samchain/econo-pairs-v1 huggingface dataset:
Woodford, Michael (2007b), “Forecast Targeting as a Monetary Policy Strategy: Policy Rules in Practice”, in Koenig, Evan, and Robert Leeson, eds., From the Great Moderation to the Great Deviation: A Round-Trip Journey Based on the Work of John B. Taylor, forthcoming. Daniel K Tarullo: Equipping financial regulators with the tools necessary to monitor systemic risk Testimony by Mr Daniel K Tarullo, Member of the Board of Governors of the Federal Reserve System, before the Subcommittee on Security and International Trade and Finance, Committee on Banking, Housing, and Urban Affairs, US Senate, Washington DC, 12 February 2010. *  *  *  Chairman Bayh, Ranking Member Corker, and other members of the Committee, thank you for inviting me to testify today. I also want to thank all of you for taking the time to explore a subject that is easily overlooked in the public debate around financial reform, but that will be central to ensuring a more stable financial system in the future. The recent financial crisis revealed important gaps in data collection and systematic analysis of institutions and markets. Remedies to fill those gaps are critical for monitoring systemic risk and for enhanced supervision of systemically important financial institutions, which are in turn necessary to decrease the chances of such a serious crisis occurring in the future.

My dear friends, as we all know, the speedy resettlement of the internally displaced people has also been a top priority for the Government. Towards this goal, many extraordinary efforts have been taken. Out of the over 300,000 internally displaced persons who were rescued and had to be temporarily housed in welfare camps, over 217,000 or 72% have already been resettled. All those from Vavuniya, Mannar, Jaffna, a part of Mulativu and Killinochchi have now returned to their homes. The others mainly from Mulativu and Killinochchi are also to be resettled systematically without any undue delay, depending on the speed at which the de-mining processes take place. This is an outstanding achievement against all odds, and I believe the successful resettlement is a tribute to the deep commitment of the Government, the tremendous efforts of our public service and the dedicated contribution of several international organizations. I am also tempted to mention that this surprising outcome may have been a pleasant surprise to many who at certain times  BIS Review 16/2010  1  expressed the belief that the government may not have had the inclination nor the urgency to carry out this challenging task so expeditiously. My dear friends, the Central Bank has also contributed its mite to these normalization processes. We have, so far, over the past 8 months, granted approvals for the establishment of more than 90 banking outlets in the Northern Province.
4  BIS Review 71/2004  In fact, recent work by Bank staff has shown that, even when preliminary ONS estimates are available, combining these with the information from the business surveys can provide a more accurate assessment than if we were to throw the business survey information away and rely solely on the ONS data. This type of analysis is influencing our judgement at the moment. The ONS’s preliminary estimate of GDP growth in the third quarter was just 0.4%, suggesting a marked slowdown in growth driven by a sharp contraction in industrial output. But business surveys suggest that manufacturing output continues to expand. Taking these two pieces of information together, the MPC judges that overall growth was a little higher in Q3 than the official data currently indicate. We talk to people A third way of reducing the risk of error is to talk to people on the ground. If the hard data are at odds with what they are telling us, that will give us pause for thought - about the likely economic outlook, or at least the risks around our central view. Back in the early 90s a familiar charge against the Treasury (which at that time had primary responsibility for setting interest rates) was that they were out of touch - stuck in London, they missed early signs of the recession. The Bank has been careful to avoid this trap. It has built up a network of agencies to act as its eyes and ears around the country.

Stefan Ingves: The monetary policy landscape in a financial crisis Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, at the Swedish Economics Association, Stockholm, 31 March 2009. *  *  *  Introduction "The monetary policy landscape in a financial crisis" is the theme of my speech this time. I thought for once that I would begin by showing you a picture. The slide shows an oil painting that was done in 1842 by the English artist William Turner.1 It is called ”Snow Storm – Steam-Boat off a Harbour's Mouth”. It is part of the collection at the Tate Gallery in London. The only thing you need to know about the painting just now is that Turner used a very special technique. He built up the picture gradually by painting several thin, semi-transparent layers on top of each other. He then added somewhat thicker, more pastose sections. As you can see, this layer-by-layer technique gave his paintings a special lustre and a special atmosphere. We would probably say that the atmosphere in this painting is dramatic. Turner's technique can also act as a starting point for a description of the situation today. Reality is made up of different layers. Every layer that is added or peeled away reveals a partly new landscape. We can compare the financial crisis to the snow storm in Turner's painting. In order to paint the picture of the complete storm we need to begin with a layer that describes the macroeconomic preconditions, the macroeconomic landscape.
In the background memorandum published in conjunction with the decision to abolish, the Riksbank argued that the interval had become obsolete since target deviations greater than 1 percentage point had become a natural part of flexible inflation targeting and that the credibility of the inflation target was not questioned even when inflation was outside the tolerance interval. 25 In retrospect, it is reasonable to ask whether the problem was not just the fact that the interval chosen was poorly adapted. Despite this, the idea as such of an interval around the target does not necessarily have to be a bad one. A better adapted interval may bring with it the advantages envisaged in the first place. It would signal that monetary policy is being conducted amidst considerable uncertainty and that the Riksbank is unable to fine-tune the economy and inflation. This is something that is good to remind people of on a more or less continual basis. In the same way as there may be reason to discuss a change of target variable, there may, in light of this, be cause to consider whether a tolerance interval should be reintroduced. I find it difficult, however, to see how an interval could normally change the practical prerequisites for monetary policy very much. The Riksbank has not had any rigid fixation with pinning the inflation target at exactly 2 per cent at all times, but an explicit target is nevertheless necessary as a guide to monetary policy and inflation expectations.

This is unfortunate as macroprudential policy is an important policy area and it is vital that a longterm, sustainable structure is created for it, so that macroprudential analysis is not given lower priority when other tasks require resources, and experiences from the crisis are forgotten. The Stability Council has so far played an insignificant role in practice. Sweden deviates from international and European standards Sweden thus deviates – in several respects – from European standards as regards how its macroprudential policy framework is designed. We have also organised the responsibility for macroprudential policy differently to most of the other countries in Europe. In 13 EU Member States, the responsibility has been given to the central bank, a similar number have given it to a separate council and two countries (Sweden and Finland) have given it to the supervisory authority. 18 In addition, it is worth mentioning that the European Central Bank, the ECB, has received a mandate that basically means that it shares the macroprudential policy responsibility with the national macroprudential authorities in those countries that  15  See ESRB (2011). 16  See ESRB (2011). 17  See ESRB (2011). 18  See ESRB (2014). 8  BIS central bankers’ speeches  participate in the Single Supervisory Mechanism. The ECB has the responsibility for a socalled “top-up” of some of the macroprudential policy measures decided at national level – i.e. to tighten the measures further if the bank feels it is necessary.
We have to make sure that when achieving the nominal criteria a substantial progress in real convergence will have been achieved as well. Thus, in my presentation today I thought that, by giving an analysis of the Romanian economy’s path to the adoption of the European single currency, it is adequate to focus not only on nominal convergence, a topic which I have repeatedly approached, but also on several issues pertaining to real economic convergence. Or, this means, in a plain language, to put in place the conditions necessary for a rapid, sound and sustainable economic growth. The large disparities between the performance of the Romanian economy and that of European Union countries compel us to do that. In this context, allow me to approach a topic less debated during public meetings in our country, but which is deeply linked to the capacity of the Romanian economy to maintain a rapid and sustainable growth. It is all about the general problems relative to structural reforms and, in particular, about labour market flexibility, the imperative need for this to come into line with the most modern practices applied in successful countries, by taking into account both the realities of the Romanian economy, and the requirements of competition on an increasingly demanding international market. At first glance, there are few connections between the changeover to the euro and labour market flexibility. In fact, the connection is strong, even essential, I would say.

Before proceeding to a more in-depth analysis of the topic, allow me to clarify an issue that was subject to previous public debate. The National Bank of Romania has nothing against wage hikes. Quite the opposite, we might say. The Romanian economy could only benefit from an increasingly fast rise in wages, in order to enjoy a higher living standard, surmount the historical disparities that separate us from the Western economies and put a stop to labour force migration. Nonetheless, we must analyse with a clear mind and assert bluntly that a mismatch between pay rises and labour productivity gains is unsustainable. Wage hikes in excess of labour productivity are not likely to bring about a higher living standard, but on the contrary, they may lead to a lower living standard, given that, sooner or later, the disparity between the two fundamental indicators will entail a fast-paced rise in prices, the weakening of domestic currency, external indebtedness. All this has a negative influence on  BIS Review 162/2008  1  investment and delays the achievement of real convergence of the economy rather than speed it up. Over the past few years, annual productivity gains came in at impressive 10% and beyond each year. Multiple factors stood behind this performance, such as the initial low level, the significant decline – even if not always illustrated by statistical indicators – in the population working in agriculture and, highly important, the strong increase in investment.
I'm bound to say I welcome that distinction because the fact that the Government sets the target for monetary policy means that it is unambiguously committed to what we are tasked to do, and that, in turn, helps in some degree to distance the Bank from political debate. But there are two necessary consequences of this arrangement. The first is that you need independent, technical, experts to do the technical job entrusted to the MPC - not people appointed for their political convictions, nor representatives of particular economic or social interests. In that respect I think we have been extremely well served: the members of the Committee have been invariably well qualified for the technical jobs they've had to do; but more than that they have typically known enough, including about the inevitable uncertainties I have referred to, to know when they could be reasonably confident in their views and when they were guessing - as we all have to do at the margin. The Committee has been divided, generally very narrowly divided, in its forecasts and policy judgements more often than not since we started. That is both natural and healthy. But what is important is that the debate has typically been measured and reflective - and remarkably free of acrimony and dogma. And that to my mind is fundamental to the strength of the process. The second corollary is that the MPC process should be transparent and that its members should be individually and collectively publicly accountable for their decisions.

For example, traders on the CCI-ILSTC have to rely on the multi-modal transport bill of lading or MTBL as proof of title as the goods are being carried on land, by rail, and over sea. However, the MTBL is currently not widely used as a negotiable document, unlike ordinary bills of lading which have clear legal status. This limits the access to trade financing facilities for importers and exporters using multimodal trade routes. We must step up efforts to enhance the acceptance of MTBLs amongst trade players in China and ASEAN. In fact, the MTBL will need to be recognised as a negotiable document, not only in its paper form but also its electronic form. Government agencies from Singapore are working with the Chongqing Port and Logistics Office to conduct a pilot to digitalise bills of lading, including the MTBL, using TradeTrust. TradeTrust is an interoperable framework to support the exchange of electronic documents. It uses distributed ledger technology to allow trade actors to establish the authenticity of a digital document. If we can scale the use of TradeTrust within the CCI-ILSTC, banks will be able to use these electronic documents for trade financing and we can effectively eliminate the risk of 1/3  BIS central bankers' speeches  fraudulent MTBLs. More broadly, the greater use of electronic trade documents will make verification checks easier, reduce the incidence of fraud and human error, and ultimately lower costs. But to achieve this, all stakeholders need to adopt digital tools and upgrade their trade practices.
See also box in Inflation Report 2000/3, pages 16-17. Mussa, M (2000): “Monetary policy to Resist Excessive Depreciation” in Bisignano, J R, Hunter, W C and Kaufman, G G (eds.) “Global Financial Crises: Lessons From Recent Events”, Bank for International Settlements and Federal Reserve Bank of Chicago, Kluwer Academic Publishers. Rødseth, Asbjørn (1987): “Stabiliseringspolitikk på godt og vondt” (Stabilisation policy for better or worse), in Full sysselsetting og økonomisk vekst? Festskrift til Eivind Erichsen (Full employment and economic growth? Festschrift for Eivind Erichsen), Tano forlag. Stiglitz, J E (2000): “Lessons from the Global Financial Crises” in Bisignano, J R, Hunter, W C and Kaufman, G G (eds. ): “Global Financial Crises: Lessons From Recent Events”, Bank for International Settlements and Federal Reserve Bank of Chicago, Kluwer Academic Publishers. 11  BIS Review 92/2000

Consequently, one of the key response from the authorities was to develop the BASEL III Reforms Package that aims to strengthen global supervision of international banks and banking systems. While the global banking supervisors have been working hard to improve banking supervision, the financial crisis has mutated into a fiscal crisis in some markets in Europe, once again threatening the viability of some global banks and causing the risk of contagion to other financial institutions and markets. Consequently this drives home the lessons that strengthening banking supervision alone is not sufficient and that prudent fiscal and monetary policies are essential for a sound and resilient banking system. Before I talk about Basel III, I would like to revisit the evolution of the Basel II framework which was published by the Basel Committee in June 2004 with a tentative full implementation date of 1st January 2007. Consequently in 2007 a pertinent question was that why did Basel II fail to prevent the financial crisis. The response was that apart from its slow and uneven implementation in the advanced markets, Basel II was a flawed standard that had failed to address some of the major supervisory weaknesses. These included the lack of a common definition of quality of capital, no limits on leveraging, no common standards for liquidity and a failure to recognize the excessive market risks embedded in trading and derivative transactions that had risen very sharply among the major banks. Therefore, Basel II would have not done the job it was required to do.
The Government is there in the background as the last resort when conflicts arise, and, in consultation with market practitioners, it takes the initiative to reform regulatory systems when new conditions require it: the far-reaching reforms proposed for Hong Kong’s securities and futures markets in the recent budget are a good example of this. 19. Finally, the Government is prepared to intervene in isolated, clearly identified cases where markets appear to be malfunctioning. In this respect, the Hong Kong Monetary Authority has a special role to play within the financial sphere. One of its primary tasks is to promote the stability and integrity of Hong Kong’s financial system, and one of its tools – in addition to  5  BIS Review 35/1999  the linked exchange rate, banking regulation, and the financial infrastructure – is the Exchange Fund, our official reserves. The Exchange Fund, among other things, is available to be drawn on to maintain the stability and the integrity of the monetary and financial systems of Hong Kong. This is done rarely and sparingly, but it is necessary to have this provision for reasons that should be readily apparent. In addition to being a free market, Hong Kong is also an open market. This gives it one of its main strengths as an economy, for our links with overseas markets are a vital part of our success as a financial and commercial centre. But it also renders Hong Kong exposed, and therefore vulnerable, to economic and other forces that are entirely beyond its control.

In short, we were far from the model of ‘atomistic competition’ among small individual actors envisaged by thinkers such as Adam Smith. The invisible hand of the market had been replaced by a very visible club being wielded by a concentrated group of speculators. 21. In many other jurisdictions, this cornering of the markets would have been subject to investigation under anti-trust legislation: the Salomon Brothers scandal in the US in the early 1990s, which many of you will recall, is a parallel that springs to mind. In Hong Kong we have no such laws: it is probably time that we thought out the cases for and against having them. We should also look at safeguards against market concentration. As things stood in August last year, we were watching (in a loosely worked metaphor that might appeal to those of you who will be attending the Rugby Sevens this weekend) a playing field that had become so badly slanted that ordinary players could barely stand up, and a game that was about to be cornered by a highly oversized and unsportsmanlike team with steroid-enhanced muscles playing by its own rules. As a referee with limited powers, but with responsibility for preserving the basic integrity of the game, we intervened using the quickest, most efficient and fairest methods that we had at our disposal.
These companies – not necessarily financial in origin – which extensively harness information about their customers using new technologies, may drastically alter the operating environment of traditional banks. The banks’ strategy faced with these challenges must inevitably involve investing heavily in this type of technology to make the most of their data. This, also, will enable them to refocus their lending business on higher-margin segments while maintaining the risk they have assumed within reasonable limits. They should also continue to strive to make efficiency  “Euro area banking sector resilient to stress caused by coronavirus, ECB analysis shows”, ECB press release of 28 July 2020. 8 The benchmark central scenario envisages an increase in infections over the next few quarters and the application of the corresponding containment measures until a medical solution is available; based on these assumptions euro area real GDP is projected to decline by 8.7% in 2020 and rebound by 5.2% in 2021 and by 3.3% in 2022. Under the adverse scenario, which envisages a vigorous rise in infections and stricter containment measures, real GDP would decline by 12.6% in 2020 and would grow by 3.3% in 2021 and by 3.8% in 2022. 7  9  See P. Hernández de Cos (2020).

But, additionally, in a crisis like this, as I have mentioned earlier, the deterioration of banks’ solvency is expected to hinge on their degree of exposure to the various regions and sectors which are being affected differently by the pandemic. In any event, as in the case of households and non-financial corporations, the public support measures implemented in recent months will help to mitigate the effects on financial stability. In particular, the government loan guarantee scheme and the various measures adopted by the ECB will contribute to smoothing the impact on banks’ solvency. The restrictions on the payment of dividends by banks also contribute significantly to this objective. And, lastly the moratoria will be useful so that the classification of loans as nonperforming is eased and distributed over time. Nevertheless, the impact of the COVID-19 crisis on financial institutions’ profitability is already clear. The banking industry’s already narrow profit margins of recent years – profitability actually stood below the cost of capital in the main European banking systems – were squeezed even further by the outbreak of COVID-19 and the need to record higher provisions to cover adverse developments in banking. Specifically, data from the first half of 2020 showed that listed Spanish banks had consolidated net losses of € billion, compared with profits of a similar order of magnitude in the same period in 2019.