samchain/econo-pairs-v1 huggingface dataset:
When it was time for the monetary policy meeting, sufficient information was assumed to have been released “by degrees” with regard to how the Executive Board as a whole were reasoning so that the economic agents would not be surprised by the interest rate decision taken at the meeting. But with the broader definition of signalling – when we in some way communicate what we are intending to do with the repo rate – the publication of our own repo rate forecast of  4  BIS Review 106/2007  course also becomes part of the signalling. At intervals of two months, the general public and the financial markets now receive a detailed description of how a majority of the Executive Board consider that the interest rate should be set in the future. It is thus evident that the need for “signalling by degrees” in speeches between the monetary policy meetings has declined significantly. It was also the most important reason why we earlier this year decided that there would not normally be reason to indicate in speeches and press releases how the repo rate would be set at the next meeting. But there were also some problems with the earlier signalling that lay behind the decision. In certain situations it was probably difficult to determine whether the signal being sent in a speech should be interpreted as an individual member’s opinion or whether it reflected the views of a majority on the Executive Board.

If there is an institutional framework that is credible from the start, it will not need to be used in most cases. It is to some extent this type of framework that the European Financial Stability Facility, EFSF, is meant to become. It will be able to buy government securities issued by euro area countries. However, it is difficult to restore market confidence when it is already seriously damaged. The institutional framework must be in place and have credibility before the crisis breaks out. This makes the crisis easier to manage and one might even prevent it arising at all. It is probably the case here that politicians in the EU have helped increase market distrust because of the way they have handled the crisis. For example, it is understandable from a political point of view that they have wanted to force private lenders to write off their loans to Greece. But from an economic perspective – and in the longer run also political – this is not such a good idea. This has meant that Italy and Spain have had to pay much higher interest rates than before – not primarily because one perceives a risk that Italy and Spain will be unable to service their debts, but because the market has become uncertain as to whether the politicians intend to take similar coercive measures here. If one suffers an acute crisis, whether one has created it oneself or not, one must consider carefully how it should be managed.
Its third article states that “the Bank shall have as its purposes to look after the stability of the currency and the normal functioning of internal and external payments.” It then adds that “the authority of the Bank, for these purposes, shall include regulating the amount of currency and credit in circulation, the performance of credit transactions and foreign exchange, as well as the issuance of regulatory provisions regarding monetary, credit, financing and foreign exchange matters.” In addition, it establishes that “no public expenditure or credit of any nature may be financed either directly or indirectly with loans granted by the Bank.” Finally, article six states that “when passing its resolutions, the Board shall consider the general orientation of the Government’s economic policies.” This is a clear mandate for the Central Bank of Chile, by which it establishes instruments and mechanisms for the designation and removal of Board members, as well as vehicles for coordination with the Executive. In addition, its autonomy is further reinforced and legitimated through the achievement of said objectives and by the Bank’s communication and transparency policy, whose effects go far beyond the provisions in the law regarding the obligation to inform about its decisions. In this presentation I will address some of the main elements concerning the autonomy of central banks, as well as an evaluation of the principal accomplishments of the past twenty years. The reasons for pursuing autonomy High inflation is costly for society because it is associated with higher price volatility, which distorts resource allocation.

2/2  BIS central bankers' speeches
The extension of the list of eligible assets the Riksbank accepts as collateral has now been made permanent, which should mean that liquidity in the Swedish banking system is good. For a Swedish bank to choose to bear the cost of placing large surpluses in its deposit account at the Riksbank would assume that lending money on the interbank market was assessed to be a poorer alternative. One reason for this could be a fear that the bank wanting to borrow would not be able to repay in time, or at all. Another reason could be that the bank with a surplus was unwilling, or unable for some reason, to provide loans requiring capital cover in accordance with capital adequacy rules and therefore chose to deposit the money at no risk in the Riksbank. Normally, however, there would be very little risk of this happening - firstly, Swedish banks have good solidity and secondly they are so few in number that they have a good knowledge of one another. BIS Review 80/2001  3  The Riksbank also has the opportunity - in situations where the financial system faces a risk of serious disruption - to provide loans at special terms to a bank that for some reason experiences such unexpectedly large deficits in its payments during the course of a day that the bank is unable to offer sufficient already approved collateral to borrow from the Riksbank at normal terms. However, the condition is that the bank is considered by the Riksbank to be sound.

The Riksbank has a crisis organisation to enable it to make rapid decisions in this type of situation. The banks' lending is important Another reason why the banks are particularly interesting in monetary policy terms is that lending from the banks plays an important role for the impact of monetary policy interest rate changes. If the Swedish banks for some reason reduce the supply of credit, companies and households cannot fully replace this loss with financing for consumption and investment elsewhere. Smaller companies are particularly dependent on the Swedish banks and the customer relations they have built up. Larger corporations, on the other hand, have access to other sources of financing, such as borrowing in the bond market, from foreign banks or via new share issues. The banks' supply of credit and their setting of interest rates can therefore influence how quickly and how much monetary policy affects activity in the economy and thus inflation. We can begin by stating that the repo rate is one important determining factor when the banks decide on their lending rates. When the lending rates are determined, the bank's own internal rate is crucial and it is normally determined by the repo rate. This is because the banks' financing of deficits and investment of surpluses arising at the end of the day can normally be done in the interbank market, where pricing depends on the repo rate. If a bank lends money to a company, the loan could be financed in the interbank market.
Norges Bank has also announced that the share of a bank’s borrowing facility that can be based on collateral in the form of bank bonds will gradually be reduced. Covered bonds will continue to be eligible as collateral. Mainland GDP increased in Q2 after two quarters of negative growth. Growth was somewhat higher than expected, reflecting solid growth in public sector demand and private consumption. In September, Norges Bank’s regional network contacts reported that activity had edged up in Q3. The main contribution came from industries providing goods and services to households and the public sector. Despite a moderate rebound in both domestic and international activity, prospects for manufacturing and the building and construction sector remain relatively weak. After falling for a long period, manufacturing production picked up again in July and August. The decline in new orders and order reserves, in the shipbuilding industry among others, nevertheless indicates a low manufacturing production level in the period ahead. According  BIS Review 139/2009  7  to the regional network, manufacturing production is expected to remain unchanged over the next half-year. Overall production in the building and construction sector is also expected to remain virtually unchanged, with increased activity in the construction sector underpinning production. Enterprises in the service sector expect production to pick up over the next halfyear. Regional network enterprises in the retail sector report that production is rising and expect continued growth ahead. The petroleum sector is having a stabilising effect on overall demand via new investment, maintenance and operations.

In this view, it is worth mentioning the positive contribution of the new FDI inflows in tradable sector, which contributed to both higher and more diversified net export and higher employment. In addition, economic recovery was supported by the fiscal stimulus as well as the accommodative monetary policy stance. Since July last year, the main policy rate is at the historical lowest level of 3.25%. Moreover, during the crisis period, a combination of standard and non-standard measures have been undertaken by the central bank aimed to give additional support specifically to the credit growth and accordingly, to the economic growth, while still preserving the price and financial stability in the economy. The outlook for this year is also positive. We expect GDP growth of close to 4%, and therefore we see economy going up on the cycle. What one can learn from our experience is the fact that the implementation of sound structural reforms can definitely move the economy upward – even during the crisis – that is an important message for the macroeconomic policy afterwards. When discussing the recovery from the crisis, we need to point out some related issues that are dealing with the exit of non-standard policy measures and turning towards fiscal consolidation, currently being the topical issues between the policy makers worldwide. The tapering decision by the FED by the end of the last year somehow announced the need of this reversal that will eventually be recognized in other countries, too.
Understanding that inflation will be close to the target, banks will not set excessively high mortgage rates. This situation was observed before the pandemic, when interest rates were low. Mortgage lending started to expand extensively even before the pandemic. This is control over inflation that helps generate long-term money, long-term loans, and mortgage loans. Other challenges existing today are associated with the changes brought about by the pandemic. We could see that remote services were crucial during the pandemic. They included both financial services, e.g. bank apps, as well as non-financial ones, such as taxi hailing apps and ones dealing with large purchases. Many such services are integrated into ecosystems that are forming, so to say, around large banks and technological companies. This creates a lot of advantages for consumers as everything they need is close at hand. However, this also poses risks. It is thus crucial to ensure personal data protection and limit the risks of investment in non-core assets. Therefore, we are currently drafting principles for regulating and controlling ecosystem risks and will discuss this topic. We will certainly need lawmakers’ support in this regard. Speaking of a digital ruble, this initiative is strategically important for the task I have addressed today: lower costs for households and businesses. Digital currency will make it possible to transfer payments more cheaply and better protect transactions. A digital ruble is a very promising project, but it is only one of the elements of the national financial infrastructure.

If we delayed the start of the key rate increase, inflation could have sped up in an even worse fashion and more persistently. We could have faced a so-called inflationary spiral when inflation continues to rise increasingly faster. In such circumstances, only radical measures might alter the situation. Therefore, we are taking proactive decisive steps, thus preventing a situation in the future which could force us to change the key rate drastically. We believe that our policy will bring inflation back closer to its 4% target in the second half of the next year. The increased key rate does not impact inflation instantaneously, but rather has a time-lagged effect on the economy. This is why economic processes are currently developing in this way. However, inflation as it stands will already affect savings to a lesser extent as banks will raise their deposit rates following the increase in the key rate. We can already see the start of this trend now. Of course, this will influence not only savings, but also the purchasing power of households’ incomes as people will not have to spend increasingly more money to cover their everyday needs. At the same time, the increase in the key rate will not hinder mortgage lending expansion. Mortgage loans are long-term loans issued for 10, 15 or even 30 years, and interest rates in this segment depend on inflation much more than on the key rate. I would like to emphasise this factor.
QE and climate considerations  A second aspect of QE that has received close external scrutiny is its relationship to climate change. Responding to climate change is a strategic priority for the Bank; we continue to work towards promoting safety and soundness by enhancing the Prudential Regulation Authority (PRA)’s approach to supervising the financial risks from climate change, and towards enhancing the resilience of the UK financial system by supporting an orderly market transition to a low-carbon economy. In particular we have supported the Financial Stability Board’s work on climate disclosure through the Task Force on Climate-related Financial Disclosures (TCFD). To show its commitment last June the Bank published a report disclosing for the first time its own approach to climate risk management for all its operations.26  Attention, however, has understandably focused on the £ corporate bond purchases that form part (around 2%) of our QE programme, and whether more should be done to account for climate considerations in these holdings. Our approach to date has been to invest in sectors in proportion to the total outstanding eligible issuance accounted for by each sector in the UK economy.27 An important part of the design of the CBPS back in 2016 was to achieve the MPC’s aim of imparting monetary stimulus in a way that was sector-neutral, consistent with the remit given to the Committee by the Chancellor. As a result, the carbon footprint of the APF Corporate Bond Purchase Scheme (CBPS) portfolio is broadly representative of the sterling investment grade corporate bond market (Figure 7).

The high degree of uncertainty militates against ambitious fine-tuning of the economy but favours focusing on the main task of monetary policy, which is maintaining price stability. Moreover, uncertainty necessitates broad-based and impartial analysis as well as judgment and flexibility in monetary policy decision-making. BIS Review 5/2008  1
First, because they can only be initiated at the point of insolvency, whereas a loss of confidence in a bank by its depositors will often precede that point. Second, normal insolvency procedures are not well suited to ensuring continuity of key banking functions, particularly access of depositors to their funds, but also the provision of credit. Third, a bank failure may involve substantial negative spill over and externalities – for instance to other banks via their inter-connectedness. But in normal insolvency procedures these externalities would not be taken into account when determining what to do in insolvency. Fourth, depositors play a special role as creditors of a bank. Unlike the creditors of a typical company, they are very numerous in number, most are not professional market participants, and their claims in the bank are in the form of money. The recent experience in the UK These are therefore strong reasons for treating the resolution of banks differently. But we didn’t start in this position at the onset of the financial crisis in 2007. At the time of the start of Northern Rock’s problems, the UK did not have a special resolution regime; rather, we were relying on the tools of the past. Northern Rock was a good example of a bank that had a liquidity problem, caused by the closure of its major funding market, for residential mortgage backed securities, and had a heightened probability of experiencing a solvency problem in the future.

It is possible to direct part or all of a failing bank’s business to a private sector purchaser after a sale process has been undertaken. Second, it is possible for the Bank of England to take control of part or all of a bank’s business through a bridge bank controlled and owned by the Bank. A special bank administration procedure can be used in combination with a partial property transfer or bridge bank. This administration procedure is broadly the same as a conventional administration save for the very important difference that the administrator has a statutory objective to support the transferred business with any infrastructure left in the insolvent rump. Finally, under the SRR provisions, it is possible to take a bank into temporary public ownership. For this approach, the Treasury would be in the lead, and there is a higher test of systemic importance to be passed (there must be a serious threat to financial stability) for this approach to be used. As I have indicated, the SRR contains important roles for all of the authorities. The FSA is responsible for triggering the SRR by determining, broadly, that a bank no longer meets its threshold conditions for authorisation, and there is no reasonable prospect of it taking actions to correct the situation within an acceptable timeframe. The FSA is also responsible for approving the transfer of business to another institution that it authorises.
To ensure that the financial system is well placed to serve the nation, on-going efforts will be directed towards enhancing the efficiency of financial infrastructure and strengthening the functioning of the markets as we advance forward. Our policy initiatives will continue to maintain a regulatory environment that encourages innovation and efficient competition towards evolving a more diversified banking sector, while at the same time maintaining high prudential standards to ensure the soundness and stability of the system. With strong concerted efforts between Bank Negara Malaysia and the industry, or continuous and honest dialogues in one form or another, we can look forward with confidence to continued strong performance from the banking sector to contribute significantly to the economic prosperity of the nation. On this note, I wish you all an enjoyable and fruitful conference. Assalamualaikum and thank you. BIS Review 32/2005  5

In the planning phase for the technical feasibility and during initial production tests in 2010, it became evident that the complexity of the new security features necessitated a postponement of the issue date to autumn 2012. In autumn 2011, during an early phase of the serial production, technical difficulties arose which had not been discernible in the testing phase, whose results were positive. For this reason, the SNB this year decided to conduct a comprehensive re-assessment of the entire project together with the industrial partners producing the new banknote on its behalf. As a result, several mostly technical measures were defined and in some cases have already been implemented. These measures should ensure that the series can go into long-term industrial production. Owing to the complexity and scope of the necessary work, the first denomination of the series, the CHF 50 note, may be expected in 2015 at the earliest. The SNB will announce the issue date as soon as production of the first banknote denomination has been completed. Since the National Bank wants to continue meeting the highest quality standards, it has accepted a postponement in the new issue, a decision which was rendered all the easier because the banknotes currently in circulation continue to offer a high standard of security. BIS central bankers’ speeches  3
By April 2008, the FSF had reached consensus on a set of 67 policy recommendations aimed at addressing the vulnerabilities identified in the global financial system. Some of these recommendations concern structural changes and thus can only be implemented over the medium term. However, a number of priority areas calling for immediate action were identified and the relevant recommendations are already being implemented by the competent authorities and the industry. In this respect, a major priority area involves the disclosure of financial institutions’ structured finance-related exposures and their valuation practices. Many large global banks have already applied the methodology set out in the FSF report to their holdings of complex and illiquid instruments in their mid-year financial reports. By doing so, they have demonstrated the willingness of the private sector to contribute to strengthening market confidence by increasing transparency. I strongly support this development and believe that the example set by these banks should be followed by a wider range of institutions. Furthermore, guidance on transparency has been provided and is being further developed by the Basel Committee on Banking Supervision and public sector initiatives, such as the European and the American Securitisation Fora. In the same vein, the International Accounting Standards Board is intensifying its work to enhance the accounting and disclosure standards for off-balance sheet entities and to develop guidance for valuation in illiquid markets.

Indeed, all financial sectors are impacted by market developments as the boundaries between financial activities are becoming increasingly blurred. More broadly, all competent financial authorities, central banks, supervisors and ministries of finance should strengthen their coordination mechanisms for managing a crisis impacting cross-border financial institutions. In Europe, an important step has been taken in this direction with the Memorandum of Understanding signed by the financial authorities of all EU Member States in June 2008, which established common principles, procedures and terminology to be used by all parties involved in a cross-border crisis. BIS Review 123/2008  5  Conclusion We are experiencing a very challenging and demanding episode of the market correction which started more than a year ago and was due to a significant underassessment and underpricing of risks in global finance. This fostered extremely high risk–taking behaviour, excessive leverage and a widespread use of toxic, obscure and abnormally sophisticated financial instruments. In this regard, global finance was potentially unstable before the start of the turbulence and this was mentioned publicly, particularly in 2006 and the first part of 2007, by a number of speakers, including myself. The sub-prime mortgage crisis has therefore played the role of a trigger but there was a good deal of explosive around. My experience of previous crises is that it is extremely important to analyse situations very carefully and lucidly and never to underestimate its gravity.