samchain/econo-pairs-v1 huggingface dataset:
For these assessments, we augment input from our research departments with critical information about local economic conditions supplied by our boards of directors, regional advisory councils and conversations with local stakeholders. You may know that one of my councils, the Upstate New York Regional Advisory Board, is designed specifically to provide me with timely information from this area. In this way, decisions by the FOMC are continually informed by views gathered from all parts of the country, including Upstate New York. One thing that makes my job even more interesting is that New York has some roles unique within the Fed. Let me tell you about some of them. We, alone, implement monetary policy. At the direction of the FOMC, we buy and sell Treasury securities. We are also the eyes and ears of the Fed on Wall Street, and we supervise many of the largest financial institutions in  BIS Review 141/2010  1  the country. We operate Fedwire® – the conduit for large money transfers between banks. And, we provide banking services to the U.S. Treasury, and central banks and governments from around the world. Finally, I must mention that the New York Fed’s district could be the most diverse in the System: ranging from the urban density of Manhattan to the forested sparseness of the northern Adirondacks, to the Caribbean islands of Puerto Rico and the Virgin Islands. All in all, there is a lot to keep my colleagues and me quite busy – even in normal times.

Before the crisis, the National Bank had repeatedly drawn attention to the high leverage of the big banks and warned that their ability to absorb losses was not adequate. These caveats did not result in any voluntary change in behaviour. For this reason, it is essential that our set of preventative instruments for financial stability be improved in three areas; namely, improved access to information, closer involvement in regulatory procedures with regard to financial stability issues, and direct macroprudential decision-making powers. I would now like to take a closer look at these. First, it is crucial that we have all the necessary information quickly to hand in order to identify the build-up of risks in the financial system at an early stage. While the SNB’s statutory authority to compile statistical data is both necessary and helpful, the latest crisis clearly demonstrated that the National Bank must be able to request additional information. With this I mean, for example, quantitative, non-standardised data on banks’ risk exposure. BIS Review 173/2010  1  Unlike FINMA, Switzerland’s financial market supervisory authority, the SNB’s stance is primarily a macroeconomic or systemic one. This is why we must be able to act independently in certain situations when gathering information. At the same time, we also want to keep our access to information to an absolute minimum and avoid a duplication of activities with FINMA. Second, clarification of the SNB’s participation rights and obligations is needed in the area of regulation essential for financial stability.
Jan F Qvigstad: Efficiencies in Norway’s payment system Opening address by Mr Jan F Qvigstad, Deputy Governor of Norges Bank (Central Bank of Norway), at the Research Conference on Payment Systems, Norges Bank, Oslo, 14 November 2008. *  *  *  It is a great pleasure to welcome you all to Norges Bank’s research conference on payment systems. Welcome also to Oslo, a fantastic place to visit all year round, but perhaps not in November. November is the time of the year when Norwegians dream of being somewhere else. Personally, I dream of being in Nice on the south coast of France, where I have relatives and thus often visit. Nonetheless, we greatly appreciate you coming from all over the world to contribute and spend some time with us. And who knows, maybe the weather conditions will provide the perfect incentive to work hard at the conference. Central banks have always taken a great interest in the payment system. This is due to the vital importance to confidence in the currency and in the financial system of a safe and efficient system for the exchange of funds and the settlement of claims. These days we all know the importance of this confidence. A payment system should not be the source of a crisis and it should continue to serve the markets even in the event of market turbulence. An efficient payment system should carry out payments quickly, securely and at low cost.

"Measuring the Natural Rate of Interest," Review of Economics and Statistics 85, no.4 (November 2003): 1063-70.
The Basle Capital Accord of 1988 was a landmark document for the banking industry. It helped increase the capital held by internationally active banks, and created a more level playing field for banks under different jurisdictions. However, there were some weaknesses in the Accord. The most important of these was the practice of assigning the same risk weight to all counterparties in each class, irrespective of the differences in their credit-worthiness. These issues led regulators to propose a more risk sensitive framework. The proposed new Capital Accord will have a great influence on the risk management practices of banks. The new Accord, however, poses challenges to Asian banks and regulators alike. Banks will have to develop more sophisticated risk management capability while regulators will need to build up technical knowledge as well as supervisory resources to validate banks’ risk management systems. As financial markets progress towards greater transparency, the market disciplinary mechanism will reward banks that manage their risks effectively, and penalise those that do not. Good risk management practice is thus even more essential for banks to maintain their competitiveness over the long run. The frequency of shocks has increased. In the past 10 years there has been an average of one shock every year starting from the Gulf War in 1991 to the Latin American crisis of the early nineties and so on down to the Asian Economic Crisis in 1997, the Russian Bond Default Crisis in ’98 and most recently last month, Argentina’s default. The causes of these stress events are wide-ranging.

In addition, these shocks have shown a greater tendency to spread rapidly to other financial markets. The rapidity with which the Asian crisis spread across East Asia in ’97-’98 is a good example. Many of us here today may wish that we have the ability to predict with certainty when the next crisis will strike. It is, however, far more fruitful to adequately prepare ourselves for the inevitable. And that, in short, means enhancing our risk management capability. BIS Review 7/2002  1  Risk Management Initiatives in Singapore MAS will introduce three risk management initiatives to help financial institutions in Singapore better manage the challenges ahead. The first initiative is a MAS guideline that aims to help banks prepare themselves to meet the ill effects of financial crises and shocks. One of the ”defining” features of a financial crisis is that it strikes suddenly and once it has struck, it gives very little time for financial market participants to react. How then can we better prepare ourselves for a crisis? Stress testing offers financial institutions a systematic methodology to prepare for financial crises. Stress testing is based on the old military saying, “the more you sweat in peace the less you bleed in war”. That is, financial institutions that have a comprehensive programme to stress test their portfolios will be better prepared when a stress event occurs.
An economic turnaround has occurred, with a soft landing after the long period of high cost inflation in Norway and a low level of activity in other countries. But inflation is too low. As mentioned, there are three main factors that have contributed to this. First, the global downturn had considerable implications for the impact of interest-rate setting in Norway. A strong krone contributed to the decline in inflation. The krone has now returned to its previous level so that the effect will be reversed. Second, low inflation in other countries and rapid changes in the international division of labour have resulted in a fall in prices for imported goods and services, even when measured in terms of what Norwegian importers pay in foreign currency. Third, intensified domestic competition also appears to have exerted downward pressure on prices. As a result of both changes in the international division of labour and increased domestic competition, there is idle labour and available real capital in Norway. We cannot rule out that adjustments will be made over a period of time and that these adjustments will encompass a large portion of the domestic economy. Thus, it is possible that the level of output that is consistent with stable inflation will increase. Inflation will remain low in 2004. However, the easing of monetary policy will gradually push up inflation. As mentioned, it may take some time before interest rates in other countries are increased to a considerable extent.

Those costs would ultimately be passed on to European households and businesses. Moreover if the large stock of existing trades of EU firms – tens of trillions of euros in size – was trapped at a CCP which was no longer recognised by the European Commission, those EU firms would face capital charges as much as ten times higher than today unless and until they could move them. 25  Fragmenting liquidity would drive up costs somewhat in the remaining market as well. On current volumes, almost 90% of swaps are traded by non-EU firms and could remain in the main UK-based liquidity pool. Given the size of this market, the impacts could be expected to be much smaller, although not insignificant. Fragmentation is in no one’s economic interest. Nor is it necessary for financial stability. Indeed it can damage it. Fragmenting clearing would lead to smaller liquidity pools in CCPs, reducing the ability to diversify risks and diminishing resilience. And higher costs would reduce the incentives to hedge risks, increasing the amount of risk that the real economy would have to bear. The Bank of England fully recognises European concerns. I know because I shared similar ones as Governor of the Bank of Canada. These were addressed then through common standards and cooperative supervisory oversight, allowing $ clearing to move to a more efficient and resilient hub in London.
Ranee Jayamaha: Policy framework for regional cooperation and the role of the central banks Speech by Dr Ranee Jayamaha, Deputy Governor of the Central Bank of Sri Lanka, at the Central Bank of Sri Lanka, Colombo, 6 July 2007. *  *  *  Thank you for this opportunity to share some thoughts on the need for cooperation to develop a regional payment initiative and the role of the central banks in that endeavour. 1. Background  As articulated by the Governor, the SAARC region’s trade and financial services are developing at a faster rate, with India achieving a rapid growth of around 8-9%. Most of the SAARC Group of countries, including India, have opened up or are considering to open their capital accounts in keeping up with global trends and the regional needs. Accordingly, trade and investment flows and demand for financial services will exceed the present levels over the next couple of years. Hence, payment system gains much importance as it is a critical facilitator in cross-border flows, as well as domestic transactions. It should be able to cater not only to the present needs, but also the future demands. For purposes of this presentation, the payment system is treated in a broader sense to encompass the payments, clearing and settlement systems. At a national level, some of the SAARC and ACU countries have already reformed or are about to reform their payment systems to minimize risks and increase safety and efficiency, although the degree of such reforms vary widely.

The current move through SEPA is to establish an integrated non-cash payments system throughout the Union. This means that individuals, banks and financial institutions, corporations and all other entities in the Euro region will be able to make cashless payments throughout the Euro area from a single payment account anywhere, from any country, using a single set of payment instruments, easily, efficiently and safely on the same way that they make payments at the national level. 4. Lessons learned  It is worth mentioning some of the challenges and problems encountered in the SEPA process in order to avoid similar problems that may come up in establishing a SAARC payment initiative, or to remember them if and when SAARC countries wish to move towards a single payment area at a future date. It also highlights the need for a committed leadership when undertaking sophisticated region-wide projects like SEPA. From the beginning, when the SEPA policy framework was set by the authorities in the EU area, it was shared with the market led by banks and financial institutions which were entrusted to implement it. However, due to lack of high-level commitment, the difficulties encountered in the coordination of the diverse interests of the banking and financial service industry and the severe competition among service providers have caused delays in implementing this project.
Such loans would normally be short-lived, and should be made available at an above-market interest rate such that this sort of finance is seen as last not first  BIS Review 71/2001  5  resort. The second solution to the co-ordination problem is for the borrower to impose a temporary suspension of payments to create a "time out" during which the borrower can negotiate directly with the creditors, and so arrange a new profile of repayments of debt. Both approaches, if understood and implemented consistently over time, can provide an efficient solution to the co-ordination problem and eliminate the incentives for a liquidity run. But, as Ken Rogoff pointed out in 1999, the lender of last resort approach carries with it the risk of introducing significant moral hazard into the loan market. If lenders believe that sovereign borrowers are likely to be bailed out, then their incentive to assess the riskiness of their loans will diminish. Equally, borrowing countries will find it more attractive to claim that the measures necessary to continue servicing their debt are "politically impossible" if they believe that there is an international deep pocket willing to extend loans and defer the moment when the national balance constraint is binding. There are two good reasons for the IMF not being able to play the role of an international lender of last resort, at least for the foreseeable future. First, the moral hazard created by both lenders and borrowers cannot simply be assumed away.

There appears to be a good deal of uncertainty concerning the conditions surrounding the availability of official finance. It could be that investors are demanding higher interest rates to compensate for that uncertainty. There is also uncertainty among market participants about what would happen in the event of a debt restructuring and the expected repayments that would ensue. One role for the official community is to try and mitigate these uncertainties through greater clarity about the criteria for official lending and its crisis resolution policies – a theme I return to below. If successful, one outcome of these reforms would be lower borrowing costs for emerging markets. Investors are also starting to differentiate among borrowing countries more clearly than before. This has led to a greater dispersion of spreads on emerging market debt. Before the Russian crisis these spreads were tightly compressed with the central 50% of the distribution of emerging market spreads covered by a range of only around 100 basis points. At present, the range covered by the central 50% of the distribution is over 500 basis points. Correspondingly, there has been a sharp fall in the correlation between changes in emerging market spreads. The rolling 26 week correlation between changes in emerging market spreads reached a peak of around 0.8 at the time of the Russian crisis. Since then it has steadily declined, reaching a level of only 0.2 before the recent rise to around 0.35 following adverse developments in Turkey and Argentina. This differentiation in spreads is a welcome development.
So it should not come as a surprise to see continued outflows from low-yielding euro area bond markets. But not all investors are willing or able to assume large amounts of foreign exchange risk on their balance sheets, particularly when the direction of exchange rate movements might be less predictable than during the run-up to the launch of a major monetary policy measure, such as asset purchases. Returns on US Treasuries adjusted for foreign exchange risk, however, have fallen steadily as the government bond yield curve in the United States has flattened. You can see this on the righthand side. Since about mid-2017 the yield of a hedged ten-year US Treasury has been below that of its German equivalent. There are two factors, in my view, that might help explain the observed persistence of capital 4/7  BIS central bankers' speeches  flows. The first has to do with the “traditional” stock effect of asset purchases.5 Central bank asset purchase programmes effectively constrain the supply of bonds available to private price-sensitive investors. So, the share of outstanding central government bonds held by the private sector – the so-called “free float” – has declined measurably as a result of our cumulative purchases, also when taking into account the considerable amount of buy-and-hold investors. The implication is that some euro area fixed income securities are increasingly hard to come by, or come with a price tag unattractive for more short-term orientated investors. This may incentivise some market participants to roll over their international asset allocations instead.

1/7  BIS central bankers' speeches  There was a striking turnaround in capital flows, from net inflows to net outflows, that started in mid-2014, just when we had announced our credit easing package and when expectations were gradually building among market participants that we would also begin purchasing government bonds. At their peak in the spring of 2016, net capital outflows – measured here in terms of 12-month moving sums – reached nearly 5% of euro area GDP. Never before in the history of the euro area have capital flows been so high. You can also see that virtually all net capital outflows have been concentrated in purchases of foreign long-term debt securities. That is, large-scale purchases of sovereign bonds by the ECB encouraged many investors to rebalance their portfolios towards the closest substitute – bonds issued by other sovereigns.3 These capital outflows are likely to have added to downward pressure on global bond yields.4 For quantitative evidence, see Cœuré, B. (2017), “Monetary policy, exchange rates and capital flows”, speech at the 18 Jacques Polak Annual Research Conference hosted by the International Monetary Fund, Washington, 3 November. On the right-hand side you can see that the start of the APP, and prior expectations thereof, coincided with a measurable decline not only in euro area overnight index swap term premia but also in term premia in the United States. Put simply, increased demand for foreign securities increased their prices and thereby lowered their yield.
So we have got rid of the politically unpleasant adjustment mechanism and have very little instead. Yes, the enlightened founding fathers (such as Otmar Issing) knew many of these things in advance and tried to minimize the free-riding by setting certain safeguards against it. Despite that, I believe many must be bitterly disappointed or shocked that many of these good rules proved to be so time-inconsistent, or dynamically inconsistent. Yes, many good rules have already been breached or are close to being breached (some of the Golden Rules of European law, one should add): •  the no bail-out clause  •  flirting with monetary financing of sovereign debts  •  consideration of something like potentially permanent public support for financial institutions operating on the single market  I believe that these rules are especially dear to this audience. So one has to ask: What are the prospects of the project when to keep it going you need first to breach some fundamental rules that should have created a solid and long-lasting basis for it? It is by definition hard to enforce rules among sovereigns, even when those rules are more important than fiscal or monetary ones – look at the United Nations, for instance.

But the opposite and rather bitter argument can also be made. The ECB at times has to stand against all 17 governments of the eurozone member states. I do not want to talk about nominal and real convergence, about rigidities, OCA arguments etc. Rather, let’s take one example. Many complain that it is so hard to make real macroeconomic adjustments within the current eurozone, among its individual states. But if I understand monetary history correctly, the eurozone was created partly to make standard adjustments more complicated. The fear of constant “humiliating devaluations” was one of the reasons why some countries wanted so much to have a single currency with Germany and wanted a transfusion of credibility for their own economies. So the desire to free ride on the credibility of the former hegemon was a part of the very basic idea of some, monetary weaker, countries. We are so happy to have got rid of humiliating devaluations, but we have not offered any better adjustment mechanism instead. When market forces appear on a different front – say, the bond market – many in the EU want to destroy or bypass these forces again and not to adjust the economies that have imbalances. The funny thing is that many are happy that the supposed tragedy of devaluations is over, but what we are now requiring of the southern axis of the eurozone is a competitive devaluation. But in a harder-to-achieve form: a so-called internal devaluation.