samchain/econo-pairs-v1 huggingface dataset:
This means that a financial instrument or activity is regulated in the same way, whether it is linked to a bank or another type of financial institution. Such treatment ensures fair competition and facilitates the development of an open financial system. An institutional approach implies that there is different legislation for different categories of financial institutions, also in the cases where they perform similar services. This may sometimes be necessary, but should be avoided since it may limit market competition and development. Another divide goes between principles-based and rules-based regulation. In the first category, general principles are provided such as “banks shall be managed in a safe and sound manner”. The authorities may then interpret this and take measures against a bank when they see fit. Rules-based regulation is more precise and says, for instance what a bank must do in order to ensure that it is managed in a safe and sound manner. I do not have a one-way view on this issue. The choice depends to some extent on your country’s legal traditions. Recent financial regulation in my own country mixes the two approaches, setting the broad principles in the legislation and delegating to the authorities to formulate the more precise and detailed rules. This approach also fits well with the fact that the financial sector is developing fast. It is quicker to change secondary regulations than the legislation itself. When regulating financial activities, it is useful to apply an analysis of the costs and benefits to society.

To achieve this goal, we have to build on the best assets of our network: its agility; its technical competence as a “knowledge hub”; and, if I may, the relentless efforts of its Chair, my colleague Frank Elderson, and the commitment of the Banque de France to its global Secretariat. A team of 14 people from the Banque de France is the backbone of the Secretariat, strongly backed by our new Climate Change Center chaired by Nathalie Aufauvre. Given the extension of the NGFS and the deepening of its work, secondments from other NGFS members would be most welcome to contribute to the dynamism of the Network, through one year stays, on site, in Paris, or flexible options including remote work. And we intend to  strengthen our efforts to communicate and disseminate the work of the NGFS among our membership and beyond. We have increased means, and still many avenues to explore. If I had to stress only two tasks where our whole global community needs the NGFS: (i) climaterelated economic scenarios. We released a first wave in July 2020, we will update them next week. I read some unfounded doubts on them: NGFS works with the best partner research institutes, publishes a range of plausible and differentiated futures – not intended to be central forecast –, and will regularly incorporate the development of scientific evidence. This provides, as a common public good for COP26, the best reliable framework for financial risk assessment.
Of the 24 instances in which prices have fallen for more than one year, all but four – two in Japan, two in Bahrain – have occurred in developing countries with pegged exchange rates. In fact, there’s a general tendency for changes in inflation to be more persistent when the exchange rate is fixed. At least when policy has a degree of credibility, deviations of inflation tend to peter out relatively rapidly in countries with independent monetary policies. In part this may reflect precisely the freedom to ease policy that, if it’s not ruled out by an exchange rate peg, may nonetheless be compromised by the zero lower bound. At least until it began to conduct QE, almost a decade after the economy began to turn down, Japan was clearly in this position. But I suspect it’s also because, when there’s an independent and credible policy, the risk that inflation expectations become “de-anchored” from any target is lower to begin with. As I say, for us that target is 2%, not zero. Even if the current undershoot is due mostly to the effect on the level of the CPI of the sharp drop in commodity prices, and should therefore have only passing effects on its rate of growth, our central expectation is that inflation will still be below target in a year’s time.

Needless to say, Paul Volcker perfectly knows that it is low and stable inflation and not any inflation that inflation targeters are trying to achieve. Yet, if we know that low inflation is our objective then what is the most suitable monetary policy? How low should the inflation target be, which price index to target, what about stabilizing output or preventing asset bubbles, should we be strict or flexible inflation targeters, how to communicate our policies? All central bankers, both those beginning the IT adventure and those more advanced with it, have to address these questions. I hope this meeting will provide an opportunity to do it. *  *  *  Since 1990, when the pioneering Reserve Bank of New Zealand first introduced IT, over twenty countries have followed its example. The National Bank of Poland along with the Czech National Bank were among the first emerging market countries’ to adopt IT. From the very beginning IT has been practiced in very diverse economies, from the UK and Peru to Korea and Ghana. Many other and more diverse countries consider following the fashion, just to mention Botswana or China. IT attracts growing interest both in developing countries, some of which are still struggling with high inflation, and countries with relatively long history of macroeconomic stability such as the United States or Japan. It is widely known that Alan Greenspan’s successor Ben Bernanke is a strong advocate of IT 2 and this makes Fed’s adoption of IT quite probable.
First, to reap the benefits of the division of labour requires social institutions that give confidence to people to take up specialised employment. Social institutions and market economies go hand in hand. Second, people who, for the most part, pursue their own self-interest, are also prepared to stand back and ask how their actions should be constrained by social institutions. Such institutions arise because we build them. On the first, The Wealth of Nations begins with the most famous example of Smith’s commentary. He explains the idea of the division of labour by looking at a “very trifling manufacture”, namely “the trade of the pin-maker”: “a workman not educated to this business … could scarce, perhaps, with his utmost industry, make one pin in a day, and certainly could not make twenty. But in the way in which this business is now carried on, … it is divided into a number of branches … One man draws out the wire, another straightens it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head; … the business of making a pin is, in this manner, divided into about eighteen distinct operations”. 4 Smith describes seeing a small factory of this kind in which the daily output of pins was almost 5,000 for each person employed. Specialisation increases productivity. The division of labour permits “this great increase of the quantity of work”.

I hope they will absorb the lesson that specialisation in production and trade across the world are the way to improve living standards in all countries – rich and poor alike. And perhaps when they return home they will press their own politicians to support the opening up of trade which has been at the heart of the British Government’s efforts to reform the world economy. So you should be proud of your famous son who, despite being “an absent-minded professor” who led a “quiet, uneventful life”, influenced the way the whole world thinks about the route to economic prosperity. 20 Let me conclude by returning to the words of Jacob Viner: “In these days of contending schools, each of them with the deep, if momentary, conviction that it, and it alone, knows the one and only path to economic truth, how refreshing it is to return to the Wealth of Nations with its eclecticism, its good temper, its common sense, and its willingness to grant that those who saw things differently from itself were only partly wrong”. 21 Truly, Adam Smith was a man of the Scottish Enlightenment, and I am delighted that from next year his face will look out at us from our banknotes. References Blinder, A and Morgan, R (2000), 'Are two heads better than one? An experimental analysis of group vs individual decision making', NBER working paper no 7909, September. Buchan, J (2006) Adam Smith and the pursuit of perfect liberty, London: Profile Books.
In the first place, a domestic authority increasing capital or liquidity requirements due to on lending by its banks to a particular sector could act as a signal to the home authorities of other, overseas banks. Plainly, it would be important to share analysis with international peers, even if things went no further than that. Transparency to the market would aid that dialogue. But it might be worth exploring whether there could feasibly be some kind of more or less co-ordinated or co-operative macroprudential response in some instances. This would entail risk weights being varied on  10  For a description of how banks used structured finance to try and transfer risk see, Tucker PMWT (2007a), “A Perspective on Recent Monetary and Financial System Developments”, a speech at the Merrill Lynch Conference for hedge funds, April 2007, (pp.8-10). 10  BIS Review 134/2009  the basis of both the economy of the borrowers and conditions in the home financial system of the lenders, with the aim of at least avoiding conflicting policy responses. As such, it would be a novel overlay on the Basel Concordat agreed thirty years ago for the division of labour between home and host supervisors. This might usefully form part of the international discussion on possible macroprudential instruments. (e)  The cross-sectional dimension: interconnectedness  Finally, to round up, just a few thoughts on the other dimension to the macroprudential challenge: the “cross-sectional” issue of interconnectedness.

While absolutely nothing can be definitively ruled out, that nightmare now seems unlikely. I shall weigh that in my own policy considerations, as for me the size of the massive monetary stimulus has partly been designed to insure against that catastrophe risk. So a key question over the coming period will be whether or not conditions are developing where some of that insurance could be withdrawn, consistent with leaving policy highly stimulative. 2 But the economy has in actual fact been very weak, with output falling and unemployment rising. The policy debate in the months ahead therefore will turn, as more usually, on the broad outlook for the risks around inflation over the medium term. That will depend on the data and, in particular, whether the data and surveys about real activity and demand come more closely into line, here and overseas. One of the biggest questions is whether, given the policy stimulus, recovery will be anaemic or whether we can attain the above-trend growth needed to absorb the slack in the economy necessary to ameliorate downward pressures on inflation. This will be at the heart of the quarterly forecast round on which the MPC is just embarking. And it could hardly matter more. Anaemic demand growth would lead to inflation undershooting the target for a period. And it would be likely to see firms continuing to shed labour, scrapping capital and delaying new investment, adding to the hardships the crisis has already brought.
We were created during Woodrow Wilson’s presidency, in the aftermath of the Financial Panic of 1907. Congress passed the Federal Reserve Act in 1913; like St. Andrews, we will mark a centennial next year, but it will be our first, while you celebrate your sixth. The Federal Reserve Act established 12 Federal Reserve Banks, together with a Board of Governors. The members of the Board, of which Ben Bernanke is Chairman, are appointed by the president of the United States and confirmed by the Senate. The 12 Bank presidents are not: They serve at the pleasure of nine-member boards of directors composed of private bankers and citizens from their respective districts. They are distinctly nonpolitical, immune from partisan influence; they represent Main Street, not the Washington power elite or the New York money changers, just as President Wilson and the Federal Reserve founders envisioned. These are profit-making banks that perform services for the private banks in their districts: warehousing and distributing currency; operating discount windows from which banks borrow to assist in their operating funding needs; functioning as the depository for the $ trillion or so in excess reserves presently piled up and going unused in our private banking system.

We have the same monetary policy as all the rest; our income is taxed at the same federal tax rate; and we are equally impacted by Washington’s tax, spending and regulatory policies. But we have better fiscal policy at the state level. We have no state income tax; we are a right-to-work state; we have state and local governments that, under both Democratic and Republican leadership, have for decades assiduously courted job creators – so much so that we have even outperformed the job creation of most every other major industrialized economy worldwide, as shown by the previous slide. Whither monetary policy? Now, back to the hue and cry of financial markets, and the question of further monetary accommodation. Interest rates are at record lows. Trillions of dollars are sitting on the sidelines, not being used for job creation. We know that in areas of the country where fiscal and regulatory policy incents businesses to expand – Texas is the most prominent of those places – easy money is more likely to be put to work than in places where government policy retards job creation. During the next few weeks as I contemplate the future course of monetary policy, I will be asking myself what good would it do to buy more mortgage-backed securities or more Treasuries when we have so much money sitting on the sidelines and yet have no sense of direction for the future of the federal government’s tax and spending policy.
The current Direction de la surveillance des paiements et des infrastructures de marché (DSPM – Payments and Market Infrastructures Oversight Directorate) will become the Direction des infrastructures, de l’innovation et des paiements (DIIP – Infrastructure, Innovation and Payments Directorate), and its scope will be extended to cover all payment innovations, infrastructures and central bank digital currency. Additional skills will be recruited to strengthen its expertise, and, with the help of our Lab, the DIIP will work with industry innovators from the private sector: we want to start 2/4  BIS central bankers' speeches  running experiments rapidly and will launch a call for projects before the end of the first quarter of 2020. We are particularly keen to take part in experiments to integrate a “wholesale” CBDC into innovative procedures for exchanging and settling tokenised financial assets. Nathalie Aufauvre, Director General of Financial Stability and Operations, will coordinate the Banque de France’s acceleration process. Our actions will naturally contribute to the work of the Eurosystem, which should make looking into the possibility of an “e-euro” one of its next focuses: Christine Lagarde referred to it on Monday in front of the European Parliament. Beyond this, we intend to take part in the work of the “innovation hub” recently created by the BIS. On a substantive level, I would like to share with you some first thoughts – which are still open to discussion, of course – on three aspects: the objectives, externalities and possible modalities of a central bank digital currency.

Mr Gjedrem reports on the Norwegian economy and monetary policy in Norway  Speech given by Mr Svein Gjedrem, Governor of the Norges Bank, at the Royal Norwegian Embassy, in London on 28 October 1999. * 1. *  *  Introduction  Ambassador, ladies and gentlemen, I am happy to have this opportunity to speak to you about monetary policy in Norway. What happens in the financial community in London is important to the Norwegian economy: the financial markets here provide substantial loans for Norwegian firms, and are at the same time an important recipient of Norwegian financial investments. Short-term capital movements between United Kingdom and Norway are also important. Against this background, I would like to share with you information about the Norwegian economy. My focus will be on explaining distinctive aspects of the Norwegian economy, which is based largely on a limited number of commodities. My hope is that this understanding may help market operators to make informed decisions when dealing with Norwegian markets. 2. Background  Trend GDP growth in the Norwegian mainland economy is about 2–2¼%, and the inflation rate is around 2%. GDP per capita is slightly higher than in most other European countries. The high level of per capita income is partly a result of extensive revenues from oil and gas extraction. These revenues also allow Norway to operate with a substantial current account and government budget surplus. Extraction of North Sea oil started in the 1970s, and the production volume has increased over the years.
Through our involvement in various international forums, such as the bi-monthly BIS Governor Meetings, as well as Standard Implementation Group of BCBS, of which we are a member, the BOT has proposed that developing countries be invited to participate in the development process of these new standards right at the beginning rather than be informed of them at the very end. Moreover, the BOT has also voiced our concern over the use of a simple leverage ratio, which does not take into account inherent risk because this would tend to penalize banks in developing countries since they generally hold less risky assets compared to developed countries. Recently, the BOT was invited to take part in the newly created Basel Consultative Group (BCG), which will meet for the first time during 28 to 29 October this year. The BCG’s main agenda is to be a discussion platform for ongoing Basel Committee on Banking Supervision’s prudential standards and their implementation issues, such as those mentioned earlier. In this regard, our stance on the implementation of any new regulatory and supervisory change includes the following points. First, regarding microprudential policy framework, the BOT already has the process to enhance understanding and adjustment of banks for the implementation of related standards, for example, through hearings. Macroprudential policy framework is a more challenging area, particularly in terms of data limitations and policy calibration. Despite this challenge, the BOT remains committed to maintain overall stability of the financial system.

We expect banks to be able to finalize and start using their ICAAP by the end of December 2010, with the first ICAAP Report submitted to the BOT within the first quarter of the following year. The BOT would then begin reviewing banks’ ICAAP during bank examination that year. In assuring adequacy of capital over the business cycle, we believe it is very important to focus on countering procyclicality by ensuring capital and provision buffer, as well as to introduce IAS 39 which incorporates correction from problem or procyclicality as being considered by international standard setters and BCBS. Importantly, we emphasise the importance of consolidated supervision to ensure adequacy not only in capital but also riskmanagement of the entire banking group, particularly liquidity risk. In this regard, with respect to foreign banks, an important issue to push forward, in our view, is that of crossborder supervisory coordination, particularly better information sharing between home-host supervisors should be warranted. This is particularly important as the current crisis shows that there is a need for home supervisor of global financial conglomerate and banks to recognizing that global bank’s local operations may be systemically important for the host economies. In closing, I would like to share with you what I believe are the key changes in our financial landscape, resulting from this global crisis. First, bank business model would likely become more conservative, placing less reliance on wholesale financing and use of leverage, while focusing more on risk management and higher liquidity buffer.
Moving forward, Bank Negara Malaysia, will further lay the groundwork to strengthen the industry. This includes creating an environment that fosters innovation, facilitated by the revised Takaful Operational Framework which will be published for consultation before the middle of the year. The revised framework will bring greater clarity on the use of multiple Shariah standards in the models and structures of takaful. We will also strengthen the governance of takaful operators, including how takaful funds are managed, to further safeguard the interests of takaful participants. An exposure draft will be published before the middle of the year, and the industry and public are welcomed to provide feedback. Conclusion Before I end, let me briefly touch on the developments with regards to the Malaysian economy. The domestic economy grew strongly, by 5.9% in 2017, supported by the global growth upswing and robust domestic demand. Domestic demand remained central to Malaysia’s growth, grounded on healthy income and labour market conditions. This is not the fruition of just one year’s effort. It is a reflection of the successful structural changes undertaken over the last two decades. Malaysia’s shift towards a domestic demanddriven economy and continuous economic diversification have placed us in a very good position to adapt to and leverage on the changes in the global economy. 5/6  BIS central bankers' speeches  Another transformation that has taken place in the past two years is the increased sophistication of the onshore financial and foreign exchange market.

This is required to improve crossborder crisis management and to create effective cooperation between authorities even in an emergency. Trust can also be a key factor in preventing a crisis from occurring at all. It is not enough for individual authorities and countries to take action when the banks’ playing field is the entire international arena. The scope of the crisis on this occasion was connected to the financial markets’ national boundaries largely being erased. But the cure in this case concerns, as I see it, meeting globalisation with globalisation. More cross-border cooperation is required, and perhaps using different methods than before. Landing on our feet and keeping our balance in the future Let me conclude by saying that I have every hope that we will land firmly on both feet when this crisis is over. There are many things that have been out of balance around the world. And the longer the imbalances are allowed to continue growing, the larger the fall will be when one finally loses one’s footing. We have been hit by a financial crisis that is without precedent in a global context. We have been hit by the worst recession since the Second World War. The recovery will take time, both with regard to the financial system and the economy in general. But it has begun, even if there is considerable uncertainty over future developments and there are many risks lining the path. Once we have regained our balance we must keep it.