samchain/econo-pairs-v1 huggingface dataset:
Given those changes, I want to explain the rationale for large scale asset purchases in the current economic climate. In doing so, I will address two key questions. First, how will asset purchases help us meet the inflation target? And second, how will we monitor the progress of the policy and assess its effectiveness? How will asset purchases help us to meet the inflation target? The objective of the asset purchase programme is to boost nominal spending in order to hit the inflation target. The tightening in the availability of credit and the collapse in confidence has led to a sharp slowing in the growth of nominal demand. The four-quarter growth rate of nominal GDP sank to a record low in the final quarter of last year. The weakness in nominal spending has been accompanied by a sharp slowdown in the growth of bank lending to firms and households and in the growth of money holdings of the non-financial sector. At our policy meeting earlier this month, the Committee judged that without the additional stimulus provided by the asset purchase programme, the growth of nominal spending would be insufficient to meet the inflation objective. The MPC instructed the Bank to use the additional reserves to purchase two types of assets: gilts and high-quality corporate debt. This twin-track approach allows for asset purchases to stimulate nominal spending in a variety of different ways. Such a pragmatic strategy seems entirely sensible given that this in the first time these unconventional tools have been used in the UK.

In Spain, banks have had to provision for potential losses through the cycle. They were required to provision using non-tax deductible amounts for future losses at the time the loan was extended. Such dynamic provisioning has probably functioned effectively also because this system did not require that the supervisory authorities or the banks themselves had to decide that capital should be increased. 12  BIS Review 131/2009  Nordic cooperation  Equal competition considerations require that banking rules are practiced as evenly as possible across countries. For Norway, there are limits to how effectively regulations specific to Norway will be because we are part of the Nordic banking market. The Nordic region, however, is a well-suited region for an active use of regulatory measures. Nordic banks engage in cross-border operations. At the same time, they have little activity outside of the Nordic region. Nor are foreign banks from other regions large in this region. The conditions are therefore in place for effective cooperation in the area of banking regulation and crisis management between the political authorities, supervisory authorities and central banks. In the growth period from 2004 to 2008, foreign banks expanded rapidly in the Nordic market, but during and after the crisis they curbed their activity. I am afraid it can be said that they have amplified fluctuations in Norwegian markets. However, we assume the decline in their market share over the past year is attributable to their being harder hit by the international crisis than Norwegian banks.
Figure 4  Oil and copper prices (dollars per barrel; dollars per pound)  150  5  120  4  90  Food prices (2) (index, 2009=100) 200  200  180  180  160  160  3  140  140  120  120  60  2  100  100  30  1  80  80  60  60  0  0  40  40  06  07  08  Oil  09  10  Copper (1)  06 07 08 Edible oils Meats Cereals  09  10 Sugar Dairy  (1) At the London Metal Exchange. (2) Based on FAO figures that consider average trading prices in main markets. Source: Bloomberg. BIS central bankers’ speeches  7  Table 1 World growth and commodities (annual change, percent) Average  Average  2009  2010  2011  2012  90-99  00-07  (e)  (f)  (f)  (f)  World GDP at PPP World GDP at mkt exchange rate Trading partners  2.9 2.4 3.1  4.2 3.2 3.6  -0.6 -2,0 -0.2  4.9 3.7 5.1  3.8 2.9 3.6  4.5 3.7 4.2  United States Eurozone Japan China Asia excl. China, India, and Japan Latin America (excl.

Thus, GDP will grow in the 5.5%–6.5% range in 2011, with a smaller contribution of supplyside sectors – i.e., fishing, mining and hydroelectric generation – than foreseen in the latest IPoM, while the other sectors will converge to trend growth as the monetary and external impulses are normalized (table 2). Prospects for trend growth are similar to September’s, that is, around 5%. In this scenario, which also features improved terms of trade, the current account of the balance of payments will post a surplus of 0.3% of GDP in 2010, contrasting with the deficit forecast in September, owing mainly to better export prices. However, estimations yield that in 2011 the current account will reach a deficit of 1.4% of GDP. Y-o-y headline inflation has remained in the lower zone of the tolerance range, while the core measure CPIX1 is still in negative territory. This low core inflation has been partly offset by increases in the prices of foodstuffs, both perishable and non-perishable and, most recently, by increased fuel prices (figure 8). Since last July, there has been a renewed, markedly ascending trend in food prices in the global market. Given the experience of 2008, it has become again cause for concern for policy-makers in some countries. As shown in a box in our IPoM, in Chile a little more than one percentage point of inflation is due to food prices. Until now, the recovery of margins in the aftermath of the crisis has allowed cushioning the local inflationary effects of world price increases.
This is what the Riksbank began doing with effect from the first Monetary Policy Report published this year. I will talk about this a little more in a moment. Let me take up a final argument in favour of transparency that I believe should not be underestimated. It is that by being open and clear towards the outside world we also become better in our analysis within the walls of the Riksbank. As transparency makes it easier to evaluate how well monetary policy functions, it quite simply increases the incentives for us to do a good job. The objections are not convincing However, not everyone is agreed that transparency is a general blessing. Academic research shows both advantages and disadvantages with transparency. A theoretical result from this research that has received much attention is that more public information from central banks and other authorities can in some cases be a negative element 2 . However, this result is based on the public information being of low quality. If the economic agents attach greater importance to poor public information than to their own better private information, the economy as a whole may suffer losses. However, this assumes that the public information is much poorer than the agents’ own information – an assumption that is hardly true in practice 3 . A more reasonable assumption, in any case with regard to central banks and monetary policy, is that public information is not poorer than the assessments made by private agents.

Svein Gjedrem: The conduct of monetary policy Introductory statement by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at the hearing before the Standing Committee on Finance and Economic Affairs of the Storting (Norwegian parliament), Oslo, 18 May 2010. Please note that the text below may differ from the actual presentation. The statement is based on Norges Bank’s Annual Report for 2009, Monetary Policy Report 1/10 and the Executive Board’s assessments in the period to the monetary policy meeting on 5 May. *  *  *  I would like to thank the Chairman of the Committee and also thank the Committee for this opportunity to report on the conduct of monetary policy in connection with the Storting’s deliberations on the Government’s Financial Market Report (previously the Credit Report). My statement is based on the Bank’s Annual Report, but is also updated based on the Executive Board’s assessments for the period to the previous monetary policy meeting and new information received to date. I also refer to this year’s report from Norges Bank Watch, a group of experts that evaluates Norges Bank’s conduct of monetary policy. 1. New imbalances  The most acute phase of the financial market crisis has for a period appeared to be over. In most parts of the world, output growth has resumed. The recovery has been strongest in emerging Asia. The upturn in OECD countries has been more moderate. The economies of many countries will continue to be marked by high levels of spare production capacity.
Poland and Hungary stand at around 67 percent (both posting values of no more than 45 percent in 2000), Czechia at 86 percent (from 61 percent in 2000) and Bulgaria at 47 percent (against 24 percent in 2000). As a matter of fact, Romania boasts the fastest growth rate in the group of peer countries with similar trends. Can we, therefore, say that this is proof of a successful catching-up in real terms? Furthermore, can we claim that having a flexible policy framework (including a managed floating exchange rate) helped us in this respect? Allow me to assert that more time is needed in order for these questions to be appropriately answered. However, a general remark can be made: the EU and NATO anchors helped us all make progress as concerns real convergence. The second lesson derives from the answer to the following question: did the strategic decisions on the exchange rate regime and monetary policy framework matter? It is known that some countries in the region (Romania, Poland, Czechia, Hungary) opted for flexible exchange rate arrangements and adopted inflation targeting, while others (Bulgaria and the Baltic states) resorted to a fixed exchange rate regime under a currency board. At first sight, it seems that the latter group of countries are better prepared in terms of euro adoption (the Baltic states have already taken this step but they, being much smaller and more open economies, are a special case), given the fiscal discipline pursued and the nominal convergence stage in those economies.

2/4  BIS central bankers' speeches  While this could be in itself regarded as a lesson, I will go further and add that the recent views expressed by policymakers in Hungary and Poland appear to favour the idea that euro area membership contains the room for growth. A number of public statements are relevant in this respect. The Hungarian Prime Minister, Viktor Orbán, said in April 2013 that “Hungary cannot seriously consider joining the euro zone until the country’s average economic development reaches 90 percent of the level of euro states”. Poland’s former central bank governor Marek Belka stated in 2015: “You shouldn’t rush when there is still smoke coming from a house that was burning… As long as the eurozone has problems with some of its own members, don’t expect us to be enthusiastic about joining”. His successor at the helm of the monetary authority in Poland, Adam Glapiński, said that – and I quote – “We will not give up on the zloty (currency), because it will dramatically limit growth opportunities for the Polish economy”. Back in 2001, Leszek Balcerowicz noted that structural reforms are those that harmonise nominal and real convergence, as there are also unavoidable tensions between the two. The more comprehensive the structural reforms, the less costly the disinflation and the more robust the economic growth over the long term.
Mario Draghi: ECB press conference - introductory statement Introductory statement by Mr Mario Draghi, President of the European Central Bank, and Mr Vítor Constâncio, Vice-President of the European Central Bank, Frankfurt am Main, 19 January 2017. * * * Ladies and gentlemen, first of all let me wish you a Happy New Year. The Vice-President and I are very pleased to welcome you to our press conference. We will now report on the outcome of today’s meeting of the Governing Council. Based on our regular economic and monetary analyses, we decided to keep the key ECB interest rates unchanged. We continue to expect them to remain at present or lower levels for an extended period of time, and well past the horizon of our net asset purchases. Regarding non-standard monetary policy measures, we confirm that we will continue to make purchases under the asset purchase programme (APP) at the current monthly pace of € billion until the end of March 2017 and that, from April 2017, our net asset purchases are intended to continue at a monthly pace of € billion until the end of December 2017, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim. The net purchases will be made alongside reinvestments of the principal payments from maturing securities purchased under the APP.

The Governing Council today also decided on further details of how the Eurosystem will buy assets with yields below the interest rate on the deposit facility under its public sector purchase programme. These decisions will be published in a separate press release at 15.30 CET. The monetary policy decisions taken in December 2016 have succeeded in preserving the very favourable financing conditions that are necessary to secure a sustained convergence of inflation rates towards levels below, but close to, 2% over the medium term. Borrowing conditions for firms and households continue to benefit from the pass-through of our measures. As expected, headline inflation has increased lately, largely owing to base effects in energy prices, but underlying inflation pressures remain subdued. The Governing Council will continue to look through changes in HICP inflation if judged to be transient and to have no implication for the medium-term outlook for price stability. A very substantial degree of monetary accommodation is needed for euro area inflation pressures to build up and support headline inflation in the medium term. If warranted to achieve its objective, the Governing Council will act by using all the instruments available within its mandate. In particular, if the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, we stand ready to increase our asset purchase programme in terms of size and/or duration. Let me now explain our assessment in greater detail, starting with the economic analysis.
A bank that is well capitalized can credibly state to its customers and clients that it can make good on its promise to pay. More and more, clients recognize this and differentiate among various banks on this basis. As financial services converge and competitive pressures increase, banks find that they must vie for capital, not only with their domestic and foreign counterparts, but also with investment funds, asset management firms, investment banks and insurance companies. This is equally true for emerging market banks that find they must compete with internationally active banks in what were previously thought to be solely domestic markets. These banks recognize that an adequately capitalized institution is a necessary, but not sufficient, condition to compete globally and to attract international funds and clients. It will be a challenge for these banks, and particularly those with high-risk profiles and opaque financial statements, to prove to clients, counterparties and stakeholders that they are operating safely and soundly. In the face of increasing competitive pressures, banks are focusing more of their attention on the role of capital, capital levels and targets, and how they relate to strategic plans and objectives. Many banks also are spending more time assessing their own risk profiles and evaluating the amount of capital they need to cope with adverse outcomes in normal times and under reasonable stress scenarios. The more sophisticated banks are in the process of developing internal systems and methodologies, including formal analytical models, that enable them to do this better.

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This is a very strong encroachment on the principles prevailing in a free market  7  The argument outlined here is particularly relevant for holders of senior bonds. 8  See Pigou, A. (1920), The Economics of Welfare, London: MacMillan. 9  10  There are a variety of advocates of this view. Cf., for instance, King, M. (2009), speech at the Lord Mayor’s Banquet for Bankers and Merchants of the City of London at the Mansion House, June 2009. It is fair to acknowledge at this point that there is a lot of controversy and only weak evidence on the existence and size of returns to scale and scope in banking. BIS central bankers’ speeches  5  economy, which is – among other things – based on the principle that firms are best positioned to select their business plan and should do so freely within the appropriate incentive structure. Increasing capital requirements and imposing a capital surcharge The “Pigovian” approach is often more suitably and closely aligned to the principles of a dynamic market economy. In the problem at hand, the Pigovian approach may take the form of the imposition of higher capital requirements together with a capital surcharge, modulated to take account of the systemic risk of a financial institution. The benefits of increasing capital requirements are manifold. First, imposing more equity capital naturally makes an institution more robust and able to withstand adverse scenarios. This reduces the probability of bankruptcy, thus the severity of the externality.

Reports of the demise of cash are vastly exaggerated. Notes and coins have been with us a long time, and have served a crucial role in the growth of the modern economy. I suspect they will be with us for quite some time more. BIS central bankers’ speeches  1  Three “C”s of a good payment instrument But be it physical cash or electronic payment, the medium of exchange for transactions must satisfy three requirements. I will refer to these as the three “C”s of a preferred payment system – confidence, convenience, and cost-effectiveness. First, confidence. Businesses and consumers must be assured of the security of payment instruments. The widespread circulation of counterfeit notes and coins can impair confidence in a country’s currency. As John Maynard Keynes put it nearly a century ago, quoting Lenin, “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.” Keynes was, of course, talking about the deleterious effects of inflation. But it applies just as well to debasing the currency through counterfeiting. Ensuring the fidelity of notes and coins and the soundness of electronic payments is therefore a critical function. Central banks and currency issuing authorities must continually innovate and stay ahead of fraudsters. In electronic fund transfers, we have instituted more end-to-end security measures like two-factor authentication. Modern currency notes come with very advanced security features. I wanted to give some examples, but have been advised that it would be tantamount to giving away our secrets!
Ultimately, the reforms were enacted, just as the then-vice president of the ECB predicted. But I believe it is fair to conclude that greater integration was a de facto prerequisite for the proper functioning of the euro, rather than a consequence of it. It was the crisis that made a compelling case for a common and reinforced banking supervision and resolution framework that would help break the bank-sovereign risk feedback loop.2 On one hand, in a context of banking crisis, the combination of State support to national banking systems and lower tax revenue exert pressure on public finances, impairing a country’s solvency. On the other, banks’ high exposure to their country’s sovereign debt compromises their own solvency, which may increase recapitalisation requirements. Memory can sometimes fail us, which is why I would like to stress the scale of that crisis. Offering some figures, Greece’s sovereign debt spread over the related benchmark was more than 1500 basis points in June 2011, while those of Portugal and Ireland were around 700 bp. As you know, the crisis hit Spain head on a year later in July 2012, with the market demanding more than 7% to finance us at 10 years.

The award of the Nobel Peace Prize to the European Union in 2012 for having “over six decades contributed to the advancement of peace and reconciliation, democracy and human rights in Europe” attested to the success in achieving this original goal. I believe that the goals of ensuring peace and promoting integration and economic development are in fact related. As the World Trade Organization rightly reminded us, the trade war unleashed during the Great Depression contributed to the outbreak of the Second World War. In this respect, one very positive consequence of trade between nations is that it contributes to transforming “rival” nations into partners, who share interests instead of having conflicting interests. Undoubtedly, since the foundation of the European Coal and Steel Community in 1952, economic and political integration in the EU has attained a most notable level. However, the process has been neither linear nor gradual. Over almost 7 decades of history, the European project has witnessed long periods of calm – where little or nothing remarkable happened – punctuated by “transformative periods” that have contributed decisively to its development and to shaping its current form. Normally, these deep transformations have stemmed from processes involving reflection and negotiations, conducted in a more or less orderly fashion. 3/10  Introduction of the single market and the euro For example, the start-up of the single market was the outcome of lengthy negotiations that began officially in 1985.