samchain/econo-pairs-v1 huggingface dataset:
Of course, one of the big problems facing a macroeconomic policy maker is the difficulty of setting out ex ante success criteria. We can’t perform controlled experiments on the macro economy. What matters is whether policy makes the outcome better than it would otherwise have been – but that alternative reality – the “counterfactual” in economic speak – is always a matter of conjecture and debate. Nevertheless I believe the scheme provides all the right incentives to increase the supply of credit. A second problem for macroeconomic policy is that we cannot rely on the usual “ceteris paribus” assumption of economic theory – when we make large changes in policy then everything else changes too, including the behaviour and expectations of those very people we are trying to influence. And policy effects which are relatively small can nevertheless be absolutely significant if the policy change is large enough. In fact, the FLS is designed to take advantage of the pressures to change behaviour. The FLS provides strong incentives to banks and building societies themselves – because the more they lend, the more they benefit. Either because of the price effect on those deleveraging and/or quantity effects on those expanding. And we have built in incentives that enhance competitive pressures between the lenders. They cannot afford to miss out on lending opportunities – or their competitors will take advantage. I think this will help answer the second question about whether lending will go to the people who are perceived as most need in need of it.

3  The Bank published an explanatory note on the FLS, available here: http://www.bankofengland.co.uk/ markets/Documents/explanatory_notefls120713.pdf  4  Drawn sterling loans to UK private non-financial corporations (PNFCs) and households, by the FLS Group, which includes all UK resident monetary financial institutions and related specialist mortgage lenders within a group. 5  If their lending expands by 7% for example, then they can draw down an amount of treasury bills equal to (7+5=) 12% of their initial stock. BIS central bankers’ speeches  9  The first point I want to make in reply is that banking in the UK is far from a perfectly competitive market. The six biggest lenders account for the vast majority of lending to UK businesses and households – and the seventh largest accounts for less than a third as much as number six. In large part the quantitative success of the scheme will depend on what these larger lenders do. But each bank is in a different strategic position to start with. They will all have some portfolios they wish to shrink, and others to expand. But some were planning to reduce their overall stock of lending, given market conditions and their own capital and liquidity positions. And some had been ordered to reduce parts of their lending because they had received state aid. The FLS is not intended to undermine competitive and financial stability objectives by forcing banks to change such strategic decisions. What we do want to encourage is an expansion of their core portfolios.
This time, nurses and teachers were the first onto the field with regard to wage bargaining and they signed 5-year agreements, which roused some concern that high wage agreements stemming from the favourable demand situation would spread to the rest of the labour market. The average level of the wage agreements in the economy was around 3 per cent, which is slightly higher than the previous bargaining round in 1998, when the agreements came out at around 2.6 per cent. However, it shows that the social partners have moved closer to a non-inflationary wage agreement, despite the fact that economic activity was high when the bargaining rounds began in autumn 2000. Why has the rate of wage increase been subdued over the past decade? Studies made by the Riksbank show that the slowing down in the rate of wage increase during the 1990s was primarily due to the fact that the formulation and organisation of monetary policy had led to lower inflation expectations (since 1996 inflation expectations among the social partners have  1  See, for instance, Nils Elvander, "Industriavtalet och Saltsjöbadsavtalet - en jämförelse" (The industrial agreement and the Saltsjöbaden agreement - a comparison), Arbetsmarknad & Arbetsliv No. 3, 2002, pp. 191-204. 2  Gösta Edgren, Karl-Olof Faxen & Clas-Erik Odhner, Wage Formation and the Economy, Allen and Unwin, 1973. 3  The National Mediation Office, "Avtalsrörelsen och lönebildningen 2001" (Bargaining rounds and wage formation 2002), annual report from the National Mediation Office, 2002.

The measures taken by our trading partners to enhance confidence in their financial systems and adjust the macro-financial imbalances hamper monetary policy transmission in the economy. They heighten public concern and undermine its confidence in the future. These are the very reasons preventing the banking system to finance the economy and the government at lower interest rates and, consequently, the central bank’s monetary policy transmission to easing the monetary and financial conditions. What is currently happening represents higher risk premium in the countries of the region for all the reasons referred to earlier, rather than an increase in real interest rates. Concluding, I would like to clarify that central banks should make their utmost to preserve the frail macrofinancial balances and bolster public confidence in institutions and the financial system. In this context, the Bank of Albania, as to date, will continue to foster macroeconomic and financial stability in Albania. This is our major obligation arising from the Constitution and relevant laws. We are committed to meeting this obligation with dedication and meticulousity. We are fully focused on these two major objectives, just like a good captain focusing on the horizon, rather than on the hands laid on the ship’s wheel. The Bank of Albania believes that, by guaranteeing these two vital pillars to the stability and prosperity of the economy, we have provided the best contribution to achieving higher economic growth.
2 Exactly how these frameworks will look is still somewhat unclear, but a few general principles have crystallised as regards both appropriate institutional structures and which instruments it may be appropriate to use. 3 Finansinspektionen already has instruments at its disposal that are focused on the health and behaviour of individual participants and companies. But one important lesson of the crisis is that this is not enough. Our toolkit needs to be complemented with tools that can focus on the system as a whole. Today, I will discuss what such a Swedish toolbox for macroprudential supervision could include. 1  The speech “Macroprudential policy and clear communication contribute to financial stability” was held at the Swedish Bankers’ Association on 30 March 2012. See www.riksbank.se. 2  For more detailed analyses of macroprudential policy and its ability to counteract systemic risk, see, for example, Borio (2010), Galati and Moessner (2011) and Viñals (2010 and 2011). 3  See, for example Lim, C., et al., (2011),”Macroprudential Policy: What Instruments and How to Use Them? Lessons from Country Experiences”, IMF Working Paper, 11/238. BIS central bankers’ speeches  1  Different types of risk… Before I go into the different types of tools that could be used to manage systemic risks, I will explain what is meant by systemic risk. The Riksbank usually defines systemic risk as the risk that a shock will occur in the financial system, leading to substantial costs for society. 4 Such risks can arise for various reasons.

This involves imposing a levy on the incomes of the working population and transferring these funds to pensioners, either through redistribution in the present (pay-as-you-go system) or via a capital funding system which benefits future generations of senior citizens. Thus, demographic ageing means that the working population is obliged to shoulder ever greater levies. If, at the same time, the global creation of wealth progresses slowly, the responsibility of financing old age pensions is going to impose an increasing social burden. Thus, it is not only necessary to improve our economic efficiency, we also need to be careful not to impede these efforts through inappropriate measures. We must allow the invisible hand of competition to bring about the most efficient allocation of our resources possible in both the domestic and the foreign arenas. Consequently, we need to do more with the resources at our disposal. At the same time, we need to make sure we have access to better quality resources. This means taking a longer-term approach to our system of education. The conditions within which our economy operates also play an important role. Growth in investment activity not only allows us to create new jobs but also, and above all, to accelerate productivity advances – both of these factors encourage growth and help to achieve a better financial basis for our old age pension scheme. There are three reasons why the Swiss National Bank is concerned about demographic developments and growth.
Households and businesses will be able to make better-informed decisions if they have a clearer notion of future policy rates; the potential for reduced uncertainty could also lower the risk premium embedded in longer-term interest rates. The second new communications initiative – a more explicit consensus framework for monetary policy – is still a work-in-progress. Thus I can only talk about it in generalities and give you my personal views about what it should say and why it would be very helpful. In my view, a framework statement should help clarify what the dual mandate goals of maximum employment and price stability mean in terms of measurable economic outcomes. It should also convey the extent to which monetary policy can be expected to deliver particular long-run outcomes. And it should better enable the public to form expectations about how policy will react to economic disturbances that move employment and inflation away from levels consistent with the dual mandate. As I noted earlier, our goals of maximum employment and price stability usually are not in conflict; but when they are, a more explicit framework can provide a better idea of how the Committee will weigh the relevant costs and benefits that enter this more difficult decision-making process. I have strongly supported the publication of our policy projections, and I strongly support the adoption of a more explicit consensus framework statement. In my opinion, my current policy views and prescriptions continue to be appropriate in light of these new communications vehicles.

Indeed, I think these additional communications vehicles can provide further clarification and  6  BIS central bankers’ speeches  increase the effectiveness of the types of additional accommodation that I have advocated in recent months, as well as earlier in 2010. Consequently, I am an enthusiastic supporter of these enhancements to Fed transparency. Let me conclude by saying that I do not see these enhanced communications vehicles as being inherently “hawkish” or “dovish.” Participants may well have differing views on the appropriate stance of monetary policy in the particular economic circumstances of the moment. In being more explicit about our framework, we would not eliminate these differences of opinion. But we would further discipline the parameters of our discussions and clarify the judgments that lie behind our policy decisions. As the central bank in a democratic society, the Federal Reserve has an obligation to articulate what it is trying to achieve with monetary policy. I believe that these latest communications efforts are an important step in further increasing such accountability to the public. The Committee equally respects both legs of the dual mandate, and I feel these communications enhancements will help articulate the ways in which we will seek to achieve both objectives. Thank you and I look forward to your questions. References Evans, Charles, 2011, “A risk management approach to monetary policy,” Remarks delivered at the Ball State University Center for Business and Economic Research, Muncie, Indiana on December 5.
Which raises an important question: If monetary policy is the same here as everywhere else in the United States, why does Texas outperform the other states? The answer is no doubt complicated by the fact that Texas is blessed with a comparatively great amount of nature’s gifts, a high concentration of military installations and what some claim are other “unfair” advantages. But many of these “unfair” advantages are man-made: They derive from a deliberate approach by state and local authorities to enact business-friendly regulations and fiscal policy. For example, if you examine the differences between Texas and two states that have been underperforming for a prolonged period – California and New York – you will note that these former power states have less-flexible labor rules. Due to local taxes, differences in zoning practices and myriad other factors, the cost of housing and the overall cost of living in California and New York are significantly higher than they are here. And due to differences in policies governing education, the scores measuring middle-school students’ proficiency in math are lower in both California and New York than they are in Texas, and in reading, are lower in California and only slightly higher in New York.5 Taken together, these factors, alongside whatever natural advantages we may enjoy (though it is hard to compete with the physical beauty of California and the Great Lakes region or the cultural splendor of New York), affect where firms choose to locate and hire and where people choose to raise their families and seek jobs.

Like all happy marriages, the bonding should foster growth and help the partners to realise their potential during good times; and provide an anchor to help them to face the challenges of the bad times with resilience and confidence. 7. Both partners have certainly done well during the good times in the past decade. (i)  HK’s developments  8. During this period, Hong Kong has continued to consolidate its role as a premier international financial centre and has become a more globalised economy: –  The total assets of the banking system have increased 2.7 times to $ trillion, with foreign currency assets accounting for about 60% of the pool. –  The market capitalization of the Hong Kong Stock Exchange has become more than 4 times bigger, advancing from number 8 to number 6 in the global ladder. –  The bond market has also increased by about 3 times, with foreign currency denominated bonds accounting for about 40% for most of the time. 9. Hong Kong has also become a hub for private wealth and asset management. Nearly 80 of the top 100 global money managers are in Hong Kong. The total assets under management hit a record high of $ trillion in 2013, with 72% of the funds sourced from  1  Mr David Puth, CEO of CLS Group Holdings, and CLS Bank International. BIS central bankers’ speeches  1  non-Hong Kong investors.
In essence, events of the past two years can be retold as a story of the progressive breakdown in trust. The proximate cause of the crisis was a breakdown of trust between banks and households, specifically sub-prime mortgage-holders in the United States. The upshot was a loss of credit, and in many cases the homes, of these borrowers from 2006 onwards. Repossession rates on US mortgages have more than tripled in the past two years (Chart 1). UK arrears and default rates, although lower, are rising. Some borrowers are now rationed out of the mortgage market. In July 2007, there were around 9500 sub-prime mortgage products being advertised in the UK. Today, there are virtually none (Chart 2). As losses on these mortgages and other toxic assets accumulated, trust among banks was impaired. This saw a seizing-up of inter-bank money markets from the second half of 2007 onwards. Before the crisis, banks required about 10 basis points of compensation for making a three-month loan to one another (Chart 3). By September 2007, that compensation premium had risen tenfold to around 100 basis points. By September 2008, it had risen more than thirty-fold from pre-crisis levels. It has since fallen back to around 35 basis points. These persistent funding pressures have constrained banks’ ability to lend to the real economy. Damaged by losses on assets and constrained by funding costs, questions began to be raised during 2008 about banks’ future profitability and, in some cases, viability.

See  BIS Review 108/2009  decentralised and specialised. The focus was on customer needs supported by some of the first-ever market research on their tastes. In the end, it was Sloan and General Motors whose strategy was emulated around the world. In meeting the future needs of the real economy, perhaps there is a case for more “Sloans” and fewer “Fords” in banking. Perhaps there is a case for a strategic focus on the “local” as much as the “global”, for more micro-finance and less macro-finance. Perhaps it is time for relationship-banking to make a comeback. •  Strategy – diversity versus diversification  Customers require a basket of banking services. The provision of some of these services is important for the wider economy; they are a quasi-public good. For example, the provision of monetary services – basic banking – has a strong public good element. That is why depositor protection, in the form of deposit insurance, is stipulated by the state in many countries. Lending to households and companies can also be thought to contain a public good element. Other functions performed by banks may provide more limited social benefits, though their private benefit may be significant – for example, proprietary trading in complex instruments. If scale economies in banking are weak, banking services could probably be equally well provided by either a financial supermarket or a set of specialist banks. These different structures might not, however, be equivalent from a risk perspective.
The kind of arguments that I have put forward at our most recent monetary policy meetings regarding the risks of an even more expansionary policy are of this type. I am quite convinced that most central banks’ monetary policy discussions largely consist of this type of more qualitative argument. By this I do not mean, of course, that “anything goes” in monetary policy. There must be a sufficient amount of structure and consistency checks in the monetary policy decision-making process. And I think there is today. The entire analysis process that precedes the monetary policy decision is carried out in an orderly and structured manner. And I also believe that there is confidence in our way of working. Although there are slight differences between different forecasters’ views of future economic developments, as far as I know there is no one who thinks our assessments are completely off the wall. The fact that we Executive Board members have had some differences of opinion recently has come under focus recently. But one thing that should be remembered is that dissension is hardly strange on a monetary policy committee like our Executive Board. It is intentionally assembled in such a way that it will consist of people with different backgrounds, experiences and knowledge. We are not supposed to be cast in the same mould.

Norges Bank has recently completed a survey of banks’ costs in connection with providing payment services. We have received detailed responses from seven banks, two large and five smaller banks, that account for 38 per cent of the volume in the payment system. We have examined banks’ direct costs and indirect costs such as those connected with personnel, operation of computer systems,  BIS Review 66/2002  3  business premises, machinery, inventory, etc. Development costs related to new products have been included and spread over the economic life of the service. The survey is described in an article that will appear in the next issue of Economic Bulletin which will be published in December. It will also be available on our website in December. 4. Transaction volume and total costs 1000  1988 1994 2001  800  600  7 6 5 4 3  400  2  200  1 0  0  No. of transactions, in millions  Total costs, in billions of 2001 NOK  In 2001, banks spent NOK 5.9 billion to produce one billion payment and cash transactions, compared with NOK 6.3 billion to produce less than half the number of transactions in 1994. 5.
In my opinion, moreover, they have had a favourable effect on the Riksbank’s internal atmosphere and efficiency. 6  BIS Review 75/2001  As regards currency market interventions, we should likewise naturally aim to be as open and distinct as possible. The arguments about credibility and legitimacy apply here as well. There is also reason to believe that interventions will be more successful if they are perceived as a monetary policy signal, with information about the central bank’s assessment of price developments and thereby the future path of the instrumental rate. When the Riksbank intervened last June we made a point of demonstrating that the measure’s context was monetary policy. The measure was announced and communicated in speeches by Urban Bäckström and myself. At the time of the first intervention, moreover, the Executive Board issued a press notice and Urban Bäckström took part in a broadcast interview in which a good deal of time was devoted to this issue. The degree of openness was also substantial in the sense that we informed our counterparties that the interventions had been made and confirmed this when questions were asked. Moreover, the size of the interventions could be calculated later from the weekly publications of the Riksbank’s balance sheet. So on this occasion we were more transparent and distinct than is customary with currency interventions, compared both with our earlier record and with most other central banks. We did, however, depart from the customary procedure in one respect.

Miguel Fernández Ordóñez: The Spanish economy after the crisis Opening address by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, at the “IV Conference on the unique features of Spanish savings banks”/Federación de Usuarios de las Cajas de Ahorros (Federation of Savings Banks Customers), Zaragoza, 11 February 2009. *  *  *  Thank you Mr Chairman, The profound worldwide economic slowdown, which in the industrialised countries has already turned into a rapid and sharp recession, is undoubtedly the most serious since the 1929 Great Depression. In recent months, the collapse of international financial markets has been averted only with great difficulty and we don’t yet know what the final consequences of the events unfolding will be for the real economy. Faced with this situation, all efforts will inevitably focus on attempting to exit the crisis. Internationally, and within Spain, hitherto inconceivable measures have been adopted, such as unlimited liquidity injections by central banks, extensive fiscal stimuli and exceptional support to the financial system. Naturally enough, governments, politicians, central bankers, supervisors and academics are all contributing to these tasks. And it is not surprising, therefore, that all my speeches in recent months have been to analyse the causes of the global crisis and to review the various measures to tackle it.