samchain/econo-pairs-v1 huggingface dataset:
If we are collectively successful, uncertainty will start to turn into confidence, and then a real recovery can begin. 1 See Anderton, R., Jarvis, V., Labhard, V., Morgan, J., Petroulakis, F. and Vivian, L. (2020), “Virtually everywhere? Digitalisation and the euro area and EU economies: Degree, effects, and key issues”, Occasional Paper Series, ECB, forthcoming. 2 European Commission (2020), “Identifying Europe’s recovery needs”, Staff Working Document, (2020) 98. 3 Anderton et al. (2020), op. cit. 4 Perez, C. and Murray Leach, T. (2018), “A Smart Green ‘European Way of Life’: the Path for Growth, Jobs and  Wellbeing”, Beyond the Technological Revolution Working Paper, 2018–01. 5 In terms of revenues. See: ec.europa.eu/environment/ecoap/indicators/socio-economic-outcomes_en 6 ECB (2020), The international role of the euro, June. 7 Sondermann, D. (2016), “Towards more resilient economies: the role of well-functioning economic  structures”, Working Paper Series, No 1984, ECB, November. 4/4  BIS central bankers' speeches

Here is a rather pungent quote from a note he sent out on Jan. 2: “…QE [quantitative easing] puts beer goggles on investors by creating a line of sight where everything looks good…” For those of you unfamiliar with the term “beer goggles”, the Urban Dictionary defines it as “the effect that alcohol … has in rendering a person who one would ordinarily regard as unattractive as … alluring”. This audience might substitute “wine” or “martini” or “margarita” for “beer” to make it more age-appropriate, but the effect is the same: Things often look better when one is under the influence of free-flowing liquidity. This is one reason why William McChesney Martin, the longest-serving Fed chairman in our institution’s 100-year history, famously said that the Fed’s job is to take away the punchbowl just as the party gets going.2 … and the eye of the needle The other eye catcher for me was a cartoon in the Jan. 6 issue of The New Yorker. Sitting in a room are two businessmen who are apparently conversant with the New Testament’s book of Matthew. One says to the other, “We need either bigger needles or smaller camels”. Today, I want to muse aloud about whether QE has indeed put beer goggles on investors and whether we, the Fed, can pass the camel of massive quantitative easing through the eye of the needle of normalizing monetary policy without creating havoc. Free and abundant money changes perspective Boockvar is right.
It would not be proper for me to say anything about the ongoing investigations beyond the joint statement issued last week. It would also not be proper for me to comment on any specific institution beyond MAS’ statement last week because the supervisory examinations are still ongoing and we have to be fair to the institutions. The two statements last week are unprecedented. We have already said a lot more publicly than we usually do when investigations and reviews have not been completed yet. Instead, I want to focus today on what the findings imply for our financial sector. There is no doubt that the recent findings have made a dent in our reputation as a clean and trusted financial centre. MAS is disappointed with the lapses in AML/CFT controls and breaches of AML/CFT regulations that we have picked up in our FIs. I am told that money laundering is growing more sophisticated in nature and is carefully designed to avoid detection; that these incidents happen in every financial centre and the large and rising frequency in which fines are imposed in other jurisdictions show we are not alone in facing this challenge; and that the rules and practices here are already very strict and on par with global standards. BIS central bankers’ speeches  5  This may all be true but they cannot be an excuse for what has taken place. What happened is simply unacceptable. We may not be any worse than other jurisdictions. But that is no consolation.

Már Guðmundsson: Iceland – recent economic developments, conditions and outlook Keynote address by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, at the 51st Annual General Meeting of the Central Bank of Iceland, Reykjavik, 29 March 2012. *  *  *  Prime Minister; Minister of Finance; Chairman; Directors and Ambassadors; Ladies and Gentlemen: As we convene for the 51st Annual General Meeting of the Central Bank of Iceland, the economic recovery that began late in 2010 is gaining momentum in spite of international headwinds, while inflation has been higher and more persistent than was considered likely last year. It is important, too, to note that inflation is driven much more strongly by domestic factors than it was around this time last year, with wages rising in excess of increases in productivity and the nominal exchange rate declining in the recent term. According to preliminary estimates, GDP grew by 3.1% in 2011. In international terms, this compares well, as output growth in the OECD averaged 2% last year. However, it should be borne in mind that the economic recovery began later in Iceland than in most OECD countries. Business investment and private consumption contributed equally to growth, about 2 percentage points each. The contribution from factors was negative, however. This growth was not borrowed, either: last year’s underlying current account surplus measured roughly 3% of GDP. In some respects, the composition of last year’s output growth lays a sound foundation for continued economic recovery.
Vítor Constâncio: Laudatio for Professor Kenneth Rogoff, recipient of the 2011 Deutsche Bank Prize in Financial Economics Speech by Mr Vítor Constâncio, Vice-President of the European Central Bank, at the Laudatio for Professor Kenneth Rogoff, recipient of the 2011 Deutsche Bank Prize in Financial Economics, Frankfurt am Main, 22 September 2011. *  *  *  Ladies and Gentlemen, It is a great pleasure to address a few words to mark the awarding of the 2011 Deutsche Bank Prize in Financial Economics to Professor Kenneth Rogoff of Harvard University. I will recall some of Professor Rogoff’s outstanding contributions to economics and financial economics, and I will also comment on some of his research in the context of the responses to the current crisis. Let me first emphasise that research plays a crucial role for the Eurosystem – just as it does for other central banks. Indeed, research has provided an essential input to the definition of the ECB’s price-stability monetary policy strategy. I would thus like to express my appreciation to Professor Rogoff for the influential contributions he has made in many fields of special relevance to central bank policymakers, ranging from monetary policy to international finance and financial crises. He merits particular praise for helping us to improve our understanding of some of the main causes and mechanisms behind the links between financial crises and sovereign debt crises.

As I said at the start, in the second part of my address I will talk about our main macroeconomic and monetary policy considerations during the coronavirus crisis. From a purely technical perspective, this crisis has been fascinating and inspiring. It also took us completely by surprise. Its main feature is that it was a typical exogenous shock: it hit the economy from the “outside”. 5/7  BIS central bankers' speeches  The GFC was caused by endogenous economic processes linked with huge levels of subprime lending, widening imbalances and unprecedentedly high risks building up in the financial sector, whereas the coronavirus pandemic is more like the plagues of Egypt. It has often been said that this crisis has drawn a sharp dividing line between the sectors and industries which have profited unexpectedly and sometimes even wildly from it, and those which have been hit extremely hard or even wiped out by it. Unlike typical cyclical crises, which tend to have a synchronised effect on most industries, this crisis is characterised by contrasting impacts. This feature has manifested itself in relatively smooth flows of employees between industries, so structural unemployment has stayed quite low. I should add, though, that strongly expansionary fiscal policy has been a major mitigating factor. At the price of sharply rising public debt, fiscal expansion has made it easier for the private sector to adjust structurally at the microeconomic level.
The argument was rather that the economy could suffer a deep recession in the long term if developments led to a bubble arising which then burst. 9  ECB (2009). 10  IMF (2009). 11  Borio and Lowe (2004). 6  BIS Review 162/2009  The economists Francesco Giavazzi and Frederic Mishkin expressed concern in their assessment of Swedish monetary policy between 1995 and 2005 that the Riksbank had given too much consideration to house prices. 12 However, monetary policy that entails flexible inflation targeting – like that conducted in Sweden – has the aim of stabilising inflation around the inflation target and also resource utilisation. This means that temporary deviations from the inflation target may be motivated if the inflation target is attained in the longer term. This was also the assessment made by the Riksbank. House prices in Sweden rose by 3 per cent between the second and third quarters of this year, after a slowdown in 2008 and the average price increase since 1996 has been around 8 per cent a year. The question is whether this is a sustainable long-term development. There may be risks with this, even if the upturn is not as large as in some other countries which have recently experienced downward adjustments. Developments in the housing market in Sweden also differ in that new construction has been considerably lower than in a number of other countries.

This move by the HKMC to issue USD denominated bonds fits very well into the efforts by the Hong Kong Monetary Authority to promote the development of a safe and efficient financial infrastructure for Hong Kong, based on a multi-currency, multi-dimensional platform. In Hong Kong’s banking system, we have around $ trillion in HK Dollar deposits. Our banks also have the equivalent of over $ trillion in foreign currency deposits. About 70% or $ billion are US Dollar deposits. The loan-to-deposit ratio for Hong Kong Dollar deposits is 87%; the equivalent for US Dollar is only around 26%. We reckon that a significant portion of the sizable US Dollar deposits is held by retail investors and some would wish to diversify and look for investment products to increase their return. One could of course look for opportunities overseas but, as an international financial centre, Hong Kong should also try to provide more such investment products locally. In the past there have been very few local issues of US Dollar retail bonds, and the most recent one appears to have been issued as far back as in September 2003. Today’s HKMC US Dollar bond issuance would help to meet part of such investment demand. Perhaps in times to come there will be more foreign currency bond issuance in Hong Kong. This bond issuance would add to the diversity of financial intermediation channels and complement the HKMA’s effort to promote the development of a multi-currency, multi-dimensional financial system in Hong Kong.
•  Sound fundamentals include a high domestic savings rate, sustainable fiscal and balance of payments positions, high foreign exchange reserves and prudent debt management. •  Good supervision involves the maintenance of solid capital adequacy and liquidity requirements for the financial sector, as well as regular examination and monitoring of financial institutions and markets. The banking system must have the capacity to avoid excessive credit concentrations and risks, and to manage market risks well. •  A robust financial infrastructure would encompass an efficient payments and settlements system for domestic and international transactions. In essence, the world is moving towards Real Time Gross Settlement (RTGS) system, which support Delivery vs. Payment (DvP) and Payment vs. Payment (PvP). RTGS reduces payment risks and allows central banks to monitor flows in domestic currency as well as exposure of banks on a real time basis. •  A non-distortive incentive structure, such as taxation or regulatory restrictions that would not encourage risk concentrations or excessive leverage in any economic sectors. 22. Put simply, managing national risks is equivalent to achieving three objectives. First, lower national gearing, because leveraging adds risks, especially if this is leveraged from external borrowing. The more you borrow abroad, the more you become vulnerable to external shocks. Second, the higher the level of domestic savings, which should be reflected in higher bank capital, lower credit/GDP ratio, and higher fiscal surpluses, the greater the resilience to the pain of adjustment to external or internal shocks.

The fact that a wide range of important decisions on issues ranging from food and energy safety to repair and reconstruction of the financial system are made at the G-20, of which Turkey is an active member, clearly suggests that the global economy’s center of gravity is shifting. Corresponding to the ever-increasing importance of the G-20, the weight of Turkey and her peer developing countries in international institutions, such as the IMF, is increasing as well. In his statement in the late 2010, IMF Managing Director Dominique Strauss Kahn described the changes in the Fund’s quotas and governance “the most fundamental governance overhaul in the Fund’s 65-year history, and the biggest ever shift of influence in favor of emerging markets and developing countries”. Once the IMF’s 14th General Review of Quotas is completed, Turkey’s share in the IMF’s total quota will be more than doubled compared to 2004. Their outstanding economic performance and rapidly increasing share in the global economy over the past decade have considerably helped developing countries to have an increasing voice in the international arena. These countries, among which Turkey, with its economic performance, stands as one of the leading countries, have weathered the recent global crisis with less damage compared to developed countries and exhibited better performance in reverting back to pre-crisis production levels and growth rates. Recently, there have been debates about whether the developing country group has decoupled from developed countries.
At home, the main risk has to do with the evolution of inflation, mainly because of the unrelenting exchange rate depreciation and its accumulated effects on costs. This, in a context of margins that seem to have narrowed because of the high annual growth in nominal wages and the limited pass-through of lower fuel prices in some sectors. Therefore, the materialization of an external risk scenario that triggers a significant additional depreciation of the peso may have substantial effects on the short-term inflation outlook, which will depend on the state of the business cycle. On the other hand, it is also possible that, despite a recent improvement in domestic expenditure and output compared with previous quarters, private expectations will not improve sufficiently to stimulate further spending, especially in investment. Conversely, a scenario where expectations recover more strongly than expected would allow for more dynamic economic activity. The same can happen if the increase in national income has greater effects on expenditure in a context of more comfortable external accounts. After evaluating these risks, we estimate that, although local risks have moderated, the risk balance is still downward biased for output, while the risk balance for inflation is unbiased. Let me share with you some final thoughts now. 4  BIS central bankers’ speeches  Final thoughts Lately, the Chilean economy has responded to the big changes in the local and external environment, by making a major adjustment.

the CPI excluding foodstuffs and energy, CPIEFE, from 4.3 to 4.7 percent annually between November and February. However, the lower oil price in international markets and its pass-through to domestic prices helped to moderate annual growth in CPI inflation, which went from 5.5 percent in November to 4.4 percent in February (figure 1). Recent inflation figures have taken the market by surprise, as it had assumed a clearly downward position with respect to the behavior of prices, even below our predictions in the December Report. Thus, the market expectation for inflation at the end of 2015 has been revised to somewhat above 3 percent, as has been inflation one year out. Expectations two years out remain anchored in 3 percent (figure 2). On the contrary, output and expenditure have evolved as forecast in December. Again this time the baseline scenario I will be sharing with you in a moment foresees a gradual recovery that will gain strength towards the second half of this year. Consistently with this scenario and the Board’s statement, market expectations for the monetary policy rate (MPR) have ruled out new cuts and, in some cases, point at a cycle of increases beginning late this year. In what follows I will describe the macroeconomic scenario we believe to be the most likely for the coming quarters, and its associated risks. Macroeconomic scenario The external environment and related risks remain largely determined by the impending monetary normalization process in the United States.
Such long lags in the dynamics of the labour market mean that there is unlikely to be a simple relationship between deviations of unemployment from its natural rate and changes in the inflation rate. Chart 1 shows that it did indeed take almost 20 years to bring inflation and inflation expectations (implied by financial market returns on indexed and conventional gilts) down from double-digit levels to the current target of 22%, accompanied by a large rise and subsequent fall in unemployment. The idea of the NAIRU can be thought of as a conceptual response to inertia in the system which means that the response of the economy to shocks will be protracted. In 1975 Franco Modigliani and Lucas Papademos introduced the concept of the non-inflation rate of unemployment – the NIRU – defined as “a rate such that, as long as unemployment is above it, inflation can be expected to decline”. Note in passing that more appropriate terminology would be the nonincreasing inflation rate of unemployment (NIIRU). Modigliani and Papademos recognised that the NIRU would be affected by macroeconomic shocks. They argued that there was evidence to suggest that “over the last two decades the NIRU [in the US] was held down by a favourable trend in the terms of trade between the private nonfarm sectors on the one hand and imported goods and farm products on the other.

In Australia, for example, the 1998 Payment Systems (Regulation) Act gives the RBA powers to regulate the payments system and purchased payment facilities (such as travellers’ cheques and stored value cards). It also allows the RBA to obtain information from payment system participants and to set access regimes and determine risk control and efficiency standards for designated payment systems. The RBA’s responsibilities in this regard are discharged by a Payments System Board. The adoption of Real Time Gross Settlement (RTGS) has been another key risk reduction initiative on the part of many central banks in the past decade and a half. These systems eliminate the build up of settlement exposure and Herstatt risk between financial institutions as a result of the exchange of high-value payments and debt securities settlements. Instead, individual transactions are settled in real time across accounts at the central bank. The availability of RTGS is also an important step in dealing effectively with foreign exchange settlement risk. Finally, no discussion of payments system oversight would be complete without some mention of AntiMoney Laundering initiatives. AML is important for the integrity of payments systems, and thus also has important macroprudential implications. The publication of a Financial Stability Report is the second way in which central banks have given more prominence to their macro prudential responsibilities. The Bank of England was among the first movers and its Financial Stability Report is now a decade old. The report recently underwent a revamp reflecting how rapidly this type of analysis has evolved in that time.
This means that we will assess the effects of these measures and adapt them, if necessary: (1) to confirm that they continue to fulfil their monetary policy objectives; (2) to ensure – within our mandate – that the relevant measures continue to support the decarbonisation path to reach the goals of the Paris Agreement and the EU climate neutrality objectives; (3) to respond to future improvements in climate data and climate risk modelling or changes in regulation; and (4) to look beyond climate and address additional environmental challenges, within our mandate. While I understand it is not a specific topic covered in today's conference, a similar commitment to fully incorporate climate-related and environmental risks applies to our banking supervision tasks and responsibilities. In addition to the climate stress test that was concluded by ECB Banking Supervision earlier this year, we will soon publish the results of our thematic review. As part of this exercise, our core banking supervision teams – Joint Supervisory Teams – thoroughly assessed to what extent banks' risk management practices for climate-related and environmental risks live up to the supervisory expectations we published in 2020. We conducted this exercise to assess where banks stand with regard to our expectations and to highlight any gaps they urgently need to close. We will also take the opportunity to identify and share best practices to help banks close any gaps identified.

Even if in the very near-term the energy crisis may cause an increase in non-gas fossil fuel being used, the likelihood of a timely and orderly transition towards a low-carbon economy consistent with the EU's commitment to the Paris Agreement has increased. That being said, another record-breaking summer has confirmed that physical risks of climate change and environmental degradation are materialising ever more frequently, which will add to the risk of increased macroeconomic volatility until the transition has been completed. When the boat we all share is rocked to such an extent by external forces, we need to be able to count on internal anchors of stability. The ECB provides one of those crucial internal anchors by pursuing its mandate of maintaining price stability in the euro area as laid down in the Treaty on the Functioning of the European Union. In line with that mandate, our primary concern is, as always, our primary objective: price stability. Inflation is currently far too high. The shocks that are hitting the euro area economy have not only led to a turning point in the outlook for economic activity but are also contributing to further upward price pressures that are much stronger and more persistent than we previously anticipated. This implies that inflation is likely to stay above our 2% target for an extended period. As a result, we accelerated the pace of monetary policy normalisation over the summer to ensure that monetary policy is consistent with inflation returning to our target in the medium term.