers' speeches  rebalanced their portfolios, moving out of euro area debt securities and into the closest substitutes – bonds issued by the safest sovereigns outside the euro area.

I take this opportunity to point out that the Bank of Albania’s efforts to keep inflation in check and anchor inflationary expectations, as well as its regulatory and supervisory measures to guarantee financial system stability managed to reduce shock-buffering costs and prevented undesirable consequences. Second, as regards the economy’s expected performance in the medium and long run, the conclusion reached after the two-week long consultations was that the Albanian economy is expected to remain in positive territory of economic growth. However, growth rates will clearly depend on the resurgence of the domestic demand, which is suffering from insecurity related to national and international developments. Consumption and investments continue to suffer from added prudence by economic agents, while financial conditions and banking system capacity to credit the economy are improved. Furthermore, higher inflation rates, noted during the first months of 2011, are expected to drop in the upcoming period. This reveals the foreign origin of shocks that have led to increased prices and reflects internal economic and financial conditions as well as our monetary policy. The joint examination of the Albanian economy found that the fiscal and external sectors are the two main ones that would require our attention and our work in the future. The Bank of Albania has long held that public finances’ long-term stability is a precondition for sustainable economic growth. The daily world press illustrates channels through which indicators such as budget deficit and public debt affect financial markets and in turn the real economy.
Jacqueline Loh: Talent development in the financial sector Keynote address by Ms Jacqueline Loh, Deputy Managing Director of the Monetary Authority of Singapore, at the Financial Women’s Association’s International Women’s Day Celebration, Singapore, 8 March 2016. *  *  *  Ladies and gentlemen, 1. Good afternoon. Thank you for the opportunity to celebrate International Women’s Day with you. 2. As a part of the leadership team in MAS overseeing manpower issues for the financial sector, the topic of talent development and continuing professional development is something that is close to my heart. I am very heartened by the Financial Women’s Association’s cause to promote and advance the standard of professionalism, especially of women, in the financial services industry. Your passion in the work that you do is truly inspiring, and I believe many women in the industry greatly appreciate the opportunity which FWA provides – like what your President Catherine Low said- “a platform that successfully educates, edifies, and encourages, allowing members to not only “take” but also “give”, through FWA’s mentorship programs and charity activities”. Gender parity 3. McKinsey Global Institute’s 2015 study on “The Power of Parity” estimated that advancing women’s equality can add $ trillion USD to growth worldwide. Our region (East and Southeast Asia, excluding China) alone stands to gain $ in incremental GDP. Within this region, Singapore is the fastest improving country – we are notably closing the gender gap in labour participation at a rate of 1.1 percentage points a year. 4.

The Singapore Diversity Action Committee found that the SGX-listed companies saw 10.2% of board seats held by women in 2015, a notable increase from 7.6% in the previous year; with large companies leading the growth. However, if we compare to other centres like the UK and Hong Kong, the women’s representation on boards is 26.1% and a slightly higher 11.5% respectively. 5. The FWA Gender Survey, results for which will be discussed in depth later, corroborates these findings. While we are heartened that the women participation numbers are healthy at the lower levels, we need to remain focused on encouraging the contribution of women at all levels, and especially at the more senior positions. 6. Singapore’s greatest asset is its people, and developing talent must be a top priority. In MAS, we place great emphasis on talent development, progression and retention in the industry. You may know that we have recently formed the Financial Sector Tripartite Committee (FSTC), which I co-chair with Mr Patrick Tay, Assistant Secretary-General, National Trades Union Congress (NTUC). FSTC brings together the industry associations, government and labour movement, to foster a financial sector workforce that is versatile and well-equipped to seize the opportunities and adapt to the changing needs of the financial services industry. Our overall objective is to build a financial sector that not only reinforces Singapore’s position as a major international financial centre, but most importantly, one that provides good jobs for Singaporeans. 7. Allow me to elaborate on our approach. 8.
By contrast, in the case of a public sector deficit, the investor's confidence is based not so much on any knowledge about the rate of return, if any, from the expenditure to which the funds are destined, as on faith in the government's ultimate ability to raise money through taxation, if necessary, at some future date in order to service its borrowings. Such a prospect of higher taxation might, among other things, serve as a dampener on financial confidence. •  Third, there may be a fear that public sector borrowing will crowd out worthy corporate sector borrowing from the financial markets, to the detriment of the economy as a whole, although to the extent that a public sector deficit has its counterpart in a corporate sector surplus (or reduced deficit), the corporate sector’s borrowing requirement will anyway have been reduced. •  Fourth, in some cases a public sector deficit may be financed by a reduction in net foreign currency assets. For instance, the government may resort to foreign borrowing because the local financial market is not mature enough to supply the funding. Or, exceptionally, as in the case of Hong Kong, the government may raise the funds by running down accumulated foreign currency investments. The respective build-up of foreign currency liabilities or reduction in foreign reserves may raise concerns in the context of net national wealth, national economic security, credit ratings, and so on. Moreover, foreign currency borrowing exposes the government to financial loss in local currency terms should the currency depreciate.

According to the World Development Report of the United Nations, of the world’s 6 billion people, 2.8 billion (almost half) live on less than two dollars a day, and 1.2 billion (a fifth) live on less than a dollar a day. Also, the average income in the richest 20 countries is 37 times the average in the poorest 20, a gap that has doubled in the past 40 years. Hence, the distribution of global gains is extraordinarily unequal. Worldwide inequality persists even on the socio-human front. Although in general, human conditions have improved more in the past century than in the entirety of previous history, particularly in health and technological capabilities, several inequalities still exist. For example, in the poorest countries, only 4 out of 5 children live to celebrate their fifth birthdays, while in rich countries this ratio is over 99 per cent. While in rich countries fewer than 5 per cent of all children under five are malnourished, in poor countries as many as 50 per cent are. Hence, there is a huge imbalance and inequality in distribution of socio-economic gains as well. In this context, it is also heartening to note that strategies of reducing poverty have evolved over the past several decades in response to broadened understanding and rethinking of the complexity of development. As we are aware, in the 1950s and 60s, many economic and political planners viewed large investments in physical capital and infrastructure as the primary means of development.
Besides dealing with short-term volatilities, another related challenge that has come with the reality of QE tapering is maintaining strong economic outlook. Specifically, recent data seem to suggest that signs of economic softness that are reflected in, for instance, deteriorations in the current account performance and weak public finances, are likely to amplify the probability of abrupt flow reversals. That is, the remaining pool of funds seems to differentiate between their investment destinations based more on fundamentals, as is exemplified in the recent episodes of substantial outflows in some of the “Fragile Five” countries. BIS central bankers’ speeches  1  6. When looked at from this fundamentals perspective, Thailand’s recent economic slowdown and political setback definitely come to mind as another growing concern. Particularly, manufacturing production and private spending have already shown signs of moderation in the midst of political uncertainty and poor economic outlook. This, combined with the likely additional delay in public spending, could have further dampening effects on growth. Moreover, should the current political situation persist, prolonged political instability will certainly have dire consequences firstly on the tourism industry but also eventually on our ability to maintain and attract the FDI flows. The country’s higher credit default swap, if left unchecked, could lead to higher funding costs in the financial markets and certainly constitutes another challenge going forward. I do hope, however, that political uncertainty will be a short-term factor and that political stability will be achieved again once agreements are reached among the different groups in the society. 7.

The first of these is the launch of the code of conduct for FX dealers by the end of this quarter. On behalf of the Bank, I would like to thank everyone involved, especially the ACI, for your considerations and suggestions that have made this long-term project a feasible one. I hope that the code of conduct will help guide fair and ethical market practices and increase confidence among the market participants for many years to come. 10. Another development is in the area of market reference rate reform. The transaction-based valuations to the benchmark calculations for the Thai Baht implied interest rates (THBFIX) will be introduced in the second half of this year, in place of the current survey-based model. The change is in line with the approach adopted by many other countries to reduce the risk of rate manipulation that has become the subject of vast discussions over the past few years. With these reform efforts underway, I hope the Thai financial markets will continue to inspire confidence among the market participants and allow us to move through these uncertain times with minimum disruptions. 11. Ladies and gentlemen, without further delay, let me conclude by congratulating the winners of the FX awards once again. I would also like to reiterate my thanks to Thomson Reuters for the invitation as well as for your continuing support as an important facilitator and information provider in the Thai financial markets.
At an international level the Financial Stability Board has commenced a holistic review of resilience in the non-bank financial intermediation sector in light of the Covid-19 shock, due to be delivered to the G20 summit in November. The Bank and FCA are actively participating in the FSB’s review. 11  7  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  7  will remain low for some time (Figure 9). But for me, the key point to emphasise is that our current guidance reflects the ongoing uncertainties and means that the burden of proof for any future tightening is high. One other point I want to make on forward guidance is that I see it as particularly valuable in reinforcing the effects of other tools. In general I think it makes sense to think of different monetary policy tools as complements rather than substitutes. And that is particularly true of forward guidance. It can serve to enhance the impact of individual policy actions by clarifying policy maker intentions, and can link separate policy actions together into a coherent package – in the words of the BIS Committee on the Global Financial System, providing “connecting material” and “giving meaning”. That is consistent with how the MPC have used it in the past and in its current incarnation. c. Negative rates – in the toolbox The final tool that I want to cover today is Bank Rate, and specifically the question of whether Bank Rate could go negative.

One natural question raised by that episode, though, is whether the need for such a large scale intervention could be avoided by addressing the structural causes of the “dash for cash”, and if not whether central banks should have facilities to provide the necessary liquidity to the financial system more efficiently. Those are topics that I don’t have time to get into in detail today but they are hugely important questions for central banks and ones with which the FPC is actively engaging.12 In the meantime the MPC has made clear that it stands ready to respond to any re-emergence of market dysfunction, and so avoid any associated tightening in monetary and financial conditions, as appropriate. b. Forward guidance – a high bar to tightening The second tool I want to consider is forward guidance – in other words future commitments on interest rates and other policy tools. Like QE, forward guidance is a tool the MPC had used several times before this crisis. In its 2013 review of the MPC remit, HM Treasury explicitly clarified that the Committee had the ability to deploy forward guidance as a policy tool, including where appropriate making it conditional on future developments.