samchain/econo-pairs-v1 huggingface dataset:
Ancient Mesopotamia did not have a circulating currency as its means of payment - coinage only appeared around 2000 years later. Instead these civilisations had a system of ledgerbased accounts of mutual debits and credits, typically denominated in terms of agricultural commodities. 7 Only the Bank of England issues banknotes in England and Wales, but seven commercial banks in Scotland and Northern Ireland can also issue banknotes, the total value of these notes in circulation is £ The seven banks must, by law, set aside assets that are worth at least the value of all of the banknotes they have in circulation. This ensures that people with genuine banknotes issued by the seven banks receive a level of protection similar to people who have genuine Bank of England banknotes. 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  The remaining 97% of the money held and used by the public takes the form not of notes and coin but of claims on the private banks in which we all store our money in payment accounts. When we use a plastic card, a cheque, a bank transfer – as we do for over 95% of the £ of transactions by value every year in the economy – we are exchanging our claims on our banks. This is sometimes called ‘private’ money as opposed to ‘public’ or state issued money. That is in my view a rather misleading description, for two reasons.

Alberto G Musalem: International spillovers and policies Remarks by Mr Alberto G Musalem, Executive Vice President of the Integrated Policy Analysis Group of the Federal Reserve Bank of New York, at the People’s Bank of ChinaFederal Reserve Bank of New York Joint Symposium, Hangzhou, Zhejiang, China, 15 Mach 2016. *  *  *  Good morning. Thank you for the opportunity to speak here in Hangzhou about the important theme of international spillovers. By exchanging perspectives and experiences we can forge relationships and a shared understanding that can lead to better economic outcomes. I will focus mostly on the interaction of international spillovers with policy frameworks within and across countries. I will do this from the vantage point of a domestic economy experiencing foreign spillovers. I will then briefly turn to considerations from a U.S. perspective. As always, my remarks reflect my own views and not necessarily those of the Federal Reserve Bank of New York, the Federal Open Market Committee (FOMC), or the Federal Reserve System.1 International spillovers encompass a broad topic with respect to their sources and channels. Before narrowly focusing on monetary sources and associated channels, it seems appropriate to first take a broader view of the various sources. Foreign spillovers can emanate from monetary, fiscal, regulatory, currency or trade policies. Spillovers can also arise from endogenous productivity changes, from financial stability developments, and from a global financial cycle.2 The Mundell-Fleming logic remains relevant for thinking about policy options of open economies.
Notably, the launch of the ASEAN Banking Integration Framework (ABIF) in March 2015 and the progress made in integrating the regional capital markets and the payment and settlement systems are important milestones in this process. Partnerships for a Successful Future While the authorities and policy makers in ASEAN have entered into multilateral partnerships to achieve the common goal of a more promising future, so has the private sector, given the immense opportunities the more integrated region presents. This is also reinforced by the intrinsic predisposition of the DNA of the region and its people and institutions. The future of ASEAN needs to be built on the collective actions that are for the advancement of ASEAN. Businesses have already been proactive in harnessing the benefits arising from the diversity  2  BIS central bankers’ speeches  and complementarities in the region. To date, these efforts have culminated in the launch of the ASEAN Economic Community in 2015. In a global landscape that is constantly evolving, uncertain and complex, building effective and smart partnerships has become an imperative for the common goals that ASEAN aims to achieve. Partnerships are important because no one entity has all the solutions, answers and expertise to take full advantage of all the opportunities and synergies that are created in such partnerships. Moving forward, building successful partnerships is an important strategy to realise the true economic potential of ASEAN. As an example, effective partnerships in the financial sector have made important contributions to institutional building in our financial systems.

This could eventually increase the flexibility of wage formation and increase productivity. This development is particularly in evidence in the expanding services sector. According to the National Institute of Economic Research, the proportion of time-limited employment has increased from 10 to approximately 16% of the total number of employees between 1990 and 1998. This development may have been reinforced by the difficult situation in the labour market during these years but many believe that the trend will continue. New methods of compensation are also spreading. Bonus wages, profit sharing and a 13th monthly wage are examples of components in wage formation that increase flexibility in the labour market. Increased cost consciousness due to stiffer competition can be a factor driving on this development. Although short-term employment in various forms may reduce the inflationary pressure and make the labour market more flexible, this does not mean that this development is always positive for wage-earners and households. Uncertainty about future income makes long-term planning more difficult such as having children and buying a house. In order to reduce the risk of various groups in the labour market competing against one another to drive up pay increases in a way that in the end creates a poorer outcome for all, various changes in the forms of wage formation have been carried out and are planned. The most important is the so-called Industry Agreement between some 20 organisations in the labour market.
Mervyn King: Monetary policy developments Speech by Mr Mervyn King, Governor of the Bank of England, to the Birmingham Chamber of Commerce Annual Banquet, Birmingham, 23 January 2007. *  *  *  Lord Mayor, Lady Mayoress, President, Distinguished Guests, Ladies and Gentlemen, Two weeks ago your Chamber of Commerce called on the Bank of England to take manufacturing more seriously when it sets interest rates. In arguing against an interest rate rise, the Birmingham Chamber said, “we would urge the Bank of England to once again consider the effects this will have on the beleaguered manufacturing sector”. It will not have escaped your attention that Bank Rate did rise in January and has now increased by 75 basis points since the beginning of August. So tonight I want to explain why the Monetary Policy Committee took that action, and why the Bank believes that the control of inflation is essential for the success of Birmingham – and all British – manufacturing. Last week we learnt that inflation, as measured by the Consumer Prices Index, was 3% in December, the highest level since the Monetary Policy Committee was set up almost ten years ago. If it rises by one further decimal point to 3.1%, I shall have to write an open letter to the Chancellor explaining why inflation has risen to more than one percentage point above the target of 2%, and what measures the Committee are taking to bring inflation back to target.

We can’t be sure since no two historical episodes are ever exactly the same. Until underlying growth resumes, we can’t be certain that it will, of its own accord. At the very least, that makes me pause to consider when policy should start to be normalised or even whether further loosening might be justified. The recovery in 2010 was driven by a particularly strong contribution from business investment and stock-building (Chart 4). The latter was always likely to offer a transitory boost to overall growth as companies returned stock holdings towards their desired levels, after de-stocking during the recession. And investment was always likely to make some positive contribution – at least once delayed projects and routine maintenance were re-started. But that boost is unlikely to persist without a pick-up in final demand to justify it. And consumer spending, the most important component of UK demand, has been stagnant for a year (Chart 5). The current behaviour of consumption is markedly different to that during the 1980s and 1990s when consumption had broadly regained its pre-recession level by this point in the cycle, rather than being around 4% below it (Chart 6). BIS central bankers’ speeches  3  Chart 4  Chart 5  Contributions to 4-quarter GDP growth(a)  Household consumption(a)  Percentage points 6 4 2 0 -2  Consumption Government spending Investment Stockbuilding Net trade GDP (per cent)  -4 -6 -8  2000  2002  2004  2006  2008  (a) Investment includes valuables. excluding the alignment adjustment.
Concerning the macroeconomic environment, most of you will remember the deadly combination of high inflation rates and low or negative growth that characterised our economy from the mid-1980s way into the 2000s. Following the high levels of inflation, suppliers of finance inevitably sought to obliterate negative real returns on their investments by raising interest rates to levels of inflation and in many instances above. Furthermore, the low levels of economic growth exacerbated the adverse perception of borrower risks in the economy such that suppliers of finance only concentrated on servicing their existing small blue-chip customer base that survived the harsh economic environment. This environment, Ladies and Gentlemen, has played a very critical role in cementing the high cost of finance. At a micro-structural level, a poor credit culture is also another venomous factor that has had its own share of supporting the high cost of credit. Bad borrowers, who regularly borrow from several institutions with little or no intention to repay their loans, have also been cited as one reason for commercial banks’ relatively high non-performing loans, which in turn fuel high interest rates. Non-repayment of loans does nothing but muddying the waters for even good borrowers with profitable projects, and in order to stay afloat banks have responded by maintaining their loan rates high. Ladies and Gentlemen, in recognition of the shortcomings in the functioning of financial markets and the obtaining high cost of finance, the Government has instituted policy measures aimed at correcting imbalances in the economy and restoring macroeconomic stability.

I thank you for your attention. 4  BIS Review 105/2010
And, unfortunately, the financial sector continues to throw up fresh regulatory issues. In this respect, one of the major challenges we now face arises from the welter of conduct issues that have surfaced in recent years. For banks we are now at or very close to the end of the design stage for all of the major reforms. The end points are increasingly clear. In many areas we are well into the implementation stage. For non-banks we are further behind. But the direction is clear. And the international regulatory community needs to keep its eye on how the key moving parts work together. We must be alive to the risks of unintended consequences. Indeed, given the breadth of the reforms and the complexity of the financial system, I would be surprised if everything worked exactly as we intended it to. There may well be cases in which we need to adapt standards and rules in the light of experience. There may be others in which there are indeed impacts that had not been foreseen but the reforms remain justified in terms of financial stability. BIS central bankers’ speeches  5  So we will need to be very alive to “coherence” as implementation progresses. Given the need to agree standards between a large number of countries with very different financial institutions, we are unlikely to achieve perfection. But if we can achieve good, robust and consistently implemented and applied international standards, we will have made the system much much safer.

This need for “consistent application” brings me on to the much harder condition for success – the “condition of mutual trust”. We have a globally integrated financial sector. But we have national – and I should note in Europe’s case, regional – regulation and supervision that answers to national parliaments and, when it goes wrong, drags in national taxpayers. Internationally we can only agree standards. We cannot implement them in international law, in international regulations. That can only be done by national legislators in national law. Nor, when we have implemented the rules, do we have international supervisors to apply them to international firms. We have only national supervisors, answerable to national parliaments. Without mutual trust between national authorities, without a willingness to recognise each other’s implementation of internationally agreed standards, we put at risk the success we have achieved so far in developing the “governance” of the international financial sector. The risk comes from two directions. From one side, there will be pressure for a race to the bottom. If there is inconsistent application and lack of trust regulators and supervisors in each jurisdiction will come under pressure from the firms they regulate to ease up. Firms will argue that other jurisdictions are not implementing properly and that their competitors in those jurisdictions are getting a favourable ride. The pressure will be to weaken implementation everywhere ending with a race to the bottom. This is not theory. It is one of the most important lessons of the pre-crisis period.
Consequently, for us it is not a matter of excluding entire sectors or industries. On the contrary. We simply wish to exclude those companies for which there is clear evidence of a serious violation against the principles mentioned. Therefore the number of companies involved is very limited. How do we implement this? We are convinced that it would not be practicable for the SNB to examine the conduct of dubious companies itself. In our view, the SNB’s tasks and competences do not include the filtering-out of such companies. For the implementation, we therefore use analyses by established institutions with relevant experience. These help us to constantly review which companies fulfil the predefined exclusion criteria. You will understand that we do not provide any detailed information on the exclusion procedures or the equities involved. As I mentioned at the beginning, the SNB always endeavours to maintain a high degree of transparency and, in this respect, goes further than other central banks, especially when it comes to its investment policy. Nevertheless, it is also an established principle that we do not reveal any details about the various external providers whose services we employ in our operations. The same applies to details about the indices we use, or, indeed, the individual securities. Such information could trigger undesirable movements in the market, which would go against our principle of ensuring the minimum possible impact on the market. In addition, this information could also limit our investment policy room for manoeuvre and thereby have a negative impact on the investment results.

First, Countrywide had paid millions of dollars each year to big banks as a liquidity insurance policy so that, in the event of difficulty, they would provide it with long-term loans. So on August 17 Countrywide was able to claim on that insurance and draw down $ of committed credit lines. Northern Rock had not taken out anything like that level of liquidity insurance. So when it came to the Bank of England for support, it was important that liquidity was not provided free. Second, even though Countrywide had insurance, its depositors were still worried. On hearing that it had claimed on its insurance, queues formed. But those queues were short and soon dissipated. The depositors simply did not face the same incentives to withdraw their money. The United States has a well-developed insurance scheme for depositors. If a bank is forced into administration, there are mechanisms in place to repay depositors in full, up to $ per account. And most importantly, the depositors are paid within just a few days. Without such a scheme in the UK, once the queues started to form at Northern Rock, other depositors faced every incentive to join them. The only way to stop the run was for the Chancellor to announce a government guarantee of the deposits of Northern Rock, which today was extended to new depositors as part of the continuing stabilisation plan for the business. BIS Review 114/2007  3  So what are the main lessons for us from the recent episode?
Greater responsibility for stabilising inflation and output fell to monetary policy. 2  The expression “Dutch disease” originates from the Netherlands, where the government rapidly spent large revenues from the extraction of gas in the 1960s. 3  Q. Farooq Akram (2005): “Efficient consumption of revenues from natural resources – An application to Norwegian petroleum revenues”. Norges Bank, Working Paper 2005/1. 4  Aftenposten Morgen 11 September 1986. BIS Review 50/2006  3  Economic policy was revised in spring 2001. The most important policy change was the plan for phasing in petroleum revenues – the so-called fiscal rule. An inflation target for monetary policy was introduced at the same time. The fiscal rule and the inflation target can also be seen as an answer to the problems raised by Finn Kydland and Edward Prescott. The insights from their influential work was that economic policy can achieve better results if the authorities can commit themselves to a pre-established set of credible policy rules. The need for rules in the spirit of Kydland and Prescott is perhaps greater in Norway than in most other countries. Other countries often find themselves in situations where they have to limit and stabilise their fiscal deficits and government debt levels. Balanced budgets serve as a long-term guide for fiscal policy. For us, balanced budgets will not work as a guideline. Macroeconomic framework Norway’s stabilisation policy now rests on four pillars. Under the petroleum fund mechanism, increased government petroleum revenues are invested abroad.

An economist 3 in Norges Bank has found, using a stylised model, that in order to minimise restructuring costs over time, petroleum revenue spending should be limited in such a way that a constant share of imports can be financed by petroleum revenues for an indefinite period. Furthermore, he found that spending one per cent of total petroleum wealth per year would achieve this. Petroleum wealth comprises here both financial wealth accumulated in the petroleum fund and the value of oil and gas under the seabed. The rule implies that petroleum revenue spending would not affect the real exchange rate. This work focused on minimising restructuring costs, and did not analyse the issue on the basis of a more general welfare function. Moreover, the flexibility of the economy to adapt to a shifting economic environment may change over time. Increased flexibility and efficiency in labour, capital and goods markets may reduce the need to take restructuring costs into consideration. I will come back to our current fiscal rule for petroleum revenue spending shortly. The need for some sort of rule in fiscal policy aimed at restraining petroleum revenue spending should become clear when we look at our experience over the last 30 to 40 years. The government began at an early stage to budget on the basis of future strong growth in petroleum revenues. The result was that we spent a large share of our petroleum income in the 1970s and 1980s. Welfare schemes were expanded significantly.
Also, the calendar for further price liberalisation, which has an impact on inflationary developments, is often set by each government and is thus difficult for a central bank to predict. From an ECB perspective, financial sector reform is also of the utmost importance. The reasons for this are mainly twofold. First, sound financial sectors are key to delivering “stable money”. Weak financial systems tend to blur the monetary transmission mechanism and the capacity of monetary policy to influence inflation and growth outcomes, putting the maintenance of price stability and the credibility of the central bank at risk. Second, financial sector reform is needed because it ensures that structural reforms, particularly in the goods and labour markets, become fully effective. Indeed, despite recent structural reforms and positive growth, the catching-up of per capita income with the euro area has remained limited, and in many countries output growth remains below potential. Efficiently functioning financial markets are an important precondition for an efficient allocation of capital, thereby contributing to an economy's growth potential. In many ways, the prospect of EU accession has been instrumental in triggering reform in accession countries, and structural reforms have advanced far enough in these economies to achieve macroeconomic stability. However, there is much that remains to be done. I am confident that the policy-makers in the region will “hear and listen” and remain committed to continuing along the path of reform on which they have already embarked.

Let me briefly elaborate on three aspects which lie at the core of stability-oriented policies in the accession countries: first, the need to enhance central bank independence; second, the importance of fiscal discipline; and, third, the implementation of further structural reforms. As regards the first point, most accession countries have modified - or are in the process of modifying - their respective EMU-related legislation to ensure compliance with the requirements of the Treaty. However, central bank independence in accession countries should not be seen only as a legal requirement under the acquis communautaire but also as an important impetus to and precondition for policies geared towards monetary stability and nominal convergence with the EU. Indeed, if the drafters of the Treaty placed a strong emphasis on central bank independence, it is because of the conviction that the achievement of price stability is best served by an independent institution with a well-defined mandate. In line with this approach, the forerunner of the European Central Bank (ECB), the European Monetary Institute (EMI), established a list of parameters of central bank independence, which form the basis for assessing accession country compliance with this requirement by the ECB when evaluating the new Member States' convergence processes. The process of enhancing central bank independence has not been smooth in all accession countries but, overall, it is now well advanced and its benefits are already apparent. Indeed, most accession countries have made significant progress in terms of disinflation.