samchain/econo-pairs-v1 huggingface dataset:
Despite the role of seasonal factors, this slowdown is more apparent compared to that of recent years (Chart 3). Accordingly, the exchange-rate-adjusted annual credit growth rate is expected to converge at around 25 percent by year-end, as envisaged. In the baseline scenario presented in the July Inflation Report, global economic activity was assumed to continue to improve gradually; however, it was also highlighted that downside risks on the global economy were growing stronger. Indeed, right after the publication of the Report, risk perceptions deteriorated rapidly and debt problems in the euro area further intensified changing the baseline scenario. In response, we introduced a comprehensive package of measures to contain the potential adverse effects of these developments on financial stability and economic activity. The objective of these measures was to supply liquidity to markets in a timely, controlled and effective manner in the event of financial turmoil that may be driven by developments in the global economy. Moreover, we opted for a modest cut in the policy rate in order to contain the risk of recession in domestic economic activity that may be posed by escalating global economic problems. Moreover, Turkish lira required reserve ratios were adjusted in order to extend the maturities of liabilities of the banking system (Chart 6). The mounting uncertainties facing the global economy since the July Inflation Report and accelerating capital outflows from emerging economies called for a series of measures intended to contain fluctuations in the foreign exchange market.

The authorities are to devise a strategy in advance for managing the bank if it is danger of failing. If the bank is large and important, there is to be a plan to ensure continued operation. If the bank is so large and complex that it probably cannot be resolved without the use of public funds, it can be restructured. The resolution authority can demand that complex parts of the institution be transferred to separate subsidiaries. As a last resort, the authorities can demand that large banks be broken up into several smaller ones. There should also be a plan for how continued operations can be funded. All systemically important banks in Europe shall hold a minimum amount of liabilities that can quickly be bailed-in. This entails a limit on the share of short-term and secured debt banks may issue. The authorities must also ensure that large banks and systemically important investors do not invest too much in other banks’ risky debt. This is a new perspective on banks’ funding structure. In the future, banks will have to ensure that portions of their liabilities can quickly be written down and converted to equity. Bail-in as an instrument will be implemented in the EU on 1 January 2016, a year after the rest of the Directive. The Directive must be followed up in Norway under the EEA Agreement. Norway’s own bank resolution legislation must be updated. As regards the Norwegian framework, the new elements are in particular the requirements for resolution plans and bailin.
Svein Gjedrem: Economic policy challenges Address by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), to the Executive Board of the Confederation of Norwegian Business and Industry, 19 September 2002. Charts for the speech can be found on the Norges Bank’s website. *  *  *  A year and a half ago, the Government and the Storting adopted new guidelines for economic policy, which call for an annual use of petroleum revenues equivalent to the expected real return on the Government Petroleum Fund. At the same time, the Government issued a new operational mandate for monetary policy. Norges Bank shall set the key rate with a view to maintaining low and stable inflation. The first sentence in the monetary policy mandate refers to the value of the krone. Stability in the national value of the krone implies that inflation must be low and stable. This is the best contribution monetary policy can make to economic growth and prosperity and is a necessary precondition for stability in the financial and property markets. The regulation also states that monetary policy shall be aimed at stability in the international value of the krone. The krone exchange rate fluctuates from day to day, from week to week, and from month to month. We do not have the instruments for fine-tuning the exchange rate. The first paragraph of the mandate sets forth an objective. The last paragraph specifies what Norges Bank shall do. The inflation target is set at 2½ per cent.

To join or not to join To join or not to join EMU is a complex and multi-faceted decision for any sovereign nation. By definition, it amounts to a long-term commitment to an uncertain process subject to unpredictable influences. The long-term costs and benefits of such a decision are therefore not easily evaluated. In addition, the cost-benefit analysis must take place at many different levels. Economics constitutes only one layer of analysis and by no means the only relevant one. Switzerland and the United Kingdom are both nations with long-standing traditions of global integration and free trade. Both nations rely fundamentally on multilateral contractual frameworks such as the one offered by the World Trade Organization (WTO). Our nations and our peoples live in and benefit from a global and open world. Europe is and must remain part of that world. Surely an open multilateral global economy must be our primary long-term commitment. The decision to join a regional agreement such as the European Monetary Union must be evaluated against this global backdrop. I have tried to provide you with a brief sketch of some of the salient macro-economic issues related to such an evaluation. Beyond  4  BIS Review 24/2004  economics, both of our nations have a proud political history. Ultimately, the decision to surrender national sovereignty - be it monetary or otherwise - will always be a political one. Central bankers may have views as private citizens which they would presumably express at the ballot box.
Mark Carney: Introduction to the Open Forum Introduction by Mr Mark Carney, Governor of the Bank of England and Chairman of the Financial Stability Board, to the Bank of England Open Forum, London, 11 November 2015. *  *  *  Thank you, Lord Mayor for your extraordinary service this past year and for your gracious hospitality today. Welcome, everyone, to the Open Forum. In a building that started its life in 1411 as “a little cottage”.1 And which has become the place to bring people together: Livery companies and businesses, Traders and market makers, World leaders and citizens. Today, we draw inspiration from this great tradition by gathering representatives from across civil society to discuss how to build the real markets of tomorrow. The Bank of England has a statutory responsibility to protect and enhance the stability of the financial system in the UK. Therefore, even if we don’t regulate markets per se, we have a close interest in working with others to create real markets that enjoy the trust of society whilst effectively allocating capital and risk. Markets can be powerful drivers of prosperity and security for all. Financial markets matter. By financing firms to hire, invest and expand, markets drive growth. By opening up cross border trade and investment they create new opportunities for businesses and savers. By transferring risks to those most willing and able to bear them markets help households and investors insure against the unexpected.

Vulnerability - a quick survey Ensuring that companies, consumers and investors have confidence in their ability to effect transactions and access their funds, securities, and other financial assets is of the highest importance in times of crisis. Therefore it is clearly in the private and public interest to ensure that, in the event of any large-scale disruption, systemic consequences are minimized. However, minimizing systemic consequences requires knowing the major vulnerabilities of the financial system. With this knowledge the responsible parties in the private sector as well as in central banks and government can in principle take adequate precautions and remedies. Three sources of vulnerability can be identified. A first source of vulnerability is economic concentration among large and complex financial institutions. This may strike you as odd. But size is a potential source of vulnerability and industrial consolidation usually increases size. The financial industry has been experiencing numerous mergers and acquisitions. This has resulted in financial services offered by an increasingly small number of large and dominant players. Even if only one of these players were to stop functioning well the financial system as a whole might suffer. The second source of vulnerability is geographical clustering. Financial institutions are heavily clustered in a limited number of important international financial centers. Economic concentration and  2  BIS Review 55/2002  geographical clustering tend to add up. A huge number of firms, among them the industry’s giants, may be affected in one and the same location by one and the same disruptive event.
This is why the recent regulatory changes on capital in Spain are crucial.9 Banking assets are however opaque, which – combined with the high leverage – make recapitalisation in private markets difficult, especially in crisis periods.10 Therefore, to reduce these problems, high transparency is extremely important: the stress tests and Bank of Spain’s publications on key bank variables are thus indispensable. If, after these exercises to promote transparency, some small groups of banks cannot fulfill the capital requirements, restructuring may be the only solution. Banks are still too highly exposed to real estate assets in their balance sheets and so the new haircuts introduced by the Bank of Spain go in the right direction. Geographical diversification (notably the internationalisation of some banks) and better risk management are also crucial factors, I believe, in addressing the current challenges. But also the strengthening of corporate governance is of utmost importance to avoid excessive risk-taking. In other words, transparency and risk management are important, as I said, but incentives as well! In this sense, the restructuring of some groups of banks may be vital.11 Second, looking into the future, with the crisis behind us, higher bank capital requirements will also play a positive role by reducing incentives for excessive bank risk-taking.12 On that  8  See Iyer and Peydró (2011) and Rochet and Vives (2004). 9  See Jiménez, Ongena, Peydró and Saurina (forthcoming). 10  See Morgan (2002). 11  See Cuñat and Garicano (2010). 12  See Freixas and Rochet (1997) and Acharya and Richardson (2009).

McConnell, M. and G. Perez Quiros (2000), Output Fluctuations in the United States: What Has Changed Since the Early 1980s?, American Economic Review. Mian, A. and A. Sufi (2009), The Consequences of Mortgage Credit Expansion: Evidence from the U.S. Mortgage Default Crisis, Quarterly Journal of Economics. Morgan, D. (2002), Rating Banks: Risk and Uncertainty in an Opaque Industry, American Economic Review. Rajan and Diamond (2009), The Credit Crisis: Conjectures about Causes and Remedies, American Economic Review. Rochet and Vives (2004), Coordination Failures and the Lender of Last Resort: Was Bagehot Right After All?, Journal of the European Economic Association. BIS central bankers’ speeches  5
As always, my comments represent my own views and opinions, not necessarily those of the Federal Open Market Committee or the Federal Reserve System. With the benefit of hindsight, it is clear that the Fed and other regulators, both here and abroad, did not sufficiently understand some of the critical vulnerabilities in the financial system, including the consequences of inappropriate incentives, and the opacity and the large number of self-amplifying mechanisms that were embedded within the system. Likewise, we did not appreciate all the ramifications of the growth of the shadow banking system and its linkage back to regulated financial institutions until after the crisis began. Of course, understanding now what we did not understand then is only half the battle. We need to respond to ensure that ongoing changes in our financial system do not threaten the stability of the financial system in the future. For one, the crisis is provoking a reevaluation of our views on how to respond to asset bubbles. For years, central bank orthodoxy has been that you cannot identify asset bubbles very well. Thus, the strategy has been to move aggressively to clean up such bubbles after they have burst. BIS Review 161/2009  1  I think our level of confidence in that approach has been considerably reduced in the wake of the crisis that we have just experienced. The costs of cleaning up after the fact have been immense. But make no mistake – developing an effective, more proactive approach is not easy.

4  BIS Review 161/2009  should be an explicit quid pro quo for that status in the form of higher capital and liquidity requirements. For example, contingent capital could be made a part of any additional regulatory capital requirements for “too-big-to-fail” firms. As I have discussed, we are moving forcefully to make the system more robust and resilient. While at times, the criticism of the Federal Reserve and other regulators has been on target, at other times, I believe it has been off the mark. For example, the Federal Reserve has been singled out for criticism about the failures of supervision even though it did not have any regulatory responsibility for many of the largest U.S. financial firms that collapsed during the crisis. 4 American International Group, Inc. (AIG) is an important case in point. The Federal Reserve learned about the significant liquidity problems AIG was experiencing only shortly before the Lehman bankruptcy. At that time, we were assured that a private-sector consortium was being assembled to provide AIG with liquidity support if that proved to be necessary. Unfortunately, once Lehman filed its Chapter 11 petition on September 15th, the environment worsened and the lending consortium fell apart. A recent report by the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) suggested that the Federal Reserve should have had a contingency plan in place for AIG. The reality is that, in fact, the Federal Reserve was the contingency plan.
Minouche Shafik: The interaction of monetary and macroprudential policy Speech by Ms Minouche Shafik, Deputy Governor for Markets and Banking of the Bank of England, at the IMF panel on “Revisiting Monetary Policy Frameworks”, Lima, 10 October 2015. *  *  *  I would like to thank David Aikman, Angus Foulis, Grellan McGrath and Alex Varadi for input to the preparation of these remarks and Don Kohn for comments on an early draft. •  The “lean or clean” debate used to be one of the most contentious in monetary policy until the crisis. Should monetary policy “lean against the wind” in the expansion phase of the credit cycle? Or should it remain solely focused on delivering the inflation target and “clean up” after the credit cycle contracts? The crisis taught us that cleaning up afterwards is a very expensive proposition. But are we confident enough in macroprudential tools to prevent the emergence of unmanageable risks during the credit cycle? The debate remains very much live, in part because macro-prudential policies are still nascent and we have not yet accumulated sufficient evidence through a credit cycle to make definitive judgements about optimal policy. “Lean versus macropru” remains an area in which perfectly reasonable people can have very different opinions. •  At one end of the spectrum there are those – such as Lars Svensson – who argue that the cost-benefit calculus is likely to be tilted heavily away from directing monetary policy at credit bubbles.

At the other end of the debate there are those such as Jeremy Stein who argue for the active use of monetary policy to lean against the wind because it “gets in all the cracks.” Or Jaime Caruana and his colleagues at the BIS who argue that it would be appropriate for advanced economy monetary policy to begin to normalise in order to head off emerging macroprudential risks. •  I will aim to show that there are merits to elements of all of these arguments. But where the institutional set up and full spectrum of macro-prudential tools are available, there is strong case for using monetary policy only as a last resort for tackling financial stability risks. I will try to illustrate this argument with experience from the UK. •  Let me start with a simple question: can monetary policy be used to lean against the wind? The answer to that question is “yes”, because monetary policy and macroprudential policy both affect financial conditions and clearly have implications for one another. •  To illustrate the implications of monetary policy for macroprudential policy, consider the example of Hong Kong, where the unusually low interest rates since 2009 (as a result of their peg to the US dollar) have fuelled sharply rising prices across a range of residential and commercial properties (He 2014).
Why are all these questions relevant for central banks? In my view, there are sound reasons to argue that the research effort of a central bank need not necessarily be confined to the traditional fields of macro and monetary policy. On the contrary, the deeper and broader our understanding of the 11  See Gabriel Zucman (2014), “Taxing across Borders: Tracking Personal Wealth and Corporate Profits”, Journal of Economic Perspectives, volume 28 (4), pp. 121-148. 12 See http://www.oecd.org/tax/beps/. See also the Chapter 2 of the April 2018 Fiscal Monitor of the IMF. 6  economy is, the better we will be able to fulfil our task of producing good analyses in monetary and financial matters. In the particular case of tax and benefit systems, they have sizable effects on investment, labour-force participation and productivity, and hence on potential output growth and the level of the natural rate of interest. In addition, apart from potential discretionary decisions, tax and benefit systems are the main ingredient of automatic fiscal stabilisers in advanced economies. A deep understanding of tax and benefit systems is therefore crucial to anticipate aggregate demand and inflation dynamics and to assess the appropriate stance of monetary policy and, more generally, of the overall policy mix. From the standpoint of Banco de España, the foregoing arguments in favour of a wide view on our research activities are even more compelling since our responsibilities include providing advice to the Spanish government on economic policies.

8  In this regard, over the years more and more countries are easing the requirements to work with the micro and administrative data produced by the public sector. I believe 13  that Spain should not lag behind in this endeavour. In keeping with this assessment, Banco de España provides researchers with the micro data of some of the surveys it conducts, such as the Survey of Household Finances and the Survey of Financial Competences. But more needs to be done. In this regard, we are committed to extending the availability of micro data to other products, such as the balance sheet data of non-financial corporations and some banking data. In this respect, Banco de España has recently joined INEXDA, a network of central banks whose aim is to exchange experiences in the management of granular data in order to facilitate their use by external researchers. Also, we must strive to have other public institutions join us in this initiative. Although the Spanish public sector currently provides samples of administrative data regarding, among others, tax returns and social security records, there is ample room for improvement in this area.
Consequently, more than ever, the Member States should take advantage of the improved economic conditions in the euro area to step up their consolidation efforts. Concerning France in particular, the Monetary Policy Council notes that, as in previous years, public spending as a percentage of GDP is too high. According to the European Commission, it stood at 53.9% in France in 1999, compared with an average of 49.1% for the euro area as a whole and less than 40% for the G7 countries. An initial decrease in this ratio to less than 50% of GDP is necessary to maintain the low medium and long-term market interest rates that are propitious for growth and the fight against unemployment, and to create the conditions for a gradual and lasting reduction of compulsory levies. Secondly, implementing adequate structural reforms The effectiveness of economic policies is not merely the result of a good mix of fiscal and monetary policies. Structural policies also have a major role to play. This is particularly true in France and all the large economies of the euro area in which, according to all international organisations, unemployment stems largely from structural factors, i.e. it is unfortunately maintained by our own regulations and approaches. The importance of structural reforms in the effective fight against unemployment was explicitly recognised by the European Council meeting in Nice after those of Luxembourg and Cardiff.

Mr Carse discusses the importance of ethics in banking  Speech given by Mr David Carse, Deputy Chief Executive of the Hong Kong Monetary Authority, at the Banking Conference on Business Ethics in Hong Kong on 15 September 1999. *  *  *  Ladies and gentlemen, I am pleased to have the opportunity to speak today at this important conference on business ethics. This is an area that is becoming a growth industry, and it is one that it is particularly relevant to banks given the position of trust that they occupy. Indeed, this is one of the daunting things about giving a speech about the importance of ethics in banking. It all seems too obvious. After all, what do we mean by ethics in business? It means, I would suggest, trying to be a good corporate citizen; trying as an organisation to adhere to certain ethical values; and trying to do the right thing by all the various stakeholders – customers, employees, suppliers and shareholders – that any business organisation has. It means, as one writer has put it, “choosing the good over the bad, the right over the wrong, the fair over the unfair”. Put this way, is there any respectable bank that would claim not to attach high importance to core ethical values such as honesty, integrity, fairness, responsible citizenship and accountability? Is there any bank that would claim that it was right to accept bribes in return for loans, to lend to connected parties and to cheat customers?