samchain/econo-pairs-v1 huggingface dataset:
This would be a welcome development for the U.S. If, in contrast, Europe were not to be fully successful in charting an effective course, this could have a number of negative implications for the U.S. In particular, there are three possibilities that I would like to highlight for the Subcommittee today. First, if the European situation were to deteriorate, then the euro area would face even more serious fiscal and economic challenges. As a result, growth within the euro zone would  BIS central bankers’ speeches  1  weaken and this would lead to less demand for U.S. goods and services that are exported to Europe from companies and workers here. This would hurt growth here in the United States and would have a negative impact on U.S. jobs. It is important to recognize that the euro area is the world’s second largest economy after the U.S. and an important trading partner for us. Also, Europe is a significant investor in the U.S. economy, and vice versa. Thus, what happens in Europe has significant implications for our economy. Second, if the European situation were to deteriorate, this could put pressure on the U.S. banking system. The good news is that U.S. banks are much more robust and resilient than they were a few years ago. U.S. banks have bolstered their capital significantly, built up their loan loss reserves and have significantly larger liquidity buffers.

William C Dudley: What the euro crisis means for taxpayers and the US economy Testimony by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, before the Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs, Committee on Oversight and Government Reform, US House of Representatives, Washington DC, 15 December 2011. * I. *  *  Introduction  Chairman McHenry, Ranking Member Quigley, other members of the Subcommittee, it is an honor to testify before you today to discuss the economic and fiscal challenges facing Europe and the potential implications for the United States. My name is Bill Dudley, and I am president of the Federal Reserve Bank of New York. Let me preface these remarks by stating that the views expressed in my written and oral testimony are solely my own and do not represent official views of the Federal Reserve Board, the Federal Open Market Committee (FOMC) or any other part of the Federal Reserve System. Additionally, because I am precluded by law from discussing confidential supervisory information, I will not be able to speak to the financial condition or regulatory treatment or rating of any individual financial institution. The Federal Reserve seeks to promote financial stability in order to enable U.S. businesses and households to maintain their access to credit and to ensure sustained economic growth.
But he stayed involved in U.S. diplomatic, political and financial matters. Until his death in 1849, he served as a diplomat in Paris, and later in London. He also directed the Bank of New York, and indulged in economic, financial and ethnographic research. He was laid to rest in the Trinity Church cemetery on Wall Street. Years earlier, Trinity Church had already become the final resting place of Alexander Hamilton. If you visit Trinity Church, you will find that the two are buried at opposite ends of the cemetery, perhaps fittingly so in light of their difficult personal and political relationship. 23  Real growth averaged 3.1 percent in OECD countries between 1994 and 2000, as compared to an average growth rate of 2.8 for the period 1980 to 2006. During the more recent seven-year period between 2000 and 2006, growth has averaged 2.5 percent, and no OECD country has reduced its debt-to-GDP ratio by more than Gallatin’s record. 24  Ireland experienced an average real growth rate of nine percent during the years in question. This compares to an estimated average growth rate for the United States between 1801 and 1808 of just over three percent. Source: Author’s own calculations based on data provided in Carter et. al, op.cit., and the IMF World Economic Outlook. 25  See, for example, Rappard, op.cit. 26  Rappard, op.cit. recounts Gallatin’s post-treasury diplomatic career as well as his travels in Europe and time spent in Geneva. BIS Review 106/2008  5  3.

15  Jefferson was elected president in 1800, but did not appoint Gallatin until 1801 – even though it had been his intention from the start. See for example Wright and Cowen, op.cit., p. 93, for details. BIS Review 106/2008  3  priorities included a change in Hamilton’s tax structure in order to better reflect the Republican Party’s ideology and its constituencies. He also focused on the need to increase transparency in fiscal policy. He progressed rapidly on both fronts. Internal taxes were soon abolished. The federal government came to rely almost exclusively on import tariffs, which Gallatin saw as luxury taxes that did not burden his farming constituency. 16 Gallatin also convinced Congress to pass the law of 1801, which required an annual report by the Secretary of the Treasury to the President. He submitted the first of these reports later that year. Moreover, the minting of dollars was somewhat scaled back under Gallatin. To compensate, he allowed foreign coins to circulate along with the dollar. These measures were not taken because Gallatin was opposed to the Mint. Rather, the Mint proved to be very costly for the federal purse. Therefore, Gallatin saw the reduction of its operations as a way for the government to save money, in line with his primary objective of fiscal consolidation.
3  In part, that is because shocks are not measured directly, only their consequences; so what appears to be ‘good luck’, may reflect the beneficial influence of structural changes or better policy in ameliorating their impact; see Bernanke (2004). Other contributions to this literature include: Cogley and Sargent (2005), Sims and Zha (2006), and Stock and Watson (2003), who ascribe a sizeable portion of the improved performance to good luck; and Clarida, Gali and Gertler (2000) and Lubik and Schorfheide (2004), who put more weight on better policies. 4  BIS Review 101/2009  ability of policy makers to maintain steady growth in the real economy. The Fed’s reluctance to use interest rates to lean against asset price booms coupled with a willingness to relax monetary policy aggressively in the wake of sharp asset price falls (Greenspan, 2002) may also have helped place a floor under expected asset prices (the “Greenspan Put”; see Miller, Weller and Zhang, 2002). A tendency of people to underestimate future risks during periods of good economic performance seems to be a recurring theme in the history of financial markets. In part this seems to be a mixture of a willingness or desire to believe that the world has changed for the better, and moreover to find ways to rationalise that belief – in other words, “this time it’s different”. To that must be coupled a limited imagination – shared in this instance with regulators and central bankers – to see quite how badly things could go wrong.

Sir Philip said: “I have frequently described the Government’s economic policy stance as being one of “positive non-interventionism”. Not surprisingly, perhaps, some have claimed that this is really just a fancy term for laissez-faire or, less kindly, that it covers up a “do-nothing” approach. This is simply not so: positive non-interventionism involves taking the view that it is normally futile and damaging to the growth rate of an economy, particularly an open economy, for the Government to attempt to plan the allocation of resources available to the private sector and to frustrate the operation of market forces, no matter how uncomfortable may be their short term consequences.” Sir Philip added: “But in my description of our economic policy stance, I do qualify the term ‘non-interventionism’ with the adjective ‘positive’. Perhaps in the past I have not spelled out the implications of this adjective clearly enough. What it means is this: that the Government, when faced with an interventionist proposal, does not simply respond that such a proposal must, by definition, be incorrect. Quite the contrary. “Generally speaking, or so I would like to argue, the Government weighs up carefully the arguments for and against an act of interventionism in any sector of our economy and on the demand or supply side in the light of present and likely future circumstances. The Government then comes to a positive decision as to where the balance of advantage lies.
These reforms aiming to ascend to the international best practice such as the IMF’s Financial Sector Assessment Program (FSAP), the Basel II capital standard, the  4  BIS Review 147/2008  fair value accounting rules or IAS 39, will help ensure financial sector stability in the longterm as well as escalate the level of competitiveness and resiliency of the regional financial institutions. However, research studies are needed in finding ways to mitigate the procylicality problem associated with the adoption of Basel II standard and the IAS39 rules. Nevertheless, much more still needs to be tackled further. More emphasis will be needed on improving and enhancing risk assessment and management of bank and non-bank corporations as well as strengthening authorities’ responsiveness to risks. Deepening and broadening capital markets, particularly the relatively infantile corporate bond markets will continue to be one of the top priorities as liquid and well functioning local capital markets would help the domestic financial markets withstand risks in the increasingly more volatile world capital market better. The important tasks in this area include improving the legal and regulatory frameworks to ensure investor protection and increase transparency, enlarging and diversifying the investor base, and finding ways to improve the quality of international and local credit rating agencies’ over-the-cycle risk assessment. In addition to the above crucial works, I would like to stress the challenge in human resource development as the world becomes more complex.

Typically, when the source of an inflationary shock is stemming mainly from demand, monetary policy will respond proactively to prevent the economy from overheating. And when faced with supply shocks, to the extent that such shocks are seen to have no lasting impact on inflation, central banks will “look through” and extend the medium-term policy horizon if necessary. But such a neat categorisation does not adequately capture the situation we are facing in the euro area today. We are not seeing the type of demand-led overheating that is visible in the United States and, despite a tight labour market, the risk of a wage-price spiral so far seems to remain contained. Instead, the euro area is seeing an increase in inflation driven by two unprecedented shocks. These shocks have constrained global supply, but they have also shifted demand and led to a large and persistent inflation response. The first shock was the pandemic. Pandemic-related supply bottlenecks and rising prices have reinforced each other, with firms reacting to the threat of shortages by ordering more and earlier. This “bullwhip effect”[1] has driven up prices along the pricing chain. At the same time, the fiscal and monetary policy response to the pandemic has succeeded in protecting nominal incomes, thereby supporting a fast recovery of demand when our economies reopened. The resilience of incomes has, in turn, triggered large swings in demand across sectors. During the lockdown period, and thanks notably to e-commerce, consumption was concentrated on durable goods.
Given this twofold mission, we base our activities on a principle of neutrality and freedom of choice, which in turn means that we cannot favour one payment instrument over another and do not seek to influence people’s behaviour or preferences. 1. In the payment instrument landscape, we are currently seeing a twin trend as  cash payments go down, while cashless payments undergo a transformation driven by behavioural changes and technological innovation. Shifts in consumption approaches, such as the growth of e-commerce, are fuelling a steady  decline in the use of cash in transactions, while the use of electronic payment instruments is increasing. Statistically speaking, the volume of banknotes returned by the public to cash processing firms fell by over 10% between 2012 and 2017. However, this decline needs to be put into context, because banknotes still dominate face-to-face transactions, particularly small-value transactions, as shown by recent Eurosystem research, which found that banknotes continue to be the main payment instrument in Europe and France by number of transactions, accounting for 79% of transactions in the euro area and 68% in France. In value terms, they make up 54% and 28% respectively. At the same time, we are seeing a rise in electronic payments, which are not merely growing but also developing along four different pathways:  Spreading technology: advances in internet technologies and devices have paved the way to increase the number of channels used to initiate and accept payments. The ways in which these technologies are used are becoming more diversified and increasingly digital.

They are no longer confined to cards, as we are seeing with the rise of mobile payments. A broader range of participants: I am thinking here about how the payments market has expanded to include competition from big techs and major retailers, which are following a wide range of strategies in this respect. The flipside of this trend is the increasingly global nature of the market, which is raising sovereignty and independence issues, including the question of control of data with respect to the American and Chinese tech giants. Payment is becoming less prominent: nowadays the actual act of paying is becoming less visible, as it is combined seamlessly within the overall transaction process to minimise the impact on the payer. We are seeing this shift in online payments, for example, which are designed to be increasingly fluid through solutions such as one-click buying. Availability of payment services: payment services are becoming more available, ignoring physical borders and time constraints to satisfy customer demand for instant, continuous and uniform payment services, as economic agents become ever more mobile. 2. The development of crypto-assets naturally forms part of these underlying trends affecting payment instruments, combining the search for anonymity, management of non-intermediated peer-to-peer payments and the use of entirely web-based technologies. But crypto-assets are also different because of their financial, monetary and technological features that I mentioned in my introduction.
It was Chairman Bernanke, the Board of Governors, and President Geithner who made the policy determinations on behalf of the Federal Reserve System – determinations that in my view were careful, creative, and right. With this introduction, I would like to start with a question that I am often asked about Lehman: “Why did you allow Lehman to fail?” It is an understandable question, but one that nevertheless contains a false premise. The Federal Reserve did not “allow” Lehman Brothers to die, bankruptcy being the equivalent of death to a financial company. Instead, the Federal Reserve, the United States Treasury Department, the Securities and Exchange Commission (SEC), and others tried hard to save it – not for its own sake, of course, but for the sake of all the families and businesses who would be harmed by the devastating effects of a Lehman bankruptcy. We did not succeed, but the effort made was serious and determined. We came very close. In my remarks today, I will summarize the Federal Reserve’s actions to address the Lehman problem in two parts. In the first part, I will describe how the Federal Reserve monitored Lehman’s efforts to stabilize itself and pressed its most senior management to find a longterm solution for its liquidity and capital problems. In the second part, I will review how we attempted to facilitate a rescue from bankruptcy and, when this failed, to mitigate the impact of Lehman’s demise on the economic system as a whole.

Scenarios containing different assumptions regarding the repo rate and using a longer time horizon can also contribute to a clearer illustration of the considerations monetary policy has to take into account with regard to balancing inflation against real economic aspects. I have also discussed this. The primary advantage of supplementing the assumption of an unchanged repo rate with alternative interest rate paths and making longer-term forecasts is that it makes it easier to explain the monetary policy message. The simple policy rule – which involves interest rate decisions being based on inflation normally being returned to the target one to two years ahead – will continue to provide a good guide to our actions. The guidelines in the clarification from 1999 will thus continue to form the basis of our monetary policy. When the decisions need to take account of other information than that significant for inflation one to two years ahead, the new working method should make it easier to understand how this is done. Discussing an entire interest rate path can also create the conditions for a more balanced discussion of monetary policy. This can involve when we intend to change our monetary policy stance and how quickly we should proceed. What will happen if we wait a while before changing the interest rate? This type of consideration is probably more important than detailed discussions about tenths of a percentage point in a forecast. In conclusion, I have also mentioned the fundamental framework that governs monetary policy.
As of 2002, the “implicit inflation targeting regime” was adopted as a strategy of convergence  BIS Review 89/2006  1  with the formal inflation targeting regime and gradually the components of this regime were adopted. In line with these efforts, some changes were made in our Bank’s organization and some new departments have been established, our set of data has been expanded and the decision-making processes have been further institutionalized. By 2005, the monetary policy strategy implemented under the name of the implicit inflation targeting regime had become a regime covering most of the elements of formal inflation targeting and significant achievements had been made in the pre-conditions necessary for a successful transition to the formal inflation targeting regime. In 2006, encouraged by our achievements, the “formal inflation targeting regime” was adopted on time. The new regime necessitated a more institutionalized structure and a higher degree of transparency compared to the previous one. In order to have a more comprehensive understanding of the course of inflation and the policy decisions of the Central Bank it is essential to have a good grasp of the framework that we have drawn for the inflation targeting regime. Therefore, I would like to take this opportunity to highlight some important elements of the formal inflation targeting regime once more in this meeting today. Under this regime, the Central Bank adopts a medium-term perspective. Accordingly, inflation targets are announced for a period of three years.

Michael Gondwe: Encouraging local content and business linkages – role of the financial sector Opening remarks by Dr Michael Gondwe, Governor of the Bank of Zambia, at the 2013 SME Local Content and Business Linkage Forum, Lusaka, 28 November 2013. *  *  *  •  The Guest of Honour, Minister of Finance, Honourable Alexander B. Chikwanda, MP;  •  The World Bank Country Director, Ms Kundhavi Kadiresan;  •  Senior Government Officials and Development Partners present;  •  Heads and Representatives of Financial Institutions;  •  Business Industry and Associations represented;  •  Distinguished Invited Guests;  •  Members of the Press;  •  Ladies and Gentlemen. On behalf of the Bank of Zambia and indeed on my own behalf, I wish to extend a very warm welcome to you all to this very important Forum. Some of you may recall that in June last year, together with the World Bank, we organised a strategic forum for small and medium enterprises (SME) on the “role of finance for unleashing the potential of local Zambian businesses”. The objective of that Forum was to facilitate strategic policy dialogue between the Government, Bank of Zambia, the financial sector and the private sector on issues central to facilitating access to finance by Zambian businesses including SMEs. As Bank of Zambia, we believe that it is important to sustain this dialogue to facilitate an inclusive strategy in the financial sector development.
When national currencies disappear and the interest rate largely reflects the single monetary policy, some of the immediate signals to politicians and other decision-makers will disappear. Access to the large, uniform capital market that will result from EMU will also make it easier to borrow. Up to a point, of course, this is good; it eases the tax burden in countries with a large government debt, for example. But it also involves risks, above all that a country abuses the situation so that ultimately it is other countries which may have to pay when failure threatens. The Maastricht Treaty, as most people probably know by now, contains a number of conditions that member states have to fulfil in order to participate in the euro area. Once countries have joined the euro area, however, there are no correspondingly strict rules. This is where the growth and stability pact comes in. The purpose of the pact is to get participating countries to strive for a cyclically balanced budget or a surplus position. Deviations from this target are to trigger alarm signals whereby the Council starts to take action in the form of examinations, advice, recommendations, publication and, ultimately, sanctions. The monitoring of economic development in member states is to be reinforced with a mandatory stability programme, similar to the present convergence programme. In the event of a country having an excessively large budget deficit, its government must act.

Thanks to the development of new information and communication technologies, there has been an increase in trade in services, which - until recently - have been considered nontradable. The importance of the services sector in the economy should be stressed, as this sector constitutes a 70-percent share of the GDP in the developed economies. The whole accounting departments or customer support call centres outsourced are only some of the services that take advantage of new technologies. Some of those innovations have already become a permanent element of our reality: the possibility to purchase an airline ticket via the Internet, creation of inventory control systems in IT companies, a possibility to gather and process information on consumer behaviour. The aforementioned solutions embody the new forms of labour organisation and the development of new products and services, which are becoming increasingly common. Research by van Ark 29 indicates that the results of a comparison of the growth in labour productivity in the services sector in the USA and the EU-15 in the past 10 years are in favour of the USA. The advantage of the USA has resulted primarily from a higher labour productivity in retail and wholesale trade and in the financial services. Among the causes for the lower increase in labour productivity in the EU countries one should mention lower innovative capabilities of the European companies and a lack of reforms that could have forced the sector to take advantage of its potential.