samchain/econo-pairs-v1 huggingface dataset:
The macroeconomic projections by Eurosystem staff constitute an important input into the monetary policy decisions, because they are a way of organising a large amount of information and they help to create a consistent picture of possible future developments. However, the economic projections cannot encompass or even reflect all the complexities, conditioning factors, nuances and the multi-dimensional nature of a comprehensive assessment of the risks to price stability on which monetary policy decisions need to be based. While the information synthesised from various indicators serves as an important input into the decision-making process, the Governing Council of the ECB does not take decisions only on the basis of projections. The Governing Council’s “judgement” must eventually come into play in order to assess the likelihood of the alternative scenarios suggested by the economic analysis. This is particularly important when it is quite unclear how a certain situation will evolve, as is the case sometimes with sharp movements in asset prices. Related to this, attempts to base monetary policy decisions solely on inflation forecasts would involve significant limitations. Notably, they would entail an inefficient use of information, since every forecast, or any composite index of indicators, is based on one possible scenario and one combination of assumptions. In the end, monetary policy requires judgement on the part of the policy-maker to assess  BIS Review 67/2004  5  not only the plausibility of all possible scenarios, but also the nature of the shocks and the best policy reaction in order to deal with this uncertain environment.

As a result, markets have remained liquid, and activity has recently picked up. There is a renewed sense of optimism that, whatever adjustments remain to be worked out, the worst is now over. In labour markets, wage freezes are the norm, combined in many cases with cuts in bonuses in sectors that have been most affected by the crisis. Nominal wages are likely to show little, if any, growth this year, compared with increases of 7-8% in the period leading up to the crisis. Price inflation has also dropped markedly, and has turned negative in recent months. Price reductions inevitably cause short-run dislocations. But they are a key channel of adjustment for Hong Kong, and the improvements in our competitiveness that result will set the stage for a sound recovery. The important consideration is that this process should be completed quickly, and there is every indication that it will be. A few critics maintain that we should have ‘let the link go’ during the crisis to allow nominal exchange rate depreciation to restore our competitiveness. I believe that such a step would have been fraught with risks. Any direct impact on growth would almost certainly have been offset by reduced confidence in our longer-term policy direction and heightened anxieties about the short-term impact on the financial and corporate sectors. I do not need to remind you that Hong Kong did not suffer from the structural problems in these sectors that have been ascribed to some other economies.
And monetary policy was well positioned to support the economic expansion and the achievement of the Fed’s goals of maximum employment and price stability. Risks to the Economy However, during the past month the outbreak and subsequent spread of the coronavirus has brought with it new risks to the economic outlook. This is first and foremost a human tragedy, and my deepest sympathies are with those who have lost loved ones. The virus and the necessary scale of the response to address the public health challenge will have near-term effects on the global economy. These repercussions have been especially strong in the hardest-hit countries, including China, South Korea, Japan, Italy, and Iran. We are now also hearing reports that some businesses here in the United States are being affected by supply disruptions and weakening demand. As people take precautions, we’re seeing concerns around the tourism and travel sectors, in particular. Disease outbreaks require a multifaceted approach, and the coronavirus is no different. This is primarily a public health issue, which will be fought on the front lines by doctors, nurses, and other healthcare professionals. Governments will also need to step in to support the healthcare response, and, if needed, to provide targeted relief to affected industries and workers through fiscal measures. Monetary Policy Central banks like the Federal Reserve also have an important role to play in addressing the economic effects of the coronavirus, ensuring that financial markets function effectively and providing support to the economy.

John C Williams: The economic outlook Remarks by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Foreign Policy Association, New York City, 5 March 2020. * * * As prepared for delivery Thank you so much for this award. It’s a genuine honor to be recognized in this way. And allow me to add my congratulations to all the other organizations and individuals that have been commended this evening. The work that you’re doing—particularly in the area of corporate social responsibility—is so important. On Tuesday, the Federal Open Market Committee (FOMC) lowered the target range for the federal funds rate by 1/2 percentage point.1 This action was in response to the evolving risks the coronavirus poses to the U.S. economy. Tonight, I’ll use my remarks to provide more context around that decision and about our response as we look ahead. But before I give this evening’s remarks I need to give the standard Fed disclaimer that the views I express today are mine alone and do not necessarily reflect those of the Federal Open Market Committee or others in the Federal Reserve System. Economic Outlook To start, let me emphasize that the fundamentals of the U.S. economy remain strong. We’ve seen continued solid job growth, unemployment is at a historically low level, and we entered 2020 with very good momentum. After a year that was characterized by uncertainties, global growth appeared to be stabilizing, and geopolitical risks receding.
But if any new relevant information or leads arise from ongoing investigations in Singapore or elsewhere, rest assured MAS will re-open the files and pursue the matter. At the same time, MAS has intensified its supervision of financial institutions that have higher inherent money laundering risks or control areas found wanting from past inspections. The inspections go beyond rules-based compliance to focus on risk understanding and 6 / 10  BIS central bankers' speeches  management. In our inspections, we examine: - whether the Board and senior management have effective oversight of money laundering/terrorism financing risks; - whether the financial institution takes timely action to properly resolve risk control concerns; and - whether there is good risk understanding, adequate risk culture and systems throughout the organisation, to support the proper execution of risk controls. Sustained effort and unstinting vigilance will be needed on the part of industry players to manage the risk of illicit finance and keep our financial centre clean. CREATING VALUE FOR THE ECONOMY MAS is reputed as a tough, “no-nonsense” regulator. But we also seek to be progressive and proactive in developing the financial sector – to be dynamic, innovative, and purposeful. We have said much before about our strategies to help grow various activities in the financial sector. We have also shared on many occasions our FinTech agenda and efforts to facilitate innovation in the financial sector.

A very large base of the pyramid, so to speak, that’s not well served by the financial sector in Asia. So there’s tremendous scope for innovation in finance as a way of reaching out to far more people and meeting their needs. And there’s a new generation of tech-savvy individuals in Asia like elsewhere. They are also averse to paying fees. They too are a prime market for FinTech in Asia. We are promoting innovation in finance in a comprehensive way in Singapore. It requires a whole ecosystem. It requires bringing a whole range of players together – the technology players, finance players, start-ups, and both global and local Singapore players. We are also looking at every segment of the financial business. There is scope for innovation across the business – in credit, savings, investing, payments and so on. BIS central bankers’ speeches  1  But importantly too, we intend to be right there at the frontier with regard to the common technology platforms, or the utilities that can be a very important enabler for innovation in finance – the common platforms that help individual players, produce network effects as more players come on board, and help the market work better. We are looking at each of the industry verticals to see what common platforms might be needed. Ravi will talk more about this. In trade finance, for example, where we are making good progress. There are also the horizontal infrastructures that can underpin innovation in a range of industry verticals.
Put somewhat pointedly, the statement that monetary policy cannot be ‘the only game in town’ that has been heard quite often recently, perhaps particularly from central bank representatives, is basically about us not ending up in a situation where instead fiscal policy will be the only game in town for the foreseeable future. Both will certainly be needed. However, there are also good reasons other than the development of inflation that suggest that fiscal policy may have to play a more active role in the future. One is that we have major structural challenges ahead of us: the population is ageing and this means that healthcare will need more resources, the integration of different groups into Swedish society and the economy needs to be improved, and climate change will require major adjustments – to name but a few. Here, it may be worth recalling what I mentioned earlier about the original motives for using a surplus target to reduce public debt. This was not just a matter of restoring confidence in public finances, but also of creating room for both stabilisation policy and managing structural challenges. Measures in these and other areas aim to make the Swedish economy and Swedish society function better in various respects. Many of them also aim to increase growth and production capacity in the long term – what are usually called supplyside policies. When aggregate supply and production capacity increase, conventional economic theory suggests this puts downward pressure on prices for a  20 Ekonomisk Debatt (1995) No. 3, p. 268.

This means that private actors are willing to lend long-term to the state without any significant compensation, or are even willing to pay to lend. This can, without exaggerating, be described as a pretty generous offer. It is not very difficult to imagine that it is possible to find areas in which public investment may be needed and where the funds borrowed to implement that investment may well have a positive return because the cost is very low or negative. Why this has not happened to a greater extent than has been the case is not entirely easy to understand. One probable explanation is that many countries have put in place rules to prevent or counteract increased borrowing. The reasons for  13 See, for example, Blanchard (2019), who also notes – possibly somewhat surprisingly – that the tendency for  growth to exceed the risk-free interest rate is not a new phenomenon. A summary of the changed view of the role of fiscal policy is available in Lagerwall (2019). 8 [17]  this are good if we look at past negative experiences. However, if this is the explanation, it is natural to start to consider whether these rules are actually adapted to the changes that have taken place in the macroeconomic environment since they were introduced, particularly the fact that the level of interest rates has been historically low.
In Europe, the cost of implementing Basel III is estimated at over 70,000 full-time private sector jobs (Harle et al (2010)). In the US, the cost of DoddFrank is estimated at tens of thousands of jobs. As these resources might otherwise have been profitably deployed in other industries, these are deadweight opportunity costs borne by society. The direct and opportunity costs of the tax system are no less great. The Taxpayer Advocate Service recently estimated that US households and companies spend as much as 6.1 billion hours per year in filling out tax returns. Others have estimated the annual cost of tax compliance in the US at around 1% of annual GDP (GAO (2005)) – or about $ billion in 2012. Similar estimates are found in Europe. Second, complex frameworks tend ultimately not to solve the problems for which they were a response. They may be ineffective. In filling old cracks, complex rulebooks tend to open up opportunities for new ones to emerge. Indeed, they may increase the likelihood of new loopholes or workarounds emerging. Using complex rules to control a complex environment carries the risk of chasing one’s tail in ever-decreasing circles (Gigerenzer (2007)). It is not difficult to spot this tail-chasing problem in the financial regulation sphere. For example, the shift to a highly-complex risk-weighting system for bank assets has resulted in the average amount of capital banks assign to these assets halving over the past 20 years. Why? Because complex rules have generated both the incentives and the means to exploit regulatory loopholes.

That is why simple measures of bank leverage, untainted by such complexity, were ten times better at predicting banking failure during the crisis than complex regulatory alternatives (Haldane and Madouros (2012)). What is true of financial regulation is true too of tax. For example, studies have analysed the incidence of tax evasion and avoidance across different countries. They have found that the single most important determinant of tax evasion is often the complexity of the tax code (Richardson (2006)). The greater the complexity, the more numerous the loopholes, the greater the incentive and means to exploit them. Third, complex regulatory frameworks tend also to be inequitable. They advantage those best able to exploit the cracks, navigate the uncertainty, squeeze through the loopholes. This tends to be those with the deepest pockets who can afford the most sophisticated riskmodeller, the slickest tax accountant. Complexity, in other words, acts like a regressive tax. That is why big banks (using in-house complex models) typically hold far less capital than smaller banks (using simplified, standardised alternatives) even when their underlying exposures are identical. It is one reason why Warren Buffet claimed to pay a lower tax rate than his secretary. And it is why, over the recent past, regulatory and tax arbitrage have both become high-growth industries. They are toxic exhaust fumes from the Heath-Robinson vehicles history has created. If complex frameworks come with economic and social costs – inefficient, ineffective and inequitable – why has society not done more to tackle them?
This must start from personal qualities, such as an affinity to be independent, individualistic with high moral grounds and integrity; and a desire to express his opinion independently and honestly. Ninth, is the issue I raised last year on “the remuneration of Board members” which has been added to the principles of good directorship. I would like to propose that Board remuneration not be tied to the future stock price of the bank nor solely linked to profits alone. The point is that if the bonus of Board members is tied to the future stock price, it might critically affect the bank in the way that occurred in the cases of Enron or World Com. When management proposes any project that might raise the company’s stock price, although a high risk project, Board member might give less weight to the risk aspect. Thus, the check-and-balance of management power will automatically decline. Moreover, the increased price of stock may not only result from the specific bank operation, but also attributed to general improvement in economic conditions and favourable stock market environment. If the remuneration of board members varies solely with the profits of the bank, then this could create a disincentive for board members to exercise their oversight responsibility to ensure the prudence and soundness of the bank through adequate provisioning, or prevent management from undertaking excessive risks for greater prospects of profits.

However, the decisions of the ECB and the reiteration by its Governing Council of the commitment to do everything necessary to support all citizens of the euro area through this extremely challenging time, ensuring that its monetary policy is transmitted to all parts of the economy and to every country, have alleviated these tensions. Likewise, the response of the European Union, which has resolved to make significant public funds available to Member States with which to mitigate the impact of the crisis and reactivate their economies, has also been crucial. In the case of Spain, the pandemic has struck the economy at a time when the general government accounts still displayed certain elements of vulnerability. In particular, despite uninterrupted robust growth in recent years, at the end of 2019 the public sector structural deficit stood above 3% of GDP and the public debt ratio above 95% of GDP. Moreover, according to Banco de España projections, in the next few years the budget deficit may exceed 10%, while the public debt-to-GDP ratio may stand at around 120%. Following its initial increase, ECB and European monetary policy decisions have kept the risk premium well contained in recent months. However, looking ahead, persistently high levels of public debt would reduce the scope for countercyclical fiscal measures in response to adverse macroeconomic shocks and might even limit the economy’s growth capacity; in any case, they would expose the Spanish economy to a situation of chronic vulnerability to changes in investor sentiment on the financial markets.
Through these regular sessions, we want to: share information on opportunities relating to jobs and skills; hear from the industry’s workers the challenges they face in their professional development; showcase success stories of upskilling and reskilling; learn good human capital practices from experts and from one another; so that … … together we can transform Singapore’s financial sector workforce to be among the best globally. MAS will provide greater transparency around financial sector workforce data, so that everyone has a clear idea of where we are doing well as an industry and where we https://www.mas.gov.sg/news/speeches/2020/gearing-up-for-new-and-evolving-jobs-in-financial-services  3/18  04/12/2020  "Gearing up for New and Evolving Jobs in Financial Services" - Remarks by Mr Ravi Menon, Managing Director, Monetary Authorit…  need to do better. The Growing Timber series takes its inspiration from the Green Shoots series. Green Shoots is a webinar series which MAS launched in April this year to keep alive the FinTech spirit and the drive for innovation amid the throes of the COVID-19 circuit breaker. These regular engagements have been hugely successful in raising awareness, promoting collaboration, and sustaining investments in FinTech firms – so much so that we are looking at a record year for FinTech investments in 2020. Growing Timber and Green Shoots represent the two key horizontals of MAS’ developmental strategies for the financial sector – jobs and skills; and technology and innovation.

If the country is strongly dollarised or has a currency board (Argentina 2001) or another form of fixed exchange rate regime, there is no possibility to take certain measures, such as supply the economy with a large amount of liquidity. Finally, I have seen that in the cases where the financial sector is large in relation to the rest of the economy (Thailand 1997), the negative contagion effects to society as a whole are much greater. How can one prevent financial crises? In my experience, much can be achieved if the authorities and the financial participants together draw up effective preventive measures and plans for good crisis management. One clear and positive conclusion from the crises in the past twenty years is that good crisis management can save large amounts of money and reduce disruptions to society. On the other hand, it has been demonstrated that bad crisis management aggravates crises, partly by spreading uncertainty among the general public and the financial market agents. Good crisis management involves creating good laws, regulations and supervision. I have seen deficiencies in these fields in many countries. The legal framework may be insufficient, including the external conditions for good supervision, such as poor auditing and accounting. In some countries it is even possible to question whether a rule of law prevails there; that is to say, whether the laws are the ultimate guiding principle as to how the country is governed.
The Rt Hon Sir Edward George: Macro-economic policy and monetary stability Speech by The Rt Hon Sir Edward George, Governor of the Bank of England, at the Euromoney Bond Investors' Congress, London, 19 February 2002. *  *  *  Thank you Padraic for that kind introduction and for honouring me with the Euromoney Lifetime Achievement Award. It's nice to be prompted to recall some of the good times - and some of the not so good times in the course of my career at the Bank of England which I think of not so much in terms of achievement but of lifelong learning. We've come a long way since 1962 - both nationally and internationally - from different starting points certainly, and moving in fits and starts, at varying speeds and to varying degrees, in a process of continuing, indeed accelerating, change. But standing back and trying to look through the confusion of short-term events, I would pick out three broad trends for comment this morning. The first relates to macro-economic policy, where the earlier emphasis was very much on short-term demand management designed to manage the perceived trade-off between growth and employment, on the one hand, and inflation and a manageable balance of payments position, on the other.

As things stand at present neither the  2  BIS Review 11/2002  debtor countries nor their private sector creditors have much idea what to expect, and may be tempted to assume that they will be bailed out if things go wrong. Greater clarity could help to persuade borrowers to face up to hard policy choices earlier, before things get out of hand, and enable the creditors to make a more objective assessment of the risks. I think, too, that it would be helpful if we could at least agree on best practice guidelines for a debtor country's handling of a situation in which it could not immediately honour its obligations. That, too, could help creditors better understand the risks that they are taking on. But while the official community can help in these ways, in the final analysis the buck stops with you, the investors. I find it encouraging that so many of you are attending this conference, at which many of the relevant risks, and how they can be measured and managed, will be discussed. I'm very tempted to remain with you for your discussions, but sadly I have my own job to do, which makes it impossible for me to stay. But I wish you, Padraic, and everyone here an enjoyable and interesting couple of days in what has become the best tradition of this very special event. BIS Review 11/2002  3