samchain/econo-pairs-v1 huggingface dataset:
Summing up, the significant expansion of the balance sheet, in a context of economic deterioration, reflects the counter-cyclical behavior of the Bank, which is necessary to secure the fulfillment of its mandate, and the existing confidence in our currency. This counter-cyclical operation, coupled with efficient asset and liability management and austerity in budget administration, will allow the Bank to regain positive net worth which, if sustained over time, would allow it to deliver profits to the Treasury for the first time in history. III.3. Technological development The fast-technological advances, marked by the digital revolution, has effects on our Central Bank as it does in any knowledge-based institution, but moreover by its impact on the specific area in which we operate. At the Bank level, we have been investing in the digitalization of its operations and in cyber security. The sanitary contingency has accelerated this process, namely by extending teleworking systems to almost all the staff, allowing them to keep performing most of their usual activities. The emergency of recent months sped up several plans, such as the use of cloud infrastructure capabilities, which has facilitated work from home, coordination among the workers and granted the necessary working flexibility to the teams that so require. Throughout 2020, efforts have continued to be devoted to make the Bank’s systems more resilient by providing a minimum infrastructure that is independent of the current processing centers and that allows the operation of the main business processes to be maintained even when both centers fail at the same time.

Pasricha (2017) shows that policymakers use capital inflows tightening for macroprudential concerns, while use capital outflows easing for competitive purposes. In Chile, the dynamic of outflows easing reflect mainly that Pension Funds’ limits on investing overseas have loosen. Nonetheless, Chile is among those EMEs that are less active when it comes to capital control actions over the past decades. The challenge, however, still remains in terms of addressing the actual level of capital account openness rather than it’s tighten/loosen evolution. Page 4 of 12  Central Bank of Chile September 2019 High-level Policy Seminar on Integration or Fragmentation? International Capital Flows in the Post-crisis World, September 2019 CENTRAL BANK OF CHILE  Pasricha et al. (2015)  Indices of capital controls policy for Chile and other EMEs Pasricha et al.
Despite that, as we have seen only too clearly, it is next to impossible to stabilise activity in the face of a financial crisis, as indebted households, businesses and intermediaries all seek to de-leverage simultaneously. Moreover, the upswing of the credit cycle is frequently associated with an increase in lending to purchase assets, especially property; that was certainly true on this occasion. If the consequence is an investment or construction boom – as was the case in the United States, Ireland and Spain – the result is a capital overhang that needs to be worked off. There are welfare gains from avoiding such capital misallocation. That leads naturally to my fifth lesson: prevention is better than cure. 5  The marginal funding cost is the three-month Libor plus the average of the five-year CDS premia of the major banks. The corporate loan rate is the three-month Libor plus the average of the spread on sub-investment grade syndicated loans. 6  If no other policies were available, then one might be tempted to conclude that the inflation target should just be higher in normal times, as advocated by Olivier Blanchard, Giovanni Dell’Ariccia and Paolo Mauro (2010). By ignoring the other policies that are available to deal with, and prevent, financial crises, to my mind this is giving up too easily. 6  BIS central bankers’ speeches  But how best to do that? Could a different choice of monetary policies have led to a better outcome?

Before delving into the details, I’d like to give you a preview of my main points:   First, I would like to discuss capital and the financial crisis, and will suggest that many U.S. financial institutions did not have the quality or quantity of capital needed to withstand the shocks we recently experienced. The focus in Basel III on improving the quantity and quality of capital at financial institutions – particularly systemically important financial institutions – is critically important.   Second, I will suggest that we should be particularly focused on narrow definitions of capital, which are what investors focused on during the financial crisis.   Third, I will suggest that stress tests are an important supervisory tool that should be used for prudential and macroprudential3 supervision as well as for management’s own capital planning efforts. The rapid recapitalization of many financial institutions in the United States greatly benefitted from the attention during supervisory exercises (including stress tests) on the quantity and quality of capital. I will also discuss the evaluation of discretionary capital distributions (such as increasing dividends, and stock buybacks). Capital and the financial crisis I think it is instructive to look at the capital ratios of two of the very large banking organizations that encountered problems and were acquired during the financial crisis. Wachovia was one of the four largest banking organizations in the United States, with total assets in 2008 exceeding $ billion.
Figure 6 CPI inflation (*)  CPIEFE inflation (*)  (annual change, percent)  (annual change, percent)  6  6  6  5  5  5  5  4  4  4  4  3  3  3  3  2  2  2  2  1  1  1  1  0  0  0 11  12  13  14  15  16  17  Dec.2015 MP Report  6  0 11  12  13  14  15  16  17  Sep.2015 MP Report  (*) Gray area shows forecast, as from the fourth quarter of 2015. Sources: Central Bank of Chile and National Statistics Institute (INE). BIS central bankers’ speeches  11  Figure 7 MPR and expectations (percent) 6  6  5  Financial asset prices, December MP Report(*) MPR  4  5  4  9  3  EES, December 2015  3  FBS, first half December 2015 2  2 11  12  13  14  15  16  17  (*) Built using swap contract interest rates up to 10 years. Source: Central Bank of Chile.

We can do so adopting a culture of permanent assessment of the actions arising from our responsibilities; providing other economic policymakers with the best analyses and proposals for improving economic growth and citizens’ well-being; assisting and collaborating with the research community in the use of our information to contribute to that objective; and promoting – also in collaboration with the public and private sectors – the economic and financial education of the public at large, enabling them to sufficiently understand and appreciate public policies and take the best financial decisions for themselves. This is part and parcel of our commitment and service to Spanish society. 1 For a discussion of the role of the independence of economic regulators, see P. Hernández de Cos  (2020), Testimony by the Governor of the Banco de España before the Audit Committee on Democratic Quality, the Fight against Corruption, and Institutional and Legal Reforms. 2 See S. Albrizio and J. F. Geli (2021), “ An empirical analysis of the determinants that can boost Next Generation  EU’s effectiveness”, Analytical Articles, Economic Bulletin 4/2021, Banco de España. 3 For a discussion on the importance of the use of administrative data by researchers, see M. Arellano (2018), “El  acceso a los microdatos administrativos públicos: la nueva frontera de la investigación económica y social”, XVIII Aula de Verano Ortega y Gasset, UIMP, Santander, 20–21 August. 4 See the Banco de España “Survey of Financial Competences”.
Uncertainty rose, growth in other advanced economies slowed, financial conditions tightened, and both the public and 9  These annual stocktakes serve two purposes. First, they provide the MPC with a regular opportunity to step back from the month-tomonth flow of economic data and consider supply-side developments as a whole and over an appropriately lengthy time period. Second, by undertaking routine systematic annual assessments of the supply-side, rather than addressing the issues ad hoc from quarter to quarter, we hoped to provide clarity on our analytical processes to observers outside the Bank. 10 See the August 2014 Inflation Report. The equilibrium unemployment rate depends on the horizon being considered, as wage pressures can arise for many reasons and some factors will be more persistent than others. These figures are the MPC’s estimates of the medium-term equilibrium unemployment rate, the measure most relevant for gauging wage pressures over the MPC’s three-year forecast period. This is distinct from the MPC’s estimate of the long-term equilibrium unemployment rate – which depends on structural factors such as the extent to which potential employees are aligned with vacancies in terms of skills, location and occupation; the benefits regime; and the influence of trade unions on wage bargaining – and which remained at 5% during this period. 11 See ‘The spirit of the season’, speech by Mark Carney at the Economic Club of New York, 9 December 2013 and the box on page 40 of the February 2014 Inflation Report.

And could these developments merit either a substantial adjustment to inflation targeting or even the adoption of a different monetary policy framework in the years ahead? In what follows, I will not presume to give the answers but would suggest that a careful and deliberate research review of the UK’s monetary policy framework is warranted. That’s why my colleagues and I look forward to the contributions of the distinguished group assembled here today. And it’s why the Bank will conduct a dedicated research programme over the next year, joining many of our peers around the world in similar exercises.3 At a minimum, as I advocated in my parliamentary testimony prior to joining the Bank,4 open, periodic reviews reinforce the legitimacy and acceptance of this vital component of the UK’s macroeconomic landscape. Let me begin by reviewing how inflation targeting has performed in recent years. I. Monetary “Spring” – Securing the recovery When I joined the Bank, a long economic winter of discontent was finally beginning to thaw. Throughout most of 2011 and 2012, UK GDP growth (at around 1½%) had languished well below its pre-crisis trend (of close to 3%), and unemployment was about 8%. But by mid-2013, there were signs of a nascent recovery: four-quarter growth had picked up above 2%, and the unemployment rate fell to 7.7%, its joint lowest level since early 2009 (Charts 1a and 1b). The timing and pace of the recovery had caught most unawares.
In its internal audit report published in March 2013, the FSA highlighted several issues pertaining to the breakdown of the internal audit function, which led to the manipulation of the rates. Despite the Group internal audit functions carrying out their routine audits in this area, deficiencies in the banks’ systems, controls and policies were not adequately highlighted. The lessons learnt from the above cases and others clearly reinforce the key roles played by both the internal audit function and the Audit Committee. My view is that the strength and effectiveness of the internal audit function will influence the risk and compliance culture in an organisation. The function has to continually be refreshed such that it remains robust and effective. 2  BIS central bankers’ speeches  Clearly, the job is now more difficult and challenging than ever, given the increased expectations by stakeholders and heightened scrutiny when things go wrong, as well as increasing obligations under the statute that place additional fiduciary responsibilities on audit committee members. I would like to share my thoughts on four matters where efforts are necessary to raise the bar on audit standards and audit quality. Firstly, the audit coverage and scope should not be confined to compliance or risk-based parameters. The audit scope should be holistic, encompassing new risk areas and tail risk events that originate from the evolving operating environment and financial landscape.

The scope is relatively moderate, but appears nonetheless to have reduced bottleneck tendencies in some industries where demand has increased sharply. Traditionally, many workers from our neighbouring countries have contributed when the labour market in this country has been tight. In 2001, close to 30 000 persons resident in Sweden were employed in Norway for all or part of the year. Swedes who have registered as residents of Norway come in addition. An increased supply of labour from new EU member states to Norwegian enterprises may lead to a higher-than-normal increase in potential output for a period. Many of the foreign workers work for a shorter period in Norway without being employed in a Norwegian enterprise. Examples include foreign contractors and self-employed in the construction industry who carry out various building projects in Norway, as well as others who carry out other types of projects. Aker Kværner, for example, has contracted 300 consultants based in India to work on the Ormen Lange project in North-West Norway. An increase in the use of these short-term contracts will appear as an increase in Norway’s service imports, and contributes to increasing the supply of goods and services without drawing on domestic resources. Protectionist measures may dampen the impact on the Norwegian economy of an increased supply of labour from the new EU member states. The transitional rules from 1 May last year stipulate that foreign workers shall have Norwegian wages and working conditions.
But, if the athlete cannot breathe for some reason, he will soon be dead notwithstanding his fitness. Your liquidity, or your cash inflows and cash outflows is also like breathing in and out. These cash flows have to be monitored very carefully. Liquidity management has to be practised diligently. The board members of finance companies must also learn and appreciate the principle of liquidity management. Don't think that it can only be left to the executives of the company. In the final analysis, the executives may not even be responsible in a legal sense. The legal responsibility will rest with you! BIS Review 55/2008  3  I am sure the other speakers will expand on all these aspects that I touched upon. So, I will now conclude with a few overall thoughts. My dear friends, take your responsibilities as Directors very seriously. Keep abreast of what is happening. Keep abreast of the markets. Keep abreast of the risks that are taking place, both globally and locally. Watch the world and environment carefully. Be alive to new techniques. Take the interest to do all that, because if you do, then we can all have a healthy market. That is what we at the Central Bank, are hoping you would discharge your responsibilities diligently. The last thing we would like to do is to call you up and to say that your business is not run properly. We don’t want to do that.

Nonetheless, I wish to state that efforts are underway to make IFRS a mandatory requirement for financial institutions. It is important for this provision to become a legal requirement in order to enhance the credibility of financial statements that are being produced by institutions governed by the various laws. I wish to state here that as much as it is important to follow international standards, these need to be reviewed for their relevance and practical application locally. It is also important to look at their relevance to small and medium enterprises where compliance may place additional burdens on operations. Ladies and Gentlemen, as we discuss the harmonization of various laws, I would like to bring up the issue of money laundering. The Prohibition and Prevention of the Money Laundering Act (PPMLA), enacted in 2001 requires all persons, whether corporate or unincorporated, to comply with its provisions. Although the Act does not impose specific obligations on accountants, they are expected to comply with its provisions. It has been noted from the recent court cases on abuse of office and corruption that professional entities such as law and accounting firms have been used as a channel to launder some of the proceeds of crime. As we are all aware, one of the duties of accountants is to know the sources and application of the resources in their organization. Therefore I don’t think it is unfair to say that in most organisations, where money is being laundered, an accountant is involved.
If the economies of our most important trading partners recover, and if the financial markets begin to stabilise, it is likely that the Swiss economy will also pass through the cyclical trough during the course of the year 2010. Faint signs that the economy is gaining a little ground have recently become evident abroad. The SNB’s measures are aimed at reducing the danger of deflation in Switzerland. To maintain price stability in the future, pinpointing the optimal date for exiting from the current zero interest rate policy will be critical. Although the reduction in liquidity can be carried out swiftly and easily in technical terms, the practical details are extremely challenging. Correct assessments by decision-makers are very important in view of the particularly high level of model uncertainty at present. In addition, firmness will be required in the face of political pressure so that necessary, but unpopular corrective measures can be taken in good time. BIS Review 54/2009  1

CPI inflation is judged in turn to be 1.1% after twelve months and 2.0% in twenty-four months’ time. Thus, CPI inflation will be moving closer to underlying inflation. One reason for this is that the downward effect on inflation from house mortgage interest expenditure is diminishing. In other words, just as the previous marked fall in interest rates held back CPI inflation so that it was well below the underlying trend, so house mortgage interest expenditure is now tending to bring them closer together. As I have pointed out before to this Committee, monetary policy ought to disregard these direct effects of interest rates because repo rate adjustments mean that they are accentuated. It is also for this reason that the Riksbank is currently focusing monetary policy on inflation’s underlying rate, measured as UNDIX. Transitory factors – changes in indirect taxes, subsidies and house mortgage interest expenditure – are judged to have a downward CPI effect of 0.5 percentage points in one year’s time. The contribution from interest expenditure is still negative because the process whereby house mortgage loans at high rates are renewed at the present lower level is still in progress. As the earlier house mortgage loans had a long duration, this process takes time. In two years’ time, however, the CPI contribution from transitory factors is judged to be an upward effect of 0.1 percentage point.
40 The invention of the printing press by Guttenberg in around 1450 led to an explosion in book production. It is estimated that there were more books produced in the 50 years after Guttenberg than in the preceding 1000 years. What followed was much more than a technological transformation. Books contributed to a great leap forward in literacy levels, boosting human capital. More speculatively, they may also have re-wired our brains. Nicholas Carr argues that the changes brought about by the printing press, and other information media, may have re-shaped our minds. 41 Books laid the foundations for “deep reading” and, through that, deeper and wider thinking. Technology was, quite literally, mind-bending. It has been argued that this re-wiring stimulated the slow-thinking, reflective, patient part of the brain identified by psychologists such as Daniel Kahneman. If so, it will have supported the accumulation of intellectual capital – creativity, ideas, innovation. Technology will have first shaped neurology and then neurology technology, in a virtuous loop. Slow thought will have made for fast growth. 36  For example, Clark (2009). 37  Wang et al (2011). 38  Mullainathan and Shafir (2014). 39  Bannerjee and Duflo (2012). 40  Carr (2011). 41  Carr (2011). 8  BIS central bankers’ speeches  It is possible to construct a quasi-neurological explanation of much-earlier shifts in growth. The world’s growth journey appears to have commenced, in earnest, around the time modern homo sapiens replaced Neanderthal man. Maybe that was no accident.

Notes: Data for the United Kingdom and the United States are derived from nominal bond yields deflated using inflation swaps. The Germany/EA figures are based on nominal Bund yield deflated using euro-area inflation swaps (as a proxy for the euro-area risk free rate). The measure of inflation used is RPI for the United Kingdom and CPI for the United States and the euro area. Data are to close of business 9 February 2015. BIS central bankers’ speeches  25  Chart 15: Population growth Annual percentage change 3  2  2050  2040  2030  2020  2010  2000  1990  1980  1970  1960  1950  1940  1930  1920  1910  1900  1890  1880  1870  1860  1850  1840  1830  1  0  Source: United Nations population projections (http://esa.un.org/wpp/) for 1950 onwards; The Maddison-Project (http://www.ggdc.net/maddison/maddison-project/home.htm) prior to 1950. Chart 16: Business expenditure on Research & Development South Korea  Japan  China  United States  United Kingdom  France  R&D Expenditure as a % of GDP  3.5 3.0  Germany  2.5 2.0 1.5 1.0  1981  1985  1989  1993  1997  2001  2005  2009  2013  0.5  Source: OECD.