samchain/econo-pairs-v1 huggingface dataset:
*** The last few years have already been littered with outstanding achievements. It was not so long ago that most people doubted that the single currency would ever see the light of day. Then, when they saw that it would, they speculated that only a few countries would be able to join. But they underestimated the resolve of European governments to be part of this great step forward in Europe’s history. Since then, we have witnessed the two changeovers; the introduction of the euro in book-entry form and then in the form of banknotes and coins. Both went smoothly, not because they were easy, but because of the hard work of all involved. And of course, for nearly five years now, we have had a single monetary policy conducted by the European Central Bank for the euro area. During this time, the Bank has not been without its critics. I have not been without my critics. The nature of that criticism depended on which newspapers you read. If you read the Anglo-Saxon press, then we paid too much attention to monetary growth. It seems that money shouldn’t matter for monetary policy. If you read the German press, well the story was different. Some said we communicated too little. Others said we communicated too much. When you are flanked on both sides, then you must be somewhere in the middle of the park. I conclude from this that we must have positioned ourselves more or less right.

They signed up to a package, a clear set of rules, including a Pact. This is a contract not just among governments but a contract with every single citizen of the euro area. It is on the basis of this contract that they have accepted the loss of their monetary sovereignty. And it is on this contract that the confidence in our new currency, not just of European citizens, but also of markets and of those on the outside looking in, is based. If you break this contract, this confidence will be lost. I acknowledge that these are not easy times, that conditions are adverse. But the difficulties that some of you now face were not entirely unforeseen. Not unforeseen when the Pact was signed. Not unforeseen when the conditions were more favourable. You were warned. The rules were not designed just for the good times, but also for the bad. The difficulties that some of you now face do not provide grounds for tinkering with the rules. They call for their implementation. The rules are there to help not to hinder efforts to put the house in order. They should be allowed to do what they were designed for. Otherwise I fear the Pact will unravel, the contract with the people will be broken. Without the right foundations, you cannot build a stable house. I hear some of you say that the house needs more than stability. It also needs growth. Of course you are right. Stability and growth go hand in hand.
Hence, on financial sector surveillance, I support the idea that all systemically important economies need to participate in financial sector surveillance or FSAP, including the stress testing, to support the global surveillance objectives. As for the overall global surveillance, we need more effective role of the IFIs, in particular the IMF. Effective surveillance means the capacity to ensure right policy actions by the public sector and sufficient risk awareness and management by the private sector so that policies and market responses generate positive feedbacks. Underpinning effective surveillance is of course the credibility and legitimacy of the governance structure of the IFIs. In this regard, I believe that we all need to be sincere in pushing for continued improvement of the IMF for it to be a truly credible and effective organization for surveillance. 2  BIS Review 34/2010  Dealing with the inherent instability: developing deep and broad financial markets and a multi-currency system I’d like to emphasize that even if we have achieved all the above and embraced good global citizenship, it is almost certain that there will be the next crisis. But, hopefully, this will not happen in the immediate future, and it will perhaps come from different sources of vulnerabilities. So, it is imperative that both the public and the private sectors remain very vigilant and risk-focused in identifying the changing nature of risks and new sources of vulnerabilities. The last point I’d like to touch upon is on the vulnerability in the current international monetary system.

As in the case of sub-prime markets, risk awareness was not adequate by suppliers and demanders of financial instruments and no preemptive action was taken despite some very risky characteristics. The responses by crisis countries to prevent the next crisis were no different from what Asian economies did more than ten years ago. The calls made by the G-20 Leaders include putting more focus on financial stability, strengthening financial sector regulations and supervision, enhancing surveillance mechanism at both individual and international levels, especially more effective surveillance role and liquidity support by the IFIs, particularly the IMF, just to mention a few important initiatives. Please allow me a few comments on a few issues that I’d like to highlight. What has been done and what more needs to be done Effective surveillance: being good global citizen One of the immediate responses to the crisis has been to strengthen effective surveillance capacity at national and international levels. We are of course on the right track in this effort to create a more robust and effective surveillance system with a view to ensuring timely policy actions. Tackling the problem at an early stage not only helps lessen the chance that micro shocks can adversely affect the macroeconomy, but also safeguards against spillovers from one country to the rest of the world. In today’s globalized world, this spirit of good global citizenship is essential.
Given Facebook’s pre-existing network of around 2.5bn users, Libra if introduced could very quickly become systemically important.14  So, whilst any benefits such a proposal might bring would be magnified, so too would the risks. That means the regulatory community must consider those risks carefully before a stablecoin achieves a systemic footprint. All are subject to strong ‘network effects’ – the value of money to me is in part determined by others’ willingness to accept it as a means of payment. The bigger the network of people willing to accept it, the more useful that money is. That is why reserve currencies emerge. 14  9  All speeches are available online at www.bankofengland.co.uk/news/speeches  9  And given the potential and likely use of stablecoins in cross border payments, we are considering these risks internationally within the Financial Stability Board, which will report this year on developing regulatory recommendations with respect to stablecoins. Some of these risks pertain to ensuring that users can have confidence in the end to end resilience of the system for transferring the coins between users, and here the principle of same risk same regulation applies. Such systems, though they use different technology, must provide the same end to end reliability that I referred to above and that we require of payment systems that use commercial bank money.

And 97% of the money we use, for transacting and storing our wealth, takes the form of electronic claims on banks – what we call ‘commercial bank money’. We use these different forms interchangeably and without really knowing – or needing to know – what is behind them and why they are reliable expressions of the social convention that is money – why they can be  1  The meaning of pound sterling has evolved over time but is thought to date back 1,200 years and referred to physical weight of silver coinage. 2  All speeches are available online at www.bankofengland.co.uk/news/speeches  2  transferred, will be accepted and will hold their value through time. It is our job, at the Bank, to ensure those things. But the forms money takes in society is not fixed. Those forms change as the structure of economies changes, as the ways in which we transact with each other change, as technology makes new forms possible. We think of medieval England as a society using state issued metallic tokens – coins stamped with the monarch’s head – as its main form of money. But transferable debt obligations, recorded on notched sticks of wood, the ‘tally sticks’, also functioned as money, not for day-to-day use, but for large transactions.2 We think likewise of the gold standard period, following Sir Isaac Newton’s coinage reforms, as one in which metallic money dominated.
Chart 5: Guidance has reduced the correlation between economic uncertainty and interest rate volatility 10  Economic uncertainty and option-implied volatility of 3 month rates 1 year ahead 3m rate standard deviation 180 160  2000-August 2013  140 120 100 80 60 40 August 2013 EU referendum  20  EU referendum - latest  0 -2  -1  0 1 2 3 Economic uncertainty (deviations from average)  4  5  Sources: Bloomberg Finance L.P., ICE, Bank calculations and Haddow et al, ibid. 10  The indicator of economic uncertainty is based on the principal component from seven measures of uncertainty: FTSE and sterling option-implied volatility, dispersion of company earnings forecasts and among forecasters’ growth projections, proportion of companies reporting that uncertainty is limiting investment, households’ unemployment expectations, and number of press articles citing ‘economic uncertainty’. See Haddow, A, Hare, C, Hooley, J and Shakir, T (2013) “Macroeconomic uncertainty: what is it, how can we measure it and why does it matter?”, Bank of England Quarterly Bulletin, 2013 Q2. 9  All speeches are available online at www.bankofengland.co.uk/speeches  9  The MPC is now in the process of reviewing the possible range for the equilibrium real interest rate in the medium term. This analysis reflects the importance of global equilibrium rates for the UK, and the possibilities that the global equilibrium real rate may rise as the global recovery proceeds and that domestic cyclical factors such as the pace of public and private balance sheet repair may shift.

And we can see this clearly when we study developments adjusted for absence due to sickness (Figure 8). Here we can see that the average working hours have shown a declining tendency even when adjusted for people who have not worked due to illness. Compared with the period 1994-1995, average working hours have declined by around 3 percentage points and the negative tendency is particularly strong after 1999. Moreover, the other curve in my diagram - for the number of employed shows that the growth in working hours last year was curbed by a lower increase in employment. This was in turn a result of the economic slowdown no longer affecting just manufacturing, but also the services sector. The decline in working hours appears to depend on three main factors, apart from increased absence due to illness. The first factor is an increase in other types of absence than illness, e.g. holidays or looking after sick children. The second is a decline in the amount of overtime worked and a reduction in the working hours agreed between employers and employees. The third factor is a shift where more people choose to move over from full-time to part-time work. The relative significance of structural and economic factors in this context is again difficult to assess. There are many indications that variations in overtime are particularly affected by economic activity. Although it is more difficult to determine how this relates to the other factors.
Credibility and anchored inflation expectations require that we do not give credit to the past “toothpaste” view of monetary policy – contractionary policy cannot fight inflation once it is out – nor symmetrically to the current “string” view of monetary policy – whereby accommodative policy cannot fight deflation. So, our results have to be judged over the medium term. We are only fifteen months after the real start of QE in the Eurozone but we can already see some positive effects. According to Eurosystem staff assessments, without the APP (Asset Purchasing Program) inflation would have been negative in 2015, more than half of a percentage point lower in 2016, and around half of a percentage point lower in 2017. If we pursue our program, what should we expect down the road? The US Federal Reserve has shown us the way, taking a series of very important steps to increase monetary stimulus even after it brought its policy interest rate to zero. The Fed issued forward  2  2  C. Romer and D. Romer “The Most Dangerous Idea in Federal Reserve History: Monetary Policy Doesn’t Matter” American Economic Review: Papers & Proceedings 2013, 103(3): 55–60. BIS central bankers’ speeches  guidance to signal a protracted period of low interest rates and began QE. The US logically leads the way as it was the first epicenter of the Great recession. The US QE began in November 2008 and core inflation troughed in October 2010.

I. Monetary policy is doing its duty, and has already done a lot  I am well aware that some recent monetary policy decisions of the Governing Council are hotly debated in Germany. The expression of such criticism reflects, at a minimum, the need to explain our monetary policy decisions better. However, I’d like to argue that our recent monetary policy decisions are very much in line with the principles of stability that German culture incarnates so well. Let me elaborate on three of these principles. First, independence. The divergent inflation performance of the major industrialized economies after the collapse of the Bretton Woods system had a profound effect on the subsequent conduct of central banks. On the practical side, Germany was seen to have navigated the so-called stagflation episode of the 1970s considerably better than others. The Bundesbank was role model for the independence of other central banks. Second, a clear mandate for price stability. The Eurosystem was built on these foundations as enshrined in the Maastricht treaty. We also adopted, as early as 2003, a transparent quantitative definition of price stability as an inflation rate close to but below 2% over the medium term – very close to the present definition of the US Fed, the BoE or the BoJ: so this is nothing new or specific to the ECB. From 1999 to 2011, the HICP inflation rate averaged 2% in the euro area, remarkably consistent with the objective.
On our part, we will make the necessary modifications in the supervisory and regulatory framework that target the above mentioned issues with a realistic and flexible approach. The sole purpose of this conformist approach to supervisory rules, is to provide a cushion for avoiding potential future disturbances in the financial stability. Finally I would like to strongly emphasize for all business community, households and all other economic agents that Bank of Albania will make all efforts to ensure and further consolidate the general macroeconomic equilibrium in Albanian Economy, with specific role on financial stability. I believe that business community comprehends this important mission. Bank of Albania intends to be vocal regarding its prospects for economic developments, so that none of its actions should come to you as a surprise. Therefore I invite you to interpret our signals fairly and smoothly integrate them into your decision making process. I would like to remind you that our medium term agreement with IMF and focused policy orientation toward EU and European Exchange Rate Mechanism (ERM) provides additional collateral for our pledge. Thanking The Economist Conference for giving me this opportunity I am open to take questions and share comments. BIS Review 85/2006  3

Investment behavior in these countries may be motivated by broader strategic considerations, which may prompt retaliatory measures and result in restrictions on crossborder capital flows. Global and prompt policy action is warranted yet again. To this end, the G20 has embarked upon an unprecedented exercise in policy collaboration with the adoption of the Framework for Strong, Sustainable and Balanced Growth. IMF surveillance will acquire a new dimension by assisting G20 Finance Ministers and Central Bank Governors in the process of mutual assessment of their economic and financial policies. It is crucial that the G20 framework lives up to expectations. The decisions and policies adopted by its members will affect the environment for the formulation of economic policies in all countries, large and small, rich and poor. The Governor of the Bank of England, Mervyn King, remarked last month that “…so far the only specific agreement [among the G20] is to talk to each other. Concrete steps to reduce the scale of global imbalances have, to date, been notable by their absence.”  6  Press release (27 January 2010) on the G20 website: President Lee to Attend Davos Forum. 7  Mark Carney: The Evolution of the International Monetary System, Remarks at the Foreign Policy Association in New York City, November 19, 2009. 4  BIS Review 22/2010  And I agree that the G20 has laid its reputation on the line. It will be damaged if the framework comes to nought.
If the share of trade invoiced in SHC were to rise, shocks in the US would have less potent spillovers through exchange rates, and trade would become less synchronised across countries.43 By the same token, global trade would become more sensitive to changes in conditions in the countries of the other currencies in the basket backing the SHC. The dollar’s influence on global financial conditions could similarly decline if a financial architecture developed around the new SHC and it displaced the dollar’s dominance in credit markets. By reducing the influence of the US on the global financial cycle, this would help reduce the volatility of capital flows to EMEs. Widespread use of the SHC in international trade and finance would imply that the currencies that compose its basket could gradually be seen as reliable reserve assets, encouraging EMEs to diversify their holdings of safe assets away from the dollar. This would lessen the downward pressure on equilibrium interest rates and help alleviate the global liquidity trap. 41  See https://libra.org/en-US/. For more details, see ‘Enable, Empower, Ensure: A New Finance for the New Economy’, speech by Mark Carney, at the Lord Mayor’s Banquet for Bankers and Merchants of the City of London at the Mansion House, London, 20 June 2019. 43 This requires that the other currencies included in the basket backing the global currency are not perfectly correlated with the dollar, which seems likely to be the case given countries face idiosyncratic shocks.

Answer: I will wait for all our accounts to be finalised. Question: In October you considerably expanded the collateral framework for credit operations. Since then you have accepted more risky securities as collateral. How high is the ECB’s exposure as a result? Answer: Like all other central banks, we have been more forthcoming as regards our collateral framework in order to provide the banking sector with appropriate liquidity. Our balance sheet has grown by approximately 55% over the last 12 months. At the same time, we have to permanently ensure that our risk management is improved to take into account the increased volume of risks. Question: The financial sector has been largely safeguarded through guarantees and equity capital aid. Now the car industry is asking for state support. Is this not understandable? Answer: The decision on this falls first of all under the responsibility of the national governments and parliaments. As a central bank, we have emphasised the fact that the financial sector is of systemic importance because it affects all other sectors, all enterprises and their employees. Question: Knowing what we do now, was the interest rate increase in July this year a mistake? And why is it generally so difficult for central bankers to admit to mistakes? Answer: The modest interest rate increase in July was important taking into account the inflationary threats that were visible at the time. Question: What were those threats? Answer: Long-term inflation expectations threatened to become unanchored.
In particular, the FPC is charged with ‘the identification of, monitoring of, and taking of action to remove or reduce, systemic risks with a view to protecting and enhancing the resilience of the UK financial system’, but this does not ‘require or authorise the Committee to exercise its functions in a way that would in its opinion be likely to have a significant adverse effect on the capacity of the financial sector to contribute to the growth of the UK economy in the medium or long term’. 7 This approach, of proposing and testing, is similar to the notion of ‘discursive governance’ proposed for independent regulatory agencies by Gehring (2004) and discussed in the financial stability context by Demekas (2019). 6  7  All speeches are available online at www.bankofengland.co.uk/speeches  7  Together, these three ingredients mean we have a clear mandate to follow but, at the same time, we have the flexibility that’s needed to manage financial stability efficiently and effectively. An example – resilience of major banks Our approach to how resilient major banks should be to economic shocks captures all of these ingredients. We started with Parliament’s preferences: resilience but not at the expense of growth over the medium to long term. Using all the evidence available, we’ve balanced the benefits and costs. On the benefit side of the ledger: the fact that the system will not magnify severe downturns.

Once employees are on board, performance management should play a greater role, both in compensation decision-making, which needs to be simplified and diversified, and in the promotion process. The process should reflect a better balance between production and controls, by focusing not on “what” was accomplished but “how” it was accomplished. Repercussions are necessary for employees that do not behave in a manner that is desirable. I said that leadership must come from the top. But that doesn’t mean that you can’t drive the culture from throughout the organization in the form of “culture carriers” – employees who are well connected, respected and can be effective in making your culture “go viral.” Cultural change is not just a “flavor of the month.” It is a long-term commitment to changing a firm and an industry. It will take time. And, once you feel you’ve achieved what you originally set out to achieve, you will likely have raised the bar and will need to reset your goals. Building and maintaining a strong culture in a firm is an ongoing effort, not a “one and done” initiative. 8  BIS central bankers’ speeches  Conclusion Will our list of “to dos” ever end? Probably not. Will our list of “worries” get shorter? Unlikely in the current environment. We live in an ever-changing environment where speed and agility are of the essence. Demands from customers change, expectations from shareholders change, and the regulatory landscape you work within will continue to evolve to keep pace.