samchain/econo-pairs-v1 huggingface dataset:
4  BIS central bankers’ speeches  Accordingly, the complexity of the present scenario calls for particularly prudent monetary policy making. On the side of domestic output, the projections we are now presenting show stronger growth, mainly because recently output and demand have risen above December’s forecasts. On the prices side, our evaluation points at a higher level of inflation, especially in the short run. Our view that output gaps are closed implies that economic growth should converge to its trend in order not to cause imbalances that end up being very costly. Experience has taught us how damaging an increase in inflation can be, particularly to the poorer population. It has also taught us the importance of expenditure not growing excessively, in order to avoid imbalances in the external accounts that erode our capacity to deal with shocks of different kinds. This is especially true at this moment, when we are confronting these risks of the domestic economy with doubts about how warranted this better mood of external markets is. The situation of developed economies is very complex, and teaches a great lesson in how phenomena that are overlooked and not addressed on time may end up taking a massive toll on the people. For all this, I want to stress the importance of proper management of the expectations about the behavior of our economy and, of course, of our monetary policy. Prudent monetary policy conduct means being prepared for any scenario, assessing them carefully, and adjusting policy as required.

2/4  BIS central bankers' speeches  Finally, collaboration among different parts of the ecosystem is crucial. My colleague Raymond Chan has highlighted the importance of collaboration in the ‘Path Forward’ session. Regtech solution providers and professional services providers, such as technology firms and advisory firms, have a wealth of knowledge and experience supporting Regtech implementations. As Ms Jessica Tan noted, these technology companies can help to bridge the gaps that banks may have in technical capability, people and skills. We also heard today that some banks have successfully implemented Regtech using external vendor technology for some of their solutions. Leveraging such expertise in turn frees up banks to focus on their core value propositions and competitive edge. How to Grow and Nurture Regtech in Hong Kong 13. Some of the Regtech adoption challenges are technical ones. But one very common barrier is mindset. We have heard multiple speakers who are leaders in their respective organisations say today that investment in Regtech is growing, and it will grow even faster in the future. How can we ensure that the mindset for growth is in place throughout the Regtech ecosystem? 14. One way with which we promote Regtech adoption in Hong Kong is by providing an environment conducive to the development of Regtech solutions. This includes attracting top talent to the city. The Global Regtech Challenge was one such initiative. Earlier, we had the Regtech Challenge finalists presenting their amazing solutions for transforming risk management and regulatory compliance processes.
Labour shortages had increased Net figures  70  70 M anufacturing industry Three service industries Construction sector Retail trade  60  60  50  50  40  40  30  30  20  20  10  10 0  0 91  93  95  97  99  01  03  05  07  Source: The National Institute of Economic Research  6  BIS Review 111/2007  Figure 3. The weak productivity growth was assessed as temporary Annual percentage change  5  5  4  4  3  3  2  2  1  1  0  0  -1  -1 -2  -2 81  83  85  87  89  91  93  95  97  Note. The broken line refers to the Riksbank’s forecast in MPR 2007:2. 99  01  03  05  07  09  Source: Statistics Sweden and the Riksbank  Figure 4. Inflation was in line with the forecast but… Annual percentage change  4  4 UND1X  3  3  2  2  1  1  0  0  -1 jun-02  jun-03  jun-04  jun-05  jun-06  Note. The broken line refers to the Riksbank’s forecast in MPR 2007:2. BIS Review 111/2007  jun-07  jun-08  jun-09  -1 jun-10  Sources: Statistics Sweden and the Riksbank  7  Figure 5.

Barbro Wickman-Parak: The Riksbank and monetary policy – perspectives on interest rate forecasts Speech by Ms Barbro Wickman-Parak, Deputy Governor of the Sveriges Riksbank, at a Statistics Sweden seminar, Stockholm, 3 October 2007. *  *  *  Thank you for inviting me to this seminar. Economic forecasts have long been my special field and this of course plays an important role in my job at the Riksbank. But as you know, the Riksbank’s communication policy means that we do not usually send any signals on how we intend to act with regard to changes in the policy rate at the next meeting. This limits the possibilities for me to actively participate in a discussion of the most recent yield of statistics, which is the theme of this meeting. So the view of the economic situation I intend to present in brief today applies to my assessment at the time of the monetary policy meeting held in September. I shall instead take the opportunity to say a few words about our experiences so far of the Riksbank’s publication of its own forecast for the repo rate. What lessons can we learn? The monetary policy decision on 6 September In September we Executive Board members decided to raise the repo rate from 3.50 to 3.75 per cent. I supported both the raise in the interest rate and the assessment that the repo rate should be raised further at around the pace we presented in June.
Macroprudential measures February 2004: DSTI caps (30% for consumer loans and 35% for mortgage loans) and LTV cap (75%)  October 2006: extending the prudential measures to NBFIs  August 2005: Maximum total DSTI limit at 40%  August 2008: requirements regarding the DSTI caps should be set taking into account interest rate risk and FX risk  January 2007: Higher risk-weight (100%) for commercial real-estate March 2007: self-regulation regime (banks establish DSTI and LTV maximum levels in their internal norms)  December 2012: extending the measures to nonfinancial companies lending  October 2011: LTV caps (60% - 85%) and stress test parameters for DSTI caps  January 2016: - CCoB buffer of 0.625% -> gradual increases in equal steps until 2019 - O-SII buffer of 1% for systemically important banks - CCyB buffer of 0%  Source: NBR  12

•  Margin debt has been setting historic highs for several months running and, according to data released by the New York Stock Exchange on Monday, now stands at $ billion. 2  •  Junk-bond yields have declined below 5.5 percent, nearing record lows. 3  •  Covenant-lite lending is becoming more widespread. In my Federal Reserve District, 96 percent of which is the booming economy of Texas, bankers are reporting that money center banks are lending on terms that are increasingly imprudent. The former funds manager in me sees these as yellow lights. The central banker in me is reminded of the mandate to safeguard financial stability. As I said recently in a speech in Mexico, we must watch these developments carefully lest we become responsible for raising the ghost of irrational exuberance. It is clear to me that we have a liquidity pool that is more than sufficiently deep and wide enough nationwide to finance job-creating capital expansion and reduce labor market “slack.” But that will happen only if and when our fiscal authorities – the Congress and the president  1  Robert Shiller’s price-to-earnings ratio for the S&P 500 is based on average inflation-adjusted earnings from the previous 10 years, known as the cyclically adjusted PE ratio. 2  Data on market activity and margin debt can be found at www.nyxdata.com/nysedata/asp/factbook/ viewer_interactive.asp. 3  As measured by the Bank of America/Merrill Lynch high-yield corporate debt index covering credits rated BB+ and below.
Our Asset Purchase Program, especially the PSPP, its largest component, is a case in point: the Eurosystem applies strict eligibility requirements. Purchases are subject to issuer and issue limits. We closely monitor the risks of the programme in place and any possible deviations from the benchmarks, e.g. in the CBPP3. Our due diligence can, under very strict conditions, lead to purchases of covered bonds that credit rating agencies rate below our regular eligibility threshold. On the other hand, our due diligence can also lead to additional risk control measures for particularly risky covered bonds. Given that we have not suffered any impairment since we started the expanded asset purchase programmes, I feel justified in saying that the financial risks have been successfully contained so far. Maintaining the risk management principles while returning to a more conventional monetary policy It is clear that, once we have seen a sufficiently sustained adjustment in the path of inflation, we will continue to prudently adjust our tool-box of monetary policy instruments, as we have been doing since December last year. This will also be the moment when we have to carefully review how our operational and risk management framework has deviated from its pre-crisis state. Where necessary, some temporary measures will be rolled back. But we will also consider whether there are areas where we have taken new risks onto our balance sheet – and consequently where certain elements should be kept.

I believe there are three things that finance must aspire to, if it is to be a force for good: it must be trusted; it must be inclusive; and it must be sustainable. This Symposium will cover these issues in greater depth. I want to focus my opening remarks on the issue of trust. Global surveys show that the financial sector suffers from a trust deficit. The Edelman Trust Barometer asked over 33,000 respondents globally to rate how much they trust businesses in each of 15 industries to “do what is right”. Financial services was the least trusted industry. There is also a broader sense that finance has not served the economy or society well. Why this mistrust? The reckless risk-taking and blatant disregard for ethical conduct that we saw in the lead-up to the global financial crisis are a big part of the explanation. And it has not helped that the financial industry continues to be dogged by disappointing revelations of financial misconduct and malfeasance. 1/5  BIS central bankers' speeches  Europe saw its largest ever money laundering scandal last year, with hundreds of billions of Euros in tainted money flowing through European banks and their branches across the world. In the US, regulators and prosecutors imposed on financial institutions a total of $ billion in penalties last year for failing to comply with anti-money laundering requirements. In the UK, more than 13 million complaints have been made against retail banks for the aggressive mis-selling of so-called Payment Protection Insurance.
Despite this, his critics point to the fact that he has left behind a European economy that is “drugged”, with low growth, rates at zero and inflation very far from the objective. Monetary policy is not the reason for this; it’s been the main driver of the economic recovery and growth in Europe. 11 million jobs have been created, in no small part thanks to monetary policy. This is the main thing, although there are collateral effects. The problem we have at the moment is that these monetary policy decisions need to be complemented by other instruments. Sometimes it seemed like you were not exactly among Mr Draghi’s most ardent supporters. I have always supported President Draghi. But when you heard him being talked about as the saviour of the euro or the person who had rescued Spain, it didn’t sit well with you. Well, he didn’t see it like that either. In Spain, we rescued ourselves, off our own backs, with the help of our European partners, including the ECB. Mr Draghi made a key contribution, but there’s no single saviour here. It was a set of circumstances and a matter of everyone carrying out their responsibilities in their individual roles. As Vice-President will you continue to appear alongside President Lagarde? I have no idea. I suppose it will continue like that. It’s an unwritten rule, a tradition. Traditions can change, but they can also be of value. Brexit, trade and currency wars, geopolitical tensions.

From a journalistic standpoint talking about Japanification is attractive, but there are actually many differences. While European demographics are not brilliant, they cannot be compared with Japan. The situation facing banks here is not as bad. No real estate bubble has burst here the way it did there. The parallels are in low inflation, low interest rates and low growth. But the outlooks are different and I don’t think that the term really applies to the European economy. Will EDIS be complete when you leave office? 4/5  BIS central bankers' speeches  Yes, I think it will, and quite a few years before that, in fact. One of the German proposals is to limit the amount of sovereign debt held by financial entities. Spain has experienced precisely that, with only national entities continuing to buy public debt at the same rate. Does that seem reasonable to you? It’s a starting point. Completing EDIS is crucial. But we also have to take measures simultaneously to limit how much risk is generated by certain countries. In my experience with Banco Popular and the savings banks, the problem wasn’t public debt. The underlying problem was other types of loans that led to solvency problems. Does the issue with Popular, Villarejo and BBVA bother you? We do not comment on specific situations. Of course, European banking supervision and risk surveillance is on the lookout for anything that might have an effect on financial stability, but so far we have not seen anything. 5/5  BIS central bankers' speeches
If this discussion were to eventually conclude that it is appropriate to make certain changes within the areas I raise, then this would not have drastic consequences for the monetary policy framework as such. Rather, it would mean adjustments and improvements which could be accommodated well within the existing framework of flexible inflation targeting. Before I continue, I would like to underscore one important thing: the members of the Executive Board always give their own views in their speeches. The ideas I express here are therefore entirely my own. The issues I raise are issues we in the Executive Board have discussed off and on, but it is an ongoing discussion and we have not yet drawn any conclusions. What I say here should therefore not be interpreted as the Riksbank's official view on these issues. I would like to highlight two aspects of the monetary policy framework – the target variable and a potential interval, or band, surrounding the target. 3  In Canada, this work has been formalised in that the monetary policy framework is reviewed every five years. This results in an “Inflation-Control Agreement” between the Bank of Canada and the government. 4  The evaluation of Swedish monetary policy by Marvin Goodfriend and Mervyn King on behalf of the Committee of Finance (Riksdagen, 2014), which is assessing different areas of the monetary policy framework, will undoubtedly further stimulate the discussion. This evaluation will be presented in January.

If there were a tolerance band, inflation of just over 1 per cent, or below 3 per cent, instead would be “tolerable” if unforeseen events meant that inflation ended up there, but it would not be something to consciously aim for. The idea that many commentators seem to have is that a target range would mean the Riksbank would feel less forced to bring inflation up to 2 per cent, which in turn would mean that monetary policy would not need to be as expansionary and the risks linked to such a policy could be mitigated. Difficult to pursue another policy even with an interval I would like to point out here, without commenting on the pros and cons of a target range in general terms, that this idea appears to be based in part on a misunderstanding of the motives behind the Riksbank’s policy. The reason the Riksbank is eager to get inflation to rise is not that we have a rigid fixation with achieving exactly 2 per cent inflation all the time. It is due to the fact that the period in which inflation has been below the target has gradually become longer, and that long-term inflation expectations have shown a falling trend and still remain below the target.
(g) Economics and Finance  Although the path less followed, ABM techniques have found a number of applications in economics and finance. In 1957, Guy Orcutt proposed a new model which “consists of various sorts of interacting units which receive inputs and generate outputs” (Orcutt (1957)). Orcutt was ahead of his time: just 8 of his subsequent 500+ citations are from before 1980. Perhaps the most famous application of ABMs in economics is Thomas Schelling's work on racial segregation (Schelling (1969, 1971)). This demonstrated how, in a simple cellular structure with agents following simple rules of thumb, a pattern of segregation might naturally emerge. The model’s predictions closely matched locational patterns in real cities and communities. In the 1980s, Robert Axelrod applied ABMs to game theory (Axelrod (1997)). These could be used to simulate the outcome of dynamic games among interacting agents over time. For example, the optimal behavioural response of agents was often different in repeated games. These techniques found application in real-world settings, from trade wars to Cold Wars. 14  Through the 1990s, some Wall Street firms began using agent-based models to forecast financial variables – for example, prepayment rates for individual mortgages, with high degrees of reliability. 15  ABMs techniques  became attractive in helping explain how even highly irrational agents might still produce efficient markets and could explain some of the irregularities in financial markets, such as crashes and fat-tailed asset prices distributions.

The technique involved generating random numbers and comparing them with probabilities derived from theory. By doing this for a large number of possible neutron paths, he painstakingly painted a picture of the transport of neutrons. Fermi had, by hand, constructed the first agent-based model. These models were about to get a machine which could do these large-scale computations for them. Assembled at Los Alamos during World War II was a dream team of the great and good in science, including John von Neumann, Richard Feynman, Niels Bohr and Robert Oppenheimer. Von Neumann himself offered use of one of the first-ever computers to perform neutron calculations. That exercise culminated in the hydrogen bomb. ABMs had found their first real-world application. 11  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  11  Figure 2: John von Neumann  Figure 3: The hydrogen bomb  Source: LANL (public domain). John von Neumann in the 1940s (image available here). Source: The Official CTBTO Photostream (CC-BY-2.0). An atmospheric nuclear test conducted by the U.S. at Enewetak Atoll on 1 November 1952 (image available here). (b) Military Planning By 1947, the use of random numbers in computation had a name which reflected its probabilistic nature – 3  Monte Carlo, home of the casino. In a lecture in 1948, von Neumann described the idea of cellular automata - artificial systems of cells exhibiting life-like behaviour which evolved according to simple rules of behaviour (von Neumann et al (1966), Sarkar (2000)).
I believe that the EU negotiations process will establish the best conceivable framework not only for the continued reform process, but also for the new reforms within the framework of convergence to the EU. The membership will act as a much needed reform anchor for Turkey. The membership process is expected to show its very first impact on increase in predictability, or in other words, decrease in uncertainty in policies and the economy. In a parallel manner, there are two more important benefits of the EU membership process for Turkey. The first one is institutionalisation of policies and the second one is improvement in governance indicators in the country as a whole. Developments in these areas together with increase in credibility would carry the Turkish economy to a better macroeconomic equilibrium point to operate. In the area of trade, though tariffs on both sides were abolished with the completion of the Customs Union, the accession process and the membership would bring about the elimination of non-tariff, administrative and technical barriers and so foreign trade relations with the EU would further develop.22 This would clearly result in welfare gains not for only Turkey but also for the EU due to trade creation effect.

In this framework, the membership would give both an opportunity and an obligation for local firms to improve their businesses at the micro level through increasing their productivity, enhancing their management and technical skills together with the quality of labour force and switching to products with high value added. In short, as the Turkish economy moves along the membership process and converges to the EU economy, we would see a high and satisfactory level of sustainable growth, advance further in economic stability and therefore in the enhancement of the welfare of the society. Ladies and Gentlemen, As you all know, we have started negotiations only a few weeks ago. It is obvious that the EU enlargement with Turkey will be very different from the previous enlargements in the sense that Turkey is not similar to the other countries in its dynamics including economic, demographic and political ones. However, a closer look at the enlargement periods of the new members reveals the fact that these periods are associated with both debates and concerns. But, when we look at the results, we see a win-win situation for both the EU and the new member states. And I believe that Turkey s membership will be another win-win situation as well. All in all, I believe that Turkey s membership will create a synergy in which both the EU and Turkey could enjoy a mutually advantageous conjunction of their different characteristics. However, one has to remember that during this process, both Turkey and the EU have their own responsibilities.