samchain/econo-pairs-v1 huggingface dataset:
Michael Held: Remarks at the Securities Industry and Financial Markets Association's Compliance and Legal Society Monthly Luncheon Remarks by Mr Michael Held, Executive Vice President of the Legal Group of the Federal Reserve Bank of New York, at the Securities Industry and Financial Markets Association's Compliance and Legal Society Monthly Luncheon, New York City, 9 May 2017. * * * Martin Grant, Thomas Noone, and Jennifer Spain assisted in preparing these remarks. Thank you for your kind words. And thank you to SIFMA’s Compliance and Legal Society for inviting me. I’m grateful for the opportunity to speak with you. As always, what I have to say reflects my own views and not necessarily those of the Federal Reserve Bank of New York or the Federal Reserve System. I have been a lawyer in the Legal Group at the New York Fed for almost twenty years. In my current role as General Counsel, I also oversee the Bank’s compliance function. Martin Grant, whom some of you may know, is our Chief Compliance Officer. Martin has been an advisor and role model for me throughout my tenure at the New York Fed. So much of what I have learned about compliance, I have learned from Martin. It’s not every day you get to thank a mentor publicly, so I don’t want to let this opportunity pass without saying thank you to Martin. I will offer some observations today as a fellow traveler in the legal and compliance fields.

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.
And this brings me to my final lesson – that innovation and regulation are, in the end, friends not enemies. As I said earlier, the initial use cases for the technologies developed in the crypto world, such as speculative crypto assets, may have a limited future. But we can see that a range of other use cases are being proposed and developed in both the crypto and the non-crypto world. On the retail side, while Libra/Diem, the most high profile proposal for stablecoins for retail payments, including cross border, has withdrawn, a number fintechs and established firms are exploring the potential for technology in this area. Similar exploration around tokenisation and DLT is happening in the area of wholesale payments. A separate but rapidly developing field is the deployment of crypto technologies and smart contracts in the exchange, clearing and settlement of financial securities. Today, in mainstream finance these activities are carried out in sequence by separate entities at significant cost. However, some of the protocols that have begun to be developed in the crypto world have pointed to the possibility of collapsing these activities into a single entity and automating through the use of smart contracts. If successfully developed, such technologies could simplify the network of relationships that need  Page 8  to be maintained for trading in shares and bonds and lead to lower costs, greater speed and greater transparency for end investors.

Since the last monetary policy assessment, the exchange rate and interest rate conditions have changed substantially. This has considerable repercussions for the inflation and growth outlook in Switzerland. Global economic outlook I will now present our assessment of the global economy. The international economic environment is developing largely in line with our previous expectations. The global economic recovery is continuing. In the fourth quarter of 2014, growth in the US remained above potential. The favourable momentum of the economy there is also reflected in the sound growth in employment. The economy picked up somewhat in the euro area. This was primarily due to strong quarterly growth in Germany. In Japan, too, demand increased. By contrast, economic developments in the major emerging economies were mixed. Consumer price inflation edged down worldwide due to lower oil prices. In many advanced economies, inflation moved into negative territory at the beginning of 2015. During the course of the year, the growth of the global economy is likely to firm gradually. Several factors are supporting this growth. First, the significant decline in oil prices is helping to increase demand. Second, monetary policy in the advanced economies remains very expansionary. The euro area, in particular, is likely to benefit from the further decline in interest rates as well as the marked depreciation of the euro. Recently, an easing in European banks’ lending conditions, which were very restrictive, has also been observed. BIS central bankers’ speeches  1  Despite these favourable developments, the outlook for the global economy is still uncertain.
Veerathai Santiprabhob: Financial connectivity in CLMVT (Cambodia, Lao PDR, Myanmar, Vietnam, Thailand) Keynote address by Dr Veerathai Santiprabhob, Governor of the Bank of Thailand, at the CLMVT Forum 2016 “Towards a Shared Prosperity”, Bangkok, 17 June 2016. *  *  *  Your Excellencies, Honorable Speakers, Distinguished Guests, Ladies and Gentlemen, A very good morning to you all, It is my great pleasure to be here with you this morning. I would like to start by thanking the Thai Ministry of Commerce for inviting me to give a keynote address at this important forum. Let me take this opportunity to once again welcome all our guests, especially friends from CLMV countries, to Thailand. I am very delighted to have this opportunity to meet with many ministers, senior government officials, and business leaders participating in the first CLMVT forum. This forum provides a meaningful platform for all of us to share perspectives on how to sustainably enhance regional connectivity and unlock great potentials of our region. Over the past decade, economic integration in our region has strengthened impressively. Driven by international trade, direct investment and production networks, the share of intra-regional trade within the CLMVT to total trade volumes has nearly doubled. Amid a slowdown in global trade due to gradual and fragile recovery of major industrial economies and China’s economic transformation, cross-border trade and investment activities within the region continue to grow at a fast pace.

Given the increasing availability of innovative financial products and much improved risk management techniques by commercial banks in Thailand, the Bank of Thailand has gradually relaxed our regulations in this area. At the moment, importers and exporters who wish to hedge this foreign exchange risk for a traderelated transaction can choose from forward contracts, plain-vanilla options or even certain structured products to suit their needs and preferred level of sophistication. My final point concerns the role of the futures market as an insurance mechanism. As mentioned previously, agricultural products tend to exhibit highly volatile prices causing farmers to suffer from this risk of violent price fluctuation. The government has stepped in to provide relief in the form of government price support scheme. At present, the government is running commodity price  2  BIS Review 14/2006  stabilisation schemes in four products namely paddy rice, corn feed and tapioca. These price support schemes provide an insurance for farmers against adverse price movement- in the form of selling put options to the farmers. The schemes have grown to become a substitute for the futures marketeliminating the very incentive for farmers, traders and producers to participate in the futures market. This is particularly the case when the guaranteed buying prices from the government are set at relatively high level compared to market-determined prices. I mentioned before that the average daily turnover in the AFET now is around 400 contracts. However, the majority of the trading is heavily concentrated in the ribbed smoked rubber sheet no.
First, in the euro area, the latest consumer price data have surprised on the upside, and there are some signs of an upturn in inflation expectations. This is actually good news, as Philip Lane noted last week.1 That said, this rise shouldn’t be overstated; it primarily reflects temporary factors rather than a persistent and significant change in the inflation path. The euro area economy is in a different situation compared with that of the US (in terms of real activity, output gap and fiscal stimulus). There is no risk of overheating in Europe. Second, this less disinflationary environment shouldn’t raise questions about our future monetary policy, and our reaction function. Let me reiterate a strong conviction about our inflation objective: it is flexible, symmetric and medium-term. To put it clearly, these last two imperatives mean that 1/4  BIS central bankers' speeches  we cannot completely ignore the past inflation shortfalls, and that in the future we should be ready to accept inflation above target for some time. As necessary, our forward guidance could be strengthened to make this tolerance explicit. And third, there are other elements in this tightening of financing conditions, including excessive spillovers and tensions on the term premia. In so much as this tightening is unwarranted, we can and must react against it, starting with an active flexibility of our PEPP purchases, which we have made possible since its inception in March 2020, and enhanced last December. II.

23.05.2018  “Strengthening the economic governance of the euro: short-term priorities and the long-term view” High Level Seminar. Banco de España Luis M. Linde Governor  Ladies and Gentlemen, Let me first extend a warm welcome to you all to the Banco de España. Thank you for joining us today in this seminar that addresses the pressing and very important topic of the Economic Governance of the Euro: Short-term Priorities and the Long-term View. I would like to thank the panelists who have been so kind to accept our invitation; we are very pleased to have among us a long list of distinguished participants that would certainly throw much welcomed light on the discussion. The timing of this conference is particularly relevant. After years of low growth, Europe is now experiencing a robust recovery which opens up a window of opportunity to make progress in the governance reform agenda before the next economic downturn unfolds. Supported by expansionary monetary policy, real GDP in the Euro Area has expanded for 19 quarters in a row. Stronger price dynamics are yet to materialize, but we are confident that if we are prudent, patient and persistent, our monetary policy measures will be effective in achieving the medium-term goals. Price stability is a necessary but not a sufficient condition for achieving sustained and balanced growth. In fact, one important lesson we can draw from the first twenty years of the EMU is the need to improve the area’s resilience to large macroeconomic shocks and to increase its stabilization capacity.
But effective delivery extends well beyond mechanically changing parameters within our systems. The Bank’s operations in money, gilt, corporate bond and foreign exchange markets, its operation of the Real Time Gross Settlement (RTGS) system, all supported by its comprehensive financial and operational risk 8  All speeches are available online at www.bankofengland.co.uk/speeches  8  management framework, afford it a unique insight into the workings of the financial system. Markets and Banking staff are thus able to advise members of the MPC, FPC and PRC about key developments in monetary and financial conditions. Our operations also leave us well placed to assess the resilience and effectiveness of markets and the infrastructure that underpin them. The Bank has always stood ready to use its convening powers or, where necessary, intervene directly in order to help ensure the smooth functioning of core sterling markets. But this has been given new impetus in recent years as initiatives such as the Open Forum and the Fair and Effective Markets Review made clear that the Bank considers scanning the horizon for emerging vulnerabilities as important as stepping in when risks have crystallised. Working to monitor and improve resilience and effectiveness is something I consider to be a core part of delivering not only monetary, but also financial stability. And I believe the Bank’s work in this area will play an important role in ensuring the UK has a resilient, effective and innovative financial system as it leaves the EU.

A second potential explanation for how the supply side data have evolved is that since the referendum workers have responded to uncertainties about the outlook by showing even more flexibility in their wage demands. People’s willingness to accept lower real wages would encourage firms to hoard labour, and shift away from capital expenditure toward more labour input for a given unit of output. Such a further increase in labour market flexibility would imply that part of the recent renewed weakness in productivity growth is cyclical, meaning there is a bit more room for the economy to grow without generating above-target inflation in the medium term. I attach some weight to the idea that workers have responded to the changing outlook by showing greater flexibility in their wage demands. This would be consistent with a trend I have observed throughout my career and in successive cycles in which peaks and troughs in unemployment have been lower in each cycle since the 1980s. Since the crisis, real wage flexibility has been particularly notable, and it may have intensified further since the referendum as the unemployment rate has fallen further to 4.3%. As supporting evidence I would point to the fact that the weakness in private sector real wage growth relative to the MPC’s May 2016 forecast has been greater than would be required just to match the weakness in productivity 3  growth , and that is in spite of the additional pressure on real income growth from higher import prices over 4  the same period .
Since the CDFIs have the relationships with the small businesses, partnerships between banks and CDFIs that increase the lending capacity of the CDFIs could be helpful. Possible avenues to achieving this include partnerships between CDFIs and banks, as well as assisting CDFIs to better access funding from the Federal Home Loan Bank (FHLB) system. I would like to touch on three additional issues that I think would assist small businesses to be successful: financial education, certification of community organizations that assist small businesses and greater transparency for small business lending. Establishing a thriving small business takes more than a good idea and hard work. While both of these are essential, there are many other factors that come into play. It is important that people starting businesses have access to financial information that will assist them in navigating the difficult way forward. This assistance can include how to develop a sound business plan, how to enhance their credit profile, how to avoid early pitfalls such as obtaining financing with punitive interest rates and how to cultivate a banking relationship. These will all increase the likelihood that the small business will have access to the credit it needs over time to grow and thrive. CDFIs have been an important source of this financial education to small businesses, and these efforts should be supported and expanded. It is critical that small businesses also know that the organizations they work with are reputable and knowledgeable.

Beyond the yearly shadow banking monitoring exercises, policy makers intended to make sure that no part of the financial system would be left unregulated and that a similar set of rules should apply to a similar set of risks. For the sake of a better regulation of globally systemically important institutions, some progress remains possible in the monitoring, and the need for relevant data in particular as regards the better understanding of inter-linkages among G-SII. Cross-sectorial consistency was seen as a key factor to prevent any opportunity for regulatory arbitrage and preserve appropriate level playing field. The Financial Stability Board following the G20 recommendation has launched an ambitious regulatory program which aims at better controlling risks which are related the shadow banking sector. Indeed, the US have recently adopted a regulatory framework for Money Market Funds (July 2014). Other reviews are still ongoing, I am thinking of the assessment of risks and systemicity of asset managers whose assets under management have experienced a major growth these last few years, or the rapid development of ETFs providing real time liquidity on their liability while their matching assets have a lower liquidity. In Europe, this global initiative translated into a number of regulatory initiatives such as the Securities Financing Transactions Regulation (repos and SFTRs) or the Regulation of Money Market Funds. The final objective was to turn the shadow banking sector into a safer and regulated “market-based financing”. 2.
The difference between the red and blue yield curves shows what would happen to interest rates for various maturities if the repo rate path were to become credible. This would cause the blue yield curve to shift upwards to the red one. A three-year interest rate would thus increase by approximately 60 basis points, and a five-year interest rate would increase by closer to 90 basis points. Normally, the Riksbank’s wish and endeavour is that the repo rate path is credible, and incorporated into market expectations and market pricing. In this way, monetary policy has the largest possible impact. This time, it seems to be less desirable. If the repo rate path were to become credible, long interest rates would rise drastically, which would mean a substantial tightening of monetary policy in relation to the present situation. In my opinion, the repo rate path in the main scenario should be one that we want to immediately become  6  I have extended the repo rate path beyond the three-year horizon so that the repo rate rises steadily up to a long-term level of 4 per cent. BIS Review 158/2010  7  credible, if it is not already credible. That is, the repo rate path of the main scenario should be chosen such that is best stabilises inflation and resource utilisation when it is credible. Why such a modest krona appreciation in the main scenario? The main scenario includes a fairly modest appreciation of the krona. Why isn’t it bigger?

The main scenario in the Inflation Report that is published today does not represent a future development of inflation that threatens price stability. But every inflation forecast contains an element of uncertainty and the risk spectrum also has to be considered when formulating monetary policy. The present Report concludes that higher inflation compared with the main scenario is more probable than lower inflation. Remember, moreover, that to be most effective, monetary policy has to focus on the situation one to two years ahead. This suggests that the Riksbank is moving towards a situation in which the repo rate will be raised. Yesterday, however, the Executive Board decided in favour of an unchanged repo rate. But sooner or later, if developments continue along the lines in the present assessment, a repo rate increase will be called for. If some kind of international shock with a probable downward effect were to occur, or if indications of more subdued economic activity or prices were to be observed, that would naturally be taken into account in our future assessments. Why a higher repo rate? A repo rate of 2.90% is probably too low over a complete business cycle, even in an economy where inflation expectations have settled down around the targeted rate of 2%. Under such circumstances, the direction of monetary policy can be described as expansionary. This is not countered by a restrictive fiscal policy.
In any event, and in line with the current recovery phase, wage settlements under collective bargaining agreements have risen from 0.6% in 2014 to the current level of 1.7%, on cumulative data to September. This improvement will foreseeably continue in the future, in line with the recommendations of the Employment and Collective Bargaining Agreement, signed by the social agents on 25 June and in force over the next three years, which promotes wage increases of 2%, plus a variable amount of 1% conditional upon different sector-based macroeconomic concepts. The variable elements in collective bargaining should be viewed favourably, insofar as their application caters for firms’ specific circumstances, such that wage developments are adjusted as much as possible to labour productivity. Main factors of risk in the short and medium term The outline I have offered on the foreseeable course of the Spanish economy is not free from risks. And should such risks materialise, they might adversely affect economic growth. On the external front, as earlier stated, are the uncertainties associated with the effects of monetary policy normalisation (in particular in the United States) on global financial conditions. Other factors of concern are the possible resurgence of geopolitical tensions or a potential escalation in the adoption of protectionist measures. Specifically, the outcome of Brexit and the situation in Italy are of particular significance for the Spanish economy.

As I said when I officially took up office, the main objectives are to increase the presence and influence of the Banco de España at the European and global levels, and to reinforce its early-warning capacity regarding identification of the vulnerabilities and risks to the Spanish economy’s financial and macroeconomic stability, as well as its responsiveness in mitigating these risks and preventing their materialisation. In short, we aspire to a more open and transparent institution, and one more flexible and efficient, that harnesses its human and material resources to the full, under the guiding principles of independence, intellectual rigour and excellence. Following this introduction, allow me to turn to the central purpose of this appearance. As you know, in late May the Banco de España published its Annual Report, which reviews economic and financial developments in the Spanish economy, and in the European and international environment, together with the main challenges and vulnerabilities facing it. The Annual Report is the Banco de España’s main publication in respect of its functions as the monetary authority and adviser to the Government on economic policies. Accordingly, I would like to begin by summarising the main aspects of the current situation of the Spanish economy and its external environment, along with its short and medium-term risks, moving on subsequently to describe the challenges our country faces over a longer horizon. External environment As regards the external environment, the global economy has, so far in 2018, shown signs of slowing, following the high growth recorded in 2017 (see Chart 1).