samchain/econo-pairs-v1 huggingface dataset:
For the euro area it is based on an update of the reaction function estimated in L. Christiano, R. Motto and M. Rostagno (2010), “Financial Factors in Economic Fluctuations”, ECB WP No. 1192. For the US leverage is computed as the year-on-year change in the leverage ratio of brokers and dealers. For the euro area it is computed as the year-on-year change in the leverage ratio of OFIs computed on the basis of asset transactions to make sure that movements in leverage are not dominated by revaluation of assets. Subject to data availability, the sample is 1997–2007. Source: ECB Staff calculations. BIS central bankers’ speeches  13

The ECB’s asset purchases are being expanded in terms of both size and composition: the monthly purchase volume has been increased from € billion to € billion and the universe of eligible assets now includes non-bank corporate bonds. Purchases are intended to run until the end of March 2017 – or beyond, if necessary – , and in any case until the Governing Council sees a sustained adjustment in the path of inflation to levels close to 2% over the medium term. Taking into account the current outlook for price stability, the Governing Council expects the ECB’s key policy rates to remain at present or lower levels for an extended period of time, well past the horizon of the net asset purchases. We are confident that the very accommodative monetary policy stance will provide further support to the euro area recovery and will accelerate the return of inflation to levels that we consider to be consistent with our objective. The Governing Council has done and, within its mandate, will continue to do whatever is needed to pursue its price stability objective. Our very accommodative monetary policy stance has provided considerable support for the euro area recovery. By supporting growth prospects, our actions have also been beneficial for financial stability.
This sets out baseline standards for financial institutions, and addresses key fundamentals of technology resilience including governance, cybersecurity risk management as well as capacity-building. Conclusion These are exciting times, where rapid technological innovations, evolving business models and shifting customer preferences, present new opportunities and challenges to the status quo. Such opportunities can bring about a positive and transformational impact to our society and economy. We should be bold to capitalize on these emerging trends, while remaining steadfast in managing the associated risks. Times are changing, and change is good. It takes us out of our comfort zones, and helps us reach new heights. Before I close, I would like to congratulate all the winners of today’s ceremony and I wish you all a pleasant evening ahead. 4/4  BIS central bankers' speeches

But we feel that the costs of delayed action may sometimes outweigh its benefits, as postponing the inevitable and failing to accept the changed reality will lead to additional unnecessary costs. One should not want to keep alive old structures that clearly cannot be sustainable in the changed world for longer than necessary. This is a waste of limited resources and reduces long-term productivity. There is a saying that “a crisis should not be wasted” – negative shocks to an economy should lead to productivity gains. Our experience shows that quick decision-making and decisive policy actions can shorten the period of uncertainty that also weighs on economic activity. People and entrepreneurs in countries with delayed reforms overreact, leading to a higher level of risk aversion than necessary. Overshooting in risk aversion results in lost jobs and postponed investments. BIS central bankers’ speeches  1  Estonia, for example, lost almost 20% of its GDP during the crisis. By now we have regained the pre-crisis level, contrary to many countries that preferred to delay the necessary reforms. Some of them still face years of decreasing economic output. In summary, I would like to stress that prolonged fiscal consolidation and structural reforms can lead to unnecessary costs to the society. Some countries have chosen to delay the pain and take only gradual steps with their structural reforms, but this has in fact resulted in a reduction of the overall economic activity to the extent that might be no less than the shortterm cost of a quicker adjustment.
Indeed, it was Carlos Diaz-Alejandro, by the mideighties, who eloquently said “good-bye financial repression, hello financial crash” (DiazAlejandro, 1985). Some recent research also points in the same direction, as reviewed in Dr. Reddy’s lecture – beyond a certain level, financial depth has marginal contributions to growth (Arcand et al., 2012; Cecchetti and Kharroubi, 2012). In Chile we had a great financial crisis in the early eighties which led to an overhaul of financial regulation. The country followed the prudent route, allowing only activities that could be handled appropriately by financial intermediaries, but above all that could be understood  1  and monitored well by market participants and financial regulators. Since the country was emerging from a deep financial crisis, the macro view of the financial system and its regulation were a central part of the design. But this seems not to have been the case in advanced economies. The global financial crisis has revealed the perils of financial deepening. It has shown that advanced economies are not different. This is not new in emerging markets, but is something less common and more dramatic in advanced economies. Long ago we learned that when an economic downturn comes with a financial crisis the costs are extremely high. What went wrong? It is important to recall that the crisis had its origins in a noble cause: providing housing to low-income families.

Exchange rate certainty within Europe - even though it is nominal certainty rather than real exchange rate certainty - would potentially enhance the benefits to be derived from the European Single Market. The euro’s second very powerful advantage is the possibility it opens up for much broader and more liquid financial markets. It will mean a progressive narrowing of spreads between borrowers and lenders - and that will be good news too for financial intermediaries as a group, because it will lead to higher volumes of financial activity - though not every individual intermediary will benefit, of course, in the more competitive environment. The City of London is already making an important contribution to this process of financial euro-market integration. So there are potentially powerful advantages. What then are the risks - the possible arguments against our joining the euro? Essentially the potential downside can be summed up as the risk that the single - one-size-fits-all – short-term interest rate within the Eurozone - which is the inevitable consequence of a single currency - will not in the event prove to be appropriate to the domestic monetary policy needs of all the participating countries. Countries may have divergent cyclical positions. They may face divergent fiscal positions which would affect their appropriate fiscal/monetary policy mix in different directions - though this should be contained by the Growth and Stability pact.
If, on the other hand, people expect the rise in infection rates (and the associated restrictions) to subside relatively quickly – and if there are also no close substitutes for the sorts of spending that expose people to infection risk – one would expect a more marked effect on aggregate consumption, and less expenditure switching. Charts 5(a)-(c) depict some simulations to get these points across. The model they’re based on is extremely simple and stylised. In particular, it assumes that incomes, current and expected, are held fixed, and that there’s no change in the degree of uncertainty about the economic outlook. The only thing that changes is the path, actual and expected, of the pandemic. This is very obviously unrealistic. Household incomes have clearly been affected by the crisis. And we know from long experience that when uncertainty about people’s future incomes goes up, saving rates tend to rise as well. But as we saw earlier, from Chart 4, household incomes have been significantly protected by the furlough schemes, at least as compared with the huge dip in national income. (While this isn’t a free lunch – higher government debt has to be paid for eventually – it does spread out the cost of that dip.) So the assumption 2 In a more general model than the one used here Krueger et al (2020) also point out that the impact of the pandemic on aggregate  spending is lower the closer the degree of substitutability between risky and non-risky consumption.

And at least until resources can move in response, they may at the margin add to aggregate costs and inflation. I wondered about this effect first in the years after the financial crisis, and specifically whether it might help to explain why inflation had been less weak that one might have expected, given the large decline in GDP8. I thought at the time that one indicator of such a demand-driven misallocation might be a noticeable sectoral divergence in prices, mirroring that in demand and marginal costs. Chart 9 plots the sectoral dispersion in inflation rates, across broad components of the CPI, over the past 15 years or so. You can see that there was a spike in the series following the financial crisis and another last year. This isn’t a particularly clean indicator. The effect I’m discussing here involves cross-sectoral shifts in demand specifically. But relative prices can change for other reasons too (sector-specific changes in costs or productivity, for example), in a way that wouldn’t reflect any sort of misallocation of resources. In an effort to isolate areas where demand looks to have been the dominant influence, Chart 10 plots changes in inflation and sales through the course of last year, each dot indicating a different part of consumption, but only for those sectors where the two things went in the same direction9. Tentatively it suggests that, in areas where demand was relatively strong, prices went up by a little more than the equivalent declines in low demand areas.
To conclude, I have personally conveyed to the Government and to the main opposition party the need for certain regulatory changes that might notably improve finding solutions in keeping with the principles informing our actions to date, which as you are well aware, were backed by a recently approved parliamentary motion. The purpose of my testimony today is not to debate what must be done in future, since that is evidently the primary responsibility of the Government and the parliamentary groups, since  4  BIS Review 42/2009  any changes must ultimately be approved by this House. However, I do want to mention some changes which we would view very favourably. For example, providing savings banks with the wherewithal to increase their own funds, at least on a comparable footing with Banks. This is important because, as I have reiterated today, it is essential to consider all possible private solutions before asking taxpayers to contribute more public funds. Evidently we must comply with the requirements of Monetary Union membership. But in this connection, one desirable institutional change, along the lines of the deposit guarantee funds that have worked so well for us, would be to avoid, as has occurred in the case of CCM, calling a cabinet meeting every time taking control of an institution is called for. These and other changes should also strive to ensure the orderly restructuring of banking institutions and, while maintaining the necessary discretion specific procedures require, comply with all government and parliamentary reporting procedures deemed necessary.

I wish success to the beneficiaries of this project, to the National Bank of Moldova, to Governor Armașu, a reliable partner in our bilateral collaboration. I am convinced that achieving the objectives will lead to increased resilience and will support the development of the economy of the Republic of Moldova. Thank you! 2/2  BIS central bankers' speeches
Thirdly, we are under no illusions about the limitations imposed by the Link. We agree that it rules out the possibility of using the exchange rate to help us adjust more quickly to sudden shocks. We agree that it ties Hong Kong to US monetary policy at times when the economic cycles of the Hong Kong and the US may not necessarily be moving in sync. We agree that it is a cause of asset price inflation in the nineties and deflation more recently. We agree, in short, that it is not a perfect system. But then, no exchange rate system is perfect. And the question to be asked, I would suggest, is not "Where is the exchange rate system that will remove these limitations?" It is "Are these limitations so severe, so constricting, so damaging as to outweigh the advantages that the Link brings to Hong Kong, or to outweigh the risks and uncertainties that would inevitably arise if we were to change or abandon the Link?" I think that the answer has to be no. Let us take the question of competitiveness first. The claim is made that, without exchange rate flexibility, our products, and Hong Kong generally, have become uncompetitive when compared with economies in the region that have devalued their currencies. Even ignoring the fallacy of competitive devaluation, this claim assumes that the nominal exchange rate on its own is a reliable measure of an economy's competitiveness.

Some shops were reluctant to accept Hong Kong dollars. No one, I think, who lived through those times would wish to live through similar events again. Conclusion The creation of the Link eighteen years ago helped restore stability at an unstable time. History does not repeat itself. Times change. But let us at least remember the experience of those years when we talk about the usefulness or otherwise of the Link to Hong Kong during what are, arguably, even more unstable times. At this time of great global uncertainty and local distress, our efforts should be directed towards building stability, not destroying or undermining it. I have given some account in this talk of how, in its banking system and financial infrastructure, and in its currency, Hong Kong enjoys a position of great strength. It is from this position of strength, and not through any sudden and destabilising gimmickry, that we will best be able to weather the difficulties that now face us, and to embrace the opportunities to come. 6  BIS Review 88/2001
And even if this mechanism has been at work, it’s not clear it has important implications for inflationary pressure over the medium term, which is the focus for monetary policy. It’s reasonable to expect the degree of dispersion  Sources: ONS and Bank calculations. in demand and spare capacity to narrow as and when aggregate spending recovers (those areas most affected by the pandemic are likely to see stronger growth afterwards). To the extent shifts in consumption do persist – some have speculated, for example, that a higher proportion of people will work from home in future, with possible implications for the pattern of spending over the longer term – one would expect the economy to adapt to those over time. But alongside other possibilities that the MPC described in the August Monetary Policy Report, the significant dispersion in demand might be one other thing that’s effectively served to flatten the price Phillips curve (i.e. to temper the response of inflation to shifts in aggregate spending), if only in the shorter term10. Conclusion  The pandemic, and the waves of the restrictions that have accompanied it, have had highly selective effects. They’ve hit some areas of spending much harder than others. The decline in aggregate consumer spending would almost certainly have been more protracted and more widespread – affecting not just activities that involve infection risk but those that do not – but for the furlough schemes. These have helped shield household incomes from the big drop in national income last year.

I strongly believe that a better understanding of the rationale behind the changes in our forecasts is very important for communicating our policy as well as for the viability of the principles of transparency and accountability; therefore, I would like to explain these factors in detail. Better-than-expected outcomes regarding unprocessed food prices urged us to revise our assumption for food inflation downwards. Accordingly, while we decreased our food inflation assumption for end-2010 from 9 percent to 7.5 percent, we maintained our assumptions for food inflation for 2011 and 2012 at 7 percent (Table 3). The change in question had a 0.4 percentage point downside impact on end-2010 inflation. BIS Review 133/2010  13  With the increased downside risks regarding global economic activity, oil prices in the second quarter were below the levels assumed in the April Inflation Report (Figure 32). In this context, while we revised our assumptions for crude oil prices for 2010 and 2011 downwards, oil price assumptions for 2012 were maintained at USD 90 (Table 3). This revision shifted the 2010 inflation forecast down by 0.2 percentage points. Core goods and services inflation, which we believe to reflect the main trend of inflation, declined more than we had anticipated. This decline led to a 0.2 percentage point fall in our year-end inflation forecast. The contribution of aggregate demand conditions to disinflation in the revised forecast is slightly higher than envisaged in the previous Report due to the weaker external demand Outlook.
A process was therefore initiated in November that amounts to successively taking our foot off the monetary “accelerator”. As the after-effects of the Asian crisis and the financial market turbulence in the autumn of 1998 subsided, a strong economic stimulus from monetary policy was no longer required. In November 1999 and February this year the repo rate was therefore increased by a total of 0.85 percentage points. The analytical and monetary policy challenges that confronted the Riksbank during 1999 were not minor. The strong growth of demand in recent years has been accompanied by paths for underlying and trend inflation that have been weaker than earlier relationships seemed to suggest. A number of reasons have been put forward as to why these relationships may have changed. One reason may be that when inflation has been brought down to a low level, price and wage setting behaviour is different. Households as well as firms in Sweden count on inflation remaining low. Another reason may be increased competition, for instance due to deregulations, globalisation and IT commerce. A third reason may be that our assessments of resource utilisation are faulty and the actual level is lower than we have assumed to date. Economic growth can then be higher for a time, without generating increased price pressure. A fourth reason may be a higher productivity trend and an ability to produce more goods and services without generating increased prices; in other words, a higher potential growth rate.

Setting standards  Remarks given by Dave Ramsden, Deputy Governor for Markets and Banking ISO 20022 Conference, Bank of England 6 December 2018  With thanks to Carsten Jung, Amy Lee, Varun Paul, Neil Pearston, Cameron Penny, James Southgate and Tom Smith. 1  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  Welcome all to today’s ISO 20022 conference. ISO produces a lot of standards, but it’s those related to financial messaging, and in particular payments data which is what we’re here to talk about today. I’m going to open this event by talking a little more about why the Bank, along with Pay.UK and the Payment Systems Regulator (PSR), is so keen to work with the payments industry to deliver this important change to create the conditions for the next generation of innovation in UK payments and internationally. To the Bank of England, data, and the ability to collect, process and interrogate them, is vital to its ongoing ability to deliver its mission. Careful analysis of economic data is a key input into the Monetary Policy Committee’s deliberations. The Bank collects large quantities of data from the firms it supervises; that lets us understand their businesses individually and collectively, and so underpins the decisions of the Financial Policy Committee and Prudential Regulation Authority. In my own area, Markets and Banking, financial market data are crucial for calibrating and managing our own operations and risk management.
Már Guðmundsson: Preserving the credit of the sovereign through a financial sector meltdown – the case of Iceland Speech by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, at the International Monetary Seminar 2013 “Sovereign risk, bank risk and central banking”, organised by the Bank of France, Paris, 8 July 2013. *  *  *  I would like to thank Banque de France for inviting me to speak at this interesting seminar. This session is on resolving sovereign debt crises and the relative roles of the public and private sectors in that process. My comments will obviously be based on my own country’s experience during the financial crisis, which is a case of a sovereign debt crisis being avoided in spite of the meltdown of a large part of the financial sector and the country’s deepest recession since the interwar period. That result was achieved by relatively good fiscal position prior to the crisis, by a refusal – based on need rather than stubbornness – to rescue private cross-border banks with public money, and by on-going medium-term fiscal consolidation that was an important part of the economic programme developed in cooperation with the IMF. The bottom line is that all sovereign obligations have been honoured; the sovereign has maintained investment-grade credit ratings and market access.

Existing official reform proposals are a step in the right direction but do not fully address the problems revealed by the Icelandic experience. BIS central bankers’ speeches  5