samchain/econo-pairs-v1 huggingface dataset:
Coherence vs agreement I believe I have set out so far a reasoned view that the three Bank policy Committees – the MPC, FPC and PRA have a coherent set of objectives, structures, appropriate policy tools and coordination to ensure that there is not any inherent absolute conflict in the framework. And the strategic changes internally at the Bank announced earlier this year could be seen as being a reinforcement to that structure by maximising the synergies across the Bank, including the PRA. But coherence doesn’t always mean agreement. There will no doubt be disagreements at some point. Indeed, the appointment of independent members to the policy committees is intended to ensure challenge and the absence of “group-think”. Dissenting views on the MPC are not only an established part of the culture but actively encouraged by the Treasury Committee in Parliament. The FPC and PRA Board, in contrast, generally work by consensus, although there are provisions for recording dissent and votes if necessary. But disagreements over judgements between individuals are normal – that’s why we have decision making by committee in the first place. What we have not seen is any reason why the structure should be regarded as internally conflicted. How likely is it that there will be dissent across committees? There are mitigants in place to reduce the chances of that.

Another angle to cooperation arises from the “long and variable lags” in the economy – and not just in the monetary transmission process. Each committee can face very long and uncertain lags between deciding to take a policy action and the maximal impact on its objective. That makes it unlikely that any one objective can be achieved precisely at all points in time. As well as predictable lags, policy outcomes are subject to all sorts of random disturbances that constantly require changes to policy settings. Suppose, however, a committee actually tried to obtain its objectives at every moment in time regardless. That would likely necessitate wild swings in policy settings: imagine the MPC trying to set Bank Rate so that 2% inflation was achieved exactly every month! Not only would it quickly prove impossible, attempting the feat would drastically reduce the chances of the other committees achieving their objectives. So a degree of humility is required by each committee, for the sake of coordination as well as the credibility of each. In their commitments to hit their statutory primary objectives I would say that: •  The MPC should not be “inflation nutters”. •  The FPC should not seek the “stability of the graveyard”. •  The PRA Board should not seek to implement a “zero failure regime”. That is supported helpfully by the secondary objectives of each policy maker. One can interpret them in several ways, but to me they help put the primary objectives in an overall context.
Remarks on the launch of the Recommendations of the Task Force on Climate-related Financial Disclosures Mark Carney Chair of the Financial Stability Board Governor of the Bank of England  Delivered at the Tate Modern 14 December 2016  1  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  Welcome  It is my great pleasure to have been invited, in my capacity as Chair of the Financial Stability Board (FSB), to help launch the Task Force on Climate-related Financial Disclosures consultative report. 1  In late 2015, at the request of the G20 , the FSB established this private-sector, industry-led Task Force, under the leadership of Michael Bloomberg. Its mandate was to develop recommendations for voluntary, consistent, comparable, clear and reliable disclosures around climate-related financial risks for companies. The purpose was to provide the information that investors, lenders, insurers and other stakeholders need to manage these risks, and seize the associated opportunities. As those of you who’ve had an opportunity to read their report will have seen, the Task Force has achieved a great deal during the year. So on behalf of shareholders, creditors and citizens, I thank all of the Task Force members for their tremendous efforts, and your companies for making you available for this important work. If you want a job done well, give it to busy people. Public authorities – like the G20 and the FSB – could identify the problem, but we needed the private-sector to provide the solution. This is a solution for the market, by the market.

And second, because securitisation was not conceived of as a business in itself to transfer risk. Rather, simple transparent structures were created to raise financing. This, along with the prudential regulation and supervision applied in Spain, has meant that banks did not establish complex off-balance-sheet structures (conduits and SIVs) acting like parallel banks. Continuing with the analysis of the liabilities, it should not be forgotten that Spanish banks have traditionally maintained a solid deposit base. This is largely explained by the particular banking model followed in Spain. Activity is focused on retail business, with a proven capacity to adapt their combined offering of investment products. Spanish banks manage a large part of the assets of investment funds and sell insurance products. Evidence of this is the strong rate of growth of deposits in recent months, showing a notable response by banks. Accordingly, Frenkel’s phrase does not apply to Spain on the liabilities side: there is still a lot left on the liabilities side of Spanish banks’ balance sheets, in particular a broad deposit base and a significant volume of wholesale financing that matures in the medium and long term. If we now look at what is happening on the assets side, Spanish banks have not invested in the complex and opaque products that have turned out to be highly problematic or, as people usually now say, “toxic”.
And as a central banker of a country that has recently joined the euro area, five months ago, I must say that this is also not the first time we use hard currency here. Dubrovnik had a mint, called Zecca, from 14th to 19th century that minted its own much appreciated and sought after currency. To conclude, old Dubrovnik based its prosperity on openness and trade, while at the same time building its resilience through smart and prudent economic, fiscal and development policies. This multifaceted strategy cannot be a better lesson against the backdrop of today's challenges. With this historical hindsight, I wish all of us productive and fruitful discussions and I am happy to give the floor to the Managing Director of the IMF, Ms Kristalina Georgieva. 4/4  BIS - Central bankers' speeches

This applies both to companies competing on international markets and those supplying goods and services to the domestic market. In comparison with other countries, it is particularly productivity gains in banks and other service sectors that stand out. Examples are automated processes and swifter payments in the financial industry and improved inventory and management systems in commerce and transport. In sum, these positive supply side shocks have increased the growth capacity of the Norwegian economy, and have played their part in keeping inflation at a low level. Monetary policy assessments  Monetary policy influences the economy with a lag. Norges Bank sets the interest rate with a view to stabilising inflation close to the target in the medium term. The interest rate path should provide a reasonable balance between the path for inflation and the path for capacity utilisation. When we reduced the interest rate in 2003, demand and output rapidly picked up. However, it took a long time for employment to rise and the next phase from a pick-up in employment to a fall in unemployment was also long. But now the upturn has entered into a mature phase. The enterprises in our regional network report that capacity constraints are now limiting further growth. Unemployment has fallen markedly over the past year. Wage growth appears to be rising, but so far only gradually. Prices for many inputs and services and building materials are rising markedly. Consumer price inflation is also expected to pick up further ahead. Thus, interest rates are rising.
To address this concern of the business community, the HKMA has been working very hard with banks and various stakeholders in tackling the issue. Our aim is to maintain a robust AML regime in Hong Kong while the system does not undermine access by legitimate businesses and ordinary citizens to basic banking services. So we require banks to apply a risk-based approach to the CDD process, and also emphasize the importance of banks’ engagement with customers to ensure that they are treated fairly. Since our sharing session last summer and the further guidance we provided to banks last September, it is now time to take stock of the latest developments. I will leave it to the banks to talk more about the improvement measures that they have pursued or are pursuing. They would also discuss the various practical aspects relating to account opening and account maintenance at the panel discussion later on. 4. While full efforts are being made to improve the situation, there is also feedback that some foreign companies are under the perception that Hong Kong is not a welcoming place for business, and have therefore turned to banks in other jurisdictions to open accounts. This is very bad for Hong Kong’s reputation. For those of us who know what is being done, Hong Kong is clearly and definitely not closed for business. One of the important points now is therefore : how can we turn around such a negative perception. 5.

Arthur Yuen: Bank account opening and maintenance Opening remarks by Mr Arthur Yuen, Deputy Chief Executive of the Hong Kong Monetary Authority, at the Briefing cum networking session on "Bank Account Opening and Maintenance", Hong Kong, 21 April 2017. * * * Good afternoon, ladies and gentlemen, 1. A very warm welcome to all of you to this briefing and networking session. We are going to discuss the important issue of business account opening and maintenance, and this event is jointly organised by the HKMA and Invest Hong Kong. I would like to first of all welcome all the representatives of Chambers of Commerce, who share the same concern as the HKMA that some SMEs and start-up companies from overseas are finding it difficult to open bank accounts in Hong Kong. 2. I am sure you would all appreciate that over the past years, customer due diligence (CDD) requirements have tightened globally, and Hong Kong followed this international trend. Needless to mention is also that a very small number of banks, for a variety of reasons, need to comply with requirements or standards mandated by their head offices or overseas authorities, thus leading to de-risking efforts in some instances. Surely no one would disagree that we are now in a more complex world, and sometimes we indeed have to deal with sub-optimal outcome. But I totally appreciate that knowing it is one thing, and experiencing the effect of it is quite another. 3.
If the same thing were to be repeated, we would move in a similar way from C to D to E. Once again, unemployment is the same but inflation is higher. This unemployment is normally referred to as “equilibrium unemployment”. A consequence is thus that an expansionary monetary policy cannot permanently create high employment and low unemployment. The long-run Phillips curve is therefore assumed to be vertical, as shown in the figure. It’s good to keep this in mind, but I won’t discuss the long-run Phillips curve any more here. Instead, I will concentrate on the short-run Phillips curve, as it is an important piece of the puzzle for economic policy-makers, not least central banks. It is the link between demand in the economy, which central banks are assumed to be able to influence with their policy rates, and inflation. Negatively sloped Phillips curve with inflation – but flat with wage increases So what does the correlation look like in Swedish data? As I mentioned in my introduction, I will look at data for the last decade. To make the figures clearer, I have marked the period 2007–2010 in blue and the period from 2011 in red. 4 [16]  Figure 3.

The five key variables are: • • • •  inflation, measured as the CPIF, the target variable for monetary policy wage increases, according to short-term wage statistics from the National Institute of Economic Research (NIER) unemployment, according to the Labour Force Surveys (LFS) job openings, according to statistics from the Swedish Public Employment Service (Arbetsförmedlingen) on remaining job openings  I would especially like to thank Mikael Apel and Emelie Theobald for their help with this speech. Meredith Beechey, Charlotta Edler, Jesper Hansson, Ann-Leena Mikiver, Åsa Olli Segendorf, Cecilia Roos-Isaksson and Ulf Söderström have all submitted valuable comments. ∗  1 [16]  •  the krona exchange rate, according to the trade-weighted KIX index. In order to focus on the trends in these five variables, I remove seasonal variations and general noise in the series by using moving averages over twelve months throughout. We will follow the time series for these variables two at a time. By doing so, we can see the covariation between inflation and unemployment, for example. Looking at data is a good place to start It is important to understand that covariation between two variables does not necessarily mean that there is a causal relationship, a causality, between them. Instead, the covariation may, for example, depend on a third variable that is not shown. A classic example is the strong correlation between sleeping with your shoes on and waking up with a headache. But this presumably does not imply that the shoes cause the headache.
The recovery of the economy also hinges on the restoration of consumer and business confidence that can contribute to the revival of spending and investment, and the return to normality in financial markets and the banking system. The rebuilding of trust will depend on our ability to appropriately combine the policy actions needed to address the immediate challenges with the necessary reforms for establishing an economic, financial and institutional environment that is conducive to sustainable long-term growth. Thank you very much for your attention. 4  BIS Review 38/2009

First, and foremost, zero interest rates and QE have inflicted big losses on the savers and individuals, funds and institutions reliant on interest incomes. Deposit rates in the US have dropped by 3 percentage points from an average of about 3.5% in 2007. As interest incomes approach the zero mark, many depositors, especially low- and medium-income households and retirees have had to cut their spending. And, while it can be said that “a saver’s loss is a borrower’s gain”, this has not been the case for every borrower. For example, because of negative equity or bad credit scores, many US families are stuck with hefty mortgage rates. In Hong Kong, deposit rates have also dropped by about 2 percentage points since 2007. With total deposits of about $ trillion currently in our banking system, you may wish to think about the potential loss to savers. 12. Secondly, most US families are still in the process of de-leveraging after the global financial crisis and as a result, growth in consumer demand remains lukewarm. On the corporate front, notwithstanding low borrowing costs, many US companies have been reluctant to invest domestically in expanding capacity and enhancing productivity. In fact, annual growth in business investments in the US has averaged only 3.7% since 2009, well below the average of 5.8% in the past economic expansion cycles. At the same time, many US corporations have spent their cash pile to buy back their own shares.
To achieve these objectives, there has been insistence both in the Banco de España’s reports and in my regular appearances before Parliament on the need to undertake wideranging reforms. The list is an extensive one and includes areas such as education, the knowledge economy, the liberalisation of goods and services markets, the boosting of competition in the network industries and the introduction of further improvements in the house rental market. However, I would like to stress two reforms which I consider most pressing and necessary: budgetary consolidation policy and labour reform. The government has in recent weeks  BIS Review 27/2010  1  tabled some proposals for reform which, in my view, are in the right direction. In respect of public finances, a cut of € billion in overall general government spending has been announced in the period up to 2013 and, within the framework of the so-called Toledo Pact, an increase in the retirement age has been proposed that would contribute significantly to the financial balance of the public pensions system. The budgetary measures proposed are a significant public commitment by the government to fiscal consolidation. For that very reason, it is now essential that these commitments should be actually met, since otherwise Spain’s credibility might be most adversely affected. As regards the labour market, the social agents have reached a wage agreement and the government has set out proposals for labour reform.

The Official Credit Institute’s programmes, aimed at smoothing small and medium-sized companies’ access to credit, have attempted to correct this market failing. Further work along these lines should be pursued, improving where possible the workings of these programmes and increasing their volume if necessary. Yet I must urge credit institutions to be responsible, as I have on previous occasions. Evidently, at a time such as the present, they must be particularly careful and, naturally, not  2  BIS Review 27/2010  extend credit to companies that are not solvent; but nor must they forget that should they fail to lend but a single euro to companies that are solvent, they will only be making things difficult for themselves. Another example of progress in financial reform backed by broad Parliamentary consensus has been the approval of legislation whose aim is to restructure the financial system at the least cost to taxpayers and in the shortest time possible, observing the constitutional distribution of powers, so that all institutions in the system are in a position to provide credit to households and firms when the recovery arrives.
BIS central bankers’ speeches  1  Part of the answer, of course, is that around the world the holders of the largest banks’ debt relied on a public safety net. Financial institutions being “Too Big To Fail” is the biggest problem we have to crack. But moral hazard isn’t a complete explanation, because equity holders surely realised that they were exposed to risk, as events proved. We need richer explanations. Agency problems Another part of the explanation of the tendency to excess has to be layer upon layer of principal-agent problems. Shareholders of joint-stock companies enjoy the upside, but the downside is capped. When we add in the fragmentation of shareholdings, diversified portfolios and relatively liquid markets in equity shares, few shareholders seem to have had the incentive or wherewithal to monitor individual banks effectively. By giving management equity and equity options, shareholders put management in a similar position to themselves. And within the management structure of banks, there were problems in how different layers monitor others, with all to a greater or lesser degree incentivised by contracts – and accounting regimes – that rewarded short-term performance. These problems are compounded by agency issues in the asset-management industry. Why didn’t investors act to constrain the excessive risk taking at various banks? Possibly because their individual stakes were too small for any of them to make a difference. Possibly because they believed there were impediments in securities laws or regulation to their acting as a co-ordinated group.

For example, as a matter of simple arithmetic, the first round effect of higher capital requirements is probably to depress the headline return on equity. It has seemed to me quite likely that that will prompt shareholders to demand a larger share of the cake, with a smaller share going to managers. There have already been signs of this happening. This might help temper the gains available to managers in buoyant credit conditions, and so reduce the incentive to shield their eyes from the risks. But, most important of course, higher equity capital requirements provide a bigger buffer against losses – the increase is, perhaps, about an order of magnitude (around 1% of risk-weighted assets to around 10%), all things taken into account. 8  7  See, for example, Kent and Debelle (1999), “Trends in the Australian Banking System: Implication for Financial Stability and Monetary Policy”. 8  Basel 2 in effect required a minimum equity capital ratio of 2 percent. Under Basel 3 almost all regulatory deductions from capital come out of core tier 1 capital (ie equity) rather than being split equally across tier 1 and tier 2 capital or taken from total capital. Also, some risk-weights are increased, for example on counterparty credit risk exposures. Together those changes mean that the old Basel 2 core tier 1 minimum risk-weighted asset ratio is equivalent to around 1% on a Basel 3 basis.