samchain/econo-pairs-v1 huggingface dataset:
Part of our challenge was to reconcile the UK’s position as an international financial centre with stable banking in the UK. 1  To be clear, I am not referring to any company with a similar name. 2  All speeches are available online at www.bankofengland.co.uk/speeches  2  EMBARGO: not for release before 19:30 on Wednesday 4 October 2017  We concluded that domestic retail banking should be structurally separated from global wholesale and investment banking. The distinction was not between a safe utility bank which would never fail and a racy casino bank which would never be saved. We have had plenty of experience of retail banks getting into trouble. Both sides of the ring-fence would undertake economically valuable activity, both would take risks, but each would need to be resilient to these risks without relying on the other. I will not rehearse the full arguments here, but let me highlight one which has had less attention, which is about time-consistency. It is a plain fact that prudential regulators tend to ring-fence retail banking operations in a crisis – I have done it myself. Retail is predominantly domestic by nature and its troubles are best managed by those who know it best. So it makes more sense to recognise that reality and get the structures right ex ante, than to try and do so in a tearing hurry just as a crisis hits. Ring-fencing retail banking is geofinance in action – in a good way.

Mr Chairman, learning from others, some of the obstacles facing the leasing companies, include inability to attract funding and lack of adequate leasing expertise, can be overcome through formation of synergies and partnership with other industry players. I understand in the USA, for example, over 70% of leases are actually written through lease intermediary companies or brokers, who use their specialised skills to structure lease transactions in the best way possible for the benefit of both the lessee and the lease underwriter. Lease syndications and funding partnerships with bigger players should also be encouraged as these help to spread risk and reduce pressures on balance sheets of individual leasing companies. Ladies and Gentlemen, you will agree with me that there is vast untapped potential of leasing activities in this country. There is need to develop this line of business further. A developed leasing sector is characterized by a diverse range of financial services that include factoring and trade finance, term lending, corporate finance and investment advisory services, and corporate restructuring, treasury management as well as traditional leasing activities. But this is not the case in Zambia at  2  BIS Review 17/2007  present. Currently, the leasing sector is restricted primarily to the traditional leasing activities. This seminar has thus come at the right time, as the lessons learnt are vital to complement the Government’s efforts not only to develop the leasing sector, but the financial sector as a whole.
When the flight to safety and quality occurs, it will be those countries and companies with robust standards of corporate governance that will be better placed to keep the loyalties of investors. Corporate governance developments in the region We should therefore keep up the momentum of progress. Since the crisis, the Asian Roundtable countries have indeed made substantial progress in important areas of corporate governance reform. I will run through two key areas of progress very briefly. Growth and strengthening of standard-setting bodies Institutions matter. Several countries in Asia have established national committees on corporate governance since the crisis . The private sector has also strengthened its act. We have seen a number of institutes of directors set up in many countries, including China, Hong Kong, Indonesia, South Korea, Malaysia, Thailand and the Philippines. Minority shareholder watchdog groups are also now in place in countries such as Malaysia, South Korea and Taiwan. And Institutes of Directors, in particular,  BIS Review 73/2007  1  now play a key role in developing training programmes for both directors and management. In some countries – for example, Malaysia and Thailand, such training programmes have become a mandatory prerequisite for directors of listed companies. So we have seen a strengthening of both public and private bodies aimed at the common objective of scaling up standards of corporate governance.

As you will recall from the presentation we made on that occasion, we linked lower inflation to the possibility of greater capacity gaps as a result of the massive immigration of recent years, and to a lower pass-through from exchange rate variations to prices. When presenting that diagnosis, we said that the lower inflation as measured by the new CPI had implications for monetary policy, so we halted the normalization process that we had started in late last year. In addition, in order to fine-tune the diagnosis, we decided to advance to June the updating of the structural parameters—i.e. trend GDP, potential GDP and the neutral monetary policy rate. Then, at our May Monetary Policy Meeting, we discussed the option of reducing the MPR, advancing that such an adjustment would be justified in case of a significant widening of the gaps, or a lesser dynamism of the economy, a worsening of external conditions and/or a lower neutral MPR. At last Friday’s meeting we verified that all these conditions have been met. First, estimates of trend and potential economic growth have increased as a result of immigration, which translates into greater capacity gaps. Second, the neutral MPR is lower, partly because of the fall in the estimated neutral rates in the main economies. Third, in recent months, the dynamism of the economy has been below potential growth, helping to widen the activity gap. Finally, the external scenario has deteriorated, mainly because the balance of risks has become more negative.
Lorenzo Bini Smaghi: Monetary and financial stability in the euro area Speech by Mr Lorenzo Bini Smaghi, Member of the Executive Board of the European Central Bank, at the Europe Festival Conference on “The state of the Union”, Florence, 10 May 2011. *  *  *  Introduction It is a great pleasure for me to contribute to this Europe Festival Conference on “The state of the Union”. Before turning to my assigned topics, which concern the euro and the monetary policy of the Union, I would like to start with a few general comments. There can be no doubt that these are challenging times for Europe. But the current crisis does not just affect Europe, it affects the whole of the West. Problems such as the sustainability of public finances and the role of the state in the economy, immigration and burgeoning income inequality, concern not only Europe and the euro area, but the whole of the industrialised world. Moreover, this is not a cyclical crisis but a structural one, resulting from the profound changes now sweeping the world. Hundreds of millions of people have risen over the survival threshold, over two-thirds of the world’s population has opted for the market economy model, and there is a perception of a lack of progress in economic and social development and also in civil rights in a large part of the world. There is probably no historical precedent for the speed at which these changes are taking place.

After the onset of the global financial and economic crisis the franc appreciated by 17% vis-à-vis the euro in 2010 alone, driven by the reallocation of global capital on a massive scale. This has fuelled deflationary risks and slowed economic growth. To counter these effects, massive unilateral interventions were conducted, leading de facto to a closer alignment of monetary conditions with those in the euro area. This points to the conclusion that in a multipolar world having appropriate domestic macroeconomic policies is not sufficient to absorb external shocks. Unless a country or an economic region also has a deep and liquid capital market and its size is sufficient to absorb large capital flows, it is bound to become subordinate to the existing poles, or to be squeezed between them. The prosperity of the euro area countries is inextricably linked to the success of the euro. The euro: a unique construct The euro is the only major currency that is not issued by a single sovereign state, but by a union of states. As this is a totally unprecedented monetary framework, it is fair to ask whether it has what is needed to become one of the poles of the new system – in other words, is it sufficiently robust to ensure sound economic policies at the euro area level and in the individual countries, and does it have a large and deep financial market? Decisions are about to be taken on strengthening the governance of the euro area with a view to achieving these objectives.
Another reason why we envisaged a slowdown in economic activity in Sweden was that the increased financial unease would reduce sentiment among Swedish households and companies and in this way have a negative effect on consumption and investment. However, at the same time, our assessment was that the slowdown in economic activity would be alleviated by the fact that the Swedish is competitive, has sound public finances and resilient banks. Our forecast was that GDP growth in Sweden would be weak for some time to come and that unemployment would increase somewhat. As the unease in the euro area subsides next year, economic activity will strengthen, unemployment will decline again and resource utilisation will increase. Inflation will rise at the same time, after being held back by a low cost pressure and a stronger krona since the financial crisis 2008–2009. 2  BIS central bankers’ speeches  Repo rate remains low to stimulate the economy With regard to monetary policy, our assessment was that it needs to be expansionary to support economic activity and give an inflation rate in line with the target of 2 per cent. We therefore decided to hold the repo rate at 1.5 per cent and assessed that it needs to remain at roughly this low level for just over a year, and should then be raised gradually. The deterioration in international economic prospects meant that we revised down the repo-rate path somewhat, in relation to the assessment made in April.

The declining trend in labor force participation also influences how fast the economy can produce new jobs in the long run. Our estimate of the trend in payroll employment growth over the past 15 years averages roughly 100,000 jobs per month. Looking ahead, we think that declines in the labor force participation rate and population growth will bring the trend in payroll employment growth down to fewer than 50,000 jobs per month by 2016. This new benchmark probably will only become apparent in the monthly data once the economy closes the current 3.8 million employment gap. But barring sizable changes in immigration policy, policymakers and the public will need to get accustomed to a slower base of employment growth by the latter part of the decade. Job openings and hiring This brings me to the issue of hiring and job openings. The job openings rate, as measured by the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS) data, started climbing immediately after the recession and made it back to its pre-recession high this summer. 6 Yet, despite some improvement, the JOLTS hiring rate remains disappointingly below where it stood before the recession began. 7 Why might firms advertise openings aggressively but be slower to fill them? Posting a vacancy is only part of the hiring process. Jason Faberman of the Chicago Fed, in collaboration with Steve Davis of the University of Chicago and John Haltiwanger of the  3  Aaronson et al. (2014).
Moreover, the basic goal of any Government regulation should be to ensure competition, protect intellectual property and privacy, prevent fraud, foster transparency, support commercial transactions, and facilitate dispute resolution. The fourth principle directs the Government to recognize the unique qualities of the Internet in relation to existing regulatory models. We should not assume, for example, that the regulatory frameworks established over the past sixty years for telecommunications, radio, and television apply to the Internet. The Framework specifically directs the Government to review, and revise or eliminate existing laws and regulations that may hinder electronic commerce to reflect the needs of the new electronic age. Finally, in the fifth principle, the Framework announces what, to many, is the most important principle in connection with electronic commerce and the Internet, namely that electronic commerce over the Internet should be facilitated on a global basis. In this regard, the United States Government has identified nine areas where international agreements are needed to preserve the Internet as a non-regulatory medium, one in which competition and consumer choice will largely shape the market-place. The nine areas are: (1) customs and taxation; (2) electronic payments; (3) a Uniform Commercial Code for Electronic Commerce; (4) intellectual property protection; (5) privacy; (6) security; (7) telecommunications infrastructure and information technology; (8) content; and (9) technical standards. These nine areas are discussed in some detail in the Framework.

Over the past year, the PCE deflator has risen only 0.2 percent – held down by lower import prices and falling energy prices – and the core PCE deflator, which excludes the more volatile food and energy components, has risen 1.3 percent. There is also some evidence that suggests that inflation expectations are under downward pressure. In particular, some survey measures of long-term inflation expectations are at the low end of the ranges that have prevailed in recent years. For example, the University of Michigan median measure of inflation expectations at a five-to-ten year horizon fell last month to 2.5 percent, the lowest level since September 2002. Similarly, the New York Fed’s three-year median inflation expectations measure from our Survey of Consumer Expectations is currently at 2.8 percent, down from 3 percent a year ago. The good news, however, is that these declines are very modest in magnitude. Thus, I would still judge that inflation expectations remain well-anchored based upon these survey measures. Similarly, measures of inflation compensation based on the interest rate spread between nominal Treasury securities and Treasury Inflation Protected Securities (TIPS) have fallen sharply over the past year. For example, the Board of Governors’ 5-year, 5-year forward measure – in other words, what inflation compensation would be for the period five-to-ten years from now – currently stands at around 1.8 percent, down about 40 basis points from a year ago. However, I put even less weight on this development than on the survey evidence for two reasons.
I owe a big debt of thanks to my predecessor Zdeněk Tůma, who steered the bank to a position where its reputation, which had been severely tarnished before his arrival, was growing steadily. He achieved this by, among other things, imposing his own highly developed sense of self-control and restraint on the bank. As the Czech National Bank started communicating less on general topics and more on its areas of expertise, it became recognized as an institution of true independence and authority – to such an extent that the Czech political system allocated all supervisory competences to it and continues to broaden its responsibilities. I believe that the crises from which a significant part of the developed world is still emerging have – at least for smaller economies – justified a scheme in which some or all supervisory roles are allocated to the central bank, which holds responsibility for stability issues anyway. But I also have to warn against the trend where the public sees central banks gaining more and more competences and mandates and starts to overestimate their ability to deal with crises. Central banks are far from omnipotent, and this trend may harm them. After all, their independence is only a product of the political system in which they operate. And such independence depends chiefly on their reputation. A central bank’s reputation is based on qualities such as accountability, transparency, and proper management of its own operations, as well as on its ability to make good choices and good decisions.

Because if we are, the instant effectiveness of some forward-looking commitments and guidance that should never have been issued at all, will give way to a much longer-lasting decrease in our ability to guide the markets in the future, and thus to an increase in the risks faced by each and every economic agent. Our mandates and institutional frameworks may develop, but our primary objective of assisting economic development and growth by preventing abrupt changes in economic indicators – be it the price level or broad measures of the stability of financial systems – will very likely stay unchanged for quite some time to come. Generally speaking, the goal of central banks is to provide some certainty in fundamentally uncertain economies, the uncertainty being based largely on the workings of their monetary systems. In pursuing this goal, we will need three things. First, we will need external recognition of the importance and usefulness of our independence. Second, we will need to nurture good relations with our colleagues; we have made great strides in this area, but much remains to be done. And finally, in our inner circles we will need the support of our nearest and dearest. So, let me end by thanking my wife for being such a rock of support in my life, my parents for teaching me that things should be done properly or not at all, and my kids for being such a joy every time I am with them. Thank you. 2  BIS central bankers’ speeches
See David Miles’ 2014 speech ‘What is the Right Amount of Guidance?’ 18. The oracle at Delphi foretold the future but she often spoke in riddles (encouraged, some claim, by the hallucinogenic gases emanating from fissures in nearby rocks). Presumably the name was chosen more because of the contrast with commitment: one of the inscriptions at the temple reads “make a pledge and mischief is nigh”, sometimes shortened to “surety brings ruin”. 19. The first is called “the over-confidence effect”, the second “hindsight bias”. Both are extremely well researched and documented (see, for example, Kahneman (2011), ‘Thinking Fast and Slow’). The second is ubiquitous. How often does one hear people - or, indeed, oneself – say “X was bound to occur”, or “I always knew Y was going to happen”, when neither is, in fact, true? 20. ‘The Bank of England cannot make promises about interest rates’. Financial Times, 4 July 2018. Technical appendix  Ben Broadbent Deputy Governor, Monetary Policy  Sign up for latest updates  ©2022 Bank of England

The challenges facing the European economy are considerable and set in an institutional context that has been disrupted by the “no” votes in the recently held French and Dutch referendums on the ratification of the Constitutional Treaty. The difficulties of entrenching growth that is sufficient and consistent with the European model and with the general public’s expectations may have influenced the disappointing results returned by these referendums. But this is something which is closely related to the difficulties at the national level in pushing through the necessary reforms and explaining them convincingly. The significance and implications of these results should not be underestimated. But they need not check European integration. Rather, they should act as a spur to further integration by means of European and national policies that respond to the demands of the public. In any event, European integration has not been a linear process in the past and I am fully confident that the European Union will be capable of overcoming these difficulties just as it always has when obstacles have stood in its way. On the plus side in the current circumstances is the fact that it has a currency shared by a large number of countries and a federally organised central bank which are a focal point of stability and exemplify Europeans’ ability to embark on and co-ordinate ambitious undertakings that contribute effectively to the collective well-being.
See the discussion of the potential risks and benefits in Cunliffe (2022): ‘Innovation in post trade services opportunities, risks and the role for the public sector’. 6. Financial Services and Markets Bill – Articles 21 and 22. 7. The Banking Act 2009 provides the statutory basis for the Bank’s oversight of payment systems. It allows HM Treasury  Page 10 to recognise systems for supervision by the Bank of England as part of the Bank’s objective to maintain UK financial stability. 8. Bank of England Record of the Financial Policy Committee Meeting  13 December 2019. 9. Bank of England Record of the Financial Policy Committee Meeting 24 March 2022. Sir Jon Cunliffe Deputy Governor, Financial Stability  ©2022 Bank of England

At the same time, the role of the financial services sector in the recent global economic meltdown has also raised questions on the issue of the quality of the leadership and workforce and for the need to place greater focus on developing ethical and responsible leaders who will be able to lead a sustainable industry over the medium and longer term. The economic costs of a failure to arrest talent shortages are strategically significant and include low productivity, the slow pace of innovation and lost opportunities. Building a strong talent pipeline has therefore become an economic imperative as human capital rivals financial capital as the critical economic engine of the future. This requires new and innovative ways of thinking about talent development, programs, processes and competencies. The human capital challenge has therefore to be approached with a different set of solutions. Giving recognition to its importance, in the United States, the accounting rules were adjusted to allow organisations to treat a wider range of talent development costs in the same manner as long-term investments in equipment, manufacturing plants and other facilities. Financial institutions today are also forming stronger relationships with business schools to increase the relevance of their curriculum. The World Economic Forum, through its recent work on skills and talent mobility, has fostered a concerted, multi-stakeholder, cooperation and dialogue among policy-makers, relevant international institutions, governments and businesses to develop interdisciplinary solutions to address the talent shortage.