samchain/econo-pairs-v1 huggingface dataset:
Mr. Chairman, by publicising the actions of the central bank, the media has become an important agent in facilitating the desired behavioural response of economic agents to monetary policy actions of the central bank. Due to the critical role of the media in the successful execution of public policy, the central bank needs to have a clear communications policy that supports the goals of the Central Bank. One of the major goals of communication policy, for instance, is to help anchor inflation expectation by promoting credibility and understanding of monetary policy. Indeed a notable change in central banking over the past 15 years has been a world-wide movement toward increased communication by central banks about their policy decisions, the targets that they seek to achieve through those decisions, and their view of the economy's likely future evolution. Mr. Chairman, It is argued that increased willingness to share the central bank's own assumptions about future policy with the public has increased the predictability of policy, in ways that have improved central bank's ability to achieve their stabilization objectives. Public information serves the dual role of conveying fundamental information as well as serving as a focal point for better coordination. As financial markets become more efficient in a country, and as the economy becomes more open, the central bank’s communication policy needs to adapt to these on-going changes.

In this regard let me offer one simple example of how critical the role of the legislature and the media may be: The conventional wisdom is that one important way in which African economies can ensure that they are able to limit long-term damage to their economies is to ensure that they do not indulge in policy reversals for short term gain that sacrifice the longterm growth prospects. Mr. Chairman, policy reversals are more likely to occur in an environment in which information flows and understanding is poor between economic managers such as central bankers on one side and the legislature and the media on the other. Populism can wreak havoc on good economic policy making. In this regard Africa does not need to rehash the false choice of market versus the state – both are part of the fabric of society and the economy. Furthermore, calls have been heard that African Governments should also nationalise banks and purchase car companies as the developed economies, the owners of capitalism, have done. These are ultimately dangerous calls as the nature of our individual economies matters in determining the appropriate remedy for our economic ills. It is for this reason that my address today is entitled “The Central Bank, the Media, and the Legislature: Can they Work Together?” My simple answer is that they can, and that they must – particularly in the unprecedented circumstances in which we find ourselves in today.
Mohamed S Fofana: Managing Sierra Leone’s post-conflict economy Keynote address by Mr Mohamed S Fofana, Deputy Governor of the Bank of Sierra Leone, at the opening ceremony of the Regional Forum on Economic and Financial Management for Legislators, Freetown, Sierra Leone, 12 July 2004. *  *  *  Mr Chairman, Hon. Minister of Justice, Your Excellency, the High Commissioner of The Gambia, Hon. Members of National Parliaments of WAIFEM Countries, Director General of WAIFEM, Directors of the Bank of Sierra Leone, Distinguished Guests, Facilitators and Participants, Ladies and Gentlemen, Introduction It is my honour and privilege to extend a hearty welcome to all of you on behalf of the Government and people of Sierra Leone, Governor JD Rogers who is unavoidably absent today, the Board, Management and staff of the Bank of Sierra Leone and on my own behalf, on the occasion of the opening of the Regional Forum on Economic and Financial Management for Legislators organized by WAIFEM. As host, I would like to urge you to take time out of your crowded programme to visit Freetown and behold the many attractions of this rejuvenated city. Ladies and Gentlemen, permit me to briefly dwell on the state of the West African Economy.

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
1  Testimony of Ben S. Bernanke, Nomination hearing before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, November 15, 2005. 2  Remarks by Governor Edward M. Gramlich, Federal Reserve Board, “The Politics of Inflation Targeting”, Paris, France, May 26, 2005. BIS Review 80/2006  3  Norges Bank’s practice in this respect is in line with the recommendations of leading academics in the field of monetary policy, such as Professor Lars Svensson 3 : “… announcing the optimal projection – including the instrument-rate projection – and the analysis behind it would have the largest impact on private-sector expectations and be the most effective way to implement monetary policy.” Norges Bank’s interest rate projection is based on seeking to achieve an interest rate path that provides a reasonable balance between the objective of stabilising inflation at target and the objective of stabilising developments in output and employment within a reasonable time horizon, normally 1 – 3 years. Interest-rate setting is also assessed in the light of developments in property prices and credit. Norges Bank forecasts inflation, output and the interest rate simultaneously. There is considerable uncertainty associated with the estimates of capacity utilisation in the economy (the output gap), and there is no simple relationship between developments in capacity utilisation and developments in inflation. It cannot therefore be argued with great conviction that it is possible to identify one particular interest rate forecast that provides the indisputably “best” trade-off in monetary policy.

However, they also reflect supply and demand factors. On the whole, developments in credit appear to have been, up to now, in line with historical regularities, according to which loans to firms typically lag the economic cycle by a couple of quarters. In fact, credit flows remained positive, even during the period of the most severe contraction in economic activity, presumably as a result of the growing use of credit lines and revolving credit facilities. 23 Therefore, lending to firms can be expected to remain subdued even in the early stages of economic recovery, but it cannot be ruled out that supply factors will continue to restrict credit for some months. 24 The flow of loans to households began to grow again at the end of last year. The quarterly survey on bank lending indicates that the degree of tightening adopted by banks for the granting of credit to firms declined over the last few months of 2009, but remain positive (see Figure 1). It is interesting to note that among the factors that affect banks’ restrictive intentions, neither the one concerning the liquidity position of the banks themselves nor the one concerning access to financial markets seems significant any longer. Both factors now contribute in a positive way to the intentions of banks to grant credit. Considerations relating to the prospects for economic growth and those linked to specific sectors of the economy remain restrictive, but the degree of restriction is declining sharply.
Or should we view them as or straws in a wind that will increase in force and respond by strengthening our walls and perhaps leaning a bit in the other direction? Conclusion Journalists frequently ask people in my dismal profession: “What keeps you awake at night?” They do so, of course, not out of interest in the sleeping patterns of central bankers but because they want to know, quite reasonably, what we fear the next disaster, the next great crisis, will be. And, of course, at any given time there are vulnerabilities and unknowns that one is concerned about more than others. 28 According to the FPC core indicator which tracks the mean over the median (that is, the average of the top half of the distribution). It is also true in the sense that the proportion of borrowers with high LTIs and high LTVs have been rising. 29 Leveraged lending typically refers to loans to non-investment grade firms that are highly indebted (debt of more than four times EBITDA) or are owned by a private equity sponsor. 12  All speeches are available online at www.bankofengland.co.uk/speeches  12  I might have talked today about the rapid and extensive evolution of market-based finance in recent years such that it now accounts for nearly half of the international financial system. It carries different and perhaps lesser risks than the banking system. But we know much less about how it might respond in stress and have fewer policy tools to address vulnerabilities.

Building on the Regtech Watch, we are launching a new series called “Regtech Adoption Practice Guides”. This provides more practical implementation guidance when you use Regtech. We also plan to create a centralised Regtech knowledge hub as a platform for sharing Regtech information and content. We do hope that all these initiatives taken together will allow banks to become much more familiar with Regtech and also help them manage the Regtech adoption process. 14. The third action we are taking is to encourage new Regtech solutions. It’s one thing to help banks become willing and ready to embrace Regtech. But they will only do this if there are fit-for-purpose Regtech solutions to enhance the way that they manage their businesses. This requires commitment from Regtech companies and financial institutions, and also support from the regulators and Government. 15. One way to encourage new solutions and innovation is through offering incentives and organising competitions to resolve real-life pain points. In March this year the HKMA launched the Global Regtech Challenge. This competition motivated 86 global and local Regtech firms to come up with possible Regtech solutions for four specific pain points faced by banks in Hong Kong in the areas of Governance, Risk and Compliance; Conduct and Customer Protection; Customer Data Privacy; and also Stress Testing. Later today we will announce the winners from this Challenge, and the audience will hear more about how the innovative solutions can benefit banks in Hong Kong. 16. Working alongside us is the Financial Services and the Treasury Bureau.
As a result of the prospect of low inflation and moderate growth in output and employment, the key rate (the sight deposit rate) was reduced by a total of 5.25 percentage points between December 2002 and March 2004. The key rate has been kept unchanged at 1.75 per cent since then. The reductions in the interest rate have contributed to the depreciation of the krone. Measured by an index of 44 trading partners (I-44), the krone depreciated through 2003 by almost 11 per cent from its highest level in January of the same year. The krone has appreciated again somewhat through 2004. Growth in the world economy has been strong over the past year, particularly in the US and China. The recovery has also gradually broadened. A number of countries raised their key rates in the course of 2004. The Federal Reserve has raised its key rate three times, by a total of ¾ percentage point. The  2  BIS Review 66/2004  Bank of England has raised its key rate by 1 percentage point. In October, the People's Bank of China raised its key rate for the first time in nine years. After rising sharply for several quarters, economic growth in the US slowed somewhat in the second and third quarters of 2004. Looking ahead, growth among our trading partners is projected to moderate, but resource utilisation is expected to increase gradually. Increased global activity has led to rising commodity prices. Oil prices are high.

Output and employment figures are often revised and do not therefore always present an accurate picture of the current economic situation. Norges Bank therefore also uses a number of other indicators to gauge the temperature of the Norwegian economy. It appears that fiscal policy in 2004 will be somewhat more expansionary than assumed in the Revised National Budget. The Government estimates that underlying nominal spending growth over the central government budget will be close to 11 per cent between 2003 and 2005. Local government revenues are estimated to rise by slightly more than 11 per cent in nominal terms during the period. which is more than nominal growth in mainland GDP. Employment has picked up. The number of persons employed in the second quarter of 2004 was 0.2 per cent higher than in the same quarter of 2003. Employment growth has mainly occurred in retail trade, commercial services, education and health and social services. Manufacturing employment is still falling. Companies often wait to increase employment until the recovery has gained a firm footing. Compared with the recoveries in 1982 and 1991, employment growth in the current recovery has been weaker relative to output growth. The moderate increase in employment indicates that companies are still reaping the benefits of rationalisation measures. Household demand is one of the most important driving forces in the Norwegian economy. Low interest rates, high growth in real wages and rising housing wealth are stimulating private consumption.
As computing capacity has grown in line with Moore’s Law, the numbers of interacting agents that can be simulated using ABMs has escalated. The largest ABMs can now deal with interactions among 100 billion agents (LLNL (2013))). This is an order of magnitude larger than the number of humans on the planet. Second, there has been a revolution, every bit as significant, in the availability of data to callibrate these models. This Big Data revolution is hardly unique to economics and finance, affecting pretty much every 17  Dilaver, Jump, and Levine (2016). This is being developed by Steve Keen and Russell Standish, further details are available here: http://www.debtdeflation.com/blogs/minsky/. 18  20  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  20  aspect of academe, business and public policy (McKinsey (2011)). Nonetheless, with economics and finance a late-adopter of ABM technology, large-scale and more granular economic and financial data removes an important constraint on the development of these models. At the same time as the costs of developing and simulating ABMs have shrunk, it seems likely the benefits of developing these models may have become larger. Inter-connections between agents have lengthened and strengthened over recent decades, locally and globally (Haldane (2015)). This connective tissue linking individuals and economies can take a variety of forms. Flows of goods and services along global supply chains have never been larger. Flows of people across borders have probably never been greater. Flows of capital across borders have certainly never been greater.

It means being able to integrate and think critically when there are only pieces of information. It means being able to provide breadth of perspective anchored by depth. For us in Bank Negara Malaysia, mastery of economics and finance is what helps us differentiate the ‘signal’ and the ‘noise’ in economic policymaking and financial regulation. It also helps us to differentiate the symptom and the root cause in the supervision of financial institutions. It also means learning the lessons from history and avoiding the same mistakes within the context of our operating environment. Thus, I encourage you to focus and follow your curiosity in exploring the depths of your field of study. There is no end to learning, and may your thirst for knowledge drive you on. Have the humility to recognise that we never stop learning. As a Chinese proverb goes, “Learning is a treasure that will follow its owner everywhere.” Second, on adaptability. Charles Darwin famously reminded us that, “It is not the strongest of the species that survives, nor the most intelligent, it is the one that is most adaptable to change.” This means one must be able to constantly learn new things. One must also unlearn things that have become outdated. No one can really be certain on the precise impact of automation, artificial intelligence and the new industrial revolution 4.0 on future jobs and the complexion of society.
Coming to the current NBR governance framework, I would like to start by pointing out that it ensures a complete separation as regards the coordination of the relevant departments: while the Governor is in charge of the monetary policy area, the First Deputy Governor coordinates the Supervision Department; one Deputy Governor takes care of financial stability and the other, of bank resolution. The nine-strong Board of Directors runs the central bank, but the process of preparing its decisions in the areas of monetary policy and prudential supervision takes place in two distinct structures: the Monetary Policy Committee and the Supervisory Committee, respectively, which comprise members of the executive management and experts in the relevant areas. As separation is not the same thing as complete isolation, I have to add that both committees are chaired by the Governor... Pursuant to the NBR Statute, the Board is tasked to act as a first appellate forum for sanctions on credit institutions. In order to avoid conflicts of interest that may appear, the following institutional arrangements are in place: separate Board meetings, a certain degree of autonomy of the Supervision Department and recusal from the proceedings of the First Deputy Governor, in his capacity as coordinator of the Supervision Department. 2  BIS central bankers’ speeches  I would like to add a special remark regarding the new role of the NBR as the resolution authority, arising from the provisions of the Bank Recovery and Resolution Directive.

This document, which we hope to be able to publish shortly, once we have incorporated a number of comments received during the public consultation period, does not resolve all the problems, but it does represent a significant step forward in improving coordination and the distribution of tasks between supervisors. We are also keeping a close watch on how cooperation is being handled in practice between countries with supervisory responsibility for institutions belonging to international banking groups. In this respect, the AIG is gathering and sharing information and experience on the functioning of bilateral agreements and of supervisory colleges. In my view, either of these two collaboration methods can be fully valid, depending on the size and complexity of the group concerned. Over the years, these kinds of agreements on the exchange of information and reciprocal cooperation have been established among supervisors as a means to perform effective crossborder supervision. Time has shown that such agreements are more effective when the relations between home and host supervisors are based on mutual trust. In this regard, I believe that we as supervisors should steer clear of excessively formalist and legalistic approaches and try to be pragmatic. I think that the questions which need answering are more operational than legal in nature. It is a matter of finding a way of cooperating that makes us all more efficient in the use of our resources, reduces the supervisory burden for the banks and improves the stability of the financial system.
Those policy simulations could be complemented by controlled trials of policies, the like of which have been successfully pioneered by the What Works Centre for Local Economic Growth.55  The economy is a complex, adaptive system. Behaviour in those systems is difficult to predict ex-ante, especially at times of policy change; it is emergent, just as a hurricane or tornado is emergent. Often, our policy intuition about complex systems is simply wrong. No model, however micro-founded or data-rich, is proof against those uncertainties. But one that embodies complex, micro-level dynamics is more likely to do so than one without them. A complex systems framework can make for robust policy choice. That was Jay Wright Forrester’s insight in the 1950s. We know it to be true from more recent experience. The real-time, supply-chain data system developed by Walmart twenty years ago transformed inventory management, at Walmart and elsewhere. The real-time micro-level models developed by meteorologists transformed weather-forecasting at around the same time. Today, digital twinning is transforming processes across companies. These are microcosms of what might be achievable at the macroscopic scale. 55  For example, What Works Centre for Local Economic Growth (2018). 43  All speeches are available online at www.bankofengland.co.uk/speeches  43  Can a Central Bank be Local? Finally, what are the implications of these local economic perspectives for central bank policy? On the face of it, these might seem few. Central banks are national agencies. Their policies, such as interest rates, can only be set at the national level.

17  All speeches are available online at www.bankofengland.co.uk/speeches  17  Chart 13: Heat maps of health in Belfast, Cardiff, Edinburgh and Inner London  Sources: 2011 Census. Notes: Data show percentage of respondents declaring themselves to be in bad or very bad health at electoral ward level. I draw two conclusions from these micro-level visualisations. First, however striking the regional differences in economic and societal health across the UK relative to historical and international standards, these conceal even more striking differences in levels of health, wealth and happiness within regions. To the extent there is an inequality issue in the UK, it is as much or more a local rather than regional one. 18  All speeches are available online at www.bankofengland.co.uk/speeches  18  A second, nerdier, point is what this means for our understanding the economy. Many systems – social, natural and physical – exhibit a pattern in which the distribution of outcomes does not converge at higher resolutions; it remains constant or even expands. These systems have a fractal property with patterns that are self-similar at different levels of resolution. Snowflakes and shorelines are the best-known examples. The violins charts suggest economic systems may also exhibit some of these properties, with distributions which do not converge at higher resolutions and may even expand. Outcomes in these systems are not distributed like a bell-shaped, Normal distribution.