samchain/econo-pairs-v1 huggingface dataset:
BIS central bankers’ speeches  Orphanides.11 Among other observations, he shows that the estimates of the GDP gap for the United States for a certain year, made by the International Monetary Fund (IMF), have changed radically between the various dates of calculation, and draws the conclusion that GDP growth should be focused on as the basis for monetary policy, rather than the GDP gap. Figure 10 presents estimates of the GDP gap in real time and in accordance with the most recent calculation from September 2011. The estimates in real time show what we believed the current GDP gap to be at the various previous forecasting occasions. The figure indicates that resource utilisation was higher in the years preceding the crisis than we believed at the time. However, there are also problems with estimating resource utilisation in retrospect, which mean that such calculations may perhaps overestimate how high resource utilisation was before the crisis. I will come back to this. Despite these difficulties, my assessment is that the Riksbank’s calculations of the GDP gap largely give a reasonable view of current resource utilisation. The decisive factor for this assessment is that the GDP gap currently corresponds with other ways of measuring resource utilisation that are based on other economic statistics. These other measures also show that resource utilisation is largely normal. I will review a number of such measures at a later point.

For EMEs, this manifests in volatile capital flows that amplify domestic imbalances and leave them more vulnerable to foreign shocks (Charts 3 and 4). One fifth of all surges in capital flows to EMEs have ended in financial crises, and EMEs are at least three times more likely to experience a financial crisis after capital flow surges than in normal times.18 While the typical EME receiving higher capital inflows will grow 0.3  Gopinath, G and Stein, JC (2018), ‘Banking, Trade, and the Making of a Dominant Currency’, Working paper, Harvard University. The euro is in second place at 20% and the yen is in third at 4% (ECB Staff (2017)). 13 Gourinchas, P, Rey, H Sauzet, M (2019), ‘The International Monetary and Financial System’, NBER Working Paper No. 25782. 14 Ilzetzki, E, Reinhart, C and Rogoff, K (2017), ‘Exchange arrangements entering the 21st Century: Which anchor will hold?’, forthcoming in the Quarterly Journal of Economics. 15 See Krugman (1980). 16 Rey, H. (2013). "Dilemma not trilemma: the global cycle and monetary policy independence," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City. 17 Reflecting the fact that most of the assets of EME companies are priced in local currency. See Bruno, V and Shin, HS (2015), ‘CrossBorder Banking and Global Liquidity’, Review of Economic Studies, Oxford University Press, Vol. 82(2), pp. 535-564 and Cesa-Bianchi, Ferrero, Rebucci (2018), ‘International Credit Supply Shocks’, Journal of International Economics, Vol. 112, 2018, pp. 219- 237.
All of these measures have implications for individual customers of banks, but their rationale derives from the MA's principal function: to promote the general stability and effective working of the system. The important thing to note about this "principal function" of the MA under the Banking Ordinance is that it relates to general, "macro", systemic issues, to the safety and soundness of banks and the system as a whole, not to the relationship between individual consumers and their banks. The HKMA's involvement in promoting and encouraging proper standards of conduct and sound and prudent business practices under section 7(2) of the Banking Ordinance is only incidental to its primary function of promoting the stability and effective working of the banking system. Nevertheless, even in the absence of an explicit legal mandate for consumer protection, the HKMA has become increasingly involved in this area, particularly in helping to develop the Code of Banking Practice and in enforcing banks' compliance with the Code. One recent real-life example of this is a quite appalling case of mistaken identity that recently came to our attention. The debt collection agency of a certain bank was pursuing debts against an innocent and entirely unconnected third party who happened to be living in the last known address of the real defaulter. The agent did not identify itself and the bank for whom it was acting when collecting debt.

The Committee has responded effectively and promptly to public concerns about banks' business practices by providing appropriate guidance on interpretation of the Code or even amending relevant provisions of the Code. The question of the industry associations' involvement in resolving customer disputes, whether or not these are related to the Code, is more controversial. Although the HKAB Ordinance does provide the Association with certain powers in relation to conduct regulation, the principal concern is whether such an industry-run scheme would have the necessary credibility, since banks would effectively be policing themselves. The rapid growth in number of complaints is a cause of concern but not a cause for alarm. The current framework of self-regulation by the industry has worked reasonably well in the past and there is no reason why it cannot continue to do so with a bit of help from banks themselves. We should monitor the situation carefully before rushing into other costly options. Meanwhile, the banks must help by tackling the problem at source: through being careful to avoid giving grounds for complaint and through dealing with any complaints that do arise fairly and promptly. All of this does not rule out a role for the HKMA. How best can we participate?
The reforms of the past 10 years have also strengthened the resilience of the core banking system to liquidity shocks. 3  The illustrative scenario features a peak to trough fall in GDP of nearly 30%. Unemployment peaks at nearly 10%, house prices fall by 16% and Bank Rate is held at 0.1% over the three years of the scenario horizon. 5  All speeches are available online at www.bankofengland.co.uk/news/speeches  5  The major UK banks went into the COVID crisis holding around £ trillion in high quality liquid assets, over 4 times what they had going into the global financial crisis. Their aggregate loan-to-deposit ratio is now below 100%, compared to over 130% in 2007. And they have pre-positioned assets at the Bank of England against which they could draw down around £ of liquidity.4  A simple thought experiment is perhaps the best illustration of this point. A similar pandemic could well have struck in the years before the financial crisis. Had it done so, the overall impact of the FPC stress test would have wiped out nearly all of the aggregate capital in the system and taken banks below their minimum regulatory requirements.5  We would now be dealing with illiquid banks in life preservation mode, cutting back all credit to hoard capital and to remain solvent – in other words a credit crunch and possible bank failures that would make the current economic crisis deeper and the recovery more painful and protracted.

This has facilitated the smooth flow of funds in the Islamic financial system. With the development of the bond market in Malaysia which now accounts for 81% of GDP, the Islamic private debt securities account for about 44% of the total outstanding amount of private debt securities in the market, while the monthly traded volume of the Islamic money market is now about RM30 to RM40 billion. The money market also effectively serves as a channel for the conduct of liquidity operations by Bank Negara Malaysia as part of its monetary policy. The rapid expansion of the Islamic financial services industry in Malaysia is also supported by a conducive legal and Shariah framework. In terms of the legal infrastructure, the Islamic Banking Act 1983 and Takaful Act 1984 governs the conduct of the Islamic banking institutions and takaful operators respectively. There is also the Government Funding Act which governs the issuance of government Islamic instruments. A dedicated High Court judge has also been assigned to preside over cases relating to Islamic banking and finance. An arbitration centre is also available to deal with disputes. The Central Bank Act has also been amended to provide for the establishment of a Shariah Advisory Council at the Central Bank as the sole authority and reference on all Shariah matters. The treatment of tax neutrality has also been accorded to Islamic financial transactions.
It is by all means a very ambitious project that includes more than 55 activities and benchmarks, more than 10 directives to be transposed, several legal acts to be prepared, and many internal procedures to be created for a better supervision that complies with the international best practices. This project comes at a very specific moment for the global financial sector. It aims to create conditions for long term economic stability and growth by strengthening the regulatory and supervisory frameworks of the capital and financial markets and by improving the institutional and regulatory capacities of the financial sector regulators to supervise financial markets and institutions in line with the EU acquis. Therefore, the objectives of the Twinning Project are fully in line with the main lesson from the crisis – that stability and growth cannot be maintained without a stable and well functioning financial sector. First, let me present our consortium and the project team. The consortium unites the experience of a Еurosystem central bank (De Netherlandsche Bank) – with a proven track record of successful technical assistance projects for accession country institutions – together with the expertise of the Bulgarian National Bank and the Financial Supervision Commission, both having the most recent and relevant experience in EU harmonization in a new Member State. This combination of experience is further strengthened by the longstanding and successful cooperation between the consortium members. The advantage of having a consortium is that it offers larger experience and a broader pull of experts from the twinning partner institutions.

All this must be attained in a setting in which new developments and circumstances will be emerging – and they are in fact appearing already – to make our analytical and supervisory tasks more demanding. In any event, enjoying society’s trust and recognition will involve being able to respond successfully to this challenge. To be able to accomplish our mission and reach both objectives, the Banco de España is going to have to adapt. But such adaptation must also stand on sound pillars. The first of these pillars is our independence. Independence is a necessary condition for achieving the aforementioned objectives and it is independence alone that can offer us the best guarantees of success. Secondly, the exercise of independence should be underpinned by analysis and decisions based on the utmost intellectual rigour. This is also the best base from which to address the necessary accountability and transparency to society. Thirdly, we can only properly perform our dual role of members of the Eurosystem and public servants by the pursuit of excellence in our work and by promoting the excellence of our staff. Such excellence has been and is, no doubt, one of the hallmarks of this institution. It is my firm commitment to maintain and enhance the Bank’s human capital. To conclude, I shall adhere to the tradition launched by Governor Linde when he took office and end, as he did, with a quote.
-3.5 92  94  96  98  00  02  04  06  08  10  Sources: Bank of England, Bloomberg, Chicago Board Options Exchange, Debt Management Office, London Stock Exchange, Bank of America Merrill Lynch, Thomson Reuters Datastream and Bank calculations. (a) 90-day moving average of index. Index represents number of standard deviations from the mean of a range of market liquidity measures, incorporating prices and volumes, normalised on the period 1999–2004. The indicator is more reliable after 1997 as it is based on a greater number of underlying measures. See also Box 1 of the April 2007 Bank of England Financial Stability Report. 10  BIS central bankers’ speeches  Chart 9:  Chart 10:  Major UK banks’ and LCFIs’ leverage ratios(a)(b)  Major UK banks’ and LCFIs’ price to book ratios(a)  Maximum-minimum range Weighted average US LCFIs  European LCFIs  European LCFIs US LCFIs Major UK banks (b)  Ratio 120  Major UK banks (c)  Ratio 4.5 4.0 3.5  100  3.0  80  2.5  60  2.0 40  1.5  Adj. (d)  1.0 0.5  10  09  0 08  10  2007  09  08  11  Q1  2007  Adj.

(http://www.imf.org/external/pubs/ft/weo/2009/01/index.htm )  BIS central bankers’ speeches  Chart 3:  Chart 4:  Changes to US real GDP in crisis periods  Risk appetite(a)  1929 crash 1982 recession  cumulative % change since start of recession 40  Standard deviations from mean (b) 2.5  30  1.5  2008 financial crisis  2 1  20  0.5 10  0  0  -0.5  -30 1  2  3  4 5 6 7 years since crisis  8  9  10  Sources: Global Financial Data, Case-Shiller, Federal Reserve, US government bodies (Department of Commerce, Department of Labor, Council of Economic Advisers) and Bank calculations. -1.5  Credit Suisse  -20  0  -1  State Street  -10  -2 -2.5  04  05  06  07  Sources: Bloomberg, calculations. 08  Credit  09  10  Suisse  and  Bank  (a) Indices are adjusted so that positive numbers indicate increased risk-taking and negative numbers indicate reduced risk-taking. (b) 90-day moving average of standard deviations from mean. Mean and standard deviation calculated from 28 July 2004.
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.

In the Festschrift for former Norges Bank governor Hermod Skånland, Professor Preben Munthe writes the following: “There is a tradition that expects central bank governors to be parsimonious with words. This built up the aura that should surround a man in that position. He possessed knowledge about the secret black box – monetary policy with a capital M – and how it functioned. Without asking others, he changed the discount rate and thereby intervened in the economy with authority and deep insight. On seldom occasions did he step down from his cloud of wisdom to impart life’s economic truths to a gaping public.” 4 A change in views and practices relating to transparency first occurred in recent years, both in Norway and other countries. 5 It can safely be said that the change has been swift and radical. Today, most central banks are open about (i) the objective of monetary policy, (ii) its strategy for reaching the objective and (iii) the background for and the process behind interest rate decisions. Norges Bank is no exception in this respect. In some areas, Norges Bank has gone further than others. For example, Norges Bank is one of the few central banks in the world that publishes forecasts of its own interest rate decisions. 6 What then can explain this tendency towards greater transparency? I would highlight two main reasons. First, there has been a general trend in society towards greater transparency. Second, economic thinking has changed considerably.
2  BIS central bankers’ speeches  Only three days ago, the capital markets provided the latest proof of the efficiency of the macroeconomic policies in Bulgaria and the resilience of our economy in the face of such a severe global crisis. Bulgaria’s global issue of 5-year euro-denominated bonds, marking our country’s return to the international bond markets after a decade, was a great success. The international investors’ orders oversubscribed the offered amount more than 6 times. Their strong interest has resulted in a very low annual yield of 4.436%. At present, only the highest-rated EU Member States can afford to pay a lower price for borrowing on the private capital markets. To conclude, we have achieved monetary and banking stability in Bulgaria during the last 15 years. They have been bolstered by the synergies of monetary and macroprudential mandates (including banking supervision) within the central bank, complemented by the prudent fiscal policies of several consecutive governments since 1997. The BNB representatives will be eager to discuss our knowledge today and tomorrow, while also looking forward to learning about the experiences of the other countries represented at this conference. I wish you a most fruitful exchange of views and ideas. Thank you very much for your attention. BIS central bankers’ speeches  3

The wider the fans, the more uncertain the forecasts are. If economic developments are broadly in line with projections, economic agents can also expect interest rate developments to be approximately as projected. On the other hand, the interest rate path may shift in relation to the current path if economic prospects change or if the effects of interest rate changes on output, employment and prices are different from those projected. Thank you for your attention. 4  BIS Review 34/2007  BIS Review 34/2007  5  6  BIS Review 34/2007  BIS Review 34/2007  7  8  BIS Review 34/2007  BIS Review 34/2007  9  10  BIS Review 34/2007  BIS Review 34/2007  11  12  BIS Review 34/2007  BIS Review 34/2007  13  14  BIS Review 34/2007  BIS Review 34/2007  15  16  BIS Review 34/2007  BIS Review 34/2007  17
This global resolve is in congruence with the role and relevance of Islamic finance on the global economic environment in this post-crisis era. While the amount of funds managed in the Islamic financial system is still only a fraction of the total assets of the international financial system, it represents that portion of financial activities that is truly supported by underlying productive capacity that connects with the real economy. Despite the unprecedented disruptions in the international financial system, studies show that the Islamic financial industry has weathered the global financial crisis relatively well. The financial crisis has thus brought about a greater appreciation amongst the international financial community on the distinct nature and in-built strengths of Islamic finance. Based on the Shariah requirement that Islamic financial transactions needs to be supported by an underlying economic activity, its expansion contributes to income and wealth creation. In addition, the profit sharing and risk sharing characteristics in Islamic finance strengthen the incentives for the financial institutions to ensure the profits are commensurate with the risks being assumed. It is this form of finance that we would want to encourage. With this underlying foundations, efforts are being directed to build the domestic financial infrastructure. A challenge that is being specifically addressed is the development of an active secondary global sukuk market. In this regard, there has been a lack of trading in the secondary market especially in the USD sukuk market as the investors tend to buy-and-hold the instruments until maturity.

The Riksbank and Finansinspektionen cooperate in the analysis of the mortgage survey, but these random samples entail a small selection and only capture the new loans granted by the banks. There is thus a need to go one step further to see how the debts are distributed and thus how large the risks in the entire banking system are, not merely those in the newly-granted loans. Another factor that affects household debt is residential construction. Not enough housing is being built in metropolitan regions to keep up with the growth in population. This naturally affects both housing prices and household debt and is a long-term problem that should be managed but that neither monetary policy nor macroprudential policy can affect. Developments during the summer While waiting for macroprudential policy to be established, we are continuing to work on our monetary policy analysis in the way I have described and at the beginning of September it will be time for a new repo-rate decision. Since we made our assessment in July new information has been published that we will analyse and make an overall assessment of at our meeting in September, but I shall now summarise what has happened so far. Clearer guidance about future monetary policy During the summer the financial markets have largely focused on expectations of future monetary policy, in particular how the Federal Reserve is expected to act in the coming period.