samchain/econo-pairs-v1 huggingface dataset:
For most economists, such data-mining has unfortunate similarities with oil-drilling – a dirty, extractive business which comes with big health warnings. For data scientists, the situation could not be more different. For them, the mining of data is a means of extracting valuable new resources and putting them to use. It enables new insights to be gained, new products to be created, new connections to be made, new technologies to be promoted. It provides the raw material for a new wave of productivity and innovation, an embryonic Fourth Industrial Revolution. 4  1  Cœuré (2017) offers an excellent summary of the potential for Big Data to improve policymaking, in particular in central banks. For example, the Economist (2017), Henke et al (2016). 3 Leamer (1983). 4 See, for example, Schwab (2017). 2  2  All speeches are available online at www.bankofengland.co.uk/speeches  2  5  What explains some economists’ caution about Big Data? The answer lies, in part, in methodology. A decent chunk of economics has followed in the methodological footsteps of Karl Popper in the 1930s. 6  Popper championed a deductive approach to scientific advance. That started with axioms, moved from axioms to theory and then and only then took hypotheses to the data. Theory, in other words, preceded measurement. There is an alternative, inductive, approach. This has even deeper roots, in the work of Francis Bacon from 7  the early 1600s. This turns the telescope around.

14  All speeches are available online at www.bankofengland.co.uk/speeches  14  References Abad, J, Aldasoro, I, Aymanns, C, D’Errico, M, Rousová, L F, Hoffmann, P, Langfield, S, Neychev, M and Roukny, T (2011), ‘Shedding light on dark markets: First insights from the new EU-wide OTC derivatives dataset’, ESRB Occasional Paper Series, No. 11. Albertazzi, U, Becker, B and Boucinha, M (2018), ‘Portfolio rebalancing and the transmission of largescale asset programmes: evidence from the euro area’, ECB Working Paper Series, No. 2125. Ali, R, Haldane, A and Nahai-Williamson, P (2012), ‘Towards a common financial language’, paper available at https://www.bankofengland.co.uk/paper/2012/towards-a-common-financial-language Anderson, C (2008), ‘The End of Theory: The Data Deluge Makes The Scientific Method Obsolete’, Wired Magazine, 23 June. Anson, M, Bholat, D, Kang, M and Thomas, R (2017), ‘The Bank of England as lender of last resort: new historical evidence from daily transactional data’, Bank of England Staff Working Paper, No. 691. Bacon, F (1620), Novum Organum. Bagehot, W (1873), Lombard Street: A Description of the Money Market, Henry S. King & Co. Bahaj, S, Foulis, A and Pinter, G (2017), ‘Home values and firm behaviour’, Bank of England Staff Working Paper, No. 679. Bank of England and Procyclicality Working Group (2014), ‘Procyclicality and structural trends in investment allocation by insurance companies and pension funds’, Discussion Paper, July. Baptista, R, Farmer, JD, Hinterschweiger, M, Low, K, Tang, D and Uluc, A (2016), ‘Macroprudential policy in an agent-based model of the UK housing market’, Bank of England Staff Working Paper, No. 619.
We have therefore tried to develop our own treasury and securities specialists whose task it is to review and assess more leading-edge and sophisticated areas such as value at risk and treasury and derivatives risk management. Let me move on now to the subject of the prevention of money laundering. This is a key concern for the supervisors of all major international financial centres, and is something that should be high on the agenda for the management of every financial institution. Here in Hong Kong considerable time and effort has been put in over a period of years into ensuring that the banking system follows best international practice on the prevention of money laundering. Principally, this means following the recommendations of the Basle Committee on Banking Supervision and the Financial Action Task Force, whose guidance notes on the prevention of money laundering we have used to develop our own detailed Guidelines to institutions. The basic thrust of these Guidelines is to provide that institutions should have in place adequate and effective policies, procedures and controls to combat money laundering, covering essential areas BIS Review 48/1998  -5-  such as procedures for account opening, customer identification and record keeping as well as proper systems for reporting suspicious transactions and training of staff. Please be in no doubt as to how seriously we regard adherence to these Guidelines. The reason for this is simple. To paraphrase the health warning on a packet of cigarettes, “Money laundering can seriously damage your health”.

Let me now move on to discuss some of the things that can go wrong when controls break down. I will not go into particular case studies, but will try instead to draw together some of the common threads of recent problem bank cases. The Basle Committee paper that I mentioned earlier suggests five such common threads, and I will draw on this in the following remarks. BIS Review 48/1998  -3-  The first, which I have mentioned already, is lack of adequate management oversight and accountability, and failure to develop a strong control culture within the institution. Without exception, a common feature of recent problem bank cases has been management inattention to, and laxity in, the control culture of the institution, insufficient guidance and oversight by the Board of Directors and senior management, and a lack of clear management accountability through the assignment of roles and responsibilities. These cases also reflect insufficient incentives to carry out strong line supervision and maintain a high level of control consciousness within business areas. The second thread is inadequate assessment of the risk of certain banking activities, whether on or off balance sheet. Many banking organisations that have suffered major losses neglected to continually assess the risks of new products and activities, or update their risk assessments when significant changes occurred in the environment or business conditions. Many recent cases highlight the fact that control systems that function well for traditional or simple products are unable to handle more sophisticated or complex products.
This has prompted a rethinking of the issues related to the financial business and its models, and wide-ranging regulatory reforms by the international community. Related to these issues is the question on the “appropriate” size of the financial sector. As economies develop, the size of financial sector assets and, correspondingly, the value-added contribution of the financial sector, is expected to increase. However, while there is a fundamental relationship between the growth of the financial sector and the real economy, the relationship is not wellunderstood or captured in current macroeconomic models. This creates a potential challenge for policymakers to determine the point at which growth of the financial sector may be outstripping the demands and the potential of the real economy. This issue has become even more pronounced with greater regional and global financial integration, and in countries that are also international financial centres. To the extent that corporate and personal income growth is driven by financial transactions rather than by an increase in production or  BIS central bankers’ speeches  1  employment growth, economies become potentially more vulnerable to the consequences of financial system stress. The recent global financial crisis provides a distinct example of how excessive leverage and exponential growth in financial activities that are detached from the growth trajectory of the real economy can become a source of instability. Leverage increased sharply in the years leading to the crisis, buoyed by years of strong economic growth. In the advanced economies, bank balance sheets exploded, growing to multiples of annual GDP.

The results of this work are expected by the end of this year and, as in the two previous cases, will be submitted to this Commission as soon as they become available. This last point allows me to emphasize the accountability dimension of these evaluations, and the constructive orientation that the CBC wishes to give to these exercises. In particular, we would like to stress that with these exercises we are not seeking the mere approval of external organizations or experts, but rather we want to have input for the institutional evaluation that may be carried out by the Senate of the Republic, before which the law requires us to report on our measures and their results. In this perspective, we would like to ask the Commission to open a space in its full agenda for us to present in greater detail the content and actions derived from these three evaluations. Thank you very much for your attention and we look forward to hearing your comments and answering your questions. ***  https://www.bcentral.cl/documents/33528/2905204/CHILE%E2%80%94Central+Bank+Transparency+Code+Review+.pdf.
The effects of exchange rate fluctuations on activity are an important factor in our evaluation of the inflation outlook and in our monetary policy decisions. At the present time, interest rate differentials with developed economies are well below historic averages and the interest rate is still below normal levels. The fourth principle I want to discuss is that stronger countries generally have stronger currencies. In other words, the purchasing power of their wage packets is comparatively greater as these economies outpace the rest of the world. We could discuss many more factors, such as ways to mitigate appreciation, what circumstantial factors spur it, etc. At the end of the day, what we need is to transform the cyclical strength of our economy into greater productivity which will increase our potential for growth. But it is important to note that this principle does not work the other way around. In the past we have been obnubilated equating a strong currency with a strong economy, but we soon had to realize that the strength of the currency was not due to a fundamentally sound economy but rather the outcome of policies inducing currency misalignment. I would like to draw your attention to the fact that I have not included a flexible exchange rate as one of the principles, in order to avoid dogmatism. But in our country, experience overwhelmingly shows that exchange rate flexibility, managed pragmatically, is the most adequate system for us.

Now, from the standpoint of export development, several aspects are worth highlighting. Firstly, since the mid-1970s, Chile adopted an ambitious agenda of insertion into the world economy. This drive has accelerated and deepened over the years. Some sectors of the economy that were protected by international trade barriers had to adjust. Eliminating protection meant that each productive activity had to focus on its own comparative advantages and the export sector benefited from this structural change, as confirmed by the sustained growth of exports as a percentage of GDP. In the 1970s, goods and services exports accounted for about 10% of GDP (measured in pesos of 2003) while in the past five years they averaged 38%. Moreover, this increase has been based mainly on the growth of  2  BIS Review 135/2010  non-copper shippings which went up from only 30% of total exports in the 1970s to 70% in the past five years. That is, more than 80% of Chile’s exporting boom since the 1970s is due to non-copper exports. Of course, this growth has not been free of reversals or accelerations due to external conditions and domestic circumstances. Among external factors we can point to the sharp global downturn caused by the debt crisis and the 2009 recession and, of course, the devastating earthquake and tsunami in February this year. Among domestic factors, we had the necessary sharp cutback to address high levels of foreign borrowing in the second half of the 1980s.
Of course falls in house prices tend to coincide with a slowdown in the wider economy because they are affected by the same factors – notably falls in real income and employment. But they can also feed back into activity. First they slow housing investment and transaction flow which hits builders and related services like estate agents and conveyancers. The purchases of white goods and furniture tend to go hand in hand with transactions in the housing market. So the slowdown in the number of people moving home is likely to impact on spending on those goods. Falling house prices limit how much households and small businesses can borrow today and that pulls down consumption and investment. Also by reducing their expectations of what they will be able to borrow tomorrow either to compensate for a reduction in income or a need to spend, some households and firms may increase their precautionary savings. Finally, falling house prices redistribute wealth. Those who already own houses and expect to trade down in future and realise a capital gain, are worse off. On the other side, those hoping to trade up or who are not yet on the housing ladder are better off (although the tighter constraints on lending may mean they have to save a bigger deposit to enter the market). The former will tend to reduce their consumption; the latter will tend to do the  4  BIS Review 114/2008  opposite. In a perfect market these two effects might balance out.

Third, wage increases of the past three quarters affect current wages with a summed coefficient of less than 0.5, implying that lagged impulses fade within a few quarters. Fourth, the effect of price pressures on wage increases is empirically weak; wages respond less than proportionately to prices during the year. Combined, these estimates suggest that the pass through from costs to domestic prices is subject to relatively contained momentum and feedback effects. But the entire course of the pass-through process is still characterised by a degree of persistence. Accordingly, in the absence of further major global price shocks, domestic inflation should not accelerate further in Q4, but could remain elevated relative to the historical average. A key upside risk factor influencing the ongoing pass-through to consumer prices is the behaviour of cost mark-up by businesses. Profit margins might have been impaired in the earlier period when global costs shocks were intensifying, and businesses might be inclined to restore them at least partially in the period ahead. Monetary policy stance has progressively tightened Singapore’s short-term AS curve is gradually shifting to the right as global costs subside and non-resident worker inflows pick up. Wages in the first half of the year traced out a temporarily steeper portion of the Phillips Curve but are expected to revert to their historical configuration in the period ahead. The external components of the IS curve could moderate in the quarters ahead. These represent pro-equilibrating movements, but we are alert to unexpected developments and fresh shocks.
On the financial side, we can see that the number of borrowers who are unable to repay their loans is increasing rapidly. Both foreign and domestic banks must make corresponding provisions for losses, which has made an impact on, for instance, Swedbank’s and SEB’s interim reports. As consumption demand will be weak for many years, the way out of the crisis must be through investment and exports. This is only possible if competitiveness improves through further reductions in real wages. Moreover, demand from abroad must increase from the low levels experienced during the crisis. Finally, I would like to stress for the sake of clarity that the Riksbank, and thus the Swedish taxpayers, has not lost any money on the transactions with the Baltic countries. Those who have suffered financial losses are the banks’ shareholders, who have been forced to compensate for the losses with new capital. But there is also another loss – in addition to the economic contraction which the citizens of the Baltic countries currently suffer from – that is more important, and this concerns the Swedish economy as a whole. When banks make losses abroad they do not have the same possibilities to provide loans in Sweden, and thus our country may have poorer economic development. The Riksbank has done all it can to prevent such a negative development. 6  BIS Review 11/2010

Joseph Yam: Mortgage-backed securities programme in Hong Kong Speech by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the signing ceremony of the Bauhinia MBS Programme of the Hong Kong Mortgage Corporation Limited, Hong Kong, 30 October 2003. *  *  *  Ladies and gentlemen, let me first offer a very warm welcome to all of you to this signing ceremony to mark the successful conclusion of the second series of mortgage-backed securities issued under the Bauhinia MBS Programme of the Hong Kong Mortgage Corporation. The issue size this time is $ billion. It is the largest residential MBS issue in Hong Kong, so far. Ladies and gentlemen, as you are aware, the HKMC is committed to developing a deep and liquid MBS market in Hong Kong as an effective means for enhancing the availability of competitive mortgage finance in Hong Kong for homebuyers. The success of this initiative will also benefit both the financial market and the future development of the HKMC as a major financial institution. For the financial market, MBS provide an efficient channel for long-term funds from the capital market to supplement bank financing of long-term mortgage loans. They also help banks to better manage the liquidity and maturity mismatch risks inherent in their mortgage business. Development of an active MBS market will broaden the product range of the financial market and further develop Hong Kong’s role as an international financial centre.
The last time petroleum investment showed a sharp increase, in 1997/1998, growth was substantially stronger than had been assumed. At the same time, the rest of the Norwegian economy was experiencing an upturn. The unexpected increase in petroleum investment contributed to substantially stronger-than-projected economic growth. If oil prices rise further or remain at the current high level for a long period, petroleum investment may again reinforce the cyclical upturn more than projected. Monetary policy and the outlook for the Norwegian economy The analyses in Inflation Report 2/05 are based on a baseline scenario where the key rate shadows forward interest rates up to 2007, and then rises somewhat more rapidly. The krone exchange rate is assumed to shadow the forward exchange rate, which remains broadly unchanged over the next three years. Capacity utilisation in the Norwegian economy is expected to increase this year and next and exceed its normal level. There are prospects that inflation will gradually pick up and be close to 2½ per cent at the three-year horizon. Since the publication of the June Inflation Report, prices for domestically produced consumer goods have risen slightly less than expected. At the same time, oil prices have been somewhat higher than assumed. Energy prices are pushing up consumer price inflation. 4/7  New information since the publication of the June Inflation Report does not provide grounds for changing the assessment of developments in the real economy.

An increase of repurchase rate (14 days) from 1.5% to 2.5%, with the aim to correct the distorted structure of local interest rates, did help to reduce the gap between local interest rate and LIBOR, making it less attractive for capital outflow. More important is the emphasis on the managed float concept to limit short-term volatility of Baht exchange rate which did help to lessen the fear that Baht would depreciate further. Whenever Baht swings to the weak position, such fear would lead to the prepayment of $ loans by private sector or even by states enterprises which were really prepared to do so before I stepped in. It is noteworthy that Baht had stabilized as well as strengthened, which made it possible to stabilize exchange rate as well as accumulating $ into official reserves. On this point I would like to further clarify our monetary policy. Some analysts interpreted that the BOT has changed from inflation targeting framework to exchange rate targeting. This is very wrong. If we would target our exchange rate to maintain fixed relation to any currency or group of currencies, we would stand a good chance of losing our official reserves which is really against my firm belief that while global economy as well as our economy are slowing down, healthy international reserves must be maintained to avoid another crisis. Obstacles and challenges Ladies and Gentlemen, I can safely say that we have now a credible framework for our monetary policy.
But what will be the British style in this area? The PRA and the wider Bank stand ready to support this debate if and when it begins. I would urge all those involved to give serious consideration to the principles set out above, and to using an existing British approach, in the form of the model adopted for introducing the SMCR, to deliver them. 3 See for instance Andrew Bailey’s speech: https://www.fca.org.uk/news/speeches/future-financial-conduct-regulation 7  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  7  ILLUSTRATIVE Annex 1: Illustration of different approaches to financial regulation, by degree of discretion granted to regulators  UK pre1979  Banking Acts 1979, 1987  FSMA 2000 framework  Senior Managers and Certification Regime  On-shored EU regime  Ring-fencing  UK  UK domestic initiatives – 2013 Banking Reform Act  Lamfalussy (2001)  De Larosière (2008)  Single Rulebook (2009)  Other BCBS countries  EU  Less discretion for regulators  More discretion for regulators  8  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  8  EU  Crosscountry

Ida Wolden Bache: Norges Bank is raising the policy rate to bring down inflation Introductory statement by Ms Ida Wolden Bache, Governor of Norges Bank (Central Bank of Norway), at a press conference following the announcement of the policy rate, Oslo, 3 November 2022. *** Accompanying charts of the speech. Introduction Chart 1: Policy rate raised from 2.25 to 2.5 percent Norges Bank's Monetary Policy and Financial Stability Committee decided unanimously to raise the policy rate by 0.25 percentage point to 2.5 percent. Norges Bank's task is to keep inflation low and stable. The operational target is inflation of close to 2 per cent over time. We are also mandated to help keep employment as high as possible and to promote economic stability over time. Economic activity is high in Norway, and unemployment is at a historically low level. At the same time, we are seeing that some areas of the economy are cooling down. Inflation is very high. Many people are experiencing how demanding it can be to cope with rapid and unexpected price increases. High inflation is weakening households' purchasing power and hampering economic decision making for both firms and households. We believe that a higher policy rate is needed to curb inflation. In its deliberations, the Committee was concerned with balancing the risk of tightening too much against the risk of tightening too little.