samchain/econo-pairs-v1 huggingface dataset:
Now it is better understood that compensation and internal risk management policies can be decorrelated. The De Larosière Report holds that compensation incentives should be better aligned with shareholders' interests and long-term, firm-wide profitability. In particular, the assessment of bonuses should be set within a multi-year framework, allowing their actual payment to be spread out through the cycle. The De Larosière Report contains the proposal that supervisors should oversee the adequacy of financial institutions' compensation policy and enforce changes or additional capital requirements within pillar 2 of the Basel 2 framework unless corrective measures are implemented. My belief is that such a measure is in line with the principle of spurring competition and progress and is thus welcomed. 5. In good times, people forget about the crises and ignore designing crisis management mechanisms. Significant financial strains and all the more so financial crises are seldom occurring events. We are therefore lucky, but rare occurrence comes at a cost. The crisis management mechanisms in place at the time such events emerged may be inadequate. There may be legal provisions hampering quick actions, or the set of instruments and procedures may differ across countries thereby hindering cooperation, etc. The lesson to be learned is that crisis management mechanisms should be updated on a regular basis. Establishing a clear and transparent single crisis management framework based on the recommendations of the De Larosière Report would benefit the UE in particular.

But they all also expected that this effect would be temporary and that inflation in 2023 would again be below the target on average (Figure 1).3 The forecasters judged that these developments would be compatible  *  I would like to thank Mikael Apel for his work on this speech, Charlotta Edler, Bul Ekici, Jesper Hansson, AnnLeena Mikiver and Marianne Sterner for valuable comments and Elizabeth Nilsson for translation. The views expressed in this speech are my own and are not necessarily shared by the other members of the Executive Board. 1 Jansson (2021). 2 The thoughts I raised in that speech seem to have become topical. In September this year, an ESO report on the division of roles between fiscal and monetary policy was published; see Calmfors, Hassler and Seim (2022). 3 The spread in the inflation forecasts for 2023 was relatively large, from Nordea’s 1.2 per cent to Swedbank’s 1.9 per cent. As recently as December 2021, inflation excluding energy prices was 1.7 per cent, which was a decline of 0.2 percentage points compared with the outcome in November 2021. The first signs in actual price developments that inflation excluding energy prices was on the way up came in the January outcome, which was 2,5 per  1 [15]  with a policy rate maintained at zero per cent in 2022. And only a few expected modest increases in 2023.
With respect to the retention awards owed to FP employees under their pre-existing contracts, we believe that Mr. Liddy weighed a number of factors in deciding not to attempt to prevent payment, including: •  the likely negative effects of disruption in staffing at FP in managing its multi-billion dollar exposures;  •  legal advice that the contracts were valid – meaning that breaking them would likely increase the amount of company funds ultimately paid to the covered employees; and  •  the negative consequences to AIG's business that could result from the public abrogation of contracts. In conducting our oversight as lender, the New York Fed did not see reason to disagree with Mr. Liddy's judgment from a risk perspective. Equally important, we did not think it was legally permissible – or within the proper role of the New York Fed – to attempt to substitute our judgment for that of Mr. Liddy in this circumstance, even though we found the payment of the retention awards extremely distasteful. The broad public disapproval of sizeable retention payments being directed toward the unit most responsible for last fall's downfall of AIG is understandable. Americans naturally feel outraged when confronted with news of such payments to an entity that worsened the financial crisis and that is dependent on taxpayer funds to stay out of bankruptcy court where these contracts would not have been fully honored.

William C Dudley: Oversight of the Federal Government's intervention at American International Group Testimony of Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, before the Committee on Financial Services, US House of Representatives, Washington DC, 24 March 2009. *  *  *  Good morning, Chairman Frank, Ranking Member Bachus, and other members of the Committee. Thank you for giving me the opportunity to appear before you today. As you know, on January 27, 2009, I became the president of the Federal Reserve Bank of New York. Before I assumed that position, I served as the head of the Markets Group at the New York Fed. I appreciate having this opportunity to discuss the Federal Reserve Bank of New York's involvement with American International Group, Inc. (AIG). Role of the Federal Reserve Bank of New York At the outset, it is important to note that before the New York Fed became involved with AIG as a lender on September 16, 2008, the Federal Reserve lacked any kind of authority to oversee AIG. The lack of effective consolidated supervision over AIG was a critical contributing factor to the debacle that occurred at the company. The Federal Reserve made its decision to lend based on a judgment that a failure of AIG would cause dramatically negative consequences for the financial system and the economy – consequences worse than what occurred in the aftermath of the failure of Lehman Brothers. We stand by that judgment today.
Occasional Paper No 2014, Banco de España, and Box 3.4 of the Annual Report 2019 of the Banco de España for a discussion of the role of a fiscal policy coordinated at European and international level in the current context. 18  receive from the fund over this period is some € billion (around 12.5% of Spain’s estimated GDP in 2020), of which almost half would take the form of direct grants, with the rest in the form of loans. These funds, appropriately channelled towards projects with the ability to transform the Spanish economy and raise its potential growth, will be fundamental to strengthen the economic recovery and reduce the possible permanent consequences of the crisis. In fact, according to Banco de España estimates,8 this fund has the potential to become an important element of support for the recovery and, especially, a unique lever to raise the Spanish economy’s low potential growth rates. Nonetheless, we would be making a huge mistake if we were to think that mere receipt of the funds will be sufficient for our country to extract the greatest possible benefit from them. First, we need to establish the capacity to design and develop a sufficient volume of new projects, so that the funds are not used to finance spending that would have taken place in any case, or to finance projects with limited added value. Second, prompt execution of these projects would help make the Spanish economic recovery more robust, once the constraints imposed by the pandemic are lifted.

Instead, it should aim to promote and support the adaptation of the productive system and workers to the new realities and the efficient reassignment of resources among industries and firms. In short, the design of economic policy measures should be adapted to the changing circumstances of the crisis itself. The ability, over the coming quarters, to recalibrate the support measures to ensure that at all times they match the needs arising from the course of the pandemic will determine our opinion in a few years’ time of the success of the economic policies of today in addressing this crisis. It is this spirit of needing to adapt to continuously changing circumstances that has inspired the recent agreement between the Government and the social agents to renew furlough arrangements (ERTEs) until 31 January 2021: the agreement has introduced new forms of temporary suspension of employment relationships, in response to activity restrictions that may arise entirely or partly as a consequence of the introduction of fresh pandemic containment measures. One particular dimension of the necessary redesign of these mechanisms is a more selective focus. The protection measures should be directed at those industries and firms most directly affected by the activity restrictions resulting from the course of the pandemic, this being an aspect of the latest ERTE extension. The rationale for this heightened focus is twofold. First, public funds are limited and already subject to considerable pressure, so they need to be channelled towards those uses that yield the highest returns.
When interest rates are increased, demand falls and inflation is kept at bay. If demand is low and unemployment rises, there will be prospects of lower inflation. The interest rate will then be lowered. In the long run, output is determined by the supply of labour and capital and by the ability to adapt, but in the short and medium term monetary policy can also have an impact on the real economy. The economy grows over time. Output moves in waves. Output will in some periods lie below long-term trend growth and in others above trend. The difference between trend output and actual output is called the output gap. Stabilising output growth means seeking to maintain actual output near trend. We have had pronounced economic cycles in the Norwegian economy. The downturn at the beginning of the 1990s was followed by an upturn from 1993. This upturn peaked in 1998. The economy then shifted from an upturn with high growth rates to an expansion with lower growth but low unemployment, labour shortages in many sectors and strong growth in labour costs. Since 1998, output growth has been low. Growth stalled in winter 2002 and was well below capacity in the first half of 2003. Growth in the Norwegian economy has since picked up. BIS Review 23/2004  1  Norges Bank has not defined an exchange rate target. Nevertheless, developments in the krone are of considerable importance to interest-rate setting because exchange rate developments have an impact on inflation and output. The krone fluctuates.

Economic developments There are clear signs that the global economy has passed the trough. However, while the outlook is brighter, price inflation is still low and interest rates are being kept unusually low. Economic growth is high again in the US. After a surprisingly long period of weak labour market developments, the latest employment figures indicate that the situation may now have been reversed, although there is still excess production capacity and very low inflation. It may take some time before interest rates are increased substantially in the US. Growth in Asia is solid, but a global rise in interest rates is unlikely to start there. Inflation is higher in the euro area than in the US and approximately in line with the objective defined by the European Central Bank. In the euro area, however, capacity utilisation is very low, unemployment high and the outlook for growth is weaker. Recently, there have also been signs that inflationary pressures are moderating. Against this background, it will probably take time before interest rates rise markedly in the euro area. Interest rate expectations were continuously revised downwards up to March this year, and an increase towards a more normal level was postponed in the US and the euro area. Interest rates abroad have been unusually low for 2½ years, and are likely to remain low for some time to come, despite the above-mentioned signs of a somewhat swifter rise. This has been the greatest challenge for our monetary policy.
Finally, I am worried that we are not going to achieve the full benefits from trade repositories. Regulators, market participants and TRs must continue to work together to ensure that comprehensive, and meaningful data are being reported to TRs and that authorities have the ability to access and analyze the data from the TRs. Although authorities currently receive data, the data are often fragmented and reported in different formats or are not comparable across TRs. This poses challenges for regulators and supervisors of market participants and global CCPs as well as authorities more broadly. Aside from the issues with TR fragmentation, data quality and regulatory access to data, we could be leaving considerable money on the table by not using the TR dataset to increase transparency into the marketplace more broadly. Moving forward on all of these issues will require global coordination and continued efforts across all stakeholders. Authorities must continue to coordinate their oversight of global infrastructures. Where FMIs are “global,” that is providing services across multiple jurisdictions and in multiple currencies, it is important for the relevant authorities to find efficient ways to cooperate with each other to effectively carry out their respective responsibilities. Additionally, where there are overlapping or contradicting regulations, authorities must provide clear guidance to the market on how regulation will be applied. One final point: What matters is not the standardization of OTC derivatives, central clearing or the use of the trade repositories per se, but instead the results that flow from these efforts.

The difficulty in harmonizing the regulatory treatment of cross-border OTCD activity is a good example of this. Parenthetically, I’d add that I am very pleased to see the breakthrough achieved between Europe and the U.S. this summer. Regardless of the cause, because of the slower pace, we are not yet close to a harmonized, robust OTCD system. Thus, we can’t ascertain whether we have achieved what we set out to achieve – that is, reducing the amount of risk in the system, making the infrastructure more secure, and increasing the flow of information so that regulators and others can develop a more coherent view of what is happening in the global financial system. I’m also worried that even when we have finished revamping the architecture and regulation of OTC derivatives activities, reform may not go far enough in a number of respects. First, I am concerned that trades may not be standardized to the fullest degree possible. A preliminary analysis undertaken by the Financial Stability Board that compares the costs of clearing and margin requirements of standardized trades versus bespoke trades suggests that the economics with respect to costs favors standardizing OTCD trades whenever possible. However, the wider spreads that might be earned on bespoke trades, because of their greater opacity, could swing the needle the other way, with the higher profits on bespoke trades more than offsetting their higher costs.
It now gives me great pleasure to officially launch the ECRUT scheme. Thank you. 2  BIS Review 48/2008

Even the Bundesbank built up its formidable reputation during the German post war economic miracle. That said, I do not think there is any doubt that the new approach to monetary policy did represent a major advance on what went before. In what way? Inflation targeting, the UK’s current approach, broke with past attempts to run an independent monetary policy by offering commitment and clarity. For the first time, the Government and the Bank of England committed to clear objectives, clear communications and clear lines of accountability. We now have a decision-taking framework which allows monetary policymakers plenty of room for discretion, while forcing them to provide a full explanation of their thinking. By hook or by crook, the fact is that central banks do now enjoy considerable credibility. They treasure that legacy, much like any blue chip company, and for many of the same reasons. Credibility, and the trust that flows from it, is worth a great deal in policy-making, as in business. If people believe that the Bank will act to keep inflation low and stable they will factor that in to their decisions. (They may have been doing this recently, in judging how to respond to higher oil prices.) If so, that in turn makes it easier for the Bank to keep inflation on track, and reduces the fluctuations in output that controlling inflation can involve. So it is not implausible to assign a significant role to better policy in explaining the Great Stability.
If more people take part in the labour force, wages and thereby inflation should be held back. Developments in the wage bargaining rounds so far do not indicate that the potential labour supply is holding back wage demands quite as much as we had earlier estimated. Abolition of property tax on housing One of the Government’s proposals that has received considerable attention is the proposal to abolish property tax on housing. A working group has been commissioned by the Government to investigate a model that would finance this tax cut in the housing sector. In this model, the tax is replaced by a municipal charge and higher tax on profits made when selling property. In theory, a fully-financed proposal should not involve any effects on general housing price levels. However, in practice there is reason to believe that house prices will increase at a slightly faster rate due to the tax changes. In those parts of the country with high property taxes, and where the difference between the municipal tax and the current property tax is substantial, there could be fairly large price increases. But this would probably be mainly a one-off effect that did not have any more long-term effect on the rate of price increase. Therefore, a fully-financed abolition of the property tax would not necessarily have any major direct impact on CPI inflation.

Own interest rate forecasts When we expressed our views in February regarding the future development of the interest rate, it was the first time we presented our own assessment of the future repo rate path. By this we mean that we try to calculate what we believe will be a well balanced monetary policy over the coming years. Previously we presented forecasts for the economy on the basis of what the financial market participants believed about the repo rate. Now that we are presenting our own interest rate path it will be clearer both what we believe about the interest rate and what we believe about the economy in general. We consider this to be a major step forward in the Riksbank’s way of explaining how monetary policy functions. For most people I believe it is more important to have an idea of the development of the interest rate over time, rather than to know what an individual interest rate decision will entail. In this context I always try to be as clear as possible. The interest rate path is merely a forecast, not a promise. The economic conditions on which we base our forecasts are constantly changing. Changes are constantly taking place in the economy, which means that we have to reconsider our opinions of future developments. The interest rate path represents nothing more nor less than the best assessment we were able to make at the time it was published. When the world around us changes, we also have to change our forecasts.
While inflation has remained elevated and is likely to stay above 2% for some months to come, inflation rates are expected to decline further in the course of 2012 to below 2%. A cross-check with the information from our monetary analysis confirms that the underlying pace of monetary expansion continues to be moderate. After today’s decision, inflation should remain in line with price stability over the policy-relevant horizon. Owing to their unfavourable effects on financing conditions and confidence, the ongoing tensions in financial markets are likely to dampen the pace of economic growth in the euro area in the second half of this year and  2  BIS central bankers’ speeches  beyond. The economic outlook continues to be subject to particularly high uncertainty and intensified downside risks. Some of these risks have been materialising, which makes a significant downward revision to forecasts and projections for average real GDP growth in 2012 very likely. In such an environment, price, cost and wage pressures in the euro area should also moderate; today’s decision takes this into account. Overall, it remains essential for monetary policy to maintain price stability over the medium term, thereby ensuring a firm anchoring of inflation expectations in the euro area in line with our aim of maintaining inflation rates below, but close to, 2% over the medium term. Such anchoring is a prerequisite for monetary policy to make its contribution towards supporting economic growth and job creation in the euro area.

Looking forward, a number of factors seem to be dampening the underlying growth momentum in the euro area, including a moderation in the pace of global demand and unfavourable effects on overall financing conditions and on confidence resulting from ongoing tensions in a number of euro area sovereign debt markets. At the same time, we continue to expect euro area economic activity to benefit from continued positive economic growth in the emerging market economies, as well as from the low short-term interest rates and the various measures taken to support the functioning of the financial sector. In the Governing Council’s assessment, the downside risks to the economic outlook for the euro area are confirmed in an environment of particularly high uncertainty. Downside risks notably relate to a further intensification of the tensions in some segments of the financial markets in the euro area and at the global level, as well as to the potential for these pressures to further spill over into the euro area real economy. They also relate to the impact  BIS central bankers’ speeches  1  of the still high energy prices, protectionist pressures and the possibility of a disorderly correction of global imbalances. With regard to price developments, euro area annual HICP inflation was 3.0% in October according to Eurostat’s flash estimate, unchanged from September. Inflation rates have been at elevated levels since the end of last year, mainly driven by higher energy and other commodity prices.