samchain/econo-pairs-v1 huggingface dataset:
While such a timeinconsistent policy may be desirable in theory, in an individualistic committee like ours, with a regular turnover of members, it is not possible to implement a mechanism that would credibly bind future members in the manner required. Nevertheless, by reducing uncertainty about our behaviour, we are aiming to encourage households and businesses to spend and invest. The knowledge that monetary policy will not be tightened until the UK’s fledgling recovery is secured should boost confidence. Moreover, it should reduce the likelihood that the present expansionary monetary stance is withdrawn prematurely through an upward movement in market interest rates. Short-term yields have moved up since our announcement on a string of good news about the economy, but the unemployment threshold, by serving as a reminder of just how much growth is needed to regain lost ground, should temper the extent of any tightening. Indeed, for that reason, guidance is potentially more valuable during exit than during entry. Finally, given the uncertainty about the causes and durability of the recent exceptional weakness in UK productivity growth, it also provides a robust framework within which to test the scope for economic expansion without jeopardising price or financial stability. While guidance – and good central bank communication more generally – will be important during exit, I doubt very much that good central bank communications alone can ensure that it will be completely smooth. When a central bank’s reaction function is not well understood, market interest rates tend to respond to policymakers’ actions in response to economic data.

Charles Bean: Global aspects of unconventional monetary policies Panel remarks by Mr Charles Bean, Deputy Governor for Monetary Policy of the Bank of England, at the Federal Reserve Bank of Kansas City Economic Policy Symposium, Jackson Hole, Wyoming, 24 August 2013. *  *  *  Since the demise of Lehman Brothers and the subsequent exceptional contraction in demand in 2008–9, central banks have not only expanded the range of their liquidity operations in order to restore financial stability, but also adopted a range of unconventional monetary measures in order to raise aggregate demand once short-term policy rates had reached their effective lower bound. Those measures include: large-scale purchases of government bonds and private securities (quantitative easing); selective actions to support the flow of credit; and guidance over the future path of policy rates. While I believe these policies helped the advanced economies to avoid some of the worst downside scenarios, they have proved controversial – particularly quantitative easing – provoking plenty of criticism, both at home and abroad. Before I turn to the particular focus of this conference, namely the global consequences, let me say a few words on the domestic costs and benefits. Some have questioned whether quantitative easing works at all. In both the United Kingdom and the United States, central bank reserves pay the policy rate and are consequently close substitutes for Treasury bills.
BIS Review 115/2007  15  Norway has a substantial current account surplus. If oil prices remain high, this might also be the situation in the years ahead. Most of the current account surplus is matched by capital outflows from the state to the Government Pension Fund – Global. Adjusted for these outflows, the surplus has been between NOK 0 and 70 billion in recent years. It is also likely that oil companies invest substantial foreign exchange earnings abroad. In the chart, the term basic balance has been used to mean the current account adjusted for the estimated capital outflows from the state and oil companies. The basic balance has been negative in the past few years and is estimated to fall close to minus NOK 150 billion this year and next. 16  BIS Review 115/2007  The large basic balance deficit reflects a substantial saving deficit among mainland industries and households combined. Developments in banks’ balance sheets and sources of liquidity are influenced by these flows. The saving deficit is to a great extent financed by raising capital abroad, often through banks. Access to and pricing of this funding is influenced by the recent turbulence in international money markets. The situation has similarities with the situation in the mid-1980s. Then, as now, there was a large saving deficit in the private sector of the mainland economy, while high petroleum revenues laid the basis for a current account surplus.

We will have many opportunities to review areas of policy that have been fixed in legislation up to now. It will allow us to be proactive about finding opportunities to support competitiveness and growth without undermining our primary objectives. We will work hard to identify and act on them. Many factors underpin the international competitiveness of the UK as a financial centre. Most importantly, financial services are something the UK is very good at. The UK is one of the best places in the world to come if you’re looking for highly skilled people, deep and specialised financial markets, a robust legal system, and trusted institutions. It is also home to an incredibly innovative financial sector. Those are the foundations upon which the UK’s comparative advantage in financial services is built. [11] As a very large global financial centre, the UK benefits from so-called ‘agglomeration effects’. These are self-reinforcing effects which emerge when businesses cluster together in the same place. In the UK’s case, the advantages that attract firms to come to do business here – deep and varied markets and a huge supply of talented financial professionals – get stronger the more firms come. This is because such clustering leads to economies of scale and scope and positive spillovers which further entrench the UK’s advantages. The agglomeration effects the UK enjoys as a financial centre are well established and underpin its international competitiveness.
In addition, this conference continues to receive support from, and participation of, renowned international experts and our regional counterparts. I bid you a warm welcome to Malaysia, and would like to take this opportunity to extend our appreciation for your support and contributions. Allow me to also to congratulate the organiser of this event, the Compliance Officers Networking Group of Malaysia (CONG) and the collaborating partners, namely the Institute of Bankers Malaysia, the Securities Industry Development Corporation, the Malaysian Insurance Institute, Islamic Banking and Finance Institute Malaysia (IBFIM) and the Asian Institute of Finance for successfully putting this event together. I have been made to understand that for the first time, this conference has also received support from the academia, with the participation of Universiti Teknologi MARA as a collaborating partner. Financial crime continues to evolve in modus operandi, multiply in scale and complexity, and hence, the greater the potential harm they can inflict on the smooth functioning of the financial markets and payment systems, financial sector stability and economic development globally. As an unintended consequence of enhanced access to financial services and greater mobility of funds, facilitated by increased globalisation, technological advancements and ongoing efforts to promote financial sector development and financial inclusion, the opportunity and attractiveness for criminal elements to abuse the financial sector, and use it as a conduit to move illicit funds, and to disguise criminal activities, have increased.

In this regard, I urge the industry to take advantage of the knowledge and experience of the panel of experts assembled here at this conference, to better understand and prepare for the implications of the review of the FATF 40+9 Recommendations, and the expectations on financial institutions and boards of directors moving forward. For Bank Negara Malaysia, the enhancement to the nation’s infrastructure to combat financial crimes will remain as one of our key priorities. In this regard, our role as Malaysia’s primary financial regulator will continue to focus three broad areas. The first is to deter and prevent criminals from abusing the financial system to be the conduit for illegal activities by ensuring the continued effectiveness of Malaysia’s legal and other relevant infrastructure, systems and processes in combating financial crimes. Secondly, is to ensure all financial institutions continue to strengthen their defences against such threats and risks via our regulatory policies as well as risk-based supervisory and surveillance activities; and thirdly, to strengthen collaboration between the financial industry with other domestic and international stakeholders in AML/CFT initiatives to protect the integrity and stability of our financial system, including implementing capacity building programmes, such as this Conference.
An important issue is, of course, the size of the forecasting errors it is reasonable to expect. Some colleagues at the Riksbank studied this about a year ago by evaluating 52,000 forecasts which 250 institutions around the world had presented over a period of almost a decade. They concluded that the errors in forecasting inflation were somewhere between a half and one percentage point, depending slightly on the country in question. The historical errors in the Riksbank’s forecasts have been of approximately this magnitude except in three periods. The first was 1996–97, when large interest rate cuts, for example, lowered CPI inflation via house mortgage expenditure. The second was in the late 1990s, when the deregulation of electricity and telecom markets, for example, led to a relatively large one-off downward shift in the price level and temporarily lowered inflation. The third is the past year, when the greater part of the increase in inflation has had to do with various supply shocks, for instance on prices for electricity, meat, fruit and vegetables last spring. The background to these price disturbances is a poor water supply for hydroelectric power on account of low precipitation, livestock diseases and poor harvests on  BIS Review 24/2002  7  account of unusually cold weather in Europe. As I mentioned, shocks of this type are liable to raise the price level and lead to a transitory increase in the rate of inflation.

Continued lending from other parts of the euro area can therefore help cushion the impact and support consumption and investment. In addition, holding foreign bonds – which are less affected by the asymmetric shock – helps maintain income and support domestic consumption. In the United States, these channels alleviate around 60% of the impact of state-level shocks on GDP growth, compared with just 20% in the euro area. Indeed, the contribution of credit smoothing in the euro area was negative during the global financial crisis as cross-border credit provision evaporated, worsening the recessions in the periphery. [2] During the pandemic there have also been sizeable swings in measures of financial integration, albeit more muted than during the financial crisis. [3] Indicators based on the convergence of asset prices declined sharply at the onset of the pandemic, but then rebounded following the ECB’s announcement of substantial monetary accommodation and subsequent progress on European fiscal support packages (Chart 1). Movements in quantity-based financial integration indicators, which reflect cross-border asset holdings, have been slower, but more persistent. [4] Cross-border activity in the unsecured segments of the money markets paused and cross-border equity holdings declined sharply at the onset of the pandemic, posting a partial rebound in mid-2020. Over the past year, financial flows have tended to be characterised by more liquid assets and securities with shorter maturities, pointing to a higher vulnerability to shocks.
But even so, the fall should be seen above all as a consequence of the unprecedented rise and the high valuations at the beginning of 2000. An orderly adjustment I repeat that the course of events today differs in many respects from what happened in the world economy in the late 1920s and early 1930s. At that time, economic policy was tightened, free trade was restricted and banks collapsed. Global economic activity went into a downward spiral of deflation, falling output and decreased employment. Thus, the drop in share prices was only one of several ingredients in the mixture of events at that time. Although world economic demand has been subdued and the recovery in activity is now rather sluggish, the fact remains that the adjustment after the latest upward phase and the high share values has been comparatively orderly. Overall economic policy is expansionary - not restrictive - in many parts of the world. With some minor exceptions, there have been no extensive political interventions that impede international trade. Moreover, the financial system has proved to be highly robust. The maintenance of an efficient payments system and the supply of credit from central parts of the financial system are, of course, important conditions for a further successive economic recovery. In the past it is disturbances in precisely these two functions that have caused real economic developments to follow paths that resulted in falling output and deflation. For an illustration of this we need only go back a decade or so to Sweden’s own bank crisis.

The building blocks for such a Financing Union for Investment and Innovation already exist: the Capital Markets Union, which promotes the diversification of private financing; (ii) the Juncker Investment Plan, which channels a mix of public and private investment towards the real economy; and (iii) the Banking Union, which addresses persistent financial fragmentation. These initiatives, however, lack the unified governance of a Financing Union, which would help circumvent bureaucratic barriers and foster synergies. In addition, for this Financing Union to be effective, progress is still needed in four key areas: first, providing incentives for cross-border investments, mainly in equity, through accounting, taxes and insolvency laws; second, developing pan-European long-term saving products and investment vehicles like European venture capital funds – I will focus on this area of progress which is of particular interest to the insurance sector; third, completing the Banking Union; and fourth, controlling financial activities and risks that are of vital importance for the euro area, such as supersystemic CCPs. In this context, insurers have an essential role to play by taking the lead on new forms of life insurance that are compatible with the low interest rate environment, with the euro area’s need 2/4  BIS central bankers' speeches  for equity financing and with the expectations of euro area households – old age provision is now the second most important motive for saving. This means insurers should pursue reflections to develop new long-term pan-European savings products.
These disruptions are also reflected in the monetary, financial and payments spheres – which we scrutinize as central banks and supervisors –, where digitalisation is bringing about a triple revolution – and it is far from over: (i) First, the arrival of new players: new actors born from the tech world – Fintechs and Bigtechs – are challenging historical players with radically new approaches to financial services and at present much less regulation; (ii) Second, the emergence of new assets: crypto-assets from the blockchain universe in the form of tokens: they will not be credible as “crypto-currencies”, but could be used as settlement means – think of stablecoins for instance; (iii) Lastly, the emergence of decentralised market infrastructures: new technologies tend to reduce the use of proven centralised settlement systems. 2/3  BIS central bankers' speeches  These revolutions offer the potential for increased market efficiency while reducing costs and time. But they entail several risks, and they could lead to significant concentration effects among a few dominant private networks: these would in practice “re-intermediate”, but without the trust and regulation associated with the architecture of the monetary and financial edifice that we – public and private players – have built together over a period of decades. In the face of this major challenge, we need to both innovate and regulate.

These figures are currently distorted by the sharp fall in mobile phone fees, but the Bank of Japan continues to expect CPI inflation to be only close to 1.1% in 2022 and 2023. Not so long ago, many commentators were worried about a possible “Japanification” of the euro area. They were wrong, and should be reassured today: the ECB’s resolute action has been successful in preventing this risk and avoided falling into a trap where economic agents’ expectations remain deflationary (“deflationary mind” as the Japanese often say). These differences between the United States, Japan and the euro area explain the different paces of their monetary reactions. The ECB remains very vigilant about prices and wages dynamics, and will gradually adjust its monetary policy to firmly ensure that inflation recedes soon and then stabilises around its 2% target over the medium term. In our case, we think that 1/3  BIS central bankers' speeches  this gradual and sequential approach – first tapering, second lift off, and eventually downsizing – is appropriate. But we keep our full optionality about the speed of this sequence, and will definitely be data driven. II. Two great transformations are underway The present Covid crisis and inflation hump – serious though they are – should not let us forget the two “Great transformations” – the ecological and the digital ones – that we will all have to pursue in the long run.
Today most central banks are concentrating their monetary policies on maintaining price stability; and maintaining inflation at lower stable levels. John Exter, founder Governor of the Central Bank of Sri Lanka emphasized on the very first day of the establishment of the Central Bank, “There is no financial wizardry by which the Bank can suddenly pull out of a hat a higher standard of living for everybody. The Bank’s contribution must necessarily be a long-run contribution. The Bank does not itself produce goods and services, but it should, by creating the right monetary conditions enable the country…. to do so ”. Central bankers would like very much to have the ability of a captain or a pilot who knows exactly where he is heading, how his craft (i.e. economy) works and how his actions affect it course. Unfortunately we do not have that ability and as observed by some, we are more like early navigators who operate in a world of huge uncertainty with no reliable maps or compasses. Because of lags in the availability of statistics, we cannot know precisely, all the information we need. Policy instruments in our possession operate with time lags which are also not entirely precise. Over the years, we have acquired powers and independence, but there are limitations in any central bank’s ability to steer its economy with precision. Hence, central banking indeed is a challenging task, which requires continued efforts to explore how our economies work and how our policy instruments operate.

It is marked by very frequent settlements (three settlement sessions a day at the National Bank of Poland), which ensures a brief settlement cycle and a closure thereof within a single working day. The exchange of payment orders between banks is effected only electronically. In addition to the ELIXIR system, KIR S.A. has recently launched the EuroELIXIR system (in January 2006, 34 banks including the National Bank of Poland and nine out of ten largest Polish banks participated in the system), designed to settle euro-denominated transactions, both domestic (with no amount-related limitations) and cross-border ones (up to 12,500 euro and, as of January 1, 2006, up to 50,000 euro). In the case of cross-border transactions, this can be achieved due to the National Bank of Poland’s participation in the STEP 2 and EURO 1 systems. Despite a relatively high level of development of the Polish payment infrastructure, it is hardly used by individual consumers. Poland has witnessed a significant progress in the development of e-banking over the past few years; however, compared to other EU Member States and the neighbouring countries, our position is still weak, taking into account the number of customer bank accounts and the number of non-cash payments by payment cards. For instance, in terms of the number of transactions at POS terminals per one card issued in Poland, we rank extremely low vis-à-vis other EU Member States. In 2004 in Poland, approx.
And we’ll work together to ensure that, if the safety of the system relies increasingly on them, the standards they meet reflect their systemic importance. Because none of these competitive trends are to be stifled. In fact, they are to be spurred. Our job is to enable and encourage, ensuring these developments achieve their full potential. Conclusion  Five years ago, few could conceive of this unbundling of banking. In the wake of the crisis, any return of borrowing seemed a long way off. And Brexit wasn’t even a word. The lesson: stuff happens. And because it does, we all benefit from a financial system that can serve in the bad times as well as the good; from a system that doesn’t disrupt the economy but can deliver for it. But no set of rules, however detailed, will deliver that for all time. The framework that’s now five years old reflects that by hard-wiring the duty to keep up. Keep up with the macro trends. So that, whatever happens, the Square Mile is regulated for the good of all 94,000 square miles of the UK. Thank you. 10  All speeches are available online at www.bankofengland.co.uk/speeches  10  Charts Chart 1: Annual growth rates of UK mortgage and consumer credit lending  (a)  Chart 2: Spreads between quoted mortgage rates and risk-free rates  (a)  Source: Bank of England. (a) Sterling net lending by UK MFIs and other lenders to UK individuals. Seasonally adjusted. Consumer credit series excludes student loans.

Let me extend my appreciation to our industry associations and partners, including the Embassy of Switzerland in Singapore, Swiss House Singapore and Swiss Business Hub ASEAN for partnering IBF in its organization of the workshop on “Talent Development in Wealth Management” in November last year; and PricewaterhouseCoopers without whom we would not have had the pleasure of listening to Professor Collard today. I also wish to thank the Singapore Workforce Development Agency and the Monetary Authority of Singapore, for their close collaboration with IBF. I look forward to more of such collaboration between IBF and our industry associations and partners in the year ahead. I wish you a fruitful session ahead. BIS Review 81/2008  3