samchain/econo-pairs-v1 huggingface dataset:
I believe that corrective action - taken voluntarily - is not only overdue but also morally sound. This evening, I would like to focus on the effects of public policy on executive compensation. As you know, in 1993, the IRS ruled that the maximum tax-deductible salary a company can pay an employee is $ million per year. Compensation above $ million has to be “performance-related” to be considered a tax-deductible expense. This change in public policy gave firms that wanted to minimize taxes the incentive to introduce performance-related pay structures for executives earning above $ million a year. The policy change is a key reason that stock options have become the most prevalent performance-related structure for executive compensation. Option-based executive compensation raises a number of issues. For example, one feature of the 1993 IRS ruling is that the $ million salary cap for tax deductibility is nominal and not indexed. This means that as the average total compensation for executives rises over time, the incentive to use stock options increases. Another issue stems from the fact that stock options are non-transferable. Therefore, an increasingly large fraction of an executive's compensation in the form of stock options represents a non-diversified risk. Moreover, if the firm goes bankrupt, the options become worthless at the same time that the executive’s job is lost. As a result, firms may have to increase the amount of options they offer an executive to offset the increased riskiness of this form of compensation.

William J McDonough: Issues in corporate governance Remarks by Mr William J McDonough, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the William Taylor Memorial Lecture, Washington, D.C., 29 September 2002. *  *  *  I am honored this evening to be invited to deliver the William Taylor Memorial Lecture. Bill Taylor was a very special person. He was deeply committed to public service and to the well-being of this nation's financial markets in his many years as head of Bank Supervision at the Federal Reserve Board and as chairman of the Federal Deposit Insurance Corporation. For many of us, he embodied the ideals of a central banker and a bank supervisor: measured, professional, impartial, and unstinting in his willingness to go the extra distance in his search for the right answers to the problems he needed to address. His years in the bank supervisory community were cut all too short. We have sadly missed the benefits of his wisdom. This evening I would like to honor Bill's memory by talking about some issues I know would have been of profound interest to him. Specifically, I would like to focus my remarks on the elements that make for a sound banking and financial system and the issues that have been raised over this past year which have led many to question the quality and integrity of the information available to our markets.
This is supportive of the conclusion that the suite of postcrisis official sector actions in the U.S. has made the U.S. financial system more resilient, while not eroding global competitiveness. Provision of Financial Services I will now turn to the provision of financial services by looking at indicators of different types of banking activities such as lending or underwriting activities.10 A more rigorous analysis would identify supply and demand factors in an attempt to understand not just what has changed, but why, and could allow an assessment of whether financial services are efficiently provided. Nonetheless, this perspective provides a benchmark from the pre-crisis period to support some initial conclusions. In terms of traditional lending, (Figure 7) shows that the ratio of aggregate bank loans to GDP—a rough measure of credit intermediated through the banking sector—has recovered from the postcrisis low and is consistent with historical levels. In addition, aggregate net lending revenues, proxied by net interest income and scaled by GDP, are near historic norms despite compression of net interest margins in the low rate environment. Survey evidence of credit availability also shows ongoing provision of credit.

Conferences like this that bring together the official sector with financial analysts, markets participants and academic economists play an important role in developing the theory and empirical analysis needed to inform those assessments. Thank you very much for your attention. Data Appendix The primary sample includes U.S. owned bank holding companies (BHCs) with assets greater than $ as of 3Q16. This represented approximately 80% of all U.S. owned BHC assets. Where available, estimates are adjusted for mergers since 2000 to include major banking and non-banking (broker-dealer) operations. The FDIC sample represents all FDIC-insured 6/7  BIS central bankers' speeches  depository institutions. 1 The Federal Reserve supervisory program described here applies to bank holding companies, and I use the  term “bank” for ease of exposition. 2 "Consolidated Supervision Framework for Large Financial Institutions,” SR 12–17, December 17, 2012. This  framework applies to institutions that are part of the Federal Reserve’s Large Institution Supervision Coordinating Committee (LISCC) portfolio, including domestic banking organizations with consolidated assets greater than $ billion, large foreign banking organizations with combined assets of U.S. operations greater than $ billion. 3 "Supervision and Regulation,” Federal Reserve Chair Janet Yellen, September 28, 2016. 4 "Amendments to the Capital Plan and Stress Test Rules,” Federal Reserve Board of Governors, January 30,  2017. 5 The cost of capital for banks may depend on the mix of equity and liabilities due to tax effects, conjectural  guarantees, inefficiencies in raising equity, or the opacity of bank risk.
They know we sit on a large amount of the gold and dollar reserves of the world. But what they think is really cool is the Fed Challenge, and how they can win a place in the national competition. My wife said to me this morning that the Fed Challenge sounds considerably more fun and exciting than the real thing. I applaud all of you who contribute to this effort. And I thank the NAF for its tribute to the New York Fed. 2/2

By contrast, the inflation outlook has improved appreciably. This has increased the SNB’s room for manoeuvre. Finally, there is a risk that the financial crisis will cause a deterioration in financing conditions for the economy as a whole. These are the considerations that have prompted today’s decision to cut the three-month Libor target range by another 50 basis points. Given the expected deterioration in the Swiss economy and the imponderables linked to the long and variable monetary policy transmission lags, a further rate cut appears appropriate. With this action we are reducing, to the extent possible, the risk of an even more pronounced economic downturn. Inflation forecast chart How has our inflation forecast been revised? The dashed red curve on the chart represents the new forecast. It covers the period from the fourth quarter of 2008 to the third quarter of 2011, and maps the future development of inflation on the assumption that the three-month Libor remains unchanged at 0.5% over the forecasting period. For purposes of comparison, the dash-dotted green curve shows the inflation forecast of the September monetary assessment, based on a three-month Libor of 2.75%. The new forecast shows a rapid fall in inflation over the next few quarters. It drops back below the 2% mark as from the fourth quarter of this year.
In practice, however, with the large levels of excess reserves in the system, certain institutional aspects of money markets – including bank-only access to IOER, credit limits imposed by cash lenders and other impediments to market competition, and the costs of balance sheet expansion associated with arbitrage activity – appear to create frictions that have made IOER act more like a magnet that pulls up short-term interest rates than a firm floor beneath them. 5 Second: An ON RRP facility. The FOMC will supplement the magnetic pull of changes in the IOER rate with an ON RRP facility to help control the federal funds rate. 6 Under the facility, the Desk will offer general collateral reverse repurchase agreements at a specified offering rate to a broad set of counterparties – including several types of nonbank financial institutions that are significant lenders in U.S. money markets. ON RRPs, particularly if offered at full-allotment – that is, fulfilled for any amount demanded at the designated rate – are conceptually similar to IOER for banks in that they provide access to a risk-free overnight investment. 7 An ON RRP facility can therefore help firm the floor beneath interest rates by widening the universe of counterparties that are unwilling to lend at rates below those available directly from the Fed.

Additionally, having some excess capacity, also known as headroom, in ON RRP operations over expected usage is important for the facility’s effectiveness in helping to control rates. One might want such headroom – which provides confidence to market participants that an ON RRP cap will not bind – to be somewhat higher on average if take-up in ON RRP operations becomes more volatile. Given the importance of a successful liftoff to the Federal Reserve’s credibility, the FOMC has indicated an intention to set ON RRP capacity at a temporarily elevated level when policy firming commences to support policy implementation. As always, the Federal Reserve will monitor financial markets closely and make adjustments in its execution of monetary policy, as needed, to achieve its mandated objectives. Changes in money markets The operational approach for policy normalization I described earlier refocuses the mechanism for implementing monetary policy back to money markets, after the post-crisis period in which policy has been driven by large-scale asset purchases. However, we will be operating in a complex, dynamic, and still-evolving market environment that looks much different from the money markets in which the Fed last operated actively to achieve its interest rate objectives. Still, these markets are no less important for the transmission of monetary policy or the broader U.S. financial system than they were before. 19  In order to explore how term tools might be used more broadly during normalization, the Desk also conducted a series of one-week term RRP operations in mid-February through early-March 2015.
Indeed, 65% of Maltese respondents believe that the euro will result in a one-time increase in prices. And this despite the fact that around 60% considered that the euro will deliver price stability in the medium-term; and that a large majority are aware of the various initiatives that are being taken to limit price abuse and consider that the dual display of prices 3 is helping people get used to the new currency. 4  2  53% and 43%, respectively. 3  According to the April 2007 NSO survey, 91.4% of respondents. 4  The first observation is based on the results of Flash Eurobarometer Survey No. 207. The second and third observations are based on the National Statistics Office survey which was conducted a few weeks after the completion of fieldwork for the Eurobarometer survey. While corroborating many of the findings reported in the Eurobarometer survey, including the same level of concern about potential price abuses, the NSO survey reveals some facts which are not discernible through the questions featuring in the Eurobarometer survey, including the two reported here. BIS Review 77/2007  3  What is equally striking is the fact that while a high level of education and young age are correlated with a positive attitude towards the euro, there is no discernible pattern across age groups or education levels when it comes to expectations about the potential inflationary impact of the changeover. Apprehension is widespread.

Since the upturn in 1993, annual GDP growth has averaged 3–4 per cent, while inflation has stopped at 1 per cent. This is impressive, not least compared with the 1970s and 1980s, when growth averaged little more than 2 per cent and inflation over 8 per cent. Moreover, open unemployment has fallen in just four years from 9 to less than 4 per cent. Today, when Sweden again faces an economic downturn, the initial position is considerably better than earlier. Inflation is low. There is no sign of large financial imbalances. Foreign trade is generating surpluses. The government budget is also in surplus and government debt has been reduced from about 80 per cent of GDP to 50–55 per cent. An economic policy synthesis This brief review clearly illustrates the interaction of theory and practice over the years. New features in economic development raise new questions. New theories provide answers that are sometimes incorporated in practical politics. This influences developments and raises new questions. In view of this, there is every reason to be humble. We are no doubt as far from the end of history in this field as in others. Perhaps one can discern the outlines of a synthesis between the classical approaches and the ideas of Keynes. As I see it, such a synthesis can rest on three pillars: •  The basic condition for a good economic development is markets that function properly, with rules that are clear and firm.
The recent global financial crisis serves as a reminder that status quo is never good enough. Financial development is therefore a journey that should never end, with milestones along the way. BIS central bankers’ speeches  1  As we move on to the next stage of our journey, it bodes well with a saying that “Yesterday was a walk in the park. But tomorrow is a step in the dark.” While I would not exactly call our past events a walk in the park, there are approaching challenges that depict dark clouds above our path. The contextual trends and challenges that I am going to highlight tonight derive from technological developments, the ageing society, urbanization, and regionalization. Firstly, with technological developments, traditional barriers to entry were brought down, allowing non-banks such as fintech companies and cross-border players to the market, and helped reduce operating costs. At the same time, consumers expect better and more timely services. Banking is something that customers want to do “anytime and anywhere”, and they want to do it cheaply as well. While technology may help us reach our destination faster, it also dictates that we be more adaptive and responsive to changes. Banks that get stuck in the past will lose out quickly. A second challenge that put banks’ adaptability to the test is the shifting demographic structure of Thai population.

Prasarn Trairatvorakul: Journey towards a more competitive, inclusive, connected and sustainable Thai banking system Speech by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the Association of International Banks (AIB) Dinner Talk, Bangkok, 21 May 2015. *  *  *  Ladies and gentlemen, It is a great pleasure for me to be here on this special occasion. The topics I addressed in previous occasions focused on economic situations and developments. So much has been said and discussed on those issues, so today I would like to talk about the future development of the banking system in Thailand which is equally important. As many of you here are already aware, we are drafting the third Financial Sector Master Plan which will cover the next five years time span. The process is quite challenging because it involves many stakeholders, both in the public and private sectors, including foreign banks like yourselves. We thank you for your suggestions and feedback provided individually and also as a group through the AIB. Today I will share with you briefly the concept and aspiration behind the development plan for the banking system in Thailand. Thailand is currently at a crossroad in need of structural reforms to cross over the middle income trap. This requires commitment from all stakeholders. The public sector is already taking the lead on infrastructure development to promote urbanization and more equitable income distribution. For the private sector, they will need to make a transition toward production with innovation and higher value-added.
These flexibilities allow us to adapt rapidly and without undue stress to new developments and shocks. Among its other virtues, inflation targeting is purported to improve the transparency and accountability of monetary policy and to help enhance the central bank’s credibility. These were also what we hoped the new framework would deliver for us. On the transparency front, the establishment of the Monetary Policy Committee as the decisionmaking body has transformed the way we conduct monetary policy. Today, the public can see what decisions have been taken, by whom, against what objectives, and for what reasons. On the accountability front, we have now learned to operate in the environment where the public expects us to keep inflation within the target range. This makes us extremely conscious of every policy decision we make, which in turn allows us to avoid potentially costly policy mistakes. But perhaps the biggest change is on the credibility front. The way we conduct policy and our track record have helped us to regain any credibility we may have lost following the unsuccessful defense of the baht. Public confidence in the Bank enables us to anchor private-sector expectations about future inflation, which in turn reinforces the effect of our policy. Yet despite all the good things inflation targeting has brought us, it is not a panacea. In other words, there are limits to inflation targeting. An apparent example here is development of asset prices. Also, past successes do not guarantee future success.

We are honored to have with us five leading international researchers who will present their in-depth studies on some of these issues along with highly regarded discussants and panelists, not to mention the rest of the participants. The goal is to have an intellectual exchange of ideas and practical experiences on these important issues. To make the most out of the one-and-a-half-day event, I strongly urge the audience to ask questions and air your thoughts and/or concerns to the fullest extent possible. Your active participation will help us central banks improve our conduct of monetary policy. After all, as BOE governor Mervyn King puts it, “inflation targeting is a framework designed for a world of learning.” Thank you for your attention. 2  BIS Review 114/2006
These includes the ways the loans are classified, their provisioning requirements, their potential individual or group guarantees, the supervisory norms of the loan quality etc.. In addition, the counterparty risk is indirectly controlled by the requirements in capital adequacy of the institution. There are also other risks that are considered in the regulation, for which certain requirements have been defined. For the liquidity risk, there have been set up various norms for maintaining sufficient liquid assets and limiting the duration of the loans. For the concentration risk, the regulation requirements focus on the lending activity, and set out the norms for the net exposure in relation to the total assets of the institution. This regulatory framework is  2  BIS Review 88/2005  meant to be actively orienting the activity of the microfinance institutions, and as such, will be revised as the developments may require. Besides these two regulations, the examinations manual of these institutions has been prepared. It is based on the CAMELS system we use for banks, and is aiming at assessing the adequacy of the internal policies and procedures, the quality of the management and the identification, assessment and monitoring of risks. The Accounting Manual is also prepared and is based on the national accounting standards, adjusted for the microfinance activity. We retain current regulatory framework, after some expected changes and approval, is adequately monitoring microfinance activity in Albania while not becoming an impediment for its development.

The banking system currently comprises 16 operating institutions, with total assets of around 53 per cent of the country’s GDP. The system is well capitalized and liquid. Its intermediation role is increasing. The lending activity although small (accounting for around 23 percent of total banking assets and around 12 percent of GDP), is strongly picking up. Other financial institutions are trying hard to increase and modernize their activity. However, many problems primarily legal and property rights related which are outside financial sector are making it difficult for them to increase their credit lines. Microfinance has proved to be a more effective way to deal with these problems. With its inventive formulas it makes financial resources become accessible to small and medium businesses that account for most of aggregate production during these development stages. These resources are often used to finance small projects in areas like agriculture, livestock or services like handicraft, small food stores etc. The first microfinance institutions in Albania, were set up in 1994 as development projects co-financed by the Albanian Government and the World Bank. 13 donors cooperate with the Albanian government in supporting the development of SME-s in Albania. From 1992 a large share of funds has been allocated in Albania as donation, but only a portion has been spent. Most of these funds has been  BIS Review 88/2005  1  given as soft loans for Albanian government. Aid represents around 30 % and only 5 % are direct commercial loans to co-finance the private investment.