samchain/econo-pairs-v1 huggingface dataset:
So, imposing new trade barriers – or “bilateral deals” – on some trade partners not only has almost no chance of eliminating the overall current account deficit, but it also threatens long-run economic growth. Alternatively, it would also be misleading for countries to carry out non-cooperative domestic macroeconomic policies. Competitive devaluations first: after some unilateral and unfortunate declarations last week, several of us on the Governing Council of the ECB felt the need to reiterate that during the last IMF Annual Meetings in DC last October we committed with all our partners to a multilateral approach saying that, I quote, “we will not target our exchange rates for competitive purposes”. Any deviation from this common rule would be at the cost of breaking mutual trust and global growth. Speaking of the Governing Council of the ECB, let me say a few words on our monetary policy. It is following, with confidence and with patience, a path of gradual normalisation. But one shouldn’t focus excessively on the sole instrument of monthly net asset purchases: whether we end them in September or taper them somewhat more gradually is not a “deep existential” question… There are two more important issues: First, we prefer, as in Irish dancing, a four-hand reel rather than a solo; we will rely more and more on the entire policy package, including the sizeable stock of acquired assets, the forthcoming reinvestments and the forward guidance on interest rates. And we will follow a predictable sequence.

I should emphasize that the weaknesses of the current regulatory capital framework are much more relevant to the supervision of the largest and most sophisticated banks than they are generally across the industry. For the vast majority of the thousands of U.S. banks, the existing regime largely works. In recognition of this, among other considerations, we expect that in the U.S. most banks will stay on Basel I while the largest and internationally active banks will adopt the advanced Basel II approaches. We are considering some simple adjustments to Basel I to ensure that the framework is up to date and that there is competitive equity with Basel II adopters. In any event, the lack of risk sensitivity and incentives for arbitrage have made Basel I less relevant in our supervision of the largest banks - it is a benchmark requirement to be met, but not, in practice, a critical discriminating factor as we judge their financial condition. As supervisors, we have focused increasingly on assessing the rigor and effectiveness of each organization’s risk management and control systems. We have looked to understand the risk appetite of each firm, and then assess how well it is able to measure and manage the resulting degree of risk taking. A key recent part of the supervisory effort has been to encourage the development of banks’ internal economic capital models - models that link risk taking to capital and that look to compare risk taking, and the returns on risk, across business lines, regions and products.
Nowadays, central banks are entrusted with the fundamental task of providing citizens with costless access to simple, secure and risk-free means of payment that can be used on a large scale. Delivering on this task requires central banks to analyse relevant developments in society and adapt accordingly. In order to be able to give Europeans easy access to a safe form of central bank money in a society that is moving increasingly quickly towards digital payments, the ECB’s Governing Council has decided to advance work on the possible issuance of a digital euro. Should the need arise, we want to be ready to introduce a digital euro: a form of central bank money that would complement cash, not replace it. Together, these two types of money would be accessible to all, offering greater choice and easier access to ways of paying. After publishing our report on a digital euro on 2 October, we are now in a phase of listening and experimentation. Our exchange today is a key step in this phase and marks the launch of the ECB’s public consultation.6 I will come back to this consultation in a moment. But first I will outline the characteristics of a digital euro, as well as the advantages and the challenges it could present. I will also discuss some scenarios that could require the ECB to issue a digital euro. What is a digital euro?

We already have an array of choices when it comes to retail payments: central bank money in the form of cash, commercial bank money – for example, digital bank deposits – and non-bank digital money (such as payment cards). What we do not have is a digital currency that is issued by the central bank and that we can use for all our daily transactions, including in e-commerce. A digital euro would fill this gap: it would be an electronic form of central bank money accessible to all citizens and firms – in other words, a digital equivalent of euro banknotes. It would provide 1/4  BIS central bankers' speeches  costless access to a simple, risk-free and trusted digital means of payment, accepted throughout the euro area. In the digital era, it would preserve the public good that the euro provides to European citizens. Compared with existing means of digital payments, a digital euro would provide added value in several ways. First of all, it could be used for payments anywhere, by anyone and at any time – just like cash in the physical world. Second, it would bring simplicity: a digital euro should be designed to be easy to understand, easy to use and easy to transfer. Regardless of its features or the technology it would be based on, people from all groups in society should be able to use it in their daily lives.
In an effort to continue to shed light on the important issues, last week we published in our Liberty Street Economics blog a five-part series entitled “Restoring Economic Growth in Puerto Rico.” Some important conclusions emerged from our analysis, and I want to emphasize those today. First and foremost, Puerto Rico’s current level of public debt is unsustainable. Achieving fiscal sustainability requires real reforms and a significant adjustment to the Commonwealth’s debt burden, as Congress and the Administration have recognized. To illustrate this point, our analysis demonstrates that even if growth were to return to between 2 and 2.5 percent per year – an optimistic scenario – debt as a share of GDP would continue to rise under the 2  BIS central bankers’ speeches  current fiscal balance and debt structure. This underscores that the current regime is not sustainable. Second, while fiscal reform is definitely needed, restoring economic growth remains a crucial ingredient to achieving a sustainable fiscal regime. Puerto Rico slipped into recession in 2006, and a decade later a recovery has yet to materialize. Any fixed level of debt will grow even more burdensome if the economy is shrinking. Consequently, this long deep recession has exacerbated the Island’s fiscal woes. Much of last week’s analysis focused on a key contributor to economic growth – the labor force – so let me point out a few conclusions that I drew from that work. Puerto Rico’s outmigration remains an important concern, and is both a cause and an effect of the economic decline.

William C Dudley: “Remarks at the New York Fed’s Economic Press Briefing on the Regional Economy” Opening remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Economic Press Briefing on the Regional Economy, Federal Reserve Bank of New York, New York City, 18 August 2016. *  *  *  Jaison Abel, Jason Bram, Hunter Clark, Giacomo De Giorgi, Richard Deitz, Jack Gutt, Andrew Haughwout and Joseph Tracy assisted in preparing these remarks. Good morning and welcome to the New York Fed’s Economic Press Briefing. I am pleased to have this opportunity to speak with the journalists covering our region. You are an important communication channel to the people in our District. This morning I want to focus on economic conditions in our region, giving particular attention to job growth. I also want to discuss our ongoing work on Puerto Rico. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System. The New York Fed is deeply committed to serving our region. This commitment manifests itself in several ways. We produce business surveys and local economic indexes to help our constituents track regional economic conditions. My staff writes papers and blog posts on economic issues important to our region. We meet with a number of advisory boards comprised of community and business leaders.
Már Guðmundsson: Monetary policy after capital controls Speech by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, at the Annual General Meeting of the Confederation of Icelandic Employers, Reykjavík, 7 April 2016. *  *  *  Madame Chairman, honoured guests, In my speech today, I would like to discuss the monetary policy that might be appropriate for Iceland after the broad-based restrictions currently imposed on capital outflows have been lifted. More specifically, I will discuss the monetary policy framework rather than its implementation, which would naturally depend on economic conditions and prospects at any given time. But what is meant by monetary policy? In the modern sense of the term, monetary policy entails applying the Central Bank’s balance sheet and other instruments at the Bank’s disposal so as to affect the economy. In that sense, entering a currency union is not monetary policy; it is currency policy. Only central banks can pursue monetary policy, while governments take decisions on currency policy. In my discussion today, I assume that we will pursue independent monetary policy, at least in the near future. Designing a monetary policy framework entails deciding what its objectives should be, which policy instruments should be applied, how decisions on the application of those instruments should be taken, how these decisions should be communicated, and how accounting for monetary policy after the fact should be handled. Exchange rate policy is naturally an important part of this framework; i.e., whether the exchange rate is pegged, free-floating, or somewhere in between.

Its final form will be a joint declaration by the Government and the Central Bank, like that dating from 2001. The discourse will therefore continue. In this context, I would like to thank the Confederation of Icelandic Employers for having this topic on its agenda today and for giving me the opportunity to express my views on the subject. But we must keep one thing in mind. The new framework will be better than the one we had before the crisis, but it will not be a panacea. Monetary policy is limited in terms of what it can deliver in the long run, and it will continue to be implemented under conditions of uncertainty in a constantly changing world. Under most circumstances, however, it should be able to provide us with medium-term price stability, and that is no small achievement. BIS central bankers’ speeches  5
Central banks can benefit from, and rely on, extended access to supervisory information and intelligence, especially on systemically relevant intermediaries, in order to better assess risks and vulnerabilities of the financial system as a whole (A. Orphanides, May 2010). It is not necessary to say, because it is obvious, that I share the same opinion. IV. policy. The crisis also showed that there is no financial stability by pursuing profligate fiscal  The latest developments in Europe whetted this issue. The decisions of the governments, as one of the basic economic actors, have enormous influence on the aggregate demand. Therefore, the fiscal policy has key role as a shock absorber, contributing to the maintenance of the financial stability. However, we witness that many governments are ignorant to that. Why it is so, is not hard to guess, but watching this “sobering” in Europe, it is obvious that the crisis helped to firm up the following perspectives: 1) The fiscal policy should be countercyclical. It should have cyclically adjusted balanced budget rules adopted; 2) The fiscal policy must not be a source of shocks. If looking over the fiscal deficits in certain countries, it can be perceived that, there, it is far from that;  BIS Review 90/2010  7  That is why the old ideas for the need of establishing independent fiscal agencies and minimal framework which will guarantee independence to the statistical agencies competent for the national accounts, resurrected. It is impressive what Germany commenced.

This exceptional liquidity will be provided at long maturity (up to four years) and a guaranteed fixed rate, a clear sign that monetary accommodation should persist for a very long time. Finally, the Eurosystem is actively preparing to buy asset based securities that will help channel monetary accommodation and ease financial conditions to private non financial borrowers, especially SMEs. IV. New communication strategy  As you know, two important decisions were made at the last Governing Council: the frequency of monetary policy meetings will change to a six-week cycle; and starting in January 2015, the ECB intends to publish accounts of its monetary policy discussions. Why these decisions and why now? The starting point is that monetary policy is becoming more complex. This is true for all major central banks. Monetary policy does not only consist anymore in moving interest rates, but also comprises many other non-conventional measures. This makes it more difficult for markets and economic agents to understand the economic rationale behind these complicated sets of decisions. Still it remains crucial for central banks to be able to influence expectations. Indeed, one form of non conventional policy, namely, forward guidance, depends entirely on managing expectations about future interest rates. There are, therefore, important challenges in implementing monetary policy in the post-crisis environment. The response is to place more emphasis on enhanced communication. As you know, the Eurosystem has always put a priority on transparency. We were the first to systematically organise press conferences after our policy meetings.
8  Figure 1 Accumulated inflation, February - December 2018  Evolution of CPI and CPIEFE inflation (1) (2)  (percent)  (annual change, percent)  CPI  2.5  CPIEFE  2.5  2.0  2.0  1.5  1.5  4.5  4.0  4.0  3.5  1.0  1.0  4.5  3.0  3.0  2.5  2.5  2.0  2.0  1.5 0.5  0.5 0.0  Basket Basket 2013 2018  Basket 2013  Basket 2018  1.5  CPIEFE  1.0  0.0  3.5  CPI  1.0  0.5  0.5  0.0  0.0 18  Abr. Jul. Oct.  19  (1) As from January 2019 the lines use the new indexes with annual base 2018=100, so they are not strictly comparable with earler figures. (2) Blue (red) diamonds show the annual CPI (CPIEFE) variation using the 2013=100 basket. As from February 2018, they show the annual change that is obtained by splicing the 2013=100 basket series with the monthly variations in the 2018=100 basket. Sources: Central Bank of Chile and National Statistics Institute (INE). Source: National Statistics Institute (INE). Figure 2 Exchange rate and goods EFE (annual change, percent)  6  30  5  25  4  20 TCN (right axis)  3  goods EFE (*)  2  15 10  1  5  0  0  -1  -5  -2  -10  -3  -15 16  16 Jul.

For the medium term, our projections are consistent with the MPR reaching its neutral level towards the end of the policy horizon. The Board has estimated for some time that the neutral MPR is between 4% and 4.5%. This parameter that will also be revised in the June Report. V.4. Risk scenarios  The base scenario that I have just presented reflects the events most likely to occur with the information at hand at the close of this Report. There are risks, however, that, if materialized, may reshape the macroeconomic outlook and the course of monetary policy. On the external front, despite having steadily input lower growth prospects, the risk balance continues to be biased downward. The main risk remains that of an abrupt reversal of financial conditions facing emerging economies, which could be triggered by various reasons, including a more abrupt and widespread slowdown in world growth or the negative evolution of the various geopolitical tensions that have persisted in the recent past. Although in such a scenario the main central banks would probably expand their monetary policies, a lower appetite for risk and declines in commodity prices are also possible, more than offsetting these lower interest rates. At home, it is estimated that the risk balance for both activity and inflation is unbiased. First, the massive immigration of recent years may have a greater impact on growth and inflation.
Compounded to it is the renewed influx of capital flows towards emerging economies and the resulting appreciation of our currencies. Against this backdrop, managing monetary policy has become more complex. Today, our assessment continues to be that the crisis in the developed world will sooner or later affect the performance of our economies. It is possible that the impact will be less than what we thought some time ago, but to assume that nothing will happen does not seem sensible. Nonetheless, the difficulties involved in measuring the actual impact makes me very cautious in measuring the impulse required by each economy to offset the effects of the external scenario. Today, prudent monetary policy management has to be prepared for all kinds of scenarios and to adapt the amount of stimulus applied according to needs established on a case by case basis. As I said a moment ago, activity we see today is at a level above what we  4  BIS central bankers’ speeches  forecast a few months back. In fact, in our latest Monetary Policy Meeting we decided to maintain the Monetary Policy Rate at 5% for a second month in a row. The current situation in developed economies is very complex, and teaches valuable lessons. On one hand, as to how imbalances that are not addressed on time end up creating enormous costs for the population.

As a  1  We have been tracking these developments using data our economists have developed to help us better understand the job prospects facing recent college graduates. These data are available on our website and are updated regularly. See The Labor Market for Recent College Graduates. BIS central bankers’ speeches  5  result, for the first time during this recovery, both unemployment and underemployment among recent college graduates has generally been falling. This means that, not only has it become easier to find a job upon graduation, but more college graduates are taking jobs that better utilize their degrees. In addition, starting salaries for recent college graduates have been increasing for the past couple of years, reflecting the growing demand for their skills in a tighter job market. To conclude, while there are economic challenges facing both the nation and the region, I am optimistic that we will continue to make progress on both fronts over the next few years. Achieving our dual mandate of maximum sustainable employment and price stability will help those who will graduate soon to achieve their own aspirations. Thank you for your kind attention. I would be happy to take some questions. 6  BIS central bankers’ speeches
With the relatively long time horizon that has been chosen, monetary policy can contribute to stable developments in output and employment. However, situations may arise where more than two years or less than two years is required to attain the inflation target. This will depend on what disturbances the economy is exposed to. Norges Bank will communicate such a change in the time horizon. 4. Monetary policy and competitiveness  Monetary policy cannot be used to influence the size of the internationally exposed sector over time. This is primarily determined by wage and income formation, fiscal policy, including the use of petroleum revenues over the government budget and the adaptability and efficiency of the economy. 8  BIS Review 49/2002  The new monetary policy mandate is linked to the new fiscal policy guideline. When the new guidelines were adopted in March 2001, Norges Bank pointed out that, in isolation, a gradual phasing in of petroleum revenues could contribute to deteriorating conditions for the internationally exposed sector. Norway’s fiscal policy will stimulate demand in the public and sheltered sectors. Consequently, internationally exposed industries may have difficulties recruiting labour and may face higher labour costs. The contest for labour may result in a deterioration in competitiveness internationally.

Over time, growth in real wages must be consistent with growth in labour productivity. An inflation target of 2½ per cent and trend productivity growth of around 2 per cent, according to updated national accounts figures, imply annual nominal wage growth of about 4½ per cent. Under the “Solidarity Alternative” in the 1990s, a stable exchange rate and the rate of wage growth among our trading partners functioned as an anchor for the social partners. Up to 1997, this anchor remained effective. However, growth in labour costs jumped in 1998 and has since been around 2 percentage points higher than among our trading partners. Wage growth is high in relation to earnings in many enterprises. It is demanding to improve efficiency at the pace required to keep up with the rise in labour costs. 10  BIS Review 49/2002  The sharp rise in labour costs in recent years carries with it a potential for higher unemployment. The interest rate is an effective instrument for countering lower demand and growing unemployment when measures to stimulate demand do not translate into higher wage growth or unstable financial markets. However, there is little monetary policy can do to prevent an increase in unemployment that is driven by high cost inflation. Developments in wage settlements have been a driving force behind the appreciation of the krone. The foreign exchange market has responded as expected.