samchain/econo-pairs-v1 huggingface dataset:
In fact policy documents, such as the 2018 Pre-Budget Document and the Budget for 2018, have stressed the need to upgrade infrastructure and enhance environmental protection. Similarly, international institutions have emphasised the need to shift attention towards sustaining growth and making it more inclusive. Going back to the latest IMF Article IV mission, their recommendations focus on addressing housing market pressures, closing the infrastructure gap, upskilling and reskilling the labour force and strengthening innovation. We would like to discuss some of these challenges, before outlining how we think that our financial sector can play a role in helping to tackle them. The housing market In last year’s speech, we touched upon the need to avoid the formation of asset price bubbles. We quoted Central Bank research indicating that house prices were still below their equilibrium fundamental value, but warned that price trends would nevertheless continue to be closely monitored. House prices, as you know, have continued to rise. Page 4 of 10  National statistics data suggest an increase of 5.3% during the first half of this year, as against 6.1% in the same period of 2016 and 3.2% in 2015. That said, housing supply is responding to the high demand that is contributing towards house price inflation. In the first seven months of 2017 building permits were 62% higher than they were in the same period of 2016 and 153% higher than in 2015. This increased supply, unless there is a further acceleration in demand, should result in housing price inflation moderating.

With the advent of the EU’s internal market in the 1990s, however, the issue of a common currency was revived. National currencies came to be seen as the last major barrier to the internal market’s full impact, which would pave the way to even greater European integration. To a large extent, the driving force behind the Werner Plan and the Maastricht Treaty was political. Experience has taught us that institutionalised economic cooperation can be an antidote not just to trade conflicts but even to war. A common currency is a strong political symbol that can render cooperation durable in the daily economic round. Instead of being just a topic for solemn speeches on television, European cooperation with a single currency could be something real that people carry around in their purses and pockets. 1  BIS Review 102/2000  But the Maastricht Treaty was, of course, also backed up by the strong economic forces that lay behind previous attempts at monetary union. By reducing exchange risks for firms, a single currency facilitates cross-border trade and investment. It also helps to integrate capital markets, rendering them larger and deeper, which aids the supply of corporate capital in Europe. These considerable effects are accompanied by others that we ought not to underrate. In the present situation, moreover, they are likely to be enhanced by the internet and other new information technology. Not the least of these is that the monetary union eliminates the psychological barrier that different currencies raise when we try to compare prices in different countries.
There is no doubt that the spread of benchmarking allows fund managers and clients to better assess their performance against that of other funds. But, in a context of growing competition within the sector, it may well have increased mimetic behaviour. Some market participants operators (whose own compensation is closely linked to the relative, rather than absolute, profit and losses they generate) may indeed have come to the conclusion that it would be better to be wrong along with everybody else, rather than running the risk of being right alone. A striking example of rational mimetic behaviour is the influence that hedge funds enjoyed as "opinion leaders" and trend makers. By its nature, trend-following amplifies the imbalance that may at some point affect a market, potentially leading to vicious circles of price adjustments and liquidation of positions. Moreover, more and more participants are able to access directly to financial markets, while the expertise to deal with a larger set of technical information is not evenly distributed. This may also reinforce the role of “gurus”. ·  Third, index management: as a fund management technique, it has proven very popular on equity markets and may have contributed to exacerbating movements in financial asset prices. Because their goal is to mimic the performance of indices, “passive managers” try constantly to match the composition of their benchmark. They thus help to amplify market trends, buying more as the market rises and liquidating more as the market drops.

The recent “tech-stock bubble” provides us with an illustration of such a difficulty: while one was witnessing the “irrational exuberance” in 1996, the surge in capital spending associated with the development of new technologies resulted in a faster productivity growth, which in turn boosted equity prices. At that time, uncertainties about fundamentals (was there an American miracle?) made difficult a proper assessment of asset valuations, although the large movements in asset prices where a concern for central banks. However, when expectations reverse, for example due to the reassessment of expected profitability in the economy, and consequently asset prices decrease, the point is to determine whether the attitude of the central bank ought to be different in order to preserve monetary and financial stability. That is, some could argue that the central bank’s response should be asymmetric. In the booming phase, as long as price stability is not endangered, central banks do not react to the rise in asset prices. Conversely, in the recession phase or when a bubble bursts, central banks could consider reacting if they deem that monetary and financial stability is endangered. What could then restrain them from doing it?
As we noted in the December FOMC statement, we anticipate that we will continue reinvestment “until normalization of the federal funds rate is well underway.” I think this policy makes sense not only because the decision to end reinvestment will represent a further tightening of monetary policy, but also because it is difficult to assess ahead of time the impact of such a decision on financial market conditions given the lack of historical experience. I also believe that continuing reinvestment until the federal funds rate reaches a higher level makes sense. We want to ensure that we have the ability to respond to adverse shocks by easing monetary policy by lowering the policy rate. Having more “dry powder” in the form of higher short-term interest rates seems more desirable than less dry powder and a smaller balance sheet. Now the words “well underway” in the FOMC statement are vague – what does that mean in terms of the level of the federal funds rate? Reiterating the disclaimer that I am speaking for myself, my view is that we should not set a numerical tripwire for ending reinvestment. If the economy were growing very quickly and the risks of an early return to the zero lower bound for the federal funds rate were deemed to be low, then I could see ending reinvestment at a relatively low federal funds rate.

The Czech Lands had been a key industrial and economic part of the former AustriaHungary and hence had a relatively well-developed banking sector. An awareness of the close links between government finances, the banking sector, firms and households shaped the economic policy of the First Czechoslovak Republic. Karel Engliš worked systematically to balance the budget and deserves most of the credit for sorting out public finances in the early 1920s. In 1927 he submitted three tax laws that substantially lowered corporate taxation and supported the creation of capital. At the same time, though, he tied the tax reform, which led to lower revenues, to cuts in government expenditure and a streamlining of the civil service. So, Rašín and Engliš established a trinity of traditions in our country: a stable currency, sound government finances and non-inflationary economic policy. These traditions became a theoretical, practical and moral legacy for subsequent generations of economic policymakers. It is unusual these days to look back to the communist period for economic inspiration. The socialist system was inefficient and cumbersome and discouraged initiative and innovation. Central planning by definition made the system less adaptable to change and created an economy of shortage. Despite this, the Czechoslovak version of socialism tried to eliminate the most glaring imbalances and preserve basic macroeconomic equilibrium. Fortunately, our central planners didn’t cause any major imbalances in the consumer market in the 1980s, so the savings surplus wasn’t as large as in other communist countries.
That is a lot slower than would be needed to regain the level of output implied by a continuation of the pre-recession trend. The outlook for inflation For many quarters, the judgment about the outlook for inflation two to three years ahead has been shaped by two opposing factors – the balance of demand and supply in the economy, and the extent to which the resulting degree of spare capacity bears down on prices; and the extent to which price shocks cause higher inflation expectations to become embedded, prompting higher nominal wage and price increases. 6  BIS central bankers’ speeches  On the economy’s potential supply, the evidence is highly conflicting (there are few aspects of the economy where the data are clear!) On the one hand, labour productivity remains around 8% below the level it would have reached had it followed its pre-crisis trend (Chart 9), implying a significant margin of spare capacity in the economy. But on the other hand, the main business surveys suggest that there is little spare capacity within businesses (Chart 10). Moreover, the expansion in output since the trough has been met by an increase in employment, rather than by productivity growth. Coming to a judgment about the degree of spare capacity in the economy is therefore difficult – but at the same time crucial.

Paul Fisher: The economic outlook – some remarks on monetary policy Speech by Mr Paul Fisher, Executive Director for Markets of the Bank of England, to the Agency for Scotland, London, 23 May 2011. *  *  *  I would like to thank Ronnie Driver for his help in preparing this speech. For most of us, the current outlook for the UK economy is not a very attractive prospect. After experiencing a precipitous fall in demand during 2008/09, the latest estimates suggest that UK output in 2011 Q1 remained around 4% below its peak pre-crisis level. The Monetary Policy Committee’s (MPC) central projection published in its May Inflation Report, is for output to grow at around its historical trend rate (Chart 1), such that it would be mid-2012 before that previous peak level is regained (Chart 2). At the same time annual CPI inflation, far from being subdued by the recession, has picked up to 4½%. In the short-term it is likely to go higher still before, we expect, falling back towards the 2% target (Chart 3). All this poses a significant challenge for policy makers, not least because of the genuine hardships slow growth and high inflation cause for businesses and households up and down the country.
2  BIS central bankers’ speeches

The Riksbank believed this expenditure would be higher than estimated in the report and that small and medium-sized firms in particular would find it difficult. The Riksbank also drew attention to the risks of Sweden being discriminated against in various respects. One example was the disadvantageous terms for outsider countries in TARGET, the European payment system. Moreover, an outsider position for the time being would involve additional costs in various parts of the economy. Financial institutions, for instance, would have to operate twin systems in order to remain competitive. Negative long-term effects of remaining outside Such is the nature of the long-term effects that assessments of them are unlikely to change fundamentally in the course of a year or two. Still, there is new and additional information that may cast a somewhat different light on certain aspects. One major issue concerns the link between EMU and the single market. There is empirical evidence that the single market is exerting downward price pressure in the European Union. Some assessments suggest, moreover, that EMU may lead to a further price fall; figures as high as 10 to 15% have been mentioned. If the effects were to be of that magnitude, the welfare gains would be substantial. 3  BIS Review 92/1999  In practice, however, it is not easy to distinguish the parts that EMU and the single market are playing in price formation. Empirical data therefore have to be treated with caution.
Prior to this, only real estates and certain types of movable property can be used as collateral. With this new Act, a firm can further gain access to funding by putting up inventories, machineries, and intellectual property as collateral. Given this, Thailand’s small and medium enterprises, which constitute 95 percent2 of the total number of firms and make up 30 percent of total employment3, are expected to gain better access to credit, thus representing a better distribution of economic opportunity. Ladies and gentlemen, allow me to reiterate that, although I group this set of laws as ones that promote governance and improvement in economic opportunity, in actuality, they all have positive spillover towards enhancing economic growth and productivity. After all, having a well-functioning capital market, better managed SOEs, a fairer and more competitive environment, and more access to credit will allow 1 Excluding activities to preserve national security 2 Source: The Office of SMEs Promotion, 2014 3 Average over 2015, National Statistical Office of Thailand calculated by the Bank of Thailand  4  greater efficiency among players both in the public and private sectors. I will now turn to the legislation that will help improve productivity. There are three laws in particular that I believe will be of your interest. First is the Licensing Facilitation Act, which is already in effect since July last year. The law intends to make acquiring a permit easier and more transparent for all businesses.

In response to this more competitive and challenging environment, banks could adopt various strategies such as greater income diversification, the containment of operating costs and increased investment in technology. From the regulatory standpoint, the main challenge will involve maintaining a level playing field for all financial system participants, so that similar activities posing similar are subject to a comparable level of regulation. As the supervisor of banks and guarantor of financial stability, the Banco de España also faces very important and specific challenges as a result of disintermediation. In this new environment, the relative importance of the main risks to financial stability will foreseeably change with an increase of those linked to market risk. As a result, the supervision and analysis of the financial risks arising outside the banking system and of the interconnections between banks and other financial system participants will become more important. These interrelations will not only take the form of cross-balance sheet or income statement positions; similarities between the portfolios of different types of participants may also mean that shocks initially affecting one institution or a group of institutions may ultimately have repercussions for all other financial market participants. In this respect, it should be borne in mind that the Banco de España is responsible for activating and deactivating certain macroprudential tools introduced under legislation to mitigate systemic risk in the financial sector. Most of these instruments are applied almost exclusively to banks.
16  Goodhart (2013) argues that so-called countercyclical measures will need to be introduced at a time when they are likely to be opposed by many politicians, most borrowers and lenders, and many, probably most, commentators in the Press. He also doubts that the measures will be implemented with sufficient vigour and aggression to have any mitigating effect, as they would be operating against the prevailing trend of the financial market. 17  This objection of course applies to all policy areas trying to counteract financial risks, including a monetary policy that leans against the wind. But while this objection is often made against monetary policy, it has so far only been discussed to a minor extent with regard to macroprudential policy. 18  Stein (2013). 6  BIS central bankers’ speeches  Little acceptance for this view in the Swedish debate To summarise: in my view, macroprudential policy should be the first line of defence against financial imbalances.19 But it is possible, and even quite probable, that in some situations it may need support from monetary policy. And there is thus, at least as I understand it, good reason to extend the strategy for monetary policy and allow greater consideration to be given to financial imbalances than was the case prior to the financial crisis. One of the main arguments against this view in the Swedish debate is that monetary policy in practice has little effect on the risks linked to financial imbalances.

Page 4  RTGS and ISO 20022: enhancing the quality of payments data In the UK the way that payments are made and settled is being transformed with the renewal of the Bank’s Real Time Gross Settlement (RTGS) Service. This is the critical infrastructure which delivers final and risk free settlement and virtually every sterling payment is settled over RTGS eventually. As an integral part of upgrading its hard payments infrastructure the Bank is joining to global push to enhance the soft infrastructure of payments by introducing ISO 20022 messages in the renewed RTGS and in CHAPS. As everyone at this conference will no doubt be aware ISO 20022 is a gamechanger for the financial system. It is an open international data standard that allows financial institutions to communicate through a common data language. It will enable financial systems to understand each other wherever they are in the world. One of you could walk down the road and send a payment from a local bank branch in Kaunas and the information conveyed within the message would be the same information as available to my local bank here in London. ISO 20022 also allows for more structured and enhanced data, which can be user driven. In other words it can develop according to the user’s needs either through adapting the language by adding new data fields or by adapting to meet different technology needs.
François Villeroy de Galhau: With economic recovery underway in Europe, what monetary policy? Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at a lunch-debate at the Centre des Professions Financières, Paris, 28 September 2017. * * * Accompanying slides  Ladies and gentlemen1, It is a pleasure to be here with you for this lunch-debate of the Centre des Professions Financières. I would especially like to thank your chairman Michel Pébereau for his kind invitation. Today, I am delighted to be able to speak to you on a highly topical subject: monetary policy in Europe in the context of economic recovery. The prospect of a very gradual normalisation of our monetary policy gives rise to concerns and expectations. I will begin by focusing on what our accommodative monetary policy has already achieved today, before talking about prospects for the future. I. What is the situation today? Economic recovery in the euro area is here [slide]. It is robust and broadly based across  countries and sectors. Our latest ECB forecasts2 confirm this: growth should stand at 2.2% in the euro area in 2017, i.e. a significant upward revision of 0.3 point compared with June’s forecast of 1.9%. This means that for the second consecutive year, euro area growth will be comparable to that of the United States.

Structurally, many studies 3 suggest that the Phillips curve, i.e. the relationship between inflation and fluctuations in economic activity or unemployment, appears to have flattened since the 1980s [slide]. Inflation seems less responsive to changes in economic activity in advanced countries, notably because of globalisation,4 which appears to exert downward pressure on inflation via the decline in imported goods prices and competition from low-wage countries. But a flatter Phillips curve does not call into question this relationship: we are in no doubt about the way we are heading: the recovery and job creations will lead to higher wages and, ultimately, more inflation. But we nevertheless remain less certain as to the speed of this adjustment. We are both confident about the effectiveness of our monetary policy and willing to be patient regarding the time it will take. II. What prospects for the future? Let me now turn to the consequences for our monetary policy. You are well aware that we at the ECB’s Governing Council will decide this autumn on the re-calibration of our policy instruments beyond the end of the year – and, I quote Mario Draghi, “probably the bulk of these decisions will be taken in October”. We are now faced with a simple requirement, in line with our mandate to maintain price stability, and the progress towards our inflation target: we have to reduce the intensity of our net asset purchases, while maintaining overall a substantially accommodative monetary policy.