samchain/econo-pairs-v1 huggingface dataset:
We have seen an almost unprecedented series of such disturbances – unprecedented certainly in modern times. I am going to pick out four which have been at work in the last two and a half years and discuss them in broadly chronological order. I will start with the onset of Covid over two years ago now and its subsequent waves. It is worth briefly recalling the precipitous drop in economic activity at that time, and the speculation that it would be the largest drop in three hundred years. In the end it was very big, but not quite that big. It required a very large response from macroeconomic policy. Monetary and fiscal policy both acted to counter the cyclical downturn, reinforcing one another even as they were implemented independently. Moreover, the response had to be sustained because of the sheer scale of the uncertainty around the impact of further waves of Covid. It is worth recalling that the key aim of policy was to support businesses and households through the crisis, limiting lasting damage to the economy – which could have been compromised by a premature withdrawal of stimulus. Without that policy support, the economy today would be in a much worse position. Moreover, policy is necessarily made in real time, not in hindsight. Remember that we started with no functioning vaccine and the previous average time to implement one for viruses of this nature was 10 years. The second disturbance came with the recovery from Covid.

Page 1  Bringing inflation back to the 2% target, no ifs no buts − speech by Andrew Bailey Given at the Mansion House Financial and Professional Services Dinner  Page 2  Published on 19 July 2022  Andrew Bailey talks about the impact of four recent shocks on our economy. These shocks have pushed inflation up, he says, but we will set monetary policy to bring it back down to our target. Speech Lord Mayor, it is a great pleasure to be here at Mansion House this evening. The return to more normal times allows those of us from the Bank to pop round to our neighbour for an informal light dinner. It is also pleasing that you have been able to resume travelling in pursuit of your important role of promoting the UK and in particular the services of the City. We thank you for that important work. Quite appropriately you have also been keen to ensure that there is a suitable number of events to mark your Irish roots, the strong connections between the City and Ireland, and the rich vein of form of the Irish rugby team. I would like to join you [and the Chancellor] in welcoming Paschal Donohoe. It’s always good to see you Paschal. Chancellor, congratulations on taking up the office. I know from a lot of experience that you will find a warm welcome in the City. In my experience, you will find that people in the City want to get things done.
With greater affluence, households will also become more empowered in expressing preferences and more discerning in making  1  IMF- World Economic Outlook 2014 Update. 2  Emerging Asia definition: South and East Asia excluding advanced countries (Hong Kong. Singapore, South Korea, Taiwan). 3  Swiss Re- Sigma World Insurance in 2004 – 2012. 4  Swiss Re- Global Insurance Review 2013 and Outlook 2014/15. 5  Why Does Population Aging Matter So Much for Asia (Lee et al 2011), Aging, Economic Growth, and Old-Age Security in Asia (ADB 2012). BIS central bankers’ speeches  1  financial decisions. Insurers will need a more tailored approach in ensuring their distribution capabilities are able to effectively deal with different customer segments. Thirdly, advancements in information and communication technology (ICT) have given rise to an era of instantaneous connectivity. According to certain estimations, Internet and smartphone penetration rates in Asia have reached 32% 6 and 43% respectively in 2013 7 Beyond offering new channels for delivery of products and services, ICT has opened up new ways of doing business. The Internet has evolved from being merely a tool for insurers to provide information on products into a competitive marketplace and platform for exchange. In more advanced economies, for example, aggregators have intensified price competition in personal lines insurance business. The advent of “big data”, encompassing technologies ranging from social media to telematics, will significantly augment insurers’ analytical capabilities to enable a more responsive and personalised customer experience, foster process innovation and provide strategic agility through quicker time-to-market.

The Riksbank also has an internal preparation process with broad participation. Finally, we publish the minutes of Executive Board meetings in which the opinion of each member is evident. The latter issue has a different “charge” at European level since there is a risk that a genuinely single monetary policy would be undermined if individual positions were made public. Monetary union and financial stability in Sweden The Riksbank not only has the task of maintaining price stability but also that of promoting a safe and efficient payment system. In light of this, allow me also to say something about the potential implications of entry into monetary union from this perspective. The financial markets in Europe have developed rapidly over the past decade, partly as a result of the fact that the freedom to trade financial services is fundamental to the cooperation in the EU. Competition for the national banks has hardened. The single currency has contributed to the evolution of a far better capital market outside the banks, which has increased competition further. In several large European countries, a process of structural transformation in the banking systems is underway, much like that experienced in Sweden in connection with the banking crisis at the beginning of the 1990s. When competition grows stiffer, it can of course pose a threat to stability, especially if the banks are not accustomed to competition and are also weakly capitalised.
Swiss banks do hold socalled numbered accounts, but a restricted circle of persons within the bank must - by law - know the name of the person(s), i.e. the beneficial owner(s) behind every account. In this regard, the “know your customer rule” is once again essential. Banking secrecy is routinely lifted in the case of criminal investigations and the Swiss judicial authorities have earned high marks for the extent of their cooperation in international criminal affairs, including those involving politically exposed persons. These facts do not mean that our country is especially attractive for criminal money. They rather show that bank secrecy rules are not an obstacle to an efficient and determined action against criminal activities. Let us be frank: the fact that some financial centres only rarely or even never register cases of suspicious transactions is certainly not a proof of integrity but rather of a lack of it. Conclusion Today, we find many financial centres around the globe. They all benefit from easier communication and high capital mobility. Some have a long history of banking activities, others have recently expanded, often by giving foreign investors special legal or fiscal treatment. With its customers from all over the world, Switzerland is as much an offshore centre as London or any other significant financial centre. We do not provide special advantages to foreign investors.

3 Official Norwegian Reports NOU 2017:13 New central bank act. Organisation of Norges Bank and the  Government Pension Fund Global (Summary in English). 4 Lie, E., J. T. Kobberrød, E. Thomassen and G. F. Rongved (2016): Norges Bank 1816–2016. Fagbokforlaget (in  Norwegian only). 5 Between 31 December 2007 and 31 December 2009, the average stake in listed companies worldwide  doubled. 7/7  BIS central bankers' speeches
Finally, I’ll suggest some areas where new research could help push forward the frontier of stress test modeling, both of specific elements that go into the stress test calculation and of the broader impact of the stress testing programs implemented here in the United States and elsewhere. And of course, I need to note that my remarks today are my own and do not necessarily reflect the views of the Federal Reserve Bank of New York or the Federal Reserve System. I believe that stress testing and the CCAR program were the most significant and impactful regulatory and supervisory changes coming out of the global financial crisis. Why do I feel that way? To begin, it helps to remember the prevailing environment that generated the first broad-based supervisory stress tests – the SCAP – in early 2009. It was a period of significant uncertainty – uncertainty about the stability of funding markets, about losses at individual institutions and about losses in the financial system overall. There was a growing cottage industry in estimating global and U.S. financial sector losses on mortgages, mortgage-backed securities and other positions, with projected global losses ranging as high as $ Trillion. 1 Equity prices had plummeted, especially for banks, with declines running far ahead of falls in regulatory capital ratios. As of September 2008, the tier 1 capital ratios of the five largest U.S. bank holding companies ranged between 7.5 and 8.9 percent, well above the then-prevailing 4 percent minimum requirement.

To begin, how do we assess errors from models intended to capture performance under stressed conditions when those conditions have not yet been realized and might not be in the historical data? How can we assess the uncertainty or margin of error around loss and revenue projections derived from models that can be quite complex, often involving multiple estimation steps? Further, since the final stress test calculations are derived from the combination of projections from many different (often multi-step) models, how do we assess the error around the ultimate calculation of stressed capital ratios? How do we measure correlation in model errors in a tractable and practical way? How much model risk owes to the decision to develop complex models for many individual pieces of the net income and regulatory capital ratio calculations instead of using simpler, “top down” estimation approaches? A final tactical research area involves this last point – the role of simpler, easier to estimate models of net income and its key components. Federal Reserve modeling teams have already developed a set of these “benchmark” models that produce loss and revenue estimates as a comparison to the projections from the more sophisticated and complex production models. Creating more of these models – including multiple benchmarks for an individual loss, expense or revenue component, benchmarks that cover the full range of detailed net income elements, and benchmarks at higher levels of aggregation – would enable more robust assessments of supervisory results both across institutions and over time.
The MPC now views the economy’s potential growth rate to be around 1.5%, about 60% of its pre-crisis average. That diminished rate of supply growth reflects the climate of the past few years, with the shallowest investment recovery in over half a century,  12  lower growth in labour supply and modest productivity growth. By the first quarter of this year, UK GDP had increased by 1 percentage point less than the MPC had projected in May 2016. Factoring in the stronger-than-anticipated growth in the European and global economies and more supportive fiscal policy, the shortfall increases to around 1¾%-2%. 11  This was in line with the MPC’s standard approach to condition its projections on the government policy of the time. By contrast, growth in UK total investment outperformed the rest of the G7 in 2017. That reflected strong growth in spending on buildings. Dwellings investment (1.7pp) and spending on other buildings and structures (2.1pp) together contributed 3.8pp to total growth of 4.0%. 12  10  All speeches are available online at www.bankofengland.co.uk/speeches  10  Even without taking those additional factors into account, average household incomes are currently 4% lower than the MPC had expected prior to the referendum, equivalent to over £ per household. 13  Lambda: trade-off management in exceptional circumstances The MPC has repeatedly emphasised that monetary policy cannot prevent either the necessary real adjustment as the UK moves to its new trading arrangements or the weaker real income growth likely to accompany that adjustment.

A negative figure implies output is below potential and a positive that it is above  In the opposite direction, growth could surprise on the upside, requiring monetary policy to be tightened by a little more, a little sooner than in the May conditioning path. For example, if business investment growth were to recover much more strongly than currently projected – perhaps because of improved in sentiment about progress on Brexit – then demand would grow well in excess of supply, pushing inflation above target throughout the forecast in the absence of tighter policy. 19  These scenarios illustrate how guidance, by revealing the MPC’s reaction function, allows people to anticipate how policy will adapt as the circumstances change. The Other Brexit Path Now consider a different Brexit path where the transition isn’t smooth and/or the final outcome is less open than the MPC’s conditioning assumption. The Bank is doing all it can to reduce the risks of the former. We are taking steps to reduce financial stability risks around Brexit, just as we did around the referendum when we engaged in extensive contingency planning with HM Treasury, foreign central banks, and private financial institutions. In particular, the FPC has identified the Brexit “cliff edge” risks and now publishes a quarterly checklist of progress towards their mitigation. Wherever it can, the Bank is reducing Brexit financial stability risks.
And if you think that you have no limits, then you are taught that there are limits by the Ricardian effects, by the financial markets themselves. FT: If you look to the medium term, how do we get to achieve a better balance? How do we avoid, if you like, another wave of volatility based around unrealistic asset prices, or an asset bubble? Trichet: Let us look at the time of the bursting of the internet bubble. There was a degree of excessive pessimism, if I can analyse the real situation after the internet bubble burst. I do not exclude that in terms of macroeconomic policies that were… FT: …in other words that we assumed things were really bad after the bubble burst, and therefore we erred maybe on the monetary side, perhaps…. Trichet: I am not criticising anybody, and I know to what pressure the ECB was resisting at the time. I was appointed at the end of 2003. As early as the beginning of 2004 three Heads of State and Government of large countries were calling publicly on the ECB to decrease interest rates. I suppose with the benefit of hindsight it would appear extraordinary, taking into account what happened afterwards, but it is documented.

Eva Srejber: The power of transparency for macroeconomic discipline Speech by Ms Eva Srejber, First Deputy Governor of the Sveriges Riksbank, at the 10th International Financial Economic Forum, Vienna, 11 November 2004. * * * The crisis encountered by the Stability and Growth Pact has put the new enlarged Europe at a crossroads: either we get our act together and produce better checks and balances in our institutions or we are going to move down a path of looser fiscal policy and tighter monetary policy. Both fiscal and monetary policy need the other to be predictable: a government needs the predictability of a transparent and consistent monetary policy to know how to conduct fiscal policy, and of course no monetary policy will be sustainable if poor fiscal policies lead to a rapid accumulation of debt. This is what Sweden witnessed in the 1980s and the 1990s. In the 1980s we had an unsustainable mix of fixed exchange rates and lax fiscal policy, which led to high inflation and eventually to a crisis that landed us with an even higher mountain of debt. When the regime collapsed in 1992 we introduced a target for inflation of two per cent, which today is hailed as a success. However, the real breakthrough for the new regime was in the mid 1990s when a forceful implementation of fiscal consolidation, supported by a broad political majority in parliament, made the whole macroeconomic set-up credible.
But when asked a subtly different question, about the relative importance of job security for employees versus dividends for shareholders, a strikingly different pattern emerges. A majority of Japanese, German and French company executives put employee job security above shareholder dividends. For UK and US companies, a strong majority place the balance the other way around. This suggests a very different set of managerial objectives and incentives across countries. Empirical evidence on the relatively efficacy of these different models does not give a clearcut answer. Prior to the crisis, some papers pointed to broader stakeholder representation boosting market value (Fauver and Fuerst (2006)), others to it reducing value (Gorton and Schmid (2004)). Experience since the crisis might provide clearer clues. For example, banks with shareholder-friendly boards in general fared worse during the crisis (Belratti and Stulz (2009)). The debate here seems set to continue and this is a place where further research would be valuable. BIS central bankers’ speeches  15  Conclusion Challenges to the shareholder-centric company model are rising, both from within and outside the corporate sector. These criticisms have deep micro-economic roots and thick macro-economic branches. Some incremental change is occurring to trim these branches. But it may be time for a more fundamental re-rooting of company law if we are to tackle these problems at source. The stakes – for companies, the economy and wider society – could scarcely be higher.

What a Difference a Decade Makes Mark Carney Governor of the Bank of England Chair of the Financial Stability Board  Remarks at the Institute of International Finance’s Washington Policy Summit, the Reagan Centre, Washington DC 20 April 2017  I am grateful to Alice Carr, Wayne Chapman, Carsten Jung and Iain de Weymarn for their assistance in preparing these remarks. 1  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  Introduction It’s a pleasure to be back at the IIF’s Washington Policy Summit. 1  Last time I spoke here (in 2011) it was still early in the international financial reform process. From the IIF’s perspective at the time, there were three major concerns: -  The consistency of implementation across the G20;  -  The possibility of significant regulatory arbitrage in shadow banking; and  -  Whether the FSB/G20’s ambitious agenda would impair the recovery. Today, those debates have largely been settled. First, the new international minimum standards are being, by and large, consistently and promptly implemented in G20 jurisdictions. This progress is regularly assessed and transparently reported by the FSB 2  and the IMF. And in general, when countries have deviated from international standards, it’s because they have chosen to go further. Second, activities which give rise to similar risks are being treated consistently regardless of where they originate. A series of measures have addressed the major regulatory arbitrage opportunities that encouraged shadow banking. Contingent exposures of banks have been brought on balance sheet and appropriately capitalised.
Digital payments could entail greater data on users’ identities and transactions being centrally visible. The data generated could have huge opportunities for the detection and prevention of financial crime, but this must be balanced with the risk of surveillance into private financial matters. These questions, as well as issues of encouraging inclusion and promoting competition, are not ones for central banks and regulators alone to answer. They go the heart of how we use money and who should be responsible for safety and security. There needs to be a wider debate between policy makers, governments and society as a whole. 9  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  9  Conclusion  We have reached the point in the cycle of innovation in payments where it is essential that we set the standards and thus the expectations for how innovation will take effect. It should not happen the other way round, with the standard setting playing catch up. The answer is not to strangle innovation, and it does therefore require a strong dialogue between the parties, which I think we have. It also requires the sort of thoughtful input that Brookings scholars have made. If I can end with one overarching point, I think the public expects its payments to carry the assurance of value that comes with money. At this point, my mother would have said firmly to me, “Thank you for that statement of the blindingly obvious”.

This baseline set of expectations will help avoid regulatory fragmentation and is an important and necessary step. But alone it is not sufficient. Existing standards must be examined and updated where necessary. There needs to be a clear G20 mandate for the various sectoral standard-setting bodies to consider their standards and whether they need to be refreshed or clarified in light of stablecoins. This is necessary to truly deliver on the principle of same risk - same regulation. The Committee on Payments and Market Infrastructure (CPMI) and International Organization of Securities Commissions (IOSCO) are working to ensure that it is clear to stablecoin developers how international standards of regulation and supervision for financial market infrastructures, including payment systems, (the Principles for Financial Market Infrastructures – PFMI) will apply to them, including where stablecoins are used in systemic payment systems. Other standards setters, such as the Financial Action Task Force (FATF) and the Basel Committee on Banking Supervision (BCBS), will need to respond as well. Coordination between regulators is essential too. In particular, host regulators of global stablecoins must, and are, working with other regulators in other jurisdictions to ensure that they are appropriately regulated and gaps in coverage, opportunities for regulatory arbitrage, do not emerge. The Bank looks forward to the conclusions of the FSB’s consultation, and the subsequent finalising of international work, to ensure a comprehensive framework can be in place. Current proposed global stablecoin offerings will need to demonstrate how they meet these key domestic and international standards.