samchain/econo-pairs-v1 huggingface dataset:
We need a system where senior people who are responsible for the performance of their firms understand that for a reasonable period of time a meaningful proportion of their remuneration is at risk of being taken away. There is nothing new about this; after all, it is how the traditional partnership system worked. So let me be blunt, the bonus cap is the wrong policy, the debate around it is misguided, and the best thing I can say about allowances is that they are a response to a bad policy. They are not a good solution. I will not win friends in some places for saying this but it dismays me to see a debate which is at times so divorced from the heart of the matter, which is setting appropriate incentives by putting a meaningful amount of pay at risk. Sadly, taking this stance sometimes attracts the criticism of being pro bonuses. This is not true, and I can say from experience that advocating putting bankers’ pay at risk does not naturally improve my popularity in some quarters. But if you don’t believe it from me, here is what the Parliamentary Commission on Banking Standard had to say: “There are distinct advantages to a significant proportion of banking remuneration being in variable rather than fixed form. It is easier to adjust variable remuneration to reflect the health of an individual bank.

These concepts are not all that easy to define but roughly speaking it is a matter of new technology leading to extensive changes in the business community, as well as in society in general. The economy is launched into a process of transformation — a sort of struggle between old and new. New products are introduced as well as new forms of production. Patterns of consumption also change and so does the demand for education. Growth shifts to other parts of the country. The new demand stimulates the growth of capital markets. All these developments influence the public debate and the political system. Bit by bit, the entire economy responds to the new technology. That is what happened in many parts of the world when the steam-engine was successfully developed in the late 18th century. It also occurred after new sources of motive power led to the electric motor and the combustion engine in the late 19th century. 2  See e.g. Myhrman, J. (1994), Hur Sverige blev rikt (How Sweden became prosperous), SNS Förlag, Stockholm. 3  See Magnusson, L. (1996), Sveriges Ekonomiska Historia (Sweden’s economic history), Tiden Athena, Stockholm; Schön, L. (2000), En Modern Svensk Ekonomisk Historia (A modern Swedish economic history), SNS Förlag, Stockholm; Åkerman, G. (1932), Om konjunkturväxlingarnas nödvändighet och grundorsak (On the necessity and basic cause of economic fluctuations), Ekonomisk Tidskrift 1. For a survey of Erik Dahmén’s work and contributions to economic research, see Eklund, K. (1986), Springtime for Dahmén.
Mugur Isărescu: The future of the international banking system Presentation by Mr Mugur Isărescu, Governor of the National Bank of Romania and President of the Romanian Association for the Club of Rome, at the Annual Conference of the Club of Rome “The Power of the Mind”, organized by the Club of Rome, the Romanian Association for the Club of Rome (ARCoR) and the National Bank of Romania, Bucharest, 2 October 2012. * I. *  *  Introduction  I was asked to address this Conference about the future of the international banking system. It is not an easy task at all, at least for two reasons. The first reason is that I am addressing a Conference of the Club of Rome, a forum for open debates and for launching mainly revolutionary ideas. I am afraid that my position, as the Governor of the National Bank of Romania, does not allow me to have more than an evolutionary vision on the banking system. I know that from time to time, and mostly during crisis periods, banks and financial markets are considered the root of all evil. I have to accept that markets in general, especially financial markets, do not function perfectly, but I will paraphrase Winston Churchill and say that the market mechanism could be bad, but better than any other economic and financial mechanisms that humanity has known until now. You have in front of you a person who lived forty years in a centrally planned economy.

MAS posted a net profit of $ 5.0 billion for the year due to higher returns from MAS’ foreign investments in buoyant financial markets globally. VIII  Further enhancing transparency of MAS’ operations  In this annual report, we have included a new section that highlights our key achievements and work in progress. To enhance transparency of our decision making framework, we also disclosed details of the Board Committees in the annual report. Conclusion In closing, MAS continues to be focused on supporting non-inflationary economic growth, developing the financial sector and enhancing the supervisory framework for a sound and resilient financial sector. The economy is expected to do well this year. The IMF/World Bank Financial System Stability Assessment concluded that our financial sector is robust, and our legal, supervisory and institutional framework is sound. Rating agencies like Standard & Poors, Moody’s, and Fitch continue to re-affirm the strength of our economic fundamentals, which underpin our status as the only Asian country with a triple A sovereign credit rating on both domestic and foreign currency debt. We are committed to Singapore’s vision as a leading financial centre. We continue to stay abreast of market developments and industry concerns and uphold our high standards of regulation and supervision. We will work with the industry to continue to develop a more dynamic, competitive and vibrant financial sector. BIS Review 43/2004  3
What implications does this have for the competitive environment? There are banks on the market which operate fairly, comply with regulations, do not accumulate risks, act prudently, and develop business with the target of long-term sustainability. This is the principle governing what they offer to their customers. At the same time, nothing restricts a fraudulent bank unconcerned about risk management, instead simply ‘hoovering up’ depositors’ money. Certainly, to customers looking in from the outside it will seem like the bank with the most appealing offer. If we fail to expose such banks and withdraw them from the market promptly, decent and fair banks will continue to lose in terms of competitiveness. Therefore, I find it strange that the ARB consistently urges the Bank of Russia not to revoke licences. We believe it to be totally against the interests of responsible banks, which - I am convinced - constitute the majority in the Association and in this room. We are very much concerned that the ARB, though emphasising the importance of competition, nevertheless tolerates misreporting, fraud and the violation of laws. The Association neither condemns dubious operations nor seeks to develop good standards of practice. Furthermore, they demand that we turn a blind eye to problems arising in banks. This is exactly what the ARB means when it insists that we ‘not revoke so many licences’. However, we abide by the law and take measures stipulated by the law. Managers of those banks from whom licences were revoked used to be members of the ARB Board, i.e.

Inflation expectations may be sensitive to a large but temporary shock that moved inflation outside the range within which it has remained for some years. With their belief in stability jolted, households’ inflation expectations might move by much more than was justified by the temporary nature of the shock. That would make it more difficult for the central bank to bring inflation back to target. The moral of this particular story is that it may be risky to infer from the observation that inflation expectations are stable that all is well. There will be times when large and persistent shocks occur, and it would be unwise to count on inflation expectations remaining stable when actual inflation starts to deviate substantially from its recent range. So those are the three lessons that I have learnt from Alan: (i) a recognition that economics is not a set of doctrines but a way of thinking; (ii) the importance of using qualitative and quantitative information from a range of sources; (iii) there are a small number of fundamental objectives that are crucial and which we can judge by the Greenspan yardstick of whether we have freed businesses and households from the burden of expending resources to deal with unnecessary policy volatility. Alan’s departure from the central banking scene will deprive us of a source of wisdom, inspiration and leadership. To be sure, Alan’s words, whether spoken or written, will surely still reach us from the sidelines.
Domestic and to an even greater degree foreign banks (which had better access to liquidity from their parent banks) increased their lending at a rapid rate and demand was further boosted by rather lenient fiscal policy in Latvia and Lithuania, although not in Estonia. However, the rapid growth led to the economies overheating. As early as 2007, for instance, the rate of wage increase was 20–30 per cent a year, bank lending to the corporate sector increased by 30–50 per cent and lending to the private sector by 50–70 per cent. The deficit in the current account was 25 per cent of GDP, although that in Lithuania was slightly lower. Foreign analysts, such as the IMF, came to the conclusion that this development was not sustainable in the long run. The course of the crisis As a result of the large imbalances in the Baltic economies, developments would sooner or later have led to an economic crisis regardless of the external circumstances. Now the global financial crisis acted as the trigger. Investors no longer wished to take on as much risk and as the Baltic region was considered risky, with a risk of their currencies devaluating, capital was withdrawn from the region. Governments and banks, both local and foreign-owned, experienced difficulties in finding funding. The outflow led to an acute currency crisis in Latvia.

But of course speculative situations cannot be ruled out either in the present ERM or in ERM 2, as is clear from developments in Finland in recent months. The Swedish position has been to avoid making the new exchange rate arrangement mandatory. Basically, we consider it would be better to achieve coordination in Europe with a single inflation target. We find the present construction of Swedish monetary policy satisfactory. But we can get along with the system that has been chosen. Cooperation will not be mandatory, which means that monetary policy can be conducted with an inflation target as well as with a fixed exchange rate with the euro. Still it is clear that there will be strong pressure on us to participate in ERM 2. It is also conceivable that a period of participation in the exchange rate mechanism will prove to be a condition for EMU membership. In any event, as a EU member state we have undertaken to conduct exchange rate policy as “a matter of common interest”. Changeover plan for the financial sector It is the Riksdag (Sweden’s parliament) that decides if Sweden should join EMU. The Riksbank has the task of helping to ensure that Sweden does in fact have a choice when the time comes to decide, so that Sweden is ready to join if a Riksdag majority so requires. The Ministry of Finance and the Riksbank each have an organisation for the euro’s practical introduction.
Decreasing value of the debt necessitated write-offs and eroded bank capital; (ii) lower market value of government bonds also strained liquidity, given the widespread use of these bonds as collateral for funding in the private repo market, a prime source of non-retail financing for banks; (iii) faced with a fragile banking system, some governments had to spend public money on keeping otherwise insolvent banks afloat. This was a full-blown twin banking and sovereign debt crisis. But it did not affect all euro area countries in the same way. Instead of the convergence and financial integration we want to see in a monetary union, we were witnessing increasing heterogeneity and financial fragmentation within the euro area. Moreover, many countries neglected the need for structural reforms. They faced severe competitiveness deficiencies and therefore built up substantial current account deficits. Tensions in financial markets made the financing of these deficits more difficult. And this set the stage for hopefully the last layer of the iceberg. In the summer of 2012 the hitherto loose talk of a possible break-up of the euro area translated into investors’ fears, then panic, and manifested itself in what we call a perceived redenomination risk, or in other words: an exorbitant widening of the spreads in yields on government bonds issued by stressed countries as opposed to those issued by the hard core of the monetary union. Monetary policy response to the crisis  Let me now describe in more detail how the ECB has responded to these crisis elements.

The second layer of the iceberg – dissipating bank solvency – became overwhelmingly apparent in September 2008 when Lehman Brothers collapsed. This seminal event unleashed a sudden re-pricing of risks, leading to a severe financial crisis. The consequence was a sharp downturn in private investments and consumer demand, and the result of that was a sizeable fall in economic activity. BIS central bankers’ speeches  1  The third layer of the iceberg – the sovereign debt crisis – emerged in the beginning of 2010, when the true scale of the dis-connection between some countries’ official debt and their capacity to generate income to service the debt became clear to everyone. In all fairness, I remind you that central banks in general and the ECB in particular had pointed to this risk long before the sovereign debt crisis erupted. The re-pricing of risks escalated, it spread from banks to the sovereigns and back to the banks, reflecting an adverse feedback-loop between banks and their respective home country. The feedback-loop was composed of three elements to varying degrees in the affected countries: (i) some banks’ solvency was under pressure due to their high exposure to their home country’s sovereign debt.
Paul Tucker: Central counterparties – the agenda Speech by Mr Paul Tucker, Deputy Governor for Financial Stability at the Bank of England, at the European Commission Conference on “European Post Trading Landscape: The Road Ahead”, Brussels, 24 October 2011. *  *  *  Thank you very much for inviting me today. The map for post-trade infrastructure is being redrawn, here in the EU, in the US, and in Asia, under the policies of the G20 and Financial Stability Board. This renewed focus on the plumbing of the financial system is welcome to central bankers. I should like to make just four points1. All starting from the proposition that the safety and soundness of central counterparties (CCPs) is absolutely vital to preserving stability in global capital markets. 1. Organisational structure  Some years ago, there was a debate about whether the authorities should favour “horizontal integration” or “vertical integration” of trading, clearing and settlement infrastructure. Events have taken their course, and vertically integrated groups – concretely, of exchanges owning clearing houses – have become commonplace. The authorities need policies to address this. One dimension is competition. The Commission are focussed on that.

6  BIS Review 36/2004  Both the formulation of a precise inflation target and the aim of striking a balance between the objectives of stable output and inflation could invite a repeat of earlier attempts at fine-tuning. But here it is important to adhere to the lessons drawn from the 1970s and 1980s. The uncertainty underlying the decisions taken must not be underestimated. There is uncertainty as to the current state of the economy, the underlying driving forces and the economy’s functioning, including expectations formation and the impact of monetary policy. Economic models are tools that help us address some of this uncertainty. Inflation targeting places new demands on our models and our use of models. In an uncertain world, risk analysis is a very important part of the work. The aim is as much to understand the economics of the forecast as to produce quantitative estimates. In central banks, dramatic developments in macroeconomic modelling have taken place over the past 10 years. At Norges Bank, we have started work on developing modelling tools for inflation targeting. We are inspired by and work closely with other central banks and the IMF and draw on our long experience of model building in Norway. We are working on several different models and we are assessing other building blocks that we need to support our work in setting interest rates under an inflation targeting regime.
The ratio of consolidated budget deficit to gross national product turned into surplus of 0.4 percent in the second quarter of 2006. And the ratio of public sector net debt stock to gross national product decreased from 90.5 percent in 2001 to 52.8 percent in the first quarter of 2006. In fact, public sector net debt stock is on a downward path converging towards the Maastricht criterion. And maturities are becoming longer. More importantly, the issue of public debt sustainability is no longer at the top of the agenda, implying decreasing pressure in financial markets. I want to stress here again that the continuation of tight fiscal policies and high primary surplus is quite important in terms of both the price stability objective and the financial stability issue. Dear participants, The last concept in central banking that I want to mention today is the role of expectations management in emerging market economies. 3  Moreno, R. (2002). “Fiscal Issues and Central Banking in Emerging Economies: An Overview”. Meeting held at the BIS in December 2002. 4  Eichengreen, B., Haussmann, R. (1999). “Exchange Rates and Financial Fragility”. NBER Working Paper 7418. 4  BIS Review 88/2006  As economic literature tells us, and you very well know, the management of expectations is of great importance for every central banker.

The current surge in oil and commodity prices also poses a challenge to global growth, though, we expect the supply shock to have a limited impact due to several reasons: first, increased oil resiliency, second, real oil prices are still lower than its peak in 2008 and third, many emerging markets administer prices to cushion the blow. There is a downside risk that this environment of global liquidity amid uneven recovery and geopolitical risk in the Middle East may threaten global growth and stability. This scenario has a low probability of happening. Nevertheless, we should be mindful of it. In this scenario, oil prices will surge upward again and remain high due to strong demand from emerging markets, partly fueled by global liquidity, and supply constraints arising from adverse weather and widespread and protracted unrest in the Middle East. Global recession may result; or worse, global stagflation. The outcome depends on how US and Euro policy makers will respond. US and European monetary policymakers are therefore between a rock and a hard place of balancing structural risks to growth and new risks to inflation. If US or Euro recovery is still fragile, policymakers may choose to keep interest rates low, prompting stagflation further down the road. The US and Euro policymakers are therefore in a race against time. Their economic stimulus packages must revitalize the economy before the negative side-effects return home to derail the recovery. In such a world, what can the Bank of Thailand do?
However, such transitory movements should have no material effect on financial conditions or the broader economy. What matters for policy transmission is the predictability that on most days money market rates will be close to the target range set by the FOMC. 13 Of course, if rates were to move substantially outside the target range and those changes were expected to persist, the Fed would take appropriate action to assure that its intended stance of policy is achieved. In addition, as highlighted in minutes to the Committee’s recent policy meetings, an operating regime with a reasonably large positive spread between the IOER and ON RRP rates would support active trading in the funds market like we see today, and would likely prevent the Fed’s involvement in the repo market from growing too large. This would, in turn, lessen the possibility that patterns of financial intermediation could be altered in unanticipated and potentially undesirable ways by the Fed’s actions. Recent changes to the overnight RRP test exercise Now I’d like to return to the ON RRP testing that the Fed has been conducting over the past year, and discuss the changes to the testing exercise that were introduced following the September FOMC meeting. You’ll recall that we began testing ON RRPs in September 2013, when the Committee instructed the Desk to examine how a potential ON RRP facility might work and how it might affect short-term interest rates.

7  To the side are two further images celebrating Austen’s work: an illustration of Miss Elizabeth Bennet 8  undertaking “The examination of all the letters which Jane had written to her”; and an image of Godmersham Park, home of Austen’s brother, Edward Austen Knight, and believed to be the inspiration for a number of her novels. The central design in the background of the note is inspired by the twelve-sided writing table and writing quills used by Austen at Chawton cottage, where she lived and wrote most of her novels. Also included is a quote from Pride and Prejudice – “I declare after all there is no enjoyment like reading!”  9  As Austen’s final resting place, this building – Winchester Cathedral – is also commemorated in the note, featuring in the foil. The Bank of England is committed to ensuring our banknotes recognise the diversity of their users not only through the characters represented but also through their ease of use. That is why we are introducing a new tactile feature on the £ to help the visually impaired: a series of dots in the upper left-hand corner. These dots join existing features, such as differing colour palettes and raised print, that enable those who are blind and visually impaired to recognise different notes, ensuring the nation’s money is as inclusive as possible. 10  This short video illustrates these and other features of the note.