samchain/econo-pairs-v1 huggingface dataset:
However, in the face of deflationary shocks driving inflation below its target and leading the central bank to cut its interest rates, these may ultimately “collide” with their lower bound. This asymmetry makes monetary policy potentially more effective in combating inflation than in combating deflation or, even, persistently low inflation. A dangerous vicious circle may be created as a result. In a setting in which central banks’ hands are expected to be frequently tied by the lower bound on interest rates, economic agents will with good reason expect any inflation overshooting to be corrected swiftly, but no so for undershootings. Therefore, average expected inflation over a long period will tend to run below target. Given that in the long run the nominal interest rate is the real equilibrium interest rate plus expected inflation, a fall in the latter implies lower average nominal rates, causing these to collide with their lower bound more often. This entails less headroom to provide stimulus in recessions with low inflation, further lowering inflation expectations, and so it continues. In this setting of historically low natural rates, a loss of interest rate policy scope and risk of a deanchoring of inflation expectations, the major central banks have deemed it necessary to rethink their monetary policy strategy, i.e. how they express their monetary policy targets and how they pursue them with the tools available.

From a broader perspective, the introduction of the PEPP – and the June and December expansions, which increased the maximum volume of net purchases to € trillion – led to a period of gradual easing of financing conditions in the euro area, not only for sovereign debt, but also other market segments such as corporate debt. In addition, according to analysis by the Banco de España, the PEPP is having a markedly favourable impact on GDP growth and inflation in the euro area.1 This easing has been essential for providing fiscal authorities in all countries in all euro area countries with room for manoeuvre, which has allowed them to deploy the measures to support the income of households and firms that I have mentioned earlier. In addition to the PEPP, another key instrument in the monetary policy response during the crisis are the TLTROs. This programme affords banks funding under particularly advantageous conditions, provided they meet certain targets in terms of lending to firms and households (excluding, in the latter case, loans for house purchase). With the onset of the pandemic, this programme was modified to make it even more attractive to banks, enabling them to obtain funding at an interest rate that could temporarily be as low as -1%, on the condition that they do not reduce their volume of eligible lending in light of the pandemic crisis. This instrument has also proved very effective.
We all share the same social model – to which we are strongly attached – combining a high volume of public services with markedly less inequality than in other countries – for example in the United States. The right response to inequality, therefore, is not a change of monetary policy. And it is not more protectionism, even though the rules of global trade need to ensure the benefits are spread more widely. The correct response to inequality is to develop the right social model. d) The euro is controlled by technocrats in Frankfurt Yes, Frankfurt is in Germany… just as Brussels is in Belgium. But yes, despite this, the ECB belongs to us all: not just to the Germans – as the Italians tend to think – and not just to the Italians – as the Germans tend to think. With the Eurosystem, that is the ECB and the 19 national central banks, we have had a genuine federal system, one that works, since 1999. We take our decisions collegially, within the Governing Council, and then apply them in each of our member countries. ECB staff – at the heart of the system – only account for 5% of total Eurosystem headcount. France and Italy thus have much more say in decisions today: before the advent of the euro, de facto our monetary policies closely followed that of Germany.

b) The euro is an “all-risks insurance” for all Member States This view appears to be the opposite of the preceding one; in fact it stems from an equally false perception: attributing excessive evils or benefits to the euro. A currency is an essential nominal value; but this alone does not determine the real performance of the economy. In the first part of the 2000s, once it had acquired the collective gain of the euro, France and Italy, like many 3/6  BIS central bankers' speeches  Southern European countries, wrongly believed that it was possible to let up on competitiveness efforts, which are nonetheless an ongoing imperative – “there is no free lunch”. Today we are suffering the consequences: we have lower economic growth and employment than some of our neighbours, such as Germany and Spain, which succeeded in carrying out the reforms necessary for enterprise (corporate sector), employment, education and expenditure reduction (public sector). Contrary to what some say, our lag in growth is not due to excessive fiscal discipline. The government debt to GDP ratio has more than doubled in Italy since 1980, and it has risen fivefold in France. When my generation was 18 years old, debt stood at 20% of GDP in France. For your generation today, it verges on 100% of GDP in France and in Italy stands at over 130%. We have failed when it comes to intergenerational solidarity and sustainable development.
When we make forecasts for the labour market, we also have to take into account the fact that the labour supply will increase when economic activity strengthens. This is a normal pattern. The Government’s policy will probably also mean that the number of persons in the labour force increases slightly more than has been usual in previous economic upturns. The fact that the labour supply increases will mean that unemployment will fall at a slower rate than employment rises. With regard to inflation, we expect it will fall over the coming six months. It is the large fluctuations in energy prices that make an impact on inflation in the short term. We cannot – and should not – do much about this type of short-term fluctuation in inflation. In the longer term we are expecting inflation to rise and be close to 2 per cent two years ahead. One might wonder, if inflation is now expected to fall in the short term, what reason do we have to believe that it will rise to 2 per cent in the longer term? One important reason for this forecast is that productivity growth should be more modest in future. Over the past two years we have been able to note that productivity growth has slowed down compared with the years before that. This indicates that productivity growth is about to slacken to a more normal level, seen from a long-term perspective.

As a complement to our statistical studies of productivity and other subjects, we will also create channels for direct contacts with companies. This is to improve our knowledge of the current status and current events in the economy. At the same time, I would like to point out that one should not have overly high expectations that the work will lead to significantly more accurate forecasts. We will probably have to continue to live with some surprises in the economy. This applies in particular when structural changes in the economy change the historical pattern. But improving understanding of what has happened is still important. The cause behind fluctuations in inflation and growth is important for how monetary policy should be designed. The high productivity growth has meant that the Riksbank has been able to conduct an expansionary monetary policy. In other words, the economy has managed a high growth rate without prices rising much. Under these circumstances a natural question might be whether we should have cut the rate more in order to push up inflation towards the target more quickly? With hindsight it is fairly easy to note that we could possibly have made the interest rate cuts at a slightly faster pace when we began making cuts a few years ago. We have already noted this in various contexts and it is hardly controversial. On the other hand, I do not believe that it would have been wise to cut the rate much more in recent years.
The Incorporated Society of Valuers and the RICS are funding research by IPD into the performance of the secondary market and, although this project is still in its infancy, I hope very much that you will support these efforts as the project develops. Indeed, on the basis that transparency generally improves the performance of markets, I would, personally, support John Ritblat’s opinion that commercial transaction prices should be made public through the land register. Some of you would lose proprietorial advantage as a result in the short term, but in the long run a more liquid market benefits the most professional more than the free riders. 12 It would, however, be rash to conclude that the market is now unambiguously healthy in all respects. There are still several factors which will continue to pose challenges to the investment, banking and valuing communities. For example, while lease lengths may have temporarily stabilised, break clauses exercisable by tenants are becoming more common. And despite the positive tone of the recent CBI/Grimley survey, it is clear too that many occupiers will continue over the long-term to reduce their needs for space and to demand greater flexibility. Privity of contract has disappeared on new leases. All of these factors are making it less straightforward to form a view of the quality of cashflow likely to stem from a particular building. 13 There is a sizeable overhang of unlet secondary property.

Perhaps from your point of view it should be called insourcing. If risks are properly identified and priced, the PFI potentially can provide the longerterm bond-type investments that many of you are seeking. It offers great opportunities to all of you. This revolution has only just begun. 20 A third issue that is particularly relevant now is technology. It has undoubtedly contributed to property obsolescence. But technology is potentially an important ally, and in more senses than one. Developments in building and construction techniques, as well as smaller and more powerful machinery and computer technology, facilitate the construction of buildings BIS Review 11/1997  -5-  that meet occupiers’ needs. Information technology enhances the usability and efficiency of property as an asset class. Just as Mr. Otis made skyscrapers possible, one of you will create completely new configurations of site exploitation - or develop new and integrated relationships between different buildings. The automobile and advertising have entirely altered the shape, size, appearance and location of shops in the USA - and to a lesser extent here. But today’s offices still look pretty much to me like those designed by Frank Lloyd Wright. Is there scope for an IT driven revolution in the next eight years in which the working environment is transformed into a virtual reality? I do not know but I am convinced we ain’t seen nothing yet. 21 The fourth factor could make an important difference - greater market liquidity and instruments such as derivatives which will facilitate short-term tactical positiontaking or investment.
Adherence to the terms set forth in the operating circular represents an indispensable element of a depository institution’s endpoint security program, designed to protect both the individual institution and the network at large. Attention to these security responsibilities regrettably is no longer the exclusive 2/4  BIS central bankers' speeches  purview of technologists and auditors, but compels awareness and direct engagement of executive management and directors. Collectively, these measures represent material enhancements in endpoint security controls supporting the payment system. At the same time, given an escalating threat environment that is not static, we cannot stand still. Therefore, looking forward, we are presently considering another wave of application level enhancements to give depository institutions greater control of their payment activity, such as an exploration of tools that will identify anomalous payments relative to historical patterns; contemplating a further expansion of real-time monitoring to include all depository institutions; and considering adoption of an assurance program to enhance confidence that external endpoints are operating in adherence with security requirements. We recognize, especially in the resiliency and security domains, that either intentionally we are progressing or inevitably we are regressing; given the technological sophistication and guile of our adversaries, there is no idleness. Conclusion Let’s pivot in conclusion from the age of electronic payments to the payment form of antiquity. Many of you will shortly tour the gold vault, the largest such repository in the world, representing approximately one third of the world’s known supply.

4  BIS Review 132/2007  A strong Swedish economy with increased cost and inflationary pressures… If we begin with the situation at home, it is clear that the Swedish economy is continuing to show strong growth (slide 5). We see increased cost and inflationary pressures ahead of us and there are a couple of main factors in this development that I wish to highlight. Strong growth Both the statistics in the National Accounts and the survey of Swedish companies carried out by the Riksbank confirm the picture of strong growth in Sweden. Although the rate of increase in GDP has slowed down slightly, it remains fairly high and is expected to be around 3 per cent this year. Our assessment is that we are in a situation where we are currently making more use of economic resources than normal. If we look ahead, we are expecting GDP to grow slightly more slowly up to 2010 than it has in recent years. This is due to several interacting factors; we believe that productivity and the labour supply will increase more slowly, and that international growth will be lower. In addition, we are expecting the interest rate to rise gradually, the exchange rate to be stronger and investment to increase at a slower rate. These factors subdue growth. … and tighter labour market Despite the fact that GDP growth has been strong for several years, it was not until 2005 that employment began to increase (slide 6).
Evidently, we must shorten the transition as far as possible, so that banks are aware with sufficient certainty of the supervisor’s requirements in the short and medium term and can, in this way, effectively design their strategic and management measures. True, this objective is currently hampered by the still-unstable international regulatory framework. I trust the Basel Committee’s announced intention in its recent report to the G20 to see through the regulatory reform next year will be fulfilled. In any event, in the supervisory realm we must make further efforts to specify with greater precision and permanence the solvency requirements for each bank based on its risk profile, and to establish certain clear guidelines on the application of restrictions on the remuneration of capital instruments and on directors’ variable remuneration. At the same time, as I previously pointed out, we must continue to work on the convergence of supervisory practices, moving towards better standards, and on smoothing the differences that still persist across the different SSM jurisdictions. For example, while some national authorities have traditionally focused on reviewing management procedures, others have placed particular emphasis on reviewing the classification and valuation of assets on financial statements. These differences in supervisory practices involve, in turn, heterogeneity in the professional profile of the employees of the various authorities now sharing missions within the SSM.

Accordingly, the defining of effective information and analysis co-operation and exchange procedures between the Supervisory and Resolution Boards is crucial for preventing dysfunctions, overlaps and frictions that hamper the proper functioning of the Banking Union. A Memorandum of Understanding between both agencies is currently being drawn up and will, I hope, contribute to achieving the necessary coordination. Lastly, we should sustain our efforts in order to achieve the degree of cohesion between the various components of the SSM that effective supervision requires. The SSM directly supervises 122 European banking groups, encompassing some 1,200 institutions. This is done with supervisory teams that draw on staff from various institutions, with highly diverse skill sets, seniority, experience and working conditions. Evidently, we must strive to fully develop a sense of mission to which all the component parts must contribute, under the leadership of the ECB and its Supervisory Board, without exclusions or unnecessary subordination. That is vital for maintaining the motivation and commitment of all SSM supervisory staff, irrespective of the authority to which they are attached. Indeed, they have to date shown exceptional professionalism. Final remarks In concluding, I will say that the past year has seen major headway in setting the Banking Union in place, but we still have some way to go. We must move ahead in a setting that will be complex for the European banking industry. Specifically, economic activity remains relatively sluggish, price stability is subject to significant risks and, as a result of this, interest rates are holding at very low levels.
Sharp declines in asset prices and households’ expectations led to a swift rise in precautionary savings. Conditions worsened rapidly in labor market and job losses have reached levels never seen since the Great Depression. Unprecedented policy reactions to crisis taken by government and central banks worldwide have managed in stabilizing the financial conditions of banks and reduced funding pressures. BIS Review 121/2009  1  Thanks to the decline in counter-party and liquidity risks and the ease of tension in international markets, emerging market equities have rapidly gained ground, bond spreads have narrowed, and volatility in exchange rates came down. Commodity prices have rebounded from their recent low levels. Capacity utilization ratios and industrial production have globally recovered compared to the first quarter of 2009. However, taking into account the loss of confidence and the size of the damage financial institutions and households have suffered, the fragility in the financial sector and reluctance in consumption and investment is likely to continue in the near future. Despite recent signs of revival in global economy, the pace of economic activities remains weak. Problems prevail in the credit markets. Unemployment rates keep rising. In summary, all indicators point to a recovery, which is slow, gradual and painful. Distinguished Guests, Global problems require global solutions. Quite often, changing an existing system is more difficult and expensive than forming a new one. It is obvious that this ongoing crisis is going to end sooner or later as did previous crisis.

Likewise, we cannot be specific today about the design of the “final” post-crisis operational framework. Before  8  BIS Review 51/2010  deciding on this, we will need to consider thoroughly the lessons to be learnt from the crisis. However, the operational framework that prevailed prior to the turmoil seems to provide a good benchmark. It served us well prior to the crisis, and could be adapted quickly as circumstances worsened. Concluding remarks Let me conclude. There is no doubt that the crisis will leave us a heritage of severe macroeconomic imbalances. Dealing with them will represent one of the most daunting challenges for policymakers in modern history. Against this backdrop, let me emphasise that the Governing Council will continue to deliver on its mandate, which is to maintain price stability over the medium term. All our decisions regarding an exit from supportive measures need to be seen within this context. As regards fiscal policies, it is essential to prevent public finances from running out of control. Clearly, this will require a very ambitious fiscal consolidation effort. In particular, as regards the consolidation strategy, and given that the tax burden is already high in many countries, the fiscal adjustment will have to be primarily expenditure-based. Finally, let me stress that any call to reduce the real value of public debt through higher inflation will be firmly opposed by the ECB. A low and stable level of inflation is a prerequisite for confidence, stability and sustainable growth. Thank you.
The Riksbank’s objectives and means have been influenced by developments in society Figure 1 illustrates inflation in Sweden over the past 140 years and the exchange rate regimes we have had during this period. Something that becomes clear is that even if we have now become used to a flexible exchange rate, over a long period of time a fixed exchange rate has been much more common. However, from time to time socioeconomic developments in general have led to the prevailing monetary policy regime being reconsidered. 1 As you know, Sweden has not introduced the euro as currency, but on the other hand we were part of a Scandinavian currency union between 1873 and 1924. 2 This began a period with different varieties of fixed exchange rate, which – with the exception of the First World War and a brief period in the 1930s – came to last until 1992. During 1931–1937 the Riksbank worked with a price stability target, for some years this was also combined with a fixed exchange rate. It would take another 50 years until we introduced a price stability target again. 1  This also applies to the central bank’s mandate in a broader sense. See Georgsson, M, Vredin, A. and Åsberg-Sommar, P., “The modern central bank’s mandate and the discussion following the financial crisis” Economic Review 2015:1, Sveriges Riksbank. 2  This cooperation largely came to a halt in connection with the outbreak of the First World War ten years earlier.

1990s crisis: “Things abroad were quite OK, but Sweden was not OK” I hope that it is clear from what I have described so far that the 1990s crisis was in many ways domestically generated. Inflation was far too high in relation to other countries, and the deregulation of the credit market and the too expansionary economic policy created an overheating that ended in disaster: the banking crisis, a currency crisis and also a public finances crisis. In somewhat simplified terms, I usually describe the crisis of the 1990s like this: “things were quite OK abroad, but Sweden was not OK”. There were thus many lessons to be learned with regard to domestic economic policy and not least monetary policy. Important lesson – increased elements of “norm-based thinking” give credibility to the nominal anchor Perhaps the most important individual lesson learnt from the 1990s crisis was the importance of “norm-based thinking” and long-term game rules for economic policy. 5 This came to mark the thinking behind the new monetary policy regime. 4  See Englund, P., “The Swedish Banking Crisis: Roots and Consequences”, Oxford Review of Economic Policy, no. 3, 1999. 5  This way of thinking had been brought up earlier in the debate in Sweden, particularly by the Swedish Centre for Business and Policy Studies’ Economic Policy Group, but did not have a broad impact on practical economic policy until the 1990s.