samchain/econo-pairs-v1 huggingface dataset:
This despite the fact that the economy was in the midst of a productivity-driven boom, the longest expansion on record, and the prevailing federal funds rate was 5.25 percent. These papers and the ensuing discussions and debates planted seeds that would germinate in research and policymaking. Central banks across the globe ultimately used variations of nearly all of the tools discussed at the conference. Indeed, the topics of interest rate policies, targeting asset prices, asset purchases, and negative interest rates are among the most prominent discussions in monetary economics today. Importantly, this research made its way straight to policymakers within a few years—a quick turnaround by central bank standards! In January 2002, Marvin, Dave, and I reprised our roles from the conference in briefings to the FOMC.10 And in June 2003, Vince Reinhart briefed the FOMC on alternative monetary policy approaches—including asset purchases and forward guidance—to mitigate the effects of the ZLB.11 This was followed by a flurry of further research by academics and central bank economists that delved deeper into these topics.12  Putting Research into Practice This research had important practical lessons for policymakers in the United States and abroad following the global financial crisis.

But equally it would be wrong to jump to the opposite extreme, given there are clearly major welfare gains from improved choice of financial products and better matching of risks. 41 So what are some of the lessons for financial innovation? What will the landscape look like in 5-10 years’ time, once the dust has settled and institutional changes can be implemented to address the frictions identified? What if anything can policy do to facilitate or expedite this process of adjustment? 42 A first observation is that it is important to distinguish between different financial products. As shown in Table 1, there has been a huge dispersion in activity in different innovative products over the past year. For example, the corporate CDS market grew by 36% in the second half of 2007 and appears to be underpinned by strong demand. Other derivative and option markets have also continued to grow very rapidly. But on the other hand, new issues of corporate CDOs, CLOs and ABS CDOs have virtually completely stopped. Complex structured products with a high premium on information requirements and with a high bespoke element have thus fared much worse than simpler innovative instruments where there is more natural two-way trading and liquidity. Moreover, it is important not to lose sight that the success of some products and failure of others is a standard feature of the innovation process and of a competitive economy.
In the light of this information from the two pillars of the monetary policy strategy, the Governing Council reduced the key ECB interest rates twice by 50 basis points, first on 17 September, in the immediate aftermath of the events of 11 September, and then again on 8 November 2001. After these decisions, the minimum bid rate on the main refinancing operations stood at 3.25% and the rates on the deposit facility and the marginal lending facility stood at 2.25% and 4.25% respectively, 150 basis points lower than a year earlier. Let me also report that at its meeting of 8 November 2001, the Governing Council decided that it would henceforth – as a rule – assess the stance of the ECB's monetary policy only at its first meeting of the month. Accordingly, since November 2001 interest rate decisions have only been taken at such meetings. In addition, I should mention that in the context of its regular review of the reference value for M3, the Governing Council confirmed in December 2001 the value of 4½% for the annual growth of the broad monetary aggregate M3. I would now like to turn briefly to the analysis of the current economic situation. Over recent weeks we have seen a slight weakening of monetary dynamics, which might be a first indication of a gradual unwinding of the factors that led to the increase of M3 growth in the second half of last year, and a continuation of the decline in credit growth.

I should like to thank the members of the Committee on Economic and Monetary Affairs for the very fruitful exchange of views, both in the context of my presentation of the ECB's Annual Report and on other occasions. This Committee has indeed played an important role in bringing the euro closer to the citizens of Europe. BIS Review 26/2002  3
Monetary policy was tightened five times within the space of a year - between October 2021 and October 2022 – even in the face of increasing growth uncertainties. The trade-weighted exchange rate of the Singapore Dollar has appreciated by 8.3% since the beginning of October 2021, helping to dampen imported inflation and domestic cost pressures. But the fight against inflation is not over and the monetary policy stance remains tight relative to the business cycle. The most recent monetary policy decision to maintain the prevailing rate of appreciation of the trade-weighted Singapore Dollar means that the exchange rate will continue to exert a dampening effect on inflation. The continuous tightening of monetary policy imparted by the upward slope of the exchange rate policy band is unique to Singapore's exchange-rate centred monetary policy framework. In countries whose monetary policy is centered on interest rates, the policy rate is set at a specific value and will not tighten further unless the central bank makes a fresh policy decision. The impact of this appreciating path as well as our previous policy moves will therefore continue to flow through the economy and dampen inflation. About one-third of the cumulative restraining effects of the previous five moves remains in the pipeline. MAS is not switching from "inflation-fighting mode" to "growth-supporting mode". We are closely monitoring the evolving growth-inflation dynamics and remain vigilant to risks on either side. We stand ready to adjust monetary policy as needed, especially if inflation momentum were to re-accelerate.

This was a clear break with the earlier arrangement where the management was closer to that of a conventional company with a managing director and a board that exercised control and took the overriding decisions. I should like to conclude with some remarks on the challenges this change involved. As regards monetary policy, it was not all that difficult. In the light of experience from the German, British and American central banks, for example, we had drawn up proposals for working procedures which we have largely adhered to. Our internal process is very open and the staff are deeply involved. The minutes of the Executive Board's monetary policy discussions are published, which dispels any sense of mystery. At the same time, a better foundation is hopefully provided for a discussion of monetary policy in society in general. The matter of internal control has been trickier. One alternative would be to treat the Executive Board as a board of directors; that, however, would have meant working with as many as 18 chief executives in the form of the heads of department. Another possibility would be to see ourselves as chief executives but that, too, has its pros and cons; few organisations have six chief executives, presumably for very good reasons. Perhaps the closest parallel is the board of a group with a number of subsidiaries. In practice we have adopted a variety of approaches.
The Central Bank’s effective policy rate has fallen from 18% (the seven-day collateralised lending rate) at the beginning of 2009 to the current 4½% (the average of the current account rate and the maximum CD rate), and is now at an all-time low in the nearly 50-year history of the Central Bank of Iceland. Progress has also been made in improving Iceland’s external liquidity position by expanding the foreign exchange reserves, which reduces concerns about the Treasury’s ability to service its foreign debt in coming years. Repurchases of the Treasury’s foreign debt have also helped. The foreign exchange reserves exclusive of short-term obligations could quickly grow to over 3 billion euros, if Iceland draws in full on the loans contingent upon the third IMF review and when payments on the Avens agreement and the sale of Danish bank FIH are remitted. In comparison, the Icelandic Treasury’s payments of instalments and interest on two bond series maturing in 2011 and 2012, less repurchases, amount to 1.1 billion euros. This positive development explains the relatively upbeat outlook of foreign bankers and analysts towards Iceland, as could be discerned at the annual meetings of the IMF. It also explains why the CDS spread on sovereign debt has fallen in recent months and now lies below that of the European countries whose public debt problems have dominated business media recently. But we have to do better if Icelandic companies are to gain access to foreign credit markets on acceptable terms.

Nevertheless, there is much that the government can do to facilitate financial-market development by clearing the way, particularly where this involves markets of a regional nature. Three areas of work in which the HKMA – with various partners – is taking an active role are worth citing here. The first involves the gradual introduction and expansion of renminbi business within Hong Kong, which requires primarily co-operation between the Mainland and Hong Kong authorities at various levels, including both political and technical. The second example is our collaboration with other central banks in the region, under the auspices of EMEAP, on the Asian Bond Fund, which is intended not just to encourage business in the debt market, but also to stimulate regulatory reforms in economies in the region. The third example is our work in encouraging the development of Islamic finance in Hong Kong, through ensuring a level playing field, stimulating interest in Hong Kong among Islamic countries, encouraging product development, and raising market awareness within Hong Kong, particularly through the educational work of the Treasury Markets Association. All of this work looks both to the past and to the future for inspiration. Looking to the past, we have the still-recent experience of the Asian financial crisis, one element of which was the undeveloped state of some of our financial markets, in particular the debt market. Many of the market-development initiatives on which we have been working have been intended to address these deficiencies.
It is whether they can convince investors that it is safe to provide them with funding at reasonable spreads over Bank Rate without central bank support. As the Financial Policy Committee (FPC) noted in its recent Review, UK banks are still some way from being able to convince the market in this respect. Regulators, who from 1 April will be in the Bank of England’s new Prudential Regulation Authority, are now working hard to ensure that banks are making adequate provisions for future losses, the likely costs of regulatory penalties and compensation to customers, and stating the riskiness of their assets in a more prudent way. A lesson from past crises, and also from this one, is that it is important to act now rather than hope that problems will go away of their own accord. As the FPC said last December, it is likely that banks will be required either to raise more capital or to restructure their businesses or exposures, and the FPC will review the position in March. There is no single remedy appropriate to all banks. With proper implementation, there is no reason why the two banks with significant state shareholdings could not largely be back in the private sector within a relatively short period. After all, in the United States banks that received state support are already back in private hands. Restoring our banking system to full – and transparent – health is only one of the structural changes that will be necessary to rebalance the economy.

Anita Angelovska Bezhoska: How to make capitalism work for all Speech by Ms Anita Angelovska Bezhoska, Governor of the National Bank of the Republic of North Macedonia, at the IMF/WB Constituency Meeting, Skopje, 22 June 2019. * * * Distinguished Prime Minister, ministers of finance and other respective representatives of government institutions, governors of central banks and other respective representatives of central banks, Executive Directors, Vice Presidents in World Bank Group Directors in International Monetary Fund, Professor Zingales, Delegates of the Constituency, excellences, fellow colleagues, representatives of the media, At the very beginning, let me say how honored we are to have the opportunity to host this important gathering of our Constituency. Sixteen years have passed since the last meeting of the Constituency in Skopje, and we are delighted to have all of you with us here during these three days. By a twist of fate, I recently came across a book that I have not seen since my early youth days; a book that starts with a very powerful notion – “Happy families are all alike; every unhappy family is unhappy in its own way” – you might recall Tolstoy’s “Anna Karenina”. Few days after, while searching for the most recent discussions on the matter of capitalism, inequality, wealth distribution, I read an analytical piece where the author cited the same quote, linking it with all the different modalities of inequality, as a symbol of the global unhappiness. Standard metrics on inequality point to a widespread and rising phenomenon.
Niklaus Blattner: Global trends in financial market infrastructures and their significance for financial stability Introductory remarks by Mr Niklaus Blattner, Vice-Chairman of the Governing Board of the Swiss National Bank, at the end-of-year media news conference, Zurich, 14 December 2006. *  *  *  Developments at banks and financial markets are subject to extensive daily media analysis and commentary. By contrast, financial market infrastructures, i.e. stock exchanges, payment and securities settlement systems, only rarely make the headlines. I have decided to shift the focus today and concentrate on financial market infrastructures. In particular, I wish to highlight some interesting global trends and assess how these trends impact on the stability of the financial system. Internationalisation of financial market infrastructures Traditionally, most financial market infrastructures have a strong national focus. This made sense as long as the financial markets also had a strong domestic focus. However, the deregulation and liberalisation of financial markets and the associated increase in cross-border financial flows resulted in a widening gap between financial markets and financial market infrastructures, with the latter remaining constrained within national bounds. More internationalisation of financial market infrastructures became inevitable in order to avoid a loss of competitiveness due to inefficiencies. This process of opening up market infrastructures still continues today. We can differentiate between different types of internationalisation. First, direct access to infrastructures that used to be reserved exclusively to domestic participants is now being granted more frequently to foreign participants as well.

Although the general government “structural deficit” is not directly observable and, therefore, its calculation is based on assumptions subject to a high degree of uncertainty, it is a useful indicator of the underlying state of public finances. This indicator will, moreover, play a more important role in the new phase of fiscal policy due to begin, in the event that the EU Council eventually rules that Spanish general government is no longer in an excessive deficit situation. As I have already mentioned, the latest data point in this direction. In fact, exiting the “corrective arm” of the EU’s Stability and Growth Pact would involve Spain automatically entering the “preventive arm”.
But as the crisis deepened in late September, it became clear that we needed more than a case by case approach here to tackle the continuing loss of confidence in the banking system in the UK, in euro area and in the US. On 8 October therefore we announced a comprehensive package of measures including support for recapitalisation, guaranteed funding and enhanced liquidity. That very quickly became the template for action in other advanced and some emerging countries. The central plank of the package was the offer to underwrite capital issuance of at least £ billion and it is important to be clear what that was intended to do. It was not to establish new regulatory minimum ratios. It was intended to underpin confidence in the banks and to ensure that each institution would have a sufficient capital buffer both to absorb losses that are likely to arise during a recession and to continue lending on normal commercial criteria. Under the new Basel II rules the ratio of capital to risk weighted assets is almost bound to fall as arrears and losses mount. The aim of the package was to create the headroom for that to happen and to remove the capital pressure on banks to deleverage quickly by refusing even good credit requests. The capital raising is not complete of course but the process is underway. Banks and building societies have already secured around £ billion of guaranteed funding in the market and has facilitated new bank debt issuance without the need of a guarantee.

We need to ensure that banks build up resources in good times to a greater extent, which can then cushion the shock in bad times. I think of this as “protecting banks from the economic cycle”. But we have seen also how the financial sector can drive the wider business cycle, by becoming over-confident in the upswing and over-constrained (by lack of financial resources – capital and liquidity) in the downswing. It seems to me that mechanisms which oblige banks to build up resources in good times can serve a second useful purpose of dampening the economic cycle. I think of this as “protecting the cycle from banks”. We need two-way protection and I would like to describe three ways you might go about providing it. The first is the Spanish system of dynamic provisions, which requires banks to build a general reserve that can be drawn on in downturns. Each period, banks are required to make general provisions equal to the difference between the “inherent” losses (based on the growth of loans and a long-term average of incurred losses) and the specific provisions on impaired assets for the period. The difference, if positive, is treated as an expense in the profit and loss account. If negative, it is treated as income – provided that the general reserve has been previously built up to the required level. The specific provisions made by Spanish banks fluctuate substantially through the business cycle, as one would expect, falling during upswings and increasing in downturns.
But on many occasions, and compared with this simple representation, experiments suggest that people focus excessively on the present. It’s not just that they generally place higher value on getting something sooner rather than later: people seem to put a particularly high weight on current outcomes. They seem to discount the importance of what comes tomorrow, relative to today, more heavily than they do any two successive days further into the future. This is referred to in the economic jargon as “hyperbolic discounting” and by psychologists as “present bias”. It helps to explain why we often put things off right until the last minute, even if the cost of doing it is much higher by that time. It means it can be advantageous to commit to things that are good for you over the longer term – regular saving, or signing up to a gym programme – but that, when the time comes, you might be tempted to avoid.2 And it can also explain why people borrow money, and roll over those debts, even at very high interest rates. This borrowing can take many forms, including foregoing opportunities to reduce the longer-term cost of something. In their recent book “Scarcity”, economist Sendhil Mullainathan and psychologist Eldar Shafir give the example of rag collectors in India – people who rely on collecting discarded clothes and selling them on. It is an ardous job with very little reward.

Subjects under analysis are, for instance, the implications of the provisions of the new Directive on payment services, known as PSD2, whose partial transposition in Spain is imminent, under the Government’s Annual Regulatory Plan, and to which I shall shortly refer. And there are also other topical matters, such as distributed ledger technology, “cloud” computing and the phenomenon of sovereign digital currencies. 3/8  Against this backdrop, the aim of my address is to offer some observations as to how the new technologies are changing the traditional bank-customer relationship, and to highlight the need for banks and customers to responsibly manage this new scenario. Likewise, I wish to stress the importance of financial education in this new scenario. Customers have more options, but also more responsibility, and it is essential they should be aware of this. Returning to the origins of the concern for the rights of bank customers. To set these observations in perspective, we might recall that concern in Spain to safeguard customer rights arose in the 1980s, as a consequence of the liberalisation the industry underwent and which enshrined freedom of contract – of interest rates and commissions – at the core of its workings. Accompanying this process, legislators adopted a series of measures aimed at boosting competition among banks, including most notably the enhanced comparative information with which banks must provide their customers, so that they may know the content of their rights and obligations before and once they have given their consent.
In our part, we believe that a lower policy rate and a wider interest rate corridor combined with higher required reserve ratios may serve as an effective policy mix in dealing with rapidly increasing macro imbalances driven by short term capital inflows. Thank you. BIS central bankers’ speeches  3

Christian Noyer: International financial stability Keynote address by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, at the International ParisEuroplace Financial Forum, Tokyo, 29 November 2010. *  *  *  Although the financial crisis originated in one country, it quickly became apparent that it was truly global in nature. It brought home a simple message: capital markets are closely interlinked around the world and, thus, domestic and international financial stability cannot be dissociated. They really are two sides of the same coin. Today, I would like to reflect upon international financial stability. The views expressed are my own but, as you know, France now holds the Presidency of the G20 and I will try to put my own thoughts in that perspective. International financial instability has increased over the last period. Whether we look at exchange rates, international capital flows or commodity prices, signs abound of more intense volatility. Volatility may not necessarily be a bad thing. To some extent, it is a sign of well functioning financial markets. Movements in asset prices help the financial system to serve as a cushion, an “absorber” for exogenous economic shocks. This is welfare improving since it avoids, or mitigates, adjustment in more rigid goods or labor markets. Volatility may also be driven by fundamentals. For instance, capital inflows to emerging economies partly reflect very favorable long term growth prospects and high potential returns on capital.