samchain/econo-pairs-v1 huggingface dataset:
As a matter of fact, monetary policy alone cannot ensure price stability without the appropriate fiscal discipline at the overall EMU level. Indeed, for my part, I would mention three economic justifications for the Treaty provisions that gave rise to the Stability and Growth Pact: •  First, by co-ordinating the fiscal policies of the Member States of Monetary Union, the pact ensures a good policy mix within the Euro area. This is essential for monetary policy, to counterbalance the fact that Europe does not have a significant federal budget, just as it has no federal government. Close mutual surveillance and co-ordination of fiscal policies are the  BIS Review 11/2001  3  responsibility of the "Euro Group" and of the Ecofin Council. Adherence to the medium-term objective of achieving budgets that are "close to balance or in surplus" means that individual countries must first rely on themselves to withstand possible economic downturns which affect only their own economy, while ensuring a balanced policy mix throughout the euro zone. •  Second, the pact helps to prevent well-managed economies from having to bear an unjustified risk premium by setting up a penalty system for excessive deficits. •  And lastly, the stability and growth pact allows us to disprove the assertion that the euro area has no automatic stabilisers in the event of asymmetric shocks to a member economy.

Thomas Jordan: Low interest rates – blessing or curse? Summary of a speech by Mr Thomas Jordan, Member of the Governing Board of the Swiss National Bank, at the Delegiertenversammlung des HEV Schweiz, Säntis, 19 June 2009. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  Monetary policy uses low interest rates to try and stimulate demand as a way of combating the economic crisis. The property market is an important transmission channel in this regard, as low mortgage rates provide direct relief to home owners and tenants in the form of lower interest payments and rents. This provides households with greater room for manoeuvre in consumption and investment. This in turn boosts overall economic demand and economic growth. However, despite these direct positive effects, a low level of interest rates can also pose medium-term risks for the stability of the Swiss property market, and hence the financial system. The past has repeatedly shown that prolonged periods of low interest rates can lead to speculation on property markets, and to declining standards in mortgage lending. The challenge in today’s difficult environment is how to boost the economy through low interest rates without creating medium-term risks for the stability of the financial system and the property market. Responsible behaviour on the part of home owners, combined with bank discipline when granting loans, can contain these risks. Households should buy property only if they would also be able to afford it if interest rates increased.
The federal banking agencies, for example, made clear that lenders and servicers should adhere to consumer protection requirements, including fair lending laws, and provide the opportunity for all borrowers to benefit from these arrangements.8 The federal banking agencies have confirmed that in the context of the Community Reinvestment Act, they willl favorably consider retail banking services and retail lending activities in a financial institution's assessment areas that are responsive to the needs of low- and moderate-income individuals, small businesses, and small farms affected by COVID-19 consistent with safe and sound banking practices.9 This includes, for example, waiving certain fees, easing restrictions on check-cashing, expanding availability of credit, providing alternative service options, and offering alternative payment options. Prudent efforts to modify terms on new or existing loans will receive favorable CRA consideration. In addition, financial institutions will receive CRA consideration for community development activities, e.g., activities that help to revitalize or stabilize low- or moderate-income geographies such as support for food services and digital access, as well as lending, investment and service activities that support health care and small businesses, particularly for low- and moderate-income individuals or communities. In terms of supervisory focus, the Fed has prioritized monitoring to evaluate the impact on consumers to ensure that banks work in good faith with consumers, apply fair treatment and mitigate consumer harm. We are monitoring consumer loan deferrals and modifications and corresponding servicing activities to ensure banks' responsiveness.

Jean-Pierre Roth: The position of the Swiss franc exchange rate in the Swiss National Bank monetary policy strategy Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the University of St. Gallen, St. Gallen, 19 December 2007. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The exchange rate is an important factor in determining the domestic price level in Switzerland. Nevertheless, it is not a monetary policy goal for the Swiss National Bank and is only relevant insofar as it has an impact on future inflation. Our concerns about our currency's weakness should not be read as a hidden form of exchange rate policy but rather as genuine concern about future price stability. A sustained tendency to weakness on the part of the Swiss franc could trigger inflationary effects that – sooner or later – would have to be countered with monetary policy instruments taking the form of interest rate measures. In the medium-term, this could lead to a reduction in the interest spread between the Swiss franc and the euro. BIS Review 151/2007  1
1  BIS Review 96/2000  Second, faith is used in everyday language as a synonym for “belief”, “reliance” and “trust”, which could perhaps be interpreted in the sense of “well-founded expectation”. In this context one could think of faith as a probabilistic statement. Immanuel Kant has associated faith with an intermediate degree of certainty, in between mere “opinion” but short of “knowledge”. On this definition my basic answer to the question becomes “yes”. At least in the example of the institution I represent, I see good reasons to believe that the public in Europe should and that it can rely on the European Central Bank to fulfil its mandate and maintain price stability. This sort of “reasoned faith” or “confidence” is (as it should be) underpinned by a sound institutional setup, the application of well-established economic principles and, last but not least, by the quality and determination of the people dedicated to this task. A third aspect of faith relates to “keeping a promise” or “engagement” as in “acting in good faith”, in the sense of reflecting “honesty of intention”. For Thomas Hobbes “to have faith”, “to trust” and “to believe a man” are synonymous. One could think of this dimension of faith as representing a twosided relationship, rather than a unilateral act of faith. From this perspective faith - or here better: trust - is similar to a contract established between two parties.

He recounts an episode when the colonial government imposed “fees” on disobedient district chiefs simply by painting black crosses on these stone wheels. This miraculously and promptly induced them to change their ways just in order to have these marks erased again and thus - in their perception - their wealth restored. Friedman concludes that this example illustrates “how important appearance or illusion or “myth”, given unquestioned belief, becomes in monetary matters. Our own money, the money we have grown up with, the system under which it is controlled, these appear “real” and “rational” to us. Yet the money of other countries often seems to us like paper or worthless metal, even when the purchasing power of individual units is quite high.” The euro has been in existence for almost two years now. It does not come in the form of stone wheels. In fact it does not yet have any concrete and tangible expression at all. Until the introduction of euro banknotes and coins at the beginning of 2002 it will essentially remain a “virtual” currency, which may perhaps seem as remote, unfamiliar and unnatural in the eyes of the public as the stone wheels described by Friedman. This lack of tangibility and visibility of the euro in part accounts for the particular challenges that the euro faces in winning the hearts of the general public as a new currency which has yet to replace the familiar and trusted national notes and coins in circulation.
Third, the entry into force of the Mechanism will entail the need to conduct new activities and develop new functions: the monitoring of the banking systems of the remaining euro area countries, which is needed to underpin the Banco de España’s place on the Supervisory Board; participation in the definition of the Mechanism’s supervisory policies and in the administrative procedures in relation to the significant banks; and also collaboration in the performance of other horizontal and specialised supervisory functions developed by the SSM. Fourth, there are certain areas of banking activity whose supervision will not be assumed by the Mechanism, but will continue to be within the remit of the national authorities. The Banco de España will thus continue to exercise supervisory powers in the areas of money laundering prevention, consumer protection and, partly, in the oversight of financial markets. It will also retain the supervision of banking foundations within its sphere of competence, that is to say having regard to regional governments. Fifth, the Banco de España, like the other national supervisory authorities participating in the SSM, fully retains its supervisory powers over non-bank financial institutions, other financial institutions and entities related to the financial sector such as payment institutions, electronic money institutions, credit financial intermediaries, mutual guarantee companies, currencyexchange bureaux and appraisal companies. In short, with the launch of the SSM, the main centre of supervisory decision-making on significant Spanish banks has passed from the Banco de España to the ECB.

Since 2013, and in addition, naturally, to our contribution to the preparatory work, we have been working hard at the Banco de España in two directions: a)  first, to adapt our structure to the new needs; and  b)  second, to encourage the presence of experts from the Banco de España at the ECB. A few weeks ago a reform of the Directorate General Banking Supervision was approved, designed to create a structure that mirrors that of the ECB, to facilitate interaction between the two authorities and achieve efficient management of resources. The new organisation replicates the arrangements envisaged by the ECB: two departments will be responsible for ongoing supervision of the significant banks, a third will be responsible for the less significant banks, and a fourth will perform the so-called “horizontal” tasks, in addition to on-site inspections of the significant banks. To underpin the position of the Banco de España’s representatives on the SSM’s governing bodies, a new SSM Coordination Service was created in February , which will be responsible for analysing and monitoring non-Spanish significant banks. Regarding the Spanish presence in the SSM, our experts have been very successful in the ECB selection processes, both at senior management and junior analyst levels, which testifies to their excellent qualifications and vast experience.
Starting from the February meeting, the repo rate was cut below zero and the first of a series of asset purchase programmes was begun. Furthermore, we signalled that there was a possibility of foreign exchange interventions if the krona appreciation already forecast were so strong and rapid that it jeopardised the upturn in inflation. We deliberately increased our focus on the development of short-run inflation, as we had a low tolerance of poor outcomes. What considerations should govern our choice of future path? We are now in April 2016 and I judge that we have largely succeeded in our efforts. Growth has become much higher than expected, although this is not merely due to monetary policy. The trend towards declining confidence in the inflation target has turned around in that inflation expectations have begun to rise again. The monetary policy conducted is far from uncomplicated. In a world of minus rates it is more difficult to assess what impact the interest rate decisions will have on different channels, that is, how the transmission mechanism will work. It is also difficult to assess the stimulation effects of the bond purchases. 2 Moreover, the Riksbank has been clear that low interest rates increase indebtedness among households in a way that increases vulnerability in the Swedish economy. But most of all, I feel that our monetary policy is successful and better than the alternative.

15/11/2019  Opening remarks 11th edition of the European SSM Roundtable/International Bankers Forum Margarita Delgado Deputy Governor  Good Morning and welcome to Banco de España for this 11th edition of the European SSM Roundtable, organised by the International Bankers Forum (IBF). The topic for today’s roundtable is the management of non-financial risk. This is an issue which is always in the spotlight and, at the same time, is quite hard to tackle. The concept of risk is continuously used in banking regulation. A quick search in the CRR1 or CRR2 text will reveal that it is mentioned nearly 1,500 times in each. Banks are certainly familiar with the regulatory requests to understand, measure, hedge, control, assess, address or mitigate risk. I believe it is fair to say that any firm that has survived the crisis and its long aftermath, without public support, has been largely successful in fulfilling these risk-related tasks. Of course, supervisors are also permanently concerned about risk; to some extent, it is what we are paid for. Still, I believe both banks and supervisors tend to feel rather comfortable when we assess financial risk. Don’t misinterpret me. We are perfectly aware of the consequences that a mismanagement of financial risk can entail, but we tend to look at financial risk in a more natural and intuitive way. Things get a lot stickier when we look at non-financial risk. What is the nature of non-financial risk? And what makes it different from more traditional financial risk?
While the export sector has continuously managed to achieve high productivity growth rates, productivity has lagged behind dramatically in the domestic sector of the economy. Since the domestic sector continues to represent the bulk of the Swiss economy (approximately 60% of GDP), the poor performance of the domestically oriented sectors undermines the growth potential of the Swiss economy.9 In light of the rapidly deteriorating  7  There are numerous useful definitions of globalization. Here I make reference to the one used by Ngaire Woods, ed. (2000): “The Political Economy of Globalization”, New York: St. Martin’s Press. 8  As a percentage of GDP, Switzerland’s current account surplus is exceeded only by that of Singapore. Switzerland holds net foreign assets of about 135% of GDP which is unmatched in the world. The biggest part of the Swiss current account surplus is therefore derived from the interest earned on these assets (36 billion CHF vs. a surplus of 25 billion CHF from services and a 4.5 billion surplus from trade in 2002). 9  GDP growth in Switzerland is underestimated by the official statistics because these do not fully take into account the improvement of the terms of trade that are regularly realised by the tradable sector (see Ulrich Kohli (2002): “Veränderungen der Terms of Trade und reales BIP” (Terms-of-Trade Changes and Real GDP: Evidence from Switzerland (with English summary), Schweizerische Nationalbank Quartalsheft, June, pp. 54-63.

I will explore how the dramatic increase in international competition during the last twenty years has affected price levels. I will then return closer to home and attempt to illustrate how important segments of the Swiss economy have remained sheltered from international competition through a web of regulatory hurdles. I will make the case that freeing up these sectors would not only raise economic growth – something that is urgently needed in the effort to alleviate the growing stress on our social programs – but also render monetary policy more effective and provide it with more flexibility to focus not only on maintaining price stability but also on output stabilization. Finally, I will conclude with a brief economic and monetary policy outlook for the United States and Switzerland. 1. Great Inflation to Great Moderation  In the United States, the modern era of central banking began on October 6, 1979 when the Federal Reserve, under the leadership of its newly appointed Chairman Paul Volcker announced its adoption of monetary targets. Headline CPI inflation peaked at 15% at the beginning of 1980. Chairman Volcker slowed the growth of money dramatically. Interest rates rose sharply with the banks’ prime interest rate exceeding 20%. The U.S. economy fell into a deep recession. Inflation began to recede steadily. Remarkably, despite the vigorous recovery that followed after 1983, inflation remained relatively subdued at 4%. It reached a temporary floor of 2.5% by mid-1992.
22 The shrinking of the spread around July 2017 is related to concerns in the bill markets about the impending  debt limit. Again, this is an example of a change in the perceived money-like characteristics of a particular asset (in this case, Treasury securities maturing in the so-called “red zone”) changing the asset’s price. 23 The minutes to the November 2016 FOMC meeting report on a Committee discussion about its long-run  operating framework. At that meeting most participants did not indicate support for using the balance sheet as an active tool for financial stability purposes, although a few expressed support for undertaking further study of this possibility. 24 More details on the current operating system can be found in the New York Fed’s annual reports on domestic  open market operations for 2015 and 2016. 25 Since, prior to the crisis, the Federal Reserve did not remunerate reserves, it needed to maintain tight control on  the supply of reserves and other liabilities to achieve its interest rate target. For a discussion of the benefits of separating interest control from the supply of money-like assets, see Todd Keister, Antoine Martin, and James McAndrews, “Divorcing Money from Monetary Policy,” Federal Reserve Bank of New York Economic Policy Review 14, no. 1, September 2008. 26 Primary dealers and market participants were asked to estimate the average level of the Federal Reserve’s  liabilities in 2025 under the assumption of no return to the zero lower bound between now and then.

The outreach has also been targeted at small and medium sized businesses. This process will also prompt the financial industry to increase innovation to strengthen their competitive position. This can be reinforced by market research to enhance the understanding of customers’ distinct financial needs and their risk tolerance and therefore enable the design of Islamic financial instruments that offer tangible benefits and value to customers. In addition, with increased disclosure and transparency on the manner in which Islamic financial transactions are being conducted and on how Islamic financial contracts are being executed as well as on the risk and return profiles of financial products, this will further strengthen the role of competition. In conclusion, the investment in the future needs to be undertaken by all the relevant entities in the Islamic financial sector - the industry, the regulators, the market participants, the academia and the international community. As a co-ordinated and concerted effort it will be mutually reinforcing in elevating the performance of Islamic finance. While the increasingly more competitive prevailing environment raises the pressures to produce immediate-term results, it is the investment in human capital and in research and development that will secure the long-term sustainability of the industry. It is these investments that will be the defining element of the future development of Islamic finance and its long-term success. BIS Review 47/2005  3
This would tend to push water uphill – a countervailing capital flow substitution effect; and    Third, a change in the composition of the global market portfolio as emerging economies account for a larger slice of the pie – a capital flow income effect. By combining these three factors, we can form a proximate picture of the emerging pattern of global capital flows. These projections are based on the same restrictive set of modelling assumptions. Nonetheless, they provide a transparent window on possible emerging patterns. Are the forces of financial deepening in emerging capital markets sufficient to outpace the reduction in advanced country portfolio home bias, lessening the BFSP problem? Or does portfolio reallocation by advanced economies risk swamping embryonic emerging capital markets exacerbating this problem? Chart 13 looks at the ratio of annual average capital flows to G20 emerging markets relative to their market capitalisation over the period 2010 to 2050. It is the analogue of Chart 2, using projections of both numerator and denominator. The highest and lowest annual inflows over the projection period are also shown to capture potential annual variation in capital flows. Chart 14 plots annual gross capital inflows to emerging markets over the same period. 5  Non-G20 market cap is assumed to grow in line with the forecast for total G20 market capitalisation.

BIS central bankers’ speeches  7  Some notable points include:   Over the period 2010 to 2050, the average scale of capital inflows, relative to market capitalisation, for the G20 emerging markets is around 8% per year. That is greater than the peak inflow experienced in the recent past, including in 2010, during which time asset prices rose significantly and protective policy measures were put in place.   Given the likely variation in these inflows year by year, the picture is even more striking. Potential “peak” inflows are into double digits for the majority of G20 emerging markets. As context, peak portfolio equity inflows to East Asian countries in the three years preceding their 1990s crisis averaged 4% of market capitalisation.   For some individual emerging market countries, these capital inflow patterns are dramatic. For example, over the period 2010–2050, average inflows to India and Indonesia exceed 10% of their equity market capitalisation. Taken together, these projections do not suggest a dissipation of the BFSP problem. More likely, they suggest it could intensify, perhaps significantly, in the period ahead. If capital markets operated efficiently, these portfolio flows need not cause waves in emerging credit and asset markets. In practice, frictions in the functioning of these markets mean that asset market spillovers seem very likely to persist. In other words, the splashes from the big fish risk causing waves every bit as great, and potentially greater, than those seen recently.