samchain/econo-pairs-v1 huggingface dataset:
The substantial decreases in “credit to the Treasury” item and overall net domestic assets, and the large increase in the Central Bank’s net foreign assets, are the result of these policies. Here, of course, we should take account of the damage done by the Russian crises. The capital outflows connected with these crises caused net foreign assets to decrease, which in turn produced an increase in domestic assets. Even so, the source of the latter increase was not the increase in public sector credits but mainly the increase in Central Bank funding to the banks. Another aspect of the Central Bank’s monetary program is related to exchange rate policy. The proposal to conduct exchange rate policy in accordance with the inflation target has important 1  BIS Review 109/1999  implications for expectations. First of all, it signalled to the market that the Central Bank endorsed the government’s inflation target. Since the public can monitor the exchange rates daily, exchange rate policy becomes an important tool for moving the public’s inflation expectations towards the government’s inflation target. Of course the continued success of this policy requires the authorities to set a realistic inflation target, which is to say an inflation target consistent with the public sector’s proposed budget balance. Besides influencing inflation and inflationary expectations, exchange rate policy directly affects the external sector. A stable real exchange rate policy puts the Central Bank in a neutral position in this respect.

I believe this new law will rapidly improve the soundness of Turkey’s banking system, which is crucial for the conduct of monetary policy. Just as the monetary authorities cannot achieve medium-term price stability without appropriate fiscal policies, they cannot pursue a price stability target without a sound banking system. BIS Review 109/1999  2  The banking law approved by parliament was a big step forward, but further action is also needed. One important additional issue is to restructure the state banks and reduce their role in the banking system. These banks not only operate in a competitive banking market, but also undertake operations on behalf of the government, such as providing preferential loans to the agricultural sector and to small and medium-sized businesses. Since it is intended to eliminate preferential credits in the medium-term, these banks can be commercialized by privatizing them. Another reform that the Turkish government has recently undertaken is social security reform. Let me give you a brief summary of Turkey’s social security system, which has caused major budgetary problems in recent years. The Turkish social security system includes three pension institutions. The first and largest, the SSE, is for corporate employees, the second is for civil servants, and the third is for the self-employed. All three operate on a “pay-as-you-go” basis, which means that pensions are paid out of the current contributions of the working population and not of the past contributions of the retirees.
Emerging economies are better prepared than in the 1990s to absorb these shocks, but we do not expect the subsidy coming from the commodity windfall. One final point about China  China has become a source of stability in the world economy in the last few decades (isn´t this the role China played after the Global Financial Crisis in 2009 and 2010? ), but it has become more interconnected with the rest of the world, and it is also subject to pressures on the capital account and its balance of payments. The very same risks that emerging economies face from US rate increases are relevant for China, too. This time, a bumpy process of monetary normalization in the US could become amplified rather than ameliorated, depending upon how China is able to adjust to it. And this time, the room looks smaller.

Thank you very much for your attention. BIS Review 96/2010  5
This may help to mitigate the slowing in consumption, both because households may find it easier to borrow to smooth their consumption if they still have a job and because it may limit the extent to which households increase their savings as a precaution against the possibility of future job losses. Further out, the prospects for consumption will depend importantly on the extent to which the deterioration in households’ financial position does indeed cause them to scale back their spending. As I have argued, there are good reasons for thinking this may happen. But it is also important to remember that there has already been a substantial adjustment in consumption; and that conventional measures of household balance sheets may exaggerate the scale of deterioration. Policy Let me conclude with a few remarks on policy. The current focus of monetary policy is on ensuring that there is sufficient stimulus in the economy to generate the strong and sustained recovery necessary to bring demand better into balance with supply and so ensure that inflation is on track to meet the inflation target. As I have said, the structural adjustments that need to occur – to the structure of the banking system; to the balance of global trade flows, and to the level of public and possibly  6  For more information see the box on page 29 of the August 2009 Inflation Report. BIS Review 114/2009  5  household debt – have the potential to delay and derail the recovery.

My own judgment was that the uncertainty surrounding both the economic outlook and the effects of asset purchases made it difficult to have a strong view as to the relative merits of increasing the asset purchase programme to £ billion or £ billion. Indeed, the inflation projection that was published in the August Inflation Report suggested that either policy was consistent with hitting the inflation target, depending on the future path of interest rates. For me, the decision came down to an assessment of the risks of doing too much versus the risks of doing too little. With regard to the potential risks of doing too little, my main concern was that nominal demand would not recover to a level consistent with hitting the inflation target. My main worry with doing too much stemmed from the uncertainty associated with using asset purchases as a policy instrument. We do not have much experience of conducting monetary policy via asset purchases and there is a risk that their effects will be transmitted through the economy in ways we do not predict and do not want. For example, the substantial injections of liquidity might result in unwarranted increases in some asset prices that could prove costly to rectify. I placed considerable weight on both risks and thought that they were best balanced by an expansion of the programme to £ billion. 6  BIS Review 114/2009  I am hopeful that we have started along the road to recovery.
By engineering artificial expectations of stability, the regime had led market participants to disregard the possibility of exchange rate devaluations, leading to mispricing of risk, insufficient hedging and ultimately to misallocation of financial and real resources. Governments that found themselves in this position had very limited ability to mitigate the economic damage that was to come, but the policy choices that accompanied the exchange rate change often compounded the problem. Japan's experience provides another example, though the context was different. There is a perception in parts of Asia that the Japanese government's decision to let the yen appreciate in the late 1980s was principally responsible for Japan's so-called “lost decade” of low growth. And, Japan, viewed through this prism, is cited as an example of the perils of letting an exchange rate move up in response to changing fundamentals. The reality is more complex. The problems of the Japanese economy in the 1990s were largely due to the aftereffects of the collapse of the real estate and asset price boom of the preceding decade, a boom fueled in part by efforts by the monetary authorities to limit the appreciation of the yen. The size of the negative shock to demand from the collapse of the bubble was very substantial, and the capacity of the government and the central bank to mitigate the damage was constrained by the weakness in the banking system. A more forceful macroeconomic policy response, however, might have brought about a quicker recovery.

But attempts to target a particular level for the exchange rate or the slope of the change in the rate in response to different conditions will, as the capital account becomes more open, inevitably, come with substantial risks to monetary and financial stability. Managing the transition to a more open capital account and a more flexible exchange rate regime is not a simple task. These transitions need to be handled with care and attention to the development of a strong institutional framework for monetary policy and the financial system. The more successful transitions came in contexts where the monetary authorities were independent of political constraint, where balance sheet problems and currency mismatches in the government and the financial system were not acute, where the prevailing legal framework provided reasonable protections for property rights and the enforcement of contract, and where there was effective supervision of the banking system. Where these conditions were weaker, the transitions from fixed exchange rate regimes were more traumatic. These conditions seem exacting, and the understandable need for caution often is invoked in defense of protracted and very gradual transitions. A certain degree of caution is wise: there is a great deal of risk in a poorly managed and premature shift toward flexibility. But there is risk in gradualism too. Delay magnifies the costs of living with the distortions caused by a managed rate.
This will be an important piece of market infrastructure that helps demonstrate Hong Kong’s commitment not only to technological innovation but also to cross-border collaboration to promote more efficient trade and financial flows for the benefit of our businesses and peoples. UK and Others 6. I am also pleased to report that the HKMA has expanded and strengthened our ties with several other overseas authorities in the area of fintech collaboration in addition to Singapore. For example, we signed a Fintech Cooperation Agreement with the Financial Conduct Authority (FCA) of the UK in December last year. Later this morning, a colleague from Project Innovate of the UK FCA will share with us their experiences in fintech development. Moreover, the London-Hong Kong RMB Forum, which was first set up in 2012, has recently been expanded to become “London-Hong Kong Financial Services Forum” so as to cover wider areas such as fintech and the Belt and Road Initiative. This year’s annual meeting of the Forum will be held in Hong Kong in December, and is expected to be attended by high level government and private sector representatives from both sides to discuss a whole range of financial collaboration issues. 7. I should perhaps mention that we are also in active discussions with some other jurisdictions, including Switzerland, which share a common interest in mutual cooperation in promoting fintech. I hope to be able to report more news in the not too distant future. Guangdong-Hong Kong-Macao Bay Area 8.

Kevin Stiroh: Opening remarks - Community Bankers Conference Opening remarks by Mr Kevin Stiroh, Executive Vice President of the Financial Institution Supervision Group of the Federal Reserve Bank of New York, at the Community Bankers Conference, hosted by the Federal Reserve Bank of New York, New York City, 4 April 2019. * * * As prepared for delivery Welcome to the 17th Annual Community Bankers Conference. We are very glad that so many of you from community banks in the Second District joined us today for our conference about what’s “On the Horizon for Community Banks.” I am also pleased to welcome my colleagues from other regulatory agencies, including Doreen Eberley from the FDIC, who is our keynote speaker. Before proceeding, let me emphasize that my remarks are my own and do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System.1 It has been more than 10 years since the financial crisis, and over that time we have seen the industry change in material ways. Ten years ago there were 7,479 community banks nationwide. Today that number is 5,320, a 29% decline. Some of this decline was due to failure, and some through consolidation or acquisition. Your financial institutions remain today as a result of prudent risk management practices, resiliency, and the ability to successfully weather those stormy years. Today, the data show, on average, strong metrics for the balance sheets of community banks in the Second District.
28  All speeches are available online at www.bankofengland.co.uk/speeches  28  Chart 22: Automation exposure vs. change in labour share by industry Change in labour share 0.3 0.2 0.1 0 -0.1 -0.2 -0.3 -0.5  -0.4  -0.3  -0.2  -0.1  0  0.1  0.2  0.3  0.4  0.5  Initial automation rate Source: ONS, Frey and Osborne (2013) and Bank calculations. Note: Data shown at SIC1-digit level. X-axis shows an estimate for the automation rate in 2001 based on Frey and Osborne estimates for the future probability of automation by occupation. Y-axis shows change in labour share between 2001 and 2016. Size of bubbles represents size of industry. Trend line weighted by size of industry. Chart 23: Settlements data (whole economy) Per cent 5  4  3  2  1  0 2002  2004  2006  2008  2010  2012  2014  2016  2018  Whole economy settlement (12m mean) Whole economy settlement (3m mean) Source: Bank of England, Incomes Data Research, XpertHR, Incomes Data Service, Labour Research Department and Bank calculations. Note: “3m mean” refers to annualised three month-on-three month settlement rate, and “12m mean” refers to settlement compared to same period a year earlier.

When one additionally considers our many exports to neighboring, non-EU countries, but who maintain a Euro-centric policy we can see an indirect detrimental effect; which in turn means roughly 90% of our exports were hit by the crisis. For example, we experienced a decline in GDP of 1% in 2009 with a recovery of 3% in the next two years before declining again by –0.4% in 2012; which is reasonably low when compared to other countries in the region. Although this does not mean the effects from the Euro Zone crisis were not harsh, they clearly were; however, there were compensating policies such as a fiscal stimulus from the government which substantially mitigated the negative impact which is most likely why Macedonia had the slowest decline in the region. What were some of those hedging fiscal policies? Traditionally, Macedonia has had low fiscal deficits, ranging from –1% to +1%, but during the crisis in 2009 this grew initially to 2.5% then to 2.8% with our highest in 2012 at 3.8%. This year, due to the financial stimulus we are forecasted at 3.5%. We were able to mitigate successfully because our public debt was low at around 20% of GDP which afforded us room for expansion which we used during this crisis period. Apart from the macro-economy concerns, the crisis with the Euro as a currency helped boost confidence in our domestic currency [MKD denar]. This is because people naturally began to wonder what would happen with Europe; therefore, its primary currency.
They responded positively to the Bank’s recommendations, and there was no question that credit growth slowed substantially. However, there are now many indications of a return to the earlier situation, so the Bank must reiterate its words of warning. At the same time as the Central Bank announced its interest rate decision yesterday, it published Monetary Bulletin. This outlines the main assumptions behind the Bank’s decision along with indications about its policy in the near future and the viewpoints it considers important to bear in mind for economic policy. In the current edition, major changes were made to the assumptions behind the baseline forecast, which enhance both the credibility of the forecast and monetary policy transparency. By doing so, the Central Bank of Iceland joined the vanguard of the inflation-targeting central banks. Monetary Bulletin reveals that inflation developments have turned rather more favourable than the Bank’s previous forecast had indicated, and although underlying inflation was somewhat higher in February and March than was hoped, the Bank expects both headline and underlying inflation to decrease rapidly in the next months. By both measures, inflation will be close to target from the middle of 2008. There is no doubt that this outcome is largely thanks to the tight monetary stance, which included raising the policy rate by 3.75 percentage points last year. As usual it should be pointed out – and especially in the current climate – that exchange rate uncertainties can complicate this picture.

Thus caution, steadfastness and self-control are called for in all areas of the economy – in other words, the maxim that “the doors of pleasure should not be thrown wide open” still applies. As far as the Central Bank is concerned, ensuring low inflation is its most important function today and in the future. And that picture is growing brighter, although care still needs to be exercised. 4  BIS Review 42/2007
4  BIS Review 73/2007  or possibly because of, the fact that the monetary authorities were explicitly targeting the monetary aggregates as a means of controlling inflation. Part of the explanation of the divergence was that the 1980s were a period of rapid financial innovation following the removal of exchange controls and of pricing, income and dividend policies. This changed the amount of money people were willing to hold for a given amount of money spending (which in economics is known as the velocity of circulation). So the increase in money growth did not lead to a pick up in inflation. Even so the acceleration of monetary growth at the end of the 1980s did foreshadow the upturn of inflation at the end of the Lawson boom. The chart shows that since 1992 the rates of growth in broad money and inflation have diverged again and that broad money growth has picked up sharply since 2003. A key question is whether this reflects a further spurt in financial innovation or is telling us that we should expect increasing growth of money spending and inflation. There are good grounds for attributing part of the increase to structural changes in the financial markets which have led “other financial companies” (OFCs) to hold more deposits with the banks for a given level of economic activity. 8 It is within this OFCs sector that the growth in money has been the most rapid (Chart 12).

But estimating how they divide up is not easy. Money and credit The third area in which the development of financial markets is complicating the interpretation of statistics is money and credit. And again that is an area of keen attention at the moment. The question is whether the recent growth of the money supply is telling us something about the prospects for inflation and the economy that we are not getting from other variables – like consumption, interest rates, prices, or inflation expectations. Chart 11 shows monetary growth over 130 years in the UK against consumer inflation. The association is obvious. But even in the days of the gold standard when the Bank had a more direct control of the money supply, money growth and inflation diverged for periods (eg in the late 19th century and in the late 1920s). More recently, the growth of money in the 1970s did act as a leading indication for inflation. But in the early 1980s the relationship appeared to break down despite,  6  “Improving the measurement of banking services in the UK National Accounts", Leonidas Akriditis, ONS Economic and Labour Market Review, May 2007  7  I have used the AWE in this speech, even though it is the more recent and less well established of the two, because it is designed to handle outliers at the top and bottom of the ranges better and the City has a disproportionate number of outliers.
To take one example of the complexities involved in making such an assessment, the natural rate of interest might face both downward pressure from expectations of severe weather events10 and upwards pressure from demand for investment to replace carbon-intensive capital stock (such as replacing petrol cars with electric ones). This dynamic is not unique to climate change. We see it in other structural shifts such as the post financial crisis trend of weak productivity, and the growth in intangible capital.11 To improve our understanding and better inform future monetary policy, we need more research on this topic. I am pleased to say that the Bank plans to do more in this space, both in its own capacity and through working with other central banks and international bodies. 3/5  BIS central bankers' speeches  As well as being relevant to the setting of monetary policy, climate change and the transition to net-zero are also relevant for the implementation of it. The Bank recently became the first central bank to set out a comprehensive framework for greening a monetary policy asset portfolio – the £ stock of sterling corporate bonds acquired via our Corporate Bond Purchase Scheme (CBPS).12 This will remain a monetary policy tool, with its overall target stock of assets set by the MPC in order to achieve its primary inflation objective.

Changes seldom mean that all previous truths suddenly cease to be valid, and moreover changes do not happen overnight. Especially in the banking market, important changes are more likely to occur slowly and gradually over a long period. Nonetheless, these trends, even if the impact only proves to be half as big as the financial markets’ trend oracle predicts, entail interesting challenges and opportunities for Swedish banks. Together, disintermediation and commoditization should result in a more distinct division of production, distribution and risk-taking. As I am sure you know, this is what consultants call the breaking up of the value chain. Even though some banks undoubtedly will try to keep as much of the value chain as  3/4  possible, it is going to become more difficult. Each part of the value chain will be exposed to competition from specialised niche players. Allow me to give a few concrete examples. For several years now it has been noted that Swedish banks’ share of savings is slowly but surely decreasing. Not because Swedish banks have performed worse than any other pension or fund manager, but simply because there are a lot of players that are at least as good, and sometimes also cheaper. The four major banks have a strong grip on the Swedish mortgage market for households. But they seem to have defended their large market shares in some measure through price cuts. Also as regards the corporate market, the four major banks appear to have a continued strong position.