samchain/econo-pairs-v1 huggingface dataset:
Within the broad concept of automation, two areas pose unique challenges for governance. These are artificial intelligence (AI) – by which I mean the use of a machine to perform tasks normally requiring human intelligence – and by machine learning (ML) – by which I mean the subset of AI where a machine teaches 1  Carney, M., (2019) ‘A Platform for Innovation’ 2  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  2  itself to perform tasks without being explicitly programmed. The focus of my remarks is therefore on AI and ML, but the principles I discuss could be applied to automation more broadly. It is certainly not the role of the regulator to stand in the way of progress. Indeed, AI/ML in financial services could herald an era of leaner, faster and more tailored operations, reducing costs and ultimately improving outcomes for customers. It could also help to make financial services more bespoke, accessible and inclusive. In capital markets, there is some evidence from market participants to suggest that automation is leading to increased effectiveness. According to the IMF, two thirds of cash equities trading by volume is now associated with automated trading, about half of FX spot trading.2 And the Governor recently explained how AI provides the opportunity to reduce bias.3 On balance, it is probable that increased automation will enhance net resilience of institutions, and support the PRA’s statutory objectives. For example, AI and ML are helping firms in anti-money laundering (AML) and fraud detection.

If I tell you to shoplift, then I am committing an unethical act - and so are you, if you follow my instruction. “I was only following orders” is not a legitimate defence. There is, if you like, a double-lock on unethical instructions within a wholly human environment - on the part of the instructor and the instructed. This is one reason why firms and regulators are so determined to promote ‘good’ cultures, including, for example, ‘speak up’ cultures, and robust whistle-blowing. But there is no such double-lock for AI/ML. You cannot tell a machine to “do the right thing” without somehow first telling it what “right” is - nor can a machine be a whistle-blower of its own learning algorithm. In a world of machines, the burden of correct corporate and ethical behaviour is shifted further in the direction of the board, but also potentially further towards more junior, technical staff. In the round this could mean less weight being placed on the judgements of front-office middle management. 6  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  6  There have been some initial steps to promote the ethical use of big data and AI/ML in financial services. Notably, for example, in Singapore,7 and – more broadly – within the EU.8 In the UK, the Centre for Data Ethics and Innovation is looking at maximising the benefits of AI,9 and many consider them leaders in this field. Principles-based expectations have focused on areas such as fairness, ethics, accountability and transparency.
In this regard, the InsuranceInfo website represents an important delivery channel which has significant potential to be used extensively to bring relevant and timely information to the public. All the pamphlets and booklets can be downloaded from the website. Over time, the website will be continually enhanced to provide for a more interactive and user-friendly interface with consumers that will also enable consumers to provide feedback on the programme and obtain prompt answers to their questions. Ladies and Gentlemen, The Consumer Education Programme represents one of several important elements in the overall strategy of enhancing the consumer protection infrastructure. To achieve the desired outcome of high standards of market conduct that are founded on principles of integrity, sound ethics and professionalism, Bank Negara Malaysia has adopted a combination of regulatory policy instruments. These include policy development, regulatory initiatives, compliance reviews and ongoing surveillance. Recent initiatives that have been implemented in the area of strengthening market conduct within the insurance sector include:  2  BIS Review 38/2003  ·  The framework for the introduction of qualified independent advisers is currently being finalized. Such independent advisors will form a new distribution channel for the sale of life insurance products. These intermediaries will be licensed under the Insurance Act and will be held to the highest standards of prudential conduct, accountability and governance to safeguard the interests of consumers. ·  The entry requirements for agents have now been raised under a graduated implementation programme that commenced in April 2003.

A change of culture is possible and as the England Cricket team has demonstrated to our great enjoyment, a lot can be achieved in a short space of time where there is commitment. Thank you  BIS central bankers’ speeches  3
Fourth, there is an important asymmetry in the risks facing the UK economy at present, which needs to be weighed when judging the appropriate monetary policy response. With expectations and animal spirits fragile, and uncertainty high, maintaining confidence among companies and consumers is key. Indeed, a failure to do so could itself become self-fulfilling in its negative impact on activity. In this environment, policy leadership and action has a particularly important role to play in buttressing expectations and supporting confidence. That includes, but is not confined to, monetary policy leadership and action. 12  BIS central bankers’ speeches  There is also an asymmetry in the potential effectiveness of monetary policy. If there is greater uncertainty about the effectiveness of tools for easing than tightening, then the monetary policy implication is clear: more should be done to cushion the effects of negative shocks, the like of which we have just seen, than positive ones. This is sometimes referred to as the “risk management” approach to monetary policy. 16 And in the current environment, with risk elevated, I think it has particular force. Put differently, I would rather run the risk of taking a sledgehammer to crack a nut than taking a miniature rock hammer to tunnel my way out of prison – like another Andy, the one in the Shawshank Redemption. And yes I know Andy did eventually escape. But it did take him 20 years. The MPC does not have that same “luxury”.

Mr Lim gives a policymaker’s perspective on the role of macroeconomic modelling in public policy  Opening remarks by Mr Lim Hng Kiang, Member of the Board of Directors of The Monetary Authority of Singapore and Minister for Health and Second Minister for Finance, at the launch of The Monetary Authority of Singapore’s new macroeconometric model of the Singapore economy, the Monetary Model of Singapore (MMS) on 2 February 2000. *  *  *  Introduction It is my pleasure to be here today. This conference provides an excellent opportunity for networking and the exchange of ideas between policymakers, private sector economists as well as academics. Last July, at the Far Eastern Meeting of the Econometric Society in Singapore, I mentioned that the Economics Department of MAS was working on a new macroeconometric model of the Singapore economy, the Monetary Model of Singapore. This model incorporates the latest techniques and thinking in modelling. I am glad that the development work is completed and the model is now ready to be used for policy work. The staff of the Economics Department will be presenting the details of the model later this morning for review and discussion. Post-Asian crisis: a time for reflection The economic outlook for Asia has turned positive. Memories of the Asian financial crisis and of the economic recession that followed have already started to fade. The crisis Asian economies are recovering - we see production, exports and consumption growth rebounding, some even surpassing pre-crisis levels.
On an annual basis, cobalt output at 8,781.85 mt was 49.4% higher than the 5,879.14 mt of cobalt produced in 2009. The improvement in output was due to the resumption of production at Konkola Copper Mines and Chambishi Metals Plc. Manufacturing 20. During the quarter under review, production of clear beer by Zambian Breweries Plc increased by 6.2% to 237,458 hectolitres from 223,607 hectolitres the previous quarter. Further, this output was 46.7% higher than the 160,820 hectolitres produced in the corresponding quarter of 2009. On an annual basis, output of clear beer at 727,191.0 hectolitres was 27.6% higher than the 569,771.0 hectolitres of clear beer produced in 2009. 21. Similarly output of soft drinks by Zambian Breweries Plc rose by 28.8% to 163,848.0 hectolitres from 127,244.0 hectolitres in the previous quarter. Moreover, this output level was 45.3% higher than 112,722.0 hectolitres produced in the fourth quarter of 2009. On an annual basis, output of soft drinks at 561,910.0 hectolitres was 49.1% higher than the 376,747.0 hectolitres of soft drinks produced in 2009. 22. Production of milk by Parmalat Zambia Ltd during the quarter under review rose by 10% to 8,613,737.0 litres from 7,830,878.0 litres in the third quarter of 2010. Further, this output was 5.3% higher than 8,178,335.0 litres of milk produced during the fourth quarter of 2009. On an annual basis, output of milk at 32,456,505.0 litres was 8.2% higher than the 29,984,030.0 litres of milk produced in 2009. 23.

The general improvement in the availability of foreign exchange necessitated the Bank of Zambia’s participation in the market. In this regard, the Bank recorded a net purchase of US $ million compared with net purchase or sale of US $ million in the third quarter. Balance of payments 35. Preliminary data show that Zambia recorded an overall balance of payments (BoP) deficit of US $ million during the fourth quarter of 2010, compared to the surplus of US $ million recorded in the third quarter of the year. This was largely due to the unfavourable performance in both the current account balance and the capital and financial account. 36. During the period under review, the current account surplus declined to US $ million from US $ million recorded the previous quarter, largely on account of a decline in the merchandise trade surplus and widening of the net income deficit. 37. The merchandise trade surplus declined by 9.2% to US $ million in the fourth quarter of 2010, from US $ million recorded in the third quarter, following an increase in imports, which outweighed the rise in exports. Merchandise export earnings, rose by 5.2% to US $ million from US $ million recorded in the previous quarter. This was due to an increase in metal exports earnings by 7.3% to US $ million from US $ million in the previous quarter. 38.
Both results will help to make banks more resilient, less sensitive to the ups and downs of the business cycle, and better able to serve as a source of credit and growth for businesses and consumers. Those benefits are worthy of our continued hard work. Thank you for your attention. 4  BIS Review 68/2004

Moreover, costs are pushing inflation upwards for other reasons as well, namely a shortage of manpower in certain industries, expenses to ensure compliance with additional sanitary and epidemiological rules, and possible disruptions in supplies due to the aggravation of the pandemic situation. Of course, the acceleration of current inflation itself should not significantly impact our monetary policy, but there are signs suggesting that proinflationary trends may become longer-lasting. This is evidenced by a material rise in households’ and businesses’ inflation expectations. Increased inflation expectations may induce secondary effects. This is another factor which we took into account. There are signs that secondary effects have already started to manifest themselves. What are the reasons behind them? A considerable rise in prices for individual frequently purchased products, even when it is driven by one-off factors, makes people expect an increase in prices for a broader range of goods and services. This in turn explains the readiness to pay more and pushes prices upwards. Actually, we are already observing such an environment, which once again proves that households’ inflation expectations are currently not anchored yet. When I say that they are not anchored, I do not imply the level of households’ inflation expectations, but rather their response to one-off factors. The fact that households’ inflation expectations are significantly higher than current inflation is typical not only of Russia, but of a whole range of countries (even where inflation is very low).
Indeed, we have just had a case of co-occurrence of highly remunerated financial innovation and a temporary narrowing of the intermediation spread that was built upon, among other things, a serious erosion of credit standards. We all know how this ended; rather miserably with investors losing a lot of money and borrowers finding credit expensive and hard to come by, and consequently considerable damage to the economy. How do we deal with this conflict? I am afraid I have no answer, other than always to be alert to it and be ready, as protectors of the public interest (in terms of maintaining stability, upholding integrity, promoting diversity and efficiency in financial intermediation) to act whenever the private interest of the financial intermediaries threatens to override the public interest. But this is easier said than done, particularly when financial innovation is often packaged and presented skilfully by financial intermediaries as an effort to enhance financial efficiency. Furthermore, in capitalist, free-market economies, the authorities generally do not have a lot of influence over innovation. The financial intermediaries often constitute a strong political lobby against regulation, arguing quite forcefully that regulation stifles innovation and progress. And so, regrettably, we have an environment that is often not conducive to the financial authorities taking preventive measures to protect the public interest. You have I am sure heard of the rather unkind and unfair street talk that the US Treasury was being run largely by Wall Street.

Developments in loans to enterprises continue to reflect the lagged relationship with the business cycle, credit risk and the ongoing adjustment of financial and non-financial sector balance sheets. The annual growth rate of loans to households (adjusted for loan sales and securitisation) increased to 1.4% in November, compared with 1.2% in October. The bank lending survey for the euro area for the fourth quarter of 2015 points to further improvements in demand for bank loans, supported by the low level of interest rates, financing needs for investment purposes and housing market prospects. Credit standards eased further on loans to enterprises, notably owing to increasing competitive pressures in retail banking, and reverted to a net easing on loans to households for house purchase. Overall, the monetary policy measures in place since June 2014 have clearly improved borrowing conditions for both firms and households, as well as credit flows across the euro area. To sum up, a cross-check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed the effectiveness of the monetary policy measures in place and the need to review and possibly reconsider our monetary policy stance at our next meeting in early March in order to secure a return of inflation rates towards levels below, but close to, 2%. Monetary policy is focused on maintaining price stability over the medium term and its accommodative stance supports economic activity. However, in order to reap the full benefits from our monetary policy measures, other policy areas must contribute decisively.
By contrast, the central bank essentially holds nothing but liquid assets – largely government securities (Chart 49). Shifting deposits away from commercial banks, and towards the central bank, would therefore make for a “narrower” banking system – a “narrow” bank being one whose assets are as liquid as its liabilities. In principle, it would also make for a safer one. Backed by liquid assets, rather than risky lending, deposits would become inherently more secure. They wouldn’t be vulnerable to “runs” and we would no longer need to insure them. 8  Nor is it a live issue for the Bank. As the Governor recently said to the House of Commons’ Treasury Committee, “May I…be absolutely clear: there are no plans to abolish cash at the Bank of England”. 9  The Bank of England’s balance sheet has obviously grown following QE. Those operations have been conducted via the Asset Purchase Facility (APF), which is not directly on the Bank’s balance sheet – strictly speaking, the blue bar in Chart 4 is not direct holdings of gilts but a loan from the Bank to the APF. But the APF itself holds only gilts and, even before QE, the vast majority of assets on the Bank’s balance sheet were government securities. BIS central bankers’ speeches  5  The case for narrow banks has a long and distinguished pedigree. The classical economists Adam Smith and David Ricardo favoured such a system.

Famously, during the Great Depression, a group of economists at the University of Chicago recommended the end of fractional reserve banking (the so-called “Chicago Plan”). There have been similar calls since the 2008–09 financial crisis10. Proponents of narrow banking have generally argued it should be imposed by regulatory fiat, rather than via some sort of nationalisation of deposit-taking by the central bank. An exception is a 1987 essay by the economist James Tobin11. To avoid relying too heavily on deposit insurance to protect the payments system, Tobin argued, the government should create what he called “deposited currency accounts” (DCAs) at the central bank. “I think the government should make available to the public a medium with the convenience of deposits and the safety of currency, essentially currency on deposit, transferable in any amount by check or other order.” There are two interesting points about Tobin’s proposal. One is that he made it long before anything like the “distributed ledger” was conceived (he suggested that DCA branches could be housed in post offices). Another is that he fell short of suggesting the wholesale nationalisation of deposit-taking: he thought there should still be room for commercial banks to raise deposits of their own and that they should continue to be insured12. One reason is that draining deposits from commercial banks is unlikely to be costless. In particular – and this is the potential catch with too widespread a CBDC – it might threaten their lending activity.
Chart: Central bank balance sheets Policy rates are still negative for several of our trading partners, more than a decade after the financial crisis. The extraordinary measures that have been applied have also led to a substantial expansion of central bank balance sheets, and in a number of countries they are still expanding. In Sweden and Japan, the asset purchase programmes have not yet been brought to an end, and the European Central Bank has recently announced that its asset purchase programme will be restarted (also note that Japan has to have a separate graph in this chart). Unconventional instruments appear to have become a part of the ordinary central bank toolkit. We have more policy room for manoeuvre in Norway as the policy rate has risen slightly. In the event of a severe downturn, we would lower the policy rate. In principle, other countries’ experience shows that the impact of a lower policy rate does not stop at the zero lower bound, 6/9  BIS central bankers' speeches  even though the scope for rates below zero is limited. But in Norway it is difficult to envisage negative rates over a long period or monetary policy being stretched even further through unconventional measures. Even though such measures would probably have some effect here in Norway, the potential gains must be weighed against the costs. Norway also has fiscal room for manoeuvre.

This must be viewed in the context of persistently low policy rates among Norway’s trading partners. Weighting our trading partners together, we find an expected policy rate of close to zero at the end of 2022. Among some of Norway’s main trading 1/9  BIS central bankers' speeches  partners, market rates are negative for maturities as long as ten years. Despite persistently low interest rates, there are few signs of pressures in our trading partners’ economies. Although unemployment in the US, euro area and the UK has fallen steadily for several years, and to somewhat below pre-crisis levels, wage growth remains moderate and inflation is below target for a number of our neighbours. Chart: Unemployment and inflation in selected countries The combination of persistently low interest rates, moderate economic growth and low inflation suggests that headwinds have dampened the effect of the monetary policy measures. These conditions can be purely temporary, such as high uncertainty contributing to increased saving and low willingness to invest. But the forces at work are also of a more structural kind, rooted in demographic trends, wider income gaps and global downward pressure on wages for large groups of workers. Regardless, the consequence seems to be that the interest rate level that is consistent with normal growth and inflation, ie what we refer to as the neutral interest rate, has fallen to a low level. How long this will persist is difficult to predict.