samchain/econo-pairs-v1 huggingface dataset:
Democratic control is now ensured through a clear mandate defined by the government for the central bank’s conduct of monetary policy. The political authorities can verify the central bank’s compliance with the mandate without deciding on the use of the instrument. 31  -  The third innovation sprang out of New Zealand. In connection with economic reforms, the authorities introduced fiscal performance targets. They then started searching for good and realistic performance targets for monetary policy. They found that what monetary policy should deliver was stable inflation in the medium term – New Zealand introduced a so-called inflation target for monetary policy. 32  What is the difference between what is referred to as inflation targeting and the former policy of parity? Let me explain the difference using a stylised example. Assume that the price index has been 100 over a longer period. The price level is thus stable. An increase in, say, energy prices then occurs and the index moves up to 105. Energy has become more expensive in relation to other goods. Under the parity system, other prices had to be reduced to move the index back to 100. This could require a substantial decline in output and employment, as was the case in the interwar years. Under an inflation targeting regime, it is in this example accepted that the index remains at 105.

14  Øksendal, Lars Fredrik (2008), “Monetary policy under the gold standard – examining the case of Norway, 1893-1914”, Working Paper 2008/14, Norges Bank. 15  See Bjerkholt, Olav and Jan F. Qvigstad (2007): “Introduction to Ragnar Frisch’s 1933 pamphlet Saving and Circulation Regulation”, in Revisita di Storia Economica, Banca d’Italia. 16  See Eitrheim Øyvind., Jan T. Klovland and Jan F. Qvigstad (Eds.) (2004), page 293: “Historical Monetary Statistics for Norway 1819-2003”, Occasional Papers No. 35, Norges Bank, Oslo. 17  However, they were more flexible in September 1931. It only took seven days for Norway to follow the UK’s lead in abandoning the gold standard. 18  There was a consensus on parity policy in the 1920s. See for example Hodne, Fritz and Ola Honningdal Grytten (2002), pages 111-112: Norsk økonomi i det 19. århundre (The Norwegian economy in the 19th century), Fagbokforlaget and Skånland, Hermod (1967) “Det norske kredittmarked siden 1900 (The Norwegian credit market since 1900) Samfunnsøkonomiske studier No. 19, Statistics Norway, Oslo. See also Mykland, Knut (ed.) Cappelens Norgeshistorie, Vol. 13 page 86. 19  For further discussion of parity policy and Norges Bank’s role, see Ecklund, Gunhild J. (2008), pages 46-51 and 67-71: “Creating a new role for an old Central Bank: The Bank of Norway 1945-1954”, Series of Dissertations 2/2008, BI Norwegian School of Management, Oslo. 20  This link to gold was not as strong as when the obligation to redeem in gold applied.
In Chile, these needs are particularly important because, in the first weeks of the social crisis, many companies found themselves in a similar situation, which may have consumed a large part of their liquidity cushions and may have been unable to replenish them. To facilitate access to credit for individuals and companies, especially smaller ones, the CBC Board established the Conditional Facility for Increased Lending (FCIC) whereby 4-year loans are granted to banks, with an interest rate equivalent to the MPR and in a magnitude that increases according to the refinancing and credit operations in the most stressed segments. This facility will initially provide resources of about USD 5 billion. A third transmission channel relates to the deterioration of business and consumer expectations and its impact on investment and consumption. Prior to the aggravation of the sanitary emergency, both were already in pessimistic territory and the current situation makes a reversal difficult. A box in this Report presents the results of a survey that the Bank conducted in the second half of March among the participants in the Business Perceptions Report. A major deterioration in their outlook for employment and activity during the next six months was revealed, which must be weighed in the light of the impact on businesses since the social unrest of October 2019.

Figure 10 CPI inflation forecast (1) (2)  CPIEFE inflation forecast (1) (2)  (annual change, percent)  (annual change, percent)  5  5 5 Dec.19 MP Report  4 3  5 Dec.19 MP Report  4 4  4  3 3 Mar.20 MP Report  2 1  3 Mar.20 MP Report  2 2 1 1  0  1  0 0 18  19  20  21  22  0 18  19  20  21  22  (1) 2018 figure shows the annual variation in the CPIEFE obtained by splicing the 2013=100 series with the monthly variations of the 2018=100 basket as from February 2018. See box IV.1 Monetary Policy Report of in March 2019. (2) Gray area, as from the first quarter of 2020, shows forecast. Sources: Central Bank of Chile and National Statistics Institute (INE).
Mr. King looks at the UK economy and monetary policy Speech by Mr. Mervyn King, an Executive Director and Chief Economist of the Bank of England, at the Building Societies Association Annual Conference in Bournemouth on 27/5/98. Next Monday - 1 June - sees the start of the statutory basis for Britain’s new monetary policy regime. An independent Bank of England will, through its Monetary Policy Committee (or MPC), set interest rates to achieve an inflation target of 2½%. For over 30 years economic policy in Britain has been bedevilled by inflation and the resulting instability of output and employment. Stability - of both prices and macroeconomic performance more generally - requires a credible commitment to a monetary and fiscal framework embracing low inflation and sustainable public finances. That we now have. But stability of the economy is not the same as stability of interest rates. Short-term interest rates must go up and down according to the state of the economy if the inflation target is to be met. In contrast, if monetary policy is successful in achieving the inflation target then, precisely because short-term interest rates will have moved over the economic cycle, long-term interest rates will be relatively stable. And, from the perspective of your borrowers, whether on fixed or floating rate mortgages, what matters is the predictability of the cost of a loan over the life of the mortgage rather than fluctuations, within reason, of monthly payments.

So members of the Committee vote on interest rates according to the economic data, which change from month to month, and the analysis of those data. No one takes a position that higher interest rates are a good or a bad thing out of principle. If you drove past an infant school at 40mph, you might well be described as driving dangerously fast. But if you drove at 40mph on a motorway, you might well be described as driving dangerously slowly. Actions must be judged in the light of the circumstances. In terms of monetary policy, that means that the positions which members of the MPC take on interest rates will change over time according to the way the economy evolves. But if interest rates themselves cannot be predicted, because they depend on changing economic data, what should be predictable is the way MPC members respond to those data. A predictable “policy reaction function”, to use the jargon, should, over time, diminish the interest which market commentators take in the meetings of the MPC and direct that interest to what is happening in the economy. So, as the voting record shows, it is seriously misleading to think of the MPC in terms of fixed camps of “hawks” and “doves”. As circumstances change, it is easy to imagine that the “hawks” shall be “doves” and the “doves” shall be “hawks”.
The low net debt of the Treasury, courtesy of a responsible fiscal policy, has allowed for this gradual adjustment without major surprises. However, there are limits and the debt has been increasing. In this context, I am particularly concerned that the accumulation of commitments could end up straining our public finances. In the case of monetary policy, the limit comes from credibility. There is an explicit objective—the inflation target—and a market that monitors on a daily basis to see whether our monetary policy conduct is consistent with achieving that objective. For as long as the market remains confident in the Bank’s capacity and, above all, on its commitment to take inflation to 3% in the two-year horizon, an expansionary monetary policy will be successful. The minute we lose that confidence, we will fail. That is why we are adamant about our concern with inflation expectations, insisting that we will do whatever it takes for it to stand at 3% over the forecast horizon. The good news is that we have succeeded: despite inflation’s high volatility, due mainly to the sharp variations in the exchange rate, expectations two years out have remained at 3%. This encourages us to keep our guard up and not to neglect what has been achieved or try to extract from monetary policy more than it can deliver. The second challenge is that experience suggests that our first line of action to deal with the cycle is monetary policy.

Potential growth differs from trend growth in that it can be affected by temporary shocks to productivity and constraints to factor use that may alter our productive capacity over the short term, but not in the 3 / 14  BIS central bankers' speeches  long. That is why our trend GDP growth estimates are a little higher than our potential growth estimates. Our latest evaluations place trend growth at 3.2%, three tenths of a point less than year ago estimates. Meanwhile, we forecast potential growth for 2016 and 2017 between 2.5% and 3%, compared with the 3% to 3.5% range estimated last year for the same period. Moreover, incoming figures suggest that potential growth will take longer to converge with trend growth. Anyway, our assessment of the current output gap is not very different from what we foresaw a year ago. This, because although since then we have revised downward our 2016 GDP growth figure by something more than one percentage point, at the same time we lowered our estimate for potential growth and 2015 GDP growth was revised up (figure 10). In recent months, financial conditions from the standpoint of borrowing costs have remained favorable. The fees charged in commercial, consumer and mortgage loans are near record lows. At the same time, growth in the stock of consumer and commercial loans has recovered from a year ago. The opposite is true of mortgage loans, which have decelerated from earlier this year. This low credit cost coincides with also low long-term interest rates.
Mario Draghi: ECB press conference – introductory statement Introductory statement by Mr Mario Draghi, President of the European Central Bank, Frankfurt am Main, 4 December 2014. *  *  *  Ladies and gentlemen, the Vice-President and I are very pleased to welcome you to the first press conference in our new premises. We will now report on the outcome of today’s meeting of the Governing Council, which was also attended by the Commission Vice-President, Mr Dombrovskis. Based on our regular economic and monetary analyses, and in line with our forward guidance, we decided to keep the key ECB interest rates unchanged. As regards our nonstandard monetary policy measures, we have started purchasing covered bonds and asset-backed securities. These purchase programmes will last for at least two years. Next week, we will conduct the second targeted longer-term refinancing operation, to be followed by six further operations until June 2016. Taken together, our measures will have a sizeable impact on our balance sheet, which is intended to move towards the dimensions it had at the beginning of 2012. In the coming months, our measures will further ease the monetary policy stance more broadly, support our forward guidance on the key ECB interest rates and reinforce the fact that there are significant and increasing differences in the monetary policy cycle between major advanced economies. However, the latest euro area macroeconomic projections indicate lower inflation, accompanied by weaker real GDP growth and subdued monetary dynamics.

In this context, we will focus in particular on the possible repercussions of dampened growth dynamics, geopolitical developments, exchange rate and energy price developments, and the pass-through of our monetary policy measures. We will be particularly vigilant as regards the broader impact of recent oil price developments on medium-term inflation trends in the euro area. Turning to the monetary analysis, data for October 2014 support the assessment of subdued underlying growth in broad money (M3), with the annual growth rate standing at 2.5% in October, unchanged from September. Annual growth in M3 continues to be supported by its most liquid components, with the narrow monetary aggregate M1 growing at an annual rate of 6.2% in October. The annual rate of change of loans to non-financial corporations (adjusted for loan sales and securitisation) was –1.6% in October, after –1.8% in September, showing a gradual recovery from a trough of –3.2% in February. On average over recent months, net redemptions have moderated from the historically high levels recorded a year ago. Lending to non-financial corporations continues to reflect the lagged relationship with the business cycle, credit risk, credit supply factors and the ongoing adjustment of financial and non-financial sector balance sheets. The annual growth rate of loans to households (adjusted for loan sales and securitisation) was 0.6% in October, after 0.5% in September. The monetary policy measures in place and the completion of the ECB’s comprehensive assessment should support a further stabilisation of credit flows.
Large established firms seem to be most advanced in deployment. There is some reliance on external providers at various levels, ranging from providing infrastructure, the programming environment, up to specific solutions. Approaches to testing and explaining AI are being developed and, perhaps unsurprisingly, there is some heterogeneity in techniques and tools. Firms said that ML applications are embedded in their existing risk  6  McKinsey (2018) ‘Adoption of AI advances, but foundational barriers remain’ 4  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  4  frameworks. But many say that new approaches to model validation (which include AI explainability techniques) are needed in the future. Of the firms regulated by the Bank of England that responded to the survey, 57 per cent reported that they are using AI applications in risk management and compliance areas, including anti-fraud and anti-money laundering applications. In customer engagement, 39 per cent of firms are using AI applications, 25 per cent in sales and trading, 23 per cent in investment banking, and 20 per cent in non-life insurance. By and large, firms reported that, properly used, AI and ML would lower risks - most notably, for example, in anti-money laundering, KYC and retail credit risk assessment. But some firms acknowledged that, incorrectly used, AI and ML techniques could give rise to new, complex risk types - and that could imply new challenges for boards and management. Challenges of AI and ML for boards  Let me suggest that there are three challenges for boards and management.

The fox and the hedgehog: preparing in a world of high risk and high uncertainty Speech given by Charlotte Gerken, Executive Director, Insurance Supervision InsuranceERM Risk and Capital EMEA Virtual Conference 3 December 2020  I would like to thank Alan Sheppard, Zachary Morris-Dyer, Gareth Truran, Anthony Brown, Robin Swain, Manuel Sales, Olga Filipenko and Sarah O’Sullivan for their assistance preparing these remarks. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  Good morning. Thank you to Insurance ERM for inviting me to speak at your conference. When I told a colleague I had been asked to give a talk on responses to risk, he told me: “the fox knows many things; the hedgehog knows one important thing.” I was curious to learn more: this idea came from a fragment of text by an Ancient Greek poet Archilochus of Paros; it inspired Isaiah Berlin’s 1953 essay on Tolstoy’s view of history; and has been used in Jim Collins’s book From Good to Great. What it boils down to is a way of thinking, one that guides how you prepare for and respond to risk: the fox looking at every eventuality; the hedgehog’s one big idea being to curl into a ball and wait for the peril to pass. I’m left with the image of the fox hopping about and getting ever more frustrated as it schemes how to get at the hedgehog.
The impressive advances in technology that have enhanced the industry’s ability to collect and process large amounts of information in real time could hardly have been suspected 20 years ago. Collecting risk data across many business lines has catalysed further efforts to aggregate those measures of risk by quantifying them in a more rigorous and more consistent fashion. The “ultimate expression” of risk aggregation is the summation of many types of risk into a single measure based on the concept of economic capital, which estimates the amount of capital a firm requires to protect itself against these risks with a certain degree of confidence. Using the concept of economic capital, banks can develop sound policies for monitoring exposure limits, risk-adjusted pricing policies and sound provisioning practices based on the inherent risks of the portfolios. They can also measure returns and assign capital on a risk-adjusted basis. Likewise, the progressive widening and deepening of financial markets and the continuous creation of new assets has enlarged the menu of choices available for banks to manage, share and transfer risks. The Basel II process started, more than 6 years ago, against this background of increasingly sophisticated risk management practices, heightened complexity in the financial markets and stronger interaction between the real and the financial economy. Rather than simply resetting the quantitative standards, we sought to develop a new forward-looking approach that would be more sensitive to the actual risks that banks take on. The new framework is a significant step towards achieving a more comprehensive and risk-sensitive supervisory approach.

29.04.2022  Presentation of the Action Plan against Financial Fraud* Ministry of Economic Affairs and Digital Transformation Pablo Hernández de Cos Governor  *iEnglish translation of the original speech in Spanish. First Deputy Prime Minister, State Secretary for Security, Chair of the National Securities Market Commission, authorities, ladies and gentlemen, good morning. The protocol we sign here today stands as a milestone in our efforts to enhance and reinforce action against potentially fraudulent offers of financial products and services. It comes at a particularly opportune time, with several factors giving rise to an increase in financial fraud, most notably growing digitalisation. Moreover, it is an excellent example of how a problem for citizens can be addressed far more effectively through collaboration between different stakeholders, be they public or private. In the case of the Banco de España, apart from the evident microprudential and macroprudential concern for the security and resilience of the supervised entities’ IT systems, the impact that fraudulent use of technology may have on the citizens and firms that use banking or credit services has been a concern of ours for some time. Such fraud can also come at a high reputational cost to the financial system, the proper functioning of which depends on mutual trust between supply and demand.
EU level harmonisation often applies to high level principles and minimum requirements, while implementation, additional requirements and enforcement is left to the member states. In practice, this becomes a barrier to integration. An EU bank will be subject to as many different reporting requirements and regulatory relationships as it has countries of operation. For a banking group involved in life insurance and securities trading this number should be multiplied by three. For instance, ABN Amro is rumoured to be dealing with 47 different regulators only in the EU. Second, today’s banking regulation was originally designed to protect the soundness and stability of the national banking system and sometimes even to politically control it. Thus, supervisors as well as central banks have national mandates and responsibilities vis-à-vis their politicians and citizens. This was all fine in the so called good old days of closed national markets. Now, however, it may sometimes be in conflict with the ultimate goal of a single market in financial services. Some of the work needed in these areas has already been started. The Brouwer reports to the Ecofin well describe some of the difficulties. The BSC Task Force on Crisis Management has taken the first steps towards a more structured approach to crisis management of cross-border banking groups, through the signing of a Memorandum of Understanding. CEBS (Committee of European Bank Supervisors) is also trying to take on some of these issues, in particular regarding the convergence of supervisory practices.

1987-2003 10  10  8  8  6  6  4  4  2  2  0  0 1987 1989 1991 1993 1995 1997 1999 2001 2003  SG CME 08.06..2004  Source: Statistics Norway  2  The exchange rate remained stable up to autumn 1996, partly because wage growth was low and overall demand did not generate pressures in the economy. Gradually, the krone began to show wider fluctuations. The experience of the last half of the 1990s demonstrated that monetary policy cannot fine-tune the exchange rate. Developments in international financial markets led to more pronounced fluctuations. And more fundamentally, exchange rate developments no longer provided signals to wage formation and fiscal policy when labour market pressures mounted and incomes policy failed. High petroleum revenues, fiscal slippage and expectations of increased use of petroleum revenues contributed to this. Hence, the exchange rate was no longer appropriate as a nominal anchor. Norges Bank therefore placed increasing emphasis on low and stable inflation. A formal inflation target for monetary policy was introduced in the spring of 2001. The mandate for the conduct of monetary policy is provided for in the Regulation on Monetary Policy, issued by the Ministry of Finance on 29 March 2001. The operational target of monetary policy as defined by the Government is inflation of close to 2.5 per cent over time. The idea of an inflation target for monetary policy was not new.