samchain/econo-pairs-v1 huggingface dataset:
Nevertheless, it is uncertain today how an enlargement will change the EU’s face in the future. How will these countries be integrated? How will the decision-making process inside the EU be affected? And finally, how will the EU enlargement be financed? All these open questions constitute a potential risk factor for the euro. 4. Conclusions  Looking back at the first 14 months of the euro from a Swiss perspective, the most striking observation is the extraordinary stability of the Swiss franc/euro exchange rate. A detailed analysis shows that this stability was due to a high degree of convergence in economic fundamentals and in the monetary reaction of the two central banks. Thus, solid economic reasons have been behind this stability and not some artificial strategy of currency pegging implemented in secret by the SNB. In the future, the exchange rate should evolve depending on the development of the fundamentals - in Switzerland and in the euro-zone - and on the answers to some important political questions. Exchange rate stability, on the scale that has been experienced so far, is not guaranteed to last forever. However, the risk of erratic movements seems limited because the presence of large currency blocks has lowered the attractiveness of the Swiss franc as reserve currency. Nevertheless, I would hesitate today to qualify the euro and the Swiss franc as “sister currencies”. If you have a sister, she remains your sister for life and not just in case of common interests.

On behalf of the Board of Governors, I wish to register our profound gratitude to the Centre for Central Banking Studies of the Bank of England and the UK Treasury Department for collaborating with WAIFEM to build capacity for macroeconomic management in the West African sub-region. Our particular thanks go to Messrs. Simon Gray and Tony Smith, who represent these collaborating institutions at this course, for taking time off their busy schedules to share their wealth of knowledge and experience with us. 2.0  The need for liquidity forecasting  This course could not have come at a more auspicious time than now when all the countries in the West African sub-region are operating the indirect approach to monetary management and for that purpose most have instituted monetary policy committees (MPCs). MPCs bring together the major stakeholders in monetary and fiscal management with responsibility, among other things, to derive the quantum of liquidity for mop up from, or injection into, the economy through Open Market Operations (OMO). The overriding objective has been to keep inflation at low and stable level. In recognition of those objectives this course augurs well in filling the capacity gaps in liquidity forecasting as an essential input in the design of sound monetary policy administration in countries of WAIFEM member banks.
If the substantial optimism regarding the future that is reflected, for instance, in the development in savings proves partially unwarranted, the problems may become even more difficult to handle at a later stage. Although the focus is on the USA at the moment, concern over developments in Japan has increased recently. Here there appear to be both severe problems in the real economy and in the finance sector, as well as political difficulties in dealing with these problems. In the insurance sector there are a number of major life insurance companies that are insolvent in the technical sense, as they have promised pensioners a return that they are unable to deliver. A large part of the insurance companies' assets are of course traditionally invested in low-yield treasury bonds. The Japanese 10-year bond rate is currently around one and one-third per cent. The Bank of Japan has declared that it intends to continue with its zero interest rate policy for the foreseeable future and the market expects to see prices falling rather than otherwise during the coming year. If interest rates and inflation were to gradually rise, which at the moment does not appear likely, this would of course further erode the value of Japanese pension money, as the bonds stock in the insurance companies would fall in value.

The international economic picture has darkened considerably and in the Inflation Report published at the end of March GDP growth was estimated at 2.4 per cent for both 2001 and 2002. This entails a reduction of a whole percentage point for the current year and half a percentage point for next year, compared with the Report published in December. The growth figures are still good in an historical comparison, but we have undoubtedly begun the slowdown that appeared desirable in December. The question now is whether the downturn will be too rapid and too severe. A good starting point When one considers this question, it is useful to observe that the Swedish economy has a pretty good starting point. A lot has happened since the crisis years of the early 1990s. Deregulation of the financial, telecommunications and electricity markets, as well as the ongoing liberalisation in trade has increased competition in the economy and forced companies to become ever more efficient. A purposeful management of the bank crisis and an equally single-minded consolidation of the central government finances have restored the international confidence in Sweden that had become rather tarnished. We have directed our policies towards price stability and thus, hopefully, left behind us a long period of price and wage spirals, followed by devaluation and where growth was lower than in our competitor countries. A credible inflation target is now seen as a necessary condition for macroeconomic stability.
That is to say, we only intervene intensively in the event of likely failure, to ensure that insolvency is orderly and that depositors are paid out promptly. Recent work at the Bank investigated the predictive power of the regulatory returns for these firms.9 It found a significant and stable correlation between simple explanatory variables and the probability of default one, two and three years later. In most banking data sets, this structural relationship is obscured by the intervening hand of supervision - leaving few if any observable banking failures. The research has the practical application for focusing our scarce supervisory resources in a systematic and efficient way on those credit unions where they are most likely to be needed. The tool cannot yet be classified as ML, as there is no learning involved. But it does demonstrate how more advanced analytics can be used to enhance effectiveness of supervision, and we are beginning to experiment with introducing genuine ML into this tool. 7  I am grateful to Hermann Hauser for first bringing this argument to my attention. Professor Peter Gahan, University of Melbourne 9 Coen, J., Francis, W B., Rostom, M (2017) 8  5  All speeches are available online at www.bankofengland.co.uk/speeches  5  The task that lies at the heart of supervision – the third step I referred to above – is setting strategies to reduce prudential risks. For each firm that the PRA deems sufficiently critical, we form an assessment of the key risks to its safety and soundness.

Firms have developed a wide range of more-or-less polite methods for providing us with feedback on the letters we write to them. But letter writing is an art rather than a science, and evaluating objectively how clear we are does not lend itself easily to traditional forms of quantitative methods. Advances in ML,  6  All speeches are available online at www.bankofengland.co.uk/speeches  6  however, are helping. We recently analysed the letters we write to firms on the key risks they face and our supervisory strategy. We quantified a number of qualitative features of these letters, for example, how blunt we are in our messaging, how personal we are in terms of to whom we address the letter, and the overall sentiment expressed by the letter. We then used an ML model called random forests to detect whether, for example, the PRA writes to firms differently than the prior regulator, the FSA. (We do. )10 On the back of that project, we have built an app that now enables supervisors to analyse their written communications. Supervisors can use the app to analyse any of their draft documents before they are sent to firms. IV. CONCLUSION  Advanced analytics, machine learning and AI seem to be everywhere now – from image and voice recognition software to driverless cars and health care.
But there’s something wrong. Interest rates are on the wrong side of the argument! They are too low, not too high, even if we assume that the equilibrium real interest rate is zero. Chart 5  Chart 6  Neither does international comparison suggest that Iceland is off the charts. Chart 5 shows a comparison of the real policy rates in a number of countries, based on the most recent interest rate decisions and the most recent twelve-month inflation figures. Iceland is 4  BIS central bankers’ speeches  somewhere in the middle. In Chart 6 we see several industrialised countries. Iceland is at about the same level as Sweden. Interest rates are higher in countries that are further along in the business cycle and have less slack, and they are lower in countries where the slack is greater, monetary policy is more credible, and long-term inflation expectations are near target in spite of higher current inflation. Chart 7  Chart 8  Finally, I show charts that illustrate, on the one hand, nominal GDP growth as forecasted for 2011 and, on the other, the current nominal policy rate. Some have posited that monetary policy should aim at keeping nominal GDP growth as stable as possible at a level that, in equilibrium, would deliver a desirable inflation target. I have certain doubts about how this would work in practice, but that is beyond the scope of my speech today.

Benchmarked against selected countries within the region which do not regulate commission payment, the commission rate currently earned by Malaysian agents remains relatively high compared to the benchmarked rates of between 140% to 150%, as seen in other jurisdictions. This excludes other agency-related benefits which are also allowable under the OCC guideline. BIS central bankers’ speeches  1  Some have argued that the current commission levels are too low as the commission structure has not been revised since the Guidelines were first introduced in 1996. However, closer scrutiny shows that agency income from commissions had increased in absolute terms in line with the increase in average premiums size. The average size of new business grew by 9% per annum over the last decade while in-force premium size recorded a compounded annual growth rate of 5%. Hence, the commission income of productive agents has in fact been growing in excess of the consumer price index and national average wage inflation. The world is constantly changing, the transformation that is taking place in the financial sector landscape also warrants a suitable change in the regulatory framework which the industry must be prepared to embrace and adapt to, going forward. The OCC had served its objectives well to keep operating costs reasonable to ensure policyholders’ interests are preserved. To enhance greater efficiency and facilitate a more competitive market environment, the Bank will accord greater operational flexibility to the industry in determining amongst others, the commission structure for its agents and other intermediaries.
This logically implies that an exclusive focus on the two-year ahead central inflation projection will cause policymakers to miss the risk of undershooting the inflation objective sometime in the future, possibly by a non-negligible amount. In turn, this implies that the central projection for inflation does not represent a sufficient statistic for monetary policy, and that a more sophisticated approach, factoring in the possibility of “tail risks” such as the bursting of a bubble, should be taken into account. A possible way of addressing the problem  9  See Dubecq et al. (2010). 10  See Reinhart and Rogoff (2009). 6  BIS central bankers’ speeches  within the traditional forecast-based framework which has been dominant among inflationtargeting central banks is to extend the forecast horizon beyond two years ahead. The risks to the central inflation projection deriving, say, from excessive credit growth and the resulting build-up of an asset price bubble would then be encoded in the probability distribution for inflation at longer horizons. This would allow the central bank to meaningfully discuss the dangers associated with such a build-up, and – assuming that within future policy frameworks monetary authorities will be endowed with macro-prudential instruments – it will allow them to explain to the public the adoption of measures designed to curb credit growth.

Preparations for EU membership and the adoption of the euro have spurred a broad-based reform process. The adoption of the euro should not mark the end of this structural reform process. In order to reap the full benefits of euro adoption and to ensure sustainable convergence, this process should continue. As you know, economic and monetary integration between countries with somewhat different characteristics and levels of development requires careful preparation. However, you have already reached this stage and your planning for the introduction of the euro is almost complete. Looking ahead the adoption of the euro will enhance your integration with all EU partners. Today practical preparations towards the public are remarkably advanced and the euro campaign has been outstanding in Malta. Indeed, the Central Bank, and also the National Euro Changeover Committee can be praised for their excellent work paving the way for a smooth changeover. The ECB has contributed to this euro campaign by making the public acquainted with the visual appearance of the euro banknotes and coins and the security features. The framework used by the ECB and the CBM constitutes an optimal communication mix to ensure a good reach of the public. This means research, advertising, direct marketing, public relations (like this event today) or addressing the vulnerable population. Overall, around 500, 000 copies of publications will be distributed by the CBM or via multipliers – so more than the actual population.
Bringing the issue up to date, this is why there are clear benefits to banks if they issue contingent convertible capital instruments with a trigger point that is safely above the point at which there is likely to be a question mark as to whether the bank remains a going concern – in other words before it is too late. Also, holders of these instruments have to be very clear that they are at risk of conversion or write-down. We cannot have a situation where holders gamble on an assumption that the trigger will not be pulled – it will. 1  2  Canada introduced the “asset-to-capital” multiple in the early 1980s. The definition pre-crisis was defined as on and some off-balance sheet exposures as a ratio of total capital. Generally, this was set at the assets being no more than 20 times the total capital amount. However supervisory discretion could permit a higher multiple (up to 23 times) if the firm met certain conditions. In the US a minimum everage ratio was introduced in the early 1980s. Pre-crisis, the definition used was Tier 1 capital/on-balance sheet assets, as measured under US GAAP. Firms had to meet a 3% ratio if considered “strong”, and 4% otherwise.

But the ECB is responsible for withdrawing the € note. We have direct responsibility for this because of course we print the banknote. The ECB’s Governing Council is currently considering very carefully the question of whether or not to withdraw the € note. We hear from the competent authorities that the € note is increasingly being used to finance terrorism and launder money. We take this warning very seriously in the Governing Council. What is your personal view? Personally I think that we now have fewer reasons for keeping the € note than we did when the euro was first introduced, because electronic payments have become much more important. We have been told that the banknote is increasingly being used for criminal activities. That’s why I believe that the € banknote will eventually be withdrawn, but it has to be done carefully. Let me emphasise that this does not mean that we should do away with cash in general. Cash is crucial in our everyday lives. So even if the € note no longer exists, people will still be able to use all of the other banknotes. Given the high importance of cash for the citizens, there is no discussion whatsoever about getting rid of it in general. Greece is under strain from the thousands of refugees who arrive on its shores each day, and it is also going through a severe crisis at the same time. Is the refugee crisis weighing on Greece’s recovery?
In 2005, EU Heads of Government re-launched the Lisbon strategy with an enhanced focus on jobs and growth and a streamlined governance regime. The key elements are the National Reform Programs which cover, for each country, the commitments taken over a 3-years cycle as regards structural reforms. EMU, with a single monetary policy and 12 governments responsible for budgetary policies, requires an institutional fiscal framework. It has to be simple, easy to implement, and able to ensure that fiscal policies are sound and sustainable, to avoid free-riding behaviours as well as neo-ricardian effects. The most widely-discussed surveillance process, because it is the most binding one, is the Stability and Growth Pact (SGP). The Pact may be defined as the “users instructions” for the obligation, defined in the Treaty, for EU Member States, to achieve a medium-term budgetary position of close to balance or in surplus, while maintaining the ratio of the annual government deficit to gross domestic product (GDP) at within 3 % and the ratio of gross government debt to GDP at within 60 %. Member States which do not respect these ratios face an “excessive deficit” procedure which may lead the Ecofin Council to take a series of measures which range from simple recommendations to financial sanctions. In 2005, the European Council agreed to reform the SGP. The important role of the SGP in terms of budgetary discipline is confirmed.

In fact, Malaysia’s capital account remains free with free mobility of inflows and outflows of capital for investments. The market remains open to all market participants and we shall ensure the necessary liquidity to the market. In essence, the measures that were instituted over the past week are consistent with our long standing policy of non-internationalisation of the ringgit and one that we expect banks to fully adhere to without exception. We do not recognize or condone the non-deliverable ringgit offshore market. Those who engage in NDF or NDF-related transactions are doing so at their own peril. I understand that to some, these are challenging measures but as I mentioned earlier, they are not new. We need to remove the negative influence of the NDF activities that impacts the smooth functioning and stability of the onshore financial market. We need to protect the interest of genuine investors and businesses, irrespective of whether they are foreign or domestic. Only through a concerted effort by all the stakeholders of the ringgit market, can this objective be achieved. We need to remember, that integrity and proper functioning of our financial market is in 3/5  BIS central bankers' speeches  the interest of every market participant, and all of us have a role to play towards achieving this objective. Way forward To overcome these challenges and to take on new direction and impetus, we had formed the Financial Market Committee (FMC) earlier this year.
William C Dudley: What does interconnectedness imply for macroeconomic and financial cooperation? Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Swiss National Bank-International Monetary Fund Conference, Zurich, 8 May 2012. *  *  *  It is a pleasure to have the opportunity to speak here today. As I see it, the complex interconnections that exist between the real and financial sectors of the economy, both within and between countries, have important implications for both macroeconomic and regulatory policy. In particular, cross-border coordination in both realms is warranted. Often, macroeconomic and regulatory policies are too narrow in their focus. At times, policies are designed with the goal of being “best” at the national level. Yet the resulting mix of national policies is distinctly inferior to what a well-coordinated global regime could have produced. Today I will discuss two important challenges that go along with living in an interconnected world. The first is how to define what aspects of macroeconomic policy or regulation require greater international coordination and harmonization. Some issues can be handled effectively at a national level, but the crisis has demonstrated clearly that many can not. The second challenge is how to make international coordination workable so that progress can be made in a timely manner while still preserving sufficient autonomy for countries to fashion policies to suit their particular idiosyncratic structures.

of rooms  2.5  2.0  1.5  1.0  0.5  0.0 BE IE LU UK MT DK ES FR CY FI DE SE NL AT EE PT CZ LT SI IT BG EL LV HU SK HR PL RO  Source: Eurostat  6  Figure 6. Population living in poor conditions percent 30  25  Total population having neither a bath, nor a shower, nor indoor flushing toilet in their household - 2015  20  15  10  5  0 RO LV BG LT EE HU PL HR PT CY SK DK EL UK FR AT SI FI BE CZ ES IE IT LU MT NL  Source: Eurostat  Figure 7. People at risk of poverty or social exclusion, % total population percent  Bulgaria  70  Czech Republic Hungary  60 50 40 30 20 10 0 2007  2008  2009  2010  2011  2012  2013  2014  2015  2016  Source: Eurostat  7  Figure 8.