samchain/econo-pairs-v1 huggingface dataset:
And the Bank of England is similarly mandated to pursue "price stability as defined by the (symmetrical) inflation target, and without prejudice to that objective to support the Government's economic policy, including its objectives for growth and employment". Now the exact words of these mandates differ - to varying degrees. What's more we all have our own procedures and processes - in terms of the composition of our decision-making bodies for example, or the form and frequency of our policy meetings, or of our arrangements for public accountability. And our approaches to fulfilling our mandates vary from one central bank to another - some of us, for example, have a more precise target, or tolerance range, for inflation, or some provide a more explicit role for monetary aggregates within the analytical framework and so on. And much is sometimes made of these various differences. One can in fact spend many happy hours debating the finer pros and cons of one formulation as against another, and that can be a productive thing to do in pointing up the issues, though I think in the end my own conclusion is that circumstances alter cases - there's no unique best buy. But I think that we need in any event to be careful that in pointing up the differences between us we don't exaggerate them. Because I have to say that in my experience - at a more fundamental level we are all trying to do the same thing.

As regards the short-term predictability of monetary policy, policy moves have been pretty well anticipated by money markets. Recent studies by academics have confirmed the predictability of the ECB at the highest level amongst major central banks. Investors have indeed become more confident in their forecasts of future short-term interest rate developments prior to ECB monetary policy announcements. Bond market indicators paint essentially the same picture. Implied bond market volatility in the euro area is currently close to its lowest level since January 1999. Communication is an ongoing challenge Financial markets evidence indeed indicates that we as a central bank have managed to be understood by market professionals. But this is only part of the picture and should give no reason for complacency. We are well aware that earning people’s trust in the credibility of the ECB remains an ongoing challenge. And we know that the familiarity of the general public with the Eurosystem and the ECB still needs to be further enhanced. One indication of the daunting size of our communication task was the issue of so-called perceived inflation rising much higher than the actual measured inflation. It has turned out to be difficult to explain people that they should not judge the general price level just by observing the prices of some individual goods. We see the dichotomy of different target groups in the fact that there was at times a heated debate about deflation risks among financial analysts while at the same time the general public was deeply concerned about inflation.
It is not at all certain that a peg would engender the foreign exchange stability that exporters dream of. We have learned from our experience with flexible exchange rates that any explicit foreign exchange target stimulates the appetite of speculators instead of calming the atmosphere. And this would be especially true if our pegging decision were to be taken unilaterally, without the prospect of a full and permanent integration into the euro area. Today, with global markets and global speculation, it would be an illusion to believe that a central bank can defend a specific exchange rate target unless there is strong convergence of economic fundamentals with the economy whose currency it is pegging the domestic currency to. Furthermore, a nominal peg against the euro would do little to stabilise the real value of the Swiss franc – the only thing that matters for the international competitiveness of the Swiss economy – or to stabilise the franc vis-à-vis third currencies, especially the US dollar. Given our exposure to global economic and financial shocks, and their arguably smaller importance for the euro area, pegging the Swiss franc to the euro is not a realistic option. Flexible exchange rates give us the room of manoeuvre we need. 4  BIS Review 46/2006  Conditions for monetary independence Having reviewed the advantages of retaining our national currency and flexible exchange rates, I would now like to turn to the conditions necessary for successful monetary independence. I see three crucial factors here: credibility, transparency and efficiency.

Looking at our development over the last ten years, I do believe that price stability, due to monetary independence and flexible exchange rates, has been beneficial to the Swiss economy. It has maintained a low interest rate environment which has facilitated the private sector's adjustment to the rapid changes of the world economy. And what about Israel? I think that the arguments in favour of Switzerland's monetary independence apply even more to this country. While we at the SNB concentrate primarily on domestic developments and trends in the euro area, the Bank of Israel also has to take into account economic conditions in the US. Thus, there are three major sources of shocks that Israeli monetary policy has to respond to in order to achieve the goal of price stability. BIS Review 46/2006  7  Despite difficult circumstances, Israel was able to stabilise its monetary framework in the 1990s. The Bank of Israel now operates with an inflation target and will soon benefit from a new law that will modernise its decision-making process and strengthen its autonomy. All the necessary ingredients are now in place for the implementation of a successful independent policy in this country, as was once also the case in Switzerland. May I wish Stanley Fisher and his colleagues all the best in this endeavour. 8  BIS Review 46/2006
Just as important as the level of income is: how we produced it, and what resources did we use? •  Output per hour worked has increased considerably. BIS central bankers’ speeches  1  o  In 2015, Singaporeans worked 2,300 hours. o  But we are now generating nearly three times as much income as 50 years ago. o  •  This year Singaporeans are expected to work only 1,400 hours. The carbon intensity of our economy has fallen sharply. o  o  In 2015, we emitted 0.2 kilograms of carbon to produce a dollar of output. Today, we emit just 0.05 kilograms. Third, the distribution of income. •  •  Income distribution has become more equal, thanks to heavy investments in building human capital and skills as well as a tax and transfers system that has become more progressive over the years. o  In 2015, the Gini coefficient after taking account of taxes and transfers was 0.41.  o  Today, it is 0.36. Wealth inequality has remained more stubborn though. o  Today, the top 1% and 10% of wealth holders in Singapore own around 20% and 60% of total wealth respectively. o  This is little changed from 30 years ago, when we first started to collect this data. 1965–1984: Export-led industrialisation through multinationals In 1965, when Singapore left the Federation of Malaysia, few expected it to survive let alone prosper.

Therefore, the number of observations in common with an artificially reduced register could be very low or even zero. The path to striking a balance between giving access to the research community to the more interesting databases while ensuring confidentiality and anonymisation could much benefit from the experience of other institutions. To this end, a few years ago several central banks set in motion the so-called INEXDA network. At present this network comprises central banks, including the participation of the ECB Statistical Directorate, and other statistical institutes, like Eurostat. In this forum participants from the statistical areas and datalabs exchange experiences in the management of micro data, the aim being to guarantee the harmonisation of certain procedures and share best practices in this domain. Access to the information in the hands of private sources is also a very interesting field where we can make further progress. INE had a very good experience this year in exploiting data from mobile phones to analyse citizens’ mobility in different cities and regions, easing and lessening the cost of developing such statistics, with the help of new technologies. The need to better understand and organise the transition from customer data, privately used by service corporations, to citizens’ micro data, of interest for public analysis, has to be studied thoroughly. That is why I welcome and congratulate INE on recently launching a Business to Government Working Group (B2G WG), under the name of “WG about the role of official statistics on data stewardship”.
The estimated regression line has clearly shifted to a lower position since the crisis and the period of weaker productivity growth that has ensued. However, if people come to accept the implications of that weaker productivity trend for the real wage increases they can expect to receive – the “norm” for real pay growth being one thing that determines the position of the Phillips curve – that’s precisely what you’d expect to see. It would also shift leftwards if structural improvements in the labour market had lowered the equilibrium rate of unemployment. The MPC reduced its estimate of that equilibrium rate, from 5% to 4½%, in February. In real time, as it’s happening, it’s statistically  Chart 10: Phillips curve: down but not out  difficult to distinguish a shift from a flattening and there is clearly room for caution about our forecasts for growth of wages and unit costs. But, over time, I think the evidence looks more in favour of the former. The curve still seems to have a slope – all else equal, a tighter labour market is likely to mean faster wage growth. Conclusion  Sources: ONS, Bank of England, and Bank calculations. I was in Aberdeen earlier this year and, when asked by a wily reporter what I planned to vote at 11  the following MPC meeting, fobbed off the question by referring to a number of “imponderables” . I’ve talked about some of those today.

There is another lesson that I draw from this history, namely that there must be some difficult impediments to achieving the goal of institutional stability in financial regulation. To start with, achieving consistency and clarity in identifying the objective of regulation has been a problem in the past. The new approach anchors the PRA’s primary objectives of the safety and soundness of firms and the protection of insurance policyholders in the broader goal of the stability of the financial system. This very clearly ties together micro and macro-prudential regulation, whose objectives are consistent. And, we now have a secondary objective around the competition implications of our actions, which I welcome. Just under two weeks ago we announced changes to the Bank of England’s strategy and structure. In doing so, we adopted a single mission, namely to promote the public good through achieving and maintaining financial and monetary stability. This single mission is much more than just the speak of management, it is a clear change intended to promote the integration of the Bank of England’s objectives of monetary and financial stability. This integration of objectives into a single mission represents a very deliberate decision that the Bank of England should not be organised as a series of silos defined by our different statutory objectives and by the structure of policy making committees given to us in legislation.
Deposits up to a specific quota are remunerated at the key policy rate, which is Norges Bank’s sight deposit rate. Deposits that exceed the quota are remunerated at a rate below the key policy rate, referred to as the reserve rate. 1 Banks that borrow overnight from Norges Bank pay the overnight lending (D-loan) rate. As shown in the chart, the reserve rate and the overnight lending rate are set respectively at 1 percentage point below and 1 percentage point above the key policy rate. 2 Interbank transactions take place throughout the day. The transactions are settled via the banks’ accounts with the central bank. Banks with deposits above the quota at the end of the day normally lend reserves overnight to banks with a negative balance in Norges Bank or to banks that have deposits below the quota. Chart: Norges Bank interest rates and market rate The interest rate on these transactions, called the overnight interbank rate (NOWA in Norway), is normally very close to the key policy rate. The interest rate corridor around the key policy rate is intended to promote reserve trading between banks and not between banks and the central bank. This contributes to an active interbank market and an efficient money market. In order to keep the overnight interbank rate close to the key policy rate, Norges Bank aims to keep banks’ total reserves below the sum of the quotas that can be remunerated at the key policy rate.

However, the experience of the subsequent waves of the pandemic has proven that restrictions are impacting demand increasingly less, whereas supply contracts when enterprises are forced to suspend operations. We consider that restrictions rather have a proinflationary influence now. The industries that directly depend on restrictions, primarily services, will be affected most considerably. The Government has introduced support measures to aid the most vulnerable industries, first of all small and medium-sized enterprises and their employees. The Bank of Russia, on its part, has allocated a limit of 60 billion rubles within a special 4% refinancing programme for the banks that would issue loans on preferential terms to small and mediumsized enterprises affected by restrictions. We have also recommended that banks and microfinance organisations should approve 3/4  BIS central bankers' speeches  restructuring applications for those individuals and entrepreneurs who need this. I will now speak about our future decisions. It has become more probable that the level of the key rate will be higher, and the period during which the key rate might stay at this elevated level will be longer than we assumed in our previous forecast. According to our baseline forecast, the key rate will average 7.3–8.3% per annum next year, and 5.5–6.5% per annum in 2023. In other words, the key rate will return to its long-term neutral range no earlier than in the middle of 2023. Thank you for attention. 4/4  BIS central bankers' speeches
Such a system needs to ensure that failure of a large bank does not have serious negative consequences for the provision of financial services to the real economy. There are several possible routes to achieve this goal. We need to examine all the available options with an open mind. The optimal policy is likely to combine different elements. As I explained in the introduction to this speech, here in Switzerland the problem of “too big to fail” is particularly pronounced. Accordingly, the FINMA and the SNB are jointly evaluating different avenues. The two big banks are now closely involved in this work. We welcome their active engagement. At the international level, the FSB and its member bodies are also addressing this problem at the request of the G20 leaders. Ladies and Gentlemen, it is imperative that a real solution to this problem be found. At the forefront of our efforts to mitigate the “too big to fail” problem must be an internationally agreed and orderly process to allow for the wind down of large, systemically important financial institutions in the event of a severe crisis. Obviously, there are many technical and legal problems that have impeded any meaningful progress in reaching international coordination in this matter. But what has been missing is a bold and international political commitment to put in place a framework for the orderly resolution of large cross-border financial institutions. Provided we have such an unequivocal commitment, solutions will eventually emerge.

Mervyn King: Monetary policy developments Speech by Mr Mervyn King, Governor of the Bank of England, to the Birmingham Chamber of Commerce Annual Banquet, Birmingham, 23 January 2007. *  *  *  Lord Mayor, Lady Mayoress, President, Distinguished Guests, Ladies and Gentlemen, Two weeks ago your Chamber of Commerce called on the Bank of England to take manufacturing more seriously when it sets interest rates. In arguing against an interest rate rise, the Birmingham Chamber said, “we would urge the Bank of England to once again consider the effects this will have on the beleaguered manufacturing sector”. It will not have escaped your attention that Bank Rate did rise in January and has now increased by 75 basis points since the beginning of August. So tonight I want to explain why the Monetary Policy Committee took that action, and why the Bank believes that the control of inflation is essential for the success of Birmingham – and all British – manufacturing. Last week we learnt that inflation, as measured by the Consumer Prices Index, was 3% in December, the highest level since the Monetary Policy Committee was set up almost ten years ago. If it rises by one further decimal point to 3.1%, I shall have to write an open letter to the Chancellor explaining why inflation has risen to more than one percentage point above the target of 2%, and what measures the Committee are taking to bring inflation back to target.
In our view a package which did not tackle the issues we have identified with the Matching Adjustment would be seriously unbalanced. It would simply remove bits of regulation that insurers don’t like without taking proper account of risks to policyholders, and would not provide a solid basis for investment. I worry that some might consider such a thing to be a free lunch, but in fact less capital, fewer checks and fewer restrictions on assets, with no steps to strengthen the part of the regime where that is needed, means more risk for pensioners and other policyholders. In our view leaving the EU should not lead us to lower standards of financial regulation in the UK. We should change regulations to work better for the UK, including by stripping away unnecessary bureaucracy we have inherited from the EU and taking steps to support investment,  Page 11  competitiveness and long-term growth. But changing prudential regulations in the UK should not be simply a one-way street, particularly where that would mean weakening protections for business which serves groups such as pensioners. There are areas where the regulation we have inherited from the EU is too strong for UK, and others where it is too weak. We should be willing to make changes in both directions where the evidence supports it. Industry will of course have strong views on any changes – we should attach significant weight to these and be willing to adapt our thinking in light of evidence provided.

We’re listening to the reasons for that reaction, will continue to engage and look forward to responses to the  Page 10  consultation, in order to make sure we fully understand the concerns being raised. It is important that whatever decisions are taken on this topic are taken based on the latest data and I would urge insurers to participate constructively in our evidence gathering. We understand the pressures on firms and are being as flexible as possible to enable firms to respond to our request. More broadly, we would welcome any ideas and suggestions for how the issues we have identified can be tackled. We have laid out one model, but it may well be the case that this could be improved upon or that there are other ways of achieving our objectives. We think it’s essential that we tackle the problems we have identified with the current regime, but we have an open mind as to how this is done as long as it is done credibly. I am also hearing some insurers say that they would prefer simply to stick with the EU’s version of Solvency II as it evolves. To be honest I think this is a red herring. The government has been clear that the point of leaving the EU, at least insofar as financial regulation goes, is to enable us to tailor our regime to make it work better for the UK.
If one looks at historical patterns, the actual repo rate has often shown a rather different development to what market agents were expecting, according to forward rates (see Figure 1). The fact that market expectations are now below the Riksbank’s forecast for the repo rate is of course worth analysis and consideration. But one must remember that this is just a snapshot image, and that it is primarily in the longer run – where uncertainty is greatest – that the differences are really tangible. It is also worth mentioning that many forecasters are much closer to the Riksbank’s view of the repo rate. Figure 1 The repo rate and forward rates  Sources: Reuters EcoWin and the Riksbank. It should be added that the Riksbank is of course also “wrong” sometimes, and that the actual policy turns out to be quite different from what we had forecast. The repo rate path is, after all, a forecast and not a promise, as we often point out. It is not reasonable to believe  BIS Review 134/2010  3  that we and market agents will always reach the same conclusions, and the differences do not necessarily express any form of confidence crisis. Inflation expectations are wellanchored around our target, which in my opinion is the most important indication that the market has confidence in monetary policy. So why did I support the repo rate path we published in the September Monetary Policy Update?

In other words, a monetary policy committee must not only agree that it can disagree, it must also agree on which way it is okay to disagree. But these differences also contribute to the diversity that leads to better decisions. There is no one who holds the key to the truth with a capital T, and when views and assessments are contrasted with one another there is less risk of bad decisions. There is some support for this in academic research, where one result is that a group of persons who process information and reach their decisions in different ways can outperform even very skilful individuals when it comes to solving complex tasks. 1 One could say that diversification trumps specialisation – it is the differences that create added value. 1  See, for instance, Alan S. Blinder, “Monetary Policy by Committee. Why and How?” European Journal of Political Economy 23 (2007). 6  BIS Review 134/2010