samchain/econo-pairs-v1 huggingface dataset:
I judge that there are some upside risks to inflation, should confidence about achieving the 2% inflation target in the medium run be lost. But there are also downside risks if growth remains very subdued. As long as medium-term inflation expectations do remain consistent with our objective – in particular as long as wage growth remains so weak – I believe that we can and should continue to support the economy through the supply of money. But there is a case for taking a slightly longer-term approach than previously. Because of the underpinning from regulated and administered prices, and the fact that the economy is currently flat rather than contracting, I think the risk of deflation is considerably reduced. Rather than a very large, rapid programme of asset purchases to avoid an imminent slump – as was needed in 2009 and again in 2011/12 – a slower, more gradually supportive policy might be more appropriate and less risky to nurse the economy through the next phase of recovery. It is sustained momentum that the economy needs now rather than emergency action. Because of that, in February I voted for an additional £ over 3 months thinking that this could be the first instalment of a more prolonged run of purchases at a somewhat slower pace than previously, and with a relatively modest addition to the total by the end. If we were to do that, then it would be straightforward to accelerate or to stop purchases as the economic outlook developed and the risks became clearer.

Business’ demand for loans persists to be the sole lending increase source, whereas loan to households continues to shrink in annual terms, for the fifth consecutive month. During this period there are transmitted also the first signals on an easing of lending standards from banks, but this step is applied only on large-sized business. Fiscal stimuli developed at more controlled paces in the first 4-month period of year, providing a lower contribution on the economic activity during this period. Fiscal policy has  BIS Review 77/2010  1  maintained an encouraging character, but at a lower rate relative to the same period of previous year. Budget deficit amounted to ALL 5.3 billion, contracted by 47 percent in annual terms. The low economic activity is reflected on the low growth by about 3 percent of budged revenues during the first 4-month period of year. On the other side, budget expense recorded a reduction by about 2 percent from the rate recorded in the previous year. Bank of Albania continues to draw the attention that, notwithstanding the short-term positive effects the fiscal stimuli may generate; the long-term stability of public sector should remain the main leader of fiscal policy. The lesson from the current problematic situation involving many European Union countries, is the indispensability for consolidation of public finances and for that purpose the implementation of important correcting measures at quickest time, is a target of strategic importance.
Scope of monetary policy and acting within the ECB’s mandate I will now come to the first of two points to which the rapporteur has requested we pay particular attention: the “scope of monetary policy”. This includes the question of whether we are acting within our mandate. Our mandate is clearly formulated in Article 127 of the Treaty on the Functioning of the European Union: to maintain price stability. According to primary EU law, the ECB and the national central banks of the Eurosystem are already permitted to purchase government bonds in the financial markets in the context of their monetary policy tasks (Article 18.1 of the Statute of the European System of Central Banks and of the European Central Bank). While the Treaty clearly states the objective the ECB has to pursue, it describes just as clearly what the ECB is not allowed to do. Article 123 of the Treaty prohibits monetary financing. In particular, we are not allowed to buy any government bonds directly, i.e. on the primary market. Government bonds can only be purchased if they are already on the market and traded freely. The market mechanism – the basic principle Member States have to follow to finance themselves independently – should apply. We therefore also interpret the prohibition of monetary financing as being comprehensive insofar as ways to circumvent it are addressed. It is not possible to purchase newly issued government bonds at certain times.

The ECB will decide completely independently – on the basis of its own assessment of the situation – when and whether to intervene on the secondary market for government bonds for monetary policy reasons. Not only do the framework conditions set by the Governing Council of the ECB for OMTs ensure that the ECB acts within its monetary policy mandate, they also ensure compliance with EU law, particularly the prohibition of monetary financing. I am firmly convinced that introducing the OMT programme was the right thing to do to ensure price stability in the euro area. After all, a currency can only be stable if its continued existence is not in doubt. I am now at your disposal for questions. 4  BIS central bankers’ speeches
For example, the mandate could include demands that the body must take action, or publicly explain why it refrains from taking action, when certain predetermined levels for key variables are passed. Accountability would also be facilitated by demands for far-reaching transparency and reporting, for example to the Riksdag. Macroprudential policy is only a complement I have now expressed my heartfelt support for the need to make it possible to conduct effective macroprudential policy in Sweden. However, I would like to conclude by referring back to what I said initially about having realistic expectations of what macroprudential policy can achieve. We can ask ourselves, for example, if we would have avoided the stress on the financial markets that we have seen recently if an effective macroprudential policy had been conducted in the euro area. No, we probably wouldn’t have, because the problems essentially relate to the fact that monetary policy and fiscal policy have not been appropriate given the economic development in a number of euro countries. Macroprudential policy cannot take the place of well-designed monetary and fiscal policies. But it can act as a wellneeded complement, as well-designed monetary and fiscal policies provide no guarantees against being hit by financial crises. Thank you! References Assenmacher-Wesche, Katrin and Gerlach, Stefan (2010): Credit and Bubbles, Economic Policy, July 2010, 437–482. BIS (2012): European bank funding and deleveraging, BIS Quarterly Review, March 2012. Bank of England (2011): Instruments of Macroprudential Policy: A Discussion Paper prepared by Bank of England and Financial Services Authority staff, December 2011.

This is still a somewhat high number, given the country’s population, and above all, the similarity of products banks are offering. Further mergers and acquisitions may have a positive impact on cost management, which will in turn make it easier for economies of scale to be achieved. On the other hand, domestic mergers and acquisitions are unlikely to involve a cutback in foreign ownership. Enhanced cooperation amongst regulators and supervisors from home and host supervisors is thus essential to the continuing stability of the system. BIS central bankers’ speeches  1  Yet there exists no precise definition what international regulatory cooperation is. Most of the time, it brings to mind the system of committees and working groups meeting in Basel, at the Bank for International Settlements. The international regulations which are the outcome of the Basel system, comprise among other documents, Basel III, the bold new guidelines at the core of which is the concept of risk-weight; some assets are riskier than others and this should be reflected in the percentage of capital that should be held against them. For credit risk, this riskiness is taken to depend on the obligor, i.e. it is taken that savers and investors are almost inherently more averse to obligations of some entities than to obligations of other entities. This approach is not new, but an enhancement of the existing Basel I and Basel II infrastructure.
As one country imposes capital controls, it pushes international financial flows elsewhere, inducing others to impose capital controls, and so on. Now assume that all countries are able to impose capital controls so that at the margin, there are no changes in net capital flows. Then the global adjustment would not take place, EMEs would grow beyond their potential, generating inflation, while weak economies would be trapped with low demand growth. EMEs can still try to temper capital inflows transitorily, but to completely avoid them would be unfeasible and inefficient. Concluding remarks Despite all the current tensions, the global economy is adjusting. Exchange rates of EMEs and commodity exporters have been strengthening – albeit at different speeds as some economies try to smooth the adjustment – and the global recovery is taking place (Figure 4). Fortunately, trade restrictions, which represent the biggest threat to the global recovery, have not been implemented. In recent weeks we have witnessed increased tensions in the world, such as the turmoil in the Middle East and North Africa and the natural and nuclear disasters in Japan. We need to play close attention to these developments, but they should not change the perspectives of the dual-speed recovery in the world economy. As discussed above, the policy decisions in large countries have repercussions on the rest of the world. However, the main role for policymakers is to secure recovery and to create the basis for sustainable growth, which requires macroeconomic and financial stability.

Mohd Razif bin Abd Kadir: The life insurance industry in Malaysia Speech by Mr Mohd Razif bin Abd Kadir, Deputy Governor of the Central Bank of Malaysia, at the Launch of Tokio Marine-Asia Life Group, Kuala Lumpur, 9 March 2007. *  *  *  Mr. Kunio Ishihara, President of Tokio Marine, Mr. Morio Ishii, Vice-President of Tokio Marine, Members of the Senior Management of Tokio Marine Asia Pte. Ltd and Asia General Holdings, Mr. Ng Chek Khiang, Chief Executive Officer of Asia Life (M) Berhad, Distinguished Guests, Ladies and gentlemen, It is a pleasure to be here with you this evening to celebrate the official launch of TM Asia Life Malaysia Bhd.. An alliance of this nature is certainly a happy event, especially when it reflects the positive transformation that is shaping the insurance industry in Malaysia. TM Asia Life combines the strengths of the one of the world’s largest Japanese insurance groups and an established life insurer in the Malaysian market that has provided over 50 years of trusted service to Malaysians. It also marks the establishment of the first Japanese-owned life insurance company in Malaysia, adding further diversity to the profile of foreign insurers in our market. When developments like this take place in the industry, we look forward to new innovations, fresh management perspectives and a renewed energy that will take the industry to the next level of development.
It is to illustrate how far we are into the implementation phase of that reform programme, what remains to be done and, from the vantage point of a macroprudential regulator, how I view the future now that we are eight years on from the financial crisis and memories are beginning to fade. On the first point, the implementation phase, it is illuminating in itself that from a macroprudential point of view I have also chosen to talk about something else today. That is not to say that there is nothing that remains to be done. There is a vast amount of complex and difficult implementation that still needs to happen. My colleague, Andrew Bailey, will set out in a speech tonight the progress we’ve made so far on prudential regulation and three big areas of implementation left to complete: the Senior Managers Regimes, structural reform and competition. But as I have said before, the contours of the reformed regulatory framework for banks are clear – the Basel 3 capital and liquidity regime for banks, the reforms that address too big to fail, especially the regime for loss absorbing capacity in resolution that needs to be held by global systemic banks – which goes by the unlovely acronyms of TLAC and MREL and which is on course to be agreed by the G20 in Antalya this November. And the changes to derivatives and securities financing designed to increase transparency and reduce risk. There are, it is true, some material components of the reforms still under construction.

This question is very pertinent today as it is clear that market liquidity in the system is more fragile, not just in particular market sectors, but also across the system as a whole. Dealers are holding less inventory. For example, in US fixed income corporate securities, market maker inventories are half the size they were immediately before the crisis and back at levels seen in the early 2000s even though corporate bond markets have doubled in size since then. How much should we worry about that? If liquidity is always a good thing, how far can we and should we seek to restore liquidity to levels seen before the crisis? This is a question that is increasingly asked of prudential regulators. I think the issue is more complex, however. Nothing in life is free and that is most certainly true in financial markets. Liquidity comes at a price. And that price is not at all the same for all financial assets. It should reflect the underlying liquidity characteristics of the asset itself and how it is traded. Financial assets cannot escape entirely their underlying risk characteristics. Financial intermediation and financial engineering can reduce the costs of those risks by enabling them to be held by those who can best bear them – and I will return to that. But when pricing the liquidity risk of an asset its underlying characteristics matter. And, the more its liquidity depends on intermediaries being able and willing put their capital at risk, the higher the price should be.
It is also an appeal for application of a timehonored managerial principle: greater autonomy and discretion of local management to develop a tailored approach that balances risk, complexity, and effectiveness appropriate for the needs of a particular institution, and a corresponding accountability upon local management for the results. Absent this sensibility I will state my fear plainly: beware the risk management industrial complex. Provocative Question Number 3: To what extent might the invocation of manual procedures in “protracted outage” scenarios exacerbate rather than assuage from a financial stability perspective? As you know, the CPMI-IOSCO cyber guidance exhorts financial market infrastructures to consider alternatives for processing critical transactions in the event automated means of recovery are not successful. We are therefore compelled to consider not merely “star wars” resiliency but also “stone age” contingency. Locally, this work proceeds across multiple fronts, including analyzing and parsing our transaction flow to identify systemic activity, developing procedures and tools to facilitate 3/5  BIS central bankers' speeches  operations in a manual mode, and conducting simulation exercises with systemically important customers and interfacing financial market infrastructures to test our hypotheses and procedures. I would be remiss, especially in recognition of our Clearing House venue, not to herald our partnership to support each other in the event either the Fedwire Funds Service or CHIPS experiences an operational disruption from which it cannot recover on a same day basis.

Might it be preferable in select cases for a systemic infrastructure to declare a settlement holiday, unpalatable as that may be, or to work with relevant industry associations to declare that select markets are closed? Are the operational challenges of conducting manually activity that is fundamentally dependent upon automation a bridge too far? Do reconciliation challenges that become exponentially more complex as a disruption event extends in duration risk prospects for an orderly return home? Might industry dialogue to agree on the accepted circumstances and corresponding practices for dealing with a settlement holiday in a pre-meditated manner prove to be a superior course? These questions are not easy to answer, but it is very important in the present evolution of industry discourse that they are asked. Provocative Question Number 4: To what extent do measures to address endpoint security risks, such as anomaly detection and assurance regimes, compel a new paradigm for the attribution of liability in the end-to-end payment transaction flow? The reality that endpoint security breaches can undermine confidence in a network even when an operator’s infrastructure has not been violated has spawned a novel body of work, including initiatives to enhance assurance that external endpoints are operating in adherence with an operator’s strict security requirements, and the development of application tools such as anomaly detection to enhance a participant’s management of fraud risk.
After this year’s spike in inflation related to the effects of the pandemic—and with inflation expectations and other measures of underlying inflation close to our 2 percent longer-run goal—I expect inflation pressures to moderate over time and for the inflation rate to come back to its underlying trend of around 2 percent next year. It goes without saying that there is still a great deal of uncertainty about the inflation outlook, and I will be watching the data closely in the coming months. North Country I’ve spoken at great length about the outlook for the U.S. economy as a whole. While people’s experiences are influenced by the macro outlook, the local economy often plays a very important role in shaping their economic opportunity. At the beginning of this speech, I referred to the Federal Reserve System’s Second District, which is the region the New York Fed is responsible for. This area includes New York State, parts of New Jersey and Connecticut, Puerto Rico, and the U.S. Virgin Islands. To better understand the state of the economy and economic growth here, I’ve spent a lot of time this week meeting with North Country business leaders, community organizers, and elected officials. Much of what emerged from these conversations reflects the unique aspects of the North Country economy, which suffered outsize job losses at the onset of the pandemic and continues to experience a reduction in tourism owing to border closures. This area, like many across the Second District and around the country, has its challenges.

Recent data show core inflation, which excludes volatile food and energy prices, running at about 3-1/2 percent, which is well above the Federal Reserve’s longer-term 2 percent goal. Taking a closer look at the data, it’s clear that this spike in inflation largely reflects the transitory effects of the rapid reopening of the economy, which is pushing supply and demand in extreme ways. As the economy gets through these unusual dynamics, I expect inflation to come back down to around 2 percent next year. Given the complexity of this topic, I’ll go into this in more detail. I find it helpful to view recent developments in terms of three categories. The first is related to prices for goods and services that underwent huge declines during the pandemic but are now rebounding as the economy reopens. For example, in the first year of the pandemic, prices for airfare and lodging fell sharply as people cut back on travel. Since then, we’ve seen these rebound toward their pre-pandemic trends, pushing the inflation rate up. One simple way to get a better read of inflation that is not overly influenced by these big swings in prices is to take the average inflation rate from the start of the pandemic. That calculation shows that core inflation has averaged 2-3/4 percent since February of last year. But even that number is heavily influenced by the effects of the pandemic on the second category: used vehicles.
Within some range, increased market power raises rents and acts as a spur to investment, innovation and productivity. But beyond a point, those forces go into reverse. Market power is associated with a fall in innovation and investment incentives, with knock-on negative effects for productivity. There is some empirical support for such a relationship. Jones and Philippon (2016) and Gutiérrez and Philippon (2017) suggest increased market power may have reduced investment among US companies. De  14  Our results are consistent with De Loecker and Warzynski (2012) who find that exporters charge, on average, higher mark-ups and that firm mark-ups increase upon export entry. 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  Loecker and Eeckhout (2017) document a negative relationship between mark-ups and the capital share among global companies. And Díez et al (2018) identify empirically a concave relationship between markups and investment, in line with Aghion et al (2005). We can re-run the Díez et al (2018) investment equations using the panel of UK-listed firms. This also finds a concave relationship with mark-ups (Table 2, column 1). The same relationship holds between mark-ups and R&D expenditure (Table 2, column 2). Chart 12 plots the estimated investment curve. It suggests that firms with mark-ups above around two tend to be associated with lower investment rates, in line with Díez et al. With estimated firm-level mark-ups having risen secularly in a number of countries, this is potentially a cause for concern.

1,2  Labour markets have been subject to big structural shifts over recent years, including the secular fall in the degree of worker unionisation in a number of industries (for example, Schnabel (2013)), the emergence of the so-called “gig economy” (for example, Taylor (2017) and Katz and Krueger (2017)) and secular rise in the degree of globalisation and automation in the workplace (for example, Brynjolfsson and McAfee (2014) and Acemoglu and Restrepo (2018)). Each of these shifts has led to a change in employment patterns and tenures and in workers’ bargaining power. These structural shifts have been used to help explain the secular fall in labour’s share of national income and the recent weakness of wage growth across a number of advanced economies (for example, Dao et al 3  (2017) and Abdih and Danninger (2017)). They have also been used to justify potential shifts in the position and/or the slope of the Phillips curve (for example, Blanchard (2016) and Kuttner and Robinson (2010)). Each of these potentially has a bearing on the setting of monetary policy. Yet, over the same period, structural shifts in the product market have been no less profound. They include the emergence of highly-integrated global supply chains, increasing the degree of specialisation of product markets (Baldwin (2016)); the blossoming of companies benefitting from global network economies of scale and scope, who acquire “superstar” status (Autor et al (2017)); and the rapid emergence of e-commerce and price-comparison technology (Cavallo (2017)).