samchain/econo-pairs-v1 huggingface dataset:
However, monetary policy will do its part to ensure the macroeconomic and financial stability that can help in achieving progress in these areas. Moreover, even with respect to macroeconomic stability, monetary policy could use an assist from fiscal policy. It is important that monetary policy and fiscal policy work together and not at cross purposes to be able to bolster the economy when it needs support. Thank you for your kind attention. I would be happy to take a few questions. 1 See New York City’s Return from the Brink, Remarks at the Lotos Club, October 19, 2016. 2 Raj Chetty, Nathaniel Hendren, Patrick Kline and Emmanuel Saez. “Where is the Land of Opportunity? The  Geography of Intergenerational Mobility in the United States.” Quarterly Journal of Economics, Vol. 129, No. 4, 2014. 6/6  BIS central bankers' speeches

In fact, I would say that there is no other international regulatory initiative that gives more attention to these questions. For the sake of brevity, I will give you just three examples of how the new framework encourages banks to consider how risk determinants change over the cycle and in stressed conditions. First, banks are expected to use sufficiently long time series of historical data in designing their rating systems. The aim is to capture as much data as possible about how relevant factors have behaved in the past. Furthermore, when assigning ratings to borrowers, they should also consider how the borrower’s ability to meet contractual obligations may change in the future as a result of possible changes in economic conditions over the course of the cycle. Second, banks’ LGD estimates should reflect economic downturn conditions. The potential for realised losses to be higher than average during times of high default rates may be a material source of unexpected credit losses for some exposures. The Committee has elaborated principles that banks are expected to fulfil in this respect, and will continue to monitor industry practice and encourage the development of appropriate approaches to this issue. Third, Basel II places much emphasis on stress testing in the assessment of capital adequacy. Indeed, the new framework sets specific stress test requirements for banks using the advanced approaches to credit risk, but also encourages the use of these tests more generally.
Along with the low demand of businesses and households, its performance reflects the selective and prudent behaviour of banks in lending. Regarding lending problems, the Bank of Albania deems that banking system’s balances are sound, sufficiently liquid, and well capitalised to comply with the economy’s demand for monetary assets. The positive position of its balances triggered the lending growth during the past years, while many countries in our region experienced contraction of lending. The banking system has reviewed and tightened lending standards during the last years; this behaviour to enhance the financial discipline of the economy is welcomed and shall positively support the long-term growth of Albania. On the other side, credit performance is increasingly experiencing the lack of demand, which is triggered by the consumers and businesses reluctance to carry out expenses and investments. Bank of Albania deems that, notwithstanding the cyclical situation of Albania’s economy, the perspectives on medium and long-term development remain positive. This is reflected by the interest of foreign investors to increase their exposure toward the Albanian economy. In particular, economy sectors related to exports, tourism and agriculture, which serves to the domestic and regional markets, provide unused development potentials. Bank of Albania deems that, within the sound business’ logic parameters, the Albanian entrepreneurs and consumers have room for a more active approach toward the growth of investments and their consumption. Financial markets showed low interest rate fluctuation and operated under sufficient liquidity terms in the second quarter of 2012.

Against this background, the authorities had two options: either to use the fact that Malta did not meet the fiscal criteria to maintain the status quo and delay the implementation of sensitive reforms, with the risk of undermining growth prospects; or to use the adverse impact of globalization on Malta’s current account and the vulnerability of the fixed exchange rate regime to highlight the urgent need for a faster pace of reform, while holding out the promise of the expected benefits of the euro. The authorities chose the latter approach, including a rather ambitious programme of fiscal consolidation and a unilateral commitment to maintain the Maltese lira/euro exchange rate at the central parity rate in ERM II. This appeared a natural way to buttress the economy’s long record of exchange rate stability, though it was also dictated by the need to counter harmful speculation at the time about the level of the exchange rate. Three years after EU accession, that bold decision appears to have paid off. Economic growth rose to 3.3% in 2005 and 2006, and is expected to stay around that level; the unemployment rate stabilised, then eased slightly; and FDI flows, which have always been important, strengthened further. The gap between productivity growth and wages narrowed to the point that unit labour costs are now increasing negligibly or falling, depending on the measure used.
John C Williams: Monetary policy strategies for a low-neutralinterest-rate world Remarks by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the 80th Plenary Meeting of the Group of Thirty, Federal Reserve Bank of New York, New York City, 30 November 2018. * * * As prepared for delivery I would like to start by thanking Tharman for the invitation to participate in this panel of esteemed current and former policymakers. I am also pleased to continue the long tradition of hosting the Group of Thirty at the Federal Reserve Bank of New York and very much look forward to this morning’s discussion. In my remarks, I will focus on the following question: What long-run monetary policy strategy is best suited to anchor inflation expectations, foster price stability, and promote maximum employment? I emphasize the phrase “long-run” because I will focus on the features of a systematic policy framework, rather than tactical policy decisions. This topic is not only of academic interest: As was recently announced, the Federal Reserve is embarking on a review of its long-run monetary policy framework.1 I will argue that the global decline in the neutral rate of interest over the past quarter century poses significant challenges to maintaining wellanchored inflation expectations in a standard inflation-targeting regime. I will then lay out some alternative policy strategies that have the potential of providing a solid anchor for inflation expectations—even with a very low neutral interest rate—while preserving broad continuity with current inflation-targeting practice.

Leaving aside differences across countries, a long and challenging process of economic transformation brought countries in the region significant improvements in incomes and living standards. Full membership of the EU – or the prospects of accession – provided an important stimulus for the process of transformation as well as an anchor of stability. In Western Europe, completion of the three stages of EMU led to the establishment of the European Central Bank (ECB) and the introduction of the euro in January 1999. Having started originally with 11 participating countries, the euro area has since expanded to include 17 EU Member States including some previous transition economies, namely Estonia, Slovenia and Slovakia. The changes Europe has seen over these past 20 years are enormous. Equally enormous have been the challenges along the way, not least of course due to the global financial crisis. But there have also been enormous achievements. In my remarks today, I would like to take stock of some of those achievements and focus on three main aspects of the process of economic convergence in Central and Eastern Europe. BIS central bankers’ speeches  1  Three main aspects of the process of economic convergence 1. Nominal and real convergence: what has been achieved? The first aspect of convergence relates to developments in terms of nominal and real convergence between the countries of Central and Eastern Europe and the euro area.
The bail-in changes the ownership of the group but it does not affect the balance sheets of the subsidiaries. Contrast Lehmann. 2  BIS central bankers’ speeches  That doesn’t mean there is nothing to do. Far from it. For example, firms (legal entities) issue bonds not only in their home county but in a host of other jurisdictions. We shall need the documentation of bond issues by banks and by their holding companies to make clear in terms that they may be bailed in or subjected to another type of resolution operation by the firm’s home authorities; at the consequent change of ownership does not trigger “default” or ‘control” clauses. That should not be a high hurdle. It is equivalent to incorporating Collective Action Clauses (CACs) in sovereign bond documentation. There is also a debate about which particular kinds of creditor claim should be subject to bail-in via resolution. Indeed, this is one of the key questions in the Commission’s consultation. One thought on this. It seems to me that the approach to putting losses on to different types of creditor should probably be the same whatever the resolution tool used and, indeed, the same as in a standard insolvent liquidation. That would suggest that one way of addressing proposals to “exempt” some types of claim from bail in, and to establish a hierarchy amongst other types of claim subject to bail-in, would be to alter the creditor hierarchy in insolvency law.

In other cases, where a business is rotten through and through, a more “traditional” break-up of a group may be needed, perhaps using a “bad bank” in some cases. Planning for that will not be easy, and so for those extreme cases there is a special need somehow to ensure continuity in the provision of absolutely critical services to the economy. In the UK, that is one way that ring-fencing fits into resolution planning. Implications for supervision All this has important implications for prudential supervisors. In the first place, supervisors get some allies: debtholders. The prospect of taking losses will incentivise bondholders (and fellow banks) to monitor the risks taken by banks – pricing or rationing accordingly. This is market discipline: an extra line of defence. Risk being priced into bank bonds will not, as some suggest or threaten, kill the market. It would be uncertainty  4  BIS central bankers’ speeches  about the regime governing what happens in the event of distress that would kill the market because that kind of uncertainty could not be priced. Supervisors won’t be idle though. Resolution needs preparation. Hence the international agreement that firms should prepare Recovery Plans and contribute to Resolution Plans. To be clear, while the firms will own the Recovery Plans, the authorities will design and own the Resolution Plans. It has to be that way. To a much greater extent than ever before, supervisors will need to work backwards from the end game, working with resolution authorities.
BIS central bankers’ speeches  5  forward, banks will destroy value. This is not the sign of a vibrant banking system ably supporting the real economy. The last time price to book ratios were this low was in the euro-area crisis in 2011/12 and before that in the global financial crisis in 2008. In those cases, particularly the latter, the fall in banks’ price to book ratios reflected concerns about their resilience and indeed their solvency – that is, whether they had sufficient capital to back the riskiness of their assets. Low price to book ratios were accompanied by very high debt spreads on bank debt for the same reason. This time round, banks’ low price to book ratios are accompanied by relatively low debt spreads. 12 In the main, they probably do not reflect concerns about banks’ resilience, which has improved significantly since the crisis. The FPC and PRA Board, in 2014 and 2015, subjected the UK banking system to severe but plausible hypothetical stress tests. The 2014 test was centered on a sharp contraction in UK economic activity – in the test house prices fell by 35% and CRE prices fell by 30%. The 2015 test featured a global slowdown emanating from weak growth in emerging-market economies. The results of both tests showed that, on the whole, UK banks would be able to withstand these scenarios and continue lending to the real economy. Therefore, the current low price to book ratios probably reflect concerns about banks’ future prospects.

HKMA, as both a banking regulator and market facilitator, has the role of creating a conducive environment for this to happen. Therefore, we have launched a new Fintech 2025 strategy recently and will work hand in hand with the industry along this fintech journey. 18. Of course, we are mindful that technology can be a double-edged sword. If done properly, technology can enhance financial inclusion. But there are always risks. For example, the improper use of artificial intelligence and machine learning may lead to biased outcomes and even exclusion. Ill-constructed “model-based” lending could unfairly discriminate against some SMEs. And from a conduct risk perspective, customers could be advised to invest in products not in their best interests. Therefore, it is necessary to properly manage such risks and ensure fairness in the algorithms through rigorous validation and testing. 19. In other words, building a smarter financial system is not just about how much technology content we inject into it. What is more important is whether the outcome for customers is more inclusive and efficient, and whether banks can better manage the risks involved. 20. If we look at another key development priority pursued by the HKMA – Green and Sustainable 2/4  BIS central bankers' speeches  Finance – similar financial exclusion concerns could also arise. It is important that when we gear towards a greener financial system, we should also have financial inclusion in mind. This is the third role of the financial system that I want to talk about. 21.
Through the Accelerator and the Bank’s broader Fintech work, we have made valuable connections with important parts of the financial and technology sector beyond the regulatory perimeter – relationships that could matter greatly in the years to come. And those engagements with FinTech firms have also exposed central bankers to some very different ways of working and thinking: more agile, more willing to experiment, less bound by convention. Internal ‘hackathons’ run by our Technology department along similar lines, and aimed at identifying innovative solutions to Bank-specific problems, have been extraordinarily popular and have shown central banking officials to be capable of much more radical thinking than is sometimes supposed. The firms we have worked with have also valued the experience, giving them insights on the wider application of their technologies, and the needs and thought patterns of regulators and policymakers. Our feedback has been honest: positive where that is due, but also highlighting challenges or gaps where they are evident. And our work has in turn been part of the broader effort by the UK authorities to support and guide the sector. 9  All speeches are available online at www.bankofengland.co.uk/speeches  9  The latest wave of innovation in financial technology has shaken up traditional thinking about how to deliver financial services, defining the pace and shape of innovation in what has sometimes been quite a slow-moving industry technologically-speaking.

And the results and key findings are published on the Bank’s web pages, and factored 7  See for instance Ian Hathaway’s Brookings study of accelerator performance at https://www.brookings.edu/research/acceleratinggrowth-startup-accelerator-programs-in-the-united-states/. 8 Framework adapted from Susan Cohen ‘What Do Accelerators Do? – Insights from Incubators and Angels’ innovations’ (Innovations, volume 8, number 3/4, MIT Press). 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  into the Bank’s future work programme. Firms we have worked with have been invited to join the Bank’s FinTech community, which meets periodically to share insights and assess developments in the sector. The Bank’s FinTech Accelerator: what have we done? The Accelerator has done quite a lot in a short time. In the 16 months since the Accelerator was established, it has completed 9 PoCs with 10 firms across three cohorts (Table 2). And we are announcing a further cohort of 4 PoCs today – the details of which I will come back to shortly. In total, some 200 firms have applied to work with us across a wide range of disciplines. The process is resource intensive for both sides. But our broader interactions with those firms, even those not successful in their application, have been of great value, allowing us to reach a much wider external audience keen to interact, collaborate, teach and learn with us. The PoCs span most aspects of central banking, but can be grouped together into four broad technologies: distributed ledgers; data storage and analysis; machine learning; and cyber security.
Luis M Linde: Snapshot of the Spanish economy within the international environment Testimony by Mr Luis M Linde, Governor of the Bank of Spain, before the Parliamentary Committee on Economic Affairs and Competitiveness, Madrid, 17 June 2014. *  *  *  Ladies and gentlemen, I appear before this Committee in connection with the presentation of the Banco de España Annual Report for 2013. I will briefly review the international economic environment before setting out developments in the Spanish economy, which has been characterised by a gradual recovery in activity and progress in the internal adjustment process. I will then address aspects relating to the situation of and outlook for the banking system, concluding my testimony with some thoughts on the challenges our economy faces in seeking to set sustainable growth firmly in place. The international environment In 2013 the global economy grew by around 3%, slightly down on the previous year, although it did move on a gradually recovering path which is expected to hold in 2014. The euro area initiated a phase of recovery in 2013 Q2, starting then to emerge from the recessionary phase affecting it since late 2011. This recovery has been marked by the strengthening of the developed economies – particularly in the United States, where expectations have held that monetary conditions are progressively normalising – and by lesser momentum in the emerging economies, central to which is the moderation of growth in China.

On the latest available data for May, the official number of registered unemployed fell by almost 112,000, placing the year-on-year rate of change at –6.5%, 0.8 pp better than in April. Social Security registrations increased this same month by 198,000, or at a year-on-year rate of 1.6%, 0.4 pp above the growth recorded in the previous month, marking four consecutive months of growth. This change in the Spanish economy has arisen from a combination of external and domestic factors. Let me take the former first. The external boost to recovery in the Spanish economy First, the rise in activity and global trade in the second half of 2013 and the resumption of economic growth in the euro area shaped a favourable environment for our exports. Second, a favourable impact has also been exerted by the measures adopted by euro area Member State governments in terms of fiscal consolidation and the approval of structural reforms, particularly visible in those economies that were subject to financial tensions. The support programmes for Greece, Ireland, Portugal and Cyprus also unfolded favourably. Indeed, Ireland and Portugal have already exited their respective financial assistance programmes without resorting to any additional precautionary mechanism. Greece, for its part, posted a primary fiscal surplus in 2013, indicating that its public finances have been redressed. But the challenges ahead remain significant, as highlighted by the European Commission in the annual revision of the exercise on macroeconomic imbalances within the area. Measures by the ECB are contributing to shaping a setting favourable to recovery.
Thanks to the reforms in the 1990s, it is now easier than it was 30 years ago to deal with high inflation. Firstly, monetary policy now has a different mandate and a constitutional independence that enables us to act decisively to counteract high inflation. Still, the monetary policy assessments are not easy. The high level of indebtedness is likely to mean that interest rate sensitivity in the economy is greater than before, and different – public finances are less affected, but households and companies are more affected. This composition makes it likely that a given interest rate increase will have a greater effect on demand and thus on inflation. Secondly, the period of inflation targeting has led to long-term inflation expectations now being much better anchored. In the early 1990s, high inflation had been  13 [16]  built into the expectations of economic agents in a completely different way. If prices and wages rose too much in relation to the rest of the world, it was expected that problems with cost crises and rising unemployment would be solved by writing down the value of the krona, that is, through devaluation. Thirdly, strong public finances are now a major advantage. This has increased the market's confidence in Sweden’s ability to keep public finances in order and fiscal policy is not feared in the same way as in the 1970s and 1980s to be a contributing factor in itself to sustained high inflation.

It also seeks to enhance regional connectivity by reducing behind-the-border non-tariff trade barriers and promoting consistency in regulation across all the member countries. Singapore views the TPP, along with the RCEP, as complementary tracks that will lead towards increased regional integration, and eventually, to a Free Trade Agreement of the Asia Pacific. The recent decision by Japan to join the TPP will further reinforce the TPP as a platform for broader economic integration across the Pacific. With Japan’s inclusion, the TPP’s membership has now expanded to 12 countries. This represents nearly 40 per cent of the global economy and one-third of world trade. As you all know, joining the TPP is a key element of the three-arrow strategy embodied in Abenomics. The prognosis for Japan has improved considerably compared to six months ago. After stagnating for much of last year, the Japanese economy rebounded strongly in the first quarter of this year, with GDP growth of 3.5 per cent on a pick-up in consumer spending. Growth forecast for the whole of this year has been progressively raised, with room for further upward revision. Sentiments have improved strongly since the announcements of aggressive monetary and fiscal policy measures to revive the Japanese economy. The sharp depreciation of the Yen has also helped to boost expectations for GDP growth and corporate profits. One example of this is Toyota Motor. It has reported consolidated operating profit of 1.3 trillion yen for the 2012 business year, about 3.7 times that of the previous year.