samchain/econo-pairs-v1 huggingface dataset:
It has fostered both price and macroeconomic stability through its credibility and has shielded many euro area countries from significant exchange rate volatility and financial market turmoil. It is all the more important to acknowledge these achievements since it was said in some quarters that the euro would never see the light of day or that it would create severe economic disruptions. Those scenarios have not materialised. In the post-war European adventure, the euro represents a major milestone. That said, and whatever its own merits, a currency is not an end in itself, even though the new EU members are keen on adopting it as soon as possible. Entry into Monetary Union must be founded on a sustainable convergence process. Enlargement of the euro area also gives renewed impetus to addressing the challenges ahead as it makes it more pressing for policy-makers to tackle long-ignored weaknesses. This is a crucial contribution to building a stronger EU, in which I strongly believe. All in all, let me express my confidence in the future of the euro and of the single monetary policy of a large Eurozone.

Not only would this more effectively capture the risks that banks are taking, but it also would create incentives to move the trading and settlement of such instruments more rapidly to central clearing parties (CCPs) and to exchanges. The greater use of CCPs and exchanges should have several benefits, including reduction of risk through the multilateral netting of exposures and improved transparency with respect to the structure and pricing for such instruments. 4  BIS Review 125/2009  Capital conservation More explicit supervisory standards regarding capital conservation would also be an important element of an efficient capital regime. During the crisis, some banks continued to pay out dividends even though their condition and market valuation metrics had sharply deteriorated. Banks did this to try to convince investors that their bank was “sound.” But by depleting capital, these actions made banks and the financial system weaker. To mitigate these dynamics, regulators could require the reduction and possibly the cessation of dividend payments and share buybacks during adverse market environments when particular triggers were breached. For example, limits on dividend payments and share repurchases as a share of earnings could be mandated to occur when common equity ratios fell below certain levels (recognizing that credit and mark-to-market losses deplete the capital structure from below) or when market-based measures hit certain trigger values. Taking away the discretion of banks to deplete capital would strengthen the banks’ ability to withstand adverse environments. In principle, such constraints could conceivably be extended to compensation and bonus payments.
In historical terms, households’ interest costs are currently very low. That the low interest rates have increased households’ ability to take on bigger loans is one cause of the upturn in house prices. During the summer and autumn, the rate of increase in house prices appears to have been dampened somewhat in certain areas, but the rate of increase is still high. Monthly data show that the annual rate of growth for the whole country during the period July to September was 10 per cent. The developments in Sweden are by no means exceptional. Internationally, there are examples of countries which have seen sharper rises in house prices, such as Australia and the UK. But there are also examples of countries where the rate of increase has been lower, such as Germany. Recently, however, the international situation has become more mixed in that house price inflation in some countries, e.g. Australia and the UK, has slackened considerably whereas in others, including the US, it has continued to pick up. In Australia and the UK, the rate of house price increases dropped when the central banks there raised key interest rates, although this occurred with a slight lag in Australia. In the US, the rate of increase has continued upwards in spite of rises in nominal short-term market interest rates. Longer-term rates, however, have not risen to the same extent since the Federal Funds rate began to be raised.

With regard to the outlook for Sweden, the Riksbank foresees an average annual growth rate of almost 3 per cent in the coming years. Looking at inflation prospects, the rate of price increases is expected to rise in the period ahead as resource utilisation increases in Sweden and abroad. However, a continuation of relatively weak labour market conditions and a favourable cost situation mean that the rise in inflation is expected to be relatively moderate in Sweden. Our forecast in the Report is for a risk-adjusted inflation rate of 1.1 per cent one year ahead and 1.8 per cent two years ahead, measured as UND1X inflation. Swedish housing finance On 1 July this year the Act on issuing secured bonds (2003:1223) will come into force. One of the main incentives behind the new Act is to offer Swedish mortgage institutions the same favourable financing opportunities that these institutions face in European countries that have already introduced similar legislation. So will this new legislation result in a new financing structure for Swedish mortgage institutions and in large issue volumes in the international markets? This remains to be seen. The Riksbank has, for reasons of principle, been hesitant towards the introduction of the legislation on secured bonds, primarily because the supervisory task charged to Finansinspektionen (the Swedish Financial Supervisory Authority) could be perceived as an implied government guarantee, but also because the legislation in this field entails a return to regulation in the credit market, which in itself can be questioned.
The underlying long-term growth dynamics in Emerging Asia are good.   The demographics are favourable, with the proportion of the working age population continuing to rise in most Asian economies.   The emergence of a sizeable middle class and ongoing urbanisation will underpin a continued expansion in domestic consumption and investment. These underlying factors alone should support healthy growth in Emerging Asia, barring serious policy mis-steps or crises. But if Emerging Asia also undertakes the necessary structural reforms and achieves greater regional integration, growth could be even higher. For example, successful reforms and further integration could boost ASEAN’s growth from close to 5% currently to 6%. Structural reforms will help unlock the productivity gains that Asia needs for its next phase of growth. This will be increasingly important as countries move up the economic value chain. The structural reforms each economy needs are different. But what is encouraging is that these countries have moved economic restructuring to the top of their agenda.   In China, the goal is to orientate the economy towards domestic consumption and strengthen the role of the market in allocating resources. The Third Plenum reforms offer a comprehensive blueprint to do this.   In India, the critical task is to improve the business environment and build the infrastructure necessary for a strong manufacturing sector that will provide jobs and  BIS central bankers’ speeches  1  raise incomes. The new government has signalled clearly that India is open for business.

The impact of the Fed’s tightening cycle in the 1990s on emerging markets was not as widespread as the 1980s episode had been, and countries like Chile and Colombia were able to  st  1 Remarks at the 2017 IIF Latin America Economic Forum, Asunción, Paraguay on Saturday April 1 , 2017. I acknowledge the support of Diego Gianelli and Mauricio Hitschfeld in the preparation of this speech. These remarks do not imply endorsement by the Central Bank of Chile or any of its Board members. 2 There is a third episode between June 1999 and June 2000. This process of 150 bp hikes can be understood as the final adjustment along the 1994 episode. 3 See, for example, the discussion in García‐Herrero, A., 1997, Banking Crisis in Latin America in the 1990s: Lessons from Argentina, Paraguay and Venezuela, IMF Working Paper 97/140. See also Sachs, J., A. Tornell and A. Velasco, 1996, Financial Crisis in Emerging Markets: The Lessons from 1995, NBER Working Paper 5576. 1                weather this period relatively well and to keep high growth rates.4 But there is ample evidence that, in a context of several macroeconomic imbalances in several emerging economies, the 1994 episode triggered a series of difficulties and crisis that configured the macroeconomic map in the developing world in the second half of the decade. In contrast, the monetary policy normalization process starting in 2004, did not have a negative effect on emerging economies.
In addition, the latitude of changes in regulation is much more limited than that of interest rates. A more constructive approach may be to design rule-based countercyclical regulation with a clear purpose to minimize the risk of financial crisis. Nevertheless, we still need to learn more about the interactions between monetary and financial policies. Final remarks A natural reaction to a crisis is to think that everything is wrong and that all must be changed. Emerging markets, and in particular Chile, performed well during the crisis, and above all during the recovery. Therefore, a first lesson must be on the factors that produced these good results, and macroeconomic management was certainly central to the rapid recovery. The financial system was resilient, which shows that the regulatory framework was appropriate. However, our role is not to congratulate ourselves for our achievements in the past, but to look at strengthening our macroeconomic framework. As development proceeds, new challenges arise due to financial innovation, and it is extremely important to look for lessons while the crisis unfolds, to take advantage of financial development without risking financial stability. There is a need to study the interactions between monetary and financial policies further, especially given the challenges stemming from the global outlook. Implementing monetary policy in a flexible inflation targeting framework has shown its benefits; incorporating financial frictions and the appropriate policies should help us to navigate better in a very uncertain world.

José De Gregorio: Price and financial stability in modern central banking Keynote speech by Mr José De Gregorio, Governor of the Central Bank of Chile, at the joint Latin American and Caribbean Economic Association (LACEA)-Latin American Chapter of the Econometric Society (LAMES) Conference 2011, University Adolfo Ibáñez, Santiago, 11 November 2011. *  *  *  I would like to thank Rodrigo Cifuentes, Luis Oscar Herrera, Alejandro Jara an Enrique Orellana for valuables discussions and comments. Introduction It is a pleasure to address this audience at the main gathering of Latin American economists, which brings together not only the best and more promising from our region, but also great scholars from other parts of the world. During my professional life I have had many challenges and jobs. I was in politics as Minister in three portfolios a decade ago, and had of course to deal with politically sensitive issues. Then I moved to the Central Bank. Many people tend to think that life in a central bank is a quiet one. It is true, it is very low key compared to politicians’, but requires hard work. During my tenure as Governor we have had to deal with rising inflation, then the largest financial crisis in the postwar period, followed by an earthquake, a change of the government coalition after twenty years, and, more recently, inflationary shocks, exchange rate pressures and now the European crisis and an increasingly weakened global economy.
In particular, we didn’t  set as an objective to assess the extent to which the current regulatory framework is sufficient and well suited to absorb climate-related risks, and whether additional supervisory capital requirements would be legitimate. Models, metrics and methodologies developed so far are still in their infancy and the data too sparse to allow drawing firm conclusions about the loss absorption capacity of current capital levels. Nonetheless, we already see at the ACPR these exercises as prudential tools, as they have proved helpful to us at incentivizing financial institutions to give the proper level 1/3  BIS central bankers' speeches  of priority and resources to the monitoring and management of climate-related risks. The publication in November 2020 of the SSM guide on climate and environmental-related risk was driven by the same logic and the preparation underway of an SSM stress test should provide an additional step at European level towards more supervisory scrutiny in the process of fully integrating these risks into the day-to-day risk management of banks. 2- There are also a few lessons that can be drawn from our experience from a methodological standpoint, as the use of such scenario analysis by supervisors is likely to be repeated and is likely to spread among supervisors. I would like to highlight two of them. First, tremendous progresses have been made in the domain of climate risk scenarios under the aegis of the Network of central banks and supervisors for the greening of the financial sector, the NGFSs.

With such caracteristics of climate-related risks, climate « stress test » as well as climate « scenario analysis », can prove to be very useful tools for financial institutions and their supervisors, to examine and understand the effects of different pathways for climate  change, as well as the effects of different pathways for climate policy, technology and consumer and investor preferences. It can prove also useful to reflect on and examine the impact of management decisions. It is with those mainly qualitative objectives in mind that, at the ACPR and the Banque de France, we have conducted with the French insurance and banking industry our first scenario analysis, which was completed and published a few weeks ago. I must say that those qualitative objectives have been well met, from our perspective. In particular, the exercise has clearly incentivised the participants to reflect on and develop appropriate tools and methodological frameworks to incorporate climate-related risks as a  mainstream risk to be governed and managed on a day to day basis accordingly, in line with our supervisory expectations. Given the difficulties to assess the exposure to and the impact of climate-related risk we have not assigned to this exercise quantitative objectives, beyond providing participants and us with a first bottom up assessment of their exposure, based on common assumptions, assessment which appears to be moderate by 2050.
Such transparency would also allow regulators to monitor and identify concentrations and trading patterns that might be related to market manipulation. In addition, if the public had more detailed information about the OTC derivatives positions of market participants, market discipline would be enhanced by providing market participants with information that would help assess risks during times of stress. Uncertainty about the valuations of complex derivatives due to the lack of price transparency was a factor that exacerbated the financial crisis. Large financial institutions became less willing to engage  BIS Review 28/2010  3  with one another because of an inability to assess the size of the exposures or to value the opaque positions held by their counterparties. My third regulatory reform concern is that the Federal Reserve’s role in regulatory oversight will be excessively constrained going forward. This threatens to throw the baby out with the bathwater. The Federal Reserve made mistakes, as did others, in the run-up to the crisis. We are fully cognizant of that, which is why we are revamping how we oversee the financial system and supervise large, systemically important institutions. To cut back our bank supervisory role significantly would be a mistake because macroprudential supervision is important; the Federal Reserve is particularly well suited to this role; and because bank supervision helps inform the Fed in its lender-of-last-resort role and in the conduct of monetary policy.

The Eurosystem has been a very efficient firefighter during the crisis and is doing its best to contribute, within its mandate, to building a more dynamic growth path for the euro area, through its monetary policy. However, the success of monetary policy still needs to be complemented with a genuine economic union to achieve the European project. This is now the responsibility of the architects, including the next governments in France and Germany. 1 business.financialpost.com/fp-comment/robert-mundell-euro-is-here... 2 If we take the rule of thumb once used by John Williams, the President of the SF Fed. 6/6  BIS central bankers' speeches
Within its own remit, each NCB carries out the regular tenders orchestrated by the ECB and grants refinancing within the framework of these periodic auctions of central bank money. The NCBs manage the settlement accounts of credit institutions, hold the standing facilities for overnight credit and deposits, and also monitor minimum reserves. They are in constant contact with the ECB and supply it with all the daily data essential to the conduct of effective monetary policy. •  A rapid integration of the national money markets  It was crucial to enable liquidity to circulate smoothly from one financial centre to another in the euro area so that operators could conduct the necessary arbitrage between the different centres, thus ensuring a single euro interest rate for each maturity. The TARGET system is the key component of this unification. Right from the start of 1999, it enabled credit institutions to effect large-value, crossborder transactions with same-day value all day long, thus allowing the interbank market to function as a single market right away.

Orphanides, Athanasios, and John C. Williams, “Inflation Targeting under Imperfect Knowledge,” in Frederic Mishkin and Klaus Schmidt-Hebbel (ed.) Monetary Policy under Inflation Targeting, Central Bank of Chile, 2007. Reprinted in FRBSF Economic Review, 2007. Reis, Ricardo, “Losing the Inflation Anchor,” Brookings Papers on Economics Activity, Fall 2021, 2022, 307-361. Swanson, Eric T., and John C. Williams, “Measuring the Effect of the Zero Lower Bound on Medium- and Longer-Term Interest Rates,” American Economic Review, 104 (10), October 2014, 3154-3185. 1 Board of Governors of the Federal Reserve System (2012). 2 Board of Governors of the Federal Reserve System (2020). 3 See Orphanides and Williams (2004, 2005, and 2007). There is a large theoretical and empirical literature on the formation of expectations. See, for example, Evans and  Honkapohja (2001), Malmendier and Nagel (2016), Coiboin et al (2022), and references therein. 4 As discussed in Levin and Taylor (2013), data on longer-run inflation expectations were spotty in past periods of high inflation. This situation has improved markedly over  the past 20 years, first with the appearance of inflation-indexed Treasury securities, and more recently with the introduction of the Survey of Consumer Expectations in 2013, and other surveys of businesses and market participants. 5 This is constructed by inferring the expectations 6-10 years from matched individual responses for “the next ten years” and “the next five years,” then taking the median  from the sample.
A few years ago, these ideas would have sounded difficult, but today we are edging ever closer to realising many of them, which is indicative of the rapid pace of change in the offshore RMB market. But as we all recognise, this will be a paced process and not something that would or should happen overnight. On this front, the HKMA has been engaging with Mainland Chinese authorities on further expanding fund flows between the onshore and offshore RMB markets. And I am pleased to say that significant progress has been made. Most recently, the quota for the RMB Qualified Foreign Institutional Investor (RQFII) scheme was expanded by RMB200 billion, bringing the total to RMB270 billion. The Qianhai cross-border lending pilot scheme was also launched, enabling companies incorporated in Qianhai to borrow RMB loans from banks in Hong Kong for uses relating to the development of Qianhai. I look forward to the further streamlining of policy arrangements so that all cross-border transactions currently settled in US dollars can have the option to be settled in RMB also. This in turn could be followed by the continued relaxation of cross-border flows of RMB into and out of Mainland China along with the liberalisation of China’s capital account. The relaxation of capital account restrictions, the expansion of the offshore RMB market, and an increase in the financial depth of the onshore markets can be mutually reinforcing and beneficial to the growth of the offshore RMB market.

So what does this all imply for monetary policy? First, barring a sustained period of economic growth so strong that the economy’s substantial excess slack is quickly exhausted or a noteworthy rise in inflation expectations, the outlook implies that short-term interest rates are likely to remain unusually low for “an extended period.” The economy can be allowed to grow rapidly for quite some time before there is a real risk that shrinking slack will result in a rise in underlying inflation. We will learn more as we go, and, as always, should be prepared to adjust course in a timely manner if incoming information suggests a different strategy would better promote our objectives. Second, the Federal Reserve needs to continue to communicate effectively about its objectives, the efficacy of the tools it has at its disposal to achieve those objectives, and the willingness to use these tools as necessary. This is important in order to keep inflation expectations well-anchored. If inflation expectations were to become unanchored because Federal Reserve policymakers failed to communicate clearly, this would be a self-inflicted wound that would make our pursuit of the dual mandate of full employment and price stability more difficult. If we consistently and effectively communicate our objectives and our strategies, we can avoid this outcome. Thank you for your kind attention. I would be happy to take a few questions. 4  As a byproduct of actions taken to combat the crisis, the Fed generated record net income in 2009 and 2010, and remitted $ billion to Treasury.