samchain/econo-pairs-v1 huggingface dataset:
All the models the Riksbank has used suggest that the real exchange rate will appreciate in the coming years. So to that extent the conclusion is clear. But the size of the calculated appreciation varies a good deal; in our calculations it ranges from a few per cent up to 10 per cent from the current level. Given the reasonable assessment that the level of inflation will be much the same in Sweden and the euro area in the years ahead, this real range implies an interval for the nominal SEK/EUR rate that extends from approximately 8.20 to a little more than 9 kronor. Take the next few years into account as well  The assessment of the real exchange rate in the longer run is thus an important component when considering an appropriate central rate. It is a matter of arriving at a rate that results in a balanced economic development in the long term. But it is not just the long term that is relevant here. In practice it is highly important that the chosen rate is perceived by the market as credible in the shorter run, too. That is a prerequisite for a stable development during the period in ERM2. That in turn presupposes, for example, that the rate functions properly in relation to the prevailing level of economic activity, the current fiscal policy and so on. The underlying inflationary tendencies that are discernible in labour costs, for instance, also play a part.

Decisions about ERM2 participation and the exchange rate on entry are made jointly by the finance ministers of the euro countries, the ECB and the central bank governors and finance ministers of other ERM2 participants (at present Denmark). The first step is taken in practice in the framework of the EU's  BIS Review 65/2002  1  Economic and Financial Committee. It is only if this Committee fails to reach a consensus that the central bank governors and finance ministers concerned engage in direct negotiations. When the time comes - in the event of full participation in the monetary union - for the conversion rate with the euro to be locked irrevocably, this is decided unanimously by the euro-country members of the Ecofin Council together with Sweden. On every previous occasion, these decisions have been based on the central rates in ERM/ERM2. The choice of a central rate and a conversion rate A premise when setting the Swedish krona's central rate in ERM2 is that this will also be the conversion rate for joining the monetary union. Having said that, I want to emphasise that there are no absolute criteria for which central rate or final conversion rate that is most appropriate. What we can do is use various models, expert knowledge and common-sense to try to narrow down a reasonable interval and analyse the consequences of different choices. The real exchange rate is a natural starting point A central concept in this context is the real exchange rate.
Indeed, in practice, banks often model the effect of even severe macroeconomic shocks as if they were occurring to the bank in isolation. They thus may assume that they have freedom to readjust their balance sheets and lending practices in the event of an adverse shock, without considering whether other banks may be trying to do the same thing and the effect that these behavioural responses may have cumulatively on market liquidity and on the economy as a whole. An important implication is that many firm-level stress tests may consequently underestimate the possible impact of adverse shocks. As I have highlighted, some of the potentially missing effects should be captured in the proposed suite of models. But the proposed enhanced “top-down” approach outlined above may still benefit from additional insights gained from closer dialogue and interaction with major financial firms on their likely reaction to episodes of stress. I consequently think there is merit in more formal comparison of “top-down” and “bottom-up” stress testing exercises, and of seeking ways of integrating the two into more formal “systemic” stress tests, where the authorities present an initial scenario to firms and then modify the scenario in the light of feedback on the potential response by firms in an iterative loop. This approach has recently been pioneered by the Dutch central bank.

Second principle: The criteria governing the management of foreign exchange reserves are primarily the security of investments and their liquidity. Return is also a factor. Secure and liquid assets are key, because the SNB must always be able to implement its monetary policy, and hence must have rapid access to its foreign exchange reserves, should the need arise. The need for secure assets means that a large proportion of our investments are in government bonds; the need for liquidity means that we invest in the world’s most liquid assets and currencies. Finally, the third principle is this: The SNB takes care to ensure that its investments do not disrupt the markets. We are aware that the huge amounts we have under management could impact significantly on market prices. To prevent this kind of problem, we control the volumes we place on the markets, so as to avoid having any perceptible market impact. Thus, with such a large volume to invest, there is a fairly long period of transition before the desired allocation is achieved. We are sometimes obliged to hold liquidity on our accounts at other central banks for a while, until it can be invested in line with our investment strategy. A number of players are involved in implementing the investment strategy. I am not planning to go into too much detail about the investment process today. Briefly, the Governing Board decides on the main investment principles, as well as the strategy.
Chinese authorities now appear to be doing just that. In the 1930s, many countries resorted to devaluations, tariff barriers and regulation of crossborder capital movements to protect their own manufacturing industry. But this was the wrong medicine. World trade fell, and the international division of labour went into reverse. This led to lower income for everyone. In his letter to The Times, Hayek made the following comment: “.... the right way [...] to proceed is [...] to abolish those restrictions on trade and the free movement of capital which are at the present impeding even the beginning of recovery.” Today, the global system of trade and cross-border investment is again under pressure. In both Europe and the US, influential groups have argued in favour of erecting new walls and barriers to the international exchange of goods. This is a recipe for yet another downturn. Norway is a small open economy with substantial wealth invested abroad. As a nation, we are completely dependent on a functioning international system of free trade and investment. In the short term, major economies have less to lose from closing themselves off. We trust that they will not, after all, abandon the global economic system that has been built up over the past 70 years. Hayek or Keynes? The current situation on our continent – Europe – has much in common with the 1930s.

Ravi Menon: Chongqing-Singapore co-operation in green finance Keynote address by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Singapore-China (Chongqing) Financial Summit, Singapore, 20 April 2023. *** Party Secretary Yuan, Minister Teo, Governor Huang, Mayor Hu, colleagues from China and ASEAN, ladies and gentlemen, good afternoon. Welcome to the fifth Financial Summit of the Singapore-China (Chongqing) Connectivity Initiative, or CCI. I thank the Chongqing Municipal People's Government for hosting this event, with such impressive efficiency and warm hospitality. On a personal note, I am very happy to be back in Chongqing after more than three years. The city is even more vibrant and beautiful than when I last saw it. Our gathering today comes at a challenging juncture for the global economy. According to the latest IMF World Economic Outlook, global economic activity is experiencing a broad-based slowdown, with core inflation persistently higher than seen in several decades. The global financial system is undergoing a tenuous adjustment to the new era of higher interest rates, as shown by recent stresses in the banking sector. These macro-financial developments make for a fragile global economy. If recent banking stresses lead to an aggressive pullback of credit, it will further drag down an already slowing global economy. The risk is of a potentially destabilising dynamic, where slower growth weakens credit quality and asset prices, thereby further exacerbating financial system vulnerabilities. Central banks need to stay focused on bringing down inflation.
And when analysing the potential existence of gaps to the current framework, we are taken a very comprehensive approach, meaning that we will look in detail to the regulatory, supervisory and disclosure dimensions. I think we all agree that the topic of climate change is all-encompassing when it comes to the potential impact on banks, and therefore requires a holistic approach when considering potential responses. On disclosure, we are conscious that there are a lot of initiatives underway focused on developing a globally consistent approach to sustainability reporting. But across these initiatives, we still need to bridge gaps so as to build a common disclosure foundation. Given the evolving initiatives and uncertainties related to the measurement of climate-related financial risks, we will consider in near term an appropriate Basel Committee response to support these initiatives. The Pillar 3 framework is a powerful instrument when it comes to disclosure. It is designed in a modular way and can therefore can be easily updated and adapted to reflect additional risks. On supervision, both the Basel Core Principles and Pillar 2 framework are flexible to accommodate any additional supervisory responses. The Committee is also exploring sound supervisory practices associated with climate-related financial risks. The target is to prepare a report for discussion with the Committee in Q3 and publish the report by year-end (subject to the Committee’s approval).

BIS Review 126/1999  6  These have not been easy times for banks. As a regulator, I cannot help but underscore the essential role banks play in the global marketplace. By intermediating credit between savers and investors and providing liquidity to the financial sector, banks are the essential link in well-functioning economies. Thus, while capital levels and risk management policies are without question important, they do not take precedence over the responsibilities of bankers to serve their purpose in a Schumpeterian world of creative destruction. This most fundamental of responsibilities involves the use of credit judgment. By this I mean that bankers must not lend to excess when times seem good and then lend too little when times appear more difficult. This is an ongoing obligation of banks and is no less so as we approach the century date change. With roughly six weeks to go before year-end, I believe it critical that banks approach the new year with these thoughts in mind and I call on them to be attentive to providing for their customers’ reasonable needs. By reasonable needs, I have in mind that banks should think twice about huge demands based on what seems to be customers’ excessive concern about Y2K, but grant appropriate credit for realistic needs, even if this involves somewhat greater use of their own balance sheets than would usually be the case.
But the second and potentially more powerful way in which technology is helping to drive down the cost of financial intermediation is through partnerships between financial institutions and FinTech firms. Soc-Gén is working with TagPay to provide mobile banking in Africa through a cloud-based platform that is compatible with any mobile phone. AXA is working with MicroEnsure to offer simple and affordable insurance products to customers across Asia and Africa. By helping to reduce customer acquisition costs, these collaborations have helped to serve a larger social purpose – enhancing financial inclusion and expanding opportunity. But there is a lot more we need to do. There are about 1.7 billion adults globally who are unbanked. In the ten ASEAN countries of Southeast Asia, half the adult population is unbanked. This is a shame. The ASEAN countries have a burgeoning middle class and increasingly modern infrastructure, yet so many do not have access to a bank account, secure and affordable payments, or insurance protection. Banks and insurers face high costs in reaching out to customers in remote areas. We need to take collaboration between financial institutions and FinTech firms to a much broader level – through platforms for innovation and inclusion. This is why the MAS, the ASEAN Bankers Association, and the World Bank’s International Finance Corporation have teamed up to establish the ASEAN Financial Innovation Network, or AFIN in short. AFIN aims to bring banks and FinTech firms from across the world to develop innovative solutions to penetrate hard-to-reach markets in a cost efficient way.

The Securities Holdings Statistics can also contribute to providing a better picture of interconnectedness at the financial system level and for sectors of the euro area economy. In the same vein, the new Centralised Securities Database of the European System of Central Banks that holds complete and consistent reference information on individual securities is a major step in the direction of a better understanding of the map of cross-exposures through securities holdings. Further work on enhancing statistical sources and output has been carried out in recent years. A high priority has been given to the development, collection and maintenance of conceptually sound and consistent granular data, and – by exploiting sources of micro data – to monitoring credit exposures, especially those of large financial groups. In addition, efforts have been made to obtain a consistent picture on securitisation and credit risk transfers in general. At the same time, work is being undertaken in cooperation with the European Statistical System (Eurostat and National Statistical Institutes) to improve the availability of macroeconomic data, as well as financial and non-financial accounts statistics. In the context of the ESRB-related work, data-sharing agreements have been put in place to allow the regular provision by the ESAs of aggregated information to the ECB in support of the ESRB’s risk analysis.
Speech Central Bank of the Republic of Turkey  Prof. Şahap Kavcıoğlu, Governor CBRT 89th Ordinary Meeting of the General Assembly 30 March 2021, Ankara  2  Esteemed Shareholders, Distinguished Guests On the occasion of this meeting, I would like to express my pleasure to be here with you today as the Governor of the Central Bank. I believe that we will duly fulfill our responsibility with all my colleagues at the Central Bank in the period ahead, and I wish that the new period will be beneficial to our country, our nation and our Bank. Today, we are holding this meeting under safety measures due to the coronavirus pandemic going on for the past year, which has deeply affected both our daily lives and world economies. I salute all the stakeholders and audience attending our General Assembly meeting either in this hall or in front of their screens. The pandemic that has been going on for over a year has caused, among other things, economic challenges and uncertainties all over the world. As you know, the measures that have been put in place to curb the spread of the pandemic since the first quarter of 2020 have adversely affected growth performance of economies all over the world. For this reason, countries have tried to mitigate the potential impact of the pandemic on their economies through expansionary monetary and fiscal policies.

Accordingly, it will set the ground for a sound and sustainable increase in investments, production, and employment. Dear shareholders, In the upcoming period, implementing the reforms set out in the Economic Reform Package announced by our Government will be crucial to reinforcing confidence and stability and thus, to achieving both a permanent fall in inflation and sustainable growth. On the other hand, like before, we will continue to use our communication channels actively to enhance the effectiveness of our policies and get the views and suggestions of our stakeholders. In line with the transparency and predictability principles, we will share our decisions with the public. As I end my speech, I would like to thank you all for your participation.
A facility can also help to alleviate some of the frictions that may curb the effectiveness of IOER in a system with large levels of excess reserves by enhancing market competition through a strengthening of large cash lenders’ bargaining positions, and by reducing the amount of reserves held by banks and therefore associated balance sheet costs. Third: A 25 basis point target range for the federal funds rate bounded by the IOER and ON RRP rates. Framing the stance of policy in terms of the federal funds rate focuses monetary policy on a rate that is familiar to the public. Meanwhile, setting a target range, rather than a  4  Congress granted the Federal Reserve the authority to pay interest on reserve balances held by depository institutions in 2006, with an effective date of October 2011. The implementation of this ruling was accelerated to October 2008 during the financial crisis to enhance the Federal Reserve’s ability to control short-term interest rates amid the reserve-expanding credit programs and asset purchases it initiated at that time. Although the rates of interest on required reserve balances and excess reserve balances are currently equal, they need not be the same. 5  I spoke about these dynamics in December 2013 and October 2014 speeches, available at http://www.newyorkfed.org/newsevents/speeches/2013/pot131202.html and http://www.newyorkfed.org/newsevents/speeches/2014/pot141007.html. 6  When the Desk conducts a reverse repo transaction, it sells Treasury securities held in the SOMA under an agreement to repurchase the securities at a pre-determined price.

Figure 6 Interest rates in pesos and dollars in the local market (percentage) 14  14  12  12  10  10  8  8  6  6  4  4  2  2  0  0  Jan.08  Apr.08  Jul.08  Oct.08  Stock Exchange-90 days  Jan.09  Apr.09  Jul.09  Oct.09  Libor + 90-day on-shore spread  Sources: Bloomberg and Central Bank of Chile. 8  BIS Review 145/2009  Table 1 Monetary policy rate and expectations according to EES (percentage) Actual level  Expected for Expected 2 same month months ahead  Expected for Dec.09  Oct. 2008  8.25  8.50  8.50  7.00  Dec. 2008  8.25  8.25  7.75  6.25  Feb. 2009  4.75  6.25  5.00  4.00  Nov. 2008  8.25  Jan. 2009  8.25  7.25  Mar. 2009  8.25  7.50  2.25  6.75  3.13  2.50  6.63 5.50  2.00  Source: Economic Expectations Survey (EES), Central Bank of Chile.
It is much more likely that it reflects the magnetic attraction of the US at present as a destination for long-term investment. And while that may partly reflect relatively greater flexibility on the supply-side of the US economy, it does not have much to do, as far as I can see, with the introduction of the euro. Of course, whatever the cause, the euro’s weakness complicates the task of monetary policy within the Eurozone. It adds to inflation in itself and amplifies the inflationary effect of the rise in oil prices. The ECB is rightly concerned to ensure that these effects do not feed through into an increase in the rate of core inflation. Given the importance of the Eurozone as far and away our major trading partner, the weakness of the euro, in this case more specifically its weakness against sterling, also, of course, complicates our own monetary policy task in the UK. Looking at the aggregate economic data the UK has had a rather good run now for the past seven or eight years. We have grown fairly steadily quarter by quarter at an average annual rate over that period of some 2¾%, which is well above our longer term trend rate - usually estimated at around 2¼%. Employment has risen steadily so that the number of people employed is the highest on record. And the rate of unemployment is as low as it has been for about twenty years.

Frankly it is not clear to me that this is a risk which it would be in the interests of either the UK or the Eurozone to take in today’s conditions. For the time being our best bet, it seems to me, is for both the Eurozone and the UK to continue to pursue macro-economic - both fiscal and monetary - stability in parallel, and to hope that the euro recovers, as I continue to expect that it will. That strikes me as a more reliable path to the sustainable convergence which the British Government has set as the essential economic criterion on which its decision to move ahead to a referendum on UK entry to the euro will be based. 3  BIS Review 92/2000
Which brings me to my last point. III. Big data raise issues that cannot be solved in a national context but require a public  global reflection. Very large worldwide corporates are hugely leveraging on Big Data. Public authorities have to forge answers to concerns that may arise on an international level. Which themes should be addressed? I would like to propose a few leads. 4 1)  Data sharing has to be developed on a worldwide basis, as rightly underlined  by the IMF in the ‘Data Gaps Initiative’ that has been launched by the G20. In Europe, existing legal provisions that authorize data sharing between supervisors and central bankers could become more prescriptive and be more largely implemented in practice in all countries concerned. Data sharing between tax authorities and other public administrations should be facilitated, subject to the respect of individual privacy of course. 2)  Private innovation is fostering growth and is increasing economic efficiency. It  should therefore not be discouraged by disenabling regulations. At the same time, it would be beneficial to the economy in the long run, and to financial stability more specifically, that the global actors that handle enormous volumes of data on physical persons as well as on private entities, comply with 3 core principles: security, transparency, accountability. In a fully interconnected world, it cannot be effectively addressed at the country level. I therefore believe that it would be useful for the International Organizations to carry out a reflection and issue recommendations in this regard.

•  What about the more difficult question of whether monetary policy should be used to lean against the wind. The answer is a more obfuscating “that depends.” Specifically, it depends on the efficiency and efficacy of the macroprudential tools and institutional framework available, a point eloquently made by my colleague Don Kohn recently (Kohn 2015). •  Take the extreme case in which there are no macroprudential tools. In such circumstances monetary policy may be the only means of tackling system-wide financial risks, but it would come at the cost of significant effects on the real economy – precisely because monetary policy “gets in all the cracks.” For example, some empirical work by former Deputy Governor Charlie Bean suggests that setting Bank Rate around 200 basis points higher than it was over the over the period 2003–2006 would have reduced the growth in the ratio of household debt to GDP by just 2 percentage points from 2003–2007 at a cost of GDP growth over this period being 2.6 percentage points lower (Bean et al 2010). •  By contrast, the targeted nature of the tools available to the Financial Policy Committee under the current institutional framework in the UK makes them a natural first line of defence for dealing with build-ups in financial system vulnerability while minimising the knock-on effects to the rest of the economy – as was recognised in the financial stability knockout built into the MPC’s forward guidance.