samchain/econo-pairs-v1 huggingface dataset:
In case of a favorable macroeconomic scenario, particularly one in which the job-rich growth observed in 2004 and 2005 continues over the period 2006-2008, the deficit could decline more than set forth in the Convergence Programme, even in the absence of consolidation measures but also without the introduction of new, deficit-increasing legislation. A stronger deficit reduction could be additionally supported by the implementation of the new Public Finance Act, which should contribute to more efficient fiscal management. Unfortunately, these upside risks to deficit targets in the Convergence Programme are far outweighed by downside risks in the form of new deficit-increasing legislation. This includes the recently proposed 4.5 point cut in social contribution rates. While this measure would bring about the much needed reduction of the tax wedge on labour income, it would cost the budget more than 1% of GDP in foregone revenue. Therefore it is essential that it should be accompanied by cuts in spending. Instead, it is more likely that spending will increase, with, among other measures, salary hikes promised to various groups of public employees, as well as more generous social assistance and pension indexation formulas. To sum up, in the medium-term horizon, Poland should be in a position to achieve a general government balance in line with the Maastricht fiscal criteria. This would require moderate discipline in public spending, which unfortunately does not appear very likely at the present moment.

While pull factors actually improved, and rating upgrades by Moody’s outnumbered downgrades by three to one in 2005, they cannot fully account for the magnitude of capital flows to emerging markets in that year. For example, BIS provides a measure of an average sovereign credit rating for emerging markets based on long-term foreign currency Standard & Poors ratings. While credit spreads fell to an all-time low, at the same time emerging markets sovereign ratings remained below their highest levels recorded in 1997. Therefore we may conclude that push factors have been playing an important role in emerging markets. For example, the hedge fund community came to a view that in early 2004 the Polish zloty was an obvious “no-brainer” trade, partly because it had depreciated significantly in previous years and partly because EU accession resulted in a significant and permanent drop in the country’s risk premium. In early 2005, hedge funds were telling me that the Brazilian real was another “no-brainer” trade, as the central bank would have to keep high rates to control inflation and a good external balance indicated that the exchange rate could appreciate. In both cases, the Polish zloty in 2004 and the Brazilian real in 2005 were star performing currencies, and hedge funds pursuing carry trade and momentum strategies were important players on these markets. Such a situation poses a true challenge for many central banks in emerging markets.
Depending on the precise timing of the steps that will occur in the exit sequence, there will likely be opportunities to do so. For example, there is a good chance that the Desk will still be selling MBS at the time when the SOMA portfolio gets back to its normal size. 11 In such circumstances, the Federal Reserve would have to then engage in sizable Treasury purchases to offset the ongoing sales of MBS and to expand the SOMA portfolio as needed to meet currency demand and other factors. This period of Treasury purchases would allow the FOMC to rebuild its Treasury portfolio with the maturity structure that it sees as optimal. 9  This view was expressed by Chairman Bernanke in the press conference following the April 2011 FOMC meeting. 10  Of course, the minutes also noted that the path of sales could also be adjusted up or down in response to material changes in the economic outlook or financial conditions. 11  In this scenario, the Treasury portfolio, through redemptions of maturing assets, would have fallen below the levels that will be required once the SOMA portfolio has been fully normalized. This outcome would be intended to get the overall size of the balance sheet down more quickly, with a view that Treasury redemptions are an effective tool for doing so relative to more rapid sales of MBS.

Irma Rosenberg: Monetary policy and the conditions for growth Speech by Ms Irma Rosenberg, Deputy Governor of the Sveriges Riksbank, at an economics conference, Klippan (in the south of Sweden), 1 November 2004. *  *  *  Let me begin by thanking you for the invitation to come here and speak. The subject for this year’s conference is growth. This is a subject close to the hearts of economists and one that often crops up in debate. What factors determine economic growth in the long term, and what can be done to increase it? I intend to approach this question from a central bank perspective. Is it possible, for instance, for the Riksbank to use monetary policy to raise the level of long-term growth? Are there means of affecting growth? Long-term, or potential, growth is a many-faceted concept and I intend to begin by speaking about the prevailing theory with regard to links to monetary policy. I shall then go into more detail on the underlying determining factors behind the long-term growth rate and briefly describe trends in recent years. I shall also speculate on possible future developments and what can be done to improve long-term growth prospects. Long-term growth and monetary policy Let us start with Figure 1, where the blue line shows developments in real GDP in Sweden during the period 1950 to 2003. One can see that there has been a clear trend increase during these years.
Such NCCTs will be subject to sanctions if they do not come into line. Moreover, banks from NCCTs are caught under the newly enacted US Patriot Act. Such banks, and any others regarded as higher risk from a money laundering perspective, will be subject to increased scrutiny by their US correspondent banks and the US authorities. At worst, higher risk foreign banks could eventually find themselves shut out of the US payments system. Hong Kong has a good reputation internationally as a financial centre that takes seriously the need to combat money laundering. I am sure that you will agree that we all have a vested interest in keeping it that way - which means that we need to keep in line with international standards as they evolve. The role of the HKMA The role of the HKMA in this is to work with the other relevant authorities in Hong Kong - the Commissioner for Narcotics, the law enforcers and other regulators - to ensure that we have an effective framework to deter, detect and report cases of money laundering. Our particular responsibility relates to AIs. It is our job to verify that AIs have adequate policies, procedures and controls in place to enable them to: •  identify suspicious customers and transactions;  •  report suspicious transactions to the Joint Financial Intelligence Unit (“JFIU”); and  •  assist the law enforcement authorities through providing an audit trail.

We do this through issuing guidelines that lay down the minimum standards that institutions should incorporate in their anti-money laundering systems. We then carry out on-site examinations to check that these standards are being adhered to. This year we introduced a two-tier, risk-based approach towards examinations. In cases where AIs may be at higher risk of money laundering, we conduct more in-depth examinations using specialist teams. This may involve sample testing and visits to branches to look at how controls actually work in practice and to ascertain at first hand the knowledge and awareness of staff. In more routine cases, higher level review of anti-money laundering controls is conducted, generally as part of our normal risk-based examinations. We intend to supplement our own examinations with a system of self-assessment by compliance officers of AIs on risk indicators of money laundering within their own institutions and the quality of  BIS Review 47/2002  1  controls. This will be done using a structured self-assessment framework that we aim to release to the industry later this year. This should help the HKMA to conserve its own resources and direct them where they are most needed. But it should also serve to remind AIs that they have the primary responsibility for making sure that their own house is in order. The HKMA guideline Checking that standards are being observed is obviously important. But it is necessary to ensure that the standards themselves remain effective in dealing with risks.
Financial stability is our common good, and we should also face a more subtle threat to it: debt complacency on a global level, in the context of accommodative monetary policies which will be less warranted in the near future. Global debt was already about 200% of world GDP before the crisis (2007), but is up to 220% today. Sound fiscal policies for public debt, responsible lending by financial actors for private debt and – if needed – macroprudential measures, should react against this debt complacency. 1/3  BIS central bankers' speeches  More broadly on multilateralism, we should continue to work together to preserve the world economic and trade order. We Europeans, shoulder-to-shoulder with Canada, Japan and others, must resolutely defend international economic relations based on commonly respected rules and multilateral institutions: we are all aware that an escalation of protectionist threats from the United States would dampen growth everywhere. The recent uncertainty is probably already having some negative effects on investment: you saw it in the British economy since the Brexit vote in 2016. And real tariffs would hurt more: according to most calculations including ours, a 10% increase in tariffs would diminish world trade by double digit figures, and decrease global GDP by more than 2%, starting in the United States. 2. The finance of tomorrow Let me now turn to my second point: the finance of tomorrow in an interconnected world.

Similarly, no country or financial institution can adequately respond to the challenges of this changing world on its own: we must definitely join our efforts to build our future. Thank you for your attention. 1 ACPR study on the digital revolution in the French banking and insurance sector, March 2018. 3/3  BIS central bankers' speeches
Michael Held: The evolving first line of defense Keynote address by Mr Michael Held, Executive Vice President of the Legal Group of the Federal Reserve Bank of New York, at the 1LoD Summit, New York City, 17 April 2018. * * * Good morning. It’s an honor to join you at the 1LoD Summit. The views I express today are my own, not necessarily those of the Federal Reserve Bank of New York or the Federal Reserve System.1 I’ve heard it said that being in the risk control business can be, and often is, a thankless task. We get all the blame when something goes wrong, and none of the glory when things go right. So, I want to start my remarks with a word of gratitude to you, my fellow travelers in the world of risk controls. Thank you—not just for the invitation to speak today, but also for the work you perform each day at your firms. The growing sophistication and stature of the first line of defense is, in my view, an unqualified improvement in corporate governance—especially at financial firms. Let’s begin with what you are defending. The credibility and reputation of your colleagues, your employer, and your industry. The trust of your customers and clients. And, perhaps most important, the public interest. From my perspective, you are not just a first line of defense for your organization. You are the first line of defense against significant risks to the financial system. This may sound inflated to some.

The relative size of the programme, representing just 1.6% of the euro area GDP against 13.7% of GDP that has been bought by the Bank of England or the 11.4% purchased by the Federal Reserve, makes it easier to implement. The ECB continues to comply strictly to its mandate to ensure price stability and does not allow inflation to increase as a way of easing the burden of the debt. On this point we disagree with from some of the suggestions made recently by Professor Rogoff. The inflation tax is a blunt tool whose accidental effects would reflect mainly ex-ante institutional features (such as the degree of indexation or the maturity structure of liabilities) rather than the actual necessity to adjust. More importantly, Professor Rogoff has said himself, inflating the debt away would unduly jeopardise the most precious capital of the ECB and of any independent central bank, namely its credibility. The ECB will never debase the currency, as our record shows: we have remarkably preserved both internal and external value of the euro by keeping inflation low and inflation expectations well-anchored. As we have learnt and repeatedly experienced, credibility and in particular the ability to anchor inflation expectations are crucial for the smooth functioning of monetary policy. Their key role has been highlighted again and again during the financial crisis, particularly in preventing the danger of an entrenchment of deflationary expectations. The euro area is a highly integrated economic and financial area which needs to be managed through common decisions.
In historical terms, households’ interest costs are currently very low. That the low interest rates have increased households’ ability to take on bigger loans is one cause of the upturn in house prices. During the summer and autumn, the rate of increase in house prices appears to have been dampened somewhat in certain areas, but the rate of increase is still high. Monthly data show that the annual rate of growth for the whole country during the period July to September was 10 per cent. The developments in Sweden are by no means exceptional. Internationally, there are examples of countries which have seen sharper rises in house prices, such as Australia and the UK. But there are also examples of countries where the rate of increase has been lower, such as Germany. Recently, however, the international situation has become more mixed in that house price inflation in some countries, e.g. Australia and the UK, has slackened considerably whereas in others, including the US, it has continued to pick up. In Australia and the UK, the rate of house price increases dropped when the central banks there raised key interest rates, although this occurred with a slight lag in Australia. In the US, the rate of increase has continued upwards in spite of rises in nominal short-term market interest rates. Longer-term rates, however, have not risen to the same extent since the Federal Funds rate began to be raised.

At that time the price increases were driven instead by expectations that prices would continue to rise strongly in the future. When it eventually became evident that these expectations were not going to materialise, the prices fell quickly. Such speculative elements do not appear to exist today. At the same time, property companies’ earnings and debt-servicing ability are good. As things stand today, the property sector will hardly cause any large loan losses for the banks and so it does not constitute a threat either to the stability of the financial system. Housing prices and household debt Over the past one to two years we in the Riksbank’s Executive Board have devoted quite a bit of attention to the house market, where a rapid rise in prices has gone hand in hand with an increase in household debt. But it is important to distinguish between the conclusions we have come to regarding  1/6  the significance for financial stability and the discussions we have had in connection with our monetary policy decisions. I will come back to this. That house prices have risen rapidly in Sweden and many other countries can hardly have escaped anyone’s attention. In Sweden, house prices in the past ten years have more than doubled, and the upswing has been especially strong in metropolitan areas. Increasing house prices have been accompanied by an accumulation of household debt. Due to the fall in interest rates, households’ interest costs have dropped, despite the rise in debt.
At the moment, an intense debate is raging as to whether forward guidance can actually increase the effectiveness of monetary policy in a zero interest rate environment. What is crucial for the effectiveness of forward guidance is that it is transparent and credible. In the case of the SNB, the inflation forecast provides implicit information about the expected interest rate path. At present, however, the minimum exchange rate against the euro is also in place. With short-term interest rates close to zero, the minimum exchange rate makes it possible, for the foreseeable future, to ensure monetary conditions that are appropriate for the Swiss economy. Irrespective of any kind of forward guidance, international monetary policy is extremely expansionary. This has had a stabilising effect on international financial markets, as reflected  2  BIS central bankers’ speeches  by the situation in spring, when long-term interest rates sank to a historically low level and risk markets benefited from strong capital inflows. Various stock indices recorded new historical highs and risk premia for corporate bonds have steadily narrowed. This positive sentiment was also reflected in volatility measures which had returned to the levels prevailing before the financial crisis. First attempt to normalise monetary policy in the US Together with a revival of the economy in the US, this favourable environment resulted in the Federal Reserve making a first attempt to initiate the process of normalising monetary policy.

In addition, delaying balance sheet normalization allowed the FOMC to meaningfully assess the efficacy of its tools to control short-term interest rates with a large balance sheet, and thereby judge how patient it could afford to be in reducing the balance sheet to its longer-run level.7  Reducing the balance sheet’s size Over the past year, as the FOMC came to judge that normalization of the policy rate was well under way, with another rate increase in December 2016, and further increases in March and June 2017, FOMC deliberations turned to how balance sheet normalization might best be done. As I noted earlier, for some time the FOMC has underscored that the balance sheet will be reduced in a way that is gradual and predictable, so as to avoid risks of surprise, disruption, or volatility, and would be achieved primarily by not reinvesting maturing principal. The FOMC’s recently initiated plan does exactly this.8 Principal reinvestment will decline in a phased manner, an approach which provides for an appropriate pace of reduction in the balance sheet, and is quite straightforward to communicate. Specifically, principal maturities will be reinvested only to the extent that they exceed gradually increasing caps.9 For Treasuries, the cap initially will be $ billion per month, and will increase in steps of $ billion at three-month intervals over 12 months until the cap reaches $ billion per month. Agencies follow a similar pattern, with a cap starting at $ billion and rising in three-month steps to reach $ billion.
The Governors of the Nordic countries have built trust for a long time. This building of trust dates back to the 19th century. Although it is not very widely known, in 1873, Sweden, Denmark and Norway formed a monetary union based on the gold standard. This union was eventually dissolved in 1924. However, I believe that one legacy of the union has been that the Governors of the Nordic Central Banks – adding Iceland and Finland to the group – have continued to meet regularly since then. This tradition of regular meetings has built trust. It has taken some time, but today the trust is there. The Nordic example shows that trust between authorities can be achieved, but that trust takes time to build – so patience is warranted. At the same time, we need to start getting this process going immediately. On a European level, I think that the MoU can enhance crossborder cooperation by increasing harmonisation, regulatory convergence and, not least, by building trust. Consequently, we should continue to fully implement the MoU. We are working on this in the Nordic and Baltic countries and are currently establishing a Nordic-Baltic Voluntary Specific Cooperation Agreement. This may serve as an example and, although it may take some time, I am confident that we can increase trust in Europe as well. BIS Review 118/2009  5  Conclusion In my speech, I have talked about confidence and trust. Confidence is essential for a wellfunctioning financial system.

However, fiscal performance in 2009 was weak, mainly due to the global economic crisis, which reduced domestic revenues. Despite this, Government remained within the programmed domestic financing for the year. 1  December-2009 inflation revised to 12.0% in the Budget Speech for 2010 presented to Parliament on October 9, 2009. BIS Review 53/2010  1  Distinguished Members, the financial sector has remained resilient despite the effects of the recent global financial crisis. Currently, the Zambian financial sector is characterized by high liquidity levels, reflecting tighter lending standards in the wake of the lessons from the global financial crisis leading to marked decline in private sector lending. As a result, the demand for the relatively risk free Government securities has increased causing a decline in yield rates on Government securities. The decline in Government securities yield rates and relatively low inflation experienced since the beginning of the year should contribute to a decline in banks lending rates and thus stimulate borrowing by the private sector. I am aware that the high interest rates in the country pose a very big challenge for our manufacturers to borrow for recapitalisation and expansion of their businesses. Access to finance is essential for the economy to grow and therefore it is necessary that we find ways that could reduce the cost of borrowing to allow key sectors to expand. Ladies and Gentlemen, I wish to reiterate that the economic fundamentals point to a reduction in lending rates.