samchain/econo-pairs-v1 huggingface dataset:
But I also hope to share some lessons learned from when our institutions may have been on opposite sides of the table. I do not aim to break any new ground today. This is, after all, a luncheon. I am worried about your digestion. Instead, I want to offer some high-level reflections. I will then share with you a few of the questions that are on my mind. Let’s begin with some high level observations about the state of play in compliance. The role of compliance within supervised financial institutions has grown dramatically—in size, scope, and relevance. It’s the relevance of compliance that stands out to me. In day-to-day interactions with supervised financial firms, I sense that risk and compliance functions have grown in respect and stature across the financial services industry. That’s a good thing. I am further encouraged by what may be on the horizon for compliance. In the same way that social psychology has altered the fields of economics and other social sciences, compliance is beginning to learn from academic research about human behavior. 1 Again, this is a good thing. I am particularly fond of a description of one method, coined by Cass Sunstein and Richard Thaler: the “nudge.” I believe compliance will, in the near future, supplement an existing framework that restricts poor choices with new ways to encourage good choices. Here is a classic example of the type of change I have in mind.

What was once something that was inhibiting her business line is now something that is helping her protect it. She may find that compliance as a constructive and independent partner can offer ways to avoid problems . Greater clarity about roles is a good starting point. Here are some additional ways in which compliance may strengthen its influence while preserving its independence. First, compliance should insist on getting involved earlier. Influence delayed is influence denied. If a firm is considering restructuring a unit or designing a new product, compliance should be at the drafting table with an opportunity to hear and to be heard. If a new trading strategy is to be implemented, compliance should review sooner than on the eve of execution. I understand that time is money, but investing time early in a compliance review may save years of investigation later. Second, compliance should keep an eye out for larger, more systemic compliance risks and issues. As a centralized function, compliance is well-situated to connect the dots and identify broad issues that are not always visible to management. The compliance function typically serves the entire organization, and can use that enterprise-wide view to spot systemic problems. 3/6  BIS central bankers' speeches  One type of systemic compliance risk that I think about is what Gillian Tett of the Financial Times has called The Silo Effect. Silos can result from the specialization common in hierarchical organizations working in highly technical fields. Silos are at risk of breaking away from the main.
The rapid changes that are taking place in our environment thus demands new skills and ability to manage new challenges and capitalise on the new opportunities. Indeed, the role of leadership has changed. Leaders not only must able to see the new emerging opportunities, but also to be able to deal with the high level of unpredictability. The industry leaders need to  BIS Review 37/2008  3  be visionary and comprehend future trends, chart strategic directions and adapt to change. Effective leaders in this era, will be those who are continuous learners, who are on the cutting edge of excellence, and who have the humility to recognise the need to reinvent themselves and inspire their organization to adapt to the new environment. The investment in human capital development is thus important for future survival. Human capital development has become of strategic importance and is integral to the success of an organisation. This needs to occur at all levels of the organisation. Senior executives need to take the lead and devote a considerable amount of their time to this initiative. Human resource development functions is integral to the talent management process and in supporting the human capital management strategy. Let me conclude my remarks. The inclusion of women into mainstream economic activity is no longer an option, but a prerequisite for sustained economic development. The strive therefore has to be to provide the enabling environment and to set the standards so that the new multi-polar world will be a more inclusive one.

In Friedman, Milton (1960), A Program for Monetary Stability, Fordham University Press, he writes, for example: “[T]he central problem is not to construct a highly sensitive instrument that can continuously offset instability introduced by other factors, but rather to prevent monetary arrangements from themselves becoming a primary source of instability”. 21  See Ejven, Snorre and Thea B. Kloster (2012), “Norges Bank’s new monetary policy loss function – further discussion”, Staff Memo No. 11, 2012. What Norges Bank has done, more specifically, is to introduce a criterion that monetary policy should be “robust”. What this means in practice is that monetary policy should try to prevent financial imbalances from arising. 22  See for example Orphanides (2004) in footnote 18, who notes that: “The subtle policy change in 1979 reflected a shift to more modest but attainable goals. Reducing the excessive emphasis on stabilizing the level of economic activity around its uncertain potential and concentrating instead on the inflation outlook for policy guidance provided the foundation for stable sustainable growth”. 10  BIS central bankers’ speeches  whether monetary policy should be expansionary or contractionary, but merely about exactly how expansionary it should be. The repo rate has been low ever since the crisis, and it is still low. One type of criticism is that the majority has not been consistent, but has referred to a number of slightly different arguments to justify the somewhat less expansionary policy.23 There may be something in this.
Until now, the U.S. dollar has played a dominant role in world trade quite out of proportion to the size of U.S. trade flows. This is particularly the case in Asia, where, despite Japan’s strong commercial and financial influence, the yen has failed to play a major role as an anchor. While the Hong Kong dollar has been well served by its solid link to the U.S. dollar, less solid commitments to the dollar in other economies have proved to be expensive and disruptive. Thus, despite the pre-eminence of the U.S. dollar, the Asian region as a whole lacks a viable exchange rate anchor. This is a problem that has to be addressed, and we would do well to look into it, especially once the current crisis has subsided. We have benefited from our own peg to the U.S. dollar, and other countries could similarly benefit from links to key currencies when they are in a strong enough position to make such links fully credible. The introduction of the euro will challenge the supremacy of the dollar elsewhere in other hemispheres by introducing a second currency pole in the global currency system. It will also offer another solid investment option to Asian central banks. The time may come when we might want to consider the possibility of our own Asian currency - perhaps something along the lines of an Asian Currency Unit - that would form an anchor currency for our region.

Taking care of the large Nordic-Baltic “home market” First of all, we should keep in mind that the Nordic-Baltic region is characterized by considerable diversity: diversity in monetary policy frameworks, models of economic development and financial structures. The second key word of the Nordic-Baltic region is integration – the region is characterized by tight trade and financial ties within the region as well as with Europe and global markets. Therefore, the region’s competitiveness and growth potential are important to each country in the region. The bank groups that finance growth in the region are largely the same in every country. All these groups are currently highly rated and well capitalized in comparison to others in Europe. As a result of mergers and natural growth, the total assets of the larger banks have risen to a high level compared to regional GDP, not to mention their very high level as a ratio to the GDP of their home countries. The combination of common economic interests and financial sector integration has fostered the emergence of a unique feature of the Nordic banking groups: they have extended the concept of the “home market” well beyond their home country’s borders. For example, Nordic parent banks continued to provide liquidity to their Baltic affiliates even during the years of the deepest crisis in the Baltic economies. In today’s slow growth environment, it remains important for competitiveness and growth that there should be an appropriate level of financing in the whole region.
The speculation in continued price rises in Sweden was evidently completely contrary to the belief that it would be possible to maintain a fixed exchange rate in the long term. With hindsight, I can observe that financial risk awareness in many parts of Sweden was low during the 1980s. Since then, however, there has been a rapid improvement. 2  BIS Review 10/2004  From regulation to a market-based financial sector The 1980s entailed a transfer from a severely regulated and controlled financial sector in Sweden - as in many other countries - to a deregulated and market-based sector. Deregulation created better conditions for the financial sector to provide an efficient contribution to macroeconomic growth, not least by freer granting of loans and other forms of financing and by managing and distribution of risks. However, to ensure this could be done without the type of problems that led to the banking crisis, the banks’ risk management had to be improved. Over the past 30 years, developments have been very rapid with regard to measuring and managing certain risks and enabling the end-customer to choose risk level. The breakthrough for option assessment in the 1970s and the emergence of the swap market in the 1980s were followed by the development of credit risk management instruments in the 1990s, such as securitisation and credit risk derivatives. This is a development which is continuing in important areas, such as market risk and credit risk and related markets.

Lim, C H, Krznar, I, Lipinsky, F, Otani, A and Wu, X (2013), “The macroprudential framework: policy responsiveness and institutional arrangements”, IMF Working Paper, WP/13/166. Maddison, A (1995), “Monitoring the world economy, 1820 – 1992”, OECD Publishing. 12  BIS central bankers’ speeches  Newman, M E J (2005), “Power laws, Pareto distributions and Zipf’s law”, Contemporary Physics, Vol. 46, No. 5, pp. 323–351. Nier, E, Osinki, J, Jacome, L and Madrid, P (2011), “Institutional models for macroprudential policy”, IMF Staff Discussion Note, SDN/11/18. North, D (1981), “Structure and change in economic history”, W.W. Norton & Company. North, D (1991), “Institutions”, The Journal of Economic Perspective, Vol. 5, No.1, pp 97–112. Olson, M (1982), “The rise and decline of nations: economic growth, stagflation and social rigidities”, Yale University Press. Olson, M (1991), “Autocracy, democracy, and prosperity”. In Strategy and choice, edited by Zeckhauser, R J. Cambridge: MIT Press, pp. 131–57. Reinhart, C and Rogoff, K, (2009), “This time is different: eight centuries of financial crises” Princeton University Press. Sachs, J (2005), “The end of poverty: How we can make it happen in our lifetime”, Penguin. Simon, H A (1971), “Designing organizations for an information-rich world” in: Martin Greenberger, “Computers, Communication, and the Public Interest”, pp 38–52, John Hopkins Press. Smith, A (1759), “The theory of moral sentiments”, London: A. Millar. Veblen, T (1899), “The theory of the leisure class: an economic study of institutions”, Macmillan and Company, New York.
To some degree, this likely reflects the anchoring exerted by stable inflation expectations. But some of the price pressures can be attributed to other, more temporary, factors:   Higher oil and gasoline prices and their pass-through into the costs of other goods and services.   Upward pressure on imputed homeowners rents due to increased demand for rental housing.   Higher import prices for goods, such as apparel. This reflects many factors including commodity prices pressures and higher wage inflation in countries such as China. Some of these upward pressures on inflation appear to be fading. Oil and gasoline prices have fallen in recent months. Apparel price inflation should gradually ease, given the sharp drop seen in cotton prices. Owners’ equivalent rent should also eventually stabilize as multi-family construction picks up and programs that shift real estate owned by banks to investors so they can be rented gear up. More generally, there are several reasons to think that inflation will remain moderate and close to our objective. First, and most obviously, the economy continues to operate with significant slack. Second, measures of underlying inflation show little upward pressure. In fact, one – the Federal Reserve Bank of New York’s Underlying Inflation Gauge – is turning down. This measure uses a very wide set of variables to forecast the underlying inflation trend (Figure 6). Third, it is hard to be very concerned about inflation risks when the growth rate of nominal labor compensation is so low and stable.

This would effectively tighten financial conditions not only by changing the expected path of short-term interest rates, but also by bringing forward the expected start of balance sheet normalization. To sum up, I see substantial advantages in behaving in as systematic fashion as possible in setting monetary policy. But that should be done in a way that fully accounts for any constraints on policy imposed by the economic environment, the presence of asymmetric risks, and allows us to learn as we go. The fact is that the economy is recovering after an unusually deep recession and a severe financial crisis. We don’t have much experience with this type of episode and how the economy is likely to perform. What we need to focus on is not what interest rate a given rule generates, but what policy setting can be expected to deliver the appropriate return path to the dual mandate objectives – the type of return path that standard Taylor Rule formulations achieved in different economic circumstances in the past. Thank you very much for your kind attention. I would be happy to take a few questions.
Although our decision considered the option of waiting, signaling the possibility of this change before doing it, we believe that in the current situation taking immediate action had greater value. Not because the economy was deteriorating dramatically, but because we were convinced of the consistency of this analysis with the persistence of low inflation. In such circumstances, delaying a decision would only be a waste of time, at a cost to the economy, at a time when more, not less, certainties are required. Page 8 of 18  The adoption of the agreement at the Friday meeting had a communicational implication that surely did not escape the attention of the members of this Commission. Faced with an important decision and unforeseen by the market, it was very complex to postpone the dissemination of the background information that supported it for more than two days, until the release of the Monetary Policy Report. That led us to issue a statement that advanced some important data of the Report. I would like to be clear that this does not set a precedent for future opportunities in which the monetary policy meeting and the Monetary Policy Report will coincide. Any more permanent change to the strategy of monetary policy communication will be assessed in depth and we will discuss it beforehand with this Commission.

Heng Swee Keat: Financial developments in Singapore Opening remarks by Mr Heng Swee Keat, Managing Director of the Monetary Authority of Singapore, at the press conference on the Monetary Authority of Singapore’s Annual Report 2009/10, Singapore, 29 July 2010. *  *  *  Strong recovery from the recession 1. The Singapore economy has recovered strongly from the recession. Five quarters since GDP reached a trough, Singapore’s output has exceeded its pre-crisis peak by 13.3%. The rapid climb from the trough can be traced to several inter-related factors. In particular, the domestic economy had been lifted by the cyclical upturn in global trade and financial market conditions since early 2009, supported by inventory restocking and unprecedented policy stimuli in the major economies. Given its openness and competitiveness, Singapore was in an especially strong position to benefit from these global forces through our externally-oriented sectors. In addition, investments made in the earlier years were completed in time to tap onto the global upturn. These investments introduced new activities in Singapore’s economic landscape, including high-end manufacturing and tourism services, and strengthened the competitiveness of our existing industries. 2. Global markets also recovered strongly after March as the financial system stabilised and investor confidence recovered. Taking into account translation effects stemming from the stronger Singapore dollar, interest and dividend income, as well as gains in the valuation of assets, MAS recorded a net profit of $ billion during the financial year. 3. Looking forward, considerable risks remain in the global economy and the global financial system.
Despite this contraction in number, the remaining firms have continued to grow and thrive, and now have assets totaling $ billion, which is an increase of about 30 percent. Community banks are much stronger financially today. In 2009, troubled assets were 26 percent of capital, primarily reflecting a large volume of construction lending. That ratio has declined significantly, to 8.5 percent today— demonstrating that community bank leaders have the capacity to take action, effectively work out troubled assets, and generate capital. These data tell a welcome story regarding your ability to successfully conduct business through the economic recovery. So, where does the industry go from here and what challenges lie ahead? That is the theme of today’s conference, and I expect a robust and enlightening series of discussions from both panelists and presenters. From my perspective, there are two challenges that I would highlight: ongoing advances in technology, and interest rate risk. First, major technological changes are compelling banks to embrace technology to better meet the needs of their customers. Today’s customer expects increased digital access, and a bank’s failure to advance technologically would be very damaging for its franchise value. But, the use of new technology comes with its own risks that require significant investment and attention— especially around cybersecurity. Second, in today’s low interest rate environment, we have observed that some community banks have taken on more interest rate risk by increasing the maturity of their assets and the average duration of their loan portfolios.

William C Dudley: Welcoming remarks at the Community Bankers Conference Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Community Bankers Conference, Federal Reserve Bank of New York, New York City, 18 April 2018. * * * Thank you for joining us today for our 16th Annual Community Bankers Conference. This is my last opportunity to address this fine group of community bank leaders in my role as president of the New York Fed. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee (FOMC) or the Federal Reserve System.1 Since becoming head of the New York Fed in 2009, I have had the opportunity to watch the evolution of community banking up close. I observed the resilience of community banks at the height of the financial crisis and how your organizations managed during those turbulent times. I also have had the privilege of meeting with many of you during my regional visits, and I remain impressed with how small banks remain important pillars of economic support for their communities. The past decade has seen significant change for your industry. There has been significant consolidation among institutions and the remaining community banks are much healthier. Back in 2009, there were 191 community banks in the Second District with an aggregate of $ billion in total assets. In contrast, there are 135 community banks today.
This in turn has led to a fall in demand that has tended to be fairly long-lived.4 In many areas, households and companies have moreover experienced difficulty in meeting their loan obligations and the banks have suffered loan losses. The much weaker economic activity and a banking system in need of support have in turn led to a tangible deterioration of public finances. The final result of the high indebtedness and overheated housing market has thus been macroeconomic instability in the form of a deep and prolonged recession. Moreover, monetary policy in many countries has become less effective as the policy rate has reached its lower bound and central banks have had to turn to new and untried methods of conducting monetary policy, and also because households have reacted less than normal to monetary policy stimulus, as they have given priority to consolidating their balance sheets.5 Trying to prevent this type of development with substantial macroeconomic instability must indeed be part of the Riksbank’s task. As I have already noted, one can make different assessments of how great is the risk that this negative scenario will occur and thus of the policy that should be conducted. But arguing that it is not in the Riksbank’s mandate, as a matter of principle, to take into account this type of risk and reduce it to the best of our ability – that I find quite difficult to comprehend.

Jean-Pierre Roth: Swiss outlook and global developments Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the Icon Roadshow Euro 2008, Frankfurt am Main, 17 March 2008. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The Swiss economy looks back on a number of successful years during which it was a very active participant in the growth of the world economy. The export sector rapidly expanded its presence in the new markets, thereby making an important contribution to this development. What was remarkable was that the increased foreign activities were not detrimental to Switzerland as a production location. On the contrary, the Swiss location benefited overall. Reforms aimed at strengthening and opening up Switzerland as a business location have also made a substantial contribution to economic prosperity in recent years. The turbulence on the financial markets that erupted in mid-2007 is unlikely to leave the Swiss economy unscathed. The export sector, including the banks, will be affected by the slowdown in the international economy. An additional factor is the substantial rise in the value of the Swiss franc over the past few months against the euro and the US dollar. However, we are already in a position to learn quite a bit from the financial market turmoil.