samchain/econo-pairs-v1 huggingface dataset:
More recently, the same data have suggested that the renewed lockdown measures in autumn 2020 and January 2021 had a much smaller adverse impact on economic activity. Harnessing non-standard data not only requires new technologies, techniques and skills, but also increases the need for multi-disciplinary teams. This is particularly true for unstructured data. While many financial market participants already use text analytics and natural language processing regularly, new ‘deep learning’ methods allow for much more than textual analysis of policy statements, minutes and transcripts. Voice analysis, for instance, makes it possible to study the tone and emotions associated with policy communication during press conferences. 10 These rapid advances in artificial intelligence are also largely the result of the tremendous growth in data, which – combined with a massive increase in computing power – can be used to train deep learning algorithms. The logical next step is to combine artificial intelligence with process automation. Businesses have used automation for many years but its benefits have become more apparent during the COVID-19 pandemic. Unlike other forms of automation, process automation combined with artificial intelligence can not only execute business processes but also decide dynamically if and how a given process should be executed. Another notable automation trend is the rise in electronic trading tools, such as ‘execution algorithms’, or EAs. Such algorithms are designed to trade a predefined amount according to a set of pre-programmed instructions.

Jean-Pierre Roth: The economic situation – la vie en rose? Summary of a speech 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 a meeting with representatives of Ticino industry, Centro di studi bancari, Vezia, 28 November 2006. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  It is true that our exports continue to benefit from a buoyant global economy, that areas of concern such as the volatility of oil prices or the possibility of a significant and lasting downturn in the US economy have partially receded, and that the current economic recovery has led to an improvement in the labour market without endangering price stability. Is this la vie en rose (living life through rosetinted spectacles)? A brief outline of the situation in the national and international economies is given, indicating that the overall perspective remains favourable. It concludes with a concise evaluation of the risks, showing that the current euphoria may conceal significant risks that we must not lose sight of. BIS Review 116/2006  1
Joseph S Tracy: Testimony on Housing Finance Reform – essential elements of a government guarantee for mortgage-backed securities Testimony by Mr Joseph S Tracy, Executive Vice President of the Federal Reserve Bank of New York, before the U.S. Senate Committee on Banking, Housing and Urban Affairs, Washington DC, 31 October 2013. *  *  *  Chairman Johnson, Ranking Member Crapo and members of the Committee, thank you for the opportunity to appear before you today. My name is Joe Tracy. I work at the Federal Reserve Bank of New York. Today I will be discussing research1 in the area of government support for housing finance that colleagues and I at the New York Fed have conducted. It is important for me to emphasize that my remarks today, and the conclusions of the research that I will share with you, represent my own views and are not official views of the New York Fed or any other element of the Federal Reserve System. I commend the Committee for focusing on the elements necessary to constitute a robust housing finance system in the United States. By “robust” I mean that such a system must provide for the uninterrupted flow of credit to housing markets even in periods of market stress. In the wake of the financial crisis, significant progress is underway to improve the resiliency of financial markets. Nevertheless, we must plan ahead for the risk of future market stresses.

This approach alone could also raise competitive equality problems, making it more difficult to ensure a level playing field, one of the key objectives of the Basel Accord. The third option would be a market-driven solution. As I have already said, the Committee has recognised the importance of market discipline in the third pillar of the New Accord. It draws on the power of markets to create strong incentives for banks, incentives to help ensure that banks manage their risks properly and do not hold unrealistically low amounts of capital for their risk. There is a lot of merit in this approach, yet all of us know that markets sometimes behave inefficiently. They can overreact to certain minor events yet still overlook significant indicators of risk in the short run. Likewise, markets are not always able to capture some externalities on their own, such as the interests of the broader public. They sometimes focus on the immediate needs of direct participants rather than those of depositors or customers or they can be too short-sighted in their time horizon. I think the thoughtful comments made by Malcolm D. Knight yesterday about gaps and limitations of market discipline clarify these kinds of issues most constructively. So it is clear that no single one of these three options provides all of the benefits that supervisors seek. We want rules to provide clarity and strong incentives. We want the ability to use discretion to manage diversity, to tailor requirements to the specific businesses of each bank.
First, and most obviously, the need to pay for constant military protection for the Normandy estates created what modern-day macroeconomists would think of as an enormous structural deficit. If John had let his expulsion from the continent be the end of the matter this financial burden would have extinguished itself. But he did not. His folly was a series of vain attempts to re-conquer Normandy, efforts which finally ended on the eve of Magna Carta. 2 Second, the monarchic finances had taken a colossal hit in 1193 because of the need to fund a gigantic public sector bailout. Richard I had managed to get himself caught in Germany on his way back from the Holy Land and was held to ransom for £ in silver. Being “Too Big To Jail”, the equivalent of two to three times annual crown income was needed to bail him out. In comparison, the government’s peak cash support to UK banks in 2007–2010 amounted to a trifling one-quarter of annual UK government revenues. 3 Third, the need to raise additional cash for the public finances was made much more problematic by the strain of inflation, which accelerated in the early years of the 13th century. 4 The problem was that a large proportion of regular crown income came in the form of “farms”, which were fixed rental payments for leases to use the King’s land for agriculture. These farms were fixed by custom in nominal terms, whereas the King’s expenditures were not. The King’s finances were unhedged.

The greatest challenge to these emerging markets is how to achieve a more balanced and sustainable growth in the midst of globalisation. As more economies in the region move to the middle-income category, I urge the Bank to proactively consider ways and means to help them meet the new challenges of changing times. Sustainability of the region’s future growth seems to lie in the growing trend of intra-regional trade and economic interdependence. Asia is highly integrated in trade. Propelled by vertical integration of the production process, intra-regional trade grew by 14% a year between 1995 and 2003, while world exports increased only 7.5%. Compared to trade, integration in the financial sector has been progressing at a much slower pace. As a result, the very substantial volume of foreign reserves accumulated in the region, of some $ billion last year alone, goes mainly to the developed rather than the regional markets. When some of the capital from the developed market is recycled back to the region, it is of a more volatile and repercussive nature, and can be difficult to cope with as we saw it in the late 1990s. To reduce the reliance on the recycling of domestic savings through the developed markets, Asian governments have put in place several initiatives to strengthen financial intermediation. A notable example is the Asian Bond Markets Initiative under the ASEAN+3 forum.
The first report, issued in 2012, set out fresh ways to describe and develop more effective governance at financial institutions. The second report, issued late in 2013, deals specifically with the interactions of boards of directors and supervisors. Both reports place less emphasis on the form of corporate governance – the traditional structures of boards and the like – and focus more on the actual behaviors of the various players involved, be it the chairman, the lead director, the chief risk officer, auditors or senior management. The 2013 report proposes a new kind of relationship, one that involves far more direct contact and ongoing dialogue between directors and supervisors about the key issues confronting firms and the financial system, such as assessing financial institution strategies, business models, risk vulnerabilities, governance effectiveness and corporate culture. The Federal Reserve has growing experience in this area. Nearly three years ago, the New York Fed initiated a program of “enhanced engagement” with directors and senior management at the major firms we supervise, very much along the lines now described in the G30 report. We provided additional training for our senior supervisory officers concerning corporate governance and relationship-building with boards, key directors and senior managers. We also gave direction on how to focus their interactions on the most important supervisory matters, particularly with respect to the firm’s risk profile and risk management  4  BIS central bankers’ speeches  practices. We also reached out to board chairmen and chief executive officers to enlist their cooperation and support.

I’d like to close my remarks by highlighting some of the practical steps we are taking on the supervisory side to continue that progress. •  First, through collaboration and communication with other supervisors, both domestic and foreign, we are continuing to work across global firms to address issues together and break down barriers to sharing information and coordinating better among supervisors. I’d say this is still a work in progress. 6  BIS central bankers’ speeches  •  Second, we need to continue to communicate our relevant supervisory findings in a timely manner and our communication needs to be candid and direct. Still too often I find that we don’t say what we mean the first time – and this leads to confusion and, at times, bad outcomes. •  Lastly, we need to be more proactive in establishing an open dialogue with the directors of the financial institutions we supervise. We look to the directors to flag for us the key risks that keep them up at night. And, it is our obligation to explain the intuition behind our supervisory concerns and the rationale for needed change. Thank you for your attention today. I would be happy to answer a few questions. BIS central bankers’ speeches  7
This too is an old debate in economics: should banks be prevented from creating liquidity, or is maturity transformation an inevitable and necessary feature of market economies? I’m certainly not attempting to enter that debate today. It’s in the nature of long-standing questions that the answers aren’t obvious. What I do want to do, however, is to point out that it is a relevant question – that the introduction of a CBDC probably involves more than a narrow, technical judgement about the efficiency of the payments system, very important though that is. What’s also clear is that we have a lot more thinking to do. That’s why the issue of digital currencies forms an important part of our One Bank Research Agenda18. It’s also why, in publishing the Agenda a year ago, we asked for help, hoping to encourage “the wider academic community” to think about the big policy questions. So, in what is the heart of that community, and notwithstanding Mr Hicks’s caution, perhaps you’ll allow me to finish by re-iterating that request: all contributions welcome! References Ali, R, Barrdear, J, Clews, R and Southgate, J (2014a), “Innovations in payment technologies and the emergence of digital currencies”, Bank of England Quarterly Bulletin, Vol. 54, No. 3 . Ali, R, Barrdear, J, Clews, R and Southgate, J (2014b), “The economics of digital currencies”, Bank of England Quarterly Bulletin, Vol. 54, No. 3, pages 276–86. Autonomous Research (2016), “Financials and technology, tales from de-crypt”. Bank of England (2015), “One Bank Research Agenda”, Discussion paper available at http://www.bankofengland.co.uk/research/documents/onebank/discussion.pdf.

So rather than try and give a lecture on monetary theory, or pre-empt the results of ongoing thinking on this issue, I’ll seek to make only a few very broad, conceptual points, touching on the following questions: what is the key innovation in private-sector digital currencies such as bitcoin? what is a “central bank digital currency”? and what might be the economic implications of introducing one? I’ll be brief about the first, not least because there are good, more detailed descriptions elsewhere – including in two excellent articles by Bank economists, published some time ago in the Quarterly Bulletin. The main point here is that the important innovation in bitcoin isn’t the alternative unit of account – it seems very unlikely that, to any significant extent, we’ll ever be paying for things in bitcoins, rather than pounds, dollars or euros – but its settlement technology, the so-called “distributed ledger”. This allows transfers to be verifiably recorded without the need for a trusted third party. It is potentially valuable when there is no such institution and when verifying such information on a multilateral basis is costly. Acting as a trusted third party is precisely what a central bank does. It performs that role only for one particular asset, central bank money (i.e. reserve deposits held largely by commercial banks at the central bank). But the function goes right to the heart of what central banks do and how they came about.
In Spain, economic activity since the pandemic broke has closely followed the path marked by the introduction of the lockdown measures and their subsequent lifting. The data for the 1  See ECB staff macroeconomic projections for the euro area, September 2020. 1  first half of the year show record declines in GDP, with a 22.1% reduction relative to end2019. This fall-off is greater than for the euro area on average, owing to the fact that the lockdown measures adopted during the state of alert were stricter. And it is also because of certain structural characteristics of our economy, such as the greater relative weight of the sectors most affected by this crisis, a Spanish business sector mostly comprising small and medium-sized enterprises, and a substantially higher temporary employment ratio. The progressive lockdown-easing steps were accompanied by a gradual improvement in activity, leading GDP to grow in the third quarter at a double-figures rate following the sharp decline in the second quarter. However, we should not be led by an excessively benign interpretation of these apparently favourable figures. As I stressed, the current recovery is, across the various regions, partial in nature. But the incompleteness of the rebound is more evident in Spain than in other economies. As a result, the level of activity attained in the third quarter this year in Spain would still be some 12.3% and 9.5% below that of the same period a year earlier, according to the two scenarios recently published by the Banco de España.

Third, increasing cost pressures have made it more difficult to sustain profit margins without raising prices. Energy and import prices are one source of higher costs. Another is the cost of employing labour which has been rising faster than the growth of real take-home pay. Higher pension costs for  BIS Review 9/2007  1  companies, on the one hand, and higher taxes, petrol and utility prices for employees, on the other, have opened up a gap between increases in the pay bill and real take-home pay. If investment and employment growth are to be maintained, the burden of these higher costs must either be passed back in the form of reduced input costs or forward as higher prices. So far, pay pressures have been subdued, but not sufficiently so to mitigate the rise in costs to employers. As a result, companies have scaled back their demand for labour and looked to raise prices. The risks to money spending, inflation expectations and cost pressures were not overlooked by the MPC and were explicitly identified as upside risks to inflation both in speeches and in our monthly minutes back in 2005. In the event, the upside risks to inflation did materialise to some extent. And a year ago, the MPC thought the risks to GDP growth were on the downside. Yet, the total output of the UK, leaving to one side the energy sector, has been rising at an annual rate of over 3%.
Employment has increased steadily from a low point of 25 ½ mn people - and we are taking people here, not just statistics - in the Spring of 1993 to its current level of around 28 mn. And the rate of unemployment fell from a peak of over 10½% on the internationally comparable LFS measure to around 5% last summer; while on the claimant count measure it fell from some 10% to just over 3%, which meant that the number of people claiming unemployment benefit, at under 950,000, was the lowest for 26 years. Now some of you - given what's happening in your own businesses - are probably thinking that I must live on a different planet. And yes, we do have a problem. Once you look beneath this apparently benign surface of the economy as a whole, you find very substantial differences between many internationally-exposed sectors of the economy - including particularly many manufacturing businesses - which have recently been having a really tough time, and other businesses largely serving our domestic market which have generally been doing very much better. There are two main reasons for the pressures affecting the internationally-exposed sectors: the synchronised economic slowdown over the past year or so in all major industrial countries, on the one  2  BIS Review 19/2002  hand; and the puzzling and persistent weakness of the euro in foreign exchange markets not just against sterling but even more against the dollar, on the other.

In other words we are trying to maintain overall, macroeconomic, stability in a much broader sense, in the medium- and longer- term and not just the shortterm; and the Government's inflation target is the criterion against which our success, or otherwise, in achieving that broader macro-economic stability is to be measured. Our problem is that we don't know with any great precision or confidence exactly what is happening on the supply-side:- we don't know that's to say precisely what rate of growth we can hope to sustain. We don't know precisely either what is currently happening, or what is likely to happen looking forward over the next couple of years or so, to overall, aggregate, demand. And nor do we know precisely what the full impact of a change in interest rates will be on aggregate demand, or how long it will take before the full impact is felt. Ours is not a precise science. In fact it's more of an art than a science. And, although we bring as much economic and statistical science to bear as we can, we know that our forecasts, and indeed our policy judgements, are subject to a range of error. They can't be accurate to every last digit. So, we can't expect to hit the inflation target all the time, but by consistently aiming to do so we can hope to get reasonably close to the target on average over time.
Instead, one must check whether average inflation over a somewhat longer period has been  14  This is discussed by Finn Kydland who won the 2004 Nobel Prize in Economics with Edward Prescott for their analysis of the problems of economic planning. See Finn Kydland and Edward Prescott (1977): “Rules rather than discretion: The inconsistency of optimal plans”, in Journal of Political Economy, 85, no. 3, pp. 473-491. 15  The central value of the Norwegian Krone against the US dollar was 7.14 from 18 September 1949 to 15 August 1971. See addendum, prepared by Ragna Alstadheim, to Jan F. Qvigstad and Arent Skjæveland (1994): “Valutakursregimer – historiske erfaringer og fremtidige utfordringer (Exchange rate regimes – historical experiences and future challenges)” in Jan. F Qvigstad, Sigbjørn Atle Berg and Kjell Storvik (eds. ): Stabilitet og langsiktighet. Festskrift til Hermod Skånland (Stability and a long-term perspective: Festschrift for Hermod Skånland), Aschehoug. 16  This story is reported in the article “Borten i fokus og bestillingsverk (Borten in focus and commissioned works)”, Aftenposten, 3 January 1987. 17  See for example Report No. 29 (2000-2001) to the Storting from the Ministry of Finance and the Regulation on Monetary Policy from 29 March 2001. 4  BIS Review 140/2009  close to 2.5 per cent. Measuring performance is possible, but can only be done with a time lag. 18 The combination of (i) delegated authority to conduct policy, (ii) room for discretion and (iii) difficulties in the day-to-day monitoring of results imply a risk of a democratic deficit.

In the interview Skogstad Aamo flatly denied rumours of a krone devaluation. But before the interview was printed, the news agency NTB reported that the krone had been devalued by 12 per cent. 16 Perhaps the journalist was disappointed but Skogstad Aamo was not criticised for breaking the eighth commandment. Over the last decade, the objective of monetary policy has not been a fixed krone exchange rate, but price stability through low and stable inflation. 17 According to the monetary policy regulation the objective is inflation of close to 2.5 per cent over time. But how long is over time? And what is close to 2.5 per cent? With these formulations, it is no longer that easy to evaluate monetary policy. There are several reasons for this. First, it takes up to one to two years for a change in the interest rate to feed through to inflation. Second, inflation is not only influenced by the interest rate. For example, precipitation levels can have a strong impact on electricity prices. Third, we set interest rates also with the aim of promoting stability in output and employment. If the economy is exposed to severe shocks, we may at times seek to bring inflation rapidly back to target, while under other conditions we deliberately choose a longer horizon. An evaluation of monetary policy cannot therefore be based on the latest figures for inflation.