samchain/econo-pairs-v1 huggingface dataset:
Short-term demand management through monetary policy too often led instead to accelerating inflation, and increasing external deficits, which had then eventually to be brought under control through recession – an absolute recipe for short-termism in both financial and business behaviour. Equally, excessive public expenditure – which had ultimately to be financed through higher taxation – imposed burdens on the private sector which weakened its capacity to generate employment and income and wealth. So the emphasis now, throughout the industrial world but increasingly too in the developing, emerging and transition economies, is on effective price stability as the immediate objective of macro-economic policy – not simply as an end in itself but as a measure of the balance between aggregate demand and underlying supply in the economy as a whole. In effect the aim of monetary policy in particular is to moderate, rather than aggravate, the economic cycle, and so to provide the basis for sustainable growth at around the underlying rate of growth of productive, supply-side, potential. And the emphasis now in relation to fiscal policy is to limit public sector borrowing, and the outstanding level of public sector debt, to levels that can be sustained into the medium and longer term without the need for increasing tax burdens or the imposition of rising real interest rates on the private sector. Of course on occasion the flesh proves to be weaker than the spirit – and achieving these macro-economic objectives is not easy in practice even as a technical matter.

On an optimistic view, if consumption continues to hold up, and assuming that the recent underlying productivity gains can be maintained, investment spending will recover as the spread of ICT through the economy resumes, and the downward stock adjustment will come to an end. On this view we can look forward to a pick up in US activity as we move, say, into next year. But the pessimist is inclined to point to the weakness of private sector saving, which could induce more cautious consumer behaviour especially if unemployment continues to rise; he points to a possible overhang of past investment excesses; and he points to the US external deficit which will at some point need to be corrected. These adjustments might take place gradually over time, in which case the US might face a more protracted period of relatively slow growth; or, if you are really pessimistic, the adjustments might be more abrupt implying a possible period of negative growth and global financial instability. The recent somewhat erratic recovery of US stock markets from their earlier gloom suggests that they are beginning to side with the optimists; some of the survey evidence of consumer and business confidence on the other hand still supports a rather more pessimistic view. For what it is worth, and given the strong policy response in the US, I am modestly optimistic, but I recognise the downside risks.
Finance by all, for all Speech given by Mark Carney, Governor of the Bank of England Remarks at Women in Banking and Finance 22nd Annual Awards, London Friday 14 June 2019  I am grateful to Jennifer Nemeth for her assistance in preparing these remarks, and to Jenny Pye, Katie Williamson and Paul Wright for their help with background research and analysis. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches  It is an honour to join you today to celebrate this special occasion. The Women In Banking and Finance (WIBF) network is a place to connect with colleagues, share knowledge and like today, celebrate success. In that spirit we have already connected at the reception and will conclude by celebrating your success, so let me take up a bit of the middle to share some knowledge that the Bank has gained as it seeks to improve diversity and inclusion at the heart of finance. Let me start by reflecting on the state of the UK financial services industry. Over two million people across the UK work in the sector. It makes up over 10% of the economy and runs a trade surplus of £ billion, greater than all other exporting industries combined. Financial services contribute enough taxes to fund the NHS.1 Most fundamentally, finance serves households and businesses at home and abroad. Last year, the UK financial system channelled £ billion in finance to UK businesses and helped 700,000 households to purchase homes.

We believe, rightly, that the banks entrusted with our life savings are prudent. When we transfer money, we don’t worry about whether the payment system will get the funds to where we want them to go. We also expect that the currency we hold will be stable – and that we will not wake up one day to find that our purchasing power has been eroded overnight. 1/4  BIS central bankers' speeches  9. In Hong Kong, you and I expect all of this to run like clockwork. And it does. But it’s only when the smooth operation of our monetary and banking systems is put under test by severe external shocks that we will see a reflection of true resilience. 10. We all know the challenges Hong Kong has faced over the past year, including social events, COVID-19, and the China-US tensions. Despite all these challenges for our economy, Hong Kong’s financial system has remained remarkably stable. 11. The value of the Hong Kong dollar has stayed close to the strong side of its trading band for most of this year. There have been strong inflows to the local currency, partly because of substantial demand for Hong Kong equities, including some large IPOs, and partly because of the very strong market confidence in the Linked Exchange Rate System. 12. There have been talks about capital flowing out of Hong Kong, especially during the peak of the social events last year.
With that background, I would like to comment on some of the criticism of Fed policy decisions. Some of the commentary surrounding the FOMC’s June decision to raise the federal funds rate 2/6  BIS central bankers' speeches  target by 25 basis points illustrates the current tension between “too low” inflation and “too buoyant” financial conditions. On one hand, some observers question the decision to reduce policy accommodation given that inflation has fallen somewhat further below our objective. I would respond to these concerns by noting that monetary policy is still accommodative and that financial conditions have eased. In addition, the long and variable lags between monetary policy adjustments and their impact on the economy imply that the FOMC may need to remove accommodation even when inflation is below its goal. In particular, if the unemployment rate were already below its longer-run natural rate, as may be the case currently, the impact on wage growth and price inflation would still likely take some time to become evident. This would be particularly true if inflation expectations were well-anchored at or slightly below our 2 percent objective, as is the case currently. On the other hand, some Fed watchers have argued that we are helping to create financial asset bubbles by not removing accommodation more quickly. My view is that asset valuations are not particularly troublesome given the economic environment in which we’ve been—that is, a long period of moderate growth, low inflation, low interest rates, and low recession risks.

For Treasury securities, when the caps are fully phased in, they will generally only be binding during the middle month of each quarter, when there is typically a spike in maturing Treasuries in the Fed’s portfolio. For agency MBS, as long as long-term interest rates are steady or rising, we expect that the fully-phased-in caps will not be binding. However, if long-term interest rates were to fall sharply—provoking a surge in refinancing and mortgage repayments—the caps would likely bind, limiting the amount of agency MBS that would have to be absorbed by the private market. As currently anticipated, once we start the balance sheet normalization program, we expect it to continue in the background until the FOMC judges that the Fed’s securities holdings are no larger than necessary to implement monetary policy efficiently and effectively. Adjustments to the target range of the federal funds rate will remain the primary tool of monetary policy. However, if economic circumstances were to change during the normalization process in a way that would warrant a sizable reduction in the target range for the federal funds rate, the FOMC would be prepared to resume reinvestment. The program has been designed to be implemented gradually and predictably so that market participants and the U.S. Treasury can anticipate when and at what pace the portfolio is likely to run off over the course of normalization. This should keep expectations more stable and reduce the risk that a sharp shift in expectations could generate undesirably large movements in interest rates and asset prices.
Companies borrowed excessively, especially in foreign currencies without hedging their exposures, encouraged by implicitly pegged exchange rates. But lenders in the developed economies could not escape blame either. They were only too eager to extend credit, based on the political connections of the borrowers, or on faith in an Asian miracle. Banks stampeded into the region. When sentiments turned, they stampeded out again, equally indiscriminately. The sudden massive outflow of funds, especially through banking lines, left countries in a severe liquidity crunch, and was an immediate cause of the crisis. The punishment meted out by the markets was out of proportion to the crime. The damage was not just the 9% shrinkage in the GDP of the crisis countries, but the social dislocation and political turbulence that followed. Indonesia suffered the worst, even though the IMF made a pre-emptive house call early in the crisis, and pronounced Indonesia’s fundamentals to be basically sound.1 The Indonesian government had pursued prudent macro policies and maintained steady economic growth. But companies had borrowed large sums from abroad, and the banking sector was afflicted by related party lending, poor credits, and weak provisioning. This, together with concerns about KKN – corruption, collusion and nepotism – was enough to turn an initial loss of confidence into a full-blown crisis of the body politic, forcing President Suharto to resign and pushing the country to the brink of chaos. The origins of the Asian crisis thus lay in institutional weaknesses and inefficiencies.

But it stressed the virtue of market discipline more than the possibility of market failure. Financial crises were the fault of inappropriate policies. The remedy was more liberalisation, deregulation and privatisation. Markets would work, if only they had access to timely and accurate information. So the emphasis was on policy transparency and data disclosure, to enable the private sector to make “correct” decisions. So steadfast was the faith in open capital markets that, as late as September 1997, after Thailand had run into trouble, the IMF and G7 countries were still lobbying member states to 1  BIS Review 76/2000  amend the IMF’s Articles of Agreement to give the Fund the mandate to promote capital account liberalisation. Crisis shock Given this worldview, the Asian crisis came as a tremendous shock. Financial markets proved highly susceptible to contagion and herd behaviour. Problems in one country triggered a loss of confidence in its neighbours. Manias, panics and crashes occurred on a titanic scale, shaking seemingly sound economies to their roots. Structural flaws in the Asian economies undoubtedly contributed to the crisis. So did policy errors by governments and international institutions in responding to the problems when they emerged. The most serious flaws were in the financial and corporate sectors. Balance sheets were weakened by currency and maturity mismatches. Banks were lax in their credit practices. They borrowed short-term from abroad and lent long-term at home, often to related companies without proper assessment.
No additional suitcases will be provided and it will never be possible to completely refresh the contents of any of them. Oh – and you have to look after them, as any loss or damage will be a cost to you. Such a situation may sound rather fanciful but it is not too dissimilar to the BPA business model. It relies on a single premium upfront to fund liabilities far into the future, and the ability to change strategy or de-risk may be constrained by a number of factors. These factors include the illiquid or complex nature of the investments and the financial resilience of the balance sheet. In relation to security of benefits, once the pension scheme is bought out, there is no possibility of further scheme sponsor contributions to meet any member benefit payments. Boards’ ability to make  Page 5  decisions now, that carefully balance a long-term view against the pressure of short-term performance measures, is therefore critical to the future health of individual firms and to confidence in the sector as a whole. The events of the last two to three years, let alone last three or four decades, remind us that over the life of the liabilities taken on today, there will more likely than not be big changes; and the uncertainty inherent in long-term business needs to remain front of mind.

Starting with the first pillar of the monetary policy strategy of the ECB, monetary data for December 2000 confirmed the gradual moderation of the growth of monetary aggregates which has been observed since the spring of last year. According to the latest data, the three-month average of the annual growth rates of M3 in the months from October to December 2000 stood at 5.0%, which was slightly lower than the average of 5.1% recorded for the period from September to November 2000. Therefore, after the recent slowdown in monetary growth, the risks to price stability from the monetary side have become increasingly balanced. Caution still needs to be exercised, however, given the continued dynamics in credit growth to the private sector and the upward deviation of M3 from the reference value in the past. Turning to the examination under the second pillar, broadly similar indications are emerging, as inflationary impulses resulting from previous developments in oil prices and the external value of the euro are gradually diminishing. As regards economic activity, uncertainty concerning the external environment for the euro area has increased, mainly related to signals that the slowdown in growth in the United States may be more significant than earlier expected. This is likely to result, directly and via a spillover to other regions, in some deceleration of growth in the world economy. World real GDP growth, which in 2000 posted its strongest performance for many years, may therefore moderate in 2001 but will still remain at an acceptable level.
Household debt ratio Debt as a percentage of disposable income 350  350  Finland France Germany Portugal Italy Ireland Spain Denmark United States United Kingdom Sweden  300  250  300  250  200  200  150  150  100  100  50  50  0  0 95  97  99  01  03  05  07  09  11  Source: OECD Figure 6. Unemployment Unemployed as a percentage of the labour force, index, 2007 = 100 350  350  Ireland (-40.5 percent) Spain (-22.5 percent) Denmark (-23.4 percent)  300  300  United States (-22.7 percent) United Kingdom (-13 percent) Sweden (-0.0 percent)  250  250  200  200  150  150  100  100  50  50 00  02  04  06  08  10  12  Note. The figures in brackets refer to the fall in real house prices from the peak to the trough. Source: OECD  BIS central bankers’ speeches  17  Figure 7. No new target for monetary policy Inflation  Unemployment (u)  Scenario 1 Scenario 2  After the forecast period  After the forecast period  u*  2%  Scenario 1 Scenario 2  Slow adjustment to the inflation target and long-run stable development Rapid adjustment to the inflation target but build-up of imbalances that are corrected  Figure 8.

Finance is one of the largest sectors of the UK economy. Around 400,000 people are employed in financial 3  services in London alone, 1.1 million across the country as whole. Their enterprise contributes £ billion to our national income, £ billion to our exports and £ billion to the Exchequer, equivalent to two-thirds of the NHS budget. 4  Your work matters because finance is not an end in itself; financial markets serve the real economy. By financing firms that hire, invest and expand, markets drive growth. By opening up cross border trade and investment, they create new opportunities for businesses and savers. By transferring risks to those most willing and able to bear them, markets help households and businesses insure against the unexpected. 1  See Fair and Effective Markets Review Final Report, HM Treasury, Bank of England and FCA (June 2015). At: http://www.bankofengland.co.uk/markets/Pages/fmreview.aspx 2 See BIS Triennial Bank Survey (at http://www.bis.org/publ/rpfx16fx.pdf) and BIS OTC data at (https://www.bis.org/statistics/d12_1.pdf) and The City UK “Key facts about the UK as an international financial centre” (November 2016). 3 Workforce jobs and financial services jobs in London (ONS). 4 GDP and exports data (ONS), tax revenues from PWC/City of London “Total Tax Contribution of UK Financial Services” and NHS Budget data at: http://www.nhs.uk/NHSEngland/thenhs/about/Pages/overview.aspx. 2  All speeches are available online at www.bankofengland.co.uk/speeches  2  Most fundamentally, your work matters because markets are the best mechanism to drive innovation, productivity, and prosperity. The Problem  Though markets are generally a force for good, markets can go wrong.
The criteria used by Norges Bank to assess the interest rate reflect policymakers’ general views and assessments. They are therefore not “carved in stone”, but can be changed and modified due to new insights. Currently, the Bank uses five criteria, which can be summarized as follows: 1. Achievement of the inflation target  The interest rate should be set with a view to stabilising inflation close to the target in the medium term. The horizon will depend on disturbances to which the economy is exposed and the effects on the prospects for the path for inflation and the real economy. 2. Reasonable balance between the inflation gap and the output gap  Norges Bank conducts flexible inflation targeting, which implies that stabilising inflation around the target should be weighted against stability in the real economy. The chosen interest rate path should therefore imply a reasonable balance between the objectives if there is a conflict in the short term between stabilizing inflation around the target and stabilizing the real economy. What is meant by a “reasonable” balance is obviously a matter of judgment and is an important element in Board discussions. 3  For example, the Swedish Riksbank communicates the criteria behind the forecasts as follows: “The Riksbank’s forecasts are based on the assumption that the repo rate will develop in such a way that monetary policy can be regarded as well-balanced.

The establishment of ACE will support and indeed, further propel efforts to raise the calibre and dynamism of talent across all levels in the industry. ACE will provide a range of facilities for professional development and skills development including learning and training for all the different levels of financial specialisation. The institutions that are to be housed within ACE have all embarked on measures to deliver programmes and qualifications that are benchmarked against leading education and training standards. The high quality talent that ACE will develop will contribute to the vibrancy and progress of the Malaysian financial industry. BIS central bankers’ speeches  1  ACE is an initiative spearheaded by the financial services industry and it will house 10 institutions, involved in education, training and standard setting. With its strategic location in Kuala Lumpur, ACE has close proximity to the headquarters of financial institutions. Its integrated facilities will foster and facilitate collaboration amongst banking, insurance, capital market and Islamic finance industries to share intellectual capital, expert resources as well as benefit from economies of scale by the sharing of common infrastructure and facilities. Today’s ground breaking ceremony marks the official start of the construction for the ACE project. Let me take this opportunity to congratulate those involved in the Project to bring it to this stage of development.
The brain rebooted humans from Version 1.0 to Version 2.0. The rest is (human) history. Fire, for reasons unforeseeable at the time, appeared to play an important supporting role in this extraordinary evolutionary story. Creative Destruction As it is creative, fire also has the potential to be destructive. No-one associated with this great institution needs any reminding of that. Nor do the residents of Paradise, California where many people tragically perished in the recent wildfires. These events are the latest in a long line of devastating and destructive fires over the millennia. 7  Clark (1969). Ford, J.L. (1994). 9 Beckert and Bronk (2018). 8  6  All speeches are available online at www.bankofengland.co.uk/speeches  6  Monument is a five-minute walk from the Bank of England and a minute’s walk away from Pudding Lane, where the Great Fire of London started on 2 September 1666. As destruction goes, this one takes some beating. One-third of London was destroyed, including 80% of all churches. 100,000 people were made homeless, around 25% of the city’s population.10 The cost of the damage amounted to £ million, or almost a thousand times the annual income of London at the time.11 Yet the often untold part of this story is what happened next. The response to the destruction caused by the Great Fire of London is every bit as much its legacy as the Monument that stands by the banks of the Thames.

CMH is expected to unlock a vast potential of opportunities for the Islamic financial industry. It can provide a wider range of new instruments not only for liquidity management and risk management purposes but players can derive additional linkages by utilising CMH to facilitate issuance of sukuk and in the creation of financing and deposit products. Besides having the potential of providing wider product selections, CMH could create a more transparent and streamlined commodity transaction practices based on the concept of murabahah or tawarruq. Leveraging on the experience of Bursa Malaysia in the area of exchange traded products, CMH is able to eliminate uncertainty in the transactions and could mitigate risks such as legal risk, market risk and counter-party risk. We are most grateful to the CPO suppliers for participating in this initiative. For CMH to be successful, it requires the cooperation of the players in the CPO market. With greater involvement of players in the commodity industries, CMH would be able to unlock the potential of your business operation by enabling the stocks to be exploited for this exchanged traded mechanism. The success of the CMH depends on the continuous support of the CPO suppliers. The CMH could also explore the possibility of sourcing CPO supplies from abroad. This innovative effort which has been endorsed by the Shariah Advisory Council of Bank Negara Malaysia and the Securities Commission has the potential to appeal to a wider market audience in and outside of Malaysia.