samchain/econo-pairs-v1 huggingface dataset:
This calls for an adjustment of demand to the economy’s productive capacity. It is important that structural measures which primarily improve the workings of the economy are implemented in good time. The good consumption trend can then be met by rising output and high growth can be maintained without this necessarily leading to unduly high inflation. As I have already made clear on several occasions, I consider that tax cuts, in tune with the established guidelines for budget policy, are motivated. The tax-to-GDP ratio has risen in recent years as a consequence of the growth of private consumption and rising wage bills; today the ratio is above 50%. The Swedish economy would probably function better with lower taxes. The reforms that are needed in the tax system – as well as those I consider should occur in the labour market – can be arranged, however, in such a way that they promote the aims of stabilisation policy. Tax cuts in Sweden are probably needed that confer long-term benefits on both the supply and the demand side of the economy; a long-term tax reform with those ambitions would be desirable. In the present situation, however, with growth seemingly reaching around 3.5% this year and 3% in 2000, tax cuts and labour market reforms that primarily favour the supply side would increase the opportunities for good growth without contributing to increased inflationary pressure. That would lessen the risk of overheating and facilitate the interaction of fiscal and monetary policies.

So I do not put them forward as the complete answer; rather I think we should be discussing whether there are some common understandings which could inform and shape crossborder cooperation. International complexity Of course reaching a common view will be difficult. But it seems to me a necessary step towards meeting the challenges of handling financial instability in the new world of open international capital markets and giant complex financial institutions. Many of the challenges have been discussed in the international community. In particular: the potential difficulty in amassing a complete picture of the health of firms and capital markets in crisis from different authorities; the potential complexity of large firm structures, where entities within a firm may be subject to different legal arrangements, preference rules and rules concerning ownership interests and creditor arrangements; and the possible technical difficulties in winding down an entity that is engaged in complex trading strategies. There are also of course issues around how liquidity and capital can be moved around a group: whether collateral, funding or capital can be moved quickly across borders to where it needs to be. Further, some of the commonly preferred methods for resolving a financial crisis, before moving to winding down methods, may be less easy to deploy than they were even a few years ago. I think many of us would share Eddie George’s view that we should look first for a private sector solution before committing public money to a rescue operation.
Misconduct costs by banks globally have exceeded USD320 billion since 2008, with USD42 billion incurred in 2016 alone. At the institutional level, there should be a ‘clear tone from the top’ that unethical behaviour will not be tolerated. This culture of ‘zero tolerance’ for unethical behaviour should permeate across all levels of the organisation, including in the process of recruitment, retention and remuneration. As a community, we cannot possibly expect ethical behaviour to be burnished if we persist in retaining, hiring or rewarding people who had acted otherwise. Our work environment should also evolve, making it conducive and safe for individuals to speak up on ethically questionable practices. Encouraging conversation about ethical behaviour in the workplace can go a long way in empowering all layers in the organisation to serve as an ethical beacon. This can significantly reduce the probability and occurrence of unethical conduct. The third is Calling. We should marvel at the deep sense of purpose and identity contained in the medical profession. One sentence in the modern version of the Hippocratic Oath is particularly resonating: “I will remember that there is art to medicine as well as science, and that warmth, sympathy, and understanding may outweigh the surgeon’s knife or the chemist’s drug.” Ultimately, to make sense of what we do in our profession, we cannot shy away from its purpose.

Ladies and gentlemen, let me end my remarks by quoting a line from the book: “Risk of crisis as financial integration increases will never disappear, and countries must pursue protection from risks of volatility and sudden stops”2. We should always be vigilant, even in peace time. To Mr Kawai and other authors, congratulations yet again on the launch of this new and important book. 15. 2  Thank you. Chapter 4: “Managing large capital inflows: taking stock of international experiences” (by Susan Schadler). BIS central bankers’ speeches  3
This would then be taken into consideration in our monetary policy thinking in some way.2 Nevertheless, it is probably the case that the greatest contribution to a more effective strategy is to ensure that appropriate regulations and supervision procedures are in place. New financial supervision arrangements As I mentioned earlier, one of the problems was that financial supervision did not give sufficient consideration to factors in the macro economy and to systemic risk. At the Swedish level, an important step in this is of course to ensure that the coordination between the Riksbank and Finansinspektionen functions as efficiently as possible. It is also necessary to have coordination at the international level. In November 2008, the European Commission appointed Frenchman Jacques de Larosière to lead a task force to draw up proposals for reforming the regulatory regime within the EU. The proposals were presented on 25 February this year.3 They include establishing a special body, the European Systemic Risk Council, with responsibility for overall financial supervision (macro-prudential supervision) in the EU. The idea is that the twenty-seven central banks in the EU would be members of the council and that the council would receive resources from the ECB. Its tasks would include pooling and analysing information, for instance on macro economic conditions, which may be significant to the stability of the financial system. Part of the problem is that financial supervision has had an excessively national focus. The de Larosière group therefore proposes enhanced coordination of the national supervisory authorities.

The banks created special intermediaries off their balance sheets to hold and structure the securitised credits. This made it possible for the banks to increase leverage both on and off the balance sheet. However, explicit and implicit guarantees from the banks to these special companies meant in practice that the risks led directly back to the banks' balance sheets. The result of all these new instruments and artificial intermediaries was a motley and almost impenetrable structure. A wide range of asset types with idiosyncrasies in pricing arose. This also made them more difficult to value. Moreover, the complicated links between the banks and their special investment vehicles made it difficult to see exactly what the banks' exposures were. Eventually, no one knew where the risks were. The increasing amount of credit not only made investors highly indebted in relation to their equity, many banks also did not really have enough capital in relation to the risks they took. When economic activity began to decline in the USA and prices fell on the US housing market, many institutions suffered major losses. Above all, however, a great deal of uncertainty arose. It proved to be simply impossible to know with any certainty who was exposed to "toxic assets", that is assets that risked losing value as a result of major credit losses. The realisation that many institutions could be more in debt than appeared to be the case on their balance sheets fuelled this uncertainty.
I am that sure my colleagues around the table would like to share their practical experiences so that we could have a better understanding of the financial market indicators suitable for emerging markets and how we as policy makers can best make use of them. Let me now pass the chair to Mr. Eli Remolona, Head of Economics for Asia and Pacific, BIS. BIS Review 64/2007  1

In 2019 we expanded the geographical scope of this initiative to the "Montevideo group" made up of the central banks of Colombia (Banco de la República), Mexico, Argentina, Chile, Paraguay and Uruguay.With all these central banks of Latin America and some others which joined Morocco, from the African continent, we organized what was going to be the 3rd meeting of central banks to promote female leadership “Fostering Women's leadership in Central Banking”. Unfortunately, in March 2020 the pandemic broke out and this event had to be cancelled at the very last moment. The work initiated by so many central banks and the questions addressed are not the result of a fad or political ideologies. The matter of female leadership and gender diversity is an economic concern of global importance, which, according to the World Economic Forum, after the pandemic, has suffered a setback with respect to the progress that was previously made: “gender equality is still almost a century away from being achieved with the current rate of change.” For this reason, studies and research such as those which are going to be presented here today and tomorrow assessing the challenges and evaluating the policies that lead us to the path towards gender equality, are of the utmost importance in order to accelerate the necessary change. Several central banks have also included the topics of diversity and inclusion in their research agendas, and the webinar features several good examples of those.
They may perceive that there is a first-mover disadvantage in attracting and retaining talent. Another possible reform could involve putting a greater onus on senior management for the costs incurred from regulatory fines or other legal liabilities, rather than on shareholders alone. Shareholders should not be shielded from such costs and fines—as they may have also profited from associated gains—but it doesn’t seem fair or prudent to shield the decision-makers from responsibility for costly breakdowns as much as they are now. Greater personal liability may also be a powerful incentive to promote better behavior. I suspect changes in these areas would lead senior managers to encourage their staff to speak up earlier about emerging risks, be more attentive when red flags were raised, and respond sooner and more forcefully. I would also note that the many regulatory reforms introduced over the past decade may create incentives of their own, with important implications for bank behavior. Such incentives may alter the nature and locus of risk-taking, and therefore need to be closely monitored. Risks could be shifted outside the banking system, or the incentives could lead to different bank strategies, business models, and product offerings that introduce new risks. There is a long history of such behavior. For example, off-balance-sheet instruments rose sharply in the 1980s in response to the introduction of minimum primary and total capital requirements based on balance sheet size.

4 See Board of Governors of the Federal Reserve System, The Federal Reserve System: Purposes and  Functions (2018). 5 See remarks by Randal K. Quarles, Early Observations on Improving the Effectiveness of Post-Crisis  Regulation, January 19, 2018. See also remarks by William C. Dudley, Lessons from the Financial Crisis, November 6, 2017. 6 7/8  BIS central bankers' speeches  6 For further discussion, see Ashcraft and Schuermann, Understanding the Securitization of Subprime Mortgage  Credit, Staff Report No. 318, March 2008. 7 See remarks by Lorie Logan, The Role of the New York Fed as Administrator and Producer of Reference Rates ,  January 9, 2018. See also the Alternative Reference Rates Committee. 8 See Financial Stability Board, Final Report on Foreign Exchange Benchmarks, and FX Global Code. 9 For further discussion of supervisory activities, see Eisenbach, Haughwout, Hirtle, Kovner, Lucca, and  Plosser, Supervising Large, Complex Financial Institutions: What Do Supervisors Do? February 2017. For a discussion of the complementarity of supervision and regulation, see Eisenbach, Lucca, and Townsend, The Economics of Bank Supervision, Staff Report No 769, January 2017. 10 For a discussion in the context of misconduct risk, see remarks by Kevin J. Stiroh, Misconduct Risk, Culture and  Supervision, December 7, 2017. See also Chaly, Hennessy, Menand, Stiroh, and Tracy, Misconduct Risk, Culture and Supervision, December 2017. 11 William C. Dudley, Opening Remarks at Reforming Culture and Behavior in the Financial Services Industry:  Expanding the Dialogue, October 20, 2016.
The integrity of the single market itself can be put at risk if the exchange rate is used – and seen to be used – as an instrument to gain competitiveness at the detriment of the others. This may fuel reaction and fuel protectionist pressures, also within the EU. Little attention has been paid so far to the risks incurred by the single market in current times, as compared to the speculations about the single currency. BIS Review 20/2009  5  Third, some countries in the euro area have experienced a divergence in terms of growth, price dynamics and public finances. The divergence was partly a consequence of the strong economic growth over the last few years. However, this convergence might have been based, in part, on unsound fundamentals, so some correction was inevitable. Correction will be needed particularly in areas related to labour market functioning, public expenditures and financial markets. Some observers have said that these corrections could be made more easily if the countries in question were outside the euro area and could devalue their currencies. This conjecture is not only questionable from a theoretical viewpoint, it is irrelevant from a practical perspective. Conclusions The next ten years will be quite demanding for the euro, possibly more so than the first ten. Adolescence is generally a more tempestuous time than infancy. There is a saying in Italian: “Bambini piccoli, problemi piccoli…”. It means “small children, small problems…” implying that as children grow older the problems tend to increase.

As a result, country-specific factors have become less important in determining corporate bond prices and spreads. Cross-border holdings of long-term debt securities of monetary financial institutions grew from about 15% in 1999 to nearly 40% in 2007. Integration in the equity markets is less advanced but shows signs of improvement. Between 1997 and 2006, euro area investors doubled their holdings of equity issued in other euro area countries to 29% of their total portfolio of euro area equity assets. The retail banking segment has remained more fragmented. In particular, the euro area cross-country dispersion of bank interest rates, especially of interest rates on consumer loans, has remained relatively high. This reflects different conditions in national economies (e.g. credit and interest rate risk, size of firms, industrial structure and degree of capital market development), institutional factors (e.g. taxation, regulation, supervision and  2  BIS Review 20/2009  consumer protection) and financial structures (e.g. degree of bank/capital market financing and competitiveness). It was probably overoptimistic to expect a faster convergence in this segment. The creation of the euro also gave rise to expectations of a broad based convergence of underlying economic developments. These expectations were quite varied, in fact. Some people expected greater divergence as a consequence of specialisation. Others expected greater convergence. The result is mixed. Some convergence has been observed, in particular in terms of business cycle and dispersion across countries, which is comparable with that among the US states.
Lorenzo Bini Smaghi: From Tuscany’s 19th century currency, the fiorino, to the euro – dialogue on international finance Speech by Mr Lorenzo Bini Smaghi, Member of the Executive Board of the European Central Bank, in the Sala Luca Giordano at the Palazzo Medici Riccardi, Florence, 15 May 2008. *  *  *  I’m very pleased to come back to Florence to consider a highly topical subject linked to the effects of the financial turmoil on the world economy. To understand the current economic situation and the current short to medium-term prospects we need to take a step back and consider the imbalances that were building up on our continent until mid-2007, imbalances that were evidently unsustainable and that underlie the corrections we are going through. We have to distinguish three main imbalances. In chronological order, the first one concerns international payments. Over the years, the United States has accumulated huge deficits on its current account which have grown out of a lack of domestic savings. The US economy was essentially growing by borrowing from the rest of the world. In 2007 the US current account deficit amounted to over 6% of its GDP. For years the problem of the sustainability of America’s external imbalance has been emphasised, especially in Europe, which feared the risk of a disorderly unwinding with destabilising effects on the financial markets.

I will not dwell on the benefits that citizens and firms gain from having a stable currency like the euro in such a financial crisis, even though they do not often realise them. It is important not to forget it. Let me just recall how the US recession in the early 1990s affected Europe in 1992-93, leading – in the presence of uncoordinated economic policies within Europe – to serious economic and financial turbulence. The ERM crisis and the exit of the Italian lira and the British pound in the autumn of 1992 as well as the widening of the fluctuation bands of the ERM led to large changes in competitiveness, with an overall contractional impact even on the stronger economies such as Germany. It is difficult to imagine what would have happened in recent months without the euro. If the past is a good guide to understand the future, we can be sure that Italian inflation and interest rates would be higher, with negative repercussions on consumption and investment. We can only guess what our oil bill would now be if we had a weak currency instead of the euro. Likewise, just imagine the situation for households having mortgage debt who would have to pay substantially higher interest rates. Monetary stability requires a monetary policy focused on medium-term price stability. Especially in a phase of higher uncertainty such as the one we are currently experiencing there must be no doubt about the priorities of the central bank, or about its strategy and independence.
As a result, the ECB recently lowered policy rates to the ZLB, has started undertaking additional unconventional monetary policies, and is now encouraging fiscal expansion among eurozone countries that are able to do so. These lessons from monetary history strongly suggest that there are great risks to premature liftoff from the zero lower bound or near-ZLB conditions. Unless economic conditions are fundamentally strong and the previous impediments to growth have receded sufficiently, the odds remain high that monetary authorities will need to retreat right back into the ZLB. And the costs of being mired in the zero lower bound are simply very large. I have already talked about how the ZLB prevents using our very best policy tools to address negative shocks. The constraint also means that interest rates cannot fall low enough to equate the supply of saving with the demand for investment. This, of course, significantly impedes capital formation, future economic growth, and further employment expansion. Furthermore, the ZLB often comes hand in hand with undesirably low inflation or even a falling price level, carrying with it the associated costs of debt deflation on the real economy. The risk of too-high inflation What about the other risk to our policy goals that I mentioned – the risk that the U.S. economy could face pricing pressures that accelerate rapidly and ultimately leave inflation far above our 2 percent target for an unacceptably long period?

That goal is central to the PRA’s general objective to promote the safety and soundness of the firms we supervise, as well as to the Bank’s financial stability objective of ensuring that the UK financial system can serve UK households and businesses in bad times as well as good. I want to use my speech today to set out my thinking on where our resolution framework has got to as we move closer to our 2022 commitment, and convey three key messages relating to that commitment. First, that progress towards the commitment reflects a regime which is built on robust and coherent principles: credibility, transparency, flexibility and proportionality. Second, how we apply these principles to the operationalisation of our regime – specifically, through the Resolvability Assessment Framework which is key to ensuring our resolvability regime is ‘fit and ready’ – fit for purpose and ready for use: and where there have been some important developments this week which I want to update you on. And third, that resolvability is not a binary concept; even once the 2022 commitment is fulfilled the work doesn’t stop. 2022 will see us pass the important milestone for the resolvability of major banks – but the work to maintain and improve the resolvability of firms within the UK resolution regime will continue. Credibility and transparency in the making There are many previous milestones in the history of UK banks’ resolvability, or lack of it, very few of them positive.