samchain/econo-pairs-v1 huggingface dataset:
Yes, there could occasionally be instances when policies would be better co-ordinated (although these are rarer and less grievous than many suppose). But there’s also a risk that a single committee might be incentivised to pay more attention to the more verifiable elements of its remit – the cyclical stability of growth and inflation – than to the less obvious achievement of financial stability. Conclusion In public debate, politicians often extol the virtues of “joined-up” policymaking. Policies set by one body might affect another’s objectives and people should be aware of such interactions. In some instances, where the interactions are sufficiently strong, it can be desirable to merge the two bodies into one. But if you try pushing that argument to its logical limit – to ensure we internalise all possible spillovers let’s just have one body determining every aspect of public policy – I think we’d all have misgivings with the outcome. Apart from anything else the policymaking process would be far too complicated to hold any one bit of it to account and the all-powerful policymaker would naturally tend to focus on the more verifiable tasks. A bit like the man who loses his keys in the park but looks for them under the streetlamp “because that’s where the light is” the attention of policy would be directed to the most observable objectives. Perhaps we collectively fell foul of this trap, in some ways, ahead of the crisis.

So too, arguably, did a lack of gender diversity. 35 And a lack of diversity within the financial eco-system – with many institutions holding very similar portfolios – fed and watered these seeds. This lack of diversity, intellectual and financial, contributed significantly to the depth and severity of the crisis. 36 This old lesson from evolutionary biology and systems theory was learned painfully and abruptly by policymakers and practitioners in 2008. What applies at the level of institutions and systems may also apply at the level of nation states. Democracy can be thought of as a sociological mechanism for maximising the diversity of decision-making. By design, it leans against the hubris bias of autocracy or monarchy while reducing the groupthink bias of single-party rule. As synergy is diversity, so too is democracy. And for the same reasons as among institutions and eco-systems, democracy has also been found to make for more robust decision-making. 37 So much for the benefits. None of this is to say that diversity is costless. History is littered with examples of the problems associated with integrating and assimilating diverse peoples. Several recent empirical studies have corroborated those perceptions, again at both the micro and macro scale. For example, there is evidence that diversity in the workplace may sometimes lower employee morale and job performance. 38 And there is evidence that racially diverse communities have fewer social interactions and thus are associated with lower levels of trust.
The narrower the gap between actual production and the capacity ceiling and the lower unemployment happens to be in relation to its equilibrium level, the greater will be the risk of higher inflation. From this also follows a need to know whether the equilibrium level of unemployment has risen. If that is the case, measures should be taken specifically to lower the equilibrium level, a task that is outside the scope of monetary policy. Where is unemployment’s equilibrium level? What is unemployment’s current equilibrium level in Sweden? As always when one goes from a theoretical analysis to practical economics, everything becomes much more complex. Unemployment’s equilibrium level is not an observable quantity. One has to make do with estimates and their inevitable uncertainty means that interpretations have to be cautious. The available estimates suggest that equilibrium unemployment in Sweden moved up in the early 1990s and, in terms of registered unemployment, is now somewhere in the interval between 4.5 and 7.5 per cent.3 The OECD also counts on a marked increase in the 1990s; in the latest report on Sweden the current level is put at between 6 and 7 per cent.4 There is not, in fact, complete agreement that equilibrium unemployment has moved up sharply.5 But what suggests that it has, even though we cannot be sure of its exact level, is that otherwise the high unemployment should have acted as a strong restraint on wage formation. The actual development of wages does not indicate this. 3  See e.g.

As the structures and institutions in the Swedish labour market resemble those in the rest of Western Europe in many respects, it is reasonable to suppose that the same forces have been at work in our country but that their impact and importance were concealed for a long time by an expansionary economic policy that was ultimately unsustainable. High and more or less permanent unemployment, or high equilibrium unemployment, is a sign that the labour market is functioning poorly. These problems are rooted in turn in wage developments because it is price formation which is the central market mechanism. Conclusion The best way in which monetary policy can contribute to an economy that functions better economy with employment and growth is by keeping inflation low and stable. 8  Björklund, A., Edin, P-A., Holmlund B. & Wadensjö, E. (1996), Arbetsmarknaden (The Labour Market), SNS förlag, Stockholm. 9 Examples of an explanation of persistence theories are given in Lindbeck (1993), Unemployment and Macroeconomics, MIT Press, and in Snower (1994), "Commentary: The Extent of High Unemployment in OECD Countries" in Reducing Unemployment: Current Issues and Policy Options, Federal Reserve Bank of Kansas City. BIS Review 38/1997  - 11 -  The economy can then expand along its long-term growth trend. If this path, which is determined by structural factors, permits a rapid increase in output, growth will then be high. If potential output rises slowly, on the other hand, economic growth will be weak even if monetary policy were to be very expansionary.
Mojmír Hampl: The EU banking industry Speaking points by Mr Mojmír Hampl, Vice Governor of the Czech National Bank, at the European Economic Congress “Section: Banking Industry in the EU”, Katowice, 15 May 2012. *  *  *  “Dzen dobry” – this is unfortunately the only thing I can credibly say in Polish, so the rest will be in my imperfect English. Thanks to the organizers for the invitation and for the opportunity to participate in such a distinguished panel. It is my first time here and I can only hope not the last one after I finish my presentation. Given the time constraints I will focus on a just a couple of quick points to stimulate the debate. My key point is: Let’s not repeat the same mistakes again and again. What I mean is this: Since the onset of the current crisis there has been a constant push for a more pan-European, or “federal-like”, approach to the regulation, supervision and potentially also resolution of the financial industry in the EU. The famous de Larosière report and all its consequences, such as the three new pan-European supervisory agencies, are just direct results of this push and this way of thinking. Some may recall that the Czech authorities were quite reluctant to accept this approach and also the final compromise which brought these agencies into existence, and we believe we had good reasons for this.

Despite all the European convergence and integration, financial systems in different EU member states still look and work very differently. Trying to administer them from a single centre according to a single set of rules might be like trying, say, to feed all the animals in a zoo with a single type of food. As an illustration: the recent ECFIN Retail Banking Survey says:   in Austria almost 100% of house purchasing loans feature variable interest rates, while in France the share is only about 10%.   countries differ substantially in the share of owner-occupied housing and therefore in the importance of the mortgage market;    they differ in how intensively they use electronic means of payment;    in the significance of building societies and credit unions;    in tax and other incentives that the government provides for certain types of financial transactions;    in the extent to which local banks trade in various non-plain vanilla products such as derivatives;    in the share of subsidiaries and branches of foreign financial institutions and, more generally, in ownership structure    in the loan-to-deposit ratio, which varies from roughly 70% in some countries to more than 200% in others;    in the degree of local market concentration;  etc. There are many more examples, some of them influenced by long-term developments, some by entrenched behavioural differences and habits.
The good economic situation can also be attributed to the country’s sound financial health. National savings are high, the external accounts are solid, and public finances are on the way to recovery. The National Bank has contributed to this success by ensuring confidence in the Swiss franc – a key factor for the smooth functioning of the economy. As I have pointed out, this commitment is not new, but has been a constant throughout our history. As our predecessors, we are honouring it by following rules that are as clear as possible, while knowing that the uncertain environment in which we operate requires the ability to adapt. Mistakes have certainly been made in the 100 years of the National Bank’s existence. It must be acknowledged, in retrospect, that certain situations were not analysed correctly, that certain decisions were taken too late or were simply inadequate. In some instances, the SNB opted for strictly following the rules rather than searching for solutions that would have been better suited to the realities of the moment. Nevertheless, the outcome has been positive overall. Switzerland has been spared the monetary problems that afflicted so many other countries. However, the purchasing power of the Swiss franc has not been preserved as successfully as one might have wished. The general price level has increased by an average of 2.5% a year since 1907, although this is still only half a percentage point above the range we now equate with price stability.

Jean-Pierre Roth: “A franc remains a franc” – 100 years of National Bank policy in support of monetary stability Address by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the official ceremony of the 100th anniversary of the Swiss National Bank, Zurich, 22 June 2007. *  *  *  Honoured President of the Swiss Confederation Honoured Prime Minister of the Principality of Liechtenstein Honoured members of the federal parliament Honoured representatives of the cantonal governments Honoured governors of fellow central banks Honoured guests Almost to the day 100 years ago, the Swiss National Bank opened its doors at the head offices in Berne and Zurich and the branch offices in Basel, Geneva and St Gallen. This marked the end of around 16 years of parliamentary work that had followed the acceptance, in 1891, of a constitutional article leading to the establishment of a central note-issuing institution for the whole of Switzerland. This prolonged process can definitely be explained by the fact that our countrymen, at the end of the 19th century, did not see any urgent need for the establishment of a central bank. In fact, the political debates prior to 1907 mainly focused on questions relating to the organisation of the bank and the distribution of its profits; the regulatory role that the new institution was to assume was hardly touched upon.
And third is the macroprudential oversight of which the key components should include a good process of macroprudential surveillance, an effective coordination between different supervisory agencies so that timely actions can be taken, and calibration of additional macroprudential overlays as needed, which can either take the form of measures implemented at an industry-wide level aimed at taming the credit cycle, or specific capital and liquidity buffers for selected systemically important institutions. And finally the fourth pillar is market development and central bank’s response to improve market efficiency, transparency, as well as the ability of central bank to response comprehensively to the emerging situations, especially liquidity provision and the supportive legal framework. These four pillars, in my view, are the key minimums for implementing an effective financial-stability orientation policy. Thank you. BIS Review 130/2009  5

Default rates for consumer finance ABS and SME collateralised loan obligations have also remained low, well below 1%, throughout the worst financial and economic crisis we have experienced. As regards covered bonds, credit quality is ensured by a double recourse (on the underlying assets and on the issuer), which is in fact comparable with the double protection that exists in our standard repo operations. Overall, the decisions announced last week were taken with a view to underpinning the firm anchoring of medium to long-term inflation expectations, in line with our aim of maintaining inflation rates below, but close to, 2%. We expect the two purchase programmes to effectively complement the TLTROs in enhancing the functioning of the monetary policy transmission and in providing further monetary accommodation given that we have now reached the lower bound. The newly decided measures, together with the TLTROs, will have a sizeable impact on our balance sheet, which is expected to move towards the dimensions it used to have at the beginning of 2012, and the Governing Council stands ready to take further action if needed, in compliance with its mandate to maintain price stability. Conclusion Ladies and gentlemen, it is time for me to conclude. My bottom line is also my starting line. Investment is rightly said to be today’s demand and tomorrow’s supply. Yet investment in Europe is falling short. If we don’t manage to get investment going again, we will weaken the economy in the short run and undermine its prospects in the long run.
And the auctions are responsive to market conditions, with the amount of liquidity available rising automatically if there is greater demand. Reflecting the improved financial positions of banks and building societies, and the liquidity provided to the market through QE, the Bank’s liquidity insurance facilities saw relatively modest usage over the year covered by the most recent annual report. More recently, however, usage has increased, as banks sought to make use of the liquidity insurance provision on offer by pre-emptively securing term funding ahead of a  BIS central bankers’ speeches  1  period of potential uncertainty around key events, such as the UK general election, and Greece. This pattern of usage is encouraging and welcome, as it demonstrates that banks are prudently managing their liquidity position ahead of potential risks, and that the ILTR is an active part of their liquidity management. Despite the increase, however, demand has remained relatively low, with just over £ billion allocated in the May operation: a high water mark for the expanded ILTR operation. Looking back to 2007, before the crisis, the cumulative changes we have made to the SMF have been transformative. The SMF now has 164 members, more than double the number signed up in 2007, with banks and building society SMF members accounting for 98% of total sterling deposits. The drawable value of collateral delivered to the Bank for actual or potential use in the Bank’s facilities has increased dramatically, and stood at £ billion at endJune 2015.

Nevertheless, in the spirit of being prepared, and drawing on feedback from previous meetings of this committee 2, staff have developed plans should market rates persistently settle below Bank Rate, to such an extent that the Bank decided it was necessary to intervene in support of monetary control. In such a scenario, the presumption is that the Bank would issue one-week Bank of England bills, draining reserves from the system. That would tend to put upward pressure on market rates, reducing the wedge that had opened up and tightening the link between policy and markets rates. The Bank has a history of issuing these instruments successfully: Bank of England bills were first issued in 2008, to drain excess reserves following the increased size of longterm repo operations. And Bank of England bills also have the advantages of being widely tradable, offering a close substitute to deposits for most participants in the money markets, and of providing additional supply of high quality collateral. I have no particular expectation that the Bank will need to issue Bills in the foreseeable future, but the tool is ready if required. The move to the current floor regime was prompted by the MPC’s policy decisions to cut Bank Rate to the effective lower bound and its subsequent decision to loosen monetary conditions via asset purchases.
A weaker exchange rate than we assume or a stronger increase in consumption could result in higher inflation. The opposite effect could come from, for example, better productivity growth or a different picture of resource utilisation. For the Riksbank it is therefore important continuously to assess new information that may provide guidance about the path of inflation. 3. Two questions The picture of Sweden’s economy I have painted thus far is relatively bright. This is warranted. The economy has gone through a deep recession after the policy realignment in the BIS Review 68/1997  -5-  early 1990s. Difficult adjustments have been made and we are now beginning to see the results. There are many resemblances with Denmark and other countries that have experienced similar processes of adjustment earlier. In every case it has taken time for the situation to become more stable and for households and firms to recover confidence. However, the bright picture must not blind us to the continued presence of serious challenges for economic policy. For one thing there is the importance of securing sound government finance in the long run. For another there is the situation in the labour market. I choose to raise these two questions because what happens with fiscal policy and in the labour market is of great consequence for the Riksbank’s ability to safeguard the value of money. It would therefore be almost a dereliction of duty not to place these matters on the agenda as clearly and distinctly as we are able.

SCAP was a supervisory stress test, meaning that regulators specified the adverse scenario and determined the resulting loss and revenue estimates on a standardized basis drawing on information submitted by each firm. The CCAR process centered on bank-run stress tests in which regulators specified the scenario but required each bank to model the stress event itself. Dodd-Frank mandates both supervisory stress tests and bank-run stress tests. We are still working out how we will do each of these types, but I expect that the SCAP and CCAR exercises will serve as models. Today I will focus on the SCAP and CCAR exercises. The first important point to make is that the purposes of the SCAP and CCAR are very different. Thus, these processes are conducted in very distinct ways. Turning first to the SCAP, its purpose was to restore confidence in large U.S. banks. The SCAP was designed to accomplish this mission by measuring how much capital these banks would need in a stress macroeconomic environment and then forcing these banks to either raise this capital from private sources or take mandatory convertible preferred equity from the U.S. Treasury. The key attributes of the SCAP include:   A common stress scenario was applied to each of 19 large bank holding companies (BHCs).   This stress scenario was applied in a consistent manner across these banks. The test was applied at the detailed trading book and banking book level, with the expected loss experiences based upon the particular characteristics of the portfolio being examined.
These actions marked a turning point, since the Central Bank had not traded in the interbank foreign exchange market since the middle of 1999. The Bank sold US dollars for ISK 15.6 billion over the period. So far this year the Bank has taken action in the foreign exchange market six times, and the króna has depreciated by 2.3% based on today's rate. There is no denying that Central Bank intervention has put pressure on the currency reserves. The Bank maintains a specified minimum reserves which is now ISK 34 billion. If the reserves head below that floor, the Bank borrows to maintain it. Short-term borrowing by the Central Bank now amounts to ISK 24.2 billion. The Central Bank has made extensive contingencies for bolstering the exchange rate if the need arises, most recently with an agreement with a German bank on access to a new USD 250 million credit line. It should also be mentioned that yesterday the Treasury made overtures in the European market for a credit facility of 250 million euros, of which 180 million euros will be used to refinance debt that will mature shortly. The remaining 70 million euros (ISK 5.6 billion) will be deposited in a foreign currency account at the Central Bank to boost the currency reserves. Talks have been held with the Minister of Finance on more action of this kind to strengthen the currency reserves. Most of the Central Bank's committed foreign credit facilities are still undrawn.

Naturally, the Bank uses data supplied by other agencies as well. It also acquires information through other channels, such as both informal and formal meetings. For this reason it is simply wrong to claim that the Bank's resistance to easing its monetary stance is based on outdated information. BIS Review 27/2001  3  The Central Bank has declared that it will maintain tight money until unequivocal signs of a cooling in the economy begin to appear. Such indications have been emerging recently. For example, total business turnover has decreased. Retail turnover has contracted sharply and there has also been a decrease on the wholesale side. Turnover in manufacturing appears to be stable. However, turnover is still rising rapidly in the construction industry and at a considerable rate in the service sector as well. Although credit growth is still quite substantial, it has slowed down. In the Central Bank's opinion, the economy has now passed the most difficult phase of overheating and the time is ripe to ease the monetary stance somewhat, among other things to avoid a hard landing. The Board of Governors therefore decided today to reduce the rate of interest on its repurchase agreements with credit institutions by 0.5 percentage points. This change has been made in light of next year's lower inflation scenario alongside the slowdown in economic activity. Inflation prospects are within the reference limits stated in the joint declaration on inflation target issued today by the Government and Central Bank.