samchain/econo-pairs-v1 huggingface dataset:
And there are clear and convincing economic arguments why – in the real world – injecting money directly into the economy is likely to provide a means of achieving that stimulus. One year on, there is a range of evidence – some relatively hard, some more circumstantial – that quantitative easing is having its desired effect. Asset prices have increased substantially, companies have made record recourse to debt and equity markets, confidence has recovered and inflation expectations remain firmly anchored. But there is still a long way to go. The bulk of our asset purchases have been made only over the last 9 months or so. Much of their effect on nominal spending and inflation is still to come through. We are likely to learn a lot about the transmission of those purchases and about their ultimate impact over the course of the next year. As you know, at its meetings in February and March, the Committee decided to maintain Bank Rate at 0.5% and to maintain the stock of asset purchases at £ billion. It is worth emphasising two important considerations underlying these most recent decisions. First, the portfolio balance channel implies that the primary stimulus from QE stems from the stock of past purchases, not the flow of additional ones. As such, maintaining the stock of asset purchases, together with the low level of Bank Rate, should continue to impart a substantial stimulus to the economy for some time to come.

The attraction of this class of models, as typified for example by Woodford (2003) and Walsh (2003), is that its relative simplicity and tractability means that it can be used to derive clear and precise policy prescriptions. And indeed that is the case when used to analyse monetary policy at the zero bound. The only way policy can gain traction at the lower bound in such a model is through influencing expectations – the most well known reference here being Eggertsson and Woodford (2003). This result stems from the fact that the economy behaves as if, in effect, there are only two assets in existence, typically modelled as money and bonds. Agents hold more money up to the point at which the marginal benefit from the liquidity services it confers equals the marginal cost: the nominal interest rate. At the zero bound, both the marginal benefit and marginal cost are effectively zero, and money and bonds become perfect substitutes. It follows that exchanging money for bonds at this point has no impact on activity or inflation. The economy is assumed – by construction – to be in a liquidity trap. As is well known, the optimal policy within this class of models is for the central bank to commit to low interest rates for an extended period and to a temporary overshoot of the inflation target. Exchange rate depreciations (Svensson 2001) and interest rate commitments (Krugman 1998, Woodford 2003) are examples of policy recommendations stemming from this result.
Indeed, credit rating agencies specifically identified a ‘public support uplift’ in their ratings. Nor was the reluctance of authorities to put banks into administration surprising. Administration results in a poorer and potentially disruptive outcome for continuity of functions critical to the economy. Where the bank is large and complex, it can be very difficult to split up the constituent parts. And the effects of putting all or some of the bank in to administration can spill-over to hit the financial system and the wider economy. Nowhere was failure more disruptive than for the liquidation of Lehman Brothers, where the FDIC lacked the requisite powers to resolve the firm in an orderly fashion. The process was disorderly, time consuming and expensive. And it was very contagious. It triggered the worst phase of the crisis. In the weeks following the failure, Reserve Primary Fund broke the buck, sparking a run on the US money market fund industry. More than five years on, the liquidation is still not yet fully complete. Fees paid to the administrators have, so far, totalled more than $ The sheer size and complexity of Lehman’s derivative book made it very difficult to wind-down. The FDIC estimates that, had a legal framework existed to put the firm through a resolution and receivership process, a quick resolution could have recovered far more value for unsecured creditors and, importantly, limited contagion to short term commercial paper and funding markets.

Which of the two ratios binds first depends on the kind of risks that banks are running. The leverage ratio automatically places tighter limits on expansions in the balance sheet through supposedly low-risk assets. The international community has made progress on the leverage ratio. The definition guiding how it should be calculated was agreed at the start of this year. This will provide the basis for banks to disclose the ratio over the next 3 years in the light of which the international community will decide in 2017 on the calculation of a minimum standard. A number of authorities, including the US, the Netherlands, and the Swiss, have already introduced or are considering a leverage ratio in advance of the international standard. In the UK, the Prudential Regulation Authority has already asked the eight major UK banks and building societies to take steps to achieve a leverage ratio above 3%. The Financial Policy Committee has been asked by the Chancellor to review whether a leverage ratio framework should be introduced in advance of the international framework. This could include a power for the FPC to vary the ratio to counter macro-prudential risks. The FPC will consult on the review and expects to publish its conclusions towards the end of the year. There is also important work underway to ensure the risk-weighted framework is robust. Reviews are underway to build a credible standardised approach to calculating risk-weights for banks’ trading activities and their loan books; this too should help reduce the system’s exposure to model risk.
For Kabwe Municipal Council, the main accountability and responsibility will be to maintain and preserve the tree and its surroundings to ensure that the area is well protected and cleaned. The Bank has also worked closely with Zambia Electricity Supply Corporation (ZESCO) who have kindly facilitated the provision of power to enable us light the MUKUYU TREE on a continuous basis. We have also worked closely with the National Heritage Conservation Commission whose input has been invaluable in providing insight into the history and status of the MUKUYU TREE as a national heritage site. On behalf of the Bank of Zambia Board of Directors, senior management and staff and indeed on my own behalf I wish to thank all our partners for the good cooperation and oneness of vision that has culminated in the commemoration and re-launch of the MUKUYU TREE today. Distinguished Guests Before I conclude my speech, I wish to pose a challenge to the general members of the public and in particular to the people invited to grace this occasion today. The MUKUYU TREE has been identified and depicted as a national monument under the Laws of Zambia. By this assignment the tree belongs to all ZAMBIANS, young and old alike. My challenge to you all is to cherish it and preserve it.

Libor: Entering the Endgame  Speech given by Andrew Bailey Governor of the Bank of England  Bloomberg Webinar, London and New York 13 July 2020  I am grateful to Alastair Hughes for his assistance in drafting these remarks and Paul Brione, Andrew Hauser, Thomas Horn, Will Parry and Edwin Schooling Latter for their input. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches  Introduction “‘The passing of summer,’ I thought. ‘There can be no summer in this land without cricket.’” So wrote the journalist and author Neville Cardus.1 Covid has deprived us of many aspects of our communal lives this year. It has meant no cricket for us until last week, and in the US still no baseball. And to prove that we share an obsession with summer pastimes, a former colleague from many years ago when I was seconded to the New York Fed gave me a book to read called ‘How Life Imitates the World Series’. Sadly, my speech cannot match that for importance. But a more recent summer tradition has been speaking on Libor, a now annual event for the past few years – but one I do not expect to be a permanent fixture. The time is fast approaching to draw stumps on the Libor benchmark, or for those to whom cricket is a mystery – after all not everyone appreciates a sport that can last five days and still end in a draw – we will soon be at the bottom of the ninth for Libor.
Andrew G Haldane: Credit is trust Speech by Mr Andrew G Haldane, Executive Director, Financial Stability, Bank of England, at the Association of Corporate Treasurers, Leeds, 14 September 2009. I would like to thank Paul Fullerton, Simon Hall and Salina Ladha for help in the preparation of this speech. *  *  *  It is good to be back in Yorkshire. I say back because I grew up around 10 miles north of here. When I left over 20 years ago, Leeds looked and felt very different to today. Nowhere is the contrast greater than in the financial sector. In 1995, almost 74,000 people were employed in financial and related business services, accounting for around 20% of employment in Leeds. By 2009 this had risen to over 116,000, or around 30% of employment. Today, Leeds has a legitimate claim to be the UK’s second largest financial centre. A short history of banking in Yorkshire The foundations for this success were laid much earlier. The history of banking in Yorkshire dates back over 250 years.1 Pease and Co of Hull, established in 1754, are thought to be Yorkshire’s oldest private bank. In the same decade, banks were founded in Leeds and Bradford. By the end of the 18th century, Yorkshire had a well-established network of over 40 banks in around 16 regional towns and cities. In the first two decades of the 19th century, private banking in Yorkshire continued to thrive, spreading to around 30 towns and cities.

But it is lack of trust – and hence credit – that may shape the recovery. Based on past evidence, as the Governor has noted recently, we might anticipate a protracted period of repair. Repairing trust – the low road to reform So what might be needed, beyond time, to repair trust in the financial system? A raft of reforms to the financial system, nationally and internationally, is currently being assembled. These measures will aim to strengthen banks’ financial resources, risk management practices and governance. They are about bringing regulatory rules into the 21st century. This is the high road to reform – for example, higher buffers of capital and liquidity and higher standards of risk management. If successful, these reforms will help cleanse bank balance sheets. It is an open question, however, whether these efforts will be sufficient to restore public trust in the financial system. One reason why regulation might not be the whole answer is that trust in financial regulation is itself one of the casualties of crisis. Regulation is seen by some as part of the problem, not the solution. More generally, in repairing public trust, it would be preferable if banks were seen to be initiating root and branch reform themselves, rather than having it thrust upon them by regulators. This would be the low road to reform. Low because it would not require any new or complex regulatory apparatus. Low because it would not need international negotiation or agreement on the contractual fineprint.
Culture can be an abstract concept, but the simplest way to describe it is how a bank employee will behave when there is little threat of “being caught”. This is also sometimes referred to as “soft laws”. The compliance function can help to shape and internalise “soft laws” through an effective monitoring and assessment framework. With a pulse on the ground, it also provides an important feedback loop to senior management and the board on actions that can be taken to reinforce a strong tone from the top. Compliance officers can also galvanise broader industry initiatives, working with bodies like the Financial Services Professional Board to develop constructive codes of ethics and conduct for the industry and encouraging their adoption. Earlier, I alluded that the compliance function can be a strategic business proposition. But this can only be achieved through sufficient investment in capacity building in the compliance function, in terms of both systems and resources. One aspect that tends to be overlooked by institutions in managing compliance risk is the importance of effective channels for communication and information flows between various control functions and the business departments. The closer the cooperation between various functions within the bank, the easier it is to share relevant information and the higher the chances for an early identification of risks. This will improve the quality and promptness of the bank’s response to any occurrence of risk or non-compliance. It is also crucial that institutions invest sufficiently in talent development within the compliance function.

• The effects on the exchange rate may vary according to international conditions - interest rates in other countries - required rates of return and risk premiums in financial markets  SG Gausdal 31.01.03  Norges Bank has one instrument: the interest rate. It is set to achieve the operational target for monetary policy - an inflation rate of 2½ per cent over time. An increase in the interest rate will normally contribute to reducing inflation by curbing demand for goods and services and by strengthening the krone against other currencies. An interest rate reduction has the opposite effect. Inflation targeting means that monetary policy contributes to smoothing fluctuations in the economy. This implies that the interest rate is increased in response to pressures in the economy and a risk of higher inflation, and that the interest rate is reduced when growth is sluggish and the outlook points to lower inflation. This objective is also expressed in the Regulation on Monetary Policy. The effect of the interest rate on inflation is uncertain and may vary over time. Its impact is partly dependent on the debt rate in the private and public sectors, the situation in the labour market and the impact of a change in the interest rate on the exchange rate. The effect of interest rate changes on the exchange rate may vary according to external conditions, such as foreign interest rates, required rates of return and risk premiums in international financial markets.
Villy Bergström: Should the Riksbank be concerned about asset prices? Speech by Mr Villy Bergström, Deputy Governor of the Sveriges Riksbank, at a Breakfast Meeting arranged by Round Table in Sundsvall, on 11 April 2000. *  *  *  The Swedish economy is growing more quickly than for a very long time. In 1999, GDP increased by 3.8% and during the coming three years, growth is expected to average almost 3.5%. At the same time, the prerequisites for a long-term favourable development appear better than for many decades. Almost all economic indicators are pointing in the right direction. Despite a very strong upswing, the long-term inflation expectations remain stable and close to the target for monetary policy. Central government finances are in surplus for the second year running and despite a planned tax reduction of over SEK10 billion this year, the surplus in the central government budget is expected to total at least 2% of GDP. From having had the next poorest budget balance in the entire EU in the early 1990s, the budget balance in our public finances is now among the strongest in the whole union. Since the mid-1990s, central government debt has decreased from 80 to 70% of GDP. Our country’s financial balance, ie the current account, has at the same time shown a surplus for a number of years and the foreign debt has fallen from 40 to 20% of GDP during this period.

Firms as a whole still strongly feel that they have excess capacity and employees, and that they should reduce their debts to restore financial soundness. Nevertheless, the number of firms that take positive action, such as increasing the amount of fixed investment, is increasing gradually, especially in high-growth sectors. Regarding employment conditions, although the decrease in the number of employees and in wages is slowing, efforts by firms to reduce personnel expenses have prolonged the severity of households’ income conditions. As for the outlook, public investment is likely to increase for some time. This, along with the favorable financial environment created partly by the Bank’s monetary easing, is expected to continue underpinning the economy. Moreover, net exports are likely to follow an upward trend reflecting the recovery of overseas economies, and it is also highly probable that business fixed investment will increase gradually with an improvement in corporate profits and sentiment. However, housing investment is expected to continue declining moderately, and there seems to be no substantial change in firms’ stance to reduce personnel expenses. Hence, it may take some time for households’ income conditions to improve and, in turn, for private consumption to recover. In addition, since firms’ prospects for sales remain modest, careful monitoring is still required to determine whether the recovery in business fixed investment is sustainable and whether it is likely to spread to a wider range of industries.
Such a performance – growth above 2% for two consecutive years – has not been observed since 1999-2000. In 2006 alone, over two million jobs were created in the euro area, which brings to 13 million the total number of jobs created since the introduction of the single currency; this figure is slightly higher than that for the United States over the same period. After a catch-up phase in which growth was significantly above its long-term trend, the euro area’s GDP is currently increasing at a rate close to the economy’s potential. This growth is balanced since all of the components of demand are contributing to it in a harmonious fashion. In the first phases of recovery, the contribution of external demand was decisive. But productive investment and, almost everywhere, household consumption are now supporting the business cycle. This has enabled and led, in most countries, to a welcome consolidation of public finances, with no adverse impact on the economy. Concerning the future, the outlook for Europe is dominated by three questions, varied in nature. The first naturally concerns the international environment. Forecasts for world growth remain good. At this juncture, the US economy appears to be absorbing the economic and financial impact of the slowdown in the property market. Emerging market economies displayed encouraging resilience in the face of the two episodes of financial volatility that affected international equity markets in May 2006 and March 2007.

Other services were deeply impacted by the shutdown of non-essential services, and other sectors – such as manufacturing – were adversely affected by disruptions to the global supply chain. Although GDP still posted positive growth in the first quarter, the contraction in the second was broadly at par with that registered in the euro area. Incoming data suggest that economic activity began to recover and sentiment improved in the third quarter as the most disruptive containment measures were lifted, Page | 1 Document Classification: Public  but rising positive cases and newly introduced restrictions will likely weigh on activity in the fourth quarter, so that confidence among consumers and business is likely to take longer to recover than previously anticipated. During these uncertain times, projections have become increasingly difficult, as economic activity is intrinsically linked to the evolution of the pandemic, its impact on confidence of consumers and businesses, and very importantly to policy support and prospects of a medical solution. Unlike the great financial crisis of 2008-2009, the fiscal response has been prompt and significant, aided by the fiscal space accumulated in recent years. Liquidity measures such as tax deferrals, moratoria on loan repayments and the Malta Development Bank COVID-19 Guarantee Scheme, have all been fundamental in limiting bankruptcies by providing liquidity support. In addition, the Wage Supplement Scheme has been very successful in avoiding higher unemployment. Additionally, the voucher scheme has been a welcome boost to support domestic consumption, and provided some relief to the retail and hospitality sector during summer.
In connection with the outbreak of the crisis, China stopped the appreciation of the renminbi that had been going on for several years and instead pegged the renminbi to the dollar until June last year. This meant that China’s currency followed the depreciation of the dollar that came when the worst of the crisis was over and investors once again began to turn to higher-risk assets, for example by investing in assets in the emerging economies (Figure 3). 14  My own calculations in accordance with the method used by the IMF to identify major falls in house prices in WEO in October 2009 (a fall in house prices is defined as major if a four-quarterly moving average of the annual growth in real house prices falls below –5 per cent) shows that 2/3 of the countries that experienced falls in house prices had large current account deficits while only ¼ those that did not experience price falls had deficits. 6  BIS central bankers’ speeches  Figure 3 China’s nominal exchange rate against the dollar and real and nominal effective exchange rate indices USD/CNY and index 2005=100 10  90 Exchange rate USD/ CNY (left) Real effective exchange rate (right) Nominal effective exchange rate (right, inverted)  9  100  8  110  7  120  6  130 05  06  07  08  09  10  11  Note.

In particular, a one-off shift in the level of wages as part of the adjustment to a transitory unexpected increase in the price level does not imply a trend shift in the path of underlying inflation. Moreover, in examining the implications of the current increase in energy prices, it is necessary to take into account the full macroeconomic implications of adverse external shocks and supply shocks in the energy sector, including the associated headwinds for the economic outlook and the negative wealth effect associated with a deterioration in the terms of trade. Through these mechanisms, an energy price shock can simultaneously raise headline inflation but exert downward pressure on the path of underlying inflation. In addition to rate forward guidance, calibrating the volume of asset purchases also plays an important role in ensuring that the monetary stance is sufficiently accommodative to deliver the timely attainment of our medium-term two per cent target. In particular, the compression of term premia through the duration extraction channel plays a quantitatively-significant role in determining longer-term yields and ensuring that financing conditions are sufficiently supportive to be consistent with the delivery of our medium-term inflation objective.2 In conclusion, in addition to learning from the research presented and discussed at this year’s event, I look forward to seeing how this year’s strategy review (and our ongoing implementation of the strategy) shapes the research that will be presented in future editions of this annual conference series. With that, let me offer my best wishes to all conference participants for an exciting two days.