samchain/econo-pairs-v1 huggingface dataset:
Even though the U.S. monetary authorities do not have a mandate that is as specifically directed at price stability as the ECB does, investors now have a choice and can vote with their feet. Thus the pressure is on the United States to deliver price stability as well. I find it very unlikely that we should again experience any time soon double digit inflation rates in the U.S., and this is very good news indeed for the good health of the international monetary system. 5. Conclusion  All in all, the introduction of the euro has been a very positive development for the international monetary system and for Switzerland as an economy strongly dependent on world trade. We benefit from the greater transparency offered by the euro and the lower transaction costs made possible by its creation. Perhaps for the first time in history, we are surrounded by an area that shares the same monetary policy objectives as we do, namely that of price stability. This explains to a large extent why the Swiss franc/euro exchange rate has been relatively stable over the past five years. But the presence of a single European currency has per se also shielded third currencies - like the Swiss franc - from too much volatility in the case of dollar turbulences. At the same time, we keep the trump card of an independent monetary policy that enables us to respond very rapidly to the specific needs of the Swiss economy.

Jean Claude Trichet: Hearing at the Economic and Monetary Affairs Committee of the European Parliament Introductory speech by Mr Jean Claude Trichet, President of the European Central Bank, at a hearing before the Economic and Monetary Affairs Committee of the European Parliament, Brussels, 7 December 2009. *  *  *  Dear Madam Chair, Dear Members of the Committee on Economic and Monetary Affairs, This is our first meeting since the entry into force of the Lisbon Treaty. The new Treaty is a reason to celebrate: in Europe generally, here at the European Parliament, but also at the ECB. It will make the Union stronger, more effective and more efficient. The powers and responsibilities of the European Parliament increase. The ECB formally becomes an institution of the European Union, and all its essential features, above all its independence, are confirmed. Dans le cadre du nouveau traité, nous nous réjouissons de notre collaboration à venir avec le Parlement. La qualité de cette coopération a été exemplaire à mes yeux au cours de ces dernières années. Unsere heutige Anhörung ist drei wichtigen Themen gewidmet: erstens, unserer Einschätzung der aktuellen wirtschaftlichen Lage; zweitens, unserer Exit-Strategie zum Auslaufen der außergewöhnlichen geldpolitischen Maßnahmen, die wir in dem Höhepunkt der Krise eingeführt hatten; und drittens, dem Thema der systemischen Risiken im Finanzsystem. 1. Economic and monetary developments  The economic situation and outlook have continued to improve since my previous hearing before this Committee ten weeks ago. The euro area economy shows increasing signs of recovery.
Hence, it is the private sector which has to extend its utmost cooperation to the central bank to implement the monetary policy measures most effectively. This understanding at all levels of the private sector is a must. BIS Review 55/2007  3  The Government’s contribution to inflation fighting The governments are usually faulted for making the biggest contribution to inflation. The blame here is usually directed to the running of a high budget deficit by the government. This criticism against the government is not at all perfectly accurate. What contributes to inflation is not the existence of a budget deficit, but the financing of the deficit through inflationary means, viz, borrowing from the banking sector. Like the government’s deficit, the private sector’s deficits are equally contributory towards the raising of money supply and consequently to inflation. Hence, any blame should be squarely leveled against both sectors. It is natural for any government to make use of the bank funding to fill budget deficits, because it is very convenient and cost effective. But, excessive use of bank funding leads to creation of additional money and through it, to inflation. Hence, governments have to behave responsibly. When inflation sets in as a result of its irresponsible fiscal policy, it is the government which has to suffer the most. The government’s desire for bank financing has normally been equated to a child putting his fingers frequently into an open cookie jar.

Although the size of this particular scheme is limited, one hopes that it can be expanded and emulated by other banks. Such programmes are a prime example of the banking sector fulfilling its role of promoting economic growth by providing the necessary low cost funding, while at the same time contributing to the profits of the bank. It is worth noting also that competitiveness does not depend only on costs; as the crisis has reminded us, financial stability is equally essential. In Ireland for example, it was the poor governance and risky credit practices of commercial banks that drove the country into the crisis, even though the competitiveness indicators were very positive. Generally speaking, Maltese banking is run on a prudential and cautious business model and this is particularly true of the systematically-relevant banks, which manifest for example a low loan-to-deposit ratio. Nevertheless, we have stepped up our efforts, jointly with the MFSA, to ensure that the soundness of the banking system is not only preserved but also enhanced. The Joint Financial Stability Board between the Central Bank and the MFSA has contributed to major initiatives, notably amendments to the Banking Rules 09 and 12. These amendments will improve the overall coverage ratio and strengthen provisioning practices. They also boost bank capital and reserves to mitigate potential risks from lending portfolios. The amendments also address the risks arising from banks’ concentration in the real estate sector.
This may not be detrimental to long-term growth if it has a “cleansing effect”, if non performing firms and equipment disappear and free resources for innovative young firms 3. However, it may also hit young, innovative and risky firms, which are more fragile and financially dependent 4. According to Foster, Grim and Haltiwanger 5, reallocation in the United States during the Great recession  1  R. Jackman and R. Layard, 1991. “Does Long-term Unemployment Reduce a Person’s Chance of a Job? A Time-Series Test,” Economica, London School of Economics and Political Science, vol. 58(229), pages 93–106, February. 2  A. Maravalle, M.-E. de la Serve. and G. Verdugo, 2014. “The euro area Beveridge curve in the post-crisis period: increase in structural unemployment since 2010,” Quarterly selection of articles – Bulletin de la Banque de France, Banque de France, issue 36, pages 95–109, winter. 3  R. J. Caballero and M. L. Hammour, 1996. “On the Timing and Efficiency of Creative Destruction,” The Quarterly Journal of Economics, Oxford University Press, vol. 111(3), pages 805–852. 4  M. Ouyang, 2009. “The scarring effect of recessions,” Journal of Monetary Economics, Elsevier, vol. 56(2), pages 184–199, March. 5  L. Foster, C. Grim and J. Haltiwanger, 2016. “Reallocation in the Great Recession: Cleansing or Not?,” Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages S293–S331. 2  BIS central bankers’ speeches  was less intense and productivity-enhancing than in normal times, contrary to previous recessions.

When we changed over from keeping the repo rate constant in our forecasting work to basing the forecasts on market expectations, we had made the assessment that the advantages of this system outweighed the disadvantages, compared with using a constant repo rate assumption. The assumption of a constant repo rate worked well in as far as it made communication simple, which I believe was particularly important when establishing the new monetary policy regime and building up credibility for the inflation target. At the same time, it was of course usually an unrealistic assumption that made it difficult for us to make good forecasts. This applied in particular in cases where there were expectations of substantial repo rate adjustments. Normally, changes in the repo rate are required to guide inflation towards the target. If we had kept to this assumption for the interest rate, these difficulties would have been particularly prominent when we changed over to making forecasts in a slightly longer time perspective. Of course, the assumption of a constant repo rate also made it difficult to compare our forecasts with those of other forecasters and to evaluate our monetary policy. But, perhaps even more importantly, it gave no clear guidance as to how we viewed interest rate developments in the long term. The general public’s and the markets’ expectations of the future interest path are at least as important for the way monetary policy influences the economy as the expectations around the decision on the current interest rate.
This will contribute to the elevation of our job market as a whole and pave the way for an industry that will thrive. Much could happen in the next five years. Technology, the environment, the economic and political landscape could change greatly. Thus, we must plan well. The financial sector will transform regardless but with proper planning and execution, we stand a chance to influence and 3/4  BIS central bankers' speeches  improve the outcomes. Financial market development will be a journey within this framework which requires effort and collaboration by both regulators and financial market participants. The spirit of teamwork and cooperation which has been developed over the years has paved the way for successful endeavours and should be nurtured further, through the sharing of information and feedback for the greater good of market development. Hence, let us take this dinner as an opportunity to strengthen our camaraderie, so we can also better achieve this common goal together. With that, I thank you and wish you an enjoyable night. 4/4  BIS central bankers' speeches

These have, inter alia, (i) reintroduced prudential filters to neutralise the effect of the change in the value of public debt on capital; (ii) allowed reserves at central banks to be excluded from the leverage ratio calculation; (iv) incorporated a favourable provisioning treatment for exposures with public guarantees; (v) brought forward the entry into force of certain measures, such as the supporting factor for SMEs and the new prudential treatment of software; and (v) allowed market model overshootings to be ignored, given the volatility arising from the COVID crisis. 5  As regards the usability of buffers, the BCBS, the European Banking Authority (EBA) and the SSM have in various statements referred to the objective pursued with the introduction of liquidity and capital buffers in Basel III, reiterating that such buffers may be used appropriately to support the economy in a situation like the current one. Also, the message has been conveyed that supervisors will allow sufficient time for these buffers to be replenished. At the same time, the BCBS and the EBA have published technical guidelines on the prudential treatment of guarantees and moratoria, clarifying that the flexibility required by the current health situation must not be at the expense of the prudence needed when recognising and provisioning for non-performing loans.
For Icelandic banks, it is therefore extremely important that CDS spreads decline, even though it is not clear what could cause it to do so in the current climate. 4  BIS Review 25/2008  At the end of last month, Moody’s Investor Service announced that the outlook for the credit ratings of two Icelandic banks had been downgraded from stable to negative, and that the outlook for the third bank remained negative. A decision on whether their credit ratings would be changed was to be expected within the month. This announcement came perhaps as no surprise, in view of the changes in the banks’ credit ratings from Moody’s over the past year. If they are downgraded by one notch, Glitnir and Kaupthing will revert to the credit rating they enjoyed before Moody’s announced the implementation of its so-called Joint-Default Analysis methodology early last year. Landsbanki’s current rating is two notches above that a year ago. In contrast with Moody’s, Fitch Ratings recently affirmed its ratings for Iceland’s banks and changed its outlook for Kaupthing Bank’s rating from negative to stable. It should be noted that many banks have been subjected to changes in their credit rating outlook. For example, Standard & Poor’s changed its outlook for many of the world’s largest and bestknown banks from stable to negative. Among the banks affected were Deutsche Bank, Dresdner Bank, Barclays Bank, UBS, Credit Suisse, and others of their ilk.

0112  1011  0711  0411  0111  1010  0710  0410  0110  1009  0709  0409  0109  1008  0708  0408  0108  1007  0707  0407  0107  1006  0706  * CBRT Business Tendency Survey results from the second survey period. 1009  3.0  4  *Calculated using linear interpolation of several maturity yields in the CBRT Expectations Survey. Yields are from the second survey period. Source: CBRT. 4  BIS Review 143/2009  The sharp fall in inflation observed over the past year is not peculiar to Turkey. Inflation rates have plummeted all over the world since the peak of the crisis due to downward pressures arising from demand and cost conditions. Although there has been a slight increase in rates with the removal of the high base effect of the previous year in the third quarter (Figure 11), core inflation data indicate that the main trend of inflation in both developed and emerging markets is downward (Figure 12). Figure 11: CPI in Developed and Emerging Figure 12: Core CPI in Developed and Markets Emerging Markets (Annual Percentage Change)  (Annual Percentage Change)  5  Developed Markets  8  4  Emerging Markets (rhs)  7  4  Developed Markets Emerging Markets  6  3  5  2  3  4  Source: Bloomberg, CBRT. 2.
Because this would call for greater variation in employment and growth, an outside observer would, all else equal, infer a lower value for lambda. This is when different views regarding the transmission mechanism of monetary policy become relevant. Those who regard the impact of monetary policy on the economy as relatively rapid may be more inclined to 22  See e.g. Blanchard, O, Cerutti, E and Summers, L (2015), “Inflation and activity – two explorations and their monetary policy implications”, NBER working paper No. 21726. 23 At root this is because, in aggregate, retailers whose costs rise adjust their prices only gradually, perhaps reflecting strategic, competitive concerns, or because many importers, over the short term at least, hedge their foreign exchange exposure. See Box on page 28 of the November 2015 Inflation Report for a review. 12  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches  12  act in response to shocks whose effects are relatively short-lived. All else equal this would tend to produce a shallower observed relationship between inflationary shocks and output gaps – a lower lambda. If, on the other hand, monetary policy is viewed as operating with a substantial lag, it may be that the more enduring influences on inflation are the ones that weigh most heavily in the monetary policy decision. In this case, this would tend to produce a steeper observed relationship between inflationary shocks and output gaps – a higher lambda.

This “procyclicality” mechanism works to exacerbate real shocks, raise the degree of economic fluctuations, and in extreme cases can play a part in leading to financial or economic crises. One remedy to this problem is to utilize the supervisory and regulatory function in pursuit of macroeconomic and system-wide stability objectives, particularly by reducing the degree of procyclicality. Such “macroprudential” approach to regulation is rapidly becoming a received wisdom among academics and practitioners, and indeed is the guiding principle underlying the recently finalized Basel III proposal. While it is encouraging that practical implementation has already been set in motion, there remains a degree of opaqueness at the conceptual  BIS Review 143/2010  1  level about the desirable features that should govern the design of macroprudential policy. This point leads me to my second topic that I want to focus my talk on today, that is macroprudential policy and long-term financial stability. In my view, there are three important issues regarding macroprudential regulation. The first is the objective of macroprudential policy, which conceptually is to safeguard financial stability. But, for practical purposes, the notion of financial stability is much more obscure compared to price stability, and the question of how macroprudential policy should be designed to target something that is loose in concept and difficult to measure in practice remains a challenge.
Should the impact of the pandemic on household and corporate income be much greater than currently assumed, it could trigger a price correction in the real estate market. Equally, such declines in income could lead to a materialisation of the historically high affordability risks. Both of these developments would negatively affect the quality of the banks’ mortgage portfolios. Given these challenges, the available capital buffers of the domestically focused banks are a crucial element for their lending capacity and loss-absorbing capacity. The SNB’s scenario analysis indicates that, in aggregate, domestically focused banks would also be in a position to absorb the losses incurred under significantly more adverse conditions than assumed in the baseline scenario. Use of cash  This brings me to the last section of my speech in which I will talk about the impact the coronavirus pandemic is having on the use of cash. There are currently two main developments. For one, banknote circulation in Switzerland rose sharply during the first wave of the pandemic in spring. This increase was mainly driven by the demand for large denomination banknotes and indicates an increased desire to hold reserves in the form of cash. Second, available data on card payments and cash withdrawals from ATMs suggest that for payment purposes, cashless methods are currently being used more than prior to the pandemic, while cash is being used less. Following the easing of containment measures, the amounts paid with cards have risen above their pre-crisis level.

3 Speech made on 22 January 1988 during the celebration of the anniversary of the signature of the Elysée Treaty. 4 Speech assessing the German Presidency, before the European parliament – 29 June 1983. 3/3  BIS central bankers' speeches
Our position, put simply, is that we do not believe that customers should be responsible for any security breach or system problem that is not due to negligence on their part, and we have requested that this should be reflected in the contractual agreements for internet banking services. Reputational risk Risk of damage to the bank’s reputation goes along with the other risks I have mentioned. It can arise, for example, from operational risk even if customers suffer no actual damage. If a hacker successfully 3  BIS Review 108/1999  breaks into a bank’s website and makes alterations, the bank concerned can suffer substantial damage to its reputation although customers’ balances are safe and the hacker has not obtained any financial benefit. This does not only affect the individual bank concerned but may also undermine confidence in the security of e-banking more generally and therefore slow down development in this area. Systems breakdown, even if only temporary, is another example of how banks may be affected by bad publicity. Given the fact that the element of trust is so fundamental to banks’ business, banks will find it increasingly important to adopt measures to manage reputational risk and incorporate public relations strategies into their overall risk management framework. Banking risks As I have already mentioned, an internet-based bank is faced with the same types of banking risk as its traditional counterparties. In some ways, the internet may heighten these risks.

Here, we would have to look at the circumstances of each case – whether, for example, the offshore internet bank advertised its services in the local Hong Kong press or accepted Hong Kong dollar deposits or refused to take deposits from a number of specified jurisdictions, but did not include Hong Kong among these. If we come across such cases of illegal advertisements targeted at Hong Kong, how would we deal with them? The easiest case would be where the bank itself is respectable and is based in an overseas location which is properly supervised. We could then write to the bank itself and to its supervisors to notify them of the advertising rules in Hong Kong, and request the bank either to comply with these rules or to add Hong Kong to the list of the jurisdictions from which it was not prepared to take deposits. If necessary, we would seek the cooperation of the home supervisor to enforce this request. It might also be necessary to supplement this with a reminder to local Internet Service Providers about the advertising rules in the Banking Ordinance and to seek their cooperation to block offending websites. The problem with this, however, is that the website in question may not actually be posted on the local ISP’s server – in which case, there may be little that the ISP can do. If the bank concerned is not respectable and it is based in an uncooperative jurisdiction, the situation would be more difficult to handle.