samchain/econo-pairs-v1 huggingface dataset:
First, banks and highlyindebted households and businesses need to get their balance sheets back in order, typically resulting in a period of low credit growth and high savings. Second, the injection of public funds into stricken banking systems, coupled with a loss of tax revenues in the downturn, results in a deteriorating fiscal position, which subsequently needs correction. Third, such crises often also result in some long-lasting impairment of the economy’s supply capacity. We can see the first two mechanisms at work in the UK economy. But it is not so easy to see what is happening to the economy’s supply capacity and therefore also to the available margin of spare capacity, which is an important determinant of domestic inflationary pressures. Certainly there is some spare capacity in the labour market, where the unemployment rate is around 3 percentage points above its pre-crisis level. But the margin of spare capacity within firms is less clear. In recessions, employers normally hang on to essential or hard-to-replace employees. As a consequence, the growth in output per hour worked typically slows, while unused capacity is simultaneously created. Productivity then accelerates sharply in the recovery phase, as that labour is brought back into use and the margin of unused capacity diminishes. But while productivity growth slowed sharply in both services and manufacturing during the downturn, only the latter has subsequently picked up (Chart 7). Moreover, since the trough, employment and total hours worked have risen by around 1½%, not much less than the 2½% rise in output.

And associated with such a re-balancing, one would expect to see some shift in the structure of production away from sectors focussed on serving domestic needs towards those producing internationally tradable goods and services. The re-balancing should be facilitated by the depreciation of sterling – down around a quarter since the middle of 2007 – but is still at an early stage. Household spending stagnated over 2010 and remains around 4% below its pre-recession level (Chart 2). The sluggishness of consumer spending should hardly be a surprise. Real post-tax labour incomes have been squeezed by a mix of low pay growth and elevated inflation on the back of higher VAT, energy and import prices. In addition, heightened uncertainty probably led some households to increase their savings or pare back their debts. The most recent survey of retailers by the British Retail Consortium suggested that the fine Easter weather and the royal nuptials may have brought a welcome fillip to the High Street, but with the squeeze on real pay likely to continue through this year, it seems likely that consumer spending will remain subdued through this year at least. Public spending will also  1  Though not all: recent employment data, for instance, have been surprisingly robust. BIS central bankers’ speeches  1  provide little impetus to overall activity, given the necessary fiscal consolidation that is now under way. That, of course, is a particular issue here in Northern Ireland. So, the prospect for overall growth depends heavily on business spending and external demand.
It is expected that the aggregate common equity tier one ratio across all G-SIBs, as calculated on the basis of the fully-loaded Basel III requirements, was more than 11% at end-2015, double the ratio in 2009. In parallel, authorities have tightened both the definition of total capital and the requirements on trading activities. Bank funding profiles have also improved since the crisis. For UK banks, liquid asset holdings have tripled to £ and, for the system as a whole, customer loan books are now entirely funded by customer deposits – up from around 75%. Trading assets are down by a third and inter-bank exposures have shrunk by two thirds. Moreover, in the United Kingdom, banks have already been stress tested to ensure they have enough capital to cover two severe scenarios: a hard landing in emerging markets, and a UK balance of payments shock. BIS central bankers’ speeches  7  Chart 7 Capital ratios up materially CET1 (net of transitionals)  % of RWA 14  Transitional adjustments  12 10 8 6 4 2 2008  2015 H1  € Core  2008  2015 H1  € Periphery  2008  2015 H1 UK  2008  2015 H1  0  US  Source: SNL, EBA and Bank calculations. Policymakers can help banks transition to more sustainable business models by giving the maximum regulatory clarity.

BIS central bankers’ speeches  Chart 9 Unprecedented net QE(a) $ bn  1,500 1,000 500 -  -500 -1,000 -1,500 -2,000 -2,500  Total central bank asset purchases  -3,000  Total gross public debt issuance  -3,500  Total net 2009  2010  2011  2012  2013  2014  -4,000  2015  Source: BoE, ECB, FRBNY, Bloomberg, Datastream and Bank calculations (a) US, UK, euro area and Japanese QE and government debt issuance. Converted into US dollar terms using end year exchange rates. That volume has likely pushed down on the term premia demanded by investors when they lend at long maturities to G4 governments, reducing the cost of borrowing for firms and households (Chart 10). In this regard, QE works through the credit and cash flow channels. Chart 10 Term premia compressed 3.5 UK  US  Germany  %  3.0 2.5 2.0 1.5 1.0 0.5 0.0 -0.5  1999  2002  2005  2008  2011  2014  -1.0  Sources: Bloomberg, Federal Reserve Bank of New York and Bank calculations. (a) UK estimate is derived using the model described in Malik, S and Meldrum, A (2014), ‘Evaluating the robustness of UK term structure decompositions using linear regression methods’, Bank of England Working Paper No. 518; www.bankofengland.co.uk/research/Documents/workingpapers/2014/wp518.pdf . The German series is a preliminary estimate based on the same methodology as the UK estimate. US estimates are available from www.newyorkfed.org/research/data_indicators/term_premia.html.
The euro area economic outlook Ten years after the start of the global financial crisis, the euro area economy is performing well – and has been for some time. We have now seen 22 consecutive quarters of economic growth, while over 9 million jobs have been created and the unemployment rate has declined to 8.1%, its lowest level since November 2008. The Irish economy has seen a particularly strong expansion in recent years. Ireland is now growing at the fastest pace of any euro area country. Unemployment has been falling too, and now stands well below the euro area average. This is all the more impressive given the severe crisis Ireland went through and the legacies it is dealing with, including high private debt and arrears. Looking ahead, while some sector-specific data and selected survey results have been somewhat weaker than expected, the latest incoming information overall suggests that the broad-based expansion in the euro area, and in Ireland, is set to continue. Against this background, euro area inflation is expected to continue to converge towards the ECB’s objective of below, but close to, 2% over the medium term. Getting to this point has required considerable monetary policy support. The euro area is looking back on several years of exceptionally low interest rates and unconventional monetary policy measures. The ECB’s key interest rates have been at unprecedented low levels since 2009. They have been supported by a series of unconventional measures, introduced in the face of a protracted recession and persistently low inflation.

We face important global challenges that are naturally causing concern among the people of Europe, especially those who feel left behind. Common institutions and collaboration among Member States give Europe a strong voice in the world. More importantly, they make it possible for us to find effective answers to joint problems. In other words, we are stronger together. Thank you for your attention. 3/3  BIS central bankers' speeches
Tan Sri Dato' Dr Zeti Akhtar Aziz: Economic and monetary developments in Malaysia for 2001 Statement by Tan Sri Dato' Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the BNM 2001 Annual Report Press Conference, Kuala Lumpur, 20 March 2002. *  *  *  In the tradition of Bank Negara Malaysia, I have the pleasure to officially release the Bank Negara Malaysia Annual Report for the year 2001. The report releases the Bank's Annual Accounts for the year 2001, and provides an analysis of the economic and monetary developments in 2001, and gives the forecast for the Malaysian economy for year 2002. The country's economic performance in 2001 was significantly influenced by the unprecedented external developments during the year that had widespread implications on the global economy. Being a highly open economy, Malaysia was affected by the weak external economic environment. The impact was compounded by the effects of September 11. Malaysia's strong economic fundamentals and the promotion of domestic sources of growth have however, reduced the impact of the external developments on the domestic economy. The strengthened macroeconomic fundamentals have also increased policy flexibility to implement pro-growth policies without creating imbalances in the domestic economy. With adequate domestic resources, stability in domestic financial markets and prompt pre-emptive actions, Malaysia has been able to weather this global economic slowdown to record a positive growth for the year at 0.4% and to contain unemployment at below 4%.

The significant progress that was achieved in financial sector reform and restructuring in 2001 has enabled BNM to shift its focus from managing banking sector problems to the medium and longer-term issues of developing a more competitive and resilient banking sector. The Financial Sector Masterplan that was launched in March 2001 aims to provide the blueprint for the development of financial sector over the next ten years. To date, 9 out of the 119 recommendations under the FSMP have been fully implemented. In addition, 22 recommendations are being implemented on an on-going basis. Outlook and Prospects for the Malaysian Economy in 2002 As we enter the year 2002, indications are that world trade is expected to recover to about 2.5% in 2002. Growth in the major industrial countries as a group is expected to stabilise at 1.1%, reflecting a stronger growth of 1.4% in the US economy. Malaysia is well positioned to benefit from the emerging recovery in the global economy. Real GDP growth in the Malaysian economy is projected to recover to 3.5% in 2002. The projection is based on stronger growth in private consumption, a modest recovery in private investment, sustained public sector expenditure and moderate growth in exports. Current domestic indicators suggest that the Malaysian economy is in the early stages of recovery. The index of leading indicators has shown positive growth for six consecutive months. Both the decline in exports and manufacturing production have also begun to moderate.
Since the centralization of open market operations in a single Reserve Bank in 1935, the Federal Reserve Bank of New York has always been designated as the Selected Bank, owing in part to New York City’s historical importance to U.S. financial markets. 10  According to Ken’s research, “the concept of a recognized dealer was somewhat amorphous. An October 1939 Bank memo remarked that the term was ‘not an exact appellation’ and noted that ‘the principal factors which we consider in extending such recognition are (1) reputation for integrity, experience, and knowledge, (2) capital at risk of the business, (3) willingness to make markets under all ordinary conditions and to take positions both long and short, and (4) large volume [of business] of national scope, with the contacts which such trading provides.’” (Garbade, The Early Years of the Primary Dealer System, pp. 8–9). 4  BIS central bankers’ speeches  In the early 1960s, a reporting dealer regime was created, featuring reporting on positions and a public list of the firms that communicated various data to the New York Fed. During the 1980s, in considering new firms for primary dealer designation, Desk staff increasingly looked for evidence that a firm had a certain share of total customer trading activity. The working threshold was generally 1 percent, with some fluctuations in this level over time. An explicit requirement for primary dealers to participate in Treasury debt auctions was added in the mid1980s.

The Fed first undertook very limited foreign exchange (sterling) purchases in the market during the late 1920s and early 1930s in an effort to defend the gold standard.12 The Gold Reserve Act of 1934 established the U.S. Treasury’s Exchange Stabilization Fund (ESF) to undertake such operations, but the ESF did not exercise its authority very often until the Bretton Woods fixed-exchange-rate regime came under pressure in the 1960s. In 1962, the Fed began to undertake foreign exchange operations in cooperation with the ESF, and the Desk acted as agent for both accounts. In those early years, the Fed and the Treasury focused on conducting swap operations with foreign central banks, although some direct intervention with the private-market participants did take place. In 1973, after the collapse of Bretton Woods, the dollar began to float, and foreign exchange operations entered a new phase. Over the next two decades, interventions in the private foreign exchange market became much more frequent and on some occasions quite large. Since the 1990s, foreign exchange intervention has become less frequent. The history of foreign reserves investment operations in the market is even shorter; the Desk began to transact directly with market participants to invest foreign reserves held in the System Open Market Account and ESF foreign reserves only in the mid-1990s. Before that, the U.S. monetary authorities held all foreign currency reserves in the form of deposits at other central banks. International context Comparing the Federal Reserve’s counterparty framework with those of our foreign central banking peers highlights a number of differences.
In particular they have significantly expanded their balance sheets, and by making changes in their balance sheet structure they have taken various measures to make targeted investments in submarkets affected by liquidity shortfalls, maintain important credit relationships and ensure a functioning monetary policy transmission. 2  BIS central bankers’ speeches  We, too, have turned to innovative measures, to the targeted longer-term refinancing operations and the purchase of covered bonds and asset-backed securities which I mentioned earlier. For sure, in times such as these we need to be prepared. That is why the ECB’s Governing Council agreed at the beginning of November that the appropriateness of the monetary policy stance should be closely observed. In concrete terms, this means that if it should become necessary to further counteract the risks of a prolonged period of low inflation, the Governing Council intends to take additional unconventional measures within its mandate. Even if it is good to be prepared, one should beware of showing activism. There is no automatic mechanism to initiate further programmes. The ECB’s Governing Council has not decided on a target for the size of the balance sheet; it has rather unanimously expressed an expectation. A kind of mechanical expansion of the ECB’s balance sheet cannot be an end in itself. All of our decisions are to be evaluated against the background of current and medium-term inflation expectations. Consequently, we must continually analyse current price increases to identify the components which comprise the weaknesses in price developments.

No more and no less. We are judged on whether we achieve an average rate of inflation for the euro area as a whole which is in line with our target of below, but close to 2%. The commitment to price stability is symmetrical. That means that the ECB must act exactly the same when the target is undershot for a sustained period as when it is overshot. We take a medium-term view when it comes to achieving our target, because our aim is to ensure price stability over the medium term. At the moment, with an inflation rate of 0.4% for the whole euro area, we are a long way off our target. BIS central bankers’ speeches  1  And in the coming years, too, we can only expect a moderate rise in the inflation rate. There are a number of reasons why the challenges of monetary policy will probably continue to occupy us for quite some time to come. Some banks will still have to adjust their balance sheets, and this applies to an even greater extent to public finances, private companies and households in some countries. This has a structurally dampening effect on overall economic demand, and particularly on investments. Furthermore, important long-term determinants of the real interest rate are pointing downwards: demographic trends, namely longer life expectancy and weak population growth worldwide – but particularly pronounced in the euro area – are creating an environment which necessitates low real interest rates and thus low balanced nominal interest rates.
Through this workshop, we hope to stimulate discussion and future research in the field. Let me take the opportunity at this point to thank the BIS for their involvement in the initiation of this workshop. We have also discussed the possibility of following up the workshop with a larger conference on a later date. In these introductory remarks, I would like to raise some issues that I believe are important for enhancing efficiency in central banks. Naturally, my views on this are influenced by my own experience after having been at the Riksbank for almost 8 years, first as deputy governor and now as governor. In addition, I would like to discuss some issues connected to the benchmarking of central banks. I am very much looking forward to hearing your views on these issues as well as on the other topics on the agenda both today and tomorrow. Well-defined objectives and operational independence It is important that the objectives of public authorities are well-defined. Only then can we achieve a clear focus that enables the institution to be made accountable for its actions. Both focus and accountability are very important for efficiency. Central banks generally have several objectives. The responsibilities of Sveriges Riksbank, for instance, are laid down in legislation as maintaining price stability and promoting a safe and efficient payment system. Economic research has indicated that accountability is crucial for achieving the goal of price stability.

Lars Heikensten: How to promote and measure central bank efficiency Speech by Mr Lars Heikensten, Governor of Sveriges Riksbank, at the Sveriges Riksbank, Stockholm, 23 May 2003. *  *  *  Let me begin by welcoming you all to Stockholm and Sveriges Riksbank. We have more or less made it a practice to organise an academic conference or workshop at least every second year on a topic which we think is relevant for central bankers. Last year the theme of the conference was Monetary Policy and Financial Markets in an Enlarged European Union. This time we have chosen the topic of Central Bank Efficiency. To attain legitimacy - and keep it - central banks have to use taxpayers' money in an efficient way, not least in countries like Sweden where the central bank is now an independent institution. This is an issue of great importance to the bank, and it has occupied much of our time in recent years. We want to continue this work and develop our thinking in the area. Efficiency is also a very important issue from a European perspective and will be as important should we become a member of the Eurosystem. Central bank efficiency is a fairly abstract concept that encapsulates several areas ranging from the roles that are appropriate for central banks to perform, to cost efficiency in a narrower sense. An investigation of the relevant literature shows that there has not been much research conducted on any of these issues.
Both forums involve attendees from a 9 10  Information on members of the RTGS/CHAPS Board can be found at https://www.bankofengland.co.uk/payment-and-settlement https://www.bankofengland.co.uk/financial-stability/financial-market-infrastructure-supervision 6  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  6  range of organisations to ensure input and challenge from a diverse range of stakeholders across the payments landscape, from the major, established banks through to innovative Fintechs and end-users. Looking ahead to RTGS Renewal This is an important time for the UK payments industry. In addition to the RTGS Renewal Programme, Pay.UK11 is working to build a New Payments Architecture for retail payments. There are synergies between these programmes and while we operate independently we are working closely to ensure that we co-ordinate where there are benefits to doing so, and where this will best support the payments industry. An example of our close cooperation is planning the introduction of messaging standards based on ISO 20022. The Bank and Pay.UK are working together on the introduction of a Common Credit Message (CCM) for CHAPS, Faster Payments Service (FPS) and Bacs. The Bank published a joint consultation with Pay.UK and the Payment Systems Regulator (PSR) in June.12 This set out how we propose to develop the new messaging standards to create a harmonised language for retail and wholesale payments in the UK. We will shortly be publishing our response to that consultation, which will set out our next steps. We have also created the Standards Advisory Panel (SAP)13.

Weaknesses in security or operations at any point in the payment chain could threaten stability and trust in the whole system. It is vital to have a holistic view of CHAPS as a network, through which financial or operational risk can be transmitted. Addressing this was particularly important given the increased sophistication of risks faced by the payments system including, for example, cyber-attack. It was therefore agreed to bring the operation of CHAPS in-house. The transfer took place on 13 November 2017, and was smooth with no disruption to the availability of CHAPS for the banks or their customers. I’d like to thank the staff across the Bank, CHAPS Co, the participating banks and other organisations who made it possible. Effective risk management for CHAPS But that was just the first step and the Bank continues to enhance its approach to managing risks in CHAPS. As the systemic risk manager for CHAPS, we seek to ensure that end-to-end flow of payments is safe, secure and stable. We are now increasingly able to draw on the broader set of tools and resources available to the Bank to: identify, assess, mitigate, and respond to the full range of risks to the delivery of the CHAPS system. Our approach is to assign responsibilities for these risks according to where they can be most effectively managed and to coordinate with the owners of these risks (such as Direct Participants and Critical Service Providers) in order to seek assurance that the payment system is operating within our risk tolerance.