samchain/econo-pairs-v1 huggingface dataset:
Then I would feel comfortable that the time had come to cut the pace of asset purchases. A few other points with respect to monetary policy are worth emphasizing following last week’s FOMC meeting. First, as I have noted in earlier remarks, a decision to reduce the rate of asset purchases is not a tightening of monetary policy. If we are purchasing additional securities we are simply adding accommodation at a slower pace. Second, any decision to cut the pace of asset purchases should not be taken as signaling an early exit from this period of unusually low short-term rates. We have established a threshold of 6.5 percent for the unemployment rate as long as we do not expect inflation to exceed  2  Federal Open Market Committee statement, September 18, 2013. 3  Federal Open Market Committee statement, September 18, 2013. 4  The 8.1 percent unemployment rate refers to the August 2012 unemployment rate that was the latest information available to the Committee at its September 2012 meeting. BIS central bankers’ speeches  5  2½ percent at a one-to-two year horizon and inflation expectations remain well-anchored. It is likely to take a considerable amount of time to reach the 6.5 percent unemployment rate threshold. Moreover, because the 6.5 percent unemployment rate is a threshold, and not a trigger, depending on the economic circumstances, we might wait a long time after we breach the threshold before we begin to raise our federal funds rate target.

Second, the recent data suggest that the downtrend in the inflation rate may be coming to an end. For example, the core personal consumption expenditures deflator rose at a higher rate over the past three months than during any other 3-month period since mid-2012. Third, measures of longer-term inflation expectations, whether discerned from financial asset prices or from surveys of households or professional forecasters, remain well anchored at levels consistent with our 2 percent objective. This is important because inflation expectations are a major determinant of the inflation process. As long as inflation expectations stay well-anchored, it will be hard for inflation to fall further. Putting these factors together along with my forecast of a gradual pickup in real economic activity, my outlook is for inflation to drift back toward our 2 percent objective over the medium term. However, much like the case of the real growth outlook, there is significant uncertainty around this forecast. Monetary policy So what does this all imply for monetary policy? As you are aware, at last week’s FOMC meeting we made no changes to our monetary policy. In particular, the Committee decided to continue to purchase long-term Treasury securities and agency mortgage-backed securities  4  BIS central bankers’ speeches  at a monthly pace of $ billion and $ billion, respectively.
If a small rise in short-term rates were to lead to an abrupt increase in term premia and bond yields, resulting in a significant tightening in financial market conditions, then the Federal Reserve would likely move more slowly – all else equal. As an example, consider the experience of the 1994–95 tightening cycle. Bond yields rose sharply and the Federal Reserve tightened less than what was ultimately priced in by market participants. Conversely, if term premia and bond yields were to remain low and the economic outlook suggested that financial conditions needed to be tighter and a rise in short-term rates did not generate this outcome, then the FOMC would likely need to raise short-term rates further than anticipated. The 2004–07 tightening cycle might be a good example of this. The FOMC ultimately pushed the federal funds rate up to a peak of 5.25 percent, in part, because the earlier rise in short-term rates was generally ineffective in tightening financial market conditions sufficiently over this period. 5 This means that there is uncertainty about the trajectory of short-term rates from two distinct sources: (1) the economic outlook and what setting of financial conditions this implies is appropriate, and (2) what setting of short rates is consistent with the financial market conditions that the FOMC is seeking to generate. This also suggests that market participants should be cautious in interpreting the Summary of Economic Projection “dot plots” that show the FOMC participants’ modal outlooks for the short-term rate trajectory.

CoCos or contingent capital issuance instruments that count as additional Tier 1 and satisfy our conditions amounted to another € billion. Internal capital generation, either by retained earnings or by extra provisions, and we calculated the provisions that are above what would have been the normal trend of evolution of provisions because indeed, as you well know, since last year banks have been increasing provisions just preparing for the exercise and the two things together amount to € billion. And then the other measures, asset sales and others, amount to € billion. This is a measure of the front-loading by the banks in preparing for the exercise, which is important to highlight because capital increases or increases in extra provisions done last year indeed reduced the numbers that the exercise could detect in the end. 2  BIS central bankers’ speeches  The stress test itself, it’s also important to highlight that the severity of the scenario in the adverse case was indeed higher than in previous exercises. In fact, if we compare with previous exercises, taking the metric of the GDP drop in the adverse scenario, after two years in this present exercise the GDP on average would drop by 5.1%, whereas in previous exercises it dropped by 3% or 4% only. And this exercise had a third year which was not present in the previous exercises, so that the overall drop in GDP in the adverse scenario over the three years comes to 6.6%.
The IMF concluded its latest Article IV Report noting that financial regulation and supervision here is “among the best globally and…a frontrunner in implementing global regulatory reforms”.25 Trust can be sustained only if all countries follow the example of Singapore to implement standards consistently, fully and in a timely way. To provide confidence that full and consistent implementation is taking place, the FSB will support that with rigorous and transparent peer reviews and implementation monitoring. We are providing clear and simple reporting, through the work chaired by Ravi Menon in our Standing Committee on Standards Implementation. In my letter to G20 Leaders last week, I provided that Committee’s latest findings of our monitoring process, in a simple summary with report card. 24  Chart 14, from Haldane (2014), shows the correlation between national savings and investment. That correlation had reached zero just before the crisis, suggesting that the global financial system was fully integrated. However, this has now reversed sharply. Sapir and Wolff (2013) document the home bias in equity markets even within the euro area. 25  IMF (2014b). BIS central bankers’ speeches  11  From next year, the FSB will further enhance this reporting, through an annual reporting process on implementation. This will seek to highlight both shortcomings and good practice, and will seek to assess whether reform measures are having unintended effects and must therefore be adjusted. The FSB’s work will include focus in particular on the effects in emerging markets.

Corporate bonds and securitised loans account for only 7%. Chart 5 shows that in each of the US, UK and Europe, the period since the crisis has seen the stock of outstanding bonds move towards the stock of outstanding bank loans. 9  See FSB (2014e). 10  Chart 6 shows the post-crisis collapse in European securitisation issuance, which has been particularly concentrated in residential mortgage-backed securities. 11  Bank of England and ECB (2014) is a consultation paper on the development of such a model of securitisation. The EBA is also consulting on the same issue, see EBA (2014). 12  Menon 2013. 13  Shanmugaratnam (2013). 6  BIS central bankers’ speeches  times. There is a disconnect between developments in real economies and the degree of financial risk taking. It is particularly notable how the search for yield has compressed liquidity premia across markets. This is unlikely to be sustainable over the medium term because it exists against a backdrop of much-reduced market-making activity.14 Fundamentally, liquidity has become more scarce in secondary fixed income markets. It just appears that it hasn’t. The reasons for the changes are clear however. New prudential requirements have reduced incentives for banks to warehouse risk positions. Dealer inventories in fixed income have declined by 70% since the pre-crisis period, while the stock of fixed income assets outstanding has doubled. And the Value-at-Risk in banks’ trading books has retreated to 2002 levels.
As you are all aware, particularly notable in Spain have been the furlough schemes (ERTEs) in respect of employment and the public guarantees for financing granted by credit institutions to firms. These were forceful measures, aimed at mitigating the impact of the crisis on employment and on households’ and firms’ income and liquidity. In the monetary policy realm, where the Banco de España plays an active role as a member of the Eurosystem, the action of the ECB, through a wide range of measures, has been pivotal. It has stabilised financial markets throughout the euro area, avoiding financial fragmentation across countries, and supported the flow of bank lending, which is so important for financing households, SMEs and the self-employed. The ECB response has thus exerted a significant stabilising effect on economic activity in Spain and in the euro area as a whole. 12  Looking ahead, the Spanish and global economic outlook will hinge crucially on how these policies can be adapted to an extremely uncertain and changing environment, so a balance may be struck between their effectiveness and the efficient use of public funds. In the specific area of budgetary policy, and within the time horizon covered by the Draft Budget for 2021, efforts should continue to be geared, as was the case throughout 2020, to combating both the health crisis and the adverse economic consequences of the lockdown measures introduced to alleviate it.

Jessica Chew Cheng Lian: Launch of Financial Literacy Month 2022 Opening remarks by Ms Jessica Chew Cheng Lian, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Launch of Financial Literacy Month 2022, Kuala Lumpur, 1 October 2022. *** 1. It is my great pleasure to welcome you to Sasana Kijang for the launch of the Financial Literacy Month 2022. On behalf of the Financial Education Network, I thank you for your presence here to join us in flagging off a month-long roadshow to help people across the country build greater confidence in financial matters. It is especially gratifying for our teams to be able to go on the road again, to meet and talk to people in person after what has been a difficult period for many. 2. This is the third year that the Financial Education Network is holding a financial literacy month. And while we have lined up many activities and programmes over the coming month, I know that no one here believes financial education starts and stops within a month. I was reminded again of this as we are about to share the results of the most recent Financial Capability and Inclusion Demand Side Survey, or the FCI Survey, in short, that was conducted in 2021. This is a survey that we carry out once in every three years to track how the level of financial capability in our society – measured in terms of financial knowledge, behaviour and attitudes – is changing over time. 3.
I expect that much of the cost to banks of adopting the advanced approaches of Basel II will come from precisely these types of initiatives. While it will not be inexpensive to achieve these capabilities, particularly for a very large and diverse organization, I believe that it is essential for the largest and most complex U.S. banking organizations to continue down this path. We know all too well the costs to society of bank weakness and ultimately bank failures. As our largest banks continue to grow, to prosper and to pursue new opportunities, they must simultaneously make the investments required to manage themselves appropriately. Likewise, the new framework is providing supervisors with an opportunity to enhance their ability to identify and respond to sources of banking risk, and to share this knowledge within the supervisory community. The Basel Committee was established precisely to maintain an open and constructive dialogue among banking supervisors. This spirit of communication will be more crucial than ever as the new framework is adopted across national jurisdictions. To help ensure that market competition is driven by each bank’s strengths, rather than by differences in each country’s regulatory capital rules, the Committee established the Accord Implementation Group. This group, comprised of senior line supervisors, is responsible for promoting the consistency and quality of implementation of the New Accord. Further, the group has been established to facilitate the exchange of information among national supervisors about bank and supervisory practices.

Hong Kong as an Ideal Platform to Go into Mainland China 6. The Mainland of China is home to the second largest stock market and bond market in the world. While Mainland China’s capital markets have long been rather difficult to access, this paradigm is gradually changing. 7. In the old days everyone had to go through the different programmes of QFII, RQFII, CIBM direct, with all the associated processes of applying for quotas, signing up new service providers and counterparties, setting up new trading system, conforming to onshore rules, 1/4  BIS central bankers' speeches  etc. But the introduction of Stock Connect in 2014 and Bond Connect in 2017 are gamechangers for a lot of international investors. 8. While the pre-existing access channels still cater for some investors like ourselves who have already set up all the systems, the Connect schemes enable all international investors to implement and manage their Chinese investments much more easily based on familiar international rules and practices. They can continue to leverage their existing systems and global partners, such as brokers, custodians and banks without the need to engage onshore service providers. For example, Mainland China is one of the very few markets that require direct holding of securities. But Bond Connect makes nominee holding possible to foreign investors. This drastically reduces the complexities for them to settle trades and manage assets. 9. The Connect schemes are fast gaining popularity among offshore investors.
The mutual or building society sector’s roots in Yorkshire are just as deep.4 Although the first societies appeared in the Midlands in around 1775, within a decade Yorkshire had established its first society, the Hill House Bank Building Club in 1785. By the end of the century, numbers had swelled to around 50, mostly in the Midlands, Lancashire and Yorkshire. The early mutuals pooled savings to buy property for members and terminated once all members’ housing needs were satisfied – so-called “terminating societies”. In 1844, “permanent societies” were permitted, which allowed for a revolving set of both savers and borrowers. But the mutuality principle remained – “to enable a working man to secure himself in the course of a few years a dwelling-house as his own freehold property, as a home for himself and family.”5 Numbers of mutuals grew rapidly during the 19th century, reaching around 850 by 1850 and over 1500 by 1875, with almost 100 in Yorkshire alone. Here in Leeds, the Leeds and Holbeck Permanent Building Society was founded in 1875 and, having been renamed Leeds Building Society in 2005, it remains in the top 10 building societies by size nationally. Consolidation and, latterly, demutualization have reduced numbers over the past few decades. Today, there are only a handful of independent, indigenous mutuals in the region. But they remain some of the strongest in the country. The success of Yorkshire’s financial sector over this lengthy period is no fluke. A reading of history reveals the same successful recipe being repeated.

Øystein Olsen: Monetary policy and interrelationships in the Norwegian economy Address by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), at the Centre for Monetary Economics (CME)/BI Norwegian School of Management, Oslo, 5 September 2011. Please note that the text below may differ slightly from the actual presentation. *  *  *  When Trygve Haavelmo was awarded the Nobel Prize in Economic Sciences in 1989 for his pathbreaking work to quantify economic interrelationships, the Nobel Committee summarised his contributions1. First, empirical science must be based on theories which reflect reality. Second, data and observations must conform to theoretical concepts. Third, a methodology is needed which can be used to quantify and test theoretical relationships on the basis of empirical observations. The interrelationships in the Norwegian economy serve as a backdrop for my address. The purpose of the Centre for Monetary Economics (CME) is to be a venue where researchers and economists in banking and finance can exchange views and gather knowledge about the Norwegian economy, perhaps with particular emphasis on monetary policy. My contribution today will be an analysis of relationships between some key economic variables and how Norges Bank utilises that insight when setting the key policy rate. As Haavelmo described, theories regarding economic interrelationships can never conform fully with empirical observations. Nor can economists carry out controlled experiments in the same way as in the natural sciences. Nevertheless, Haavelmo was an optimist.
The “non-cash” euro is already in use The final stage of the introduction of the euro will include two changeovers: the changeover to the noncash euro, which concerns all book-entry transactions (cheques, bank accounts, bank card payments, transfers, loans, etc.) and the changeover to the cash euro, which concerns banknotes and coins. This summer, banks in France started to systematically convert bank accounts into euros and provide customers with euro cheque books. In various participating countries, in particular France, all bank accounts have already been converted . It is now up to each citizen in the euro area to establish a new scale of values for the currency and to make payments in euro. In this respect, retailers have a fundamental role to play: their active participation and their readiness to accept payments in euro will greatly facilitate the euro changeover as a whole. The cash euro will be in circulation within 8 weeks As regards the cash euro, the main task now consists in frontloading the banknotes and coins so that, on 1 January 2002, transactions can be carried out smoothly in the best possible security conditions. To achieve this, frontloaded coins are supplied to credit institutions. Banknotes will soon be provided to them (as of 1 December in France). Retailers will also be provided with frontloaded banknotes and coins.

That divergence in levels of productivity has, in turn, translated into divergence in levels of GDP per head across countries over the same period. 66  The process of livings standards catch-up has stalled, possibly reversed. And the reason for that appears to be a slowing in rates of technological diffusion. 63  Comin and Mestieri (2013a). Comin and Mestieri (2013b). Baddeley (2006). 66 Comin and Mestieri (2013b). 64 65  18  All speeches are available online at www.bankofengland.co.uk/speeches  18  If there has been a slowing in rates of technological diffusion across countries, is the same potentially true within countries? Evidence using micro-level company data within countries suggests it is. Research by the OECD suggests there has been a slowing in rates of technological diffusion across firms in a number of countries. 67  Put differently, there is a long and lengthening lower tail of companies failing to keep pace with  the technologies used in frontier companies. Their productivity performance has fallen ever-further behind. This widening dispersion in the performance of upper and lower tail companies appears to be a particularly acute in the UK. To a greater extent than elsewhere, it appears that the UK is a tale (or tail) of two companies. At the upper end, the UK seems to have as many high-productivity companies as its main competitors (Chart 8). That fits with the UK’s standing as a global innovation hub, with world-leading companies and universities and high indices of innovation by international standards.
The Federal Reserve has also continued to test its Term Deposit Facility, which provides a term investment option for credentialed depository institutions. Recently, TDF tests varied the rates and maximum awards and introduced an early withdrawal feature that provides favorable treatment of term deposits under the U.S. liquidity coverage ratio. 20  The December 2014 and March 2015 quarter-ends, respectively, had a total of $ billion and $ billion in awarded bids outstanding between term and overnight operations combined. These amounts are close to the $ billion in bids that were submitted in the ON RRP operation at the September 2014 quarter-end, only $ billion of which were filled. On non-quarter-end days, take-up has averaged less than $ billion. 8  BIS central bankers’ speeches  In recent years, money market trading dynamics have changed, reflecting the effects of Fed monetary policy as well as other factors. The expansion of the Federal Reserve’s balance sheet and the introduction of payment of interest on reserves have significantly altered the motivation for many fed funds trades. 21 With an abundant supply of reserves available, banks’ need to borrow funds to meet their reserve requirements or to clear financial transactions has been dramatically reduced. Meanwhile, entities that have surplus cash but are not able to earn IOER, such as Federal Home Loan Banks, lend funds at sub-IOER levels to banks that borrow them for the purposes of depositing them at the Fed to earn IOER.

This portfolio is associated with some $ trillion in excess  BIS central bankers’ speeches  1  reserve balance liabilities – a level at which the Open Markets Trading Desk (the Desk) will be unable to move the effective federal funds rate up or down with small variations in the supply of reserves, as it did before the financial crisis. 1 Against this backdrop, implementation of monetary policy will require a new operational approach to influence shortterm interest rates when the FOMC determines it is time to start raising them. The FOMC outlined its anticipated approach to policy normalization – that is, raising the federal funds rate and other short-term interest rates to more normal levels, and reducing the Federal Reserve’s securities holdings – in a statement of Policy Normalization Principles and Plans published after the September 2014 FOMC meeting, with additional details provided in the March 2015 FOMC meeting minutes. 2 In its September statement, the Committee noted its plans to reduce monetary policy accommodation by raising its target range for the federal funds rate. The Federal Reserve intends to move the federal funds rate into the target range primarily by adjusting the interest rate it pays on excess reserve balances (IOER), and will use an ON RRP facility and other supplementary tools, as needed, to help control the federal funds rate.