samchain/econo-pairs-v1 huggingface dataset:
This is the dividend in respect of resource saving which represents one of the net benefits of moving to a single currency, even though the forex traders whose skills are no longer in such demand may not see it that way. In the bond market we have witnessed the first Hong Kong corporate issue in euro, which generated good demand - primarily from European investors but also with significant interest  1  BIS Review 53/1999  from local buyers. In former times an issue of this sort in any of the parent currencies would probably have been rarer, because the individual markets lacked maturity. A significant consequence of the euro’s arrival is that there now exists a market with the potential for a critical mass of liquidity well beyond that which the individual parent currency markets ever managed to achieve. There is further evidence to support that view in provisional reports that global international bond issuance in euro this year has exceeded that of issuance in the parent currencies during the equivalent period last year, while the same comparison for non-euro European currencies shows a decline (although I have not yet seen the formal statistics by which to confirm this). This has been achieved despite the fact that the process of establishing the euro firmly in these markets is not yet complete.

Challenges for policy Turning now to macroeconomic issues, we in the Hong Kong Monetary Authority have had a particular interest in the arrival of the euro, since it was the final step in the transition of the eleven participating countries from closely aligned rates to irrevocably fixed rates, and has therefore consolidated the number of economies where, like Hong Kong, some form of fixed exchange rate arrangement is regarded as both desirable and workable. Of course, I accept that technically the eleven currencies have not been fixed or pegged to one another, but have gone a stage further and been replaced by a single successor. But the critical point is that the euro countries individually have to a large extent, as Hong Kong did to an even larger extent over fifteen years ago, surrendered scope for exchange rate adjustment as an instrument of policy. In the euro case the surrender is not total since, although no member can any longer move relative to the ten other participants, the European Central Bank can of course still pursue an independent monetary policy relative to the rest of the world. Hong Kong is more tightly bound, since we are linked to the US dollar over whose wider value we have no influence. When we pegged the Hong Kong dollar to the US dollar in 1983 we did so at a time of crisis and partly because there was, for institutional reasons, effectively no viable alternative available to us at the time.
We are not at this stage yet; however we are working hard in this direction. I should now like to say a few words about our immediate priority tasks. First, we are making sure the measures resulting from the asset quality review are strictly applied with a focus on the capital buffer replenishment plans as prescribed for some of the banks. Second, we are finalising the plan to further enhance the work of the banking supervision. That is a continuation of the plan we have been implementing for the last almost two years now and whose fulfilment has produced good results. The new accents are: internal regulations, 1/2  BIS central bankers' speeches  information systems, and increase of resources, including appointment of the additional number of people as provided for in the original plan, which, unfortunately, takes more time than we expected. Third, we adopted a combination of measures to make the already developed system for recovery and resolution of banks fully functioning. In this area we have prioritised two sets of measures: the approval of resolution plans for the systemically important domestic banks (something that we have already done for the subsidiaries of EU banks); and the joint work with the Ministry of Finance of possibilities for the BNB to provide liquidity support.

Fourth, we have thoroughly analysed the issue of nonperforming loans (NPL), both at banking system level and at an individual bank level, and we are developing comprehensive measures which would create conditions for reduction of these loans, including strengthened loan-loss provisions, higher NPL write-offs, improved collateral valuations, enhanced disclosure practices, and strengthened data collection. Fifth, we are continuing the efforts to bring the regulatory framework fully in line with the EU law. For example, we are drawing up a completely new law on payment services and payment systems which, inter alia, would strengthen the requirements for security of payments made electronically and via Internet. I mention all these priority tasks of the BNB because for their performance we would largely rely on our constructive partnership with you, as we have done so far. Of course, we are well aware of the specific challenges that you too are facing. The strong pressure on profitability with a still weak, though increasing, and demand for loans requires that you keep seeking solutions for greater efficiency. The topics of credit risk management and costs policies would more and more be high on the agenda also because it is likely that we would witness another cycle of rising interest rates, given the worldwide trends and the expectations of such a development in the euro area sooner or later. These are topics that we will continue to discuss. Thank you for the good cooperation, and congratulations on the 25th anniversary! 2/2  BIS central bankers' speeches
In the long run, we will need to rebalance our economy away from domestic spending and towards exports, to reduce our trade deficit, to repay our debts, and to raise the rate of national saving and investment. So you are probably puzzled by the fact that we seem to be doing exactly the opposite of that today. Almost four years ago now, I called this the “paradox of policy” – policy measures that are desirable in the short term appear diametrically opposite to those needed in the long term. Although we cannot avoid the long-term adjustment to our economy, we can try to slow the pace of the adjustment in order to limit the immediate damage to output and employment. Loose monetary policy today will eventually give way to a tighter stance of policy as the economy recovers. In confronting the paradox of policy, the Bank has had to show some of the same fleetness of foot and ability to feint as my Cambridge contemporary, Gerald Davies. So let me try to explain this evening what monetary policy can do and what it can’t. BIS central bankers’ speeches  1  In doing this I am not going to pretend that I shall be entertaining. But these are serious times and you deserve a serious explanation of what we at the Bank can do and what we can’t, or shouldn’t. Let me start with what monetary policy can do. When banks extend loans to their customers, they create money by crediting their customers’ accounts.

Let me first remind you that France and the United Kingdom have already developed a similar – and I believe promising – approach to regulating innovation. Call it “proportionality” in Paris or “sandbox” in London. But it is the way of solving an apparent paradox: for many, regulation is the enemy of innovation. In fact, regulation has a role to play in order to boost and secure innovation at the same time. To give an example, by allowing third parties to safely access payment data, the revised European Directive on payment services (PSD2) is a significant driver of innovation. More broadly, since its creation in 2016, around 300 Fintechs have been guided by France’s ACPR Fintech Innovation Hub. There are so many promising innovations which will increase customers’ satisfaction, enhance competition and reduce costs. And clearly each of them – from big data to payment services – requires a specific monitoring and response by regulators, with an open and evolutive view. “One size fits all”, and “one time seizes all” would be two bad answers to financial innovation. Let me however share some thoughts on four common challenges and opportunities: cyber risks, crypto-assets, artificial intelligence and climate change. Cyber risks are a major threat, and so investing in cybersecurity is the first booster to innovation. It is clear that the current level of coordination of cyber-attacks can only be mitigated by a similarly coordinated response. We should strengthen the G7 Cyber expert group, and the “Bari principles” adopted last May.
It’s not simply that there’s more money to play for (remember how much more is held in bank accounts). It’s that the assets backing the two are qualitatively quite distinct. Shifting resources from one to the other might therefore have an important effect on the relative supplies and prices of those assets. Charts 3 and 4 make the point. Modern commercial banks, whose sterling balance sheets are aggregated in Chart 3, have what is called a “fractional reserve” structure. Their holdings of liquid assets, including reserves at the central bank, are much smaller than their deposit liabilities (the purple bar). Most of their assets are loans. But loans are “illiquid”: there’s no secondary market in which to sell them and, at least in the short run, their value to the creditor cannot be easily realised. Indeed, when banks attempt to do so – by demanding early repayment or abruptly curtailing lines of credit – they can cause great economic damage, as we (re-)discovered after the 2008–09 crisis. This “maturity transformation” – the combination of on-demand liabilities and illiquid assets – imparts an inherent fragility to commercial banks’ balance sheets. If everyone tried simultaneously to withdraw a bank’s deposits, it wouldn’t have enough liquid resources with which to meet the demand. That’s why banks are vulnerable to “runs”. Taken with the economic costs of deleveraging, it’s also why society regulates and under-writes the banking system, via deposit insurance and central banks’ lender-of-last resort facilities.

So rather than try and give a lecture on monetary theory, or pre-empt the results of ongoing thinking on this issue, I’ll seek to make only a few very broad, conceptual points, touching on the following questions: what is the key innovation in private-sector digital currencies such as bitcoin? what is a “central bank digital currency”? and what might be the economic implications of introducing one? I’ll be brief about the first, not least because there are good, more detailed descriptions elsewhere – including in two excellent articles by Bank economists, published some time ago in the Quarterly Bulletin. The main point here is that the important innovation in bitcoin isn’t the alternative unit of account – it seems very unlikely that, to any significant extent, we’ll ever be paying for things in bitcoins, rather than pounds, dollars or euros – but its settlement technology, the so-called “distributed ledger”. This allows transfers to be verifiably recorded without the need for a trusted third party. It is potentially valuable when there is no such institution and when verifying such information on a multilateral basis is costly. Acting as a trusted third party is precisely what a central bank does. It performs that role only for one particular asset, central bank money (i.e. reserve deposits held largely by commercial banks at the central bank). But the function goes right to the heart of what central banks do and how they came about.
Øystein Olsen: The conduct of monetary policy Introductory statement by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), at the hearing before the Standing Committee on Finance and Economic Affairs of the Storting (Norwegian parliament), Oslo, 4 May 2015. *  *  *  Please note that the text below may differ from the actual presentation. Accompanying charts can be found at the end of the speech or on the Norges Bank’s website. I would like to thank the Chair of the Committee for this opportunity to report on the conduct of monetary policy. My introduction here today is based on Norges Bank’s Annual Report for 2014 and our monetary policy assessments up to the monetary policy meeting in March. Chart: Inflation and projected capacity utilisation Monetary policy in Norway is oriented towards keeping inflation low and stable. The operational target is consumer price inflation of close to 2.5 percent over time. The inflation target provides the economy with a nominal anchor. Inflation has edged up in recent years and hovered around 2.5 percent through 2014. When inflation expectations are firmly anchored, monetary policy can serve as the first line of defence when the economy turns down. Monetary policy seeks to be robust and takes into account the risk of particularly adverse economic outcomes. The goal is to avoid an abrupt economic downturn and higher unemployment. In the event of major shocks, for instance a sharp drop in oil prices, this may imply a more active monetary policy than normal.

Chart: Projections for the key policy rate in various Monetary Policy Reports In the period to the monetary policy meeting in March 2015, the Norwegian economy had moved broadly in line with the path projected in December 2014. Inflation remained close to 2.5 percent. Unemployment had remained stable and was slightly lower than expected. At the same time, the outlook ahead was weaker than envisaged in December. Oil prices had continued to slide and activity in the petroleum industry appeared to be falling more than previously anticipated both this year and next. Wage growth in 2014 turned out to be lower than assumed and there were prospects of somewhat lower wage growth ahead than projected earlier. At the monetary policy meeting in March, Norges Bank gave weight to that fact that the key policy rate had been reduced in December to counter the risk of a pronounced downturn in the Norwegian economy as a result of lower oil prices. So far, the effects on the real economy had been relatively small. At the same time, house prices had continued to rise at a rapid pace. The rapid rise in property prices may lead to higher debt growth. That may increase household vulnerability and trigger or amplify a downturn in the economy further ahead. Based on an overall assessment, Norges Bank chose to leave the key policy rate unchanged.
The data needed for systemic risk monitoring and supervision are not necessarily “real-time” market data – information about trades and transactions that can be reported at high frequency when the events occur – but certainly data would need to be “timely”. What is considered to be “timely” will depend on its purpose, and decisions about how timely the data should be should not ignore the costs of collecting and making the data usable. For many supervisory needs, real-time data would be impractical to collect and analyze in a meaningful way and unnecessary. For example, while supervisors may indeed need to be able to quickly value the balance sheets of systemically important financial institutions, very frequent updates as transactions occur and market prices change could lead to more volatility in values than fundamental conditions would indicate and would be extraordinarily expensive to provide and maintain. Certainly, real-time data could be needed for regulators responsible for monitoring market functioning, and daily data would be helpful to measure end-of-day payment settlements and risk positions among the largest firms. But for supervising market participants, real-time market data could require enormous investments by regulators, institutions, and investors in order to be usable while yielding little net benefit. As policymakers consider redesign of a system of data collection, the goal should be data that are timely and best suited to the mission at hand. A second principle is that data collection be user-driven.

9 The second question, whether a different monetary policy could have prevented the crisis, is relevant when assessing to what extent monetary policy can be blamed for causing the crisis, notwithstanding if it was reasonable from an ex ante perspective. The credit growth and the housing boom in the U.S. and elsewhere were very powerful. Real interest rates were low to a large extent because of global imbalances, the global saving glut and investment shortage. I believe that somewhat higher interest rates would have made little or no difference. Empirical evidence indicates that only a small portion of house-price increases can be attributed to monetary policy. 10 Bernanke (2010) shows that the recent phenomenon of a higher share of adjustable-rate mortgages was unlikely to have significantly increased the sensitivity of house prices to monetary policy. The availability of new, more exotic mortgage types mattered much more for initial mortgage payments than the level of shortterm interest rates. In my view, interest rates would probably have had to be raised very high so as to cause considerable damage to the real economy in order to stop the credit growth and housing boom. 11 That could have thrown the U.S. right into Japanese-style deflation and eventually a liquidity trap.
Globally, labour has seen its share of income fall over the past twenty years and the IMF (2017) finds that technological rd  progress during the 3 Industrial Revolution has been the biggest contributor to this decline. The UK and Ireland  23  are outliers: in both countries, the labour share has been flat, and income inequality stable – if high  – since the late 1980s. 24  Moreover, there is strong evidence that advanced economy labour markets have been polarising since the 1980s – a structural shift that have generally been attributed to technological displacement of mid-skilled jobs resulting from the early stages of automation and digitisation of tasks. Employment growth has been strongest at the high and low skilled ends of the jobs spectrum, resulting in a hollowing out of mid-skilled employment. The polarisation of the labour market has also been evident in the returns to skilled labour, with earnings growth for those with higher levels of education far outstripping those with less schooling. So in summary thus far, if the Fourth Industrial Revolution is similar to past technological revolutions, the overall effect will eventually be labour augmenting – boosting productivity and wages, while creating new jobs to maintain or even increase overall employment. But that is in the long run. In the interim, if it is similar to previous industrial revolutions, it seems likely there will be a period of technological unemployment, dislocation and rising inequality.

His concern “that the variety and difficulty of administrative problems have so increased, and the tools and techniques for solving them have so developed, as to render administration more than ever a science” resulted in the creation of the Institute of Public Administration in 1957. To this day, the Institute continues to provide education, training and research to the public sector, enabling better policy making through a better understanding of the Irish economy. In addition, Whitaker was instrumental in setting up the Economic and Social Research Institute – the first institution to provide independent research and analysis of the Irish economy. 3 For example, nine Regional Technical Colleges were established during the 1970s to provide vocational tertiary level training. The Industrial Development Authority ensured that government funding of higher education adapted to meet businesses’ increasing demands for skilled labour in areas such as engineering and computer sciences, helping to ensure people could develop the skills necessary to work in the expanding sectors. 4 Whitaker, TK (1955/1956) 'Capital formation, saving and economic progress', Dublin: Journal of the Statistical and Social Inquiry Society of Ireland, Vol. XVIX, pp. 184-209. 2  2  All speeches are available online at www.bankofengland.co.uk/speeches  2  The Irish experience over the past half century reinforces the lessons learnt in the UK from the three profound technological revolutions – institutions are essential to smooth the major transitions and to ensure their promise is realised by as many as possible.
We at the Federal Reserve, along with our domestic and international colleagues, are working hard to devise a flexible, multi-faceted strategy that emphasizes prudence and problem prevention, compatibility with the market, and a close and cooperative working relationship between the private and public sector. With these priorities in mind, I believe there are three essential elements of a modern supervision framework - effective bank-level management, market discipline and official supervision. Effective bank level management includes sound corporate governance, rigorous internal controls and effective risk management. Together these elements represent the first and most important line of defense against potential problems. This is increasingly the case as the activities of banks and other financial institutions become more complex and more global. The second line of defense against financial instability is market discipline, which has become an increasingly important ally of the official supervisor. Of course, effective market discipline is not possible without meaningful public disclosure and more selective additional disclosure to counterparties. While significant progress has been made in recent years, it unfortunately remains the case that disclosure practices have not kept pace with the rapid changes in banks’ business activities and risk exposures, and how these exposures are measured and managed. For this situation to be fully remedied, notions of what is proprietary information and what should be in the public domain need to change. Knowing a company’s appetite for risk and its approach to, and methodologies for, managing risk is essential to understanding the risks of being a shareholder, a creditor or a counterparty.

Third, the authorities have ruled that banks may effectively use the capital buffers available to absorb unexpected losses. It has also been announced that banks will have a lengthy period for the subsequent reconstruction of these buffers, in the event they are used. Fourth, the European financial authorities, including the Banco de España, have recommended that banks temporarily eliminate dividend payouts and that they apply prudent criteria in the variable remuneration of their staff. The aim is to channel the resources generated towards strengthening their capital positions. These measures will be reviewed before the end of the year. In any event, however, banks’ dividend payout and staff remuneration policy should continue to be highly prudent until the current uncertainty clears and a sound economic recovery takes root. Fifth, there has been a regulatory reform of capital requirements (known as Quick Fix). The fix includes permanent measures, such as adapting the SME support factor in the calculation of risk-weighted assets, and temporary measures, such as the application of a prudential filter to changes in the value of sovereign debt instruments. As a result, banks’ shock-absorption capacity has been enhanced and, in turn, assistance has been given to financing to firms and to the investments that may be most affected.