samchain/econo-pairs-v1 huggingface dataset:
Excess liquidity may sow the seeds for asset price bubbles and financial vulnerabilities,3 but to cause a huge financial crisis, some serious distortions in the financial system are required. Indeed, countries like Australia or Canada had very low interest rates, but their financial systems responded appropriately to the financial crisis. Chile also followed an interest rate cycle similar to that of the US and did not suffer a financial crisis. In some countries there could have been even a housing bubble, but there was not the degree of leverage as in the US, which was central in triggering the crisis. Indeed, it is useful to recall that asset price bubbles do not necessarily cause a financial crisis, as was the case with the tech bubble in the early 2000s. The bad combination is asset price bubbles with high leverage in the banking system. However, monetary policy played a role in the crisis in the way it dealt with bubbles, deviating from the prescriptions to pursue price stability. This was the so-called “Greenspan put.” The rule followed by the Fed was not to react to the formation of a bubble, but to mop-up its effects after the bubble burst. This was done by providing unlimited amount of liquidity and sharp reductions of interest rates. Recent evidence confirms that including asset price deflation improved the fit of the Taylor rule (Hall, 2011), and hence markets were expecting an easing of monetary conditions when asset prices declined significantly.

1, No. 1, pp. 26–57. Galí, J. and M. Gertler (1999), “Macroeconomic Modelling for Monetary Policy Evaluation,” Journal of Economic Perspectives, Vol. 21, No. 4, pp. 25–45. Hall, P. (2011), “Is There Evidence of a Greenspan Put?,” Swiss National Bank Working Paper, 2011-6. Kim, C.-J. and C. Nelson (1999), “Has the U.S. Economy Become More Stable? A Bayesian Approach Based on a Markov Switching Model of the Business Cycle,” The Review of Economics and Statistics, Vol. 81, N° 4, pp. 608–616. Miller, M., P. Weller and L. Zhang (2001), “Moral Hazard and the US Stock Market: Analyzing the Greenspan Put,” CSGR Working Paper 83/01, The University of Warwick. Stock, J. and M. Watson (2003), “Has the Business Cycle Changed and Why?,” Macroeconomics Annual 2002, MIT Press. Svensson, L.E.O. (1997), “Inflation Forecast Targeting: Implementing and Monitoring Inflation Targets,” European Economic Review, Vol. 41, pp. 1111–1146. Taylor, John B. (1998), “Monetary Policy and the Long Boom: The Homer Jones Lecture,” Review, Federal Reserve Bank of St. Louis, November/December, pp. 3–11. BIS central bankers’ speeches  7
The global Islamic financial system is now operating at a time when the international economic and financial environment has become immensely more challenging. New risks that are more complex, with more profound systemic implications are emanating with the increasing forces of financial liberalisation, globalisation, technological advancement, intensified competition, 2  BIS central bankers’ speeches  financial innovation and the internationalisation of Islamic finance. Cumulatively, these developments necessitate greater prudential regulation and supervisory oversight to ensure a resilient and sustainable financial system. The role of the IFSB remains instrumental and paramount as we face a time of increasing uncertainties. Continuous and stronger support for the IFSB, particularly from its members including in actively providing feedback on its Consultative Papers and in the participation in IFSB related events, supported by the existing collaboration and cooperation among the regulators would collectively strengthen the potential for the IFSB to manage its journey ahead. Greater concerted efforts by members to consistently adopt and implement the prudential standards issued by the IFSB will not only contribute towards preserving financial stability but it will also enhance regulatory harmonisation across jurisdictions. These efforts will indeed place us on a path to realising our quest and shared aspirations for a more resilient and sound global Islamic financial system. It is also timely for the IFSB to elevate its level of engagement and connectivity with other international standard setting bodies.

This would enable the framework for financial stability in the context of Islamic finance to interface with the arrangements that exists for the conventional financial system, therefore avoiding any fragmentation in the global regulatory framework. Malaysia, as the host of the IFSB will continue to be committed to support its development and its potential as a prudential standardsetting body in the international financial system. On that note, I wish you a productive session today and look forward to the constructive outcomes of this engagement. BIS central bankers’ speeches  3
I would particularly like to thank Saba Alam, Gillian Anderson, Filippo Busetto, Harvey Daniell, Andrew Gaffney and Alex Rattan for their help in preparing this speech. I have received helpful comments from Andrew Bailey, Ben Broadbent, Rich Harrison, Jonathan Haskel, Andrew Hauser, Bob Hills, Neil Kisserli, Rhys Phillips, Dave Ramsden, Matt RobertsSklar, Andrea Rosen, Michael Saunders, Fergal Shortall, Tom Smith and Silvana Tenyero, for which I am most grateful. References A. Bailey, J. Bridges, R. Harrison, J. Jones and A. Mankodi (2020). ‘The central bank balance sheet as a policy tool: past, present and future,’ Bank of England staff working paper no. 899. Broadbent, B. (2022). ‘Reliable partners,’ speech given at Gresham College, London. Busetto, F., M. Chavaz, M. Froemel, M. Joyce, I. Kaminska and J. Worlidge (2022). ‘QE at the Bank of England: A perspective on its functioning and effectiveness,’ Bank of England Quarterly Bulletin Q1. Evans, C.L., J.D.M. Fisher, F. Gourio and S. Krane (2015). ‘Risk management for monetary policy near the zero lower bound  ,’ Brookings Papers on Economic Activity (Spring), pp. 141-196. Mann, C.L. (2022). ‘A monetary policymaker faces uncertainty,’ speech given at a Bank of  Page 18  England webinar. Nickell, S. (2005). ‘Why Has Inflation Been So Low Since 1999? ’ Bank of England Quarterly  Bulletin 45, pp. 92-107. Pill, H. (2022). ‘Monetary policy with a steady hand,’ speech given at the Society of Professional Economists online conference. Pill, H. (2021).

There may still be loan losses that may damage trust and confidence in the market when they come to light. This applies to both the United States and Europe. Figure 1. House prices Annual percentage change  35  35  25  25  15  15  5  5  -5  -5  -15  -15 95  96  97  98  99  00  Danmark  4  01  02  Irland  03  04  Spanien  05  06  07  08  USA  BIS Review 60/2008  Figure 2. Property price index (FPI) and CPI in Sweden Index 1995=100  280 260 240 220 200 180 160 140 120 100  280 260 240 220 200 180 160 140 120 100 dec- dec- dec- dec- dec- dec- dec- dec- dec- dec- dec- dec- dec- dec94 95 96 97 98 99 00 01 02 03 04 05 06 07 FPI  KPI  Figure 3. Household debt and interest ratios Per cent  200  20 Skuldkvot (höger skala) Räntekvot (vänster skala)  16  160  12  120  8  80  4  40  0  0 1982  BIS Review 60/2008  1986  1990  1994  1998  2002  2006  2010  5  Figure 4.
While the gaps in operational efficiency and productivity have improved, there remains great scope for further improvement particularly in areas where the domestic banks are evidently behind the foreign banks. For instance, productivity standards of the counter personnel as measured by the number of counter transactions per counter employee for the domestic banks averaged approximately 5,000 compared with 11,000 for the foreign banks. Meanwhile, the number of domestic banks that did not experience any disruption in their retail deposit and loan initiation systems is significantly lower than that of the foreign banks. In terms of the time taken to approve new credit card applications it averaged 8 days for the domestic banks compared with 6 days for the foreign banks. As can be seen from the scorecard, the consolidation programme for the domestic banking sector was a necessary pre-requisite to enhance the sector’s capacity to compete. Size alone however, is not a sufficient condition that will result in producing efficient and competitive banks and it does not offer guarantee of success. Being a large bank is however, an important enabler to achieving enough scale to be able to invest in cutting-edge technology and management systems and to attracting the talent required to compete with the best players in the market. Domestic institutions need to be able to meet the range of products offered by foreign competitors. But the larger scale and wider range of activities will demand stronger management teams.

William C Dudley: A preliminary assessment of the TALF Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Securities Industry and Financial Markets Association and Pension Real Estate Association's Public-Private Investment Program Summit, New York, 4 June 2009. *  *  *  I thank you for this opportunity to speak to you today about what we at the Federal Reserve have been doing to improve market function and credit market access. Since August of 2007, the Fed has introduced a wide range of special facilities designed to improve market functioning, increase the availability of credit and bring down borrowing costs for households and businesses. Today, I am going to focus my comments on the Term Asset-Backed Securities Loan Facility (TALF), which in my view is one of our most innovative programs. This facility is a complement to the Public-Private Investment Program efforts being undertaken by the Federal Deposit Insurance Corporation and the Treasury, which are the primary focus of today’s conference. In what follows, I would remind you that my comments reflect my own views and opinions and not necessarily those of the Federal Open Market Committee or the Federal Reserve System. I will discuss how the securitization markets broke down last fall creating the need for TALF, how the TALF works and what it already has accomplished, where we see it evolving going forward, and finally, some preliminary thoughts on the future of securitization markets.
Meanwhile, nominal rates have been also influenced by higher observed inflation. Growth rates of monetary and credit aggregates have moderated but are still high. Despite these changes in the margin, financial conditions are still positive. Favorable terms of trade and a fiscal policy where government spending is tied to the Central Government’s permanent income have helped avoid a major real appreciation and, at the same time, have permitted to accumulate public resources to guarantee that future expansion of public spending will be less dependent of commodity price cycles. In fact, despite the enormous terms-of-trade gain of the last four years, the actual real exchange rate is today slightly higher than the average of the past 15 years. Because monetary policy operates with a lag, in a monetary policy system such as the inflation targeting regime adopted by the Central Bank of Chile, it has to ground itself in economic prospects 24 months ahead and their implications on projected inflation. Within this context, persistently high economic growth signals a future additional narrowing of output gaps that, in a context of supply shocks on the prices of foods and fuels, and a monetary policy rate below the neutral interest rate by any estimation anticipates that, in the most likely scenario, it will be necessary to reduce the monetary stimulus in coming months to drive annual inflation projected over the policy horizon to 3%.

In connection with the expansionary cycle of the world economy, and also with the depreciated dollar, prices of copper, oil and derivatives – especially gasoline – are picking up again. The rise in commodities’ prices has now spread to foods. For the year 2008, projections from Consensus Forecast foresee global growth similar to that of 2007 but with a rebound in the U.S. and a slight deceleration in the euro zone and in emerging economies, influenced by the process of monetary normalization implemented to keep inflation under control. Such a favorable global scenario may continue longer, but it can also deteriorate if a number of latent risks materialize. The most important ones facing the world economy are: (1) a deeper deceleration in the U.S. as a result of a stronger adjustment in the housing sector that ends up shocking the rest of the economy and the world; (2) an acceleration of inflation because of supply-side shocks in a global economy with little output gaps, which generates a  2  BIS Review 87/2007  sudden and large increase in the monetary policy rates of industrial economies, especially the U.S. and the euro zone; (3) an unforeseen sharp increase in risk premiums and a liquidity shortage affecting asset prices and world activity as a result of an unexpected increase in inflation in the developed world or a shock in financial markets, at a time when risk premiums are in unusually low levels.
Through the years, the phrase has been simplified into “as safe as the bank”. As banks and central banks store gold and money in their vaults, their edifices have always been solid, protected by thick walls. In a figurative sense, it might be said that a safe and credible national monetary value relied for a long time on thick central bank walls insulating its internal workings from the general public. Until our time, central banks have been closed, both physically and figuratively. Central banks were shrouded in an aura of mystique, which they probably had a hand in perpetuating. Central bank governors worldwide refrained from saying too much, and what they did say often sounded cryptic. 1  The duty of confidentiality for Norges Bank employees is laid down in Section 12 of the Norges Bank Act. Violation of the duty of confidentiality is punishable under the General Civil Penal Code: “Any person who wilfully or through gross negligence violates a duty of secrecy which in accordance with any statutory provision or valid directive is a consequence of his service or work for any state or municipal body shall be liable to fines or imprisonment for a term not exceeding six months” (Section 121, first paragraph of the General Civil Penal Code).

The question is whether, when it is merely historical it is of any particular value, or whether from the fact that it is issued from the central bank undue importance may be attributed to certain things that are stated, more importance than perhaps they merit...’ Committee member Keynes: ‘Arising from Professor Gregory’s questions, is it a practice of the Bank of England never to explain what its policy is?’ Harvey: ‘Well, I think it has been our practice to leave our actions to explain our policy.’ Keynes: ‘Or the reasons for its policy?’ Harvey: ‘It is a dangerous thing to start to give reasons.’ Keynes: ‘Or to defend itself against criticism?’ Harvey: ‘As regards criticism, I am afraid, though the Committee may not all agree, we do not admit there is need for defence; to defend ourselves is somewhat akin to a lady starting to defend her virtue’.”  41  For a discussion of central bank transparency and financial stability, see for example Jakob De Haan and Sander Oosterloo (2006): “Transparency and accountability of central banks in their role of financial stability supervisor in OECD countries”, in European Journal of Law and Economics, 22, no. 3, pp. 255-271. BIS Review 140/2009  9  central bank to engage in what is referred to in diplomatic parlance as “constructive , ambiguity”. 42 43 Striking a balance between transparency and financial stability can be difficult, as former prime minister Abraham Berge discovered.
Setting regulatory standards and collecting data is only the start of the supervisory process. Working out what the data mean is a second stage. Recent research has demonstrated how machines can now outperform doctors in the diagnosis of certain forms of skin cancer: machines can be taught to recognise cell clusters more accurately than the human eye can. This does not, however, imply there is no role for doctors in the treatment of cancers; quite the opposite. By using technology to perform certain roles, doctors can free up time to focus on cancer treatment and patient care7. This is an example of what is sometimes referred to as human-centred automation “… which considers where humans can often do tasks or make better judgements than machines, and designs automation around these strengths”8. In a similar way, by introducing ML to perform complex tasks, we ought to be able to free up and focus supervisors’ time where it is most needed. Take the case of credit unions. Of the 570 or so U.K. domiciled credit institutions, about 450 are credit unions. These are very small and simple providers of credit facilities that between them account for 0.07% of the assets of the UK deposit taking sector. Because none of these lenders is sufficiently significant to the stability of the financial system as a whole, we supervise these entities in a proportionate manner.

Cyborg supervision – the application of advanced analytics in prudential supervision Speech given by James Proudman Executive Director, UK Deposit Takers Supervision  Workshop on research on bank supervision Bank of England 19 November 2018  I am grateful to Sian Besley, David Bholat, Charlotte Bull, Stephen Denby, Ryan Lovelock, Clair Mills, Philip Sellar, Pete Thomas and Sam Woods for their assistance in preparing these remarks and conducting background research and analysis. 1  All speeches are available online at www.bankofengland.co.uk/speeches  I. INTRODUCTION  Recognising faces comes instinctively to humans. Until fairly recently, however, it proved beyond the ability of computers. Advances in artificial intelligence (AI) - the use of a machine to simulate human behaviour – and its subset, machine learning (ML) – in which a machine teaches itself to perform tasks – are now making facial recognition software much more widely available. You might even use it to access your bank account. Because it is so easy for us but so hard for computers, facial recognition is a good illustration of the challenges faced in developing AI. Enabling a machine to teach itself to recognise a face requires sophisticated algorithms that can learn from data. Advances in computational power and algorithmic techniques are helping machines become more human and super-human like. ML also requires lots of data from which to learn: data are the fuel that powers it – the more data used to train the algorithms, the more accurate their predictions typically become.
•  In conclusion we can say that Estonia has been quite successful so far. For a successful future, we should first realise how far Estonia has progressed. Then we can decide where Estonia wants to be headed. When we know what we want to achieve in the future, we have to answer another, often an unpleasant question: how, through which measures, and at what price can we achieve the desired result? And then there is nothing more to it but to embark on taking purposeful action... It is as easy as that. Or is it? •  It is a fact that as Estonia is evolving into a ‘boring and stable European country’, our society is supporting change for the sake of itself less and less. Stability, keeping one's word, and honouring contracts concluded either directy or indirectly is becoming an increasingly highly regarded value in the Estonian society. •  As Governor of Eesti Pank I would hereby like to recall that if anyone in Estonia has the right - and obligation - to stress the importance of stability, it is the central bank. Some very successful examples illustrating the fact that stability is held in high regard are the Estonian kroon that has held out splendidly for twelve years and the Estonian monetary system that has not been ‘copied from Europe’ but has been structured bearing in mind our specific situation.

But this task can only be performed in cooperation with the Government and other constitutional institutions. Today we can acknowledge that regardless of the fact that both the central bank and other state institutions employ Estonians who are known as great individualists, our cooperation in the field of economic policy has been smooth and yielded results. •  Five years ago I also spoke about the essential developments and necessary reforms facing Estonia. Today, many structural reforms under discussion at the time have been successfully launched, including the pension system reform, which has given a completely new dimension to the saving patterns of the Estonians. As regards the changes that the financial system was facing, my anniversary speech mentioned the plans to set up a universal financial supervisory body, which has also successfully materialised. Today we have a banking sector that is very up-to-date and successful on the international banking scene as well. •  According to the World Economic Forum, Estonia is the most competitive country today among the new European Union member states with its competitiveness index of 4.64 points. With this score Estonia is also ahead of four ‘old’ member states (Spain - 4.47, Italy - 4.38, Portugal - 4.25, and Greece - 4.00), while narrowly falling behind Ireland (4.69). Our open market economy, development of the information society and the financial sector  BIS Review 26/2004  1  as well as the quality of our business environment have been considered Estonia's strongest areas.