samchain/econo-pairs-v1 huggingface dataset:
William C Dudley: The national and regional economy Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York and Chairman of the Committee on the Global Financial System (CGFS), at the Business Council of Fairfield County, Stamford, Connecticut, 2 July 2013. *  *  *  Good afternoon. I am pleased to be here with the Business Council of Fairfield County. I am told that your meetings are very inclusive – that you routinely invite education professionals, executives of local not-for-profit agencies and community leaders as well as business leaders. In doing so, you assemble the type of broad Main Street audience that I most enjoy addressing. So, thank you for inviting me here today. Today I want to talk a bit about the outlook for the nation and the region. As many of you know, I was scheduled to speak at this forum on October 29 of last year but that meeting had to be postponed because of the arrival of Superstorm Sandy which hit on that very day. The region covered by the New York Fed was at the center of the storm, and Fairfield County, as well as parts of the Connecticut shoreline suffered extensive damage. Immediately following the storm, our Regional and Community Outreach function worked with all of the affected areas as part of a needs assessment.

Mervyn King: Monetary policy – many targets, many instruments. Where do we stand? Remarks by Mr Mervyn King, Governor of the Bank of England, at the IMF Conference on “Rethinking macro policy II: first steps and early lessons”, Washington DC, 16 April 2013. *  *  *  I would like to thank Charlie Bean, Alex Brazier, Spencer Dale, Andy Haldane and Iain de Weymarn for helpful comments and suggestions in preparing these remarks; and in particular Tim Taylor who I regard as a co-author, although he is absolved of any errors in the current draft. Introduction The past five years has been an extraordinary period for central banks. The breadth and scale of our operations has expanded in ways that were previously unimaginable as we responded to a crisis in the banking sector and the wider economy. In monetary policy, we have moved into uncharted territory. But has our notion of what central banks should do, and how, changed? Now is a good time to reflect on where we stand. I want to focus my remarks on two areas. First, I want to draw out what have we learned about the objectives of monetary policy. Second, I want to reflect on the implications of the proliferation of instruments that have been used to meet those objectives. Objectives For over thirty years the objective of central banks was clear. It was to set monetary policy to achieve long-run price stability.
Any irregularities are detected and reported to concerned authorities to take actions for continually checking that they are corrected. 7. SAMA has established a permanent committee for regular monitoring of financial crimes in general and money laundering crimes in particular. The committee is made up of members from SAMA and banks to review the instructions and procedures taken in this regard so as to be applied as required. 8. SAMA has attached great importance to training in the field of combating money laundering. SAMA’s IOB held 47 training courses benefiting 800 trainees during 2009. Several government authorities, which are concerned with anti-money laundering issues, have also made great efforts to train their employees. A number of conferences and symposiums at the domestic and regional levels have been  2  BIS Review 54/2010  hosted to raise awareness of the issue of money laundering and strengthen human and technical capabilities to combat it. Your meeting today in this symposium is only part of SAMA’s efforts to raise the level of compliance and anti-money laundering. Dear audience, Despite considerable efforts made to promote the principle of compliance and anti-money laundering that have had a significant positive impact, money laundering criminal activities always seek new techniques to be able to continue. Hence, we always need to be alert and cautious, and we should enhance our capabilities and do our utmost to fulfill the tasks entrusted to us.

Achieving success also requires cooperation among all concerned authorities and exchange of information that would help achieve our goal of dealing positively and effectively with the challenges we face. Dear audience, I have looked into the program of this symposium and found it packed with a range of important and useful topics which will be presented by an elite of specialists in this area, and I call on everyone to benefit most from this symposium which will in my view, be reflected positively on our efforts to enhance the principle of compliance and anti money-laundering. I welcome you again to the Institute of Banking, wishing you a pleasant stay in Riyadh. Wassalam Alaikum Warhmatullah Wabarakatuh. BIS Review 54/2010  3
The first day of our seminar is dedicated to this topic. The second day of the seminar targets mainly the corporate sector. The Small and Medium Enterprises’ access to finance is also important for financial stability. Small and Medium Enterprises constitute the overwhelming majority (99 percent) of businesses at European level, with important contributions both in terms of value added generated by non-financial corporations (57 percent) and employment (67 percent). Increasing access to finance in this sector is among the EU priorities. It is also 3  true that this portfolio accounted for the highest post-crisis NPL ratio in the European Union. At its peak, the average NPL ratio for Small and Medium Enterprises reached around 20 percent at European Union level. In Romania, the ratio was 35 percent, while the NPL ratio for microenterprises accounted for 53 percent. Therefore, the same lesson learnt from the household sector also applies here: the Small and Medium Enterpises’ financial inclusion should unfold in a sustainable way. On the other hand, the experience with macroprudential instruments for companies is extremely limited at the European level. For example, France has recently implemented a measure focusing on highly indebted firms, but it applies only to large companies. Therefore, I think that deepening this area of research is very useful for macroprudential policymakers. In Romania we have also tried to come up with solutions that might improve Small and Medium Enterprises’ financial inclusion.

Our macroprudential authority – the National Committee for Macroprudential Oversight, comprising representatives from the central bank, the Ministry of Public Finance, and the Financial Supervisory Authority – adopted last year a recommendation to the Government, seeking to improve financial discipline in the economy and the financial soundness of firms. I strongly believe that addressing these structural vulnerabilities in the corporate sector will significantly increase the number of bankable firms and enhance the financial inclusion of Small and Medium Enterprises. Last, but not least, the climate-related topics have become more and more prominent worldwide. The financial system should not ignore the effects of climate risks. Central banks and supervisory authorities have joined the scene. There is a significant interest at EU level in the role of sustainable finance, a High-Level Expert Group on Sustainable Finance being established by the Union. The Network for Greening the Financial 4  System, that brings together 34 members, out of which 8 are central banks and supervisory authorities, highlighted the role of climate risks as a source of financial vulnerabilities. Not only the increased frequency and severity of extreme weather can translate into economic and financial losses for the real economy and the financial system, but consequences can also arise from transitioning to a low-carbon economy. Governments’ climate policy, new technologies and consumer preferences will be the main drivers influencing the developments in carbon-intensive sectors.
And I would hope, on this evidence, that the future evolution of our approach to overall economic management would be in the direction of further improvements to our supply-side flexibility, rather than any retreat from the present emphasis on macro-economic stability. Of course I am well aware that a stable overall macro-economy does not - and cannot - mean equally stable economic conditions for every individual sector or individual business. A particular complication over the past few years has been the surprisingly persistent strength of the exchange rate against the euro, itself a reflection of the puzzling more general weakness of the European currency. This has contributed to an uncomfortable imbalance within the UK economy primarily between the euro-exposed sectors, which have been under consistent pressure, and the domestically-oriented sectors, which have by and large been doing relatively well. Understandably the suffering sectors and businesses tend to complain that monetary policy takes too little account of their position, often pointing out that inflation has for the past two years fallen somewhat below the target. The implication is that monetary policy has been tighter - interest rates have been higher - than was necessary, which, they say, in turn at least helps to explain the behaviour of the exchange rate. I hope you won't think me patronising if I tell you that I have genuine sympathy with their concerns. Indeed I very much admire the huge efforts that many of them have made to overcome the disadvantage coming from the strong exchange rate.

Given our starting point, with inflation somewhat below target and expected to remain so for a while, we are relatively well placed to weather the storm if it begins to blow more strongly. BIS Review 33/2001  3
BIS Review 3/2007  3  Key implementation issues I. What is the appropriate capital adequacy ratio? Under Basel I, the minimum capital adequacy requirement was fixed at 8% of risk-weighted assets which is expected to be the minimum even under Basel II. In Sri Lanka, we have specified the minimum capital adequacy to be at 10% from 2003, because it was considered necessary to have a cushion of additional 2%, so that any unforeseen risks could be covered to some extent. Under Basel II, the minimum capital adequacy ratio could be well above 10% or even lower than 10% if the bank concerned is absolutely sure that it can mitigate all risks that are associated with its banking operations. We will continue to use the yardstick of 10% for measuring the minimum capital adequacy ratio consisting of 5% for Tier I. The other related issue is “Will 10% be adequate to cover market and operational risks as specified in Basel II?” This is where the regulator is going to leave it in the hands of the banks, but insist that the two new areas of risks are covered and all risks in banking operations are calculated in an objective manner. It is also necessary for the banking institutions to go one step further and take into account the risks of their clients also in a meaningful manner. This is certainly a challenge for both the bank and also the supervisor.

The adoption of IRB approach would entail significant changes to their existing systems, the collection of extensive data as well as the fulfillment of many other qualitative and quantitative requirements. Such banks are advised to start building up the necessary data systems now itself in order to be able to qualify for the advanced approaches and to plan the application of the ratings for their credit management. The IRB approach will permit the banks to use their own estimates for the measurement of credit risk with regard to certain parameters. CBSL will stipulate the minimum qualifying criteria regarding the comprehensiveness and integrity of the rating systems, including the ability for those systems to produce reasonably accurate and consistent estimates of risk. This will be done in consultation with the industry and by announcing a timeframe for permitting the Foundation IRB approach and the submission of applications in 2007. Irrespective of whether the advanced approaches are used or not, the Central Bank encourages all banks to study carefully the more advanced risk management concepts and practices embodied in Basel II and consider adopting those relevant to their risk management purposes, even though they may not use them for capital allocation as such.
107(2), pages 407–437. O’Neill, J (2011), “It is Time to Re-define Emerging Markets”, Goldman Sachs Asset Management Strategy Series. Prasad, E, Rajan, R and Subramanian, A (2007), “The Paradox of Capital”, Finance and Development, Vol. 44(1). Reinhart, C M and Rogoff, K S (2008), “This Time is Different: A Panoramic View of Eight Centuries of Financial Crises,” NBER Working Paper 13882. Von Peter, G (2007), “International Banking Centres: a Network Perspective”, BIS Quarterly Review, December, pages 33–45. 10  BIS central bankers’ speeches  Annex: Charts and tables Chart 2  Chart 1 (a)  Gross portfolio equity inflows relative to lagged market capitalisation for G20 emerging markets(a)(b)  Gross portfolio equity flows to emerging markets in 2010  Cumulative flows since Jan 2010 $ billions) 90  Index, 31/12/1987 = 100 1,200 1,150  Dedicated EMEs  80  1,100  MSCI EM $ Index (LHS)  70 60  1,050  50 1,000 40 950  30  900  20  850  10 0  800 Jan 2010  Mar  May  Jul  Sep  Nov  Source: Emerging Portfolio Fund Research, Thomson Reuters Datastream and Bank calculations. Source: Institute of International Finance, Thomson Reuters Datastream and Bank calculations. (a) Flows to equity investment funds. (a) Chinese equity market capitalisation includes A, B and H shares. A-shares are currently available for purchase by domestic residents only but are included since we assume capital market liberalisation occurs in China over our forecast projection.

BIS central bankers’ speeches  19  Table 2 Projected equity home bias for G20 countries(a) (2010–50)(b)(c) Advanced G20  2010  2020  2030  2040  2050  USA  0.51  0.44  0.36  0.24  0.09  UK  0.53  0.47  0.41  0.33  0.22  Germany  0.41  0.33  0.26  0.17  0.03  France  0.53  0.46  0.38  0.27  0.13  Italy  0.45  0.39  0.34  0.31  0.23  Japan  0.81  0.75  0.67  0.60  0.51  Canada  0.59  0.53  0.46  0.35  0.22  Australia  0.70  0.62  0.53  0.41  0.26  Weighted average  0.56  0.49  0.41  0.30  0.16  Un-weighted average  0.57  0.50  0.43  0.34  0.21  Argentina  0.55  0.48  0.38  0.25  0.09  China  0.96  0.93  0.87  0.79  0.67  South Africa  0.78  0.74  0.68  0.58  0.45  Mexico  0.88  0.82  0.75  0.66  0.54  South Korea  0.82  0.74  0.68  0.61  0.51  Brazil  0.92  0.87  0.80  0.72  0.61  Turkey  0.87  0.81  0.73  0.64  0.52  Russia  0.97  0.91  0.83  0.73  0.62  India  0.99  0.98  0.95  0.89  0.80  Indonesia  0.97  0.95  0.91  0.84  0.75  Weighted average  0.93  0.89  0.84  0.77  0.68  Un-weighted average  0.87  0.82  0.76  0.67  0.56  Weighted average  0.65  0.62  0.61  0.57  0.49  Un-weighted average  0.74  0.68  0.61  0.52  0.40  Emerging G20  Total G20  Source: IMF International Financial Statistics, IMF WEO database October 2010, S&P Global Stock Markets Factbook (2010), updated and extended version of dataset constructed by Lane and Milesi-Ferretti (2007), Thompson DataStream, UN Census Bureau, Penn World Tables and Bank calculations.
For analogy purposes, I would like to bring an example: It is now for two years that the Bank of Albania has been organizing the yearly competition “The Governor’s Award for the best diploma thesis”. Last year, the third prize went to a student of the University of Shkodra for a very original thesis which introduced the potentials and opportunities of the Puka Region, the development of mountain tourism and the positive macroeconomic impact it will bring to the region. This paper was assigned a prize for the originality of the topic chosen to be explored and the economic impact its presentation may have. The thesis did not only seek to present a profitable business opportunity, but also make an assessment of the positive impact this investment would have on the life of the community. The positive influence on the latter is crucial for important strategic investors. We awarded this paper not only for its original exploration by a passionate student from Puka, but also to increase public awareness and promote this new and modern mentality. When a single student manages to produce this much, a university, a local community and all of us together have great potentials to achieve even more. I brought with me today a copy of this thesis. Dear participants, I tried to briefly discuss some issues that I personally find vital and benefiting for you and the Bank of Albania.

The opening of the border with Kosovo in particular has provided us with real opportunities to perceive the Northern Alps as a single complex with their continuity to Kosovo and why not to Montenegro. I think the completed airport, which  4  BIS Review 115/2008  could very well be used for the transportation of winter sports fanatics, is another strong point. It is the local authorities’ task, to undertake in co-operation with the local stakeholders projects and feasibility studies, which in a later time may be submitted and presented to the central authorities or the specialized international operators. I would like to inform you that at the moment, their interest is overwhelming and concrete. Time is ripe for you to increase the marketing of these potentials and point out their strong advantages accurately. Second, your district is well-known for being rich in minerals. I do not know if you have any geological inventories or maps which accurately identify the mineral resources. If you don’t, this is too late. The current price structure is very favourable and I believe that any reactivation of existing mines and the opening of new mines implies more employment, more hope for this region and fewer migratory movements. Third, your district, in particular the town of Kukës, finds itself in a crucial economic crossroad, not only in terms of roads but also of air. Unfortunately, statistical information related to cross-border economic and financial activity is missing. Nonetheless, I have to admit that the potentials are not being rightly handled.
But while central banks need to be mindful of the possible side-effects of their policies, I would caution against requiring them to make more granular distributional judgments. Low and stable inflation and smoothing output volatility are public goods that benefit all; technocratic central bankers should use the tools available to them to achieve that public good and avoid as far as possible taking views on distribution. Distributional considerations and decisions should remain the province of elected authorities that have many instruments to address these issues. 9  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  9  I have discussed some of the policy implications of a low natural rate for central banks generally. In the UK, of course, Bank policy is now focused on assessing and, where necessary addressing, the implications for the economy over our policy horizon – the next two to three years – of the UK’s forthcoming exit from the European Union. I don’t need to say too much about this today. The minutes of the MPC’s November meeting and the November Inflation Report give a detailed picture about the Committee’s current forecast and policy stance to which I fully subscribe. But there is one point that is relevant to the analysis I have just laid out on the natural rate. As I said earlier, the policy rate may need to depart from the natural rate if the policymaker is faced with a shock that creates a tradeoff – for example between bringing inflation to target and smoothing output volatility.

First, it decided to continue to support ample liquidity conditions by conducting its refinancing operations as fixed-rate tender procedures with full allotment, at least until mid-January 2012. Let me point out that the outstanding Eurosystem credit in our refinancing operations currently amounts to about € billion and has come down since last year. The total value of marketable securities already presented and approved for Eurosystem credit operations amounts to € trillion and our counterparties have at their disposal almost € trillion out of the overall total of  2  BIS central bankers’ speeches  existing eligible securities of about € trillion. Therefore, this confirms that there is no liquidity or collateral shortage for the euro area banking system. Second, the ECB resumed its government bond market interventions under its Securities Markets Programme (SMP) in August. Via these interventions, the ECB Governing Council aims to help restore a more appropriate transmission of its monetary policy stance in an environment in which key market segments, such as those for government paper, are dysfunctional. The interventions do not influence our monetary policy stance. In order to sterilise the impact of these interventions on the liquidity conditions in the banking system, we re-absorb the liquidity injected. Let me underline that the secondary market purchases are not, and cannot be used to circumvent the principle of budgetary discipline as a pillar of Economic and Monetary Union.
The major global banks have raised $ billion of new equity over the past few years and are on course as a group to meet the Basel III standards more than four years in advance of the deadline. In the UK, all major banks and building societies now have in place credible plans to achieve the Bank of England’s thresholds for capital and leverage. To finish the job, international regulators need to agree over the next year new rules for capital to be held in banks’ trading books, a simple leverage ratio and a guideline which governs the stability of banks’ funding. Alongside these efforts to increase resilience, our focus is on solving the problem of banks that are too big to fail. Systemic resilience depends on being able to resolve failing banks in a way that does not threaten the entire system. Fairness demands the end of a system that privatises gains but socialises losses. And simple economics dictates that the UK state cannot stand behind a banking system that is already many times the size of the economy. Moreover, without a credible means to resolve failing banks, regulatory Balkanisation will continue as national regulators seek to protect their own interests, threatening the efficient operation of the international financial system and accordingly London’s competitiveness. To avoid these risks, we need to make the resolution of global banks a real option. Successful cross-border resolution requires coordination and cooperation between authorities across multiple jurisdictions.

While today’s announcement is significant, it does not mark the end of history for the Bank of England’s market operations. We will continue to evolve our approach as the financial sector changes. In particular, we need to respond to two big questions. First, should the Bank of England allow non-banks to have access to our regular facilities? After all, our responsibilities for financial stability run much wider than the banking sector. Institutions that play a central role in markets, like broker-dealers, are obvious first candidates. We will also consider the case for opening them to other participants including financial market infrastructures. If the scope of access to central bank facilities increases, the scope of regulation can be expected to expand in a proportionate manner.13 Backstopping the collateral management of a range of institutions should reduce the need for the Bank to act as a Market Maker of Last Resort.14 Second, given that we host an international banking system and global markets, to what extent should the Bank of England provide liquidity in currencies other than sterling? As markets evolve, banks and markets here may need backstops in other currencies in our time zone before business opens for the Federal Reserve and after it has closed for the Bank of Japan. Although the Bank of England can supply limitless quantities of sterling, we rely on other central banks for access to their currencies.