samchain/econo-pairs-v1 huggingface dataset:
Our non-standard measures of negative interest rate policy and asset purchases brought down the overall level of the yield curve to a region that is, by definition, unreachable under a zero lower bound and contributed to a considerable flattening of the term structure. The lowering and flattening of the yield curve in turn eased financing conditions for non-financial corporations and households, contributed to spurring economic activity and helped bring inflation closer towards our aim. From an analytical perspective, further study of the impact of innovative monetary policy measures is a necessity for central bankers and an opportunity for academics. While academic researchers have the  privilege of being able to watch new policy measures unfold before scrutinising their impact, central bank researchers and decision-makers have to monitor the impact of policy in real time, and are forced to rely on sparse empirical evidence, especially if the policy measure is unprecedented. There are many open issues regarding the interplay between the yield curve and monetary policy that require further research in my view. So let me finish with a little wish list or research agenda. First on the list should be a better understanding of the role of term premia in macroeconomic models. This includes a more thorough analysis of the transmission of quantitative easing through the duration channel, but also, more generally, a better integration of long-term rates in the transmission mechanism as formalised in DSGE models. [34] Second is an improved modelling of long-term trends.

Euro area (as of 1999) and German (before 1999) recessions are identified, respectively, by the CEPR and the Economic Cycle Research Institute (ECRI), with the exception of the German recession at the beginning of the 1970s identified by the OECD composite leading indicators. Latest observation: October 2019. At the same time, despite the unprecedented low level of the yield curve, the fact that the slope of the euro area yield curve is fairly flat (but slightly positive) is not at all unusual from a historical perspective (see Chart 2). [5] The yield curve is a central element in the transmission of monetary policy. Standard and non-standard monetary policy instruments affect the whole of the term structure, which in turn is a key determinant of the financing conditions of the economy. Some rates in the euro area economy – such as corporate bond rates or mortgage loan rates – are based on longer-term risk-free yields, while others – such as bank loan rates for firms – are mostly priced off shorter maturities. [6] The financing conditions prevailing for firms and households in turn affect the level of economic activity and inflation. While current monetary policy is an important factor affecting the yield curve, beliefs about future monetary policy and risk premia also play a role. In turn, these depend on a host of factors which determine the inflation or growth outlook of market participants and the evolution of risk premia.
Effective risk management is increasingly important for participants in China's capital markets, especially with the rising participation of foreign investors. The current volatile market environment presents a challenging backdrop for investors of RMB assets, with broadly synchronised monetary tightening across advanced and emerging economies, a slower-than-expected economic recovery in China, relative currency weakness, and negative yield spread with US rates. Notwithstanding the above, enhancements to connectivity between Mainland and international markets continued, particularly in the area of risk management. For example, the Hong Kong Exchanges and Clearing Limited (HKEX) launched the MSCI China A 50 Connect Index Futures in October 2021, which provides investors with a new and effective risk management tool to manage their A-share exposures. In May 2023, Swap Connect was launched, expanding mutual market access between Hong Kong and the Mainland into the derivatives space, allowing RMB bond investors to conveniently access the more liquid onshore interest rate swap market to manage related interest rate risks, rather than relying on offshore non-deliverable interest rate swaps. These initiatives have been welcomed by the market and are conducive to  1/3  BIS - Central bankers' speeches  closer connectivity between the onshore markets and international investors, and ultimately benefit the high-quality development of onshore financial markets. Moving on to another key focus for the next stage of China's opening up: its green finance market. To achieve its dual-carbon strategies, it's estimated that over RMB100 trillion will need to be directed towards carbon reduction, which presents significant climate finance opportunities for foreign investors.

In closing, given the limited amount of time today, I could only briefly touch on two key themes in the broader opening up of China's capital markets. At the HKMA, we are continuously working with Mainland authorities and the industry towards new policy breakthroughs to better serve global investors and support the development of onshore markets. I warmly welcome your views and ideas on ways to further strengthen the connectivity between China's and Hong Kong's financial markets. Thank you, and I wish today's conference a great success. 3/3  BIS - Central bankers' speeches
This implies that we need to further build our analytical toolkit to identify risks and devise a coherent policy response. It calls for intensifying both our outreach to state-of-the-art research from academia and our analytical work in-house. As mentioned earlier, deepening our understanding on the interplay between monetary and macroprudential policies is a key priority in a low-for-longer interest rate environment. Furthermore, we aim at better capturing interactions between banks, other market participants and the real economy in a fully integrated macroprudential stress-testing framework combining macro and micro building blocks. This requires estimating and modelling behaviour of financial and non-financial agents to realistically capture their balance sheet adjustments also in times of stress. On the policy side, our key priority is to become more agile in fulfilling our countercyclical macroprudential policy mandate. We need to ensure that releasable buffers are available to enable the banking system to support the real economy in a downturn. At present, the best option is to set the CCyB in a capital-neutral manner to be able to withstand current headwinds. I wish us all an insightful conference. [1] See, for instance, van der Ghote, A. (2018), “Coordinating monetary and financial regulatory policies”, Working Paper Series, No 2155, ECB, June. [2] See Cozzi, G., Darracq Pariès, M., Karadi, P., Koerner, J., Kok, C., Mazelis, F., Nikolov, K., Rancoita, E., Van der Ghote, A. and Weber, J. (2019), “Macroprudential policy measures: macroeconomic impact and interaction with monetary policy”, Working Paper Series, ECB, forthcoming.

[9] There are currently eight globally important banks in the euro area (in France, Germany, Italy, the Netherlands and Spain) holding additional buffers of between 1% and 2%, and 108 other systemically important institutions with buffers of up to 2%. Systemic risk buffers have been activated in five countries, with a range of between 0.5% and 3%, and the countercyclical capital buffers have been announced in seven countries (Belgium, France, Germany, Ireland, Lithuania, Luxembourg and Slovakia) with rates between 0.25% and 2%. For more information, see “Macroprudential measures in countries subject to ECB Banking Supervision and notified to the ECB” on the ECB website. [10] For a discussion of recent CCyB decisions, see Babić, D. and Fahr, S. (2019) “Shelter from the storm: recent countercyclical capital buffer (CCyB) decisions”, Macroprudential Bulletin No. 7, ECB. [11] See, for example, “  Refining the Stress Capital Buffer”, speech by the Vice-Chair for Supervision, Randal K. Quarles, at the Program on International Financial Systems Conference, Frankfurt, Germany, 5 September 2019. European Central Bank Directorate General Communications Sonnemannstrasse 20, 60314 Frankfurt am Main, Germany Tel. : +49 69 1344 7455, E-mail: media@ecb.europa.eu Website: www.ecb.europa.eu Reproduction is permitted provided that the source is acknowledged. Media contacts  Copyright 2019, European Central Bank
However, lending to the government increased by 41.7% from 108.9% in June 2010 and contributed 13.1 percentage points to the total domestic credit growth. On a sectoral basis, households (personal loans category) continued to account for the largest share of outstanding credit, accounting for 26.3% (26.2%) 6 in September 2010. The agricultural sector was second at 17.1% (18.5%), followed by manufacturing 13.4% (13.0%), wholesale and retail trade, 12.0% (11.7%), transport, storage and communications, 5.3% (5.4%) and real estate, 5.4% (5.2%). Interest rates Demand for Government securities remained strong although it was relatively lower during the quarter under review. The average rate of subscription at the Treasury bill tenders was recorded at 123.7% down from 129.5% in the preceding period. Similarly, the average rate of subscription rate for Government bonds was down at 123.5% compared with 126.6% recorded in the second quarter. Although participation at the auctions was strong, yield rates trended higher across all tenors, as investors sought to sustain recent gains on government paper. 5  Estimates used before monetary survey is compiled. 6  Previous quarter. BIS Review 148/2010  7  In the Treasury bills market, the composite weighted average yield rate increased by 2.5 percentage points to an average of 7.4% from 4.9% recorded in the second quarter. Similarly, the composite weighted average yield rate for Government bonds increased by 109 basis points to 11.5% during the third quarter, up from an average of 10.4% recorded in the previous quarter.

On an annual basis, M3 growth increased to 32.0% in September 2010 from 27.7% in June 2010. This outturn was due to the rise in NDA by 96.9% (June 2010, rose by 58.2%) primarily on account of increased lending to government. However, the NFA fell by 9.8% compared with a fall of 1.2% recorded in June 2010. Excluding foreign currency deposits that grew by 29.8% (June 2010, fell by 5.9%), money supply growth was 33.2% from the 49.0% recorded in June 2010. Total domestic credit, comprehensively defined to include foreign currency loans, increased by 3.1% at end-September 2010 compared with 10.1% growth registered in the second quarter of 2010. This was mainly due to a 4.4% rise in net claims on central government that contributed 1.7 percentage points to the growth in domestic credit. Similarly, lending to the private sector (including public enterprises) grew by 2.2% and contributed 1.4 percentage points to the total domestic credit outturn. Excluding foreign currency denominated credit, which fell by 4.1%, domestic credit increased by 5.2% compared to the 7.5% registered in June 2010. On an annual basis, domestic credit growth at 13.5% in September 2010 was 10.1 percentage points lower than 23.6% recorded in June 2010. This largely reflected a slowdown in credit to the private sector, including public enterprises, to 0.7% compared with the 25.9% growth recorded in June 2010. This outturn contributed 0.4 percentage points to the total domestic credit growth in the quarter under review.
But it also carries a political weight: when Mario Draghi speaks at the G20, the whole world listens to what Europe has to say. 2. Yet, despite the success of monetary union, Europe’s economy is now confronted with a new trilemma. Weaknesses have materialised. Addressing people’s expectations requires identifying the flaws of our Union in an open and honest manner. Regarding growth, we must distinguish between the snapshot of the present and the full movie that we have lived through. The present snapshot is positive: euro area growth is accelerating, and is now up to speed with the United States or the United Kingdom. However, this is not sufficient to make up the cumulative shortfall of past years: the full movie until today is that since 2011, the cumulated EU growth trajectory is 7.5 GDP points below the US’. Even when measured per capita, this underperformance amounts to 5 percentage points. And we see the same contrast regarding convergence between countries. The present snapshot, which is positive, shows that intra-area divergences have been significantly reduced and are at their lowest level since 1999. But the full movie up to today 3/8  BIS central bankers' speeches  shows rather wider disparities in income per capita, as a result of the 2009–2012 crises. To make matters worse, all too often, Member States tend to act in isolation, not taking into account the externalities and the impact that their policies have on others.

Global economic developments are marked by the turnaround in the US economy. The US accounts for about 20 per cent of the world economy. The turnaround in the world's largest economy will have an impact, also in Europe. The question is how severe the turnaround will be, and how strong the impact will be on European economies. 2  BIS Review 19/2001  The US economy expanded by 5 per cent last year. The upturn in the US has spanned almost 10 years - the longest cyclical upturn ever. The chart shows OECD forecasts and actual developments over the past five years. As we can see, growth has been stronger then expected every year in this period. At the same time, inflation was moderate and unemployment declined. Many observers attribute the prolonged period of strong growth to the new economy, which features three main aspects: •  The labour market had become more flexible. While earlier experience implied an acceleration in the rate of increase in wages and prices at an unemployment rate of six per cent, unemployment fell to four per cent without triggering higher inflation. •  Productivity growth increased in both the IT sector and in other industries. The forecasts for the annual growth potential of the US economy were revised up substantially to around 4 per cent. •  Equity prices for technology stocks advanced sharply, with more than a sixfold increase in the Nasdaq index from the beginning of 1995 to the peak in March 2000.
And the financial sector should be instrumental in driving that change. Today I want to move us from aspiration to action, and set out how we can achieve this in practice - both at a micro-level, through the decisions each of you make as individual financial institutions, and at a macro-level, across the financial system as a whole. Risks from climate change  But first, a reminder of why climate change matters to you as financial institutions and to us as the central bank and supervisor. Clearly, climate change matters for the environment and for our planet. But what has become self-evident now, even if it was not five years ago, is that climate change creates financial risks.2  These can arise from physical risks, whether acute weather events like floods and wildfires, or longer-term climate trends like the rise in sea level and record-breaking temperatures in the Arctic Circle3. They can also arise from transition risks – the changes in government policy, technology and consumer preference that move our current emissions pathway towards one consistent with net-zero. And let me remind you that the need to transition is economy wide, not just in the energy sector – in transportation, agriculture, real estate, all parts of industry, even sovereigns.

But to assist firms and policymakers in this challenge, we are working with climate scientists and our partners through the central banks and supervisors Network for Greening the Financial System (NGFS), and last week we published a number of reference scenarios.22  These reference scenarios provide for the first time a harmonised set of high-level climate scenarios, available in a publicly accessible database, in which both transition and physical climate change impacts are included in a consistent way. They provide a foundation for decision-useful financial and economic analysis, including stress testing, that will be as relevant for you and your customers, as to the authorities. And we will continue to build on these scenarios, taking on board your feedback and putting in place plans to publish a second iteration around the turn of the year. International coordination  This is only one example of our work with international partners. We are one of eight founding members of the NGFS, which was set up for central banks and supervisors to share expertise on climate-related risks. In the two and a half years since it launched, the NGFS has grown to 66 members and 13 observers spanning 5 continents and from jurisdictions that account for over half of global emissions. This reflects the broad recognition now that climate change matters to central banks and supervisors. Climate change is of course a global problem that requires global solutions. So the work we do through the NGFS and other international fora is essential.
The second concerns how to manage a process in which the group has a common objective but in which individual members are held personally accountable for their decisions. Symmetry of the target The inflation target which the Chancellor has given to the MPC is a simple point target for RPIX inflation of 22%. Prior to May 1997, the inflation target was 22% or less. The meaning of those words “or less” was never entirely clear. Rarely in the history of economic policy have so few words caused so much confusion to so many economic commentators. Moving to a symmetric point target has removed any ambiguity as to the objectives of the MPC. That is important because the rationale for handing operational responsibility for setting interest rates to the MPC is that it is better qualified to make those decisions than elected politicians, whereas elected politicians have the democratic legitimacy to choose the target. A symmetric inflation target should also make it easier for people to understand how the MPC is likely to react to the different types of shock that may hit the economy from time to time. In more technical language, the MPC’s policy reaction function should be predictable. When an unexpected shock moves inflation away from the target, it may not always be sensible, or indeed feasible, for the MPC to return inflation to the target level immediately. Shocks stay in the twelve-month increase of the RPIX index for at least twelve months.

… On the evidence of the previous six months, the MPC bears a closer resemblance to a post-graduate seminar than to a forum for strategic decision-making. …To put [several] economists in the same room is to invite what one commentator has called paralysis by analysis. As a result the Committee’s conclusions are entirely unpredictable.” Since the beginning of 1998, the Committee has been unanimous at only one out of sixteen meetings. That was in July of last year when the Committee voted to hold interest rates constant at 7.5%. Disagreements have become the norm, and are much less remarked upon by the press than they were before. Moreover, disagreement is now more widely accepted as natural. It would be strange if the uncertainties facing the Committee were not reflected in small differences of opinion. And views of the appropriate level of rates have never differed by more than 0.5 percentage points. Nor have these technical disagreements led to “paralysis by analysis”. Indeed, the Committee has reduced interest rates by 23 percentage points since October of last year. It was precisely the analysis that led to the action. The willingness of the MPC to change interest rates either up or down in order to meet the symmetric inflation target has altered commentator’s perceptions of the Committee itself. Early in its history, commentators were unable to resist labelling members of the Committee as either “hawks” or “doves”.
This is the main reason for the expansionary nature of our policy making in recent years, even with inflation being persistently above the target range. Keep in mind that the fiscal rule determines a generally acyclical public expenditure, meaning that it runs independent from the business cycle. Why? Because fiscal policy is typically slow to react and any change in spending decisions are much more difficult to undo. Thus, monetary policy is essential to deal with the economy’s cyclical fluctuations. That explains our actions. Since late 2013 we have implemented a clearly expansionary monetary policy, indeed one of the most expansionary among emerging market economies. Real short-term interest rates have been negative or barely above zero for all this time, helping medium- and long-term rates to be nearly as low as they have ever been. This policy has not only helped the economy to adjust smoothly by providing support to aggregate demand; by letting the exchange rate move freely it has also contributed to the adjustment of relative prices—a key element to address in these conjunctures. The contrast with other episodes is evident. Suffice it to recall the costs associated with the defense of the exchange rate in the early 1980s and, to a lesser extent, during the Asian crisis and its aftershocks in the late 1990s.

In the long run, countries are the masters of their own destinies, and behind those that developed and provided a better standard of living to their people are the good public policies they implemented. Ladies and gentlemen: in a few months I will be concluding the five-year term established by the Constitutional Law for the governors of the Central Bank of Chile. I believe that, although the past few years have been quite complex, the joint efforts of the Bank’s staff and Board members have helped us succeed in our mission. I take this opportunity to thank you for all your support during this period. Thank you. 7 / 14  BIS central bankers' speeches  8 / 14  BIS central bankers' speeches  9 / 14  BIS central bankers' speeches  10 / 14  BIS central bankers' speeches  11 / 14  BIS central bankers' speeches  12 / 14  BIS central bankers' speeches  13 / 14  BIS central bankers' speeches  14 / 14  BIS central bankers' speeches