samchain/econo-pairs-v1 huggingface dataset:
Slowly but surely, that is beginning to change. Central bank’s external communications are being reoriented towards a wider, non-specialist audience. Let me give a couple of examples. The first is so-called “forward guidance” about monetary policy. 45  How you judge its success hinges crucially  on what you consider to have been its objective and audience. If you are a financial market participant whose job it is to price the future path of interest rates, the most useful type of policy guidance is precise and time-specific. By contrast, if you are a company or household considering whether to spend, a general idea of the direction and destination of interest rates is likely to be sufficient. The critics of forward guidance have tended to be financial market participants for whom it lacks sufficient precision and time-specificity. But forward guidance simply cannot be that precise; it depends on the path of the economy. And pricing interest rates in financial markets was not the main purpose of forward guidance in the first place. Its purpose was to support spending in the economy by households and companies. That calls for shorter and simpler guidance, focussed on the broad direction and destination of interest rates. The MPC first used the words “limited and gradual” in 2014 when describing the likely future course of interest rates rises. It was short and simple – three little words. It was guidance aimed squarely at households and companies, offering them an indication (but no promise) of the broad direction and destination of interest rates.

The deliberative model has not been tried and tested in anger for the full gamut of societal decisions. As put, that is true. Yet there is at least one domain of public policy where this model has been tried and tested (both literally and metaphorically) for a wide range of societal decisions over many centuries: the judicial system. Many judicial systems draw on both expert (judges) and non-expert (juries) opinion, like the Athenians. Non-experts are drawn randomly from the population, as in Athens. There is a clear process for deliberation among participants, as in the boule. This system is the nerve-centre of decision-making on a defined set of issues, as in Ancient Greece. The English judicial system has already lasted for almost 1,000 years, more than twice as long as the Greek Empire. The Next Revolution  Against this backdrop, what concrete steps might central banks take to build an improved infrastructure for engagement with the general public? Can it build on others’ experience in engaging wider society, in ways which improve the public’s and policymakers’ understanding of the economy? Let me offer some suggestions, which are motivated by recent initiatives at the Bank of England aimed at doing just that. 19  All speeches are available online at www.bankofengland.co.uk/speeches  19  (a)  Minding Your Language  Historically, the language of central banks has often been pitched at a level which has made it difficult for most non-experts to understand. This has contributed to the public’s understanding and trust deficits.
Noteworthy papers include Acemoglu (2002), Acemoglu, Gancia and Zilibotti (2015) and Caselli and Coleman II (2006). 32 Comin and Mestieri (2013). Filippetti and Archibugi (2011) also discuss innovation across countries. 33 Comin and Mestieri (2013). 34 Haldane (2017), Comin and Mestieri (2013). 9  All speeches are available online at www.bankofengland.co.uk/speeches  9  Globalisation has meant that ideas and innovations are indeed spreading more rapidly and more widely than perhaps ever previously. But for later-adopters of these technologies, they are spread thinly. And despite thickening over time, penetration of these technologies among later-adopters never appears to catch up. Nor, then, do levels of productivity and living standards. If that is true across countries, might it also be true within countries? Do the differing dimensions of technology transfer help explain the slowing rates of diffusion from frontier companies to the long tail? There is no ideal economy-wide measure of diffusion and patterns differ technology by technology. Nonetheless, it is possible to build up a reasonable picture by looking at transfer patterns among some specific technologies. Looking first at adoption rates, on the face of it the UK fares reasonably well looking across a range of technologies. Firms with internet access and a website are high in the UK by international comparison. Chart 14 looks at the number of UK firms adopting five basic ICT technologies (computer, internet, website, e-purchases and e-sales) on three dates (2002, 2007, 2015). There has been a clear and significant rightwards shift over time in this distribution, consistent with increasing adoption.

Estimated GVA (EBIT + employee costs) is regressed on a range of variables to control for sub-sector and number of employees using a Weighted Least Squares method (with employee numbers as the weighting). The output of this regression is used to compute an expected productivity, representing the average for a firm of that size in that sub-sector. The residual for each firm is plotted as a percentage of the median productivity for a firm in the same size bracket in the same sub-sector.
While some of the innovations were still aimed at depository institutions, most of the facilities introduced were intended to address liquidity pressures at sets of firms in various financial markets, including primary dealers, money market mutual funds, commercial paper issuers and holders of asset-backed securities. In the end, these facilities effectively backstopped many of the different components of the shadow banking system. The efforts to ensure that the system had adequate liquidity also involved other government programs, such as the Federal Deposit Insurance Corporation’s (FDIC) debt guarantee and  4  BIS Review 40/2010  the U.S. Treasury Department’s money market guarantee. Those programs in effect broadened the insurance provided by the FDIC on bank deposits to other liabilities in the banking and shadow-banking systems. The combination of the liquidity and guarantee programs was instrumental in stabilizing the financial system. It is also worth noting that the demand for dollar funding proved to be global in nature, as financial institutions around the world faced an elevated need for dollar funding in response to market stress. This need was met by the liquidity swap lines that the Federal Reserve set up with fourteen central banks around the world. These swap lines provided dollar funding to foreign central banks so that they could inject dollar funding into their own markets, in order to address the funding demands of institutions operating during their market hours.

There is therefore a common feature of banking and insurance in terms of continuity of access to critical financial services. The PRA has the general objective of ensuring the safety and soundness of the firms under its regulation. Safety and soundness is defined in terms of the resilience of the financial system, which in itself is closely linked to the access of users to critical financial services on a continuous basis. But for insurance we have a second objective, namely the protection of policyholders. Why do we have a second objective for insurance? For me, the reason is that continuity of insurance protection – of risk transfer and long-term savings products – requires a greater assurance that the policyholder has access to their contract – in other words, it is quite contract specific, and in some cases those contracts are long-term in nature. For banks, depositors want continuity of access to funds, but they have less need of access to the exact contract – deposits can be moved. Put another way, most of the underlying risks to banks arise from their assets, whereas for insurers they arise from liabilities and assets. So, we need somewhat different objectives for prudential supervision. The traditional model of supervision has been quite industry specific. The FSA regime introduced in 1997 created a single authority, but within the FSA the framework of rules  BIS central bankers’ speeches  1  applied to insurance supervision was unique to the industry.
The outcome is obviously the major uncertainty surrounding the global economic prospect, and policymakers elsewhere can only monitor, continuously and very closely, the emerging evidence and react to that in the light of its likely impact on their own situation. The US slowdown comes at a particularly bad time for Japan which is already suffering from a combination of weak domestic demand – particularly consumer demand – and supply-side constraints reflecting pressures on the banking system, heavily burdened with non-performing loans, and an acknowledged need for restructuring parts of the non-financial sector. Japan has pretty well exhausted the scope for macro-economic stimulus. Successive fiscal packages focussed on public works, and a sustained period of attempted monetary expansion, at near-zero interest rates in the face of deflation, have failed to overcome a high rate of precautionary saving by an ageing population facing an uncertain economic future. The policy emphasis of the new Japanese administration appears to be shifting towards firmer action to bring about supply-side reform in the belief that this will help to engender greater confidence. The danger is that, to the extent that more aggressive restructuring  2  BIS Review 47/2001  results in bank ruptcies and higher unemployment in the short term, that in itself might tend to weaken consumer demand for a time before the benefits of the restructuring come through. I make no judgement about the prospects in Japan. You certainly are better placed to do that than I am!

But, as it showed just recently in making a modest reduction in interest rates, the ECB is sensitive to changes in the balance of risks around those judgements. So, too, are we in the United Kingdom. In our case we have been fortunate, since being driven out of the ERM in 1992 and moving to a symmetrical inflation target, in enjoying a sustained period of relatively stable economic growth. In fact we've experienced the longest period of continuous quarter by quarter growth since quarterly records began, with average annual growth at around 3% over the whole period compared with our long term trend rate of 2¼-2½%. Employment has steadily increased, and unemployment has fallen to its lowest level for 25 years. Meanwhile the rate of inflation has been consistently relatively close either side of the Government's 2½% target – the lowest and most stable rate of inflation that most of us in this country can remember. Domestic demand growth in the UK has remained relatively robust into this year, but we too are affected by the US slowdown and by the associated weakening of equity prices. And we have had a new problem of our own in the form of Foot and Mouth Disease, the effects of which have gone a good deal wider than just the agricultural sector. These new developments were likely to have a dampening effect on overall demand pressure within the economy, both through their direct impact and through possible damaging effects on confidence.
Bandid Nijathaworn: The role of Early Warning Systems in economic policy formulation Speech by Mr Bandid Nijathaworn, Deputy Governor of the Bank of Thailand, at the panel discussion on “The Role of Early Warning Systems in Economic Policy Formulation”, IMF High-level seminar “Early Warning Systems and Their Role in Surveillance”, Singapore, 9 February 2010. *  *  *  First, let me thank the IMF for the invitation. At first, when I was asked to speak on this panel, I was not sure why the Fund is organizing a high-level seminar in Asia on Early Warning Systems, as interest on the topic seems to have faded completely with the recovery of the Asian economies from the crisis in early 2000’s. Then, it becomes clear that the resurgence of interest on EWS, now called EWE or Early Warning Exercises, is very much the mandate of the G20 that requires the IMF and the FSB to lead the conduct of such exercises in response to the current crisis. Given the severity of the current crisis, I think this initiative is important and needs to be supported. For this afternoon, I want to make three observations on how the new Early Warning Exercises can be made most useful to help sustain global growth and maintain financial stability, especially in light of the lessons learned from the current and past crises.

Hence, a compliance program was set up by the authorities with the aim of remedying this situation in the medium term. As regards personal data protection, Morocco has ratified the 108th Convention of the Council of Europe and its Additional Protocol. Since then, it set up a national control unit to ensure proper observation of the various rights (of information, access, rectification and opposition). In this respect, the central bank plays an important role as an interface between this unit and financial inclusion stakeholders. However, this legal framework is likely to evolve in view of the regulatory progress made in this area, particularly at the European Union level. With regard to cyber security risks, Morocco is moving towards developing a strategy for the security of information systems, which would be based on  5  risk identification to provide specific legal, technical and awareness-raising measures to ensure protection, defense and security. This project is coordinated by the National Defense Administration and the Central Bank also acts as an interface with financial actors. All these developments, particularly the introduction of new actors in the implementation of the national financial inclusion strategy, will have a significant impact on banks' profitability and will put their traditional business models to the test. While these banks may be hampered by their complex architecture and cumbersome organization, the rapid unbundling of banking services to the benefit of non-banking fintechs could result in a substantial loss in their market share.
A second macroprudential aspect is that our regulatory system contains several ingredients designed to limit the risks coming from major institutions and interconnections between financial intermediaries. The General Banking Law grants the Superintendent the possibility of making additional capital charges to institutions that, due to a merger, reach a significant market share, which the SBIF has set at 15% or more of the system’s total loans. While this requirement does not apply where such participation is achieved organically, something that probably should be examined, it is a disincentive to the rapid growth of an institution that resembles charges to systemic banks that have been promoted in other jurisdictions as a partial solution to the “too big to fail” problem. In addition, the same General Banking Law sets limits on concentration by counterparty. Furthermore, the regulation of credit risk provisions that the Superintendency of Banks has issued over time contains several macroprudential aspects. Perhaps the most explicit one has to do with the guidelines established for the creation of Additional Provisions which explicitly considers the role of macroeconomic fluctuations, explicitly stating that such provisions may be established to ward off the risk of unpredictable economic fluctuations that  BIS central bankers’ speeches  5  may affect the macroeconomic environment or the situation of a specific economic sector, and that such provisions, and I quote from Spanish, “should anticipate situations of reversal of expansionary economic cycles that, going forward, could end up in a worsening of the conditions of the economic environment.

Prasarn Trairatvorakul: Unleash prosperity through regional connectivity Address by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the “AEC+3 Summit and Expo”, jointly sponsored by Kasikornbank, the International Trade Promotion Department, the Board of Investment and The Economist magazine, Bangkok, 2 November 2014. *  *  *  Chairman Banthoon, Distinguished Guests, Ladies and Gentlemen, 1. First of all, I would like to thank Kasikornbank for inviting me to speak here at the AEC+3 Summit. This event comes at an opportune time in light of the excitement surrounding the ASEAN Economic Community. 2. As single entities, the countries of ASEAN are characterized by their diverse size and development. As a unified bloc, however, the picture changes dramatically: ASEAN is the world’s third in terms of population and the world’s fifth in terms of trade and investment flows. Being the world’s most diverse economic region is also a key strength which has hurled ASEAN into an important player in the global supply chain. 3. Much has been achieved already, yet much more is still within our reaches. But to reach our potentials, we need to enhance on connectivity, not only within ASEAN but also with our Plus Three partner countries. It is on this theme of connectivity that I will focus this evening: I will first provide a snapshot of what has been achieved under ASEAN financial connectivity.
Rather, I was conscious that the current stance of monetary policy – in which Bank Rate is very low and substantial amounts of liquidity are being injected into the economy – increases the likelihood that asset prices may move out of line with their fundamental values and that this could be costly to rectify were it to occur. It is a risk that we need to be alert to. However, as I suggested, it is important not to make too much of these differences; all MPC members – myself included – were of the view that a significant degree of monetary stimulus needed to be maintained in order to meet the inflation target. Conclusion The economy has come a long way over the past year. At the time of this annual breakfast a year ago, output was in freefall, the banking system was in near meltdown, business and consumer confidence had evaporated, and there was a very real risk of a serious economic depression. Monetary policy has played a critical role in the stabilisation of the economy. We have turned a corner on the road to recovery. But there is a long way to go with many challenges ahead as the economy moves into better balance. In facing these challenges, the Monetary Policy Committee will do whatever it takes to ensure that inflation remains on track to hit the target. References Eichengreen, B. and K.H. O’Rourke (2009), “A Tale of http://www.voxeu.org/index.php?q=node/3421, 1 September 2009. Two  Depressions”,  Romer, C.D.

Inflation in recent months surprisingly moved clearly downwards (to stand at -0.3% in October, according to the CPI leading indicator published by Eurostat), mainly in respect of the performance of services and non-energy industrial goods prices, which were weighed down by the relative weakness of demand. As a result, core inflation in the area stands at an all-time low of 0.2%. All of this would be consistent with even more modest inflation rates in the coming quarters than those forecast in the September projections exercise. The worsening course of the pandemic, the drastic new containment measures and the impact this may have on the already fragile economic outlook and on the medium-term inflation forecast (already far below target), have led us to make a clear announcement, following the latest meeting of the ECB’s Governing Council, of our willingness to recalibrate in December the tools to deal with the situation, ensuring accommodative financial conditions and counteracting the impact of the pandemic on the inflation outlook. Amid such a high level of uncertainty as the current one, the best possible contribution economic policy can make is to provide confidence and certainty. In the case of monetary policy, this means ensuring accommodative financial conditions for all economic agents for as long as necessary. In view of how the pandemic is unfolding and its economic effects, we clearly need more time now than what we projected just a few months ago.
Additionally, challenges in the regulatory and supervisory area persist, such as the full integration of macro-prudential tools in economic policy design, and ensuring a regulatory framework that guarantees that typical banking risks are treated similarly regardless of the legal nature of the entity originating and managing them. In short, both institutions and the supervisory community share the challenge for the future of ensuring a more stable financial system that offers better services to society. Thank you very much. 11/11

For example it would mean people have direct access to the ultimate risk-free asset. In its extreme form, it could fundamentally and perhaps abruptly re-shape banking. However, were it to co-exist with the current banking model, it could exacerbate liquidity risk by lowering the frictions involved in running to central bank money. 11 These questions and others are why these topics are being examined as part of the Bank’s research agenda, with the prospect of a central bank digital currency for the UK, in my view, still some way off. We will work to make payments easier, and though cash may no longer be king it once was, its reign will endure for some time. The fourth way the Bank is enabling the FinTech transformation is by partnering with FinTech companies on projects of direct relevance to the Bank’s mission. I am announcing tonight that the Bank is launching a FinTech Accelerator to work in partnership with FinTech firms on challenges that we, as a central bank, uniquely face. The Accelerator will work with new technology firms to help us harness FinTech innovations for central banking. In return, it will offer firms the chance to demonstrate their solutions for real issues facing us as policymakers, together with the valuable ‘first client’ reference that comes with it. With time, the Accelerator will build a network of firms working in this space for the benefit of us and them alike. How will this help us?