samchain/econo-pairs-v1 huggingface dataset:
Our central projection, on the basis that there are reasonable grounds to expect the US to return to moderate growth in the latter part of this year, is that the impact on the UK from the weakening of global activity should be moderate. But we judge that the risks are weighted on the downside, principally on the basis that the pause in US growth could be deeper or more prolonged than expected. Domestically, on our central projection we see reasons for domestic demand to remain fairly well sustained. Overall, therefore, our central projection is for some slowdown in UK growth, to around 2% in the latter half of this year, reflecting the deterioration in global prospects, but thereafter a recovery in growth to around its trend rate as world activity recovers. In parallel, we project RPIX inflation running around 2% through this year, but picking up to reach our target of 2 1/2% at around our two-year forecast horizon. On this basis, recognising that the risks are clearly on the downside of the central projection, we implemented a modest reduction in rates, from 6% to 5 3/4%, in February. Decision-making under conditions of uncertainty lies at the core of any business activity, so I was once taught, and that is just as much true of our job on the MPC as for yours. We all of us get used in our professional lives to looking through a glass darkly.

However, there are notable differences across the region: the Baltic states (especially Latvia and Estonia) and South-East European countries (especially Croatia and Bulgaria) seem to have approached or even reached the equilibrium by 2004 or 2005, whereas in the case of the Visegrad countries (especially the Czech Republic and Poland) the credit-to-GDP ratio seemed to remain below its estimated equilibrium level at that time. Of course, it might well be that some of the CEE economies have overshot the  1  Kiss, G., Nagy, M., Vonnák, B.: Credit Growth in Central and Eastern Europe: Trend, Cycle or Boom?, MNB Working Paper No. 2006/10, November 2006 and Egert, B., Backé, P., Zumer, T.: Credit Growth in Central and Eastern Europe: New (Over)Shooting Stars?, ECB Working Paper No. 687, October 2006. BIS Review 137/2007  1  equilibrium only recently, but one has to wait for a while until the relevant data become available before this overshooting can be captured in empirical analyses. The general upshot of these papers is that the rapid credit expansion in CEE economies has mainly been fuelled by demand factors: the buoyant economic growth and the ensuing increases in disposable incomes, rising expectations with regard to future income prospects related to EU accession, remarkable decreases in interest rates, and falling or low and stable inflation rates.
– https://www.ecb.europa.eu/press/key/date/2019/html/ecb.sp191112_1~f304b47e14.en.html  3/9  Mechanism (SSM) in 2014, the Banco de España’s supervisory role was integrated into a new institutional framework with the European Central Bank at its core. I will come back to this function later on. Some lessons on central bank independence Let me share with you some reflections about central bank independence nowadays. This will be in the form of five lessons which, in my view, should be kept in mind when thinking about central bank independence, particularly at the current juncture of seemingly tamed inflation but with difficulties in achieving price stability objectives in some advanced economies. 1. Institutional settings matter First, I would state that independence, to be effective, must rest on a robust legal and institutional framework. Independence must be formally recognised in all of its relevant dimensions: namely, at the institutional, functional, personal and financial levels. This is the case in the euro area, where the Maastricht Treaty4 provided the appropriate framework; but unfortunately it is not the case in other regions, thus making the task of central banks much more complicated. 2. The need to deliver Second, the main reason for central bank independence is a utilitarian one: independence is an instrument to enhance effectiveness in order to achieve agreed objectives in the general interest, such as price or financial stability. The social value of central bank independence is thus inextricably linked to the effectiveness of its policies.

But, moreover, the cost for banks of issuing these instruments may, in many cases, prove most burdensome. By way of illustration we can consider the following example. Let us take a bank financed only with capital and deposits and that comfortably meets – e.g. with a surplus of 2 pp – its regulatory capital requirement, which we will place in this example at 10% of its risk-weighted assets (RWAs). If the MREL stands at twice the regulatory capital, i.e. at 20% of RWAs, this bank, whose position would not differ greatly at present from that of a large number of banks with a traditional business model, would need to issue eligible instruments equivalent to 8% of its RWAs in order to meet the requirement set. Assuming, somewhat optimistically at present, that the issuance cost were not greater than the return on equity (ROE), the additional financial expense that compliance with the new MREL requirement would entail would account for almost half the bank’s profit after tax. This example illustrates that maintaining excessively demanding requirements would exert significant pressure on the profitability of a portion of the banking industry, calling into question the business model of a by no means negligible number of institutions. Hence, it is worthwhile rigorously adjusting the MREL-setting policy so as to avoid a nondesirable impact on the viability of specific institutions or business models, without of course distorting the rationale behind this requirement.
In 2010 (right side of the chart), there was a 6% probability associated with negative inflation; higher than in the previous rounds but still relatively contained. Participants are also asked to provide their projections about inflation five years ahead, which can be taken as a measure of medium-term inflation expectations and hence of the credibility of the central bank. These have remained firmly anchored, as the next chart  6  Real-time estimates of the output gap, which is an unobserved variable, are generally surrounded by uncertainty. This is the reason why a range of output gap estimates is reported. However, the uncertainty might be particularly large at the current juncture as it is especially difficult to determine whether the steep falls in output also dampen potential growth. There is no clear-cut solution to this problem. 4  BIS Review 81/2009  indicates (slide 12). All survey-based measures of longer-term inflation expectations stood at 1.9% in April. Financial instruments are the third way of obtaining information about market participants’ inflation expectations. They also contain information about inflation risks, since investors not only demand compensation for the level of expected inflation but also for bearing the risk associated with the inflation outlook. In practice, yields on inflation-linked bonds are used as a basis to derive indicators of inflation expectations. 7 However, since the beginning of the crisis, bond markets have been exposed to significant disturbances that have made the measurement of inflation expectations and the associated risks more difficult than usual.

At the ECB, many measures of monetary liquidity are investigated and assessed for the implied risks to price stability. It is worth mentioning in this context that the various measures should not be regarded as mutually exclusive but rather as providing an encompassing view. An obvious measure characterising the rate of monetary expansion consists of the annual growth rate of the broad monetary aggregate M3, a measure that tends to attract most attention in the public debate. 11  IMF (2003) “Deflation: Determinants, Risks, and Policy Options – Findings of an Interdepartmental Task Force”, p 15. 12  The steep drop in the growth rate in compensation per employee in 2009Q1 is mainly driven by strong downward developments in Germany, Italy, the Netherlands and Belgium. Note that, combined with the recent release of productivity growth (-3.6%), unit labour costs growth increased further, from 4.5% in 2008Q4 to 5.7% in 2009Q1, marking a new record high since the start of EMU. 13  See, for instance, McCandless, G. T. and W. E. Weber (1995), Some Monetary Facts, Federal Reserve of Minneapolis Review, Vol. 19, No. 3, pp. 2–11 or, for an alternative approach, Benati, L. (2009), Long Run Evidence on Money Growth and Inflation, ECB Working Paper, No 1027. 6  BIS Review 81/2009  As we can see in Chart 17, annual M3 growth decelerated further in the first quarter of 2009 compared with previous quarters.
Taking these in turn, data form the core of all AI models and good data management and data governance are essential in controlling issues with, for example, biases that may be embedded in the data. At the model level, we need to think about issues such as ensuring that models continue to perform under a wide range of different conditions and being able to explain the outputs of complex AI systems. Moving to the firm level, some of the key issues will revolve around risk management and governance structures; around accountability and appropriate controls. And finally, for the financial system as a whole, AI may amplify network effects such as unexpected changes in the scale and direction of market moves. In terms of the regulatory challenges, it’s clear that policy thinking in this arena is also evolving rapidly. But the existing regulatory landscape is somewhat fragmented when it comes to AI, with different pieces of regulation applying to different aspects of the AI pipeline, from data through model risk to governance. Policy must strike a balance between high-level principles and a more rules-based approach. We also need to future-proof our policy initiatives in a fast-changing field. With all that in mind, and in order to further our objective of promoting the safe adoption of AI in financial services, the Bank of England, along with the Financial Conduct Authority, is today launching the Artificial Intelligence Public-Private Forum.

In addition, the instruments at its disposal were reviewed, with notably the creation of a new credit line facility aimed at  BIS Review 75/2009  3  countries with a proven track record and designed to avoid the stigma that up to now has too often been associated with the IMF's interventions. The Financial Stability Board is the other face of the new international financial architecture. As you know, this is the new name of the former Financial Stability Forum. In fact, it's much more than a change of name. The Forum is becoming a fully-fledged international body. It is gaining in firepower thanks to a reinforced and permanent administrative structure. It is also gaining greatly in legitimacy thanks to the broadening of its membership to all G20 countries. Moreover, it is acquiring new powers through its position as the supervisor of international standard setters. Lastly, it is strengthening its key role in the supervision of financial stability through its full participation in the exercise to identify vulnerabilities being developed by the IMF. Let me stop here. Thank you ladies and gentlemen. 4  BIS Review 75/2009
I hope this new edition will be appreciated as much as, or even more than the previous ones. Before we start the discussion, let me briefly share with you some personal thoughts on this subject. The digitalisation of financial services is clearly a fascinating subject. It is also an issue that is particularly relevant at the moment, as the emergence of digital technologies is coinciding with a period of burgeoning recovery. The fact that regulators, and notably the Banque de France, are turning their attention to these issues should come as no surprise. It is our responsibility, as central bankers and regulators, to strike the right balance between the obvious benefits that digital innovation can bring to the financial sector, and the need for an adequate framework to mitigate risks and guarantee financial stability. The search for this subtle balance can best be represented as a trinity comprising innovation, stability and regulation. We are thus facing a form of “trilemma”, and our role is to build a “possible trinity”. 1. With regard to the first element: innovation. The Banque de France is a proponent of digital innovation in financial services. There is no denying that technology has opened up a wealth of opportunities for innovation, and that we still haven’t unlocked its full potential. However, in finance, the majority of these innovations also have the potential to be highly disruptive, be it in payments, in financing (think of crowdfunding) or in financial markets (think of HFT, which has more questionable objectives).

If we want to slow the growth of the financial sector balance sheet, and most of the expansion of credit in recent years was within the financial sector, we can surely do better than raising Bank Rate to a level that undermines the real economy and our commitment to the inflation target. BIS Review 32/2009  5  As Chairman Bernanke rightly emphasised last week, one of the causes of the crisis was the impact of the growing current account imbalances on financial intermediation in the main deficit countries, the US and the UK. The large and persistent inflows of capital lowered market interest rates to extremely low levels and encouraged the “search for yield”. In response, the financial services industry rediscovered the time-honoured way of raising rates of return – increasing leverage and taking more risk while finding ways of making the degree of risk less transparent. The crisis resulted from the interaction between the “micro” behaviour of banks and other institutions in creating new financial assets and the “macro” economic strategies pursued by the world’s major countries. If we are to make crises less likely in future we will need to concentrate on policies covering these interactions. The size to which the current account imbalances were allowed to grow reflected the fact that the international monetary system, such as it is, placed no pressures on surplus countries and that the main debtor country issued the world’s reserve currency.
This will supplement the role of existing disclosure requirements which help investors assess the financial condition and risk profile of financial institutions. Conclusion It is my hope that as we venture into the future, this workshop will steer a dialogue towards developing a deeper understanding of the contemporary issues that confront the industry and yield new perspectives and insights around governance issues. Programmes such as this make an important contribution to that process. On that note, I wish you a productive and engaging workshop. BIS central bankers’ speeches  5

The opening up of the economy did not only not lead to the disappearance of industry and agriculture; it also raised Spaniards' standard of living significantly. In short, what was apparently a singular system protecting us was leading us down the road to disaster. It was not until an acute crisis hit us hard at the end of the 1950s that we realised  4  BIS Review 18/2009  that what distinguished us from other countries and what we thought was protecting us was actually achieving the opposite. It is now precisely in Spain, where employment protection purports to be in good health thanks to the high unemployment severance packages on top of government benefits, where labour shedding in the face of the current economic crisis is proving fiercer than in other countries. For this reason we should study the experience, for example, of Austria and Denmark, whose labour market reforms can offer us some ideas for reform at home. In Denmark, where the unemployment rate is 4.1%, the authorities opted to improve regular benefit payments and to practically eliminate redundancy payments. In Austria, where the unemployment rate is 3.8%, firms set up an individual fund for each worker which becomes available if workers loses their job, acting as a top-up to government unemployment benefits. When workers find employment in another firm, the unused portion of the fund goes with them and starts growing once again with the new firm’s contributions.
In addition, China plans to launch its international payment system, known as CIPS, in 2014. The development of a single centralised cross-border RMB payments infrastructure also augurs well for market efficiency and standardised practices for RMB payments across the region. 3  4  CNBC, 17 Jan 2013. “China’s outbound investment leaps to record high in December”. BIS central bankers’ speeches  Singapore’s role as an offshore RMB market 32. As an international trading and financial centre, Singapore will seek to support the growth of a resilient offshore RMB market in the Asian region by: i. Building RMB liquidity;  ii. Enhancing access to RMB for funding and investment purposes; and  iii. Integrating the offshore RMB with existing Asian local currency markets. 33. Firstly, Singapore can leverage on its strengths as a key wholesale funding centre to increase liquidity and circulation of the RMB in Asia. We are already seeing good growth in RMB deposits, both non-bank and interbank. We are also one of the largest centres for RMB payments outside Hong Kong. As a major regional funding centre, Singapore has traditionally supported the liquidity of the Asian markets and can partner China in promoting sustainable offshore use of the RMB. 34. In February this year, ICBC Singapore was appointed by the People’s Bank of China (PBC) as the RMB clearing bank in Singapore. The RMB clearing bank will be an important channel for RMB liquidity to circulate between China to Singapore. 35.

Crises can and should be curbed, using measures to strengthen the economy’s immune system as well as measures that reduce the impact once the crisis has erupted. This means that government intervention using public funds may be the right approach in a situation of decline and deflation, low interest rates, high unemployment and pessimism. But crisis-related measures must also be focused on the deeper causes of the crisis in order to strengthen economic sustainability over time. Countercyclical policy must not become counterstructural policy. Crises are not necessarily just an evil. A crisis can lead to reforms and measures that foster progress, as it did in Norway in the 1990s. The regulation of the banking sector in the wake of the global financial crisis is another example. Experiences such as these may give us some comfort in the bleakest of times. The world will go on, even after a deep crisis. Thank you for your attention. BIS central bankers’ speeches  7
However, I would like to underline once more that economic recovery is expected to be gradual and slow as opposed to the rapid recovery in economic activity after the 1994 and 2001 crises experienced in Turkey and that a significant vacceleration in aggregate demand is not expected anytime soon. Persistent tightness in external financing conditions, the lagged and gradual recovery in our primary export markets and the large share of durables and capital goods exports, which are sensitive to foreign demand, indicate that recovery in the Turkish economy will be different from what we have experienced so far. Distinguished Members of the World Economic Society, Esteemed Guests, It is a widely accepted fact that in modern economics, decision-makers act rationally and their decisions form a dynamic system in the field of economy. While measuring the efficiency of policies, their response to such policies over time is examined within a dynamic framework. As we can see in the conference program, almost every single topic in the economic literature is addressed from a dynamic perspective. We are on the brink of starting a two-day conference during which we will be listening to pioneer studies covering a wide range of topics from game theory to the labor market, from education economics to the functioning of the real estate market. There is no doubt that this is an invaluable experience for economists to catch up with the global economic agenda and to follow recent developments.

The impact on the Danish economy has therefore been more limited. BIS Review 81/2008  3  Nordic countries. The growing number of people outside the labour force and on benefits is increasingly becoming the Achilles’ heel of the Norwegian economy. On balance though, the picture is fairly positive: We have managed to keep macroeconomic developments on a steady course, we have avoided dramatic changes in industry structure, and we use our resources fairly efficiently. It is, however, too early to draw definite conclusions. We probably have to wait another generation or two to see the long-term impact of this huge windfall. The debate on sovereign wealth funds Let me wind up with a few words on the sovereign wealth funds debate. Typical features of many sovereign wealth funds are long investment horizons, no leverage and no claims for the imminent withdrawal of funds. This differentiates such funds from for instance the rising number of leveraged funds and investors with short time horizons. Hence, sovereign wealth funds have a strong risk-bearing capacity and an ability to accommodate short-term volatility. Sovereign wealth funds may reduce volatility in asset prices and increase efficiency. Again, transparency and disclosure of information is an important tool in building confidence. This runs both ways, of course.