samchain/econo-pairs-v1 huggingface dataset:
These findings suggest the need for a communications campaign that gives the issue of inflation perceptions priority attention, as well as for effective price monitoring mechanisms. Measures are being taken on both fronts. Inflation perceptions are being addressed in TV slots, newspaper articles and official statements. These messages will be intensified in the coming months. As far as pricing abuses are concerned, the national euro Master Plan has invited businesses to adopt dual display from January 2007 and makes it mandatory from the day the irrevocable conversion rate is fixed until the end of June 2008. The dual display of prices has gained momentum since the introduction of the Fair-pricing Agreements in Retailing (FAIR) initiative towards the end of last year as a voluntary, self-regulating mechanism whereby businesses commit to refrain from increasing prices simply as a result of the changeover. They, in turn, benefit from nationwide publicity recognising their commitment to adopt a code of conduct. 5 In addition, consumers are constantly encouraged to use the national telephone helpline not only to seek information, but also to report cases of suspected noncompliance with the guidelines. With the assistance of international experts, including the Austrian Price Commission, a Euro Observatory has also been set-up to monitor and analyse pricing trends during the changeover period. The unit is supported by 70 Euro Assistants who carry out fieldwork in towns and villages across the island.

Joseph Yam: A new euro clearing system for Hong Kong Remarks by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the signing ceremony for the appointment of Standard Chartered Bank as settlement institution for the euro clearing system in Hong Kong, Hong Kong, 3 July 2002. *  *  *  We live in a financial world where boundaries and barriers are progressively collapsing, whether as the result of conscious policy decisions in favour of liberalisation or because of the new vistas opened up by the onward march of information technology. Thus, restrictions on providing or using services across geographic or political borders are on the decline. Particular transactional services, such as quoting, dealing, confirming, settling, delivering, paying and safe-keeping, are increasingly footloose, in the sense that many of them can be readily accessed from remote locations. Moreover, the development of interfaces between systems in different parts of the world provides scope for continuous 24-hour real-time trading. At the same time, the regulatory framework is tending towards standardisation around the world, thereby reducing the potential for regulatory arbitrage between jurisdictions. As a result of these various developments, the marketplace in which we can operate is potentially ever larger, but at the same time the potential number of competitors is ever growing. Against this background, financial centres must be nimble, competitive, efficient and safe, and alert to the changing world, if they are to thrive. One of the essentials is that they must offer an effective and robust financial infrastructure.
Also, as Panel A in Figure 2 shows, the shape of the yield curve moves similarly, with a flattening of about 150 basis points between the 10‐ and 2‐year US government bonds in the first year.5 In a related phenomenon, shown in panel B, the term premium implicit in the valuation of the 10‐year US government bond also dropped between 1 and 2 percentage points in the two years after the start of the cycle. Essentially, the monetary policy shock and the shift in the yield curve were comparable in both episodes. Indeed, the lack of response of long term rates to short term hikes in the mid 2000s, labeled as the “conundrum” phenomenon by Alan Greenspan was, to some extent, also present in the mid 1990s.6 However, in many dimensions, these two episodes show very distinct features. (See panels C to E in figure 2.) First, during the 1994 one, there was a sharp increase in credit spreads to emerging economies, which contributed to their difficulties in the balance of payments. In less than a year, the EMBI credit spread increased, on average, more than 1,000 basis points. A decade later, Fed Funds increases were followed by secular decline in EMBI spreads for emerging markets. This contrast strikingly with the episode a decade later, when Fed Funds increases not only did not generate an increase in credit spreads but rather it was accompanied by a secular decline in EMBI spreads. A year later, EMBI spreads had fallen about 150 basis points.

Source: Bloomberg  Panel B: 10‐year ggovernment bond term premium (bassis points) 200  94-01  150  2004  2015 5  100 50 0 -50 -100 -150 -200 -250 24 -2  -12  0  12  24  36 6  48  60  72  Source: Bloomberg  obal Spread, basis b points Panel C: EMBI Glo  Source: Bloomberg and JJP Morgan  6  Panel D: Commodityy Prices (GSCI, Index t0=100) 200 94-01  180  2004  160  2015  140 120 100 80 60 -24 4  -12  0  12  24  36  48  60  72  Source: Bloomberg  Panel E: US Dollar B Broad (Index t0=100, increasse means apprreciation)  Source: Bloomberg  Figuree 3 PCE Co ore (percent, aannual changee) 3.5  94-01  2004  2015 5  3.0 2.5 2.0 1.5 1.0 0.5 -24 4  -12  0  12  24  36  48  60  72  Source: Bloomberg  7
For instance, •  Shareholders – through the active and informed exercise of shareholder rights;  •  Depositors and other customers – by not conducting business with banks that are operated in an unsound manner;  •  Auditors – through a well-established and qualified audit profession, audit standards and communications to boards of directors, senior management and supervisors;  •  Banking industry associations – through initiatives related to voluntary industry principles and agreement on and publication of sound practices;  •  Professional risk advisory firms and consultancies – through assisting banks in implementing sound Corporate Governance practices;  •  Governments – through laws, regulations, enforcement and an effective judicial framework;  •  Credit rating agencies – through review and assessment of the impact of Corporate Governance practices on a bank’s risk profile;  •  Securities regulators, stock exchanges and other self-regulatory organizations – through disclosure and listing requirements; and  •  Employees – through communication of concerns regarding illegal or unethical practices or other Corporate Governance weaknesses. In a broader sense, mandating the banks and financial institutions to adhere to full disclosures of their operations would not only allow the markets, investors, depositors and others to keep a close watch on the financial institutions, but also provide an opportunity for other regulators also to be closely involved in supervising these institutions. For example, listed banks and financial institutions are not only under the supervisory arm of the Central Banks, but also the Securities & Exchange Commissions.

Germany thus has a domestic demand problem, which it is trying to solve through supply side reforms, while fiscal and monetary policy are tied by the EU and ECB. All this appears to have contributed to further prolonging the  BIS Review 41/2005  3  economic downswing in Germany and if the recovery in the euro area were to be delayed further, it would have an effect on Swedish export demand. If these negative risks are realised in full, it could be more difficult for domestic demand to relieve the export-driven growth of recent years. This could break the present recovery impetus, which would lead to a need for further stimulus of the economy from monetary policy. Conclusion All in all, we should continue to be vigilant of risks and possible changes in the direction of business tendencies. However, it is important to hold on to a stable analytical framework and a consistent forecast assessment. The underlying factors still indicate a rise in resource utilisation and thereby a rise in inflation. 4  BIS Review 41/2005
Miguel Fernández Ordóñez: Recent developments in the Spanish economy Testimony of Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, to the Parliamentary Budget Committee, Madrid, 9 October 2007. *  *  *  Ladies and gentlemen, My appearance before this Committee as part of the Parliamentary discussion of the State budget for 2008 comes at a time when shocks are still reverberating through some of the major international financial markets, and the attendant uncertainty inevitably bears on the analysis of the economic situation. In my appearance before the Parliamentary Committee on Financial Affairs on 17 September, I examined in detail the origin and the main implications for ECB monetary policy and for the Spanish economy of these shocks, which emerged last summer against a background of marked momentum of the economy and of world trade. A significant part of this dynamism – reflected in growth rates above 5% for world output and above 6% for trade – derives from the sound performance of the emerging economies in recent years; indeed, they seem to have been less affected by the shocks than the more developed Western economies. This is, in fact, a significant feature of the present bout of turbulence which, if I may briefly recall, originated in a financial market of a developed country (the US sub-prime mortgage market).

This is because, after ten years of rapid expansion at a rate that has recently exceeded potential growth, the actual buoyancy of tax revenue has naturally been associated with the buoyancy of domestic demand and, in particular, with the vigour of the real estate sector, and therefore has a temporary component that would tend to disappear in an economic slowdown. It is therefore imperative to preserve the stabilising potential provided by the current state of public finances so that phases of less dynamic private spending can be faced with strength and the ability to react and, above all, so as to be prepared for unexpected contractionary shocks. This approach is especially valid in the current climate of uncertainty, in which a continued economic policy of rigour and budgetary stability is one of the most valuable resources when it comes to preserving internal and external confidence in our economy. Perseverance in the strategy of budgetary consolidation is also necessary from a mediumterm perspective so as to be in the best possible position to address the foreseeable impact of population ageing, aside from the required further progress in reform of the pension system. Regarding the co-ordination of this strategy, I would like to add two more comments. First, it is very important that all tiers of government contribute effectively, particularly the regional governments, whose weight in public spending policies has become most substantial.
In the advanced economies, the insurance industry built such capacity over four centuries. Asia will have a much shorter time to achieve the same, in order and to ensure that the growth does not outstrip the industry’s capacity to manage the associated risks. This brings me to the second point which relates to the impact that the global financial crisis and the ensuing international regulatory reforms are having on the insurance industry. While insurance companies have generally held up well through the crisis, the industry now finds itself at the intersection of major regulatory developments. The crisis has also delivered a major blow to confidence in financial institutions. This needs to be regained. Both these factors will have an important influence on the way in which the industry responds to new insurance and asset accumulation opportunities in Asia. We can expect that the characteristics of growth in the industry going forward will therefore differ in some respects from the historical experience. The changes in the capital rules and related accounting standards aim to achieve a more risk-based and market consistent valuations of insurance assets and liabilities. While this should improve understanding and accounting for the risks inherent in insurance business, it will also require insurers to more carefully manage risk and capital, while recognizing the prospect for increased short-term volatility.

Specifically, our research indicates that when college tuition rises in a state, it leads to higher levels of student debt and a lower homeownership rate. These factors matter for inequality and social mobility, because increasing home equity is the major form of wealth accumulation for the great majority of American families. Thus, rising tuition and changes in the way that college is financed appear to have diminished the ability of higher education to lift people from poverty into the middle class. Of course, students’ reliance on debt and the returns from graduating vary across educational institutions. Of particular interest here is recent work by Raj Chetty and his co-authors showing that some colleges—some of which can be found in the CUNY and California state systems— appear to be much better at fostering economic mobility than others. In other words, they accept relatively large numbers of lower-income students while also producing large numbers of high earners, which means that these institutions facilitate considerable upward mobility. Learning exactly how they do it and how it can be replicated strikes me as a first-order question for further study. Recent research by Caroline Hoxby to assess differences in productivity across educational institutions makes important progress in that direction. In summary, academic research on the financing, costs, and returns of higher education is more important now than it has ever been. We are pleased to have many of those researchers participating in this conference.
—POLICY REVIEW Radev, was circumspect regarding recent calls for a review of the ECB’s monetary policy strategy. He also expressed caution in response to suggestions the institution should lower its mandated medium-term inflation rate target from close to but below 2% to around 1%. "There may be reasons to start thinking if an overhaul needs to be considered,” he said. But he added: “Whatever, if anything, the ECB decides in this regard should be shaped into a carefully communicated process. I cannot but fully agree with a recent comment by Peter Praet who warned that such public announcements may be misread and, furthermore, interpreted as the ECB admitting to having failed on its mandate, which is not the case." The ECB has “plenty of instruments” at its disposal in the event of a severe economic downturn, he said, adding: “The door is not closed to asset purchases, and there is no rule-set limitation on moving rates such as those on the standing facilities or the regular open market operations. "We know there may be varying degrees of support within the Governing Council for certain especially non-standard measures, if those are to be considered. Hence it is also true that the effectiveness of any firepower of the ECB ultimately depends on its determination and leadership rather than variety or size of the tools."

This is why our focus should be on the Eurozone economic governance and coordination. We know there is deep political resistance to sharing fiscal resources and sovereignty, as well as a rising Euroscepticism. This is why we need to make the economic case. This discussion is not about “more Brussels”, but it is very concretely about more growth and jobs in Europe. The euro crisis has revealed how unprepared we were. The absence of coordination has indeed a genuine economic cost. Several approaches point to a significant cost of noncoordination, in the order of 2 to 5 % of GDP since the crisis, and therefore millions of jobs. To bring the debate forward, some principled choices have to be made. First: making parallel progress on both domestic reforms and, [not “or”], European coordination. This is the cornerstone of, for instance, any French-German agreement: to be fair, the French call for Germany to support coordination, and the German doubt about French reforms, have been and are still well-founded. This requires overcoming distrust between countries and bringing together both aspects under the same umbrella, namely a common institution. Second, we must recognize that institutions with a mandate are superior to rules without institutions, as underlined by Mario Draghi while discussing the fundamental difference between a monetary policy institution and fiscal rules. To bolster policy consistency and coordination, we admittedly need simpler rules. But they should be supported by strong institutions with discretionary powers.
Meanwhile, at the most recent policy rate adjustment, we narrowed down the policy rate corridor to 100 basis points with a view to reducing the volatility in overnight interest rates. Looking ahead, we are in the process of exploring the feasibility of a single policy rate instead of the current corridor system to give clearer signals on the interest rates, reduce volatility in the call money rate and increase the transparency in the monetary implementation process. Also, the hair cut policy relating to the pricing of securities will be reviewed in line with international best practices to ensure smooth operations in the money market. We will be looking into expanding money market activities in a comprehensive manner by introducing new instruments such as Interest Rate Swaps (IRS) and nondeliverable forwards (NDF). In order to improve the competitiveness of the banking sector, the Central Bank is also planning to introduce a more cost reflective alternative benchmark interest rate, which will be based on the marginal cost of banks. Although we do not consider the exchange rate as an objective of monetary policy conduct, a market-based exchange rate remains key instrument to facilitate the inflation targeting framework. To this end, the Central Bank will continue to follow a more market-based exchange rate system, allowing the exchange rate to act as the shock absorber in the envisaged FIT framework. The FIT framework brings about a qualitative change in the pass-through of the 18  effects of currency deprecation onto the overall rate of inflation.

However, the situation remains challenging for large sections of the economy – even at the current exchange rate, the Swiss franc is still very strong. We expect it to weaken over time, and fall back to a level more in line with its economic fundamentals. As the data show, economic activity in Switzerland slowed significantly in Q3 2011. Exports, in particular, fell noticeably. In addition to the strong Swiss franc, the general global economic outlook has deteriorated and downside risks prevail. Given this difficult environment, we remain firmly committed to defending the minimum exchange rate of CHF 1.20 per euro. This commitment applies at any time, from the moment the market opens in Sydney on Monday to when it closes in New York on Friday. We will not tolerate any trading below the minimum rate in the relevant interbank market. To enforce this policy, we are prepared to buy foreign currency in unlimited quantities if necessary. Moreover, we stand ready to take further measures if the economic outlook and the risk of deflation so require. To explain the rationale behind the SNB’s current monetary policy in more detail, let me briefly outline our assessment of the global economic situation, as well as the risks for the Swiss economy. Subdued global economic outlook and substantial downside risks In our global baseline scenario, the outlook remains – overall – subdued. Economic growth will continue to be driven by emerging markets.
In this respect, earlier experience with contingent instruments suggests two contractual features are likely to be key. First, no discretion on the part of bank management or the authorities about when and how conversion takes place. Such discretion undermined the effectiveness of uncalled capital in the 20th century and hybrids in the 21st. Second, conversion needs to take place well ahead of bankruptcy. Doing so avoids the deadweight costs of default which, for too-big-to-fail institutions, are likely to be too large to be tolerable by the authorities. That is what undermined reserve liability in the 20th century. It is also what risks jeopardising the effectiveness of so-called bail-in debt in the 21st. To satisfy these two conditions, contingent securities would need a trigger which was both early and non-discretionary. That rules out triggers activated on a discretionary basis by the regulator. It should also make us sceptical of triggers based on regulatory ratios, as these embody a great deal of management discretion. The trigger would need also to be set well ahead of default to avoid its deadweight costs. Pulling the trigger needs to be an early health scare for a bank, not the last rites. One trigger satisfying those criteria would be market-based measures of capital adequacy (Haldane (2011), Calomiris and Herring (2011)). Unlike subordinated debt, equity prices did a good job of signalling distress among institutions during the recent crisis, fully six months or more ahead of failure. Chart 9 illustrates this for the set of “crisis” and “no-crisis” banks.

20  BIS central bankers’ speeches  Chart 3: Estimated distribution of UK banks’ leverage  Source: Capie, F and Billing, M (2004), BBA, Bank of England and Bank calculations. Notes: The density estimates are based on a normal kernel function and a number of observations in each subsample. Chart 4: Estimated distribution of UK banks’ return on equity  Source: Capie, F and Billing, M (2004), BBA and Bank calculations. Notes: The density estimates are based on a normal kernel function and a number of observations in each subsample. There is a definitional change in the sample in 1967 and again in 2010. BIS central bankers’ speeches  21  Chart 5: Variation in expected and actual return on equity and leverage(a)  Source: Capie, F and Billing, M (2004), BBA and Bank calculations. (a) Illustration using the Merton (1974) model. Chart shows how the implied expected rate of return on equity is increasing in leverage for different asset volatilities, even when the expected rate of return on assets is fixed at zero. (b) Ratio of equity to assets. Chart 6: CDS premia for crisis and “no-crisis” banks  Source: Thomson Reuters Datastream and Bank calculations. 22  BIS central bankers’ speeches  Chart 7: Concentration of UK banking system (per cent of GDP)  Source: Bankers Magazine, Sheppard, D.K (1971) and Bank of England. (a) Total assets of the largest 3 banks are identified from copies of the Bankers’ Magazine before 1940. Observations are taken every 10 years and are linearly interpolated between.