samchain/econo-pairs-v1 huggingface dataset:
On the one hand, the first nine years of EMU have been characterised by low and stable inflation and firmly anchored inflation expectations, vindicating the monetary policy framework laid down in the Maastricht Treaty. On the other hand, the overall achievements of economic policies over the last nine years have been rather disappointing. Progress with structural reforms still falls short of expectations, fiscal policies in some countries conflicted with the rules of the fiscal framework, eventually leading to an adjustment of the rules rather than of policies, and also wage policies have often not taken sufficient account of the requirements of the new situation of a single currency. •  The institutional framework of the EMU provides European policy-makers with the tools to successfully address the challenges ahead. The Maastricht Treaty established a clear allocation of responsibilities to different policy areas, reflecting the fact that assigning policy instruments primarily to one single policy objective and making individual policymakers responsible for one single policy instrument ensures a high level of effectiveness and accountability. •  The single monetary policy was given the task of maintaining price stability in the euro area and was assigned to the ECB as an independent, supranational institution. Economic policy deals with the other economic objectives. Responsibility for the various areas of economic policy has largely remained with the Member States, since these policies are best carried out at the national level in order to ensure that they are appropriately tailored to the specific characteristics and needs of the individual countries.

The few of us involved received a lot of criticisms as a result, and some of these were not pleasant, particularly the accusations that we betrayed the free market. But I hope the way the matter has played out, and the handsome book profits that we are making, will serve as a vindication of our decisions. And, in case it has crossed your mind, luck has had very little, if any, to do with it, although I do not mind luck being on my side. The whole explosion of international finance has simply gone too far. If it were not the default by Russia, some other event would have caused yield spreads to widen sharply. If it were not LTCM, then some other hedge fund would have needed the massive de-leveraging that, had it been allowed to take place, threatened dislocation even in the largest market in the world. Some event, large or small, would have triggered all that. As some of you may remember, the sharp correction in the stock market in Hong Kong in 1973 was triggered by the Fire Brigade being sent in to inspect overcrowding on the then rather small trading floor of one of the stock exchanges before unification. Incidentally, the widening of the yield spreads that caused problems for LTCM last year actually started when we entered the market in August, according to a chart prepared by Stanley Fischer of the International Monetary Fund (IMF). It gathered momentum as Russia defaulted.
However, once we announced the launch of the HKMC Life Annuity Scheme in 2017, there has been marked increase in the awareness and interest in annuity products. Many insurance companies have seen sharp increase in the volume of business in underwriting other forms of annuity products to customers; The HKMC solutions, when implemented more fully, will not only help those who have retired but also provide a strong incentive for the middle income citizens to save. With the Life Annuity Scheme, they can see the prospects that their hard earned savings accumulated over their working life could be entrusted to a reliable manager (c) to produce reasonable, hassle-free and guaranteed cash flows that support their retirement. This is particularly helpful to those who feel that the small amounts that they save today would not add up to support their retirement, hence find it tempting to spend more now and save less, relying instead on the social security net provided by the government when they retire. 10. Ladies and gentlemen, it may be a bit too early to assess the success or otherwise of the Hong Kong experiment. However, I am very excited by the prospects of the two HKMC schemes in helping retirees in Hong Kong to create self-made life pension.

The BIS recently underlined this complementarity between public and commercial money in its report published on Friday. I would therefore like us to build a public/private partnership. The potential impacts on the banking industry and financial stability could be controlled using different means: for example, by having the retail central bank digital currency distributed by the banks, directly to individuals; and by limiting the amount of digital euro in circulation to prevent an excessive conversion of deposited commercial bank money into CBDC. ** In conclusion, I would like to repeat a conviction: Fintechs are no longer separate from the world of finance. They are transforming the practices of financial institutions, their relations with customers – we can see it clearly with payments – as well as their relations with supervisory authorities: new technologies are useful not only for improving crisis prevention and management, but also for optimising the work of the supervisor. We are talking about Regtech and Suptech. All these dimensions will be taken into account in the Banque de France’s next strategic plan, “Building 2024 together”. Thank you for your attention. 3/3  BIS central bankers' speeches
CPIF close to 2 per cent at the end of the forecast period With regard to inflation measured in terms of the consumer price index, CPI, future developments will be affected by the rise in interest rates, or rather by the increase in households’ mortgage interest expenditure. This is clearly visible if one looks at the same time at CPIF inflation, which quite simply is CPI inflation with a fixed mortgage rate. The CPIF is thus not directly affected by changes in mortgage rates, which means that these measures differ quite considerably over the coming years, although they approach one another further ahead. Both CPI and CPIF inflation rose in the months prior to the publication of the Monetary Policy Report (Figure 9). This was mainly due to rising energy prices, but also to weak productivity growth and to the previous year’s weaker exchange rate having a delayed impact. However, data published two weeks ago show that both the CPI and the CPIF fell in January. During 2010 CPIF inflation is expected to fall, primarily as a result of companies’ costs falling and the krona strengthening, which is expected to make imports cheaper. The rate of increase in the CPIF will rise from 2012 and onwards as economic activity improves and companies’ costs begin to rise again. At the end of the forecast period, we expect inflation measured in terms of the CPIF to be close to 2 per cent. However, CPI inflation is expected to continue to rise.

It is lined with a number of potential worries and difficult considerations, not least for central banks. But the situation in the financial markets is currently much more stable than it was during the crisis and the risk of setbacks has declined. One can say that the ice is safer. BIS Review 25/2010  5  Clearer signs of a recovery in the economic statistics As I have mentioned, there is a further overall reason that we are now on firmer ground. The economic statistics that have been coming in have been mainly positive. Confidence in the future development of the economy has also taken a sharp upturn in Sweden, the United States and the euro area (Figure 4). Our assessment is that the situation in the world economy is continuing to improve. In most countries the economy is growing again and world trade is beginning to pick up after the abrupt slowdown in connection with the acute crisis (Figure 5). New figures have been published by Statistics Sweden since our most recent forecast was published. These show that GDP at the end of last year was lower than we had estimated. At the same time, for instance, confidence indicators have continued to strengthen. However, the Executive Board will weigh up and assess the new information at our next monetary policy meeting on 19 April. Figure 4 Increasing confidence according to purchasing managers index  Note.
The idea is that if the economy is hit by a shock which requires real wages to fall (like a negative productivity shock), this can happen through either (a) keeping prices fixed (i.e. zero inflation) and cutting money wages, or (b) fixing money wages and increasing the price level (i.e. positive inflation). The first path may involve significant unemployment when money wages are downwardly rigid. The second, by contrast, may deliver the same reduction in the real wages at a unemployment lower cost. See also e.g. Kim, J and F Ruge-Murcia (2009), “How much inflation is necessary to grease the wheels?”, Journal of Monetary Economics, 56. 5  Retail sales grew by 2.3% in the three months to January, the fastest since April 2002. Consumer confidence in the general economic situation is currently over 1 standard deviation above its historical mean and from mid-2014 has been around its highest level since May 1998. 6  More broadly, the evidence for consumption delay is not compelling. Bachmann et al (2015) find for the US that a one percentage point increase in expected inflation during the recent zero lower bound period reduces households’ probability of having a positive attitude towards spending by about 0.5 percentage points. Hori and Shimizutani (2005) find some evidence of lower price expectations being correlated with consumption delay in Japan, but the effects do not look large. Finally, consumption delay is less compelling for households who are financially constrained and whose consumption varies more strongly with current income.

There are two channels through which the effects of deleveraging will be transmitted to Asia: financial and trade. The financial channel could see several global banks operating in Asia downsize their assets. The areas more likely to be affected are trade financing, project financing, asset leasing, SME lending, and syndicated lending. No doubt, some Asian banks will step up and fill some of these gaps. But it is unlikely that there would be full substitution. The resultant tightness in credit could lead to a slowdown in economic activity. The trade channel could see transmission through a slowdown in exports to the US and Europe as consumption and investment in the latter become weaker.   According to the ADB, 60% of sales from developing Asia are to the G3 economies.   According to the IMF, if growth in the EU declines by 3.5% points below the baseline for two years, growth in Asia will decline 1.5–4.0% points below the baseline.   Taking the perspective from Singapore, Europe is also one of our largest trading partners and source of investment. A scaling back of global risk appetite precipitated by slower growth in the G3 will dampen consumer and business sentiment in Asia generally. In short, Asia is not decoupled from America and Europe. But while Asia is not decoupled, it will not derail either. Growth will slow but will not stall. Asia is entering the current downturn from a position of strength.   Public finances are healthy.
Thus, monetary policy should respond immediately in order to avoid that initially restricted inflation pressures translate into an enduring deterioration in inflation expectations. Recent decisions of the Brazilian Central Bank should be understood in that context. Their effects over activity and inflation – potentially helped by some liquidity tightening in progress since the first months of the year – are cumulative and will undoubtedly produce effects in the coming quarters. International evidence, as well as the Brazilian experience under inflation-targeting, shows that there are no advantages of sustaining high inflation rates for long periods. On the contrary, high inflation rates lead to higher risk premia, to shorter planning horizons and consequently to lower potential growth of the economy. Its most harmful outcome is the deterioration in income distribution, as low-income brackets are harder hit by the negative effect of inflation on their purchasing power. It is now clearer than ever that fighting inflation generates benefits in terms of decreasing poverty and reducing social inequalities. Thus, the Brazilian Central Bank has acted and will continue to act in order to bring inflation back to the midpoint target of 4.5% promptly, that is, during the course of 2009. This stance is designed to avoid the consolidation of a negative inflationary environment, in which monetary policy would lose efficiency. It should be clear to the public that the Brazilian Central Bank will not have a complacent approach regarding inflation. The Bank is committed to act in order to bring inflation to the midpoint target during 2009.

There haven’t been significant amendments to the Monetary Law Act in that period and our objectives still remain the same; the control of inflation, the promotion of financial stability and banking sector and financial system stability and the thrust for a broader economic development of the whole country, that in a nutshell is what our objectives are, which is very clear, its unambiguous and it has kept us on the straight and narrow path through some fairly challenging periods. I think there are very few central banks in the world that have gone through the sort of events that we have been through, most notably the bomb blast which you know affected us, the physical lives of several of our colleagues and their families and such like over the years. And that was related obviously to the civil strives that this country went through for almost thirty years. Nevertheless I think the central bank has maintained financial stability, we have kept inflation reasonably under control, and the economic development of the country has done reasonably well despite those challenges, which is in no small measure due to the efforts of successive generations of central bankers who have stuck to their principles by and large and kept the momentum of the country moving forward. So it is appropriate for us to take a moment and just accept a little bit of self-congratulation at this point of time.
This is relevant to how banks themselves might estimate risk to their asset portfolios through their internal  16  The definitions of these variables are as follows: capital is the risk-based Tier 1 ratio; asset quality is proxied by loans past due as a per cent of total loans; management is proxied by the cost to income ratio, with lower values pointing to greater efficiency and, in principle, better managerial quality; earnings is measured by the return on assets; and liquidity is defined as US government bonds, cash and deposits with banks as a per cent of total assets. 17  Specifically, from the overall sample of about 8,500 banks, we pick random sub-samples of 100, 250, 500, 1,000 and 4,279 observations. We estimate the models using the smaller sub-samples and use the parameters to predict failure out-of-sample for the remaining 4,279 observations in the dataset. To minimise the risk that our results are distorted by the specific choice of sub-sample, we repeat this exercise 10,000 times. So, for example, we end up looking at the out-of-sample performance of 10,000 estimated models using samples of 100 observations. Throughout, we reject sub-samples if there are no observations of bank failures. 12  BIS central bankers’ speeches  models. It enables us to ask what size of time-series sample is needed before less-is-more effects dissipate. It also enables us to assess the effects of expanding the range of assets on the choice of simple versus complex rules.

By design, Basel II served as an incentive device for banks to upgrade their risk management technology. As a by-product, there was a step change in the granularity of the Basel framework. Risk exposures were no longer captured at a broad asset class level. And risk weights on these exposures were no longer confined to five buckets. That meant greater detail and complexity. Reflecting these changes, Basel II came in at 347 pages – an order of magnitude longer than its predecessor. 10 The ink was barely dry on Basel II when the financial crisis struck. This exposed gaping holes in the agreement. In the period since, the response has been to fill the largest of these gaps, with large upwards revisions to the calibration of the Basel framework. Agreement on this revised framework, Basel III, was reached in 2010. In line with historical trends the documents making up Basel III added up to 616 pages, almost double Basel II. 11 The length of the Basel rulebook, if anything, understates its complexity. The move to internal models, and from broad asset classes to individual loan exposures, has resulted in a ballooning in the number of estimated risk weights. For a large, complex bank, this has meant a rise in the number of calculations required from single figures a generation ago to several million today (Haldane (2011)). That increases opacity. It also raises questions about regulatory robustness since it places reliance on a large number of estimated parameters.
In addition, democratic principles indicate that the preferences of policymakers need to be aligned with those of the society at large.’ Mishkin, F (2004) ‘Can central bank transparency go too far?’ in Kent, C and Guttman, S (eds.) The future of inflation targeting Reserve Bank of Australia. 14  Kohn, D (2005) ‘Central Bank Communication’. Remarks at the Annual Meeting of the American Economic Association January 2005. 15  Mishkin has sympathy for this view, noting that “[w]hen new information comes in and the central bank changes the policy rate from its projected path, the public may see this as reneging on its announced policy or an indication that the central bank's previous policy settings were a mistake. Thus, even when the central bank is conducting its policy in an optimal manner, deviations from its projected path may be viewed as a central bank failure and could hurt the central bank's credibility.”  8  BIS Review 17/2005  The MPC has long published forecasts on two different interest rate assumptions. On one – the constant rate assumption – interest rates are held constant over the entire forecast horizon. On the other, interest rates evolve in line with rates expected by financial markets. Until August 2004, the presentation emphasised the forecast based on constant rates. Since last August we have reversed the presentation, to emphasise the market rate assumption.16 The constant interest rate path is obviously a stylised assumption, which conveys limited information about future policy intentions.

It is not that surprising that a committee of experts whose external members are based in the Bank and who devote at least 60% of their time to monetary policy should get deeply involved in preparing and debating the forecasts that they sign off. It may be more remarkable that nine economists, labouring under the burden of individual accountability, have so far succeeded in signing off 31 editions of the Inflation Report, and found ways of dealing with the inevitable range of views. The nature and role of the forecast Nowadays the forecast has two related roles in the monetary policy process. First, it helps the Committee to set monetary policy by organising, informing and focusing its discussions. And second, it provides transparency about the Committee’s thinking and plays a key part of its public communication strategy.2  Helping the MPC make decisions Monetary policy needs to be forward looking, because interest rates act with a lag. No monetary policymaker can avoid taking a view on the future. That view needs to be coherent and disciplined, and informed by the best information available. But it also needs to reflect a realistic appreciation of the massive uncertainties inherent in any forecast. The MPC spends many hours discussing the projections that go into the Inflation Report and the text that accompanies them.
The FSA brings together within a single organisation responsibility for financial regulation to deal effectively with the oversight of increasingly complex and diverse financial groups. The Bank meanwhile retains responsibility for monitoring the stability of the financial system as a whole. This regulatory structure is designed to provide confidence in financial institutions and markets, whilst not stifling innovation and risk-taking. Indeed the new Financial Services and Markets Act balances the objectives of prudential supervision and consumer protection with an explicit objective of promoting efficiency and competition. •  London has flexible labour markets, and low levels of corporate and personal tax. The UK compares favourably with many other European countries in this regard and has been the beneficiary of high levels of overseas direct investment as a result. BIS Review 11/2001  1  •  English is the language of international finance. •  We are lucky enough in London to find ourselves in a convenient time-zone so that market firms can trade with Asia in the morning and New York in the afternoon. •  And finally, London has great attractions as a place to live! Like Japan, the UK has a long heritage, and a rich culture. The euro is an opportunity for the City, not a threat Since London is an international financial centre, the launch of the euro at the beginning of 1999 was a major event for the City, as well as for the euro area itself.

As you know, the UK decided not to participate in Economic and Monetary Union at the outset. But although the UK is 'out', the City of London is effectively 'in' already. And this is because of the City's international role, making markets and providing financial services, regardless of currency. So the City of London needed to be well prepared for the introduction of the euro in January 1999. And it was well prepared. As a result, London remains a competitive market place for euro business. You can trade euro in London, just like dollars. There is a wide variety of euro payment routes available in and from London. And London is playing a key role in pioneering the development of the euro markets and financial services across Europe. This means that London can, and does, provide a gateway to the euro for Japanese financial institutions. The City of London does not depend on the currency used by the UK. Financial activity will be carried on where it can be carried on most conveniently, profitably and efficiently. The City thrives on deep and liquid markets, regardless of currency. Measured in these terms, we have, over the last few years, seen the euro as an opportunity for London, not a threat. And the City has been taking advantage of this opportunity, since the euro's launch, by innovating and setting standards of excellence in the euro markets.