samchain/econo-pairs-v1 huggingface dataset:
How should we think about moral hazard and the long term effect of the use of the Federal Reserve's Section 13(3) powers on the evolution of financial markets and the economy, as well as official sector responses to future economic crises? In responding to a crisis, how should the official sector best calibrate its lending response through the central bank, compared to its spending response through the fiscal authorities? And, in an emergency like the COVID-19 pandemic, where should decisions about the allocation of resources in the economy rest? If independence is prized in allocating emergency aid, should there be a new, independent agency with responsibility for economic investment?23 These are interesting theoretical questions. In practice, however, the Federal Reserve is what Congress has made it. Its coordination with Treasury and its administration of economic relief proceed as Congress has directed. Looking Ahead I would like to leave you with some observations on challenges still ahead of us—in the near term, medium term, and long term. Near-term challenges—those arising within the next twelve months—are many. To manage them, I commend to you Martin Wolf's advice: "Above all, make sure we get through this. That is our chief aim. "24 Like many of you, I have confronted new legal and compliance questions arising from a remote workforce, and have had to balance new priorities against ongoing commitments. To get through this, we have to do both. We have to walk and chew gum at the same time.

It is almost impossible to imagine today’s welfare level without the specialisation brought about thanks to a world of open borders. Norway exports a limited range of goods and services to the world market. This allows us to finance imports of numerous finished goods, which are cheaper than if we had manufactured them at home. Labour is thereby freed up for use in education, health and other services. Access to capital and technology abroad has enabled us to develop new industries based on domestic natural resources. Hydropower and the oil industry are prime examples. We now invest our petroleum wealth in capital markets. The Government Pension Fund Global (GPFG) allows Norway to take a share in global value added. We need other countries – more than they need us. The foundation for today’s global trade cooperation was laid in the years following the Second World War. Institutions such as the IMF and the World Bank fostered closer economic cooperation between countries. The ratification of the General Agreement on Tariffs and Trade (GATT) marked the beginning of a gradual reduction of tariff barriers, which culminated in a rulebased, multinational trade system under the aegis of the World Trade Organization (WTO). 1/6  BIS central bankers' speeches  History has shown that the trend towards a more open and liberal world order can reverse, as seen in the interwar period. This may now be happening again. Brexit, the UK’s exit from the EU is the first major setback for European integration in several decades.
Admittedly, Europe has already taken bold steps to increase its capacity to detect and handle crises. During the crisis years, two new intergovernmental treaties were introduced, paving the way for strengthening economic and fiscal stability by creating the European Stability Mechanism. This key instrument provides financial assistance to countries in difficulties and, as recently agreed, may also act as a fiscal backstop in banking resolution processes. New procedures for the surveillance of imbalances (the Macroeconomic Imbalances Procedure) and the reform of the Stability and Growth Pact were also agreed. In the financial arena, important reforms, such as the creation of the Single Supervisory Mechanism and the Single Resolution Mechanism for significant banks, were implemented. On top of this, the impulse of monetary policy, with a substantial broadening of the ECB’s monetary policy toolkit, was also a crucial factor that helped cope with the Euro crisis and its negative impact on price stability. Attempts to draw comparisons between the governance framework in the United States and the European Union should be mindful that the US currency union has had 150 years to evolve, while the European currency union is still rather young. Nonetheless, it is precisely with this long-term perspective that we have to judge EMU. All in all, while acknowledging the relevance of the various institutional changes made, a broad consensus points to the fact that additional reforms are needed in the EU’s architecture, and in particular in the architecture of the European Monetary Union.

Jean-Claude Trichet: Interview in Bild Interview with Mr Jean-Claude Trichet, President of the European Central Bank, in Bild, Germany, conducted by Mr Oliver Santen and published on 15 January 2011. *  *  *  Mr Trichet, in one word, how would you describe the state of the euro today? If you allow me two words: credible and stable. Will the euro crisis get worse this year? Let me be very clear: this is not a crisis of the euro. Rather, what we have is a crisis related to the public finances of a number of euro area countries. All governments have to put their finances in order, and above all those governments and countries which have lived well beyond their means in the past. How are the euro area countries ever to reduce the debt, now totalling € trillion? This year, the budget deficit in the euro area will be half as high as that in the United States or Japan. Virtually all advanced economies face acute fiscal problems. This is something that is often forgotten. That being said, this is no time for any complacency. Let me repeat: the ECB expects the governments in the euro area to make enormous efforts to bring down their debt. Some countries have to get their debt under control again. Can you understand that many Germans are afraid of inflation? The Germans are right to be fiercely against inflation. Inflation hurts in particular the poorest. Price stability is a precondition for growth.
That has contributed to easing the pressure on the risk premium and smoothed the way for agreements in Europe, under the Stability and Growth Pact and the Excessive Deficit Procedure. The European authorities agreed last July to allow a milder fiscal adjustment path for Spain, in particular for 2013 and 2014, which is more consistent with the current macroeconomic conditions and those that will prevail in the coming years. For this improved credibility to take root, the deficit targets must be met. Information on the budget outturn in 2013 is still limited. In the first half of the year, the deficit improved relative to the same period a year earlier (without considering the impact of the assistance to the financial sector which, as is known, does not count for these purposes). The budget outturn in the second half of the year must, therefore, be very strict at all levels of government if slippage is to be avoided at the end of the year. While there are risks, I trust we can meet the target this year of cutting the deficit to 6.5%. The headway in budgetary consolidation should not mask the fact that the effort needed to ensure Spanish public finances are redressed is still most considerable. Let us not forget the distance still existing between the present situation and the requirement set in the Stability Pact and in the new Budgetary Stability Law for the medium term, which is to have a structural balance in equilibrium.

An effective internal control system is critical for providing reasonable assurance and producing appropriate timely information by the organization that would help in discovering and correcting errors promptly. Such a system will also promote the organization's operational efficiency and ensure compliance with managerial policies, laws, regulations, and other prescribed mechanisms. BIS Review 83/2007  1  Effective risk management is based on a foundation of good corporate governance and rigorous internal controls. Risk identification in all activities is a core function of any financial institution. At the same time, the institution must have in place the technical systems and management processes necessary to effectively measure, monitor, and control risks. An effective risk management and control structure must be supported by an institutional culture that ensures that written policies and procedures are actually translated into practice. The institution's culture is determined by the philosophy and the behaviour of its board of directors and the senior management. In particular, the actions of senior management and consistency of their decisions and behavior with the values and principles they articulate are critical in shaping the institution's culture. It is vital that senior managers should emphasize their commitment to ethical behaviour, effective risk management and rigorous controls and that these principles should be continuously applied to all levels of the organization. The other important factor that supports financial stability is effective market discipline, which also contributes significantly to good corporate governance.
This suggests that policymakers, faced with the economic conditions of that period, weighted deviations from their goals in a manner similar to the weights used in these versions of the Taylor Rule. Despite these attractive features, I do not believe that simple policy rules can take the place of in-depth analysis of economic conditions, evaluation of alternative policy plans, and ultimately policy judgment. While simple policy rules provide useful information to policymakers, their very virtue – simplicity – means they cannot capture all information that is relevant for policymaking. For example, such rules cannot easily incorporate asymmetric risks or financial stability issues. Moreover, the usefulness of simple policy rules depends critically on the stability of the relationship between monetary policy and economic outcomes.

To some degree, this likely reflects the anchoring exerted by stable inflation expectations. But some of the price pressures can be attributed to other, more temporary, factors:   Higher oil and gasoline prices and their pass-through into the costs of other goods and services.   Upward pressure on imputed homeowners rents due to increased demand for rental housing.   Higher import prices for goods, such as apparel. This reflects many factors including commodity prices pressures and higher wage inflation in countries such as China. Some of these upward pressures on inflation appear to be fading. Oil and gasoline prices have fallen in recent months. Apparel price inflation should gradually ease, given the sharp drop seen in cotton prices. Owners’ equivalent rent should also eventually stabilize as multi-family construction picks up and programs that shift real estate owned by banks to investors so they can be rented gear up. More generally, there are several reasons to think that inflation will remain moderate and close to our objective. First, and most obviously, the economy continues to operate with significant slack. Second, measures of underlying inflation show little upward pressure. In fact, one – the Federal Reserve Bank of New York’s Underlying Inflation Gauge – is turning down. This measure uses a very wide set of variables to forecast the underlying inflation trend (Figure 6). Third, it is hard to be very concerned about inflation risks when the growth rate of nominal labor compensation is so low and stable.
François Villeroy de Galhau: New ideas for Europe Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, Munich, 15 February 2018. * * * Mr. Prime Minister, Ministers, Dr. Theo Waigel, Ladies and Gentlemen, It is an honour for me to speak here this evening, following on from my compatriot from the Saarland, the Finance Minister, Peter Altmaier. I am 100% French, but with family roots in Germany that go back two centuries... and Dr. Altmaier even represents my town of Saarlouis in the Bundestag. However, all honour today goes to Munich and to Bavaria, and I would like to thank Dr. Theo Waigel for so kindly inviting me. Dr. Waigel, you played a key role in the construction of our European currency. I would like to repeat the words that you used before the Bundestag in April 1998 in anticipation of the transition to the third phase of our Economic and Monetary Union: “After two devastating and painful world wars, the European project is opening up opportunities to our children and grandchildren that our mothers and fathers, our ancestors, would never have dared dream of".1 Twenty years later, we can state that monetary union is a success: 74% of euro area citizens support the euro, and this figure is as high as 81% in Germany. The Economic Union on the other hand, has not yet fulfilled its potential. And that is a concern for two reasons.

In the medium term, the renewed service will enable access with a simpler and more proportionate onboarding processes including streamlined testing requirements and interfaces such as Application Programming Interfaces (APIs). And increasing capacity significantly to facilitate more participants. This in turn should support greater innovation and competition within the payments sector in the future. Wider interoperability: Further down the line the CHAPS implementation of ISO 20022 will align with the UK’s forthcoming new retail payment system – the New Payments Architecture (NPA) for retail payments. The implementation of a common messaging approach – through the UK’s ISO 20022 Common Credit Message (CCM) – will deliver wider interoperability between payment types and makes it easier to switch between payment systems should the need arise. The Bank also continues to work with other central banks and operators to ensure that as a global standard, this provides greater interoperability and harmonisation with other international payment infrastructure – leading to an improved user experience, more efficient fraud detection and increased efficiency. Improved user functionality: The new system will be designed to better support the needs of users, for example enhanced liquidity management, the introduction of APIs and greater data availability. 3/6  BIS central bankers' speeches  Strengthened end-to-end risk management: Since the operation of CHAPS was brought inhouse in November 2017, we have introduced a more robust system with greater oversight and governance.
It took a certain boldness to stake a place in international finance, constant supervisory vigilance, and sound leadership of the local banks which have been the anchor in the financial system. We earned the respect of both markets and regulators internationally. •  As Mr Lee Kuan Yew put it, “We had to fight every inch of the way to establish confidence in our integrity, competence and judgement.”  BIS central bankers’ speeches  1  11. This evening, I will talk about two important initiatives for Singapore’s financial sector, that will buttress the foundations for its future progress: •  First, MAS will rationalise the regulatory framework that has distinguished the domestic and international banking operations, taking into account market developments over the years and global regulatory changes over the last half decade. •  Second, we will introduce several manpower and talent development initiatives to ensure a strong Singaporean core across the range of activities in the financial sector. Removing the DBU-ACU Divide 12. Let me start with the regulatory framework that has distinguished domestic from international banking in Singapore. 13. The creation of the Asian Dollar Market (ADM) in 1968 was a path-breaking step. It put Singapore on the map of international finance. It also enabled our financial sector to serve as a major source of funding for the investment, trading and risk-management needs of a growing region and beyond. 14.

The DBU-ACU divide served us well for decades, but has been losing its relevance. There are a number of reasons for this development. First, since 2004, our developmental incentives have no longer been based on the domestic vs offshore distinction. Second, the divide between domestic and offshore banking has in practice become increasingly porous. 19. Third, and most importantly, there have been major global regulatory developments in the last five years, that have resulted in banks’ offshore activities being subject to rules that are broadly similar to those governing the domestic banking business in Singapore. 2  BIS central bankers’ speeches  •  New global rules have increased the amount and quality of capital as well as the liquidity buffers that banks need to hold  •  Global regulators have also agreed on a common framework to control large exposures to a single counterparty  20. These global regulatory reforms have put all banks on a sounder footing. It has also reduced the relevance of MAS rules that distinguish between offshore and domestic banking activities of foreign banks, since home regulators will now be requiring their banks to meet enhanced standards on a group-wide basis. 21. Post-global financial crisis, we have also seen a strengthening of co-ordination among home and host regulators. MAS is an active member of the global Crisis Management Groups of regulators of foreign banks with significant operations in Singapore. This aims to enhance regulators’ preparedness and coordination in crisis management. 22.
So, what have we learned about the appropriate level of the cap? It seems likely that having a very elevated aggregate capacity was helpful in controlling market rates initially, perhaps because it showed the FOMC’s commitment to achieving interest rate control, but it’s unclear exactly how much available capacity, or “headroom,” is needed to maintain such control. By way of background, determining the appropriate level of capacity involves striking a balance between the “lenses” I discussed earlier. Imposing a limit on the facility’s capacity reduces the extent to which there can be a disruptive surge of funds into the facility and the extent to which private-sector investors can change their lending patterns by using the facility. Thus, such a limit helps avoid financial instability and unintended effects on the structure of the financial system. However, a limit that is perceived as likely to bind weakens our control of interest rates, because when demand exceeds capacity, the interest rate paid on the ON RRP facility is determined by an auction and is likely to be below the offering rate, thus reducing the efficacy of the facility in supporting the federal funds rate.43 Our recent experience suggests that having reasonably high aggregate capacity can help improve control without necessarily encouraging greater use of the facility. When that capacity is great enough, money market lenders are confident that they will be able to place funds with us at the administered rate, even on financial statement reporting dates.

As a result, to achieve the FOMC’s desired level of the federal funds rate, the Open Market Desk at the New York Fed (Desk) estimated the amount of reserves to add or subtract that would intersect supply and demand at the target interest rate directed by the FOMC.5 All else equal, if the Desk wanted interest rates to go up, it slightly reduced the amount of reserves; if it wanted rates to go down, it slightly increased the amount.6 So long as the Desk was able to effectively forecast the appropriate amount of reserves to add or subtract, temporary open market operations provided it with an efficient means to add or subtract them, and therefore allowed for good control over the federal funds rate.7 These operations were conducted as repos or reverse repos secured by Treasury securities or other high-quality collateral.8 Back then, a typical day on the Desk focused on forecasting the demand for reserves created by reserve requirements and other sources, and projecting autonomous factors affecting reserves.9, 10 With very small amounts of excess reserves in the system, there was a straightforward relationship between rates in a range of money markets. Thus, the Desk was able to target a rate in one part of the unsecured market by conducting small secured operations as needed with primary dealers. Since the financial crisis, the environment has changed in two important ways.
For instance, we now have a far more stringent and more harmonized definition of regulatory capital. The need for common and internationally harmonized capital and liquidity requirements has been broadly recognized and will be made operational in the near term. Basel 3 represents therefore an ambitious goal. At the same time, it has been set in a cautious way in order not to impact the financing of the economy and the global growth. Those latter points are the reasons for the rather long phasing in, that has been put in place by the Basel Committee. This phasing in period should also enable countries that did not move to Basel 2 – namely the US –, to implement Basel 3 at the same pace than European banks. As a matter of fact, I consider it essential that implementation of this new framework both in Europe and in the US be concomitant – and exhaustive and I am far from being the only one. As a matter of fact, experience shows that if a reform is not implemented globally, weaknesses remain. The American administration is very positive and determined about it, so I trust that can be done. Failure to implement Basel 3 in a globally consistent way would lead to a competitive race to the bottom and may thus plant the seeds for another crisis. 1.3 Last but not least, another area in which significant progress has been made since the crisis is the accounting framework.

Page 20 of 27  Figure 13 Contributions to revisions to 2021 GDP growth (1) (percentage points) 3.0  Increased fiscal transfers  Better beginning of year and agents' adaptation  Third pension fund withdrawal  Other (2)  2.0  1.1  1.0  0.7  0.4 0.3  0.0 1 (1) Built using midpoint of forecast range of March and June 2021 Monetary Policy Report. (2) Includes external sector and mining. Source: Central Bank of Chile. Figure 14 IMACEC scenarios consistent with 2021 GDP growth range (*) (index; 2013 average =100; seasonally adjusted series) April level + Common minimums 2020 average Growth 2021=9.5%  125 120  2020 Growth 2021=7.5%  2021 Growth 2021=8.5%  Considers that the economy remains in February’s level  115 110 105 100 95  Jan  Feb  Mar  Apr  May  Jun  Jul  Aug  Sep  Oct  Nov  (*) Colored area indicates period during which the benefits approved under the Common Minimums Agenda will be in place. Source: Central Bank of Chile.