samchain/econo-pairs-v1 huggingface dataset:
Should we publish voting records and the minutes of the Executive Board’s deliberations? Central banks have chosen different solutions. In Sweden, the central bank publishes the voting records and provides an extensive report with the views of members by name. The Bank of England publishes a similar report of the minutes, but members remain anonymous. Norges Bank does not publish a report of the minutes of the Executive Board’s deliberations, but instead publishes a detailed account explaining the Executive Board’s background for the interest rate decision. The interest rate decision is based on a strategy that is described in the Monetary Policy Report. The Report also presents the analyses underlying the strategy. The basis for interest rate decisions is thus available to the general public. The difference in practices partly reflects the different character of the monetary policy committees in the three countries. 27 Sveriges Riksbank and the Bank of England have committees that are referred to as “individualistic committees”. Each member is individually responsible for his/her vote, and the decision 28 is normally decided by majority voting. In Norway, the Executive Board is more of a “collegial committee”, where the members are unanimous in their decision. The ECB’s system is of the same type. One cannot have both a collegial committee and minutes with individual views. If all members publicly explain their own views, communication may become unclear.

It is easy to conceive of a situation where a bank that is in fact solid, but has payment problems, might collapse if the authorities expose the problems to the general public. Moreover, banks may take excessive risks if they know the authorities will come to their rescue. It can be argued that in this case it may be appropriate for the  36  Guthorm Immanuel Hallager (1935): Norges høiesteret: 1815-1915 (The Supreme Court of Norway: 18151915), 1 vol., H. Aschehoug & Co, p. 131. 37  See parliamentary deliberations for August 1821, Part 5, Addendum, p. 119. 38  The Supreme Court argued that if the citizens discern “svagheten af den menneskelige kundskab og viden netop der, hvor han ventede at finde vished da er det meget at befrygte, at saadan erfaring heller vil nedstemme den agtelse, han forhen følte for den samme domstole, saalænge han blot kjendte de for ham forstaaelige resultater af stemmegivningen og deliberationerne. (weaknesses in human knowledge and expertise notably where they expect to find certitude, there is a risk that such an experience will diminish the high esteem in which the court was previously held before their insight was confined to the comprehensible outcome of the voting and deliberations.)”. See parliamentary deliberations for August 1821, Part 5, Addendum, p. 128. 39  Professor Peter Lødrup wrote in 1998: “Den offentlige voteringen er etter nåtidens rettsoppfatning en selvfølge, og det må konstateres at Høyesteretts motstand mot den var et feilsyn.
Although financial stability has long been a key concern for policymakers, particularly in emerging countries where financial vulnerabilities are, or were, more evident and where risks to stability often come from abroad, nowadays the key concern is how to act in a preemptive way with actions that are costly, to ensure financial stability into the future. How should macroeconomic policy pursue the goal of financial stability in normal times, when the benefits are uncertain but the costs are noticeable? As many of you well know, this concern came with the observation that the buildup of risks in the United States before the crisis occurred during a period of stable prices and output, the so called “Great Moderation” period, where low nominal interest rates that were consistent with the Central Bank’s commitment with CPI inflation stability may have led to excessive risk-taking by financial intermediaries, and to a rise in asset prices, while good economic conditions masked the developing of financial imbalances. In the aftermath of the crisis, policy rates were drastically reduced and diverse policy measures were implemented as the zero-lower bound became an active constraint. But the increasing concern about financial conditions and the consequent reassessment of the macroeconomic policy framework was most evident with the adoption of macroprudential 1  policies. But the question remains about the role of monetary policy. Should monetary policy frameworks explicitly incorporate risks to financial stability?

2  Our best response is to continue strengthening regulation and supervision regimes aimed at avoiding future crises. And central banks have a crucial role to play because there are clear complementarities between financial and monetary stability, which, as is the case of Chile, are often formally recognized in central banks’ official mandates. Before referring to what we have done on this matter in Chile, let me briefly describe our experience with the Global Financial Crisis and our macroeconomic policy response to it. While we were still enjoying the commodity boom of the 2000s, we were hit by the spillover effects of the crisis and its aftermath, namely the tightening of domestic lending conditions, capital outflows, a reduction of the external demand for our exports and a decrease in the price of copper, which is still the main source of external income for the Chilean economy, and in particular an important source of revenues for the Treasury. The price of this critical commodity fell more than 60 percent in just five months. Exports fell almost 20 percent in two years, a strong shock for an economy where exports accounted for more than 40 percent of GDP. A similar drop experienced public revenues, with those coming from copper production falling 23 percent in 2008 and 50 percent the following year. Despite the severity of the shocks, economic performance and the resilience of the financial system have been better than in comparable situations in the past.
So we therefore need to form a judgement on where the economy is likely to be heading. But to do that, we need to start by figuring out where we are now. The great Danish physicist Niels Bohr is supposed to have observed that “Prediction is very difficult, especially about the future.” But I don’t think he realised just how tough economic forecasting is. Not only is the MPC unsure of the prospects for commodity prices, how the credit crunch will play out and a myriad of other future events, but we don’t even have a precise picture of the current state of the economy. As a result, controlling the economy has been likened to driving along a winding road looking only in the rear-view mirror. Indeed, it’s worse than that as we don’t even have that good a view of where it has been in the past either! It is as if the rear window is also a bit misted up. Our primary signposts are, of course, the official data provided by the Office for National Statistics for the key macroeconomic variables, such as output, spending, employment, prices, wages and so on. However, we do not rely on the official data exclusively, for a number of reasons. First, it takes time for the official data to be collated and published. For instance, the preliminary estimate of GDP growth in Q2 only appears tomorrow, almost a month after the quarter ended.

Since the power spectrum is a where function of the auto-covariances (including the variance , it can be viewed as a decomposition of the variance of the time-series in terms of frequency. When the power spectrum is normalised by the variance , the resulting standardised function is known as the spectral density. The filter then isolates ‘bands’ in the frequency domain of the spectral density and returns the resulting series. 10  BIS Review 168/2010  Chart 4 Ratio of loans to GDP and assets to GDP (UK)  Sources: Shularick and Taylor (2009) and Bank calculations. Chart 5 Ratio of loans to GDP and assets to GDP (US)  Sources: Shularick and Taylor (2009) and Bank calculations. The credit cycle is distinct from the business cycle in amplitude as well as frequency. To show this, Charts 6–7 plot the medium-term cycles in real GDP for the UK and US alongside the credit cycle. The amplitude of the credit cycle is twice that of fluctuations in GDP over the medium term. It is roughly five times that of fluctuations in GDP at conventional business cycle frequencies. The peak-to-trough variation in the typical credit cycle has been around 20 percentage points in the UK. For real GDP, it is around 10 percentage points. As a result,  BIS Review 168/2010  11  ratios of credit to GDP themselves exhibit a distinct cyclical pattern in the UK and US (Charts 4–5). Chart 6 Medium-term cycle in real GDP and credit (UK)  Source: Bank calculations.
2  BIS Review 24/2006  …and a financial crisis How did the banks react to the new deregulated environment? Now they could set their own prices and grant loans as they wished. One might say that the bank management saw the opportunities more clearly than the risks. They wanted to obtain market shares and increase their income. The general public’s pent-up demand for credit was substantial when the credit regulations were abolished and high inflation made it more profitable to borrow than to save. The 1980s were also a period of strong economic growth, which contributed to the credit demand enduring even after the earlier pent-up need had been satisfied. There was thus a rapid credit boom over a number of years. Between 1985 and 1990 the general public’s loans from banks increased from 75% to 115% of GDP. A substantial part of the borrowed money was used to buy property, which led to property prices being pushed up beyond what was essentially justified. In this situation it is of course important to use monetary policy and fiscal policy to tighten the economy. However, at that time Sweden had a fixed exchange rate pegged to a basked of international currencies, primarily the US dollar. Monetary policy – the interest rate – had to balance the short-term capital flows and could not be used to influence domestic demand. Nor was fiscal policy tightened to cool down the overheated economy.

If the real interest rate is low, even bad investments appear to be profitable and the banks' credit assessment process will not function properly. A large number of borrowers will then experience unsatisfactory profitability, particularly if the interest rate then increases slightly, and will be unable to pay their loans. The bad experiences from the time before and during the crisis led to the Riksbank later being given a very independent role to determine the key interest rate within the framework for monetary policy. Parliament set the objective for what should be achieved, namely price stability. The Riksbank then specified this as an inflation target, whereby the inflation rate would normally be within an interval of 1 to 3 per cent a year. Interest rate decisions are made by the Executive Board of the Riksbank, which is intended to ensure that there can be no external influence. The predictable and independent interest rate policy means that the banks and other financial agents have been given a firm foundation on which to base their risk assessments, which reduces their risks of suffering unexpected losses. Avoiding being wise after the event It is dangerous to use regulations to limit competition in the banking sector. Almost forty years of regulations had led our banks to almost entirely lose one field of competence they must have to accomplish their task to society – to assess credit risks and allocate credit where it can have the most positive effect on economic developments.
We can discourage the second by being open and transparent about the reasons for movements in inflation and decisions on monetary policy. If we have no hidden message, then eventually people will stop looking for it. Rational optimising behaviour is in many situations too demanding, and actual decisions may reflect the use of heuristics. That must be taken on board in the choice of monetary policy strategy. In turn the strategy may affect the heuristic chosen by economic agents. And a good strategy will not only help agents choose a heuristic but will be robust with respect to that choice. Does inflation targeting meet those criteria? Inflation targeting as a framework which accommodates learning So far I have emphasised three key points about monetary policy. First, expectations play a fundamental role in the way monetary policy works. As the Maradona theory of interest rates shows, expectations of future monetary policy actions are at least as important as the level at which the official interest rate is set today. Second, our knowledge of the economy is continuously evolving – as the history of the Mais lecture has itself demonstrated. There simply is no unchanging rule, however complex, that can adequately describe the optimal monetary policy strategy. Third, the complexity of optimising behaviour means that central banks need to allow for the possibility that people use simple rules of thumb. Taken together, these arguments provide a powerful case for inflation targeting.

Because inflation expectations matter to the behaviour of households and firms, the critical aspect of monetary policy is how the decisions of the central bank influence those expectations. As Michael Woodford has put it, “not only do expectations about policy matter, but, at least under current conditions, very little else matters”. Indeed, one can argue that the real influence of monetary policy is less the effect of any individual monthly decision on interest rates and more the ability of the framework of policy to condition inflation expectations. The precise “rule” which central banks follow is less important than their ability to condition expectations. That is a fundamental point on which my later argument will rest. It should be clear that, just as Maradona could not hope to score in every game by running towards goal in a straight line, so monetary policy cannot hope to meet the inflation target by leaving official interest rates unchanged indefinitely. Rates must always be set in a way that is consistent with the overall strategy of keeping inflation on track to meet the target; sometimes that will imply changes in rates, at other times not. Learning and its implication for monetary policy The academic literature on monetary policy rules has performed a great service in emphasising the importance of expectations. But there are two basic problems with the use of rules. The first is that the validity of any given rule depends upon the model of the economy that underlies it being true.
Mervyn King: Finance – a return from risk Speech by Mr Mervyn King, Governor of the Bank of England, to the Worshipful Company of International Bankers, London, 17 March 2009. *  *  *  Master, Sheriff, My Lords, Alderman, Ladies and Gentlemen, Introduction The financial turmoil that began in August 2007 led to a financial panic in September 2008 and now to a severe worldwide economic downturn. It is fair to describe the events that followed the failure of Lehman Brothers as the Panic of 2008 because of the almost complete collapse of confidence in financial institutions and the flight of funding that ensued. Perhaps we had forgotten that such panics and banking crises have occurred with depressing regularity in the financial systems of market economies. But the history of the City is in large part the history of banking crises. The measures that central banks took, and continue to take, to restore confidence in the banking system were extreme and on an extraordinary scale – the Bank of England has lent hundreds of billions of pounds to the banking system. But they were not unprecedented – it has happened many times before in crises over the years. So I want tonight to reflect on why we seem to find it so difficult to learn from experience. But even when set against that historical background, the extraordinarily sudden, severe and simultaneous downturn of activity and trade in every corner of the world economy last autumn is remarkable.

Banks felt that they had to keep on dancing while the music was playing. Regulators could never prove that the risks they identified would crystallize, and the “top down” and “bottom up” dimensions of prudential supervision were not married. Central banks and the IMF discussed the imbalances for so long that some came to believe that they were crying wolf. And no one country could prevent the world wide increase in asset prices. Christopher Fildes’ law of the financial cycle says that “disasters happen when the last man who can remember what happened last time has retired”. Periods of euphoria and panics in the financial system are inherent features of a market economy. They are the cost we pay for the benefits of a market economy – long-run increases in our standard of living which other systems have failed to deliver. After another twenty years or so, memories of the Panic of 2008 will have faded, and the regulations put in place in its wake will no doubt be seen as old-fashioned, inhibiting of the potential of the City, and as ripe to be swept away as was the Glass-Steagall separation of commercial and investment banking in the United States a few years ago. A lesson of history is that few generations have been able to avoid a repetition of earlier banking crises. The essential problem is that we can no more bind our successors than our predecessors were able to bind us.
Judging from the various indicators of inflation BIS Review 89/2001  1  expectations, on the whole we seem to have been successful (Diagram 1). Although inflation has actually fluctuated markedly, for a number of years money market players, for example, have counted on future inflation being approximately 2 per cent. Neither have they been greatly mistaken. Since we began to target inflation, the rate measured by the CPI has averaged 1.3 per cent, while UND1X inflation has averaged 1.8 per cent. 1. Inflation expectations among money market players Per cent 5  5 Jan 95  4  4 Mar 00  3  3  Feb 96  Feb 97  Sep 01  2  2 CPI Feb 98  1  1  Sep 00  0  0  -1  -1 94  95  96  97  98  99  00  01  02  03  04  05  06  Sources: Statistics Sweden and Prospera Research AB  If we have anything to reproach ourselves for, perhaps it is that, despite our efforts to the contrary, we seem to have induced many segments of society to believe that we can fulfil the target, if not always then almost so. That is evidently not the case. Inflation fluctuates, sometimes a lot. The same seems to apply in most other relatively small countries. Compare inflation in, for instance, the individual euro countries with the average rate in the European Union.

12. Major FIs, including Standard Chartered Bank and AIA, have stepped up on training for employees to deepen expertise and acquire new skills across domains, including business planning, compliance, wealth management and tech. We should not let up on training. We may not emerge from COVID-19 soon, and should take this period of slower growth to help our people and businesses build longer-term capabilities. To encourage continued and in fact intensified training, MAS, in April this year, raised the level of IBF course fee subsidies for all locals from 50%-70% to 90%. IBF further provides a 5% course fee credit, bringing the total course fee support to 95%. In addition, we introduced the Training Allowance Grant to alleviate the burden of manpower costs on FIs, so that they can retain and upskill their employees. IBF has been bringing onstream more online courses, so that training can continue even with the safe management measures. The number of such courses has increased from about 400 to over 600 within the span of three months. As a result of these efforts, training participation has increased at least 75% year-onyear, to 11,000 in Q2 2020. As the IBF Credit and training allowance support will expire on 31 Dec 2020, we are looking into extending these measures into next  year, so as to provide longer term certainty and support for business and 3/6  BIS central bankers' speeches  workers. I would like to highlight in particular, the need to expand and deepen the Singapore workforce’s capabilities in technology areas.
Evidence from Subprime Loans,” Quarterly Journal of Economics, forthcoming in Vol. 125, No. 1. Loutskina, E. and P. Strahan (2006), “Securitization and the Declining Impact of Bank Finance on Loan Supply: Evidence from Mortgage Acceptance Rates,” mimeo, Darden Graduate School, University of Virginia. Figure 1 Countries experiencing drops in real GDP in the fourth quarter of 2008 (*) (percentage of total sample) 100  100  90  90  80  80  70  70  60  60  50  50  40  40  30  30  20  20  10  10  0  0  71  74  77  80  83  86  89  92  95  98  01  04  07  (*) Using the annualized quarterly GDP for a sample of 29 developed and emerging economies. Source: Central Bank of Chile. BIS Review 68/2009  7  Figure 2 GDP (annual change, percent) 10  10  8  8  6  6  4  4  2  2  0  0  -2  -2  -4  -4  -6  -6  70  75  80  Latin America (*)  85  90  95  World at PPP  00  05  10(f)  Developed ecoomies  (*) Simple average of annual GDP change in Argentina, Brazil, Colombia, Chile, Mexico, Peru and Venezuela. (f) Forecast.

Only in this way, they may find themselves able to sail into the international waters. Thank you. BIS Review 148/2008  3