samchain/econo-pairs-v1 huggingface dataset:
Business confidence has fallen across the G7 to its lowest level in five years (Chart 6a) with sentiment among manufacturers particularly weak. Households have also become gloomier about the general economic outlook, though they remain relatively upbeat about their own financial situation (Chart 6b), likely reflecting robust labour markets. This is a similar pattern to that which emerged in the UK following the referendum. In mid-May, the US placed Chinese company Huawei on its ‘entity list’, in effect banning US companies from selling to it without US government. China retaliated, publishing its own list of unreliable entities at the end of that month. 3 Trade in intermediate goods and services doubled between 1989 and 2014 and the value added of imports as a share of exports rose from 10% in 1990 to around 20% in 2015. See Auer, R, Borio, C and Filardo, A (2017), ‘The globalisation of inflation: the growing importance of global value chains’, BIS Working Paper No. 602. 2  4  All speeches are available online at www.bankofengland.co.uk/news/speeches  4  Chart 3: Investors now see a trade war as the top tail risk June 2019 March 2019  Trade war  Monetary policy impotence US politics China slowdown A credit event Market structure Equity market bubble European elections Brexit 0  10  20 30 40 Percentage of respondents  50  60  Sources: Bank of America Merrill Lynch Global Fund Manager Survey.

6  All speeches are available online at www.bankofengland.co.uk/news/speeches  6  Chart 6b: But households still optimistic about their own prospects Differences from averages since 1985 (number of standard deviations) 1.4 1.2 General economic situation expectations  1.0 0.8 0.6 0.4 0.2 0.0 -0.2 Personal financial situation expectations  -0.4 -0.6  Jan. 16  Jul. 16  Jan. 17  Jul. 17  Jan. 18  Jul. 18  Jan. 19  Sources: European Commission, University of Michigan consumer sentiment index, and Bank calculations. Notes: The chart shows the median across the G7 euro area countries (France, Germany and Italy) and the US. Reconciling market moves with global developments All in all, the risks to the global economy have shifted to the downside. But to what extent? Does the sea change in financial markets presage a sea change in the global economic outlook? And what does the UK experience suggest? A lot will rest on the scale and breadth of the trade effects. Traditional trade models suggest that the direct effects of the tariff measures implemented so far4 are likely to be small. The Bank estimates that these measures will reduce global GDP by only around 0.1%, and the further US-China tariffs that took effect in May and June will roughly double that effect (Table 1).5 But that may not be the end of the story.
And let’s not forget that the tools available to prevent moral hazard generated by central bank liquidity facilities, such as penalty pricing, are rather blunt tools themselves. Don’t get me wrong, I don’t mean to suggest that moral hazard is not something we should worry about when thinking about the liquidity provision tools that are integrated in our  14  This is a feature of the ECB’s operating framework, which relies on a broad counterparty set and broad collateral base for its routine policy implementation operations. 15  The Bank of England (2013) describes some concrete steps it has taken to mitigate potential stigma. 16  In addition to the liquidity regulation introduced by Basel III, the SEC’s money market mutual fund reform should reduce imprudent risk-taking funded by the money fund industry. 17  Like liquidity risk management, credit risk management is also a core function of banks. However, I suspect few would suggest capital regulation is unnecessary. 18  In 2012, the Federal Reserve launched the Comprehensive Liquidity Assessment and Review (CLAR) for firms in the Large Institution Supervision Coordinating Committee (LISCC) portfolio. Like the Comprehensive Capital Analysis and Review, CLAR is an annual horizontal assessment, with quantitative and qualitative elements, overseen by a multidisciplinary committee of liquidity experts from across the Federal Reserve. In CLAR, supervisors assess the adequacy of LISCC portfolio firms’ liquidity positions relative to their unique risks and test the reliability of these firms’ approaches to managing liquidity risk.

“Liquidity Regulation.” November 20, 2014, speech at the Clearing House 2014 Annual Conference, New York. Tucker, Paul, (2016). “The Political Economy of Central Bank Balance Sheet Management.” May 5, 2016, prepared for a workshop jointly sponsored by Columbia University’s School of International and Public Affairs and the Federal Reserve Bank of New York, New York. 23  See Tucker (2016) for a consideration of these issues. BIS central bankers’ speeches  7  8  BIS central bankers’ speeches  BIS central bankers’ speeches  9  10  BIS central bankers’ speeches  BIS central bankers’ speeches  11
Conclusion I will now place my observations on monetary policy in a broader context and formulate three key messages. But before doing so, I would like to point out that the decision to adopt an independent monetary policy is not a purely economic one. Central banks act within the framework that is laid down for them by the legislature and, ultimately, the sovereign power. The culture and history of a country play an important role in selecting the national monetary order. And now I come to my three key messages. My first message is that it is possible for small open economies bordering a large currency area to pursue an independent monetary policy. It allows the central bank to react to disruptions specific to its own country and to ensure price stability in the medium term. For example, following the onset of the financial crisis, central banks in Europe lowered their  10  The first central bank outside Europe to introduce negative interest rates was the Bank of Japan, at the end of January 2016. 8  BIS central bankers’ speeches  interest rates at different points in time and to varying degrees to cushion the effects of the demand slump. Both conventional and unconventional monetary policy measures helped to absorb the shocks of the euro crisis and the ECB’s substantial monetary policy easing from March 2014. My second message is that in times of crisis, monetary policy’s usual room for manoeuvre can be quickly exhausted, making unconventional measures necessary.

BIS central bankers’ speeches  9  Chart 1  Chart 2  Sources: Datastream, SNB  10  BIS central bankers’ speeches  Chart 3  Sources: OECD, Riksbank, SNB, Statistics Denmark, Statistics Sweden  Chart 4  Sources: CNB, Danmarks Nationalbank, ECB, Riksbank, SNB  BIS central bankers’ speeches  11  Chart 5  Sources: Eurostat, SNB  Chart 6  Sources: CNB, Danmarks Nationalbank, ECB, Riksbank, SNB  12  BIS central bankers’ speeches  Chart 7  Sources: Bloomberg, SNB  Chart 8  Sources: Eurostat, SNB  BIS central bankers’ speeches  13  Chart 9  Sources: Eurostat, SNB  Chart 10  Sources: Eurostat, SNB  14  BIS central bankers’ speeches  Chart 11  Sources: Eurostat, SNB  Chart 12  Sources: CNB, Danmarks Nationalbank, ECB, Riksbank, SNB  BIS central bankers’ speeches  15  Chart 13  Sources: OECD, Riksbank, SNB, Statistics Denmark, Statistics Sweden  Chart 14  Sources: BIS, SNB  16  BIS central bankers’ speeches  Chart 15  Sources: Bloomberg, Danmarks Nationalbank, Riksbank, SNB  Chart 16  Sources: Bloomberg, Danmarks Nationalbank, Riksbank, SNB  BIS central bankers’ speeches  17  Chart 17  Sources: Datastream, SNB  18  BIS central bankers’ speeches
The new financial environment has implications for payments, as well as monetary policy and financial stability. I therefore intend to discuss both how the financial environment has changed in recent decades, and how the Riksbank is dealing with the challenges that this entails. The payment market is currently undergoing a phase of major changes in Sweden and abroad. Digital methods of payment are becoming increasingly common, at the cost of cash, and new technology enables payment services to be offered increasingly by companies other than banks, such as FinTech companies. Digitalisation and increased competition make payments simpler and smoother, but also create new risks to which the Riksbank needs to react. For instance, we need to modernise the system we provide for interbank payments. We also need to supplement cash with “digital” cash – what we are calling the e-krona. However, I would like to emphasise that it is important that Swedes can continue to pay with physical cash. An increasingly rapid integration of the financial markets has led to financial capital being able to move rapidly and freely between countries and regions. Conducting an independent monetary policy thus becomes more difficult. The national financial markets policy has also had less room for manoeuvre; the more the financial markets integrate with one another, the more difficult it becomes for national financial market policy to maintain financial stability. Quite simply, in a world with well-integrated financial markets, more cooperation is needed at a supranational level.

When the pandemic broke out, the Riksbank already had a large portfolio of government bonds. We therefore primarily purchased mortgage bonds, whose risk premiums had risen rapidly at the start of the pandemic. This market is key to banks’ lending, as most of their mortgage loans to households are funded via mortgage bonds. The purchases reduced risk premiums, which supported credit granting in the economy. Risk premiums had also risen on corporate bonds. To reduce the risk premiums on corporate loans and support credit granting in general,  39 See Gertler and Karadi (2013). 40 See Elmér et al. (2012). 41 See Alsterlind et al. (2015). 42  See Melander (2021). 43 See also Sveriges Riksbank (2020b). 18 [35]  we therefore also purchased corporate bonds – although on a much smaller scale than the volume of mortgage bonds. A large balance sheet may be the new normal The Riksbank’s balance sheet is currently very large, and this is mainly due to the purchases of government bonds we began making in 2015, and to the measures taken during the pandemic. However, the balance sheet usually varies considerably over time. In a historical perspective – since the year 1800 – today's level is certainly the highest ever, but the balance sheet has been up at similar levels on several occasions, see Figure 10. The way the Riksbank has used the balance sheet over time thus varies a lot. The level does not stand out if one compares it with other central banks’ balance sheets, see Figure 11.
Ultimately, the most important measure of success for the reforms that we are now pursuing in the general insurance industry will be how far they contribute towards addressing the protection gap that exists, in turn strengthening our foundations for growth and stability. Today, I would like to talk about how agents have a key role in this process. In a more liberalised environment, insurers will have much greater flexibility in the design and pricing of products based on their respective business and risk strategies. This should encourage pricing that is more aligned to risks (let’s call this point “A”), and place greater power in the hands of consumers to manage the cost of insurance by controlling the risk factors that influence pricing (let’s call this point “B”). This in turn can make insurance more affordable for more people and businesses, especially small businesses. However, interventions by an agent are what effectively connects points “A” and “B”. In a detariffed environment, the number and range of risk factors that determine insurance prices are expected to expand. Consumers will also have more choice on the scope and level of protection that they purchase. Agents, having both direct access to consumers, and intimate knowledge of an insurance provider’s underwriting considerations and products, are best placed to explain the insurance options that are available to the consumer and make recommendations on how to maximize the value of a purchase. A number of things will need to happen for agents to deliver on this expectation.

Trade liberalisation, in its most far-reaching manifestation – China’s prospective entry into the WTO, brings enormous opportunity for Hong Kong to enlarge and deepen its intermediary role. Globalisation is transforming the way in which government and business relate to each other, and Hong Kong is in an excellent position as an open, lightly governed city to take advantage of the process. Technological advance offers new tools to realise the practical benefits of globalisation, particularly in the field of financial services, and Hong Kong is in the vanguard of the innovative work that is going on. 28. But these processes also carry risks and uncertainties, which can be reduced, through hard work and vigilance, but never eradicated. How much business will be diverted from Hong Kong to other cities after China enters the WTO? How should small, open markets like Hong Kong safeguard themselves against the shocks and threats which are transmitted more quickly, more sharply and more forcefully through globalisation? And how, when we frankly have very little idea of where innovation is taking us or of where the dead ends may be, do we cope with the volatilities and unknowns – not least in the financial projections of technology-led companies – of a white hot technological revolution? These are among the many challenges of living in a logistics, financial and digital hub. As one of the world’s most open and connected of cities, Hong Kong is better placed than most to respond to these challenges and to deepen further its role as a global city.
After assessing these risks, which originate both domestically and abroad, the Board estimates that the risk balance is unbiased for inflation and downward biased for output. Inflation is high now, but it is expected to approach 3 percent over the course of 2015. Domestic output and demand continue to show significant weakness and growth prospects for 2015 have been revised downwards, despite that both monetary and fiscal impulses are significant, and the external impulse will be slightly larger than what we saw this year. The Board led the policy rate to 3 percent and stated that future changes to it would depend on the evolution of internal and external macroeconomic conditions, and their implications on the inflation outlook. At the same time, it reaffirmed its commitment to conduct monetary policy with flexibility so that projected inflation stands at 3 percent over the policy horizon. The Financial Stability Report (IEF) Our Financial Stability Report (IEF) discloses, twice a year (in June and December), those recent macroeconomic and financial developments that might influence the financial stability of the Chilean economy. Let me now briefly describe some of the main subjects covered in this last issue. The same scenarios for external risk I just described are analyzed in the IEF. From the standpoint of financial stability, we conclude that as the process of monetary policy normalization in the United States advances, financial volatility episodes may follow. The expansionary policies have helped to shape the current environment of low risk premiums and low volatility.

I therefore, appeal to all banks operating in Zambia to show more commitment to the growth and development of our country by; •  Opening more branches, especially among our rural communities;  •  Installing more ATMs;  •  Providing more loans that will increase the productivity of our economy; and  BIS Review 107/2007  1  •  Encouraging more Zambian to open bank accounts through provision of easily accessible and affordable products and services. These developments, Ladies and Gentlemen, will greatly contribute to the expansion of economic activities, which will have a positive bearing on poverty alleviation. I am pleased to observe Standard Chartered’s commitment to growth and reinvestment. However, you will all agree with me that those who have more should do more. I therefore look forward to seeing more from Standard Chartered Bank Zambia, as it is one of the leading banks in the country. Mr Chairman, let me conclude by thanking you for inviting me to officiate at this important event. It’s now my pleasure to officially open the new branch of Standard Chartered Bank Zambia at Crossroads Shopping Mall. Thank you. 2  BIS Review 107/2007
In particular, the Riksbank follows a direct inflation targeting strategy in which monetary policy is almost exclusively guided by inflation forecasts of about two years ahead. In contrast, the Eurosystem relies on two pillars, thereby focusing on the medium term, and does not give such a predominant role to inflation forecasts as the Riksbank. In our view, the Riksbank has achieved high standards with regard to transparency and accountability, as is for example evidenced by its comprehensive quarterly inflation report. In more recent years, the Riksbank has enjoyed a fair measure of success in gaining control over domestic price developments, as supported by its strong performance in fighting inflation, and in overcoming a deep recession in the early 1990s. Its track record also demonstrates that price stability in Sweden was given a high priority long before this was formally recognised by an amendment to the Riksbank Act at the start of 1999. The Eurosystem’s stability-oriented monetary policy strategy rests on two pillars, which are both important when the Governing Council discusses monetary, financial and economic developments at its biweekly meetings. The first pillar, which is a prominent role for money, takes into account the essentially monetary origins of inflation over the medium to long term. It recognises that empirical studies show a stable long-term relationship between money and prices in the euro area. Therefore, in the euro area, monetary developments constitute an important guide for the conduct of monetary policy and it is essential to analyse and monitor the development of monetary aggregates closely.

And, going forward, are we thinking hard about how technological change will influence incentives, behavior and culture? We’ll hear these issues discussed in several panels today. These issues require thoughtful reflection by the industry. The need for reflection, though, is not limited to boards, or even to banks. Regulators and bankers alike can benefit from such a habit. In that vein, I want to share with you an everyday checklist proposed by Ignazio Angeloni of the European Central Bank.7 He has posed six questions that seek to make responsibility for culture both individual and routine: Are you doing what you promised to do? Are you using your best knowledge and intention in doing it? Are you doing what public authorities, superiors, colleagues and business partners expect you to do, and if not why? Are you conforming to the mission and the values of your company, as they are publicly 2/3  BIS central bankers' speeches  stated? Will your actions enhance public confidence in your company and in the financial sector? Finally, and crucially, would you behave similarly if your actions were publicly observed? I suspect that while seemingly simple, the discipline of asking ourselves these questions on a regular basis and answering them thoughtfully and honestly may be more challenging, thought provoking and effective than one might initially think. I thank the staff at the New York Fed who put together today’s program, and their colleagues who are in the audience and watching today.
The situation only got worse when the sovereign crisis – that started in Greece in late 2009 – progressively spread to other euro area countries with vulnerable fundamentals. As we have seen in our discussions today, the trigger of the crisis in the euro area shows, to a certain extent, similarities to those that affected Latin America in the past: a stop in  2  BIS central bankers’ speeches  foreign capitals inflows, which induced severe financial stress and real adjustment. But also differences, due to the fact that this reduction of capital flows took place in a highly integrated monetary union, with its own peculiar adjustment mechanisms, leading to the segmentation of the euro area capital markets. These peculiarities also contribute to explain the huge magnitude and depth of the crisis. The scale of the imbalances and adjustments surpasses those in Latin American past experience. Correspondingly, the challenges that individual countries and the area as a whole are facing are daunting. Indeed, the policy response to the crisis – both at the national level and at the level of the EU and the euro area authorities – has been substantial, particularly in the structural and institutional dimensions. The euro area authorities have realised that, in parallel to the management of the crisis, a reshuffling of the European governance and a strengthening of the institutional framework are necessary for the long term sustainability of EMU.

But, the slow process of decision making in Europe, the difficulties of policy implementation and the debate around the burden-sharing of the crisis have limited the positive effects of those policies on confidence and credibility. In this setting, the ECB and the Eurosystem have played a central role. While safeguarding their paramount objective of price stability, their actions have been directed to re- establish the proper functioning of the transmission mechanism of monetary policy, as shown by the recent decisions by the Governing Council on the O[utright] M[onetary] T[ransactions] initiative. Some big steps have been taken on the institutional front at the European level. Fiscal rules have been strengthened and refined, governance reinforced and, in the financial sphere, great progress is being made to establish a common supervisory framework. In parallel, national constitutions have been adapted in several countries – Germany, Spain and others – to comply with these new requirements. This overview of the problems and challenges in Europe may be compared with the evolution of Latin America during the crisis and its aftermath. The Latin American performance during the crisis shows that these countries have drawn the lessons from the similar episodes they went through in the late nineties and early 2000’s. In particular, I would highlight two characteristics of the economic setting that has made the region so resilient to the external shock this time: the improved macroeconomic framework – underpinned by price stability – and the reinforcement of financial stability.