samchain/econo-pairs-v1 huggingface dataset:
I will confine myself today to just a few words on the third of those planks. However good the  2  BIS central bankers’ speeches  resolution instruments given to the authorities by their legislatures, and however much progress we make in tightening up cross-border co-operation, formidable obstacles to the resolution of the big global firms will persist so long as their organisational structures and practices remain so complex. Indeed, one useful way of thinking about the ICB’s recommendations on ring-fencing UK retail banking is to make it easier to apply different resolution tools to different parts of the business. Whether or not other countries adopt that approach, it will be necessary everywhere for firms to document and simplify intra-group transactions, and to ensure that IT and other services provided by one group company to another could be sustained for a period if they were separated in the course of resolution. It is striking that supervisors almost everywhere allowed such spaghetti to develop, especially given the key lesson of the BCCI saga – legislated for in the EU – of not to allowing unsupervisable structures. In the UK, the emphasis on resolvability has informed the review of banking supervision that we have been undertaking with FSA colleagues. Microprudential supervision and resolvability Traditionally, bank supervisors worked to reduce the probability of firm failure. They did so, of course, because of the costs of failure.

Conversely, the Financial Policy Committee will – and already has – drawn on briefings from the supervisors as well as the Bank’s existing staff. In other words, this is going to be about making connections, pulling together a varied range of inputs. A measure of the Bank’s success when prudential supervision transfers will be how well we knit them together. The Court of the Bank will play an important role in ensuring that the executive of the Bank delivers on this. What all this amounts to is framing microprudential regulation and supervision to deliver macroprudential objectives. Experience around the world demonstrates that it is hard to keep supervisors focused on the stability of the system as a whole. The UK’s Financial Policy Committee is designed to achieve that. By creating a new institution within the Bank of England, the government is ensuring that stability does not fall by the wayside, into the gap between monetary policy at one end of the spectrum and the regulation of firms at the other. As the Governor of the Bank said recently at the Mansion House, an important part of the FPC’s role will be to steer, to orient the work of the microsupervisors in the light of the assessment of short-term and longer-term risks to stability. That was in evidence at the FPC’s very first meeting, a fortnight ago. The Financial Policy Committee’s first decisions The decision and Record of that meeting were published last week.
At end-2008, the largest ownership interests were in British Mondi (8.7 per cent), Australian Babcock & Brown Infrastructure Group (7.8 per cent) and Finnish UPM-Kymmene (5.8 per cent). In bond markets, the largest issuers are sovereign states. The Fund will therefore normally have large holdings of government debt. The Fund’s average share of market capitalisation in fixed income markets at the end of 2008 was around ½ per cent. The Fund has a longer investment horizon than the vast majority of other market participants. The important question is therefore how sound today’s investments prove to be in the long term. The government now owns a fair share of the global business sector. This represents real value that will provide a return reflecting both global economic growth and the risk related to fluctuations in equity prices. Active ownership Active ownership has also become an important part of Norges Bank’s investment operations. The purpose is to help safeguard financial wealth for future generations by promoting good corporate governance and encouraging high ethical, social and environmental standards at investee companies. As a shareholder in almost 7 900 companies, Norges Bank has both rights and obligations in relation to these companies. Our long time horizon exposes us to developments in markets traditionally of less concern to more short-term investors. We use our position as a shareholder to address topics relating to traditional shareholder rights, such as the right to equal treatment and influence.

Jan F Qvigstad: The global economic crisis and its impact on Sovereign Wealth Funds – the example of Norway Speech by Mr Jan F Qvigstad, Deputy Governor of Norges Bank (Central Bank of Norway), at a meeting for financial sector representatives in Geneva hosted by the Royal Norwegian Embassy, Geneva, 11 May 2009. The text below may differ slightly from the actual presentation. *  *  *  Introduction Ambassador, Ladies and Gentlemen First, let me thank you for inviting me to this seminar for a discussion on the impact of the global economic crisis on sovereign wealth funds. Since I am the deputy governor of a central bank that manages one of the large sovereign wealth funds, I will use the Norwegian Government Pension Fund – Global as an example in my presentation. The financial and economic crisis What we are experiencing at this time is the deepest downturn in the world economy in the postwar period. The global economy will contract in 2009 for the first time in over 60 years. What is happening now is more than a normal fluctuation in the business cycle. The world is facing a crisis of confidence, with faltering faith in the future and a loss of confidence in banks, counterparties and contractual partners. The first signs of an emerging crisis in financial markets came into evidence already in early 2007, when several financial institutions in the US came under stress.
I think it is highly probable that the following situations will emerge: (1)  The more a country is indebted, the more deleveraging it has to undergo. It is inevitable that economic growth and employment will be weak and the living standards in some places where the problem is more serious may even deteriorate. (2)  Some advanced and many emerging economies do not need to bear the pain of deleveraging due to their low level of debt. However, as other advanced economies have to undergo deleveraging, it will not be possible to go back to the “good old days” with everybody enjoying a prosperous economic development. Countries around the world will have to strive to enhance their productivity and competitiveness so as to capture a bigger share in the international trade arena where growth has slowed down. More importantly, major emerging economies, such as China, India, Brazil and Russia, would have to try their best to expand domestic demand and carry out reforms to improve productivity, so as to reduce their reliance on exports to the advanced economies and to achieve slower, yet more balanced and sustainable economic growth. Another question we would like to ask is: what will the global asset market be heading? I wish I have a crystal ball. All I can do is to make some assumptions and analyse different possibilities. (1)  The first possibility builds on the assumption that the process of global deleveraging is not affected by quantitative easing.

Asia is at a different starting point from Europe – millions of people still do not have access to electricity. Fossil fuels are still the cheapest way to generate energy in many parts of Asia. Yet, there is scope for energy-efficient technologies and renewable energy solutions. Asia’s transition to sustainability will be progressive – through deeper shades of green. Let me describe three ways in which Singapore aims to support Asia’s transition towards greater sustainability: Asian Carbon Credit Market Green Finance Action Plan Green FinTech  Asian Carbon Credit Market Given Asia’s continued dependence on fossil fuels, an Asian carbon credit market must be part of the strategy to achieve both development and sustainability in Asia. Carbon credits are increasingly seen as a complement to firms’ de-carbonisation efforts. 6 / 10  BIS central bankers' speeches  Global demand for voluntary carbon credits is expected to grow 10 times over the next 10 years, from 100 million tonnes of CO2 equivalent in 2019 to over 1 billion tonnes in 2030. But today, carbon credit markets are fragmented, liquidity is thin, and carbon prices vary across markets. We need global coordination to scale up the voluntary carbon credits markets. We need more high-quality carbon credits and more trading of such credits across borders to drive convergence towards a global price on carbon. We need to put in place infrastructure and data connectivity to ensure environmental integrity and avoid double counting of credits.
15  For a description of Ramses, see Adolfson et al. (2013). 16  A corresponding analysis of the expected consequences of holding the repo rate unchanged at 0.25 per cent since July 2010 is presented in Svensson (2013b). According to this analysis, CPIF inflation would have been around one percentage point higher than it actually was at the beginning of 2013. BIS central bankers’ speeches  9  Figure 5. Alternative scenario for CPIF inflation and unemployment Annual percentage change and percentage of labour force, seasonally-adjusted data 3  9  CPIF, lower repo rate 2013, (left scale) CPIF, main scenario, (left scale) Unemployment, lower repo rate 2013, (right scale) Unemployment, main scenario, (right scale)  2  8  1  7  0  6 12  13  14  15  16  17  Note. The experiment with a lower repo rate in 2013 assumes a repo rate cut from 1 per cent to 0.75 per cent at the monetary policy meeting in February 2013 and a repo-rate path that from December 2013 follows the path published in December 2013 and again in February 2014. Sources: Statistics Sweden and the Riksbank  The analysis can also be applied to unemployment. We see then that a repo rate 0.25 percentage points lower would have entailed somewhat lower unemployment now. The effect on unemployment is a clear economic cost of a monetary policy that leans against the wind.

The ongoing rigidity in prices of the services group and the volatilities in prices of agricultural products due to weather conditions are being closely monitored for the achievability of inflation targets. After dwelling on the latest developments in inflation and the interest rate policy of our bank, I would like to present the general outlook of the floating exchange rate regime and the exchange rate policy. The floating exchange rate regime applied under formal inflation targeting is the main element of our policies as it has been during the past five years. When the legal framework for setting the exchange rate regime is analyzed, we see that the exchange rate regime is set with the Government, while the design and application of the exchange rate policy to be conducted in the framework of the regime is under the authority and responsibility of the Central Bank. The essence of the floating exchange rate regime is that the value of the Turkish lira against foreign currencies is formed under market conditions and according to developments in supply and demand conditions. In this respect, the Central Bank conducts two kinds of transactions in markets: Firstly, the Central Bank purchases foreign exchange to build up reserves. These purchases are made via FX purchase auctions. In 2006, the daily purchase amount for these auctions including options is USD 60 million. These auctions were suspended on May 16, 2006 due to market conditions and the decline in FX supply. When the conditions for these auctions mature, they will be resumed.
Difference rules thereby avoid introducing the policy mis-calibration and resulting noise that stems from using poorly estimated or mis-specified R- and Y-star measures.23  10  All speeches are available online at www.bankofengland.co.uk/news/speeches  10  I will explore briefly this idea in a narrower setting using a version of a model built by my colleagues Rich Harrison, Martin Seneca and Matt Waldron (a sketch of which is provided in the Annex). Essentially, this is a canonical three equation new Keynesian macroeconomic model estimated for the UK, with a few additional features to ensure more realistic persistence in inflation and output. Although estimated, I would emphasise that this is a stylised representation of the UK economy – I am using it for illustrative purposes, rather than to foreshadow any specific policy decision. In the background of the model are ‘cost-push’ shocks that introduce a difficult trade-off between inflation volatility around target and output gap volatility, which monetary policymakers seek to manage by varying the policy rate. My focus here is on the treatment by monetary policy of shocks to the R- and Y-star concepts embodied in this model. One can think of these as risk premium and productivity shocks. The crucial feature is that shocks to these starred variables have two components: one temporary, the other persistent. Neither policymakers nor households and firms can observe these shocks in real time. Rather, they have to learn about the persistence of the driving shocks over time on the basis of how the observed data evolve.

The lessons we derived from this experience will lead global decision makers to reconsider their policies. We have already started to observe critical and permanent changes in global financial order. The future of the financial system will be in a much better shape with a pre-emptive approach. The coordination is especially needed in terms of better regulation and supervision of financial market instruments. In order for the mission of the COMCEC and thus of the Organization of the Islamic Conference to be successful, it is necessary for the decision making mechanisms to acquire a more active and global dimension. The success of the economy policies of the Islamic counties under the roof of the COMCEC depends on the formation of measures to increase trust and establishment of a close cooperation in economic and commercial areas. Annual meetings of the Governors of the Central Banks of the COMCEC countries will be very important in terms of catching up with the world’s agenda and following the recent developments. Economic activities of the related countries will be supported the most by increasing the cooperation between the central banks of the COMCEC countries, enhancing the functioning of the active mechanisms of communication in international platforms and sharing the experiences. The recovery of the economies of the Islamic countries will be fastened by increasing the exchange of information in the fields of economy, finance and banking among the member and observer countries’ central banks and financial authorities.
On this front, we are happy to see that RMB lending business is developing progressively, with outstanding RMB loans reaching 60 billion yuan at end-July 2012, nearly four times the level of a year ago. So, is the wider use of RMB a continuing trend? Well, I would say the scope for further development is clear, and it will be very much up to how corporates and banks can get more engaged in the new business of RMB. Third question: does the development of offshore RMB business in other financial centres pose a threat to Hong Kong? This question, I have to say, suffers from the fallacy of “zero-sum” thinking. As more corporates and investors worldwide are becoming interested in conducting their business transactions and investments in RMB, it is natural to see financial institutions in different parts of the world providing RMB services to meet the demand of their customers. This does not necessarily mean that RMB businesses are being diverted to other places. BIS central bankers’ speeches  3  Indeed, such developments will mean that banks in Hong Kong will not be dealing only with each other locally, and there will be new business opportunities to conduct RMB businesses with counterparts overseas. For instance, as a global hub for RMB liquidity and financing, Hong Kong is well placed to channel customer and wholesale RMB deposits towards corporations and financial institutions in other parts of the world. In fact, we are already seeing such a trend.

At the bottom of the chain are service providers such as fund administrators, custodian banks and dealer brokers. They provide services to the asset managers. Therefore, asset allocation decisions by end-investors, either institutional or private wealth owners, have a knock-on impact throughout the rest of the asset management value-chain. Currently, the portfolios of asset owners in the advanced economies are still significantly underexposed to emerging markets. For example, at present, a typical US pension fund has just 6% of their investment exposure in emerging markets. Not surprisingly, given the economic challenges facing the advanced economies outlined earlier and the growth opportunities in Asia, there is growing interest from these end-investors in increasing their investment exposure to Asia, rather than relying on investing in fixed income products of the developed economies as they have in the past. This change in allocation preference towards Asia will generate significant demand for asset and wealth management services that Hong Kong’s financial institutions are well placed to provide. But the immediate question is: are we in Hong Kong ready to meet this growing demand? Well, we do start with a number of strengths and advantages. As Asia’s premier asset management centre, Hong Kong is the largest hub for Asian hedge funds and the second largest hub for private equity in Asia, only slightly trailing Mainland China. Hong Kong’s private banking platform offers unparalleled access to the growing wealth pool in Mainland China and across Asia.
While there is a familiar ring to parts of this sorry tale, you can be comforted that our job at the Bank of England is to protect the value of the new Jane Austen note. In fact, maintaining confidence in our currency is the fundamental responsibility of your central bank. That extends to maintaining its value, protecting against counterfeiting, and also ensuring that the choice of character on the notes commands respect and legitimacy. The Bank of England has, through its banknotes, a unique and rare opportunity to promote awareness of Britain’s history and to acknowledge the life and work of its greatest citizens. After the announcement of the Churchill note concerns were expressed that – in the absence of any other changes to the Bank of England’s notes – none of the four characters on our notes would be a woman. That was not the Bank’s intention; we have listened and we fully understand the concerns raised by many people, including some whom I am delighted to see here today. We believe that our notes should celebrate the full diversity of great British historical figures and their contributions in a wide range of fields. The Bank is committed to that objective, and we want people to have confidence in our commitment to diversity. That is why I am today announcing a review of the selection process for future banknote characters.

In view of such initiatives, with a worldwide and immediate scope, you will agree with me that international coordination is not an option but an obligation. 3/3
1  For an excellent summary, see Vincent, N (2012), Magna Carta: a very short introduction, Oxford University Press. 2  His allies were finally defeated in 1214 at the Battle of Bouvines, which ended the 1202–1214 Anglo-French War. 3  This would have been bad enough on its own. What was even worse was that it had come only five years after the collection of the “Saladin Tithe”, a windfall tax of a similar amount, in order to pay for a campaign to wrestle Jerusalem out of the hands of Salahuddin Ayubi, who had captured it in 1187. That cost the barons one-tenth of all their revenues and movable property. 4  Latimer (2001) suggests that the inflation was concentrated in the first six years or so of the thirteenth century. See Latimer, P (2001), “The English inflation of 1180–1220 reconsidered”, Past and Present, No. 171, pages 3–29. 2  BIS central bankers’ speeches  In fairness to the monarchy, there was not an enormous amount that could be done about this. There was obviously no CPI(H) to which the leasehold rents could be indexed. The UK’s statistical challenges have a long history. The preferred way of hedging the risk was to kick the leaseholders off the land, and bring it into direct demesne management. 5 This is what the barons themselves had been doing with their own land holdings.

They characterise Magna Carta as a pragmatic political document that was a product of its time, including the difficult economic circumstances that then prevailed. As usual with historical arguments, the answer lies somewhere in between. In what follows, I will spend a few moments on the pragmatic element not only because it plays to my comparative advantage as an economist but also because it ultimately underscores the foundational character of the document itself. The enduring legacy of Magna Carta is how its strictures on unconstrained power are reflected in our systems of political and economic governance. I will conclude that both the constitutional and pragmatic perspectives are relevant to modern central banking and the current conduct of monetary policy. Specifically, the costs of inflation were among the key economic catalysts of Magna Carta, and its core constitutional legacy – namely the importance of delegated authority, with clear lines of public accountability – is at the heart of the Bank of England’s institutional arrangements. In the spirit of Magna Carta, the Bank of England has been given a great responsibility: to deliver monetary stability for the good of the people of the United Kingdom. Our goal, the 2 per cent inflation target, is set by the Government, and we operate under constrained discretion in its pursuit. 1. The economic and political context  Where did Magna Carta come from?