samchain/econo-pairs-v1 huggingface dataset:
10  In countries where supervisory competences lie with an institution other than the central bank, a representative of the latter can also attend meetings, although only one vote per country is counted. 11  To prevent conflicts of interest between monetary policy and supervisory powers, the ECB ensures a separation of objectives, decision-making, processes and tasks. This includes strict separation of the Governing Council’s meetings. 12  This procedure does not apply to ECB decisions relating to its general framework, which are adopted by the Governing Council in accordance with the ECB’s standard procedures, following a proposal of the Executive Board. Nor does it apply to macroprudential decisions, which are proposed by the Supervisory Board and may be approved, rejected or amended by the Governing Council. 5  draft decision (which has not yet been the case), it is returned to the Supervisory Board, which will examine the Governing Council’s reasons and submit a new draft decision. To resolve any differences of views expressed in this interaction, the SSM Regulation provides for the creation of a Mediation Panel, on which each Member State has a representative chosen from among the members of the Governing Council and the Supervisory Board. This mediation process is activated at the request of one or more NCAs, when they fail to agree with the rationale for the objection raised by the Governing Council.

This involves the favourable vote of half of its members with voting rights plus one (11), where abstentions count as a “no”. In the event of a tie, the President has the casting vote. Monetary policy decisions are adopted by simple majority.4 Adoption of decisions by the written procedure at the Governing Council The Governing Council adopts a large number of decisions on a daily basis using the written procedure (Art. 4(7) of the ECB's Rules of Procedure). More than 1,200 decisions were adopted using the written procedure in 2019; less than 1% of them had to be submitted to a physical meeting to facilitate discussion, after comments had been received from Council members. 1.4 The General Council of the ECB The General Council of the ECB is composed of the President and the Vice-President of the ECB and the governors of the NCBs of all 27 EU Member States. It meets every three months and decisions are adopted by simple majority, unless provided otherwise by the Statute of the ESCB. The President of the ECB must keep the General Council informed of the decisions adopted by the Governing Council. Under the Statute of the ESCB, the 3  As from 1 January 2015, when Lithuania joined the euro area and the number of 18 countries was exceeded, a system of rotating voting rights, agreed by the EU Council in 2003, came into operation in order to ensure that the ECB would be able to continue to take decisions efficiently and swiftly.
In contrast to the United States, slower growth of external demand was not sufficiently offset by stronger domestic demand growth in the Eurozone, so that, instead of the expected pick-up in overall output growth, activity in fact increased progressively more slowly. Largely as a result, the euro has depreciated in the foreign exchange market and economic performance in individual participating countries has diverged more than might have been expected. This has been a disappointment to some proponents of the euro and has been seized upon by eurosceptics as evidence of its risks. We need to be cautious, in my view, in interpreting this initial experience in the present unusually difficult global economic environment. As demand strengthens in the Eurozone – and the latest indicators from Germany are more encouraging – the likelihood is that the euro will recover and some of the present tensions ease. It has always been clear that there are potential risks of economic divergence within the Euro area to be weighed against the more obvious potential economic benefits of the single currency. The question has been just how significant are those risks likely to be. That will, ultimately, always be a matter of judgement. But it would be premature, in my view, to reach that judgement based on today’s abnormal circumstances. Now we, in this country, have of course been battered about, like everyone else, by the global turbulence. There is no way that we could have avoided its impact – either through fiscal or monetary policy.

When we think of “innovation and disruption”, it usually brings up images of companies acting to ward off imminent threats from challengers to their business. “Innovation and sustainability” on the other hand, focuses on opportunities to do things better, increase long term value and strengthen a company’s agility to adapt and respond to changing conditions. Put another way, “disruption” often keeps an eye on your competitor, while “sustainability” focuses attention on the customer and understanding one’s own inherent strengths and weaknesses to build stronger, more responsive and more resilient companies. It would be a mistake to associate innovation solely with technology, or assume that it can only be achieved with huge investments in research and development. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. Steve Jobs underlined the point that innovation is not about the money, but the people you have, how you’re led and how much 2/4  BIS central bankers' speeches  you get it. Einstein famously said that “we cannot solve problems with the same thinking we used when we created them”. He reminds us that innovation is fundamentally concerned with solving problems, having an open mind to ideas and the ability to convert those ideas into an organized and disciplined process to create a positive and lasting impact. Viewed in this perspective, the frontiers of innovation are almost boundless; limited only by our ability to define problems and our imagination.
Finally, I will offer some reflections on the regulation of hedge funds. Definitions surrounding hedge funds and the hedge fund industry can give rise to confusion. In many ways, the word “hedge” has little definitional value.2 Hedge funds are best understood as potentially leveraged private investment vehicles deploying a wide range of largely unconstrained investment strategies with the aim of achieving high absolute rates of return. Hedge fund managers typically invest a share of their personal wealth in their own funds in order to align their incentives with the interests of the external investors. Hedge funds usually have a dual fee structure. The investor pays an annual management fee of 1% to 5%. In addition, most hedge fund managers charge incentive fees on capital gains. These incentive fees vary between 20% and 50%. Many hedge funds impose investment lock-in periods of anywhere from one to three years. During these lock-in periods, principal and in many cases profits cannot be withdrawn. During the last decade, the hedge fund industry has steadily grown in size. In 1990, there were an estimated 2000 hedge funds managing around USD 40bn. In less than 15 years, these numbers have increased dramatically.

This is high compared with the 0.2 achieved by equities and the 0.5 achieved by US bonds since 1994. Admittedly, such aggregate return data need to be interpreted carefully.6 Nonetheless, the available industry databases are useful in identifying broad trends within the hedge fund industry. Hedge funds and market volatility Throughout the last twenty years, it has become conventional wisdom to associate hedge funds with extreme market volatility. The premise is that hedge funds push market prices temporarily away from their equilibrium, either in the short- or the medium-term. The traditional counter-argument sees hedge funds fundamentally as stabilizing market participants who identify arbitrage opportunities, take profits as these inefficiencies get eliminated and provide the market with liquidity. A survey of available analytical work suggests it is difficult to conclude that hedge funds decisively and adversely affect market volatility. This raises the question of whether direct observation of market price action can provide us with additional clues. One area worth examining is the macro and the managed futures segment of the hedge fund industry where recent inflows have been substantial. A number of markets that hedge funds in these strategies are typically engaged in have recently become more liquid as demonstrated, for example, by the increase in turnover and rise in non-commercial positions in the gold and oil futures markets (graphs 3 & 4). Market observations also suggest that many technically driven hedge funds appear to hold similar positions on the basis of trading systems, driven by related trigger points.
This eventuality transpired in the market tensions that emerged in late September, following the then-Government’s mini-budget announcement.13 A number of my colleagues have already described the events surrounding the decision to postpone the scheduled start of QT gilt sales in early October, as the Bank implemented financial stability operations in the form of additional gilt purchases, including purchases of indexed gilts.14 I won’t repeat that detailed description here, other than to flag that these operations were intended to restore market functioning in long-dated government bonds and reduce risks from contagion to credit conditions for UK households and businesses. Rather I will conclude with some more general observations about the relationship between monetary policy decisions taken by the MPC and financial stability operations conducted by the Bank. Not much of this is new – indeed, I have written about these issues in the past,15 colleagues at the Bank have published an overview of their research into asset purchases in a recent Quarterly Bulletin article,16 and the Bank has taken a leading role in international forums such as the Bank for International Settlements where  Bank of England  Page 9  the role asset purchases can play in promoting monetary and financial stability.17 So I simply offer a few general high-level remarks to frame our discussion this evening.

“UK Monetary Policy – ‘Crossing the river by feeling the stones,” speech given at the Confederation of British Industry, Newcastle upon Tyne. Bank of England  Page 14  Pill, H. (2019), “Whatever it takes within our (new?) mandate” in R. Barwell and J. Chadha (eds.) Renewing our monetary vows: Open letters to the Governor of the Bank of England, pp. 37–54 (London: National Institute of Economic and Social Research). Pill, H. (2010). “Monetary policy in a low interest rate environment: A checklist,” NBER International Seminar on Macroeconomics 6(1), pp. 335-345. Tenreyro, S. (2022). “The economy and policy trade-offs,” Dow Lecture, National Institute of Economic and Social Research. Bank of England  Page 15  Endnotes 1  2  3 4  5 6 7 8  9  10 11  12  13  14  15 16 17 18 19  20  See: Vickers (2022). “The regulation of inflation: Reflections on 25 years of the MPC,” Beesley Lecture, 9 November 2022. The MPC’s communication following its 3 November 2022 meeting set out why both the market-implied path of future Bank Rate and the path where Bank Rate was maintained at a constant 3% level were seen as inappropriate given the prevailing economic circumstances. This is a form of guidance. But the preferred outlook for Bank Rate was left to be determined by the evolution of the data. See: Evans et al. (2015) for an articulation of this approach.
Caleb M Fundanga: Narrowing Zambia’s investment gap for sustainable development Keynote address by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the EuroMoney Zambia Investment Conference “Narrowing Zambia’s investment gap for sustainable development”, Lusaka, 10 June 2008. * 1.0  *  *  Introduction  Over the recent past, the Zambian economy has performed relatively well. This is reflected in the positive growth rates in real Gross Domestic Product (GDP), low inflation, relative stability in the exchange rate of the Kwacha against major currencies, stable financial sector and improved banking services. The recent impressive economic trends suggest that the reform programmes that have been pursued are working and bearing fruit. These reforms have focused on the restructuring of the economy, to let markets determine prices, shift production decisions from the Government to the private sector and provide an enabling environment for increased investment. This has led to a stable macroeconomic environment and has provided a basis for growth. However, the challenge that still remains is that of meeting the basic needs of Zambians in order to uplift their living standards. Equally, the economy still has low savings needed to finance development activities and therefore needs more foreign capital to expand its productive capacity and create more jobs that contribute to the uplifting of people’s living standards. Zambia is a country with abundant natural resources and human capital.

Mugur Isrescu: The most important economic decision Nations have ever faced Lecture by Mr Mugur Isrescu, Governor of the National Bank of Romania, at the Bitcoin versus Central Bank Digital Currency conference, Bucharest, 6 April 2023. *** Ladies and gentlemen, good afternoon! Thank you for attending this conference on the topical issue of cryptocurrencies and central bank digital currencies. Today I have the pleasure of welcoming and introducing our distinguished guest speaker, Ms. Sundri Khalsa, Professor at the National Intelligence University - known as "the Harvard of the intelligence field", and a US Marine Corps Veteran. Welcome, Professor Khalsa, to Romania and to the National Bank of Romania! Sundri Khalsa's background also includes being a Professor at the United States Naval Academy, Director and Instructor of the Marine Corps Military Occupational Specialty training school, where she trained and certified Marine Corps Signals Intelligence and Electronic Warfare Officers. She is an expert with field experience in Signal Intelligence and information support for integrated military operations. Let me add that her studies also include degrees from Harvard University, John F. Kennedy School, with additional certification in Management, Leadership and Decision Sciences, University of Virginia (with specialization in chemistry and biochemistry) and New Mexico Military Institute (where she was awarded the science scholar awards in physics and chemistry). Her book "Terrorism Forecasting: Indicators and Analytical Techniques" is on the CIA's reading list and used in university courses.
Although the outcomes were not caused by currency arrangements per se, it is hard to avoid the conclusion that regimes with limited exchange rate flexibility linked to the dollar at undervalued exchange rates frustrated one channel through which relative prices might otherwise have adjusted in a way to induce more balanced global growth. It is clear that the pre-crisis formula for global growth was not sustainable. This is obvious in the case of industrialized nations where private consumption and fiscal deficits reached unsustainable levels and needed to be cut back. Less obviously, this is also the case for EMEs, as growth strategies that rely on excessive consumption elsewhere in the system are no longer viable. Put simply, we now have a problem of arithmetic – particularly for China as the largest and most dynamic EME. BIS central bankers’ speeches  3  As China becomes increasingly weighty in the global economy, it will not be able to sustain export growth in the high teens annually3 in a world that is growing (ex China) at less than 4 percent a year on average. For China, the business fixed investment side of the ledger also appears unsustainably high as a share of GDP. In this context, China’s ongoing rapid accumulation of foreign exchange reserves, which carries real economic costs, seems less a sign of strength than an indication of how difficult it is to shift to a different growth path. The financial crisis did not cause the old growth patterns to become unsustainable. They already were.

For example, if the United States had adopted different policies, it might have shifted the composition of growth toward more business investment and less consumption and housing. But in a disinflationary global environment amid chronic EME trade surpluses, the United States could not achieve a high level of employment with a high level of national saving. Looked at from the lens of the emerging world, sustained consumption demand in developed nations induced the EMEs to continue to emphasize investment and exports. This meant that still poor populations did not reap the full benefit of their labors in the form of increases in real income and consumption commensurate with the gains achieved in productivity and output. Also, this system led, in many cases, to poor returns to EME savers. This resulted, in part, from the cost of sterilizing reserves accumulated in the process of managing exchange rates and the use of the banking system as a tool of industrial policy. While it is tempting to draw a line of causation from actions in one part of the global system to the other, this is overly simplistic. Rather, we have to think of the global economy as a single system, with outcomes based simultaneously on all the choices and preferences throughout the system. What is new is that the so-called periphery is now weighty enough to have a large impact on the pattern of economic activity in the core, as well as vice versa.
Ethical guidelines for the exclusion of companies from the GPFG were established by the Norwegian authorities as early as in 2004. Under the guidelines, the GPFG must not be invested in companies producing tobacco or certain types of weapons, or with significant coal-related operations. Companies may also be excluded if there is an unacceptable risk that the company contributes to or is responsible for certain types of behaviour. The GPFG’s guidelines for excluding companies show that there is some money Norway says no to. There are some products and some types of behaviour the GPFG’s owners do not want to be involved in, whether or not they contribute to financial return. In 2015, the Ministry of Finance decided that the responsibility for excluding companies, based on criteria laid down by the political authorities, should be transferred to Norges Bank. The Executive Board’s decisions are based on recommendations and assessments provided by the Council on Ethics, which is independent of both the Ministry and Norges Bank. Chart 10: Exclusions are not insignificant At the beginning of 2018, 133 companies, corresponding to a market value of around NOK 200 billion, had been excluded from the GPFG.8 This is a substantial amount, but only a small share of the fund. There is an inherent paradox in using exclusion as a responsible investment instrument as it transfers ownership shares to investors who do not regard the company as problematic in the same way.

Broad diversification can therefore reduce the total risk of a portfolio, without necessarily lowering the expected return. Systematic risk is risk that cannot be eliminated through diversification and is the risk associated with market returns that must be accepted when investing in global financial markets. This is the risk that an investor can expect to be compensated for and that delivers a higher expected return. For the GPFG as a long-term investor, short-term fluctuations are not the most important factor. Periods of weak economic growth occur in all countries. Investing in a broad range of assets reduces the risk of the return being dominated by such a period. The objection could be raised that international capital markets have become increasingly interwoven. Equity markets in different countries are correlated to an increasing extent. Common factors will often dominate in acute crises. At the same time, it seems likely that the more fundamental features of an economy are more important in the slightly longer term, as exemplified in the chart. The calculations are based on a data set for equities and ten-year government bonds in 42 countries through all or parts of the period 1950–2016.5 The lines show the five percent worst outcomes for the value of two different portfolios for different time horizons. The light blue line shows a portfolio diversified across a large number of markets. The dark blue line is a portfolio invested in a single country.
At times, we adjust our purchases when certain market functioning indicators suggest that particular securities are less readily available for settlement relative to other securities.11 As it has always done, the Desk closely monitors how its activities impact financial market functioning. Good market functioning is integral for the successful implementation of the FOMC’s directive and for the effective transmission of monetary policy to the real economy. When evaluating market functioning, we consider measures of market activity, such as trading volumes, bid-ask spreads, trade sizes, quote sizes, financing costs, and settlement fails, as well as other indicators. We also monitor the performance of our operations (for example, the prices at which we can execute in comparison to prevailing market quotes or the total amount of competitively priced propositions), the concentration of market participants’ holdings in securities with certain characteristics, the extent and concentration of dealer participation in operations, and the pace of settlement of our MBS purchases. Based on these types of measures, purchases of both Treasury securities and MBS have gone smoothly so far, and market liquidity seems to be holding up well. In addition to this monitoring, we have developed active policies to help prevent market dysfunction as a result of our operations. In the Treasury market, the Desk ceases purchases of a specific security once SOMA holdings of that security reach 70 percent of the outstanding stock.

Svein Gjedrem: The economic outlook and monetary policy Speech by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at SR-banken, Stavanger, 18 March 2005. The speech is based on the assessments presented at Norges Bank’s press conference following the Executive Board’s monetary policy meeting on 16 March, Inflation Report 1/05 and on previous speeches. The text below may differ slightly from the actual presentation. The  Charts in pdf-format can be found on the Norges Bank’s website. *  *  *  The Norwegian economy is growing at a solid pace, and there are prospects that growth will remain high in the year ahead. The recession was mild after the preceding expansion culminated two and a half years ago. The higher rate of cost inflation in Norway relative to other countries was broken without production being impacted to the same extent as during the recessions in the early 1980s and around 1990. One of the main reasons for this is probably that low inflation in the 1990s and the current monetary policy have anchored expectations of low and stable inflation among economic agents. The need to bring down inflation was the main reason why New Zealand, the first country to do so, introduced an inflation target for monetary policy at the end of the 1980s. Canada, the UK, Sweden and Australia followed suit later in the 1990s. Inflation targeting has gradually become the normal monetary policy system in developed economies. In Norway, the Government introduced an inflation target in 2001.