samchain/econo-pairs-v1 huggingface dataset:
We have tried to avoid this, for instance by not arguing with each other in public. We have also refrained from evaluating colleagues’ arguments and proposals. Before choosing an approach to communication and transparency, we again tried to learn from other central banks. The main issue in the public debate seems to have been the minutes of our meetings. I believe the publication of minutes has advantages. The minutes provide a clear opening for the evaluation of what individual Board members contribute to the monetary policy discussion, besides facilitating the democratic control of and insight into our work. In my opinion, the arrangements we have chosen can promote a better understanding in society in general of the Riksbank’s policy and our deliberations. That is important not least in a small country where the discussion of stabilisation policy is not all that broad. 6  BIS Review 24/2001  Some conclusions Work on monetary policy has been arranged in ways that differ from country to country. This has to do with historical differences that stem from the society in which the policy is constructed. Scandinavian and Anglo-Saxon countries require a greater degree of openness, for example, than countries in Central Europe. The duration and acceptance of low-inflation policies also play a part. A reluctance to change a winning concept was no doubt an important reason why the Bundesbank continued to adhere to money supply targets in its communication for so long even though academic studies showed that in practice its policy was being guided by inflation forecasts.

Mario Draghi: Interview in Bild Interview with Mr Mario Draghi, President of the European Central Bank, in Bild, conducted by Mr Kai Diekmann, Mr Nikolaus Blome and Mr Daniel Biskup on 25 April 2016 and published on 28 April 2016. *  *  *  BILD: Mr Draghi, when you became President of the European Central Bank (ECB) just over four years ago, the Germans were scared that, as an Italian, you would create too much inflation. Now, even an Italian is unable to generate sufficient inflation. What is going wrong? Mario Draghi (laughs): Nothing. People in Germany can rest assured that their ECB President is doing everything to restore inflation to the right level. Our mandate is price stability, which means inflation of just below 2%. BILD: In order to achieve that, you have cut interest rates to zero. German savings are melting away like butter in the sun. Don’t you care about that? Draghi: We are well aware of the situation for savers. And it’s not only in Germany that people have to face low interest rates. But interest rates are low because growth is low and inflation is too low. Think about the alternative: if we raised rates now, it would be bad for the economy and it would unleash deflation, unemployment and recession. The interest on savings comes from growth, so it is in the interests of savers that inflation stabilises and growth becomes more robust.
It also eliminates the need for a lot of interbank trading activity to move reserves to banks that would otherwise find themselves short of reserves on a particular day. In my view, this type of intermediation activity does not have much social value. While the FOMC has discussed these issues, it has made no decision about its choice of longterm monetary policy operating framework. This seems appropriate to me because over the next few years we will gain considerable further experience about operating with a floor-type system. Nevertheless, my expectation is that the FOMC will ultimately favor maintaining a floortype system similar to what is in place today. As support, I would point to the minutes of the November 2016 FOMC meeting, in which participants observed that the current framework had been working well. This leads us to the next question: Assuming that a floor system is retained, what amount of reserves will be needed in the banking system so that day-to-day open market operations are not necessary to keep the federal funds rate within its target range? In other words, how small can the amount of excess reserves be before banks begin to compete and bid for such reserves, introducing unwanted volatility to the federal funds rate? First, there will need to be sufficient excess reserves to accommodate day-to-day fluctuations in the “autonomous factors” that influence the amount of reserves in the banking system. These include shifts in the Treasury’s cash balance, the foreign repo pool, and overnight reverse repo facility usage.

I would also like to thank the faculty and administrative staff for their sterling work, and to congratulate the students of the class of 2023 of the Master in Economics and Finance, for whom I wish the very brightest of futures. Thank you very much. 2/2  BIS - Central bankers' speeches
However, the common key success to all these strategies is investment. Increasing and improving physical and human capital is vital for ensuring and fostering opportunities in the future period of growth. And foreign direct investment will continue to be a significant source of knowledge and technology transfers as well as productivity improvement. Yet for businesses to make long-term investment commitments, it is necessary that economic fundamentals be conducive. This is where policymakers can help encourage investment expansion and, in the purview of the central bank, this means finding appropriate ways to mitigate risks to economic and financial stability. As all of us are aware, the main risk at present can arise from massive capital inflows from outside Asia and potential abrupt reversals as a result of the divergence in economic growth between the advanced economies and emerging Asia. While the growth outlook for Asia is positive, there are still significant risks to the recovery in the US, the Euro area, and Japan, including unemployment, high public debt, and the housing slump. In these countries, policies continue to focus on shoring up their recovery and strengthening their own momentum of growth, with monetary policy remaining loose. This is in stark contrast to Asia’s emerging markets, where the threat of inflation is real and present in the near term. Inflation is expected to rise, given rising costs and rising demand, allowing producers to pass on cost increases to consumers. In addition, rising demand from emerging markets can potentially further push up commodity prices and inflation expectations.

With this in mind, the HKMA will set up shortly a new Centre for Green Finance (CGF) under the Infrastructure Financing Facilitation Office (IFFO). The CGF will serve as the focal point for capacity building and experience sharing. As most of you are aware, IFFO has already become an active facilitator for capacity building in infrastructure investments and it would be logical and timely for the new CGF to be set up to promote capacity and expertise in Green Finance. Only yesterday, IFFO co-organised a seminar with the Chinese Ministry of Finance and IFC on ESG and Impact Investing. So the CGF will provide a one-stop shop in capacity building for Green Finance for the financial industry, especially banks, in the coming months. We are already in discussion with the IFC on how to leverage their expertise on this. Furthermore, I would like to mention that the CGF, together with the IFC, will coorganise the next Climate Business Forum in Hong Kong in early 2020. This Climate Business Forum is the IFC’s flagship event to discuss trends and business opportunities relating to climate change and sustainability. In addition to green finance, the Forum will also cover topics such as green city, buildings, infrastructure, transportation and energy storage etc. So I look forward to your participation and support of the future activities of the CGF. Conclusion 9.
In some areas of finance, however, it appears that quantitative models have increasingly been viewed as the alpha and omega of business reasoning. They have often served as a substitute for an independent evaluation by business managers and decisionmakers alike. We should therefore welcome some of the ideas put forward in the new “Financial Modelers’ Hippocratic Oath”, such as “I will remember that I didn’t make the world, and it doesn’t satisfy my equations” (Wilmott, 2009).2 Risk and luck Finance and banking are intimately linked with the notion of risk. Risk is a fascinating but difficult concept, if only because it is intimately linked with the concept of luck. In a risky world, heroes are more likely to be lucky than smart. In asset management, for instance, Barras, Scaillet and Wermers (2010) find that around 8% of mutual funds display a significant positive alpha, but of them only about 0.5% deliver a positive alpha that is not driven by luck. One question that arises from this finding is whether the associated statistics would be very different for the group of successful bank managers or successful traders in financial markets. Yet remuneration schemes do not appear to take this identification problem into account. It can be hypothesised that bonus payments are often a reward for luck rather than compensation for actual skill or effort. This hypothesis represents a very significant challenge for an efficient financial system. It is a challenge for a new school of finance.

The position is complicated in the euro-zone by a reviving political debate about just how much of the unemployment reflects supply-side weaknesses requiring structural reforms, and how much it reflects inadequate overall demand. The outcome of that debate will be crucial to the future evolution of the euro-zone. But in the immediate situation there was no reason to suppose that continued growth of demand and output was inconsistent with effective price stability in the zone as a whole. So much for our different starting points. But over the past year, the world – and I mean the world – has changed quite dramatically for both of us in that we have both been affected by the international economic slowdown. This started, in fact, with the financial disturbances in Asia in the latter half of 1997, but even as late as the beginning of last summer it seemed as if it might have only limited impact on the overall world economy. The IMF, for example, was still then projecting 3–3¾% world growth in 1998 and 1999 respectively – which was certainly a setback compared with their forecast of over 4% just six months before – but it was hardly catastrophic. Since last summer it has become increasingly clear that things are likely to be significantly worse than that.
Though from experience, I know the bottom of the ninth can last for eternity in a close baseball game. The continued importance of the transition away from Libor  Public authorities and market participants across jurisdictions have now been working together to transition away from reliance on Libor for a number of years. Its weaknesses were originally exposed during the global financial crisis and while reforms have improved the governance and administration of the rate, the markets on which it is based have long since shrunk to a trickle of transactions. We see little prospect of those markets returning. Plans now need to be in place to transition from Libor to alternative reference rates by end 2021. John and I will speak about the progress that has been made. With 18 months to go these plans must now be acted upon in the time remaining. With the authorities, businesses and households all having to adapt to the challenges of lockdown and new ways of working, there have been calls to step back from the Libor transition as a priority. We understand the level of disruption there has been and central banks have worked to ensure financial institutions have had the support and capacity to be able to ensure a continued flow of financing to support the economy. But in my view, what we saw in financial markets in March in response to the shock of Covid only reinforces the importance of removing the financial system’s dependence on Libor in a timely way.

Level 3 is ‘expert judgement’ — where a panel bank has insufficient Level 1 or 2 transactions, it estimates the rate at which it could fund itself in the unsecured wholesale funding market, based on an approved procedure. Further details are available at: www.theice.com/publicdocs/ICE_LIBOR_Methodology.pdf 3 Interim Financial Stability Report, May 2020 – Box 1 The continued importance of the transition away from Libor, https://www.bankofengland.co.uk/-/media/boe/files/financial-stability-report/2020/may-2020.pdf 2  3  All speeches are available online at www.bankofengland.co.uk/news/speeches  3  benchmark. Libor rates – and hence costs for borrowers – rose as central bank policy rates fell to support the economy.4  It is logical that credit spreads on bank debt (a measure of perceived risks in lending to banks) should increase during periods of stress. It is also unsurprising for banks to be attracted to the idea of being able to pass that cost directly onto their customers, but it does raise an important question:  Given this cost is passed directly onto borrowers through the interest rates they pay, how well does that rate actually reflect the cost of bank funding? There have been significant changes to the way banks fund themselves since the global financial crisis, making them more robust. Regulatory changes have significantly reduced dependence on the fickle shortterm unsecured markets that Libor measures.5 We have seen the benefits of those reforms through the first half of this year as banks have continued to lend and markets have remained open.
The European Central Bank has therefore been fulfilling its mandate, which is to keep inflation below, but close to, 2% over the medium term. BIS Review 156/2010  1  With all the challenges we have faced since 1999 – the cash changeover, the oil price spikes, the internet bubble, the turbulences in the aftermath of 11th September and, of course, the global financial crisis – maintaining price stability is a notable achievement. What is more, looking ahead, inflation projections and inflation expectations are well anchored in line with price stability. The launch of the ESRB My main topic for today is macroprudential oversight and the new body that the European Council and the European Parliament have decided to create: the European Systemic Risk Board or ESRB. The legislation has been finalised yesterday and the ESRB will soon become reality. I am honoured to speak to you today not only as president of the ECB but also in my future role as Chair of the ESRB. The new European body will be part of the new European System of Financial Supervision and it will be located here in Frankfurt. The city can therefore be proud to host three European authorities: the ECB, the European Insurance and Occupational Pensions Authority (EIOPA) and the ESRB. The function of the ESRB will be to provide macro-prudential oversight of the European Union’s financial system.

Øystein Olsen: Managing wealth – some thoughts on economic policy and the allocation of national savings Speech by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), at a meeting hosted by the Norwegian Embassy, Rome, 29 November 2012. *  *  *  Introduction European economies are currently going through hard times, with repercussions of the crisis still being felt throughout the world economy. For all of us, it is a humbling experience to observe how closely interconnected markets and economies have become across national borders. My intention here this evening is not to point at solutions to the challenges currently facing the euro area. What I can offer, however, is the perspective of a friendly neighbour and a substantial investor. In this modest capacity, I hope to sound a note of optimism from a region of Europe that in its recent past went through a grave crisis, which was followed by a series of reforms and, eventually, the return of prosperity. The Nordic experience with the cycle of crisis, reform and recovery might provide some perspective for those European countries now facing similar challenges. I will also make some remarks on the current situation in financial markets in general, and government bond markets in particular, from the viewpoint of a global investor.
In our Report’s baseline scenario we forecast that in 2012 and 2013 the current account will post a deficit of around 3 to 4% of GDP. These balances contrast with what has been the behavior of the current account in recent years. It is striking because it happens at a time that, despite the complex external scenario, the terms of trade facing our country are favorable. The persistence and expansion of high current account deficits may generate factors of vulnerability for the Chilean economy when facing an external shock. Although an economy’s current account deficit is not a sufficient condition to anticipate a crisis of some sort, it does help increase its probability of occurrence. For example, due to the importance that this variable may have in sovereign risk, external credit conditions and, ultimately, on access to the sources that sustain such deficit. In the past, a significant part of the crises that the country endured have had to do with persistently, high current account deficits. Accordingly, the Board cannot overestimate the importance of closely monitoring the factors underlying our current deficit, in order to prevent the incubation of imbalances affecting the future performance of our economy. However, a big difference with the past is that today our economy has made progress in devising mechanisms to deal with external shocks and imbalances. Thus, as I said before, we need to maintain and permanently improve the macroeconomic pillars that have made  BIS central bankers’ speeches  7  our economy stable and resilient.

The growth forecast for 2012 we are presenting in this Report, details of which I will be sharing with you in a few moments, runs higher than what we presented before the Finance Commission of this Senate last June. A number of factors have contributed to this growth, including increased personal income resulting from labor market strength, an expansion of credit to firms and households, as well as the impulse from investment in mining and complementary projects associated to the high copper price. Consumer and business confidence has risen or remained in optimistic levels. Another contributor was the drop in inflation in recent months, reflecting the prices of perishable foodstuffs and fuels. The latter, however, has tended to revert in the past few weeks. However, the macroeconomic scenario entails significant risks and, to some extent, opposing ones, that drive monetary policy to face a difficult dilemma. On one hand, the effects of the frail international conditions on world growth and external financial conditions should help to reduce the strength of the Chilean economy. In addition, there is the possibility of a further deterioration of the external scenario, with more acute consequences on our economy. On the other hand, the recent intensification in installed capacity utilization, as well as the widening of the current account deficit, reflect the persistence of a degree of dynamism of domestic demand that also entails medium term risks for inflation and the vulnerability of the country’s external accounts.
The four Presidents are proposing that a genuine EMU should be built on integrated frameworks for budgetary policies, economic policies and financial market policies, which in turn must be underpinned by greater democratic legitimacy and accountability. When we look at the options to establish budgetary policies in a monetary union, and exclude any uncoordinated conduct of fiscal policy by Member States, three possible models come to mind. First, there could be a fully-fledged fiscal union, with a central budget and federal debt issuance. It is not on the cards in the short run as important steps would need to be taken to establish the necessary euro area-wide political legitimacy and governance. The second model would involve sharing sovereignty on national fiscal policies, with reciprocal control of public expenditures serving as a basis for common debt issuance by governments. Such reciprocal control would also require strong democratic legitimacy, involving national parliaments. The third model would only rely on unqualified adherence to fiscal discipline by Member States, without risk-sharing. None of these three models alone is possible in the short run. There will be a combination of the three. The desirable mix has to be decided upon by the people of Europe with the appropriate democratic checks. EMU is a unique construct, tailored to European specificities, and it need not resemble any existing federation. Let me give some examples.

Inflation expectations and the conduct of monetary policy, Speech at an event organised by the SAFE Policy center, 11 july 2019  6  Figure 3. Recent divergence between the evolution of household inflation expectations and market based-measures  Sources: ECB, European Commission  7
The model includes the standard macroeconomic variables appearing in New Keynesian descriptions of monetary policy: real GDP growth, CPI inflation and a short-term nominal interest rate. In addition, the model also includes a set of variables relating to credit and asset prices: total credit growth; the spread of investmentgrade corporate bonds over government bonds, as a general indicator of credit spreads; and house price inflation. To capture the potential impact of the Great Moderation on perceptions of the riskiness of the environment, we also include a measure of macroeconomic volatility. This is generated from an auxiliary factor stochastic-volatility model, which estimates the common time-varying volatility in a set of key macroeconomic variables (GDP, consumption, investment, exports, imports and inflation). The resulting series are shown in Chart 2, together with estimated one standard deviation confidence intervals, and have the characteristics that one would expect: high in the Seventies and early Eighties, then falling back as the period of the Great Moderation wears on, and rising sharply with the onset of the financial crisis and the Great Contraction. We envisage a set of seven underlying fundamental shocks driving these seven variables: an aggregate demand shock; an aggregate supply shock; a monetary policy shock; a macroeconomic volatility shock; a credit demand shock; a credit supply shock; and a house price shock. The first three of these are conventional in nature. The fourth captures changes in the riskiness of the macroeconomic environment.

The fact that a wide range of important decisions on issues ranging from food and energy safety to repair and reconstruction of the financial system are made at the G-20, of which Turkey is an active member, clearly suggests that the global economy’s center of gravity is shifting. Corresponding to the ever-increasing importance of the G-20, the weight of Turkey and her peer developing countries in international institutions, such as the IMF, is increasing as well. In his statement in the late 2010, IMF Managing Director Dominique Strauss Kahn described the changes in the Fund’s quotas and governance “the most fundamental governance overhaul in the Fund’s 65-year history, and the biggest ever shift of influence in favor of emerging markets and developing countries”. Once the IMF’s 14th General Review of Quotas is completed, Turkey’s share in the IMF’s total quota will be more than doubled compared to 2004. Their outstanding economic performance and rapidly increasing share in the global economy over the past decade have considerably helped developing countries to have an increasing voice in the international arena. These countries, among which Turkey, with its economic performance, stands as one of the leading countries, have weathered the recent global crisis with less damage compared to developed countries and exhibited better performance in reverting back to pre-crisis production levels and growth rates. Recently, there have been debates about whether the developing country group has decoupled from developed countries.