samchain/econo-pairs-v1 huggingface dataset:
The minutes of the monetary policy meetings are published after a time and record our discussions in outline, besides containing information about how each of us voted. We have deliberately refrained from labelling what we say at the meetings with our names. We believe that would not work very well; the discussion would presumably be more premeditated than one would wish. But even with the system we have chosen, there is presumably a risk of jeopardising the spontaneous exchange and testing of ideas. Our joint communication about monetary policy issues takes the form of the Inflation Report and the press notices and communiqués that are issued after the meetings. We also have an arrangement whereby one of us is entitled to speak for a majority of the Executive Board. An announcement to that effect is made and to date it has happened only when the Governor meets the Riksdag’s Standing Committee on Finance. At the press conferences on monetary policy, moreover, the Governor and myself, as the member responsible for the preparation of material, speak on behalf of the Board. Our procedure clearly entails risks. The media may focus most of the time on differences between our views, which could harm the Riksbank’s image and possibly also create internal problems. While that has generally not been the case, our system is vulnerable. It would not be difficult for a Board member to act in such a way that ‘conflicts at the Riksbank’ hit the headlines.

Perhaps I should add that we do have a rough idea of the level of the exchange rate that seems reasonable in the longer run. We have not intervened since the occasion during the financial turbulence in 1998 when the krona weakened in a way that both then and in retrospect seemed unreasonable. Assessments of the coming 1–2 years are crucial It takes time for monetary measures to affect inflation. Some effects of an interest rate adjustment may indeed occur very quickly. The stock market, for instance, is influenced as soon as an adjustment is announced and this can have immediate consequences for household consumption, for example, and thereby a quick impact on certain prices. Monetary policy can also elicit exchange rate movements and quickly affect prices for exports and imports. Normally, however, there is a time lag between monetary measures and their effects. For example, an interest rate hike leaves households with less money for other expenditure and also reduces the return on investments. By gradually influencing consumption and investment, this leads in time to changes in total demand. With weaker demand, firms then have more difficulty in raising prices and that leads to lower inflation. Interest rate adjustments accordingly affect inflation through a variety of channels that economists refer to as the transmission mechanism. We know more about some channels than we do about others. It is not clear just how long it takes for the effects to materialise.
While controversial, the implementation of a single EU risk-free asset would likely become a common benchmark, allowing the prices of equities and bonds across the euro area to reflect fundamental risk more clearly, enhancing the effectiveness of monetary policy and fostering the attractiveness of European capital markets. A safe asset would also help mitigate the bank-sovereign nexus, reduce cross-border safehaven flows in the event of crisis and, ultimately, improve financial integration. Of course, we should be cautious to design it in such a way as not to water down the incentives for sound national fiscal policies, which are the essence of achieving safety. 4/5  Let me conclude. Throughout its history, the EU has followed a path towards greater economic and political integration, which has brought clear benefits in terms of economic growth and citizens’ rights. The BU is an important step in this direction and has been key to addressing the euro crisis. Still, the implementation of certain regulatory and institutional elements are needed to reap the economic benefits of an increase in cross-border banking activities. When assessing our capacity to deal with future financial crises, we should not forget that the institutional setting remains incomplete and policy space has been reduced. As memories of the crisis fade, we should strive to avoid complacency. It is often said that in life you should expect the best but be prepared for the worst.

True, some of them had to do with political change and policy uncertainty to the heart of the developed world, but on top of that, major empirical and theoretical puzzles are challenging central tenets of monetary policy. In particular, inflation appears not to be responding to monetary policy as expected in advanced economies. Despite record- low interest rates over many years and massive liquidity injections by central banks through asset purchase programs, inflation has not picked up as expected. Explaining the apparent unresponsiveness of inflation has become a theoretical and empirical challenge that has drawn great attention from academia and policymakers in the last couple of years. Inflation dynamics and the way they interact with other economic variables are, of course, crucially important to central banks that have price stability as their core mandate. Most of them currently deliver on this mandate under a forward inflation targeting framework, whereby the stance of monetary policy seeks to achieve convergence of forecasted inflation to the target over a medium-term horizon. This prevents central banks from having to respond to short-term price volatility, but if inflation does not respond to monetary impulses as predicted by models, policymaking may become a much more complex game. If price responses get delayed in a highly accommodative environment, financial imbalances may build up, fiscal discipline may be eroded and inflation risks may get underpriced by markets, exposing themselves to reversals with data surprises in the future.
This is how best to deal with common shocks to global safe and risky yields. One striking feature of the past few years has been the extremely high correlation among asset prices globally, in particular among advanced economies. This is true of both “safe” rates of return on government assets and “risky” rates of return on private assets (Chart 20). In either case, correlations are extremely high, hovering around 0.9. This begs a number of questions, both research and policy. What is the root cause of these correlations? One possibility is portfolio shifts by global asset managers, allocating their portfolio on an asset-by-asset basis. If so, what implications does this carry for national monetary and macro-prudential policymakers, seeking to steer safe and risky rates respectively? Do high global correlations strengthen the case for international co-ordination of monetary and macro-prudential policies? There may be greater scope to co-ordinate macro-prudential tools. One way of doing so is to develop macro-prudential instruments which operate on an asset-class basis, rather than on a national basis. This would be recognition that asset characteristics, rather than national characteristics, may be the key determinant of portfolio choices and asset price movements, perhaps reflecting the rising role of global asset managers. There has already been some international progress towards developing asset market specific macro-prudential tools, specifically in the context of securities financing transactions where minimum collateral requirements have been agreed internationally (FSB (2014)).

I am confident that we will continue, with the same intensity, our joint efforts to integrate this very important factor into the Albanian economy at the fastest and broadest extent possible. 2/3  BIS central bankers' speeches  Thank you! 3/3  BIS central bankers' speeches
The Treaty was ratified by the parliaments and governments of all Member States of the European Union and in some cases endorsed by referendum. Thus the delegation of European monetary policy to the ECB is endowed with full democratic legitimacy. This bond of legitimacy is a crucial aspect of sound institutional foundations for monetary policy. There is no doubt that in order to be successful over the longer term, the ECB as the guardian of price stability - like any institution in a democracy will have to win and maintain the trust and support of the European public. It can and should be held accountable for fulfilling its mandate. This mandate is clear, but it is also limited. It needs to be understood what monetary policy can be expected to deliver, but also what it cannot be expected to achieve. This is particular important in the case of the European Monetary Union, which not only delegates the authority for monetary policy to an independent central bank but which also severs the traditionally close link between the currency and the nation state. Historically, currency jurisdictions and national borders have tended to coincide, at least in more recent times. This reflects the fact that the right to issue money has been seen as a key attribute of national sovereignty. Thus monetary union cannot be regarded as just a small and innocuous step of a primarily technical nature.

I must admit that, as a central banker charged with setting official interest rates, I have difficulties to accept this particular to my mind unfounded - belief, even if the authority in question was claimed to be Aristotle or the Bible, both of which I am quite happy to consult on other matters. 3. Credibility: the role of rules and institutions  The weight of historical experience, a large body of theoretical literature and of empirical evidence point to the importance of price stability as the foundation of a well-functioning market economy and as a precondition for durable growth and prosperity. Nevertheless history is littered with episodes of high inflation which imposed high economic and social costs on society. To be sure, at times the importance of the common and precious good of price stability may have been underrated or forgotten by society. At other times stability may have been purposefully compromised in the pursuit of other seemingly more pressing objectives. However, the main lesson that I would take away from history is this: when it comes to price stability, good faith and honest intentions are not enough. Fundamentally, money represents a promise. It requires trust by the users of money in the issuer of money to honour this promise. Money is built on trust, but in turn trust must be built on solid foundations. The promise must be made credible and this - at least in relatively modern times - is the job of central bankers. A promise always concerns the future.
Moreover, it is quite possible that pass-through may exceed 100% if companies making domestically produced goods and services are able to use the increased competitiveness associated with sterling’s depreciation to widen their margins.10 So there are a number of potential channels through which developments abroad may affect domestic inflation. But to repeat a point I made up front: inflation is home made. If we think that global price pressures are likely to push up on CPI inflation for an extended period, UK monetary policy will need to be set in such a way as to reduce domestically-generated inflation, and so leave room for these external price pressures. And to respond to an argument I have seen made by a number of commentators in recent months. No: raising Bank Rate will not directly dampen global inflation. But it can ensure that it does not lead to high and persistent domestic inflation. The second upside risk to inflation that I would highlight is if the prolonged period of above target inflation erodes the public’s confidence that the MPC will keep inflation close to target. Inflation has been above target for 49 out of the past 60 months. Over that 5 year period, inflation has averaged 2.8%. Inflation is likely to remain above target for the next year or so. This suggests that by mid 2012, inflation is likely to have been above target for the best part of six and a half years.

Taylor, J (2007) “Globalisation and monetary policy: missions impossible”, NBER Conference on the International dimensions of monetary policy, Girona, Spain, June. Taylor, J (2008), “The impacts of globalisation on monetary policy”, Banque de France, International Symposium: Globalisation, inflation and monetary policy, March 2008. 10  BIS central bankers’ speeches
Beside this I will try, by asking questions, to make you reflect for a moment on some simple ideas. For example, one of the questions to which I am looking for an answer is whether we have in the past consistently checked our progress in transition not only against other countries or international standards, but against what must be the ultimate goal of the transition process - increasing the wellbeing of the people. My lecture is divided into three parts. First, I will try to answer a simple question: What is transition all about? The second part will discuss what the main “ingredients” are in the process of achieving rapid and sustained growth and will focus on human and social capital. In the third part I will discuss some obstacles to transition the way I see them, which means as a central banker. I will end by summing up my remarks. 1  I would like to thank Mr. Boris Vujcic and Mr. Gary O’Callaghan for their suggestions while preparing this lecture. The usual disclaimer applies. 1  BIS Review 43/2000  1. What is the transition process all about? Numerous researchers have analysed in depth the transition process in terms of speed of reforms, their sequencing, results and possible outcomes, but rarely do we ask ourselves the simple questions like: Why has transition started and why are we involved in it? Without elaborating the answer in detail, let me offer just one possible answer.

The second crisis occurred in banks founded after changes in the economic system that were not able to remain viable, because of either weak management and/or increased competition in the market as the transition period progressed. Croatia followed that pattern. The first banking crisis, the crisis of the old banks, as they were called, started with the beginning of the transition process (and even before it), and is even now ending with the sale of the rehabilitated state banks to foreign strategic investors. The costs of this crisis, brought about by the legacy of the past and as is too often forgotten, by the enormous consequences of the war, can be estimated at about 23% of GDP. These high costs are typical of countries caught up in a war, like Kuwait and Israel in parts of their histories. During the first half of 1998 the second banking crisis became visible in Croatia. The then government made a decision to rehabilitate two banks which represented about 7% of the total banks’ balance sheet. Bank rehabilitations are payed out of the budget. The Croatian National Bank required that bankruptcy proceedings be started in nine banks and four savings banks, while it withdrew the operating permit from one branch of a foreign bank, one bank and six savings banks. This has imposed high budgetary costs for the payment of insured savings deposits in banks in which bankruptcy proceedings have been started. The total costs of the second banking crisis could be estimated at about 4% of GDP.
Mr Yam presents the 1998 Hong Kong Monetary Authority’s annual report Speech by the Chief Executive of the Hong Kong Monetary Authority, Mr Joseph Yam, on the occasion of the presentation of the 1998 HKMA annual report before the Legislative Council Financial Affairs Panel in Hong Kong on 3 May 1999. Introduction Mr Chairman, Honourable Members, I am most grateful to you for giving me this opportunity to speak to you on the occasion of the publication of the HKMA’s Annual Report for 1998. The Report is tabled at this meeting of the Financial Affairs Panel; it is also being distributed to all Members of the Legislative Council this morning. This Report covers the full range of the HKMA’s work for the calendar year 1998, in addition to giving an assessment of the economic and banking environment for the year. I have no need to remind Members that 1998 was, to put it mildly, an eventful year. The Report sets out the many problems and challenges that the HKMA has had to grapple with during the course of the year, and explains what actions and initiatives the HKMA has been taking to address them. You are all familiar with these issues, and you have the details before you. So I do not wish to take up too much time with a long description. My main focus in this presentation will be on the challenges for the HKMA in the coming year, particularly in the light of current economic trends.

But what we clearly did is to give the financial and economic sectors visibility over our monthly purchase volume for the whole of 2017. 2. What are the challenges facing the finance industry and how should we tackle them? A healthy financial sector is key for a robust economic recovery. I’d like to remind you of the significant progress that has been made in this area since the financial crisis. We shouldn’t judge the European financial sector only on the basis of its difficult cases, or those “trailing at the rear”. On average, the sector is now far more resilient than before the crisis. This is the result of considerable work carried out to strengthen regulation and to harmonise supervision in the euro area, notably with the Banking Union which is a significant step forward. It also comes from the industry’s remarkable efforts: European banks are now in a much stronger position than a decade ago, in terms of capital, liquidity or risk-taking. Regarding their capital for instance, the 2/9  BIS central bankers' speeches  Common Equity Tier 1 ratio of significant euro area banking groups has risen from less than 7% in 2008 to more than 14% today. Overall, banks are now less risky, and investors should take into account this progress by reducing their expected rates of return: banks’ cost of equity should go down. However, while solvency has improved, there is still one challenge facing European banks: profitability [slide 4].
The insurance protection gap is widening inexorably: •  Close to half of the world’s most underinsured countries are in Asia, and of these, half are in Southeast Asia. BIS central bankers’ speeches  1  •  In the past two decades, Asia has borne 50% of the estimated global economic cost of natural catastrophes. Yet, less than 5% of all disaster losses in Asia are insured, compared to 40% in developed nations. •  The 2008 Sichuan Earthquake is a case in point. Less than 1% of the total economic costs of $ billion were insured. The disaster further left governments and taxpayers with a hefty reconstruction bill of almost $ billion after the event. Going forward, it will also no longer be sufficient to just focus on traditional risks. As Asia continues to grow and become more digitally-connected, new and emerging risks will arise and we should be proactive in adapting to these needs. I would therefore like to challenge the industry to: •  raise insurance penetration of traditional risks and find innovative ways to cast the net wider to cover more insureds, and  •  develop innovative and meaningful risk transfer products for new and emerging risks. Specifically, I would like to highlight 3 key growth drivers for insurers and reinsurers today: •  New and emerging risks  •  New capital  •  New technology and innovation.

Not only will banks be expected to improve their external transparency, but they will also be expected to operate more transparently internally. In particular, banks will be expected to ensure that the board of directors and senior management are sufficiently well-informed to be able to meaningfully assess the bank’s risk profile. This will place a premium on effective and accurate risk reporting. Likewise, there is an expectation that senior management will communicate effectively to employees their responsibilities with regard to the effective management of risk. Finally, Basel II will enhance clarity by promoting international co-operation between supervisors. International banking organisations have grown increasingly complex over the years, to the point that in some cases it can be very difficult for supervisors - and even for bank management - to have a clear understanding of their global risk profiles. This highlights the need for effective supervisory co-operation for such organisations. Effectively combining the necessary supervision at the local level in the host country with effective supervision at the consolidated level in the home country requires more thorough exchange of information and better knowledge of financial instruments and links within financial groups. This will heighten supervisory understanding of banks’ activities and will promote consistency in the implementation of standards, a level playing field and the reduction of unnecessary regulatory burdens. Next steps While I have focused my remarks on the new capital framework, I would like to emphasise that corporate governance is much broader than Basel II.
The authorities thus received constant feedback on key indicators affecting national economic performance and could react accordingly. These indicators were sensitive, multiple and very reactive. In contrast to the pre-euro period, a loss of competitiveness will not show up quickly on radar screens like foreign exchange markets, interest-rate markets or the external accounts. As a result, economic managers must monitor the relevant competitiveness indicators with even greater vigilance. The sanctions for economic policy errors could come more slowly and insidiously via rising unemployment and weak growth. The rules of a market economy, especially competition, continue to apply to each economy. Jobs are created by consumers when they choose the goods and services they feel are the best value for money. Businessmen allocate these jobs to various possible locations in various countries according to the relative competitiveness of these locations. It is therefore necessary to monitor competitiveness even more closely than before through indicators such as unit production costs and the tax and regulatory framework. The close multilateral surveillance and the frank discussions provided in the context, inter alia, of the Eurogroup, will help monitor competitiveness trends with a view to ensure early warnings and appropriate reactions. *  *  *  Let me address, in conclusion, two questions: the issue of sustainable growth and the present diagnosis of the Eurosystem as regards the balance of risks. –  Growth: Central bankers are sometimes portrayed as being excessively cautious and reserved with respect to economic growth.

1  Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems  2 Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment  services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC 3 Directive 2009/110/ЕC of the European Parliament and of the Council of 16 September 2009 on the taking up,  pursuit and prudential supervision of the business of electronic money institutions amending Directives 2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC  2/2  BIS central bankers' speeches