samchain/econo-pairs-v1 huggingface dataset:
So far six such reports have been drawn up and submitted to the Coordination Council for Preparation of the Republic of Bulgaria for Euro Area Membership, headed by the Finance Minister and me. Each of the BNB Deputy Governors is in charge of the relevant area of activity within the BNB's mandate. Contact groups have been formed, with individually named members of the BNB and of the European Central Bank working on specific matters. The absence of a regular government and a clear political commitment to the euro area accession process are a serious obstacle to its progress. This is the reason why we are missing, one by one, important indicative time-frames. This time last year Croatia was well ahead on its way to the euro area. I will give you only one example. On 10 September 2021 the European Commission and the euro area Member States signed a Memorandum of Understanding with Croatia on the production of national euro coins. This Memorandum sets out the actions required for a future euro area Member State to begin producing euro coins. The signing of the Memorandum makes it possible to detail the schedule for the future euro coins of the country, allowing that country to start selecting its euro coin national side designs and to carry out the technical preparations for minting and producing a test series of national euro coins. The Memorandum is a precondition for that country to receive the technical specifications documentation needed for production of national euro coins.

We need a more structural view of QE transmission. In the annex to this paper, we sketch out a very simple monetary framework as a starting point. [16] That monetary framework may help answer important questions about the dynamics of these polices. As we will see in the next section, such a model helps address questions such as: what is the relative importance of the stock of purchases announced versus the flow of purchases conducted? Does the impact of QE fade over time? What influences the relative potency of QE over time? By their nature, event studies cannot answer such questions. I apply this highly stylised model to the current situation in the next section, in order to develop and illustrate some high-level views about the potential conduct and impact of QT. Thinking about QT Just to be clear from the outset, the discussion here is not intended to front-run the MPC’s discussion of asset sales and quantitative tightening. As I have already said, in February the MPC decided to start shrinking its holdings of gilt accumulated via QE by ceasing to reinvest the proceeds of maturing bonds. Bank staff have been commissioned to think about the potential  Page 12  modalities of gilt sales in the future. But no decisions have yet been made about whether or, if so, how to conduct gilt sales. Nor is the discussion here intended to develop a quantitative view of QT transmission.
The bottom-up approach used in the context of the EU-wide stress test relies on banks’ own reporting of projections based on common scenarios and gives national supervisors and the ECB an important role with regard to quality assurance. Recent research provides tentative evidence that “supervisory scrutiny” relating to quality assurance has a disciplining effect on banks’ risk-taking. [6] We also need to understand how banks will react to the policy measures that are applied to them. A dynamic micro-founded structural model of bank behaviour examines changes in capital and liquidity requirements and confirms considerable heterogeneity among banks’ reactions. [7] Moreover, our 3D model, with default modelled in the household, non-financial corporations and banking sector, has been successfully used in various policy exercises and exemplifies how cutting-edge research can help inform policy decisions. [8]  The role of macroprudential policy So what is the role of macroprudential policy in the current environment? The financial crisis showed that macroprudential policy is needed to complement supervisory scrutiny by accounting for system-wide macro-financial feedback loops. Macroprudential policy is called to act countercyclically, tightening requirements when we see excessive risk-taking and loosening them to avoid a credit crunch when risks materialise. Since the crisis, the resilience of euro area banks has improved significantly and their capital level is currently considered to be adequate. However, in addition to the level of capital, also its composition deserves appropriate consideration.

We monitor all financial market data: equity prices, interest rates, capital flows. Corporate and sovereign debt markets are also important. What is going on there? We have seen a sharp increase in the risk premia that firms have to pay when raising debt on the markets. For high-risk firms in particular, these risk premia have shot up. Yields for countries such as Italy have also increased signficantly. We see a broad increase in risk premia. Another question that arises is whether the markets are still functioning. Is supply still matching demand? The central bank should intervene if liquidity dries up, that is if the markets suddenly seize up because of a lack of available liquid funds, or if the transmission of monetary policy is endangered, that is if our measures are not reaching the real economy. And that is exactly what we have been doing in greater measure since last Thursday. Our bond purchases have a stabilising effect on the market. US Treasuries have seen some severe temporary disruptions. There was a series of short intervals in which the trade in US Treasuries was disrupted. That’s a sign of considerable nervousness in the markets. Besides the markets, we are closely monitoring the situation of banks in Europe. We have taken measures to prevent banks from having to overly restrict their lending during the crisis. But the pressure on banks will intensify if economic conditions deteriorate. We are also closely watching investment funds. What is happening there?
Paul Tucker: Shadow banking – thoughts for a possible policy agenda Speech by Mr Paul Tucker, Deputy Governor for Financial Stability at the Bank of England, at the European Commission High Level Conference, Brussels, 27 April 2012. *  *  *  It is excellent that the EU Commission has published a consultative paper on shadow banking and is holding this conference today. The Commission’s paper fits well with the approach that the G20 Financial Stability Board is taking. The issues here are very important since, as the international community reregulates the banking industry, more activity is almost bound to be booked outside banking. We need at some point to move on to policy. I am therefore going to use today’s occasion to put on the table some thoughts for a possible concrete policy agenda. I am doing so in the spirit of wanting to help nudge this work into its next stage. And I should be clear that the FSB, where our work is led by Adair Turner, have not yet articulated our collective preferred policy approach. The definition of “shadow banking” employed by the FSB and the EU Commission is, paraphrasing, credit intermediation, involving leverage and maturity transformation, that occurs outside or partly outside the banking system.1 That is very close to the definition I used in a speech two years ago calling for work on shadow banking, except that in addition to leverage and maturity transformation I include “monetary services”.2 I want to make three broad points about this.

Ben was among the first to highlight their potential significance for monetary policy. Another example of Ben’s tendency to go against the mainstream is his critique of the use of rational expectations in macroeconomic models. When the rational expectations revolution transformed the field of macroeconomics in the late 1970s, Ben remained sceptical. He criticised the assumption that economic agents form their expectations based on a perfect understanding of how the economy works. These models did not address the question of how economic agents derive this knowledge in the first place. More recently, the literature has begun to develop models with forward-looking agents that have a limited understanding of how the economy works. This research programme is very much in the spirit of Ben’s early criticism. Page 3/4  A final example of Ben’s willingness to challenge the accepted wisdom of the day is his reservations about inflation targeting. When one central bank after another started to adopt inflation targeting in the 1990s, Ben became one of the most prominent critics of this new monetary policy strategy. His concern was that inflation targeting would lead central banks to focus single-mindedly on price stability. In doing so, Ben feared, they might lose sight of their ultimate goal of promoting economic well-being more broadly. Ben is widely recognised as one of the world’s leading macroeconomists. However, his research interests go far beyond that. Ben is a polymath, something that has become rare in modern academia. His writings cross academic boundaries between economics, philosophy, history and religion.
Second, we have a number of rigidities in nominal wages. We have a number of rigidities in some prices, so that fuels automatically certain rises in core inflation normally, and for the time being we have not seen that change significantly. Third, when we look at long-term inflation expectations, until now they have remained well anchored to our definition of price stability. So these three reasons make me think is that what would normally happen is that after a trough inflation will come back to somewhere close to our definition of price stability. But of course we have to remain cautious and be ready to act, and certainly if we felt there had  BIS Review 29/2009  3  been a change in these various elements we should ask ourselves if other non-standard monetary policy actions might be necessary. FT: Classic quantitative easing? CN: For instance? FT: Buying government bonds? CN: Possibly. FT: Axel Weber has said 1 per cent would be the floor for the ECB main policy rate. Others have said zero could be possible. Where do you stand? CN: I’m pragmatic. We have certainly not decided in advance that there is a minimum level that would be our floor. But there are a couple of things that we need to take into account. First, it is a general rule that the more you cut rates and you approach zero, the less efficient are the moves in terms of transmission into the real economy.

CN: What has been designed by various countries – bearing in mind the structure of their economies and the relative importance of the automatic stabilisers – is probably the right balance between what needs to be done to stimulate global demand and the necessity to retain the credibility of the fiscal policy and budgets over time. It is especially important in European countries where we have the feeling that the so-called Ricardian effects can play a role. So if we were to give the impression to citizens that public finances were to deteriorate by too much and for too long consumers might increase their savings ratio to prepare themselves for tax increases in the future that they might regard as inevitable, or the reduction of benefits and pensions. So you have to keep the right balance between long term credibility and immediate stimulation. As far as we can judge, that balance is probably appropriate. That will have to be reviewed according to future economic developments. A related issue is the fact we all agree that a condition for the revival of the global economy is that financial systems everywhere are stabilised and that stabilisation is convincing the markets. I have the impression that we are a little more advanced in that regard in Europe than in the US. It is clear that the US authorities are making every effort to reach that goal, but that is probably as important as the size of the stimulus itself if we want to stabilise the economy.
This is very much the theme of my speech here at the Swedish Economics Association – weighing the effects of monetary policy today against the effects tomorrow and what challenges this creates. But I thought I’d start by discussing the downward trend in global interest rates and what this means for monetary policy, as it is important to realise that the problems we are grappling with in Sweden are very much influenced, and shared, by the world around us. 3 [23]  Downward trend in global interest rates The financial crisis that broke out in the autumn of 2008 was preceded by a seemingly calm and stable period of low inflation and good economic growth. The period is normally referred to as The Great Moderation. This positive development can be attributed to a number of factors. Ever-faster globalisation led to greater movement of goods, services, labour and capital among countries. This, in combination with various deregulations increased competition on labour and goods markets, contributing to higher economic growth. Increasingly independent central banks focused on achieving low and stable inflation are also considered to have contributed to the positive development. In retrospect, we can now see that major financial imbalances had built up in what appeared to be a stable macroeconomic environment. Central bank monetary policy had successfully stabilised inflation. But this did not prevent the break-out of the more serious economic crisis since the 1930s.

As can be seen, return has been stable with relatively minor variations around just below 9 per cent while the real interest rate has shown a falling trend. After the financial crisis, return on capital has even risen slightly, suggesting good investment opportunities. Investment growth after the financial crisis is in line with such a hypothesis. Figure 4(b) shows that investments have risen relatively rapidly since 2010 and are now close to or above their long-term trend. None of this is easy to reconcile with secular stagnation.7  6 See Gordon (2012). 7 See Gomme et al. (2015) for further discussions. 8 [23]  Figure 4. Real return on capital, real interest rate and investments in the United States 4(a ) Return on capi tal and real interes t ra te  4(b) Investments i n the business sector  10  3000  8  2500 Real interest rate, 5 years Return on capital  6  Investments Investments, nonresidential  2000  4  1500  2  1000  0  500  -2  0  00  02  04  06  08  10  12  14  85  90  95  00  05  10  15  Note. Fi gure 4(a), per cent. Return on capital in the business sector. Broken lines show a verage return on ca pital s ince the year 2000. Real interest ra te refers to 5-year real government bonds. Fi gure 4(b), USD billion.
Over the past year, for instance, the interest rate has not been raised dramatically, but at a more gradual pace, despite a rapid increase in inflation. The Riksbank’s assessment is that a cautious increase in the interest rate is sufficient to bring inflation back around the target of 2 per cent a couple of years ahead. However, the Riksbank’s task is to maintain price stability. This sets a limit as to how restrictive one can be with the interest rate weapon. Without the interest rate increase inflation could have soared similar to the way it did in the 1970s and 1980s. At that time the economic policy did not prevent inflation from becoming entrenched. The inflation target has been set to create conditions for good growth that is sustainable in the long term. An expansionary monetary policy which perhaps contributes to more favourable developments in economic activity in the short term can provide major problems for production and employment in the long term. The most recent decision When the most recent interest rate decision was made, we six members of the Executive Board held differing opinions. I and two of my colleagues voted to raise the interest rate to 4.75 per cent. There have not been many cases where the voting is a “draw” and the casting vote determines the decision; this has happened only four times since the Executive Board was formed almost ten years ago. The result is not particularly strange or surprising given the situation when the decision was made.

The desire to guarantee the purchasing power of our currency underpinned the link established in the past between the franc and gold, and it was this same concern that led Switzerland, in 1973, to abandon the fixed exchange rates of the post-war period, which were undermined by widespread lack of discipline. The objective of price stability is now inscribed in law, which reinforces its legitimacy. Our monetary system is thus now as clearly defined as it used to be under the gold standard. We define price stability as an annual rate of inflation of less than 2%. We were able to maintain such stability in the course of the past year, and I am pleased to note that this objective has been reached in each of the past ten years - an unparalleled achievement internationally. It is a modest, but highly important, contribution to the prosperity of our country. Our history has shown that inflation - or deflation - can have damaging effects that often cause suffering to the most vulnerable members of our society. One of Switzerland’s traditional values is this concern for price stability. It is a significant achievement that the National Bank will endeavour to preserve in the years to come. The new Act also stipulates that we must take due account of the development of the economy in setting any course of action. There can be no doubt that monetary policy has short-term repercussions on economic activity.
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.

These challenges have been compounded by deeper forces that have radically altered the balance of saving and investment in the global economy.4 In the process, these have moved equilibrium interest rates into regions that monetary policy finds difficult to reach. Whether called “secular stagnation” or a “global liquidity trap”, the drag on jobs, wages and growth is real. Chart 1 Geopolitical risk doubled, on average, after 9/11  Source: Bank calculations and Caldara and Iacoviello (2016), ibid. Less visible, but more fundamental drivers of economic uncertainty are the powerful forces arising from technology and globalisation. The integration of 40% of humanity into the global economy has re-orientated production, eliminated jobs and may have depressed wages. These dynamics have been accompanied by the implications of technology for the  2  These are distinct from other types of uncertainty familiar to economists, including model uncertainty (uncertainty about the empirical properties of models as descriptions of the world), or to policymakers, such as the long and variable lags involved in the effects of monetary policy. 3  Economists have recently attempted its measurement by examining the frequency of newspaper articles containing terms like “geopolitical tensions”, “terrorist threats”, and “war risks” in a sample of global newspapers. See Caldara, D and Iacoviello, M (2016), “Measuring geopolitical risk”, Federal Reserve Board, mimeo. Political scientists have also constructed similar measures though, it seems, at lower frequency. For an application see for example Berkman, H., B. Jacobsen, and J.
In 2006, as most of you well know, we issued a monograph on the sixty years of central banking operations in Macedonia, and today we have made presentation of the report on the NBRM operations in the last seven years, discussing, on about 400 pages, its main activities and accomplishments. These two books are, de facto, a first attempt for aggregate presentation of the historical course of the central banking in Macedonia, since the World War II. I think that this will help the students, the monetary policy analysts, teachers and professors engaged in this issue, and certainly many others in the financial sector. Tonight you can see the hard copies in Macedonian and in English, and the electronic version of the second book, the seven-year report where we extensively discuss the period that ends these days. Nevertheless, I assume that tonight many of you would like to ask to what extent am I (or are we) satisfied of what we have achieved, and, what would I, in few words, highlight as the most important? If there is such question, I would briefly say the following: All decisions in the last seven years were made by the National Bank, with zero influence from the outside, regardless of the verbal suggestions and insistence coming from well known addresses.

They failed to see the nature of the exchange rate regime and that changing such concept could only make greater damage. We endured. The situation consolidated. The data on credit growth, which, even back than, was not within the negative zone, unlike most of the European countries, and the banking sector stability justified our beliefs. Certainly, there are other sensitive situations. They will maybe take their turn on some other occasion. Not now during the pre-election period! Dear all, As I already said, the economy is an open equation with constant unknown variables. The financial crisis and economic recession denied many lessons developed to the level of a  BIS central bankers’ speeches  3  dogma. The central banks started a new post-recession period. They will have to take care more of the financial stability, because it turned that the price stability is not sufficient to ensure financial stability. It raises many new issues that will not be discussed now. I am convinced, however, that this institution becomes more capable to face all challenges. I wish that Dimitar and all staff members achieve better results and certainly, a personal happiness. I would like, once again, to thank you for being here tonight, for the cooperation we had, for each word of kindness that we exchanged and for everything that could join us in the future. I also wish you professional satisfaction and personal happiness. Thank you. 4  BIS central bankers’ speeches