samchain/econo-pairs-v1 huggingface dataset:
On one hand, the unemployment rate has fallen sharply over the past four months, dropping to 8.8 percent from 9.8 percent in November. On the other hand, payroll employment gains have been relatively modest. The good news is that the data on payroll employment for the past two months was better than for the prior months. The economy added a notable 216,000 jobs in March. Particularly encouraging is the growth of manufacturing jobs. Over the past year we have added factory  2  BIS central bankers’ speeches  jobs at the fastest pace since the 1990s. Other labor market indicators, such as initial claims for unemployment insurance benefits and the employment components of both manufacturing and nonmanufacturing business surveys have also shown improvement recently. Although there is still uncertainty over the timing and speed of the labor market recovery, I am hopeful that job growth will increase more rapidly in the coming months. We would welcome this. A substantial pickup is sorely needed. Even if we were to generate growth of 300,000 jobs per month, we would still likely have considerable slack in the labor market at the end of 2012. So, why is the economy finally showing more signs of life? In my view, the improvement reflects three developments. First, household and financial institution balance sheets continue to improve. On the household side, the 2008–09 rise in the saving rate appears to have stabilized in the 5 percent to 6 percent range.

This usually contributes to lower wage and inflationary pressures in the short term. The Riksbank therefore also closely follows resource utilisation in the labour market. In the short term, a central bank can to some extent lower unemployment by increasing demand and inflation with expansionary monetary policy (in the Riksbank's case, by cutting the repo rate). This leads to companies increasing production and taking on more employees. Using the same reasoning, unemployment would therefore rise if inflation was pushed down by tightening monetary policy. It is this relationship that is usually described with the aid of what is known as the short-term Phillips Curve. Some of the criticism aimed at monetary policy in recent years appears to be based on the assumption that there is a clear-cut long-term relationship between inflation and unemployment. However, it is not possible to buy lower unemployment in the longer term by allowing inflation to rise. Sooner or later wage-earners will require compensation for the higher inflation by raising their wage demands. As prices and wages rise, the stimulating effect of monetary policy will wane. Demand will fall again and employment will decline. In the long term, unemployment will return to its long-term equilibrium level. A systematic, expansionary monetary policy would only have the consequence that inflation and inflation expectations would soar. This correlation is usually illustrated with the aid of the so-called long-term Phillips curve. There is currently a broad consensus on this, both in central bank circles and the academic world.
It is meant to analyse the decisions made over this period, which was rather challenging to be honest, and to assess their influence on the economy and price stability. Second. The conditions of monetary policy implementation change over time. We are going to scrutinise whether the effective parameters of our monetary policy we are adhering to now are coherent with these developments and to what extent. Possibly, it would be reasonable to consider certain adjustments that would enhance the effectiveness of our policy in the future, taking into account, among other things, structural shifts in the Russian and global economies which might occur in the future. The third aspect is no less important than the first two. Price stability, which is the goal of monetary policy, is beneficial to the entire society. However, there are significant differences in how people, businesses, financial market participants, analysts and experts perceive price stability as such and the role of monetary policy in ensuring price stability. Annual inflation has averaged 4% over the period since January 2017 until now. Nonetheless, its rate has been fluctuating from 2.2% to 7.3% and currently stays at a high level. Within this Review, we will be able to carry out an extensive discussion of how the society perceives the policy pursued and its results.

Muhammad bin Ibrahim: Rethinking microfinance norms Special address by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Global Symposium on Microfinance, Kuala Lumpur, 22 May 2017. * * * Thank you for the opportunity to speak today at this Symposium. Bank Negara Malaysia is pleased to host this event together with the World Bank. We are also pleased to have Finance Minister II, Yang Berhormat Datuk Seri Johari Abdul Ghani present with us to address the audience here today. It has been almost six decades since the economist John Kenneth Galbraith observed that few things are more evident in modern social history than the declining interest in inequality as an economic issue. Today, financial and economic inclusion is given priority as a policy agenda, as the global economy confronts an environment of rising income inequality and tepid global growth. According to the World Bank, the distribution of income globally is highly unequal today with a Gini coefficient of 70.7, up from 68.4 in the 1980s. In some countries, income inequality has in fact risen sharply. The challenge of income inequality is even more prominent in Asia. A Working Paper published by the IMF in 2016, highlighted that in Asia, the average Gini coefficient has risen by 4 points from 36 in 1990 to 40 in 2013. Over the same period, the average Gini coefficient for the rest of the world rose by only 2 points.
Further modernisation and enhanced security of the payment process remains a constant priority across the EU and on national level. One of the main targets continues to be provision of high level of security of remotely initiated electronic payment transactions by ensuring the completion of migration to strong customer authentication for card internet payments. Efforts continue for exploiting the full potential of open banking and eliminating any obstacles in the interfaces of payment service providers. In the same vein is the Opinion of the European Banking Authority on supervisory actions to ensure the removal of obstacles to accessing accounts under PSD2, published in February 2021. In order to address the new developments in financial technology the European Commission has already launched a public consultation aiming at update and amendments of the Settlement Finality Directive1. In addition, review of other basic legal acts related to payments as the Payment Services Directive2 and the Electronic Money Directive3 is expected to start by the end of 2021. I wish interesting and fruitful work to the participants in the video conference.

Christian Noyer: Beyond Pittsburgh – the future of financial regulation Keynote address by Mr Christian Noyer, Governor of the Bank of France, at the Paris Europlace International Financial Forum, Singapore, 26 October 2009. *  *  *  Ladies and Gentlemen, I am delighted to address this distinguished audience at the Paris Europlace forum in Singapore. I will take this opportunity to present my analyses on the lessons learned from the crisis regarding the essential reforms in financial regulation. Since the crisis started, in August 2007, we have gone through the most difficult years in our modern financial history. We have mobilized enormous resources to ensure the survival of the financial system and preserve its integrity. We have implemented exceptional measures, both on the fiscal and monetary front. We have acted in permanent cooperation between all countries, industrialized and emerging alike. That spirit of cooperation was on full display during the G20 Summit that took place recently in Pittsburgh. The cohesion shown by G20 members has powerfully contributed to restoring confidence. Today, we can be reasonably assured that we have stabilized our economies and avoided the worst. Current forecasts by the IMF show reasonable prospects for growth in the world economy in 2010. But there are many downside risks and adverse scenarios that could still materialize. Above all, we have a duty, and a mandate, to make sure that the causes of the crisis are addressed and that our economies do not fall victim to such shocks in the future.
In order to prepare our region to be as competitive as possible, policy makers, firms and workers need to accurately gauge which industries and jobs will grow fastest. Given the trend over the past few decades, it is no surprise that the new jobs being created across the region and nation are most likely to be in industries with a high share of workers with a college education. Thus, education and worker training is likely to continue to be very important in maintaining the economic vitality of our region going forward. Conclusion In summary, the recovery in our region continued at a slow pace during the second quarter of 2011. While overall job growth has been sluggish through the recovery, we find that there has been a great deal of job churning below the surface throughout our region. So far, this job churning is about evenly balanced between old and new job creation. The evidence to date is pretty clear that these new jobs, on balance, are in industries that employ workers with higher levels of skills and education. I will now ask Jaison Abel to provide additional details on the regional economy. 1  Groshen, Erica L. and Simon Potter. 2003. “Has Structural Change Contributed to a Jobless Recovery?” Federal Reserve Bank of New York Current Issues in Economics and Finance 9, no. 8. Groshen, Erica L., Potter, Simon, and Rebecca J. Sale. 2004. “Economic Restructuring in New York State.” Federal Reserve Bank of New York Current Issues in Economics and Finance 10, no. 7.

Our fundamental policies are enshrined in the Basic Law: among these are fiscal independence; maintenance of Hong Kong as an international financial centre; and a financial system governed and protected by locally enacted laws. Most important, the Basic Law prescribes a separate currency for Hong Kong - the Hong Kong dollar - which is to continue to be freely exchangeable and fully backed by reserves. These points are worth stressing, because there has been much misunderstanding about Hong Kong’s position. The challenges ahead  I believe we should also look to the future, and not just dwell on current anxieties or deal with the political fall-out from our recent measures against market manipulation. As I see it, there are two main challenges ahead. One is the challenge before every economy in the region, including Hong Kong, to pull ourselves out of the economic difficulties that now face us. The other is a challenge to the global financial community as a whole. For Hong Kong, the challenge is to see through the economic adjustment that is now in train, to continue to promote our competitiveness, and to plan for economic recovery. There is no denial that this is a painful process. Nor can there be any pretence that the current downturn will be over quickly, whatever the positive signs in the markets over the past few weeks. In the financial markets we need to be vigilant against future attacks and to introduce further safeguards in our financial system.
BIS Review 131/2010  3  In order to maintain operational flexibility in terms of their business operations and an ongoing ability to distribute capital to their shareholders, we expect that banks will want to maintain their level of tangible common equity at or above 7 percent, the sum of the minimum requirement and the conservation buffer. However, we do anticipate that the buffer may be penetrated from time to time during adverse economic environments. Finally, the risk-based ratios will be back-stopped by a new leverage ratio standard, which will constrain the amount of overall leverage that a banking organization can take relative to the sum of its non-risk-weighted assets and off-balance-sheet exposures. Together, these changes represent a very significant upgrade of the standards: A much higher proportion of this ratio is now met by common equity; that common equity is much better quality than before; the amount of risk-weighted assets against which capital must be held has increased and better reflects underlying risk; a new capital conservation buffer is added, and there is a new backstop against excessive leverage. So what were the considerations that went into constructing this new standard? The basic goal was to enable the big, internationally active banks covered by the Basel Accord to absorb the type of losses associated with a major marketwide financial shock and still retain sufficient market confidence so that they could continue to be able to fund themselves and, if necessary, to raise additional equity without the need for unusual government support.

And if the word “currency” indicates an alternative unit of account – the “bitcoin”, for example – nor is this likely to be of enduring significance. You can find goods and services quoted in bitcoin. In the United States, at a rough guess, there may have been as much as $ worth of such transactions last year2. But in a country where annual consumer spending is twelve and a half trillion dollars, that’s a negligible proportion of the total. In the opinion of most  1  I’m thinking here of things like direct debits, or the capacity to receive our monthly pay. 2  According to Coinbase, around 20% of bitcoin transactions – worth $ in total – were for retail purposes. 2  BIS central bankers’ speeches  economists, it’s pretty unlikely that its use as a means of exchange will become very widespread. It’s not just that the value of bitcoin is extremely volatile, though that’s certainly been the case (Chart 2; see also Ali et al (2014a and 2014b) and Yermack (2013) for the shortcomings of Bitcoin as a useable money). One should also recognise that established currencies have a significant built-in advantage. Rather like a common language, the benefit to any individual of using a particular unit of account is greater if others use it too. That gives a big head-start to the incumbent. Switches do very occasionally happen: degrade a currency sufficiently, via hyperinflation and collapse of the banking system, and people will eventually look for alternatives.
I believe that it may be difficult in practice to make the monetary policy decisions on the assumption that the financial stability policy is regarded as given, and vice versa.5 Let me also say, in this context, a few words in general about whether monetary policy and financial stability policy should be regarded as different types of policy with different goals and means. When regarded as principles and concepts it is of course the case that financial stability is quite different from stability in the inflation rate and the real economy, that is, what central banks with flexible inflation targeting strive to achieve. Logically, one could thus argue that monetary policy and financial stability policy are two different types of policy that should be conducted quite separately. But I am not sure how meaningful this distinction is in practice. Personally, I have not regarded financial stability as merely a goal, but just as much a means, or a condition, for attaining a stable real economy and stable inflation. Assessments of developments in the financial sector must, as far as possible, be included in the macroeconomic assessments. Financial unrest and instability often lead to demand in the economy being too low and inflation undershooting the target. If one considers that there are both ”normal” economic cycles and less frequent credit and debt cycles, the upturns in both cycles are not necessarily synchronised.

If one has not created a credible crisis resolution mechanism in good time and does not manage to do so during the crisis, there is finally only one last resort, and that is the ECB. The ECB is the monetary union’s central bank and can do in a crisis what the union’s national central banks are unable to do. It can always create liquidity and buy securities as needed and therefore in principle it can also attain the same credibility as the Bank of England has in the United Kingdom. The problem is that the ECB does not have an indisputable mandate to do this, and that the EU member states have differing views as to whether it should be given such a mandate. The ECB should not save countries from making necessary adjustments in legislation and public finances, many quite rightly point out. But this also risks having the consequence that one refrains from the only remaining mechanism that can manage an acute crisis. Obstacles to setting up crisis management mechanisms One reason why it appears difficult to set up clear frameworks for managing a crisis in advance is, as I mentioned earlier, that crises occur so rarely. “There will be no more crises during my mandate period,” a politician said to me after the Swedish crisis in the early 1990s, when we were to discuss new crisis legislation. And he was right, of course. It took almost 20 years until the next crisis occurred, and by then he had left politics long ago.
Expert judgment is needed because changes in the way the world  18  Hayek (1976) thought this temptation might be overcome by allowing competitive private banks to issue their own paper monies – the threat of competition would stop them over-issuing. But the costs of using several different monies, and the need to monitor the change in their relative values, reduce the benefits from using paper money as a means of payment. Competitive monies have arisen only rarely and usually in situations where government money is either absent or very badly managed. BIS Review 102/2006  5  works mean that monetary policy cannot be run on autopilot. 19 The members of the MPC are able to exercise their own discretion over how to meet the target. Members of the Committee are held publicly accountable for their individual votes. Third, these arrangements reflect both our experience of previous monetary failures and the nature of accountability in our political system. The separation between the elected government which sets the target and the Monetary Policy Committee which makes the month-to-month decisions on the level of interest rates necessary to meet the target is natural in our Parliamentary system. Since countries vary in their political constitutions it is not surprising that their monetary constitutions also differ. The apparent success of the MPC has led many to ask whether aspects of its design could be carried over to other areas of public policy.

Just as importantly, yields on government bonds indicate that inflation is expected to remain low over the next fifty years. Gordon Brown deserves great credit for taking the time to design the institutional arrangements so carefully in advance. This was not a traditional “make it up as you go along” approach to British economic policy. In fact, the design is a good example of how to overcome the fundamental constraint faced by social institutions. That constraint is that it is both impossible and undesirable to enforce binding commitments on the collective decisions of our successors. It is impossible because there can be no outside enforcer. It is undesirable because we cannot imagine or articulate every possible future development. As such, institutions must have, and be likely always to have, widespread support. Their design must meet three principles. First, in order to maximise the breadth and permanency of support, the objective should be as clear as possible. Second, the institution must have the appropriate tools and competence to meet those objectives and be held accountable for doing so. Third, for the institution to command widespread support, the design must reflect history and experience. How do our current monetary arrangements meet these requirements? First, the objective – the inflation target – is clear. It is 2% for CPI inflation. Second, responsibility for setting interest rates has been delegated to a group of people – the Monetary Policy Committee – with the appropriate technical competence and who face incentives focussed on meeting the target.
One of the fundamental economic policy insights from the period of “the Great Moderation” and the crisis years after this is that low and stable inflation, combined with robust growth, without any direct signs of overheating, is no guarantee that the financial side of the economy will be problem-free. In brief: price stability is not sufficient to prevent financial imbalances.3 One lesson learnt from this is that the economic policy toolbox needs to be extended. In addition to the tools already available for fiscal policy, monetary policy and the supervision of individual financial institutions, new tools are needed and old tools may require modification to be more usable in counteracting the type of financial imbalances that contributed to the crisis. There is broad agreement on this. And in recent years there has been intensive work around the world on defining and implementing this so-called macroprudential policy. Does monetary policy also need to give greater consideration to financial imbalances? However, the insight that price stability does not prevent financial imbalances from arising has also raised a question of principle in central banks. Has the focus on price stability, which has been the basis for monetary policy, been too narrow? Financial imbalances can aggravate economic downswings with severely negative effects on unemployment and economic growth. If it gets really bad, the imbalances may even result in a financial crisis. Should monetary policy therefore put greater effort than before into preventing financial balances from building up?

“Modified Jackson-Hole consensus” The first view is in principle based on the same monetary policy strategy as I have described earlier and called the standard prior to the crisis, but with a few small additions. Smets calls this view a “modified Jackson-Hole consensus”. According to this view, there is indeed a need to prevent financial imbalances, that is, it is not enough to wait until afterwards and deal with the problems caused by the imbalances. But the preventive work should be entirely done by macroprudential policy, while monetary policy should have the same role as before.7 The monetary policy strategy as such thus does not need to be changed very much. The most common argument in favour of this view, according to Smets, is that monetary policy is a blunt instrument and has limited effects on the financial risks one wishes to counteract. The macroprudential policy tools, on the other hand, are regarded as much more effective for this purpose. The interaction between macroprudential policy and monetary policy can thus be kept to a minimum, and it is perfectly simple to keep the objectives and tools separate from one another. “Leaning against the wind vindicated” Characteristic of the second view is that one is more doubtful that macroprudential policy will always manage to prevent financial imbalances on its own. It could, for instance, be because the macroprudential policy tools are not as effective in practice as many people believe and hope. If this were the case, macroprudential policy would need support.