samchain/econo-pairs-v1 huggingface dataset:
Paul Tucker: Central banking and political economy – the example of the UK’s Monetary Policy Committee Speech by Mr Paul Tucker, Executive Director and Member of the Monetary Policy Committee of the Bank of England, at the Inflation Targeting, Central Bank Independence and Transparency Conference, Cambridge, 15 June 2007. *  *  *  Over the next couple of days, this conference will take forward debates on many of the strategy issues preoccupying monetary economists and policy practitioners. The role of inflation targets and communication in anchoring inflation expectations. The place of money in central bank analysis and policy frameworks. Whether to be transparent about any expectations policymakers form about the path of their policy rate. After more than a decade in which monetary authorities across the world have generally succeeded in maintaining price stability, it is hard to know whether these continuing debates – and, more important, the variations in central bank practices that underlie them – are vital or peripheral. Time will tell. Some architectural features of monetary regimes are plainly important and, unsurprisingly, are broadly shared: central bank independence; a definition of price stability that, with credibility, can act as a nominal anchor; a forward-looking “reaction function”. Within that broad canvas, the remaining variance in central bank practice may owe something to differences in the governance structure for their decision taking, and to the genesis of those differences.

This is buttressed by the way in which the Bank’s Court of nonexecutive directors approaches its statutory responsibility of reviewing the MPC’s processes, involving annual bilateral meetings with each MPC member. And, externally, it is similarly underpinned by the Treasury Select Committee holding us individually accountable for our monthly votes, which are published as part of the minutes of our meetings. This establishes very powerful incentives for each member to reach their own considered view. There is no free-riding in the MPC; and our policy debates are full and free. That lies at the very heart of the MPC’s operation, performance and communications. Indeed, it might be wondered whether the tone of some of the public scrutiny could set up incentives to cast minority votes with the aim of demonstrating independence of thought and action. 23 That, of course, would be perverse. Each member wants their individual decisions to matter – to the current Bank Rate, and to the expected path of policy and so the monetary conditions embodied in the money market yield curve. One votes in a minority when one disagrees with the immediate decision and the strategy it might convey. Occasionally, doing so, with the reasons disclosed in the minutes, can be an effective way of influencing monetary conditions. The make-up of the MPC’s majorities and minorities shifts around over time. There are no “blocs” on the Committee. And there is no distinction between “internals” and “externals” in that respect.
The problems concerning how measures of resource utilisation relate to the normal level are, however, greater. It is difficult enough to measure resource utilisation, but it is even more difficult to measure what its normal level is. Instead we have to weigh together different measures and indicators in a reasonable way. This of course provides greater scope for a wider range of assessments. The financial crisis has, not least, also raised the question of to what extent monetary policy should take financial stability into account. This is an important question that should be analysed further. Let me conclude by saying that it appears that the fiscal policy and monetary policy stimulation measures that are being implemented throughout the world are beginning to have the desired effects. The situation in the financial sector has improved and an economic recovery is now discernable. But it is still uncertain whether the recovery is stable or whether there is a risk that it will come to a halt as soon as the fiscal policy and monetary policy stimulation measures are phased out. Deciding the appropriate time to begin the phase-out of the now very extensive monetary policy stimulation measures is a major challenge. If the phase-out begins too early there is a risk that the recovery will come to a halt. If we wait too long, there is a risk that we will need to increase the repo rate very quickly in order to meet the inflation target.

SPEECH DATE:  12/04/21  SPEAKER:  Deputy Governor Henry Ohlsson  VENUE:  LO  SVERIGES RIKSBANK SE-103 37 Stockholm (Brunkebergstorg 11) Tel +46 8 787 00 00 Fax +46 8 21 05 31 registratorn@riksbank.se www.riksbank.se  Hidden wealth* Expansionary monetary policy causes asset prices to rise and thereby makes those who own assets wealthier. But this wealth is unevenly distributed among households, and therefore the income from it (capital income) will also be unevenly distributed. Expansionary monetary policy can thus lead to more uneven capital income. At the same time, unemployment decreases when monetary policy is expansionary. This makes labour income more even than it otherwise would have been. As the effects on capital income and labour income counteract each other, it is unclear what effect the expansionary policy has on income distribution in total. But this does not stop higher asset prices leading to more uneven wealth distribution. In this speech, I will highlight a phenomenon that can mitigate this effect. I will start with an example that illustrates what I mean by hidden wealth. The Norwegian oil fund is one of the world’s largest funds. In 2019, the value of the fund was 285 per cent of Norway’s nominal GDP. Norway's revenue from oil operations are added to the fund and the assets are then invested abroad. The nominal return has been a good 6 per cent a year on average since the fund started in 1996. Every year, the Norwegian state may utilise the fund’s average real return.
One example where the banks did not co-operate in the payment market is the service of digital invoicing systems. Up to spring 2002 the banks were offering two different, non-compatible systems, “e-giro” and “e-faktura”. The existence of two digital invoicing systems was an obstacle with regard to getting both companies and households to utilise the new technology. Today the banks are investing in making the systems compatible with one another and the goal is that invoicers and invoicees will be able to reach one another regardless of which bank they use. If this succeeds, it should lead to increased acceptance from customers and enable critical mass to be achieved more easily. Will cash disappear? The use of cash in Sweden has halved since the mid-1950s, which is of course a result of the technological developments with card payments and later Internet payments offering good substitutes for payment with banknotes. However, the decline in the use of cash has slowed down in recent years and the M0 money supply is currently around SEK 90 billion, or 4 per cent of GDP. Cash is suitable for certain types of transaction, including, unfortunately, those that people don’t want registered, and there is perhaps a lower limit for the demand for banknotes. In addition, the alternative cost for cash has been low in recent years, as a result of low inflation and low interest rates. However, the use of cash in Sweden is higher than in other Nordic countries.

Now I know it hasn't felt like that for everyone - particularly for internationally exposed businesses and their employees and for the regions in which such businesses are more heavily concentrated including the West Midlands with its relatively high concentration of manufacturing businesses. I am well aware that many of them - perhaps many of you - have been having a rough time over the past few years. 2  BIS Review 53/2002  Although the UK economy as a whole managed to avoid recession, UK manufacturing output fell from a peak nearly two years ago by around 7% and employment in UK manufacturing fell by 225,000 people, or some 6%. To put that into perspective, manufacturing output fell from peak to trough over much the same period by over 16% in Japan, by 7½% in the US and by 6½% in Germany; and manufacturing employment fell by 7¼% in Japan, 9½% in the US and nearly 3% in Germany. So the pressures on manufacturing were not confined to, nor did they originate in this country. There are two main reasons for the pressures on the internationally-exposed sectors of our economy. The first is the weakness of much of the global economy as a result of the Asia crisis and its aftermath in the late 1990's, and then, more recently, as a result of the sharp, synchronised, slowdown in the major industrial countries - as reflected in the figures I've just given you.
First, interest rates have been at all-time lows, with Bank Rate at near zero now for nearly four years. This has lowered the rate at which families, businesses, the government and banks can borrow. Second, the Bank’s programme of asset purchases has prevented what might have been a serious contraction of the money supply. An enormous amount of new money has been injected into the economy, now amounting to about 25% of annual GDP. This was crucial in avoiding a depression. And, in addition to these monetary policy measures, we introduced last summer, in conjunction with the Treasury, the Funding for Lending Scheme to provide cheap funding to banks for a period of four years to enable them to finance lending to UK households and businesses. The Scheme has already reduced banks’ funding costs: for example, major UK banks’ senior unsecured bond spreads have fallen by around 125 basis points. And the availability and price of credit for many borrowers has improved. But there remains spare capacity – certainly in the labour market. So should we do more to revive the patient? The short answer is yes – but the harder question is, what? In many countries, including the UK, fiscal policy is constrained by the size of government indebtedness, and monetary policy has come to be seen as the only game in town. Monetary stimulus is already very powerful. Markets expect policy rates to remain at exceptionally low levels for a considerable period of time.

The rationale behind ERM II is that, if a country succeeds in maintaining the value of its currency against the euro within the fluctuation bands for a period of two years, then it would be reasonable to assume that the country would be able to deal with the binding constraints of EMU. During this phase, accession countries will have to prove that they are able to put up with the disciplines inherent in a fixed exchange rate without imbalances arising in other sectors of the economy. That is why accession to EMU is conditional on prior participation in ERM II. Furthermore, it would be unfair on the twelve euro area countries if the EU were to demand less stringent conditions of the present wave of accession countries. Upon EU accession and during the ERM II phase, Malta, like the other accession countries, would have the status of a “country with a derogation”. Since ERM II neither entails the formal transfer of monetary policy responsibilities to the ECB nor the replacement of the domestic currency by the euro, it will not, as I have already indicated, involve any significant departure from current practice, although it offers more flexibility than our current fixed exchange rate regime, which does not involve any fluctuation band. Another difference is that the obligation to defend the central exchange rate under ERM II would be binding on both the ECB and the Central Bank of Malta. Both institutions would be expected to intervene to preserve that value.
For a small, open economy like Switzerland, in particular, the effectiveness of monetary policy measures can be largely dependent upon acceptance by the international environment. An important example for our country is the minimum exchange rate – an exceptional measure taken in an extreme situation. With this measure, the Swiss National Bank is countering distortions in the foreign exchange market which can be traced back to international events. The minimum exchange rate is accepted internationally because markets, international organisations and foreign central banks have understood the objective and motivation behind it, which they see as justified. BIS central bankers’ speeches  1

As a central banker, I will of course argue that the role of the central Bank is crucial. It should be the guardian of the health of the "financial ecosystem" through reinforced surveillance and a continuous improvement of the regulatory and legal framework. Sound supervision must be promoted by an independent body, which may be more or less related to the central bank. In France as in India, banking supervision is indeed implemented by the central bank staff. Sound supervision and a clear legal framework in turn are likely to encourage foreign participation and maximise the associated benefits in terms of best practices. The need for appropriate supervision is indeed not reduced but modified or may even be increased in case of financial liberalisation. For instance, a working group in process at the BIS, in which both the RBI and the BDF are currently participating, shows that the development of local bond markets changes the types of risks faced domestically from currency risks to interest rate risks or maturity mismatches. This requires to enhance and control adequate risk management in the banking sector and in those institutions in which the risk may have been transferred. Indeed financial innovations such as credit risk transfers may well spread risks but risk does not disappear. The central bank is also responsible for producing and disseminating various sets of monetary and financial statistics whose quality is of utmost importance for policy makers and investors.
In addition, the severe supply-chain bottlenecks that initially affected this category began to improve last year, which likely contributed to the easing of prices for some durable goods in recent months. However, there are factors that may throw sand in this gear going forward. The economic resiliency of Europe and a rebound in growth in China following the end of COVID restrictions will likely increase global demand for goods. And further improvement in global supply-chain disruptions has stalled over the past few months. For example, the New York Fed's Global Supply Chain Pressure Index remains elevated relative to pre-pandemic levels. The slowest gear to turn is the one that represents non-energy services. It's influenced by the balance of overall supply and demand, and it will take the longest to rotate at the right pace for low and stable inflation. One area where we are seeing signs of this gear turning is in shelter costs. After a sharp rise, we have seen a steep decline in the rate of increase in new lease rents. Assuming this trend continues, we should see a slowing of overall rent inflation during this year. That said, we have yet to see the gears turn for inflation of non-energy services excluding housing, which is still quite elevated, averaging 3-3/4 percent over the most recent six months. Tightening Monetary Policy Taking into account the different speeds the gears are moving, it is clear that overall demand remains well in excess of supply, and inflation is running far above our 2 percent target.

John C Williams: Our work Is not yet done Remarks by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the New York Bankers Association, New York City, 14 February 2023. ***  As prepared for delivery Thank you, Tom. It's a pleasure to share the stage with you today. As a member of the New York Fed's Board of Directors, Tom Murphy represents the Federal Reserve's Second District. Our directors ensure that a diversity of viewpoints on economic and banking conditions are represented, so we can better understand and anticipate developments in our economy, both locally and nationally. As you well know, a lot has occurred since Tom joined our board two years ago. And we have benefited immensely from his thoughtful insights and perspectives. Today, it should come as no surprise that I'll be spending much of my time discussing inflation, which remains my No. 1 concern. I'll also talk about how we are using our monetary policy tools to restore price stability. And, I'll give you my economic outlook. Before I go further, I'd like to do three things: First and foremost, I want to thank the New York Bankers Association for inviting me here. Second, I need to give the standard Fed disclaimer that the views I express today are mine alone and do not necessarily reflect those of the Federal Open Market Committee (FOMC) or others in the Federal Reserve System.
Gent Sejko: Increasing the formalization of the Albanian economy Address by Mr Gent Sejko, Governor of the Bank of Albania, at the joint press conference with the Minister of Finance and Economy, Tirana, 7 December 2017. * * *  Dear Minister Ahmetaj, Dear media representatives, It is with great pleasure that I present this concrete initiative of the Bank of Albania (BoA) in the framework of our efforts to promote the formalization of the economy. It is encouraging to see that a series of initiatives by other Albanian authorities are taken for the same purpose, to enhance the law enforcement and the use of financial channels. Experience has shown that complementary efforts of regulatory institutions lower the policies’ implementation costs and increase their likelihood for success. Informal activity imposes open and hidden costs for the Albanian economy and the society. It damages the country’s public finances, increases the tax burden and distorts its effect on the economic agents, hampers competition and increases the costs of fair business activity, reduces business financing resources and curbs their normal development, and creates social problems that arise from lack or insufficient coverage of social and health insurance. From the BoA’s point of view, as the monetary authority and as the supervisor and regulator of the banking sector, informal activity reduces the effectiveness of our stabilization policies and creates the premises for instability of one or more segments of the financial system.

As a result, many countries have been able to bring down inflation at virtually no cost. In this respect, we can probably talk about some degree of endogeneity in inflation. However, it is still the non-trivial task of monetary policy to ensure that inflation remains low and stable on a more permanent basis. In a country with its own national currency, inflation is not something that just drifts in with the wind from abroad. It is the monetary policy choices we make that determine price developments over time. As Ken Rogoff, professor of economics at Harvard University, has so aptly phrased it: “…any central bank, no matter how small or open its economy, can always stabilise domestic prices at medium- to long-term horizons, should it choose to do so…Globalisation may affect the parameters of central bank models, but independent central banks still control their own inflation destinies…”. 8 For some years now, the short-run trade-off between inflation and economic growth has been extraordinarily favourable. Inflation has been low and economic growth high. We have been hit by massive and long-lasting positive supply shocks thanks to the globalisation process. To accommodate a higher growth potential and to maintain the nominal anchor, central banks worldwide for a long period held short-term interest rates well below what can be regarded as a normal level. Furthermore, long-term real interest rates have declined markedly since the 1980s and the beginning of the 1990s and have been especially low in recent years.
Sabine Lautenschläger: Interview in Le Monde Interview with Ms Sabine Lautenschläger, Member of the Executive Board of the European Central Bank, in Le Monde, conducted by Ms Marie Charrel on 3 November 2014. *  *  *  On 4 November, the European Central Bank (ECB) assumes responsibility for the supervision of the 120 largest banks in the euro area, which account for 82% of European bank assets. Sabine Lautenschläger, member of the Executive Board of the ECB and ViceChair of the new Single Supervisory Mechanism (SSM), answers some questions. The SSM starts operations on 4 November. What is the mission of this new institution? Our task is to be an intrusive and independent European supervisor which contributes to the safety and soundness of the banking system and the stability of the financial system. Our aim is to identify inappropriate risks as well as procedures within credit institutions well in advance and to act in an efficient and timely manner to mitigate them. With the start of the SSM, there will be one supervisory approach in the 18 countries of the euro area – thus, for the first time, creating a supervisory level playing field for banks in the euro area. In our dayto-day business, we will ensure that banks are sufficiently capitalised, that they have sufficient liquidity, and that they have established a governance structure as well as risk control procedures that are appropriate for their activities. The ECB has just published the results of the banking stress tests.

By the late eighteenth century, fears of renewed Anglo-French conflict contributed to runs on the Bank which drained its gold reserves and led to the suspension of convertibility of its notes into gold. This prompted an MP to describe the Bank as “an elderly lady in the City who had…unfortunately fallen into bad company”. To this day, the Bank of England is known as the Old Lady of Threadneedle Street. It was not until the 1844 Bank Charter Act that the Bank of England’s note issuance responsibilities were 6  formalised and the rights of others to issue notes in England and Wales began to be phased out. Today the Bank is the sole issuer of banknotes in England and Wales, while a number of Scottish and Northern Irish banks can issue notes provided that they are backed by Bank of England notes or funds on deposit at the Bank of England. 7  Most forms of money, past and present, have nominal values that far exceed their intrinsic ones. And this gap has meant that money has a long and sorry history of debasement. Over the centuries, forms of private th  money, such as the notes issued by American banks during the free banking of the 19 century, have inevitably succumbed to oversupply and eventual collapse. 6  The last private bank to issue its own banknotes in England and Wales was Fox, Fowler and Company in 1921. Seven banks in Scotland and Northern Ireland can issue banknotes.