samchain/econo-pairs-v1 huggingface dataset:
Not only do we have some better data in hand, but also the fiscal drag, which has been holding the economy back, is likely to abate considerably over the next few years at the same time that the fundamental underpinnings of the economy are improving. The first thing to note is that federal fiscal policy in 2013 has been unusually contractionary. At the beginning of the year the payroll tax cut expired while tax rates on higher income households were raised, a series of taxes associated with the Affordable Care Act took effect, and spending was reduced due to the sequester and the gradual winding down of foreign military operations. According to the Congressional Budget Office, the cyclicallyadjusted or full-employment budget balance increased by roughly 1 ¾ percentage points of GDP in fiscal year 2013. Over the past 50 years there have been only two other episodes of fiscal contraction of this order of magnitude, and both of those occurred when the unemployment rate was substantially lower than it has been of late. Under current law, the amount of federal fiscal restraint will decline in 2014 and then decline further in 2015. At the same time, the sustained contraction in spending and employment by state and local governments appears to be over.

Broad impact on the economy All in all, the Swiss economy got off relatively lightly compared with other countries in the difficult years following the global financial crisis – and this despite the fact that, as a small open economy with a large financial sector, we were hit hard by the shocks. This can be mainly attributed to two factors. First of these was the remarkable flexibility of Swiss companies and workers, which made it possible to increase efficiency, develop new products, and tap into new markets. Coupled with this, the SNB’s unconventional monetary policy substantially cushioned the blow of external shocks. The real trade-weighted exchange rate of  Page 4/8  the Swiss franc has thus remained fairly stable since September 2011. Were it not for the negative interest rate and the extensive interventions by the SNB, Switzerland would today be facing a different economic reality. The franc would have become much stronger, inflation would have fallen well below zero, growth would have slowed abruptly and unemployment would have risen markedly. For us there is thus no question that the negative interest rate was significant in helping Switzerland emerge from a difficult period in good shape. And it is still making an essential contribution to ensuring that our economy continues to fare well today, despite the array of uncertainties worldwide. But how exactly does negative interest work? Negative interest rates take effect on an economy in a very similar way to a monetary policy with positive rates.
During this period, the baht strengthened nearly 7 percent against the US dollar, and 10 percent against our trading partners’ currencies. What has caused such movement in Thai baht? There is little disagreement that, over a long period of time, exchange rates tend to appreciate in economies with better growth prospects, strong external balances and overall sound fundamentals. Over the past decade, currencies in Thailand and other parts of Asia have followed gradual appreciation trends, broadly consistent with their respective fundamentals. What sets this recent episode apart is the pace with which the baht has appreciated. Part of the appreciation could be interpreted as a ‘catch-up’ move, following a tepid period of last year when the baht underperformed many in the region. Meanwhile, several currencies in the region were also subject to their domestic issues. In South Korea, geopolitical factors resurfaced. In Malaysia, a looming election curbed risk appetite until midMay. In Indonesia, current account balance remains in deficit, for example. But even if one takes these factors into account, sharp movements in Thai baht in March and April are still difficult to justify by fundamentals alone. Our internal analysis has shown that the baht has, at times, deviated from its range of equilibrium or fair values. Elements of selffulfilling prophecies were likely at work, encouraged by market speculation that the policy makers were adopting a hands-off approach regarding exchange rate. We welcome signs that the market has abandoned this misguided belief.

As I see it, an organization’s culture gets into trouble when it equates “what is right” with what is legally permissible, and when “what is wrong” becomes viewed as what is legally impermissible. A proliferation of rules—followed by the gaming of these rules—can be ultimately self-defeating. The end result may not only be a loss of trust, but also over time a more burdensome regulatory regime than would otherwise be the case. So, while regulation and supervision are necessary to ensure a resilient and robust financial system, I very much doubt that they are sufficient. They need to be supplemented by bank management that pays close attention to incentives, conduct, and culture. As I have previously said, incentives drive conduct, which establishes the social norms that help define a firm’s culture.11 The first step is for firms to evaluate the incentives that they have in place with respect to personnel evaluation, compensation, and promotion and to make sure they are consistent with the type of behaviors they want to encourage. For example, how are compliance violations treated in compensation and promotion decisions? Are incentives in place to encourage people to speak up early, when problems are smaller and more manageable? When employees do speak up, how are they subsequently treated?
We are also looking into how to better capture risks associated with banks’ trading book positions in credit derivatives and highly structured and complex products. The AIG has established a working group that is following up on the Committee’s July 2005 trading book guidance. This working group, in consultation with the industry, is in the process of identifying possible principles for the implementation of so-called incremental default risk charge for trading book capital, and will be exploring other issues related to the measurement and modelling of risk in the trading book. And work is also going on outside the auspices of the Basel Committee. Many of you are probably aware that the Federal Reserve Bank of New York and the UK Financial Services Authority, in conjunction with other supervisors of major credit derivative dealers, have encouraged the industry to focus greater attention on sound risk management practices and the infrastructure of the credit derivatives markets by improving controls around assignments, reducing confirmation backlogs and increasing the use of electronic matching platforms. Other supervisors are reviewing bank stress testing practices and potential risks arising from banks’ private equity activities and exposures to hedge funds. The Basel Committee supports these efforts, and members will continue to keep each other informed on the results of their reviews. Private sector initiatives The public good of financial stability is not just of interest to supervisors and public authorities, but also to the financial sector.

Thank you very much, and I would be happy to take any questions. 6  BIS Review 46/2006
Between them, board members must have a good range of skills and experience, including, but not limited to, being well-versed in risk management. They must have a clear picture and a good understanding of the risks banks face and be ready and able to mitigate those risks. In addition, banks’ boards must be diverse – not just in terms of gender, but also in terms of broader diversity, as set out in EU law. [4] We have engaged with those banks which do not yet have diversity policies or internal targets for gender diversity at board level. As at the end of 2021, a third of the banks under our direct supervision did not meet their internal targets for gender representation at board level. Of course, the economic environment and the skills required to navigate the banking business keep evolving. Nowadays, a bank’s board should be well-versed in climate and environmental risks, as well as IT infrastructure and digitalisation strategies. We therefore encourage banks to nominate board members with adequate expertise in these areas. Digital banks are increasingly complex structures and cybersecurity has never been more important. However, at the end of 2021, only around a fifth of the euro area’s largest banks had sufficient IT expertise at board level. Increasing this ratio will be key for banks to navigate the digital era successfully. Behaviour and culture  The elements I have mentioned thus far make up the design and structure of a bank’s internal organisation.

They influence the effectiveness of the bank’s internal governance, the soundness of its risk management, and therefore the very sustainability of its business. But structure and design are not the only elements that determine how robust a bank’s governance framework is. The behavioural patterns exhibited by management and staff, as well as the drivers that underpin that behaviour, are no less important. A bank can have all the risk controls in place, avail itself of the most advanced tools to manage risks, and rely on data of the highest quality, but still become mired in a scandal it has brought upon itself, which badly affects its reputation owing to weaknesses in its internal culture. It is one thing that someone decides to take on too much risk, to put the immediate interests of the bank before its longer-term interests, or even to break the law. It is another thing if such unwarranted behaviour is not adequately addressed. If such acts have no apparent consequence, that will be noticed by a colleague. And then by another, and then by ever more colleagues. And soon enough, a new group norm is established. Misguided decisions are often rooted in each person’s values and beliefs, as well as their perception of what behaviour is valued within the structure around them. The overriding behaviour and culture within an organisation are thus the product of both individual behaviour and the underlying culture that acts as a breeding ground for that behaviour.
These measures would increase neutrality between different types of investment alternatives and make building up debt less profitable in terms of tax policy. Both the IMF and the European Commission proposes similar measures in their recommendations for Sweden.7 Organisational structure of macroprudential policy in Sweden Developing macroprudential tools strengthens the possibilities of preventing systemic risks. However, creating an organisational structure for macroprudential policy that ensures the right tools are used at the right time is at least equally important. Both decisive action and sound analytical capability are required here. Decisive action is important because acting against systemic risks is generally difficult and unpopular. It must therefore be clear where the responsibility of counteracting systemic risk lies, which in turn requires a clear mandate. Analytical capability is important because the interaction between the financial system and the real sector, and the risks generated in this interaction, are complex matters. Neither is it easy to determine which effects can be achieved with different tools. This requires expert knowledge. However, it is also important that this analytical capability is enduring. In the often fairly long periods of calm, the temptation to cut back or reallocate resources to other areas can be substantial. Many countries have recently created organisations for macroprudential policy and have more comprehensively enhanced the efficiency of financial stability efforts. New structures have emerged in, for instance, the UK, Germany and Denmark.

Our answers have been clear. First of all, we appreciate the discussion aimed at perfecting areas that may help to improve our fellow Chileans’ standards of living and further develop our economy. However, the Central Bank will not take part in the particulars of each of the reforms, because they lie beyond its scope of action. Secondly, we value the fact that if some reforms entail permanent increases in public spending, their funding comes from increased permanent income, so as to preserve the fiscal soundness our economy has displayed for decades. Third, it is logical – and recognized as such across the board – that reforms of this magnitude generate some uncertainties and worries, pushing back investment projects and affecting economic activity. But this effect is difficult to quantify. Lastly, in our pursuit of institutional stability, we think it is positive that the deepest agreements possible be reached around the major reforms being now debated in the country. From this perspective we appreciate the spirit of the agreement led by the Finance Minister and this Parliament for the approval of the tax reform. Also, I would like to explain the role played by the Central Bank in the context of the economic slowdown we are experiencing. The function of monetary policy is not to prevent the economy from adjusting, but rather to help the adjustment to be smooth and not jeopardize the convergence of inflation.
•  After the change in our legislation in 2016, which established the finality of payment irrevocability on a legal level, we felt it was timely to resume previous conversations with CLS. Our legislation now should fully meet all the high standards and requirements for the Peso to operate in CLS. •  After demonstrating our interest to CLS, I met personally with the Vice-Governor of the Federal Reserve Board to express our interest. The Federal Reserve Board and the New York Fed are respectively in charge of the regulation and supervision of CLS, hence the importance of their opinion about the benefits and performance of the system. Besides, the Fed presides the oversight committee along with 23 central banks representing the 18 currencies that settle in CLS. Then, it was important for us to show our commitment with the process in order to be part of this committee once the Peso is incorporated. •  We subsequently moved on to the due diligence stage last July 2019, when together with CLS we held the first workshop at the CBC for the private sector. III. Benefits of the CLS for Chile  •  Since the beginning of the process, the CBC has publicly stated on several occasions the benefits of CLS and its intention to incorporate the Peso to the system. •  CLS mitigates the settlement risk, through a multicurrency Payment versus Payment (PvP) system with legal certainty, meaning the payments are final and irrevocable.

•  Last July 3rd, the CBC Board approved the release for public consultation of stage two of the FX regulation modernization. This regulatory reform consists of four stages, the first of which was enacted early this year, simplifying the compliance with, and reporting of FX transactions to the CBC. •  This second stage will allow transactions in derivative products whose settlements or payments contemplate the physical delivery of Chilean Pesos. Additionally, upon the enactment of this regulation, non-residents will be able to open and hold an account in Pesos as well as ask for loans denominated in our currency, whether in the form of mutual, lines of credit, or other. •  Although these regulatory changes are part of our 2018-22 Strategic Plan, and have an independent agenda of implementation, they are of extreme relevance to the operation of CLS. Without these amendments, foreign settlement members would not be able to manage their accounts in Pesos or have access to the credit lines in Pesos, that are fundamental to perform the payment to CLS. •  Conversely, the FX changes should impact on the FX activity involving the Peso, increasing the systemic risk of settlement. CLS arises as the best-known alternative to mitigate those risks. Then, CLS is essential in this future FX context. VII. CLS and the current situation  •  Lastly, I cannot end my intervention without referring to the Covid-19 pandemic that is sweeping across our country and the world.
If a business manager is told that she “owns the risk,” she may feel empowered to ignore or otherwise shut out other key stakeholders and control functions. After all, if she truly owns the risk, then why does she have to listen to anyone else? This is obviously wrong. Lawyers and compliance professionals, for example, should be part of an ongoing conversation about risk management. Or, conversely, if those lawyers and compliance professionals do not themselves share some stake in the risk, they may not feel that speaking up or challenging a position by the business line is worth it. After all, the business line “owns the risk” and they (the lawyers or compliance officers) do not. What’s more, certain types of risks, in certain types of contexts, do not fit neatly into the “own the risk” model. Reputational risk is an example. Firms often discover, to their dismay, that reputational risk cannot be neatly contained within one business line, or even within one organization. In a sense, it would be better to think of certain types of risks as shared, with shared accountability, rather than owned. In short, it is important to remember that risk management is a means to an end. Who “owns the risk” is not as important as clearly understanding how that risk may inhibit an organization from fulfilling its purpose or achieving its goals, and clearly understanding how that risk is being managed. That does not mean that responsibility should be unattributed or entirely diffuse.

Broadly speaking, the responsibilities of the Federal Reserve System include setting and implementing monetary policy, regulating and supervising certain financial institutions, acting as fiscal agent for the United States Treasury, and helping to maintain financial stability. Not every responsibility is shared by each component of the Federal Reserve System. For example, the Board of Governors regulates financial institutions. The Federal Open Market Committee sets monetary policy. And the New York Fed serves as a fiscal agent for the United States Treasury. But, collectively, these are the functions of the central bank of the United States. The New York Fed, where I serve as general counsel, is one of the twelve regional banks. Its district includes New York City—the financial center of the United States. The New York Fed implements monetary policy pursuant to the directives of the Federal Open Market Committee. Monetary policy refers to the actions taken by the Federal Reserve to influence the availability and cost of money and credit to help promote economic goals. The New York Fed helps to accomplish these goals by, among other things, purchasing and selling securities. And, like other Federal Reserve Banks, we make loans to commercial banks and pay interest on deposits by commercial banks. In addition, the New York Fed manages the operation of wholesale payment services—known as Fedwire® Services—on behalf of the other Federal Reserve Banks. The New York Fed also participates in the regional and international distribution of United States currency and coins.
This increase is the outcome both of more precautionary behaviour and of the restrictions on some expenditure caused by the lockdown measures. The Banco de España’s models suggest that the reservoir of forced saving might be significant and have climbed to 2.5% of GDP in 2020 Q3. Foreseeably then, as uncertainty abates, this accumulated saving will gradually be released, infusing consumption with greater momentum. However, the scale and the distribution over time of this effect is subject to high uncertainty and some factors might restrict it. In particular, a portion of pent-up consumption is attributable to spending on services, which generally cannot be deferred; and saving has concentrated in higher incomes, whose marginal propensity to consume is lower. Also, households might decide to retain a high level of saving for precautionary reasons or indeed because they expect tax rises in response to mounting public debt. The baseline scenario of the projections assumes that the saving rate will fall to 2023 but, even then, will still hold above its pre-pandemic level. 5  See Economic Bulletin 1/2021, Banco de España. See M. Izquierdo (2021). “Business births and deaths since the onset of the pandemic”, Box 7 of Economic Bulletin 1/2021, Banco de España. 7 See J. A. Cuenca, C. Martínez Carrascal and A. del Río (2021). “Euro area household income and saving during the first wave of the pandemic”, Box 4 of Economic Bulletin 1/2021, Banco de España.

First, I consider that, banks and non-bank institutions should be committed for the implementation in practice of all the innovations set forth in the Law “On payment services". It is also necessary to consider and assess the possibilities of infrastructural developments endorsed in the strategy, which will enhance efficiency in the processing of payments and transfers, such as Instant Payments or the national SWITCH. The Bank of Albania – for supporting all these developments – is working to improve and upgrade the systems it operates, in order to accommodate the market’s demands. We have also paid attention to the drafting of the legal framework for the creation of the basic account. This framework aims at further promoting the financial inclusion of the population. We consider that the adoption of this Law and its implementation by the market is very important in terms of digitalization of financial services, also of the Government. In addition to promoting financial inclusion and digitalization of services, financial education is a very important element for the materialization of measures and the achievement of intended objectives. To this end, I see our coordinated actions and intensified cooperation at the heart of our joint efforts and work to promoting financial education as a national reform. In addition to the above, it remains important to overcome any issue identified during all these years by implementing the aforementioned innovations. Particular emphasis should be placed on the problems encountered by opening accounts and signing distance contracts, which are a necessary precondition for the digitalization of services.