samchain/econo-pairs-v1 huggingface dataset:
Data gathering is the first step of understanding the nature of organizational culture. These three concepts—“connect,” “convene,” and “catalyze”—will continue to be our guiding principles on the issue of culture as we build on our current work and explore new initiatives. Like addressing cyber risks and climate change, the journey toward reforming culture in the banking and financial services industry is a long one. And there’s no single action that a regulator or a bank can take to make it happen. Getting it right is going to require the will and expertise of regulators, financial services firms, academics, and practitioners. And while changing organizational culture is a long-term, complex, and challenging task, I’m optimistic that we can and we will make progress. And the Federal Reserve Bank of New York is committed to being a partner on that journey. Thank you. 3/3  BIS central bankers' speeches

That is, that we know the range of outcomes that might happen and how the economy works and, insofar as is possible, given uncertainty, that we correctly analyse the available information to weight the probability of those. A famous corollary of this is the efficient markets hypothesis – that it is not possible to systematically ‘beat the market’. The stronger form of the hypothesis posits that market prices fully reflect all available information – that the price reflects the likely future revenue streams. But even if the price does deviate from that fundamental level, it may be rational for investors to remain in the market – as Chuck Prince famously put it, to keep dancing so long as the music is playing. The rewards of the game may be worth the risk of being stuck without a proverbial chair at the end. And even if they are not, sitting on the sidelines may not be a winning career move if promotions and funding flow to those with a reputation for high returns. It may be rational to stay with the herd, as Keynes said “it is better for reputation to fail conventionally”.11 Rational expectations do not mean that the future matches expectations and corrections are avoided – when new information arises, agents react to that. If the information is material for a financial asset, for example a change in Roman property ownership laws in AD 33, the adjustment can be large.
In the financial sector, the Government undertook further reforms that included the use of marketbased monetary instruments in the conduct of monetary policy. As a result of monetary tightening, inflation fell from 197 percent in December 1992 to about 40 percent in 1995; 18.7 percent in 2001 and 17.5 percent in December 2004. Similarly, the Government took fiscal reforms in 1993, such as the cash-budget to curtail the monetisation of fiscal deficits. Consequently, since 1993 we have seen the Government take measures to strengthen fiscal performance through limiting domestic borrowing as a ratio of GDP to levels below 5 per cent. This should be commended. Ladies and Gentlemen Having outlined a brief history of our economic management since 1964, allow me at this juncture to summarise the lessons learnt. From the foregoing, several macroeconomic management lessons can be drawn. These include: (i)  Attaining lower rates of inflation, as in the 1960s and early 1970s, continues to be elusive. However, lower rates of inflation could be attained if the Government maintained fiscal discipline by sticking to the budget and minimising its borrowing from the central bank and the financial sector, as a whole. This would contribute to the achievement of price stability, which in turn would facilitate sustainable economic growth and poverty reduction. (ii)  Lowering of interest rates requires that all key stakeholders play their part. The Government reduction of domestic borrowing contributes to lowering of yield rates on Government securities, which are sometimes used as anchors by commercial banks.

This never happened! Hence, during the 1980s, policymakers realised that economic reforms were needed as a lasting solution to Zambia’s economic woes. For instance, between 1985 and 1987, Zambia undertook an IMF/World Bank-sponsored adjustment programme. This led to a partial decontrol of interest rates and the introduction of a Dutch Foreign Exchange System as a way of allocating scarce foreign exchange through a quasi-market system. It also entailed the removal of some subsidies as a remedy to the persistent fiscal deficits. The reforms proved to be highly unpopular and culminated in public protests and abandonment of the IMF supported reform programme in May 1987. Instead, the Government pursued an indigenous programme called ‘New Economic Recovery Programme’ (NERP) whose theme was “Growth from Own Resources”. Although this programme was successful in some respects, it suffered major setbacks, such as the overvaluation of the Kwacha, soaring inflation, lack of external financing, among others, that made the programme unsustainable, thus prompting the Government to go back to the IMF and agreed on a new IMF supported programme in 1989.
Although it is not easy to reconcile the recent sharp falls in confidence in the US and the relative stability of stock market prices, it would appear that investors generally have taken comfort from the Federal Reserve's ability and willingness to react to the latest data, and take appropriate action. The second cloud on the horizon is the risk to emerging market economies posed by the US slowdown and the unwinding of imbalances in the industrialised world. In some emerging markets, especially those in East Asia exporting high technology products to the United States, the immediate outlook is for weaker economic growth. But for other countries, especially in Latin America, the fall in US interest rates and in the dollar against the euro will mitigate the direct loss of export demand. But the major concern is to avoid another financial crisis, of which there have been too many in the past five years. From Mexico in 1995, through the Asian crisis in 1997 and Brazil in 1999, and, more recently in Argentina and Turkey, sudden reversals of short-term capital flows have created financial crises. In many cases, these crises have proved devastating to the citizens of the countries affected. 2  BIS Review 16/2001  The existence of deep and liquid international capital markets offers opportunities for greater risk diversification by both borrowers and lenders. But it also increases the risk of contagion from one country to another affected by an outflow of short-term debt finance.

If we cannot ensure that the waters are calm, we can at least steer a steady course. BIS Review 16/2001  1  I want tonight to look more closely at two clouds on the international economic horizon. First, the US slowdown and its consequences for the rest of us; and second, the risk of further financial crises in emerging market economies. Central bankers are good at finding clouds. We know that one is attached to every silver lining. And even on passing through the gates of heaven, a central banker would probably argue for greater structural reform while declaring the situation "not wholly unsatisfactory". But the two clouds are moving towards us. So let us examine them. The outlook for the world economy has deteriorated markedly in recent months as a result of the sudden slowdown in the United States and signs of renewed stagnation in Japan. The speed of the deterioration was a surprise, but not the fact of a slowdown. Last year saw the fastest growth rate of the world economy for twelve years. Growth in the US reached an annual rate of 6% in the second quarter of last year, well above even optimistic estimates of sustainable growth rates. A slowdown was not only inevitable; it was desirable. The main surprise in the US was the sharp and sudden break in both business and consumer confidence. US manufacturers' optimism is now almost as low as it was in 1991 - the last time the US economy experienced a recession.
We are, though, conscious that we still have much to learn in operating this new framework, including from the experience of others. I do not know what Sir Leslie would have made of the Global Financial Crisis and the Great Recession. But I think we can take it for granted that he would have risen to the challenge of preventing a repetition. That is a challenge future central bankers must also aspire to meet. Apparently there is an old Chinese curse that wishes “interesting times” on the recipient. The past four years have, I am afraid, been rather more “interesting” than I would have liked. Times will no doubt continue to be interesting, but let us hope in the English, rather than the Chinese sense. Thank you! 7  This is analogous to the relationship between monetary and fiscal policy, where the fiscal authority is in effect a Stackelberg leader. BIS central bankers’ speeches  9  References Adrian, Tobias, and Hyun S. Shin (2009). “Money, Liquidity and Monetary Policy”, American Economic Review, Papers and Proceedings, 99, 600–605. Bean, Charles R. (2003). “Asset Prices, Financial Imbalances and Monetary Policy: Are Inflation Targets Enough?” in Anthony Richards and Timothy Robinson (eds.) Asset Prices and Monetary Policy, 48–76. Reserve Bank of Australia: Sydney. Bean, Charles R., Matthias Paustian, Adrian Penalver and Timothy Taylor (2010). “Monetary Policy after the Fall” in Macroeconomic Challenges: The Decade Ahead, Federal Reserve Bank of Kansas: Kansas City. Bernanke, Ben S. (1983).

For Africa, Islamic finance has tremendous opportunities to support the nation’s development and economic needs. I end my remarks with these words: “Actions Speak Louder Than Words” Thank you. BIS central bankers’ speeches  3
We believe it is important that internal information systems are capable of capturing the full range of exposures to individual counterparties across the firm; that potential future credit exposure is measured realistically, including through stress tests at the counterparty level and across the firm’s portfolio, and managed to prudent limits relative to capital; that credit limits and terms reflect the quality of information provided by the counterparty about its risk profile and risk management systems and are not eroded by competitive pressures; and that the risk management process tries to capture the risk to the firm that could result from the rapid unwinding of positions by leveraged counterparties. A second challenge relates to the growth in volume and complexity of new instruments for risk transfer, which has advanced, as it typically does, ahead of improvements in the trade processing infrastructure and risk management and control practices. Although these innovations seem likely to reduce overall risk in the financial system, shortfalls in the infrastructure leave the market more vulnerable than it needs to be to adverse dynamics in conditions of stress. These gaps are evident in the degree of manual processing required for trade capture and settlement; the substantial backlog of undocumented or unconfirmed trades; the prevalence of assignments of trades without the consent of counterparties; and in the slow adoption of market services for automated processing. Shortfalls are also evident in the limits of models and other techniques for measuring potential exposures in conditions of stress.

Some of these shortfalls are the result of limited investments in resources and technology and the limited ability of individual firms to improve market practice without a commensurate effort by other dealers. Some are a reflection of the complexity of the products and the limited experience firms have had with how these exposures trade in more adverse market conditions. Both require a greater investment of resources and attention by senior managers. We are encouraged by the initial commitments outlined by the major dealers earlier this month to resolve a number of these problems. In cooperation with the other principal supervisors, we will be monitoring progress closely. The third area I’d like to discuss concerns the need to improve stress testing and scenario analyses, which are among the most difficult and consequential parts of the risk management process. What is important, as always, is to bring a forward-looking view to evaluating a firm’s potential exposure across a broad range of economic and market conditions and to capture the risk in the tail of the distribution of possible outcomes.
That the Riksbank should aim to stabilise inflation follows from the Act’s price-stability objective, which the Riksbank has chosen to specify as an inflation target of 2 per cent. That the Riksbank should stabilise resource utilisation follows from the fact that the preparatory work for the Act states that the Riksbank “without prejudice to the price-stability target, should support the goals of general economic policy with a view to maintaining a sustainable level of growth and a high rate of employment”. 3 So what can the Riksbank do in order to achieve sustainable growth and high employment without prejudicing the price stability objective? Well, the best thing the Riksbank can do is to attempt to stabilise resource utilisation around a normal level. But why around a normal level? Surely, a higher level of output and employment than normal would be better? Yes, but it is beyond the power of monetary policy to increase the average level of output and employment and thus increase average resource utilisation. To increase the average level of resource utilisation one would have to use areas of policy other than monetary policy, for example a structural policy designed to improve competitiveness and the workings of the labour market. Unfortunately – as 40 years of experience have shown and 30 years of research have explained – attempts to use monetary policy to keep resource utilisation above the normal level only result in average inflation being higher than the target without raising the average level of resource utilisation.

I advocate a different repo-rate path not because my assessment of underlying economic developments is different but because I believe that, given these developments, a different repo-rate path will better stabilise inflation and resource utilisation. Figure 1: Three repo-rate paths Figure 1 shows three repo-rate paths. The curve marked “Main scenario” is the repo-rate path of the main scenario of the Monetary Policy Update in which the repo rate is left at 0.25 per cent until the end of the second quarter of 2010 and then increased. The curve marked “Lower” is the lower repo-rate path in which there is a reduction in April after which the repo rate is 0.25 percentage points below the path in the main scenario for three quarters and then gradually returns to the main scenario’s repo-rate path. The curve market “Extended low repo rate” is the extended repo-rate path in which the period with a low reporate of 0.25 per cent is extended to the end of the fourth quarter 2010 before the path gradually returns to the main scenario’s repo-rate path. BIS Review 60/2010  3  Figure 1. The main scenario’s repo-rate path, a lower repo-rate path and an “extended” repo-rate path with a low repo rate for an extended period. Per cent, quarterly averages  Source: The Riksbank  I have previously advocated a lower repo-rate path because this provides better outcomes for both resource utilisation and CPIF inflation. The Monetary Policy Department at the Riksbank performed an interesting analysis ahead of the monetary policy decision.
The level of GDP in 10 years after the reform would be around 7% higher in the CESEE countries and around 12% after 20 years compared to the "no reform" scenario, and effects on employment are of similar magnitude. The OECD, or the IMF also point to significant benefits of structural reforms in terms of TFP improvements. Even given the uncertainty around these estimates, welfare advances would most probably be substantial. But the billion(s) dollar question is, how to get structural reforms right? There are, in general, two dimensions of structural reforms. First, and in principle the easier one, are the reforms that bring us closer to the efficiency frontier. That said, it is possible that easy productivity gains from sectoral reallocation and imports of foreign technology have been exhausted. The second are the reforms that expand the frontier. But there is so many different policies that are on the table here: Product market reforms, Competition policy, Labour market reforms, Public finance and taxation (including Social security system), Human capital development, Innovation policy, etc. Can we, and should we, act on all, or most of these different fronts simultaneously? Probably yes. Do we as economists and policymakers truly understand all the synergies, complementarities and marginal effects of different reforms? Do we understand political economy of moving individually or in parallel on all these fronts? Probably not. 7  The bottom line is – there are no guarantees.

Well, as it has been shown already at this conference, convergence is still present but it has slowed down compared to the pre-crisis period. Of course, having said that, we have to keep in mind that CEE has come a long way since the beginning of the transition. Our progress has been tremendous. If we go back to 1995, the average level of income per capita in CESEE countries was below 40% of the old Europe’s income (in PPS terms). By 2008 it increased by a half and reached 60% of the EU15 level of income. And in some regions, like the Baltics, developments were even more spectacular with relative income per capita doubling in this relatively short period of time. It almost seemed that such developments were in line with so called absolute or unconditional convergence where lower-income economies grow faster than higher-income economies, simply because the marginal productivity of capital in those countries is higher. However, today no one actually believes in absolute convergence theory which builds on the assumption that across all countries, the level of technical knowledge (and its change), the rate of savings, the rate of population growth, and the rate of depreciation are all the same. This notion is clearly rejected by the data: countries differ in many, if not all, of these features. And this is the case also for our group of countries in the CESEE region with relatively similar backgrounds.
A key characteristic of the Swiss Money Market Value Chain is that it provides access to about 150 banks and other financial market participants using a single platform and a common set of rules. Another characteristic is that the SNB has direct access to this platform, through which it also conducts its monetary policy operations. The broad array of participants, the high degree of standardisation, and the fact that interbank trades and SNB monetary policy operations in the money market are conducted on the same platform help foster market liquidity, transparency and trust among participants. The advantages of a common platform are particularly apparent in times of financial distress, when it is vital that liquidity redistribution and monetary policy operations continue to function seamlessly. The Swiss Money Market Value Chain is designed to respond rapidly to technological innovations and to market participants’ needs. Its underlying technology has been adapted and renewed on a rolling basis over the past two decades, mostly in small increments. However, larger components have also been overhauled from time to time. Four years ago, for instance, the trading platform itself was replaced. Since then, the CO:RE platform has been in use. On Page 11/13  the CO:RE platform, participants can both carry out bilateral transactions and either place or ‘hit’ quotes that are visible to all. Trading on a common platform and using standardised contracts increases market liquidity. The prices of completed transactions are visible to all participants, creating a high degree of transparency.

Banks can satisfy some of their demand for liquidity by participating in these auctions. As the participating banks are then no longer as dependent on the secured interbank market for obtaining the desired amount of liquidity, aggregate demand for overnight liquidity in the repo market falls, thereby reducing upward pressures on SARON. We also wish to note that, over time, liquidity can be redistributed between banks via other channels than just the repo market. For instance, liquidity redistribution may take place via the transfer of customer deposits and longer-term deposits between banks. Naturally, such adjustment processes take some time. Let me summarise the key points we have made so far. The steering of short-term money market rates continues to work – even in negative territory. Three interest rates play a key role  Page 10/13  here. The SNB policy rate is used to communicate the monetary policy decision and, in particular, the desired stance of monetary policy. The negative interest rate on sight deposits that commercial banks hold at the SNB is the main instrument with which the SNB implements monetary policy on the money market. The exemption thresholds allow the burden on the banking system to be reduced without jeopardising the SNB’s ability to keep secured short-term money market rates, in particular SARON, close to its policy rate. As you can see, the SNB has the instruments needed to steer money market interest rates, including during times when these interest rates are in negative territory.