samchain/econo-pairs-v1 huggingface dataset:
23 A “Brexit break” could also be associated with a material depreciation of sterling, putting upward pressure on inflation. In this case, the appropriate reaction of monetary policy would be ambiguous, and it is possible that tightening, rather than loosening, may be warranted. 11  All speeches are available online at www.bankofengland.co.uk/speeches  11  rates is fully priced in between now and late-2019. Forward rates only reach 1% by 2023 and, remarkably, never reach 2%. Given these expectations, any rise in interest rates in the immediate period ahead would come as a surprise to financial markets and, perhaps to a lesser extent, consumers and businesses. Because people dislike nasty surprises, this increases the chances of an outsized response in spending or in asset prices, perhaps even one which catalysed a “Brexit break”. This is a risk which, even if it is remote, is not easily dismissed. Taken together, these factors – real, nominal, financial - make the case for maintaining the MPC’s current, accommodative, monetary policy stance. And, until recently, it was those factors which weighed most heavily with me when framing my own view on the appropriate monetary policy stance. The Case for Tightening One of the keys to good policymaking is regular and critical self-examination of your arguments. This devil’s advocacy can help expose soft spots in your policy judgement, especially at times when the data and the risks around the economy may be altering.

Perhaps a more neutral, if less catchy, description of these trends is needed. In terms of their economic impact, these trends have had the effect of making work more “divisible” than in the past. The fall in unionisation has made workers more divisible at the level of the profession, sector or firm. Wage bargaining 1  See, for example, Abel et al (2016). IMF (2017). See www.gov.uk/government/groups/employment-practices-in-the-modern-economy 4 Solow (2015). 5 For example, Hook (2015). 6 Hudson-Sharp and Runge (2017). 7 Chapman (2017). Also see OECD (2017) for some discussion of ‘job quality’. 2 3  4  All speeches are available online at www.bankofengland.co.uk/speeches  4  is less likely to be collective, and more likely to be idiosyncratic, these days. Similarly, the rise in self-employment and part-time working has made work more divisible at the level of the individual worker. People are more likely these days to be paid by the task or the hour. In short, these shifts have meant work and workers may have become more diffuse, more granular, more divisible than in the past. This increased “divisibility” of jobs and work potentially raises a number of important issues, economic and social, about the relationship between employee and employer, many of which are being tackled by the Taylor Review. I want to explore just one dimension - the extent to which they may have influenced wage-setting in the economy.
In this connection, we underscore the importance of future realignment of quota shares on a periodic basis, beginning with the Fourteenth General Review of quotas, as is currently proposed in the package. We maintain that PPP GDP and compression factor should remain in the formula for it to credibly capture the dynamic contribution and relative economic size of countries in the world economy. We also support the future work program, in particular further refinements to the definitions of openness and variability to guide future realignment of quota shares. 12. The New Income Model is also a critical element of the Reform Package, without which the Fund cannot discharge its functions properly. We are pleased to note the broad  BIS Review 51/2008  3  consensus on the core elements of the proposed new income model for the Fund and are prepared to give our support to the emerging package. We would simply underline the importance of establishing the necessary governance arrangements that allow the Board and the Management to deal effectively with the risks that broadening the Fund’s investment mandate will undoubtedly bring. We are also pleased to support the limited sale of Fund gold to establish an endowment to generate income. In fact, we see this as a critical component of the new income model, without which it may be difficult for the Fund to close its budget deficit. We look forward to a prompt resolution on this issue, particularly from the major shareholder. Strategic directions 13.

Importantly, some members of our constituency have been able to utilize the fiscal space arising from past reforms, which is a contributing factor behind the stronger demand in these countries. Nonetheless, the concurrent challenge is to keep inflationary pressures under control while ensuring that strong domestic demand does not lead to a build-up of imbalances. 4. Notwithstanding the baseline scenario, it is clear to us that the Fund is correct in identifying the financial turmoil as the single greatest risk to growth. In the US, given the loss of confidence, the immediate priority for the authorities was to limit the financial contagion and counter the downside risks to growth. Following that, the first line of defense was monetary policy and monetary operations to inject liquidity. The second line was fiscal stimulus. We view these actions as steps in the right direction, although one should also recognize the limitations of such policies at a time of impaired balance sheets and ebbing sentiments. The third line of defense was using public money to safeguard the stability of the financial system. In view of the systemic nature of the crisis and the potential for spillovers we appreciate the need for decisive policy actions and the drastic unorthodox measures. BIS Review 51/2008  1  Indeed, our own experience during the Asian crisis was that adherence to a market-centric philosophy in an environment where markets have seized up is simply not tenable.
This is why the Basel Committee has devoted so much effort to developing the so-called Basel II capital framework, which was released in June 2004. The new capital framework is built on three mutually reinforcing pillars. The first pillar aligns minimum capital requirements more closely with banks’ actual underlying risks. The menu-based approach means that qualifying banks may also rely partly on their own measures of those risks, which will help to create economic incentives to improve those measures. In concept the first pillar is similar to the existing “Basel I” capital framework in that it provides a measure of capital relative to risk. What is new are the second and third pillars. The second pillar – supervisory review – allows supervisors to evaluate a bank’s assessment of its own risks and determine whether that assessment seems reasonable. It is not enough for a bank or its supervisors to rely on the calculation of minimum capital under the first pillar. Supervisors should provide an extra set of eyes to verify that the bank understands its risk profile and is sufficiently capitalised against its risks. BIS Review 45/2006  1  The third pillar – market discipline – ensures that the market provides yet another set of eyes. The third pillar is intended to strengthen incentives for prudent risk management. Greater transparency in banks’ financial reporting should allow marketplace participants to better reward well-managed banks and penalise poorly-managed ones.

At the same time, it is also an effective instrument used by corporations, institutions and sovereigns in tapping funds at competitive rates to finance long term funding needs. At this juncture, the demand for sukuk is tremendous. The high demand for the sukuk instrument is evidenced by the over subscription which has ranged from two to thirteen times. This has pushed down the cost of issuance by at least 10 to 20 basis points. 2  BIS Review 6/2008  This demand has originated from several different parts of the world, both from conventional as well as Islamic financial investors. Due to the scarcity of sukuk issuance, the investors have tended to hold the sukuk for investment thereby reducing the secondary activity in the market. Thus, has resulted in a higher pricing in the sukuk secondary market thereby generating good investment returns for investors. The sukuk thus offers a positive value proposition for both issuers and investors. Let me turn to Malaysia's experience in Islamic finance. Malaysia has had three decades of experience in which we have developed a comprehensive Islamic financial system that operates in parallel to the conventional system. The supporting legal framework includes a dedicated legislation that takes into account the unique principles of Islamic contracts. The legal infrastructure also includes the court system and arbitration mechanism to resolve disputes to ensure that contracts relating to Islamic financial transactions are effectively enforced.
Therefore, it is unlikely for unit labor costs to be subject to cost pressures in coming months. In sum, monetary conditions remained supportive of domestic demand in the fourth quarter. Private demand recovered more rapidly amid increased consumption and investment spending, therefore aggregate demand conditions provided less support for disinflation than suggested in the October Inflation Report. Nevertheless, I would like to emphasize that the recent policy measures are expected to bring domestic demand back on to a more moderate growth path in the upcoming period. Our inflation forecasts are based on the projections of the Medium-Term Program (MTP) as was the October Inflation Report. The use of a large fraction of the additional increases in tax revenues as a result of the stronger-than expected economic activity in the last quarter of 2010 has been the primary driver of the slight upward revision to output gap forecasts. However, as the budget balance remained largely in line with MTP targets, the medium-term fiscal policy outlook was barely changed. Therefore, our forecasts are based on the assumption that the primary expenditure-to-GDP ratio would decline gradually, the debt-toGDP ratio to decline further, and the risk premium to remain broadly unchanged over the forecast horizon. Moreover, I would like to note that we assume tax adjustments to be consistent with inflation targets and automatic pricing mechanisms. Now I would like to brief you about the assumptions underlying our inflation forecasts. The developments since the reporting period of the October Inflation Report urged us to revise our assumptions underlying our forecasts.

2  “The Repertoire of Official Sector Inventions in the Financial System: Last Resort Lending, Market-Making, and Capital”, speech by Paul Tucker given at the Bank of Japan’s 2009 International Conference in Tokyo on 28 May 2009. Also see, “The Development of the Bank of England’s Market Operations”, a consultative paper by the Bank of England, October 2008. 2  BIS Review 83/2009  their savings. It turned out to be naïve on two fronts. First, it proved unrealistic to expect households generally to take such care. And second, it brought politics into bank rescues, because of the hardship that could still be suffered by regular depositors when their bank failed. Nearly a decade ago I became convinced of the need for 100% insurance of a meaningful amount in order, as I put it in internal exchanges, “to take politics out of crisis management”. In the wake of Northern Rock and Bradford and Bingley, the FSA moved to 100% insurance of £ That means that nearly all regular households in this country are completely protected; and when today I refer, rather approximately, to “100% insurance”, that is what I mean. 3 The Bank’s view has been that in such a system, the banking system’s contribution to the insurance scheme should be risk-based and pre-funded. The industry has been more doubtful about the idea of pre-funding and so I want to explain our thinking. A system of 100% insurance of a meaningful amount changes the landscape. First, it alters the purposes of bank regulation.
BIS Review 32/2010  A box in the material for assessing monetary policy in 2009 describes a method for summarising the information in the alternative forecasts. This method uses an easily-grasped measure, a so-called mean squared gap, of how effectively an interest rate path can stabilise inflation around the inflation target and resource utilisation around a normal level. 6 Allow me to illustrate the method by using an example from the Monetary Policy Report published in October 2009, in which a box presented the method. Figure 6 shows the forecast development of inflation measured in terms of the CPIF and resource utilisation measured in terms of the output gap for the various repo-rate paths discussed in the Monetary Policy Report of October 2009. The various repo-rate paths are shown in Figure 6.a. The path in the middle is that of the main scenario, the repo rate path that the majority of the Executive Board chose at the meeting in October. The lower path is the one I advocated. Figure 6.b shows the forecasts for CPIF inflation that each repo-rate path was expected to give rise to. 7 The output gap, which is shown in Figure 6.d, is calculated in the same way as in the figures I presented earlier. Figure 6.c shows the mean squared gap. A lower mean squared gap for inflation entails a better acquisition of the inflation target; that is a better stabilisation of inflation around the inflation target.

We still estimate this neutral range to be at 5–6%, provided that inflation is close to the Bank of Russia’s target of 4%. Thank you all for your attention. 3/3  BIS central bankers' speeches
However, the responsibility for the implementation of macro-prudential policies lies with national authorities. 4. Conclusions  We live in very challenging times. Although the increased interconnectedness of global financial markets have facilitated the build up of imbalances and transmission of shocks, financially integrated markets have served Europe well and remain a necessary pre-condition  4  BIS Review 81/2010  for the proper functioning of the euro area. The ECB will therefore continue its efforts to promote closer integration of our financial system. At the same time we should be aware of the opportunities, but also the challenges and risks that new developments in financial markets pose to financial stability and to the functioning of the real economy. With its involvement in the ESRB, the ECB will continue to play an active role in safeguarding the financial stability of the euro area. BIS Review 81/2010  5

One of the goals of the European green bond standard is to fight greenwashing. Concerns about this issue have grown in recent years, at the same time as sustainable finance has grown in complexity. To address these concerns, another category of bonds (sustainabilitylinked bonds) have emerged as an alternative because they link the characteristics of the bond to specific objectives based on key performance indicators. These bonds may also be used as a transition financing instrument if a target for reduction of greenhouse gas emissions is in line, say, with a net-zero-emission pathway.4 The size of the coupon has a penalty for the issuer if it does not meet the targets set at the time of issuing the bond, for example, reducing the carbon footprint of the company as a whole by a certain percentage by a specific date. Thus the problems I mentioned earlier are avoided in the sense that the penalty for failure to meet environmental targets is fixed contractually. 3  See Opinion of the European Central Bank of 5 November 2021 on a proposal for a regulation on European green bonds (CON/2021/30) 2022/C 27/04. 4  See IMF (2022). Scaling up private climate finance in emerging market and developing economies: challenges and opportunities. Chapter 2 in Global Financial Stability Report – October 2022. 4  Given these advantages, we would expect the issuance of sustainability-linked bonds to increase, but its growth was actually slower in 2023 Q1, comparing with the same quarter of 2022.
My main conclusion is that there is no optimal solution for all cases; it depends on the circumstances in the individual country at the present moment. Ensuring operational independence, accountability and transparency for the supervisory agencies are more important than how they are structured. If your country has a well functioning banking supervision do not change its structure until you have clear arguments to do so. Do not make structural changes when the financial sector is weak or recovering from a crisis. On the other hand, developments in your financial sector such as an increasing role for other institutions than banks, argue for closer ties between the supervisory agencies. There are two basic issues in the discussion on the organisation of supervision: •  Should supervision be inside or outside the NCB and the Ministries? •  Should supervision of different sectors be unified in the same authority? These questions will be discussed later in my presentation. Let me first describe some of the present practices in organising supervision. Present practices Currently there is a great diversity of supervisory structures but the majority comes under one of the two main streams: The first is the traditional one with bank supervision in the NCB and securities supervision in an independent standalone authority. Insurance supervision is in many countries also located in a separate authority, but in other cases it is a department of the Ministry of Commerce or some other ministry.

12  (a) Survey-based measures (apart from GfK NOP) have been scaled to have the same mean as CPI inflation over a comparable period. (b) The questions ask about expected changes in prices over the next twelve months, but do not reference a specific price index. All measures are based on the median estimated price change, except GfK NOP which captures the weighted net balance expecting prices to increase.
Jean-Claude Trichet: Fostering sound financial globalisation – the role of Europe Speech by Mr Jean-Claude Trichet, President of the European Central Bank, at the Paris Europlace Financial Forum “The Paris Marketplace Contribution to the Global Economy”, Paris, 2-3 July 2008. *  *  *  Ladies and Gentlemen, Mesdames et Messieurs, Je suis très heureux d’intervenir aujourd’hui à l’occasion du Forum financier de Paris Europlace. En premier lieu, permettez-moi de préciser que mon discours intervient durant la « purdah period » précédant une réunion du Conseil des gouverneurs. En conséquence, aucun de mes propos ne saurait être interprété en termes d’intentions du Conseil des gouverneurs sur l’orientation de la politique monétaire et le niveau des taux directeurs. Je me concentrerai aujourd’hui sur le rôle de l’Europe dans les marchés financiers globalisés. Il est en effet particulièrement opportun de procéder à une évaluation de la contribution, au sein de l’économie mondiale, des marchés de capitaux européens. Les événements observés sur les marchés de capitaux depuis plusieurs mois nous ont rappelé à quel point le système financier mondial était devenu étroitement intégré. La mondialisation financière est un facteur important du dynamisme économique mondial et de la stabilité, car elle favorise une allocation efficace du capital et accroît les possibilités de partage et de diversification des risques. Il convient toutefois que son développement se déroule dans un environnement caractérisé par l’efficacité et la discipline. Pour cela, il nous appartient à tous d’assumer notre part de responsabilité pour garantir un fonctionnement sûr et efficace du système financier mondial.

The Governing Council has invited all European CSDs to express their views with regard to their participation in T2S by 4 July 2008 and will subsequently decide whether to proceed with the project. While the Code of Conduct, the removal of the Giovannini barriers and T2S are different lines of work, they all aim at enhancing the efficiency of post-trading services in Europe. They are complemented by the ESCB-CESR recommendations, which aim to ensure the safety and soundness of EU post-trading activities. Finally, I would like to make a few remarks on further steps to promote retail banking integration. Again, a multi-pronged approach is most promising in this regard. For instance, the European Commission, as part of its financial services policy for the years 2005-2010, is pursuing a number of initiatives to overcome both regulatory and market-based barriers in this field. In addition, it is expected that the above mentioned initiatives to streamline the regulatory and supervisory interface for cross-border financial institutions will foster an enhanced cross-border provision of banking services, including in the retail segment. Furthermore, in January 2008 the market-led initiative to establish a Single Euro Payments Area (SEPA) was launched, which aims at achieving a fully integrated market for retail payment services in the euro area via harmonised technical standards and market practices, with no distinction between cross-border and national payments.
However, there was nothing to prevent the banks themselves, alone or jointly, establishing subsidiaries to handle the bad loans. None chose to do so. BIS Review 58/2003  3  Nor did the Norwegian authorities issue a blanket guarantee for the banks’ liabilities. Such a guarantee can create moral hazard problems and actually lead to more bank problems in the future4. In addition, it was not considered proper for the government to take on an open-ended and not budgeted liability. Nevertheless, when the crisis emerged, it was made clear both by the Minister of Finance and by Norges Bank that measures necessary to bolster confidence in our financial system would be taken. No assurances were given that individual banks would be rescued. In this respect, it was probably a blessing that there was no government ownership in commercial banks before the crisis. In the end however, only two small banks were shut down and depositors paid back through the banks’ guarantee funds. By late 1993 - one year after Norway left the peg to the ECU and started to lower the interest rate - the crisis was effectively over and banks had started to earn normal profits. Banks in general came out of the crisis much leaner and more efficient than before. The discounted value of the gross fiscal costs of the resolution of the Norwegian crisis resolution is estimated at 2.9 per cent of GDP as of year end 1993.

The human capital management also needs to be well supported by an integrated information system that can allow for rigorous analysis that can become an important basis for decision making. Finally, there need to be continuous socialisation of the human capital reforms to ensure the effective implementation of the difficult reforms and changes in the organisation. Conclusion Let me conclude my remarks. As we advance forward into the future, the economic and financial landscape can be expected to be continuously redefined. If we are to stay ahead of the curve and be well positioned to meet the new challenges, high priority needs to be given to talent development and management. Education and capacity building to generate the new talent with the right skills, mindsets and values is only one part of the solution. New  4  BIS central bankers’ speeches  strategies and approaches for the effective human capital management is an equally important part of the equation. Many of these issues are likely to be discussed at this symposium. Let me thank the speakers, especially those who have travelled here from a far for their contribution to this symposium. Let me take the opportunity to wish you an engaging and productive symposium. BIS central bankers’ speeches  5