samchain/econo-pairs-v1 huggingface dataset:
The average annual increase in the HICP since the launch of the euro has been very close to 2%, despite the sizeable adverse price shocks during this period. Moreover, long-term inflation expectations have been stable and well anchored at levels broadly consistent with the definition of price stability, as shown by the evidence coming from surveys or from indicators derived from index-linked bonds. The 318 million citizens of the euro area believe that price stability is here to stay. This is a considerable achievement that could not be taken for granted a few years ago. And the Governing Council of the ECB can claim credit for it. Concluding remarks But monetary policy is constantly confronted with new challenges and, certainly, developments since this summer (winter in this hemisphere, of course) indicate that we are not currently short of such challenges. At the beginning of July, the ECB Governing Council pointed out the risk of a potential abrupt shift in market sentiment. This risk materialised in August, although through somewhat unexpected channels. Growing default rates in the US market for subprime mortgages resulted in a loss of confidence in the valuation of structured  7  Papademos, L. (2006): “The role of money in the conduct of monetary policy”. Speech at the 4th ECB Central Banking Conference “The role of Money: money and monetary policy in the 21st century”. 6  BIS Review 132/2007  credit instruments and the disruption of the asset-backed commercial paper (ABCP) market.

Miguel Fernández Ordóñez: The monetary policy strategy of the Eurosystem Speech by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, at the Second Summit Meeting of Central Banks on Inflation Targeting, Santiago de Chile, 14 November 2007. *  *  *  Ladies and gentlemen, Let me thank Governor Corbo for his kind invitation to speak at this Second Summit Meeting of Central Banks on Inflation Targeting, hosted by the Central Bank of Chile. It is for me a privilege and a great pleasure to be here in Santiago and to have the opportunity to address this distinguished audience. I would like to begin my intervention today by recalling two important events that took place in 1999. In that year, the Central Bank of Chile adopted a full-fledged inflation targeting strategy with a floating exchange rate. This monetary regime has served Chile well, providing a coherent and transparent framework that is credible in society at large because all the economic agents clearly understand the policy objectives and the rationale for decisions. 1999 was the same year that the Governing Council of the European Central Bank took up the responsibility for conducting a single monetary policy for the entire euro area, after a prolonged period of intensive preparations and successful economic convergence.
2  BIS Review 111/2006  First, the earlier strict regulations on lending meant that banks did not really acquire the skills to evaluate the creditworthiness of customers and loan projects – only those with very high creditworthiness had had access to the limited amounts available for bank lending to non-prioritised purposes. The restrictions on lending to other purposes led to a large unsatisfied demand from potential borrowers. After deregulation, bank lending increased extremely rapidly without banks’ credit managers really having much experience on how to evaluate borrowers’ creditworthiness. A similar weakness applied to the supervisory authority – they had supervisors with good skills to check the banks’ formal compliance with laws and regulations but not to evaluate credit decisions. At the outset, the central bank took the erroneous view that the loan expansion in the banks could to a large degree be explained by old loans moving out of the former “grey sector” and into the banks. Since this had different implications than an extension of new loans, the central bank found that there was no need for the authorities to worry. Second, a large share of bank lending went into the real estate and commercial property business. There was a building boom in Sweden during the 1980s and prices rose rapidly – paving the way for additional lending. When real estate prices collapsed in the early 1990s the value of the collateral for many bank loans fell sharply and banks suffered huge credit losses from non-payments.

It may be true that HIBOR will last for some more time. But the transition to SOFR in the USD space could gradually lead to changes in market practices and conventions that may eventually shift market preference for interest rate benchmarks. Therefore, if more HONIA-based products can be introduced in the market going forward, it would help reduce any market impact in 3/4  BIS central bankers' speeches  case HIBOR has to discontinue one day owing to changes in market circumstances. Closing 21. Ladies and gentlemen, as we have learned from speakers earlier this morning, interest rate benchmark reform is complex, but it is something too important for any market participant to ignore. When LIBOR ceases to exist, there will certainly be an impact on global financial markets. Some people may say end-2021 seems a long way off. But it’s not, given the tremendous amount of preparatory work required to ensure a smooth transition. No one in the market can afford to play a waiting game. Let’s all devote resources now, and work closely together on this important task. 22. Thank you. 4/4  BIS central bankers' speeches
BIS Review 85/2009  9  Chart 7: Long-run capital levels for US commercial banks, 1840-1993  Chart 8: Daily volumes and values settled in CLS  10  BIS Review 85/2009  Chart 9: CDS premia and network uncertainty – pre-crisis  Chart 10: CDS premia and network uncertainty – in-crisis  BIS Review 85/2009  11  Chart 11: LCFI return on common equity  Per cent 30 20 10 0 -10  US securities houses US commercial banks European LCFIs UK LCFIs  -20 -30 -40  Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2003 04 05 06 07 08 Sources: Bloomberg and Bank calculations. (a) Data for European LCFIs and UK LCFIs are half-yearly. Chart 12: Spreads on new mortgage lending by the major UK banks Per cent 4  Maximum-minimum range Interquartile range Median  3 2 1 0 + 12 Jan  Apr  Jul  2007  Oct  Jan  Apr 08  Jul  Oct  Jan 09  Source: Bank of England. 12  BIS Review 85/2009

At the end of April 2022, the total number of failures over the  Page 4 of 8 previous 12 months was 43% lower than the figure for April 2019.i And even more importantly, according to our estimates, more than 95% of stateguaranteed loans (SGLs) should be repaid on time. Half the SGLs granted in 2020 started to be repaid in 2021; repayments on the other half began as of April this year. True, the shock of the war in Ukraine is slowing our rate of growth, and I shall come back to this. But the soundness of our banks and businesses at the end of 2021, with the emergence from the Covid crisis, gives strong grounds for confidence. There is nothing today that justifies, in the face of certain warnings or excessive demands, a return to the exceptional measures that we saw in 2020: either in bank prudential regulations or in terms of general, untargeted support for businesses. The Credit Mediation service, which is attached to the Banque de France has received very few requests for the restructuring of SGLs (fewer than 200 cases out of a total of 700,000 SGLs granted). France has the strongest banking and insurance sector in the euro area: this is a major asset for our economy, and one that our country is not always sufficiently aware of or positive about. This justifies us paying close attention to a healthy regulatory framework. II.
At the GPFG’s current value, this is equivalent to NOK 100 billion. Renewable energy infrastructure investments will reduce equity and bond investments by an equivalent amount. Therefore, the risk-adjusted return on the infrastructure investments should be at least as high as the return on the securities that we could otherwise have had. Our managers have assessed the risk associated with governance and sustainability in some companies as so high that we have divested. Most often, these have been companies with business models that are not sustainable in the long term. This group also includes companies that emit particularly large amounts of greenhouse gases or engage in activities that contribute to deforestation. In addition to such risk-based divestments, we sometimes exclude companies on the basis of ethical guidelines. These guidelines are set by the Ministry of Finance and serve as the basis for the Council on Ethics’ advice and our decisions on exclusions. Ethical exclusions are not based on financial risk considerations, but on whether a company’s operations or behaviour is in violation of fundamental ethical norms. Two of the criteria for exclusion are related to greenhouse gas emissions. One of the criteria applies to mining companies or power producers with substantial emissions from coal, in either 6/7  BIS central bankers' speeches  absolute terms or as a relative share of their operations. In all, 82 companies have been excluded from the GPFG’s investment universe based on the coal criterion.

Such parallels would paint far too simple a picture of monetary policy and would give the impression that there is a precision and exactness in monetary policy – a possibility  18  For a slightly older, but still very readable article, see Rogerson, Richard (1997), “Theory Ahead of Language in Economics of Unemployment”, Journal of Economic Perspectives 11 (1), pp. 73–92. A more recent reference that is also relevant in this context is Carlsson, Mikael (2012), “Monetary policy and unemployment: A conceptual review”, under publication in Sveriges Riksbank Economic Review 2012:3. The problems with basing economic policy on estimated trends and long-run equilibria are illustrated in, for instance, Orphanides, Athanasios (2004), “Monetary Policy Rules, Macroeconomic Stability and Inflation: A View from the Trenches”, Journal of Money, Credit and Banking 36(2), pp. 151–175 and Orphanides, Athanasios and Simon van Norden (2002), “The Unreliability of Output-Gap Estimates in Real Time”, Review of Economics and Statistics LXXXIV (4), pp. 569–583. 19  There is support for this view in research, see for example Blinder, Alan S. and John Morgan (2005), “Are Two Heads Better Than One? Monetary Policy by Committee”, Journal of Money, Credit, and Banking vol. 37, pp. 789–812. BIS central bankers’ speeches  9  to “fine tune” – that simply does not exist. This would possibly give an illusion of “clarity” but would, as I see it, merely be a chimera.20 The Riksbank is hardly unique in this respect.
To quote Federal Reserve Chairman Ben Bernanke “…the very substantial shift in the current accounts of developing and emerging-market nations … transformed these countries from net borrowers on international capital markets to large net lenders.”2 Indeed, it is interesting to observe that, in the late 1990’s, in the aftermath of the Asian crisis, several Asian central banks started accumulating significant foreign exchange reserves in efforts to stabilize their capital flows and their exchange rates, or to be in position to do so, should that prove necessary in the future. Meanwhile, some conjectured that mature economies with ageing populations would experience a peak in their savings rates. The “savings glut” hypothesis is contested, however. A first point of contention is that the impact of demographic change on savings and investments may be limited, compared to that of other factors.3 Indeed, the savings rates of industrialised countries did not appear to increase in this period (slide 5). In some cases, they even decreased. A second discrepancy, asserted by John B. Taylor and others, resides in the observation that the US savings gap, and the surge in savings in the rest of the world effectively cancelled one another out.4 Finally, despite the significant increase in savings rates in China and other emerging countries, there was no clear upward trend in global national savings.

In the U.S., for example, on average about 90, mostly smaller, banks per year have been resolved since 2008 and this had no impact on the solvency of the sovereign. Political union can, and shall, develop hand-in-hand with fiscal, economic and financial union. The sharing of powers and of accountability can move in parallel. We should not forget that 60 years of European integration have already created a significant degree of political union. Decisions are made by an EU Council filled by national ministers and by a directly elected European Parliament. The challenge is to further increase the legitimacy of these bodies commensurate with increasing their responsibilities and to seek ways to better anchor European processes at the national level. A more solid political foundation should allow for agreement on a basic principle: that it is neither sustainable nor legitimate for countries to pursue national policies that can cause economic harm for others. This constraint has to be built into how countries design their economic and social models. The only sustainable model is one that is consistent with the terms of a common currency. Countries have to live within their means. Competition and labour markets have to be reinvigorated. Banks have to conform to the highest regulatory standards and focus on serving the real economy. This is not the end, but the renewal of the European social model. From the ECB’s perspective, a strong economic union is an essential complement to the single monetary policy. Building this will require a structured process with correct sequencing.
But a fund selling material amounts of less liquid assets in one day to meet redemption pressures could find itself receiving less than these quoted prices.19  18  In the US, structural reforms in 2014 preserved ‘constant NAV’ status for institutional funds only where they invest in government bonds. Any fund offering constant NAV much have the ability to implement a redemption liquidity fee and gates during times of stress. In Europe, reforms of 2017 preserved constant NAV for funds invested in sovereign securities. 19 As part of its Financial Sector Assessment Programme for Ireland, the IMF estimated that it could take a high-yield credit fund up to three days to meet redemptions worth 10% of its assets. To ensure redeeming investors would not benefit at the expense of remaining investors, the fund manager would need to know exactly how much selling three days’ worth of assets in one day would move the price and adjust its quoted NAV accordingly, which is highly uncertain. 11  All speeches are available online at www.bankofengland.co.uk/speeches  11  Without other measures, redemptions from funds invested in less liquid assets can transfer economic value from remaining to redeeming investors. That could create an incentive to be on the side of the redeemers. It could create a first redeemer advantage. This isn’t much of an issue for funds invested in liquid equity markets, where large amounts can be sold at quoted prices at short notice.

20  Baranova, Y., et al. (2017), ‘Simulating stress across the financial system: the resilience of corporate bond markets and the role of investment funds’, Bank of England Financial Stability Paper, no. 42, (July) 21 Baranova, Y., et al, (2015), ‘Has corporate bond market liquidity fallen?’, Bank Underground, available here. 22 See the December 2015 edition of the Financial Stability Report issued by the Bank of England. Also see ‘Has corporate bond market liquidity fallen?’ https://bankunderground.co.uk/2015/08/27/has-corporate-bond-market-liquidity-fallen/ 12  All speeches are available online at www.bankofengland.co.uk/speeches  12  Our work here explores the depths of how open-ended funds, hedge funds, dealers, insurance companies, unit-linked funds and pension funds might, through responding separately to their incentives and constraints, together amplify market shocks. These are only simulations and the work is still at the development stage. None of the developments I have listed is conclusive of a problem but we have a duty to take the possibility seriously. With markets and funds having evolved so much, the absence of problems in the past is no guarantee for the future. There is enough here to be of concern not just to investors but also the wider economy and macroprudential authorities. I’ll allow you now to re-surface and decompress. But rest assured, we’ll be diving again to keep track of any new icebergs developing below the surface that could one day compromise the resilience of markets. Just as we’ll be working to ensure the moonwalking bears do not disrupt the wider economy.
First, the authorities are supporting the refinancing of banks by providing them with guarantees so that they can, in turn, properly finance the economy. Second, very significant reforms of accounting rules are in the process of being finalised. The first reform aims to bring the current framework in line with what is best practice in the world today: it will allow banks to transfer instruments hitherto booked at market value to portfolios where that will no longer be the case. The second will introduce greater flexibility in markedto-market accounting rules, allowing assets, whose market is no longer active to be valued at amortised historical cost. This will ensure that the valuation of these products is better suited to the market conditions that have prevailed for the last few months. Lastly, governments have confirmed their support for the recapitalisation of banks. In the case of France, the Government and Parliament very quickly fleshed out these European principles as follows: New legislation provides for the creation of a funding vehicle, created to guarantee the refinancing of banks for medium-term maturities (up to five years). This vehicle, which is strictly supervised by the French Government and the Banque de France, has a credit capacity of EUR 320 billion. The guarantee is granted for a fee, so that the banks requesting it pay costs corresponding to normal market conditions. The law stipulates that a state-owned company has the possibility of subscribing to subordinated debt issues or preferred shares.

The increase in leverage has appeared everywhere: in the expansion of banks’ balance sheets; in the proliferation of off-balance sheet vehicles that for the most part operate without own funds, i.e. with infinite leverage; lastly, as I have said, in the use of the limited capital of monoline insurers to guarantee a large volume of structured products. One well-known feature of leverage is that it amplifies both gains and losses. For many years, the US property boom provided substantial returns on investment. But with the turnaround in the market, very considerable depreciations have been recorded on structured products, which, for many banks, have exceeded their level of capital. Their inability to recapitalise has led to the failure of some of them. How, in this environment, can we assess the state and performance of our banks? They are, of course, not immune to the crisis. They have direct or indirect exposures (notably via US monolines) to structured products. They have had to make write-downs, sometimes substantial ones. They are also suffering the impact of the drying up of liquidity, the seizing up of some markets and, more generally, the rise in their refinancing costs. That said, our banks are sound and profitable. It is worth recalling four facts that, in the current turmoil, are sometimes overlooked: First, the solvency ratios of French banks are high, well above the minimum requirements set by prudential regulation and the levels of their European competitors; Second, overall our banks remain profitable: over EUR 7 billion in the first half of 2008.
Since China has been an important economic partner of Thailand and the region. To further strengthen these flows of trades and investments, close financial cooperation is the key. The Renminbi / Baht Bilateral Swap Agreement (or BSA in short) and the establishment of the Renminbi Clearing Bank here in Bangkok are the great examples. 6. The BSA is designed to be a backstop liquidity facility, which will help boost confidence of the private sector in using the local currency in trade and investment settlement. After the first signing of the BSA in 2010, the use of the Chinese Renminbi in trade and investment settlement between Thailand and China has grown remarkably. The share of trade settlement in Renminbi quadruples between 2010 and 2014. As for investment  BIS central bankers’ speeches  1  settlement, the share climbs up dramatically from a mere 1% in 2010 to 14% in 2014. In spite of the rapid increases, the volumes are still small compared to other major currencies. 7. The Renminbi Clearing bank is the next important step from the BSA. Its Renminbi settlement mechanism is the sequencing plan of the Renminbi scalability. I could see its merit which fundamentally paves the way for further Renminbi internationalization as well as the role of Renminbi in global financial markets that will become increasingly prominent in the near future. 8. There is, however, some room for improvement in order to realize the full economic benefits between Thailand and China.

This account has been persistently in deficit, although there was a marked improvement in the deficit in 2006 to 6.3% of GDP. In the long run, however, this imbalance needs to be further reduced to a more sustainable level. This can only be achieved to the extent that growth is driven more by export-oriented activities and less by consumption. In view of the large amount of currency in circulation and your interest in ensuring a smooth changeover to the euro, what advice would you give to the public in this regard? As I said earlier, the amount of currency in circulation has been contracting and there is evidence that cash hoards and bank deposits are being converted into euro. We are trying to discourage this premature conversion because portfolio diversification at this stage is expensive and makes little sense. In the case of Maltese lira bank deposits, these will be converted automatically, and at no cost, into euro on the changeover date. As for cash conversions, people who are buying euro currency notes from banks and other financial institutions are having to pay exchange commissions; those who obtain euro notes outside the banking system are being offered an even more unfavourable exchange rate, besides running the risk of receiving counterfeit notes. These early conversions, moreover, constitute a drain on the Bank’s reserves. We are, therefore, encouraging the public to deposit Maltese lira cash holdings into the banking system and retain them in Maltese lira denominated deposits, thereby earning interest.