samchain/econo-pairs-v1 huggingface dataset:
There is a very nice paper in the latest NBER issue which is called “When Inequality Matters to Macro and Macro Matters for Inequality”. So indeed, that places within macro the question of inequality – inequality which has been increasing too much in the past few decades. Changes are being discussed and are taking place I just hope that progress could be quicker. How does that impact central banking? We thought we could just target inflation, now you are saying the next generation has to consider all of these different preferences of agents, multiple equilibria, inequality... Well first of all, central banks will always focus mostly on control of inflation, or more broadly macroeconomic stabilisation. The regime of flexible inflation targeting will not change in the visible horizon, and that is because it allows central banks to take a medium-term perspective towards hitting the inflation target. The advantage of adopting this gradualist approach to reaching the target, is – as [leading monetary economist and former Riksbank official] Lars Svensson has demonstrated very convincingly – that you can allow for some consideration of stabilisation of the 6/8  BIS central bankers' speeches  economy in trying to move gradually towards the inflation target. What will change are the models used to analyse the consequences of policy – and the set of instruments that will have to be used. Central banks in the future will have to respond in a different way if they want to achieve the overall objective of reasonable inflation and macroeconomic stabilisation.

Consideration is thus given to the sustained implications of monetary stability measures on the real economy. The law therefore requires the Bank to take a balanced view to avoid the adoption of rigid frameworks that may result in strong biases that would lead to a fundamental and sustained damage to the economy. This balance is also extended to the explicit role of the Bank in developing an inclusive financial system in its responsibility to develop a sound and progressive financial system. These considerations are particularly important for emerging market economies so as to ensure balanced economic progress and development. The new Central Bank of Malaysia Act 2009 also institutionalises the autonomy for the formulation of monetary policy, thus providing for the integrity and credibility of the decisions made. It also provides for greater flexibility in monetary policy implementation, allowing for a diversified range of instruments that can now be deployed for the implementation of monetary policy. As financial markets trend towards greater sophistication and demonstrate periods of extreme volatility, central banks must have commensurate capabilities to conduct monetary policy operations in order to maintain price stability. Equally important is the mandate to provide oversight over the money and foreign exchange market to ensure the orderly development and functioning of the markets. These necessary powers are however, combined with a system of checks and balances to enable the Bank to act decisively, but yet having in place safeguards so as to enhance transparency and accountability.
Other components were: •  fiscal policy oriented towards full employment  •  regulation of credit within limits specified in a separate credit budget  •  channelling of loans through the state banks  •  regulation of capital movements  •  low nominal interest rates stipulated by the government authorities  •  a fixed, though adjustable, krone exchange rate  •  use of price regulation  •  an active business policy through state ownership and state grants and subsidies  The proposal to establish an incomes policy council did not receive support. There was just too much control and coordination. Now, only 30 years later, very little of this system remains. The building was not solid enough. We know from experience that fiscal policy alone cannot ensure a high level of employment. The structure of the labour market and of wage formation is probably of greater importance. The direct regulation of credit, interest rates and capital movements broke down and was phased out in the 1980s. The krone is floating. Price regulation no longer plays a role as a macroeconomic instrument. The scope of business policy has become more general. State ownership in the Norwegian business sector remains extensive, but the management of ownership has been totally revised following the negative experience of companies in Kongsberg, Mo i Rana and Syd-Varanger. I would like to highlight two factors that have taken on considerable importance for economic policy.

Norway’s export revenues and government revenues can be expected to be very high as long as production remains high, and as long as the global market allows producing countries to extract substantial economic rent. At the same time, we know from experience that revenues may vary sharply from year to year. As a result of the high level of earnings and fluctuations in these revenues, the most important contribution fiscal policy can make to stabilising the Norwegian economy is to provide a sound, long-term plan for the use of petroleum revenues. Attempts to use the central government budget to fine-tune economic activity may, at worst, have a destabilising effect if these attempts are perceived as being a departure from the long-term plan for the phasing in of petroleum revenues. It is necessary to show that fiscal policy can be applied symmetrically in periods of economic expansion and contraction. A year and a half ago, the Government and the Storting adopted new guidelines for economic policy, which call for an annual use of petroleum revenues equivalent to the expected real return on the Government Petroleum Fund. At the same time, the Government issued a new operational mandate for monetary policy. Norges Bank shall set the key rate with a view to maintaining low and stable inflation. Monetary Policy Regulation (1) • Monetary policy shall be aimed at stability in the Norwegian krone's national and international value, contributing to stable expectations concerning exchange rate developments.
And the central role these firms occupy in our financial system and the consequences to other firms and to the stability of the financial system should one of them face significant financial or operational difficulties requires that they hold a higher margin of capital above economic capital than would be appropriate for smaller institutions with a similar risk profile. These arguments are compelling on their own, and they are made more compelling by the challenges ahead facing the U.S and the world economy. The increased stability in macroeconomic outcomes that has characterized the last two decades, the relative ease with which the U.S. financial system weathered the stress of the equity market shock and September 11, the increased mobility of the world’s savings and the optimism produced by the acceleration in productivity growth, have all worked to lower expected future volatility and risk premia. BIS Review 28/2005  3  The reduction in credit losses and in realized volatility has created room for institutions to take greater risk without showing deteriorating risk-based capital measures. But the macroeconomic environment may not prove to be as benign in the future as it has in the recent past. And it is important that the major financial institutions in particular sustain a strong capital cushion at levels that will enable them individually and the U.S. financial system as a whole to manage safely in a more uncertain and perhaps more volatile world. Thank you. 4  BIS Review 28/2005

For the smooth financing of our economy and for financial institutions Overall, 2016 was a good year for the financing of our economy, thanks also to the professionals that you are:  the growth of credit to the economy in France is the strongest of all the major countries of the euro area. For companies, the latest figures at end-November are +4.9%, compared with + 2.2% in the euro area. Credit to households increased too in 2016, by +4.2%, compared with +1.9% in the euro area. And this credit expansion has been accompanied by some of the lowest interest rates in Europe. 2/3  BIS central bankers' speeches  the strength of French banks and insurance companies has been confirmed. On the insurance side, the solvency of the French market is largely met, with a Solvency Capital Requirement ratio (SCR) of 209% for groups and 222% for individual institutions on 1 January 2016, compared to the regulatory minimum of 100%. As regards banks, the major groups show prudential ratios well above the minimum requirements, with in particular an average CET1 solvency ratio (“full CRD4”) of 12.7% at end-June 2016, which is more than twice that of 2008 (5.8%). Elsewhere in Europe, in particular in Italy, certain banks still show difficulties: these problems are manageable but urgent action is required. Fortunately, this feeling of urgency seems at last to prevail. For the smooth financing of our economy, 2017 requires that action be taken in five priority areas:  Basel 3.
Most importantly – and this is the lie – complacency among individuals and institutions, fed by a long period of macroeconomic stability and rising asset prices, made this remorseless borrowing seem sensible.3 When the crisis broke, policymakers quickly dropped the received wisdoms of the Great Moderation and scrambled to re-learn the lessons of the Great Depression.4 Minsky became mainstream.5 Lie II: “Markets Always Clear” A deep-seated faith in markets lay beneath the new era thinking of the Great Moderation. Captured by the myth that finance can regulate and correct itself spontaneously, authorities retreated from their regulatory and supervisory responsibilities.6 The second lie, the belief that “markets always clear,” has two dangerous consequences.7 First, if markets always clear, they can be assumed to be in equilibrium— or said differently “to be always right”. If markets are efficient, then bubbles can neither be identified nor can their potential causes be  2  Raghuram Rajan (2010), “Fault Lines: How Hidden Fractures Still Threaten the World Economy”. This emphasis on the endogenous tendency of financial systems to become unstable is reminiscent of Hyman Minsky’s “financial instability hypothesis” (Minsky (1992)). 4 See for example, Krugman, P, (1999, updated and reissued 2008), The Return of Depression Economics and the crisis of 2008, Penguin.

The holder of a single share would have been liable for the equivalent of four times the salary of a teacher of the time. It is not surprising therefore that within about a decade unlimited liability had all but disappeared from the British banking scene, to be replaced with regimes that limited the liability of shareholders in one way or another.2 I would not propose that we go back to a system of unlimited liability for bank shareholders. But the City of Glasgow Bank episode is interesting because it shows that the public policy challenges of dealing with failing banks are not new. When a bank fails, the money has gone. Someone has to pay for the losses, however. The question is ‘who pays?’ This question has probably be-devilled public policy since banks were invented. ‘Who pays?’ – the past It goes back much further than late Victorian Britain. The Code of Hammurabi – written by the King of Babylon in around 1,800BC – included a provision that if the harvest failed due to adverse weather then the ‘debt-tablet’ would be washed in water and interest on the loan would be cancelled for that year.
But more recent figures from the London Chamber's report, published last December, on the contribution of Asian business to London's economy, suggest that the ethnic minority population manages or owns some 20% of London's private sector businesses, with the Asian community alone accounting for half that - or some 10% of the total. These figures make a powerful point, which is underlined by the presence of so many Asian and nonAsian business and professional people here this evening. They illustrate very vividly the great benefit that can accrue to our society, as a whole, from providing the opportunity to all the people in the UK, whatever their background, to realise their full potential and achieve all that they can in their different fields. It underscores the importance of non-discrimination, whether ethnic or religious, sexual or social, to the material as well as the moral progress of our whole community. It is a real pleasure to be with you. In his letter of invitation to me, your Chairman - Subhash Thakrar - suggested that I could talk about anything I wanted to this evening, provided it was the state of the economy, and provided I tell you what precisely will happen to interest rates. Let me begin by trying to explain to you what we at the Bank - through the MPC - are tasked to do, and why. The task sounds straightforward.

Following the Lehman Brothers bankruptcy last September, banks became ever more reluctant to lend to each other as a result of a sharp increase in the perceived risks of counterparty default and a continued lack of transparency about the health of banks’ balance sheets. 5 Since last October, the ECB has provided unlimited funding in euro at fixed interest rates over periods up to six months against an expanded list of eligible assets for use as collateral in Eurosystem refinancing operations. This extraordinary expansion of liquidity provided to euro area banks is reflected in the growth of the Eurosystem’s balance sheet. Between the end of June 2007 and the end of April 2009, the balance sheet of the Eurosystem increased by about EUR 600 billion, and had reached EUR 1.51 trillion which is equivalent to 16% of the nominal GDP of the euro area. By comparison, the size of the Federal Reserve System balance sheet had reached 14% of the US nominal GDP at the end of April 2009. III. The effectiveness of central bank policies  How effective have the ECB policies been in mitigating the impact of the crisis on the financial system and the economy? We can assess this by first examining the effects of the measures taken on the money and credit markets. The provision of unlimited amounts of liquidity (against adequate collateral) in the interbank money market and the sharp reduction in the ECB’s key policy rates to exceptionally low levels have resulted in a significant improvement in money market conditions.
In addition, cost pressures in many countries are moderate after several years of high unemployment and low wage growth. Chart: Money market rates for trading partners The low level of inflation has led central banks to implement further monetary policy easing over the past year. Policy rates are now negative in a number of countries. In addition, several central banks have introduced other instruments to stimulate economic activity and mitigate the risk of deflation. The European Central Bank (ECB) has expanded its asset purchase programme to include government bonds. The Riksbank, the central bank of Sweden, introduced a government bond purchase programme at the beginning of last year. On the other hand, the Federal Reserve raised its policy rate for the first time in nine years in  BIS central bankers’ speeches  1  December 2015. Trading partners’ policy rates can be expected to remain low for a long period ahead. External developments influence the Norwegian economy through several channels: through demand for Norwegian goods and services, through financial markets and the exchange rate and, not least, through commodity prices. Chart: Oil prices The fall in oil prices began in summer 2014 and continued through 2015. Oil prices have picked up again somewhat in recent months to just over USD 45 per barrel, but are still at less than half of their pre-fall level. Futures prices have also decreased in the past year. These prices now indicate only a moderate rise in oil prices ahead.

The Ministry of Finance will assess the need to modernise the regulation on monetary policy. After 15 years of the current regulation, a review may be in order. I would, however, emphasise that our experience of the current monetary framework is positive. Confidence in low and stable inflation is firmly anchored. The primary task of monetary policy must always be price stability. When inflation is firmly anchored, monetary policy can also contribute to stable developments in the real economy. Monetary policy can react quickly to cyclical changes, as was the case during the financial crisis when the key policy rate was markedly reduced in order to limit the downturn. The framework has also functioned well in face of the substantial decline in oil prices. The flexibility and room for the exercise of judgement provided by the mandate has strengthened monetary policy and the Norwegian economy. Thank you for your attention. BIS central bankers’ speeches  3  4  BIS central bankers’ speeches  BIS central bankers’ speeches  5  6  BIS central bankers’ speeches  BIS central bankers’ speeches  7
The PRA agrees with longstanding and justified concerns raised by the industry on the sensitivity of the risk margin to interest rates, and its overall quantum when interest rates are low. The Government’s April Consultation Document[9] lays out reform proposals. The potential impact of these reforms can be significant. For general insurers, we believe that a roughly 30% cut in risk margin can be justified, similar to the impact on EU firms of reform proposals made by the European Commission. This outcome would therefore ensure no disadvantage on competitiveness grounds for GI firms. For life insurers, given the longer term nature of the insurance risks and the presence of closely matched assets, we believe that a greater reduction of around 60% is possible – but only if the FS is also reformed to better reflect credit risk retained by life insurers. Simultaneous reform of both risk margin and MA can also correct a potential distortion in the current framework that has become apparent over time. Namely that, broadly speaking, under the Solvency II regulatory regime, some long term insurance risks – in particular, longevity risk – appears to have been highly-capitalised, relative to credit risk. This has created an environment where life insurers have been retaining less and less insurance risk, but acquiring additional credit risk, including counterparty credit risk. This trend has become more evident since Solvency II came into force, and raises questions about the effectiveness of the regime, in terms of both competitiveness and in mitigating risks to our statutory objectives.

The first and third of the Government review objectives are also mutually supportive: breadth of investment is essential to the business model of a large part of the UK industry, so by removing unnecessary barriers to investment we further both objectives. So why focus on competitiveness and productive investment today? Apart from being front of mind in most of my discussions with the insurance sector, they feature amongst the principles the PRA ‘has regard to’ when making rules or designing policy. Matters that PRA ‘has regard to’ serve to focus the decision-makers’ minds in weighing up how best to advance the PRA’s objectives given to us in law[4]. To put this more colloquially, the PRA does not make rules or design policy solely in pursuit of a secondary objective or the goals underlying a ‘have regard’. Rather, the existing secondary competition objective, and also the principles underlying our ‘have regards’ shape how we go about advancing our primary objectives. We have thought carefully about the impact of our potential reforms in these areas. So, I want to explain how we’re having regard to competitiveness and productive investment as we develop reform proposals. Investment flexibility and productive investment Looking first at investment flexibility. UK insurers manage almost £ of investment assets, and it is an objective of regulatory reform to support the productive investment of those funds.
It is likely that in the second half of this year, the UK economy will return to positive, if modest, growth. Financial markets have improved, with banks finding it easier and less costly to access wholesale funding markets, and in time this should ease lending conditions to households and businesses. These developments are encouraging. But they need to be seen in context, and we should be under no illusion that the path to a sustained recovery will be smooth and painless. Output is still well below and unemployment well above their levels of a year ago, and are likely to remain so for sometime. To keep inflation close to the 2% target, monetary policy tries to keep a balance between overall demand and supply. Judging that balance, given an impaired banking sector and the likelihood of a significant fiscal tightening over the next few years, is particularly difficult. At the moment, inflation is 1.1%. Many have forgotten that only a year ago it reached 5.2%. It is likely that inflation will remain volatile over the coming year. It will pick up over the next few months reflecting higher petrol prices, recent falls in sterling and the reversal of the cut in VAT. Looking through these short-run factors, however, inflation will be determined by the path of money spending relative to the supply capacity of the economy. Over the past year money spending, which normally expands at around 5% a year, has fallen by 5%.

In the bank’s drive for excellence and customer satisfaction, the Bank of Sierra Leone has continued and will continue to create the enabling environment for safe and sound banking. For instance, in collaboration with other stakeholders, the Bank of Sierra Leone is putting in place measures to implement all provisions of the Anti-Money Laundering Act so as to prevent money launderers using our financial system for their criminal activities. A recently concluded workshop organised by UNODC/GIABA//Bank of Sierra Leone succeeded in drafting a National Anti-Money Laundering Strategy with the aim of providing a framework for an Anti-Money Laundering regime that will ensure effective crime prevention and detection, and at the same time avoid creating excessive burden on the financial system and its users. The workshop attracted various stakeholders, including the Association of Commercial Bankers in Sierra Leone to which GTB is an active member. The Bank of Sierra Leone shall continue to maintain the open door policy and encourage dialogue in the process of ensuring a sound and stable financial system. BIS Review 79/2006  1  Mr Chairman, Distinguished Ladies and Gentlemen, allow me to close this brief remarks by once again congratulating the Board, Management and staff of the Guaranty Trust Bank (SL) Limited for another step taken to enhance the public image of the bank. I thank you for your attention. 2  BIS Review 79/2006