samchain/econo-pairs-v1 huggingface dataset:
The government recognised that the repeated devaluations were ineffectual. Confidence had been lost. In Norway, inflation had also soared without a fall in unemployment. Even if it was costly to restore credibility, in reality we had no choice. 29 The alternative was to bring the country even closer to the brink of financial chaos and runaway inflation. The devaluation in 1986 would become the last in the series. Internationally, the 1980s ushered in three innovations that would become decisive for the design of modern monetary policy as we know it today. -  First, market deregulation led to freer cross-border capital flows. Promises could no longer be relegated to the future. Failing credibility was promptly reflected in higher interest rates and weaker exchange rates. Nixon’s disinflation plan to bring down inflation at some point in the future would have had immediate consequences. On the other hand, it also became clear that a credible and transparent monetary policy could be more effective precisely thanks to financial markets’ swift reactions. 30  -  Second, the notion of central bank autonomy regained favour. The political authorities, who wanted to show the world that they were committed to delivering their promise of price stability, did as Ulysses and tied themselves to the mast. The mechanism was central bank independence and Norway was no exception. The new Norges Bank Act of 1985 gave Norges Bank the authority to set the interest rate.

As has happened under different circumstances, any movements of the exchange rate away from the trend assumed as a working assumption is possible in a floating regime, and its potential effects on the financial system, output or employment will be considered by the Board as inputs for their future decisions. Summarizing, for the rest of this year, annual CPI inflation is expected to return to figures around 3% to then move to the upper limit of the tolerance range for some months. This short-term trajectory is influenced by one-time effects, which will eventually revert, permitting inflation to hover around 3% throughout 2011 and to the end of the relevant projection horizon, this time the third quarter of 2012. Y-o-y CPIX1 inflation will describe a more gradual convergence to 3%, largely because the shorter-term effects on inflation are concentrated in items outside the CPIX1. Private expectations are not very different from this (figure 10). The Board estimates that it will continue withdrawing the monetary stimulus at a pace that will depend on how domestic and external macroeconomic conditions unfold. This process of MPR normalization was begun in June and continued in the meetings of July and August – with increases of 50 basis points each time – taking the MPR to 2% y-o-y. Going forward, the market has internalized a process of withdrawal of the monetary stimulus in the coming quarters. This is consistent with the progressive normalization of credit conditions, which is visible in various markets and indicators.
This checked the supply of credit, which in some cases caused a dramatic increase in lending rates to these countries relative to countries with a better credit rating. Exchange rate pressure grew and there have been acute currency crises, with collapsing exchange rates and thereby increased uncertainty. BIS Review 52/1999  4  It seems that the stronger the inflow of credit in the first phase, the more serious have been the consequences in the second, with declining production and rising unemployment. The reversal of capital flows, if these were channelled through the banks, has also created difficulties in the financial system. In many instances the financial system proved to lack the resilience to cope with the huge flows. The crisis that began in Asia in the autumn of 1997 had extensive contagious effects in other countries. Some of the latter were countries that had conducted a broadly judicious economic policy and were thus hit undeservedly. Singapore and Australia are two examples. Others were countries with their own economic problems. One was Russia, which was obliged to suspend foreign debt payments in August. This elicited contagious effects that hardly anyone had foreseen. The turbulence spread to financial capital’s citadel when an American hedge fund, Long-Term Capital Management, encountered extensive problems that had repercussions throughout the US capital market. Some of the crises that have begun in emerging markets have also been compounded by problems of a different sort. The Asian crisis, as well as other financial crises, included elements of nepotism and corruption.

The standard for countries wishing to participate in the international capital market—the Special Data Dissemination Standard—is being revised to give a better account of the level of foreign reserves and the debt position in individual countries. At country level, moreover, a code for monetary policy transparency and measures for maintaining financial stability is being drawn up by the IMF together with the BIS, central banks, supervisors, the World Bank and the OECD. A fiscal policy code is already in place. 4. Managing future crises Even with these measures, we have probably not yet seen the last financial crisis. A readiness for the management of future crises therefore needs to be created. A central issue in international discussions is the distribution of risks among the parties concerned. While the IMF has been provided with additional financial resources, it neither can nor should be prepared to contribute the main part of what may be needed in a crisis. This is because expectations that any costs will always be carried by someone else can result in an overall increase in exposure to risks, the problem of moral hazard. Such expectations are liable to drive up credit supply and demand and can influence private agents as well as national policy-makers. One way of dealing with moral hazard among private investors is to arrange for them to carry a larger share of the burden in a crisis.
Ásgeir Jónsson: Address – 60th Annual Meeting of the Central Bank of Iceland Address by Mr Ásgeir Jónsson, Governor of the Central Bank of Iceland, at the 60th Annual Meeting of the Central Bank of Iceland, Reykjavík, 7 April 2021. * * * Madame Prime Minister, Chair of the Supervisory Board, honoured guests: This year, 2021, can be called the Triple Crown of anniversary years for the Central Bank of Iceland. In 2021 we commemorate three earlier milestones in the Bank’s history – 1961, 1981, and 2001. The Central Bank became an independent institution in 1961 – and on this day, in fact: 7 April. So we are celebrating the Bank’s 60th anniversary today. Until 1961, central banking activities in Iceland had been in the hands of two commercial banks: first Íslandsbanki and then Landsbanki Íslands. The establishment of the Central Bank was an element in the broad economic reforms introduced in the early years of the so-called Viðreisn government coalition – reforms that released Iceland from capital controls, goods rationing, and repeated currency exchange rate adjustments. But 60 years is not an advanced age if we consider that Iceland became a sovereign country 103 years ago. With the grant of sovereignty in 1918, the Icelandic króna became an independent currency. It was not until 43 years later that a separate central bank was tasked with the conduct of monetary policy. It should come as a surprise to no one that economic policy was fairly unsuccessful over that time.

This was how I felt, anyway, when I turned 50 last year, although others may scoff if they like. On the other hand, institutions like central banks are not mortal individuals with a limited lifespan, and for them, birthdays and anniversaries are cairns marking a path with no obvious endpoint – a path that must point to the future, and to progress. The past only has meaning insofar as it illuminates the road to the future. The inflation target that we observe now is a function of much more than merely keeping inflation at bay. The policy centres on setting the right ground rules between democratically elected representatives, on the one hand, and experts or officials, on the other. And it rests on the foundations of a simple division of labour: elected representatives define monetary policy objectives, and the Central Bank has the independent power to execute policy in the pursuit of those objectives. In this context, the Central Bank can be viewed as an independent contractor engaged by the people of Iceland. The ground rules of inflation targeting have proven to be good ones for democratic countries, as inflation targeting demands transparency and public accountability, in line with the precepts governing an open society. Yes, inflation-targeting central banks work on a public stage and must be able to participate in public discourse in a dedicated and resolute way. In the final analysis, each is judged according to their actions.
Thankfully, all this is now also being worked on internationally in the Financial Stability Board. A second and obvious policy inference that one could draw from Shleifer’s paper, and one I want to spend a little more time on this evening, is that it is absolutely vital that (regulatory) capital requirements for banks more or less truly capture their risks. Two thoughts on that, of rather different kinds. First, it was very obviously a false step when, in Basel 2, the international-standard setters tried to follow the techniques and calibrations of private sector risk managers rather than engaging with the externalities that warrant State intervention in this area in the first place. Second, more particularly and more concretely, this underlines the vital importance of the current Basel work to review fundamentally the capital requirements for banks’ trading books. In short, Basel has recognised that the amount of capital a bank should hold against a liquid trading position often has good reason to be smaller than needed for a hold-to-maturity portfolio, ie where the bank can shed its exposure. But it failed utterly to recognise that since such books are marked-to-market (or model) and since the boundary conditions for solvency derive partly from accounting measures of asset values, it is vital that banks hold capital against the risk of violent swings in liquidity premia. Yet that is exactly what torpedoed a fair fraction of the largest banks and dealers in the world through their (levered) holdings of leveraged loans and super senior tranches of CDOs.

Peter Praet: Economic adjustment in the euro area Speech by Mr Peter Praet, Member of the Executive Board of the European Central Bank, at the Institutional Money Congress 2013, Frankfurt am Main, 27 February 2013. *  *  *  I would like to thank Arthur Saint-Guilhem, Melanie Ward-Warmedinger and Niels Bünemann for their contribution to the preparation of this speech. Ladies and Gentlemen, Introduction  Thank you for inviting me to share some thoughts with you on what has been achieved and what remains to be done in the process of addressing the economic challenges we are faced with in the euro area. I will give you a central banker’s view on the role of monetary policy in managing the current crisis, but I will also extend my discourse to cover the broader institutional landscape, including some thoughts on what policy-makers in other fields than monetary policy could contribute to improve the euro area’s resilience. Today, I will focus on three points: First, the European Central Bank – together with the national central banks of the Eurosystem – has acted forcefully within its mandate, in order to counteract any risks to price stability stemming from the crisis. The ECB’s monetary policy during the crisis has invoked both standard instruments such as interest rate changes and non-standard instruments to ensure that the standard instruments would have the intended effects. Second, the most distressed countries within the euro area have embarked on a correction of their policies.
This is why we should rely on a suite of models, and on actual data as much as on models. - the restrictive effects on activity, while being in mean reversed in 2025, are quicker than the dampening effects on inflation: hence we should be patient and consistent, including in our explanations to the broad public. The estimated transmission lags of monetary policy in the literature vary from one year5 to more than two years6. But interpreting these lags is more art than science. Overall transmission lags of monetary policy to inflation can vary over time and across jurisdictions, depending on factors such as the level of interest rates, the phase of the cycle and the sectoral structure of the economy (e.g. share of manufacturing, services, or housing). In the current tightening cycle, several factors suggest that the lag in transmission of policy to the real economy may be at the upper end of the two-year range. First, the current tightening cycle started from exceptionally low levels of real interest rates – as measured by nominal OIS rate deflated by market inflation expectations. 5  5. Smets and Wouters (2005); see also ECB NAWM model presented in P. Lane’s lecture on 16/02/2023, “The euro area hiking cycle: an interim assessment”. 6 Badinger and Schiman (2023), Measuring Monetary Policy in the Euro Area Using SVARs with Residual Restrictions. American Economic Journal: Macroeconomics 2023, 15(2): 279–305, or; see also ECB-BASE model.

Page 4 sur 14  As a result households have started shifting towards term deposits, and so further increasing the average cost of funding for banks. Turning now to bank loans to households and firms, let me stress that this credit channel is of primary importance in the euro area - much more so than in the United States - as bank loans remain the dominant source of financing for firms, in particular for smaller firms.1 Overall, the growth rate of loans has slowed due to a combination of higher borrowing rates, lower demand, and - for firms tighter credit standards. (1) The cost of credit has risen significantly from exceptionally accommodative levels. Households in the euro area willing to buy a house at the end of 2021 could borrow at 1.3% in average whereas they have to pay almost 3.5% in March 2023, although significantly less in France (2.6%). Lending rates for firms  1  The average share of bonds in debt financing has increased over time but only makes up 30% of debt financing for firms. See Holm-Hadulla, F., Musso, A., Nicoletti G. and Tujula M. (2022) “Firm debt financing structures and the transmission of shocks in the euro area”, Economic Bulletin, Issue 4, ECB. Page 5 sur 14 have been rising still faster, from 1.3% at end-2021 to 4.2% today. Compared to 2005-2007, the increase in policy rates is much faster today.
Karolina Ekholm: Some lessons from the financial crisis for monetary policy Speech by Ms Karolina Ekholm, Deputy Governor of the Sveriges Riksbank, at a meeting, Stockholm, 4 December 2009. *  *  *  One question that has been much debated over the past year is to what extent monetary policy has contributed to the financial crisis, which we have not quite seen the end of yet. Another – partly related – question is to what extent the policy conducted by central banks in the future should try to counteract potential bubbles 1 building up so that we can ultimately avoid a new dramatic financial crisis with substantial consequences for the real economy. These are the questions I intend to focus on today. One conclusion that can be drawn in the light of the deepest recession in the world economy since the Second World War is that it is important to try to counteract, in various ways, bubbles building up that will then risk causing substantial problems in the real economy when they burst. How this should be done, and who should bear the main responsibility for this task, are difficult questions to which there are at present no exact answers. The responsibility for a balanced development of the economy does not rest solely with the central banks; it also lies with the financial supervisory authorities and the legislators.

Following the financial crisis in Japan at the beginning of the 1990s, prices fell and households postponed their consumption as they were expecting prices to continue to fall. The Japanese central bank cut its policy rate to zero and let it remain there, but falling prices meant that monetary policy was nevertheless too tight, in real economic terms. The liquidity trap problem meant that growth was very low over a long period of time. For the three decades prior to the outbreak of the financial crisis in the early 1990s, the average GDP growth in Japan was just over 6 per cent a year. Following the financial crisis it has been just over 1 per cent a year. 5 Because of the risk of a liquidity trap it was difficult for the US central bank, on the basis of the information available at the time, to do anything other than cut the policy rate – the Fed  2  OTC instruments are bilateral financial instruments that are traded outside of the usual stock exchanges and market places, i.e. “over the counter”. 3  Bean (2009). 4  Bean (2009) and Taylor (2009). In BIS (2008) it is pointed out that low policy rates globally may have contributed to the crisis. Bubbles have also arisen on the housing markets in a number of other countries that burst in recent years. 5  See Figure 8 in the presentation material. BIS Review 162/2009  3  Funds Target rate – to 1 per cent.
This is fundamental for the timely detection of any slippage from stated budgetary objectives and for standing ready to respond appropriately. It should also be noted that in the past few weeks a good number of regional governments announced their budgets for 2013, although it is still early to make a full diagnosis of overall regional government expenditure. These developments remedy some of the weaknesses in the information available for assessing the budgetary adjustment scheduled for 2013. Even so, the fact that the presentation of the various budget documents by the various governments is not formally coordinated makes the work of analysts harder, given that, obviously, what matters from the macroeconomic standpoint or for the analysis of public finances is general government as a whole. The State and Social Security Budget for 2013 Let me now turn to the essential features of the State and Social Security Budget for 2013, beginning with a reference to the budget outturn in 2012. The budget deficit is being reduced this year in very adverse economic and financial circumstances. Indeed, as a result of the risks of possible slippage, a series of supplementary fiscal measures were adopted for the 2012 Budget. Their effects have begun to be perceived only in the second half of the year. Notwithstanding, on the information available, the possibility of slippage can still not be ruled out.

Typically, a bank that runs its operations in a normal course of business is already expected to generate returns on their business or normal profits. If the entire profit is taken as base to calculate bonus for their board members, would that seem fair to the institution? I understand that some banks are exploring ways to remunerate board members which are linked not only to the profits of the bank, but also to other factors, such as the reduction of NPL, appropriate provision of loan loss and other indicators of stability. There is still no consensus on the issue, but moving away from the model of basing remuneration solely on net profit is the move in the right direction and is to be encouraged. In fact, if we continue to explore the question with an open mind, we should be able to come up with a better and fairer model. I would like to leave you with a thought:  4  BIS Review 25/2006  the part that is linked to profits should more appropriately be linked to excess return rather than normal profits. Finally when the remuneration has been set, the Board of Directors should take care to reconsider that the amount is not unreasonably high, as the Board is in the position to be the “Role Model” of what should be appropriate practices for the bank. If the Board takes undue benefits from the institution, this would undermine its authority and set bad example for staff and management to follow.
John C Williams: A bedrock commitment to price stability Remarks by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the2022 US Hispanic Chamber of Commerce National Conference, Phoenix, Arizona, 3 October 2022. ***  As prepared for delivery Thank you for that kind introduction. I'm so pleased to join you today. As business leaders and business owners, you are integral to the U.S. economy. So, it's fitting for me to have this opportunity to talk to you about the state of our economy, as well as a topic that's on everyone's mind: inflation. From Main Street to Wall Street-and to Liberty Street, where the New York Fed is headquartered-inflation is the No. 1 concern. Clearly, inflation is far too high, and persistently high inflation undermines the ability of our economy to perform at its full potential. The Federal Reserve has two goals: maximum employment and price stability. History teaches us that price stability is essential to achieving maximum employment over the longer term. We at the Federal Reserve are therefore taking strong actions to restore price stability as a foundation for sustained economic prosperity. Today I will talk about why high inflation broke out last year, how it has evolved, and why I am confident that we are taking the necessary actions to bring inflation down.

But before I do, I will give the standard Fed disclaimer that the views I express today are mine alone, and do not necessarily reflect those of the Federal Open Market Committee (FOMC) or others in the Federal Reserve System. Inflation's Disparate Impact The FOMC's price stability objective is for inflation to average 2 percent over the longer run, as measured by the personal consumption expenditures price index. 1 In the three decades before the pandemic, this inflation rate averaged almost exactly 2 percent. But that changed dramatically last year, when inflation suddenly soared. It has reached fourdecade highs in recent months, and now stands at over 6 percent. High inflation spares no one. It makes it more expensive to feed families, heat homes, and pay rents. While everyone feels the pain, not everyone is affected equally. Those who can least afford the essentials-like food, gas, and housing-suffer the most. Inflation also has a disparate impact across ethnic groups. Economists at the New York Fed found that since 2021, Black and Hispanic households have faced higher inflation than the national average-and Hispanic families have been affected the most. 2 This is largely because on average, Hispanic households spend a larger share of their budgets on items most affected by the recent high inflation. 1/5  BIS - Central bankers' speeches  The Inflation Onion The sources of high inflation are many and complex, and they stretch across the globe. Nearly all economies are experiencing unusually high rates of inflation.