samchain/econo-pairs-v1 huggingface dataset:
Mr Latter looks at the implications of e-commerce for the banking and monetary system in Hong Kong  Speech by Mr Tony Latter, Deputy Chief Executive of the Hong Kong Monetary Authority, at a conference on China and the New Millennium: WTO, Entrepreneurs and New Technology for Global Trade, held in Nansha, Guangdong Province, People’s Republic of China on 24 March 2000. *  *  *  The internet has quite suddenly multiplied by a remarkable degree the number of potential suppliers and customers with whom we can do business, and the number of avenues through which we can perform financial transactions. This opens up all sorts of opportunities, but it also attracts all sorts of warnings - about needing to know the identity of those with whom we are dealing; about needing somehow to satisfy ourselves, remotely, as to the quality of the products or services on offer; about needing to be sure of the financial standing of counterparties, be it their ability to pay or to provide credit which concerns us; and so on. Speaking as a central banker, I begin to have a specific interest in the development of e-commerce at the point where payment has to be made for the goods or services that are traded via the internet, or where people deposit money into internet accounts. But I also have a broader interest relating to the overall stablity and integrity of the financial system.

With regard to operational aspects of monetary policy in pursuit of the general macroeconomic objective of stability in the value of the currency, the advent of this new means of payment would, if it caught on to a significant extent, have some impact on the public’s allocation of money holdings as between physical currency, various forms of deposit and, now, electronic forms. This in turn might affect the monetary statistics and their interpretation. However, any changes would only occur gradually. Besides, nowadays there are scarcely any central banks which rely single-mindedly and exclusively upon measures of money supply to guide their monetary policy decisions. Therefore I do not believe that there is anything much to worry about on this front. Next, it has been suggested that internet banking in its various manifestations could introduce additional and unpredictable volatility into world financial markets by enabling millions of people to switch funds between investments or between currencies at the click of a mouse. In general I am sceptical about such worries. Global financial markets have already been exploiting the IT age with its 3  BIS Review 28/2000  immediacy of information and electronic dealing for some years. Capital is already hugely mobile in both scale and speed. I doubt whether the inclusion of new players at the retail level would have much of an additional impact.
Source: ONS and Bank of England  Chart 10: 1990s – Real GDP and real lending  Annual growth  25  Annual growth  10  Business lending (lhs)  20 15  GDP (rhs)  8  Mortgage lending (lhs)  10  6 4  5  2  0  0  -5  -2  -10  -4 -8  -4  0  4  8  12  16  Quarters from start of recovery (1991 Q4 = 0) * Lending series deflated using the GDP deflator. Source: ONS and Bank of England  14  BIS Review 108/2009  Chart 11: Recessions and recoveries – median paths  Interquartile range financial recessions Financial recessions  Mean time to trough  Normal recessions  Mean time to trough  106 104 102 100 98 96  0 1 2 3 4 5 6 Quarters from peak in output  7  8  9  10 11 12  *Source:IMF and Bank of England staff calculations http://www.imf.org/external/pubs/ft/weo/2009/01/index.htm  BIS Review 108/2009  15

Christian Noyer: The euro area is getting stronger Speech by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, at the Paris Europlace International Financial Forum, “Post-crisis growth and investment opportunities in Europe”, New York, 22 April 2013. *  *  *  Mr Chairman, Ladies and Gentlemen, I am very pleased to have this opportunity to speak to you here in New York. I’d like to offer you some views about the euro area from both a short- and long-term perspective. I’ll start with Cyprus. This was certainly a traumatic episode. Obviously, the decision process was not optimal. And the adjustment effort requested from the country, while absolutely necessary, was totally unexpected by the population. As a result, many observers have interpreted the Cyprus crisis as a sign of fragility and uncertainty about the euro. In fact, it’s quite the opposite. Imagine if the situation in Cyprus had occurred nine months ago. Most likely it would have resulted in a new wave of turbulence in euro sovereign markets, with interest rate increases and strong capital flows out of the periphery. This was not the case. There was no contagion, and no spill-over effects from Cyprus to other euro area countries. During the first quarter of 2013, when the Cyprus crisis developed, long-term interest rates in Greece, Portugal and Ireland actually declined by around 270, 120 and 130 bps, respectively.
BIS central bankers’ speeches  3  Following our December 2008 meeting, the FOMC announced that it had cut the target range for the fed funds rate to 0-to-1/4 of 1 percent, and being thus “zero bound”, we floated the idea of purchasing longer-term Treasuries in order to provide further monetary accommodation (when we buy Treasuries or MBS and agency debt, we put money into the financial system, substituting for further interest rate cuts). On March 18, 2009, we announced additional purchases of up to $ billion of agency MBS and up to $ billion of agency debt, plus purchases of up to $ billion of longer-term Treasury securities over six months. That day, our balance sheet was marked at $ trillion.

Allow me to highlight some of our resilient features: •  We continue to have a strong current account position with the current account last year registering a surplus of 9 percent of GDP, or around 35 billion US dollars, thanks largely to a substantial saving on energy imports. •  Our international reserves have been at a healthy level, standing at three times of the short-term external debt we hold. •  Our capital markets are relatively less exposed to the risk of capital flight, with foreign holdings at less than 9 percent of the Thai government and Bank of Thailand bond outstanding, compared with more than 30 percent in some other emerging markets in the region. •  External debt of the Thai corporate sector has been relatively low, hovering around 13 percent of total corporate debt. And, most of the external debt belongs to large corporations which have used the proceeds to finance their investment aboard and are able to manage their exchange rate risks sufficiently well. As a result, the currency mismatch does not pose a threat to the Thai corporate sector, unlike what they experienced during the 1997 economic crisis. Taken together, the strength of Thailand’s external position on many fronts has helped the Thai economy withstand the recent global financial turmoil, and would continue to provide cushions against possible external shocks in the future. Nevertheless, it would be a mistake to be complacent with where we stand and fail to anticipate greater challenges ahead.
Sveriges Riksbank (2013), Financial imbalances in the monetary policy assessment. Article in Monetary Policy Report, July 2013. Woodford, Michael (2012), “Inflation targeting and financial stability”, Economic Review, 2012, 1, Sveriges Riksbank. BIS central bankers’ speeches  11  12  BIS central bankers’ speeches  BIS central bankers’ speeches  13  14  BIS central bankers’ speeches  BIS central bankers’ speeches  15  16  BIS central bankers’ speeches

William C Dudley: Comments on "A Skeptical View of the Impact of the Fed's Balance Sheet" Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the 2018 US Monetary Policy Forum, New York City, 23 February 2018. * * * It is a pleasure to be able to comment on this year’s U.S. Monetary Policy Forum paper. As always, what I have to say here today reflects my own views and not necessarily those of the Federal Open Market Committee (FOMC) or the Federal Reserve System.1 To say that I was interested in this year’s topic is an understatement. The use of the Federal Reserve’s balance sheet has been an important element of U.S. monetary policy over the past decade. The start of the reversal of that expansion—the so-called process of balance sheet normalization—has been a key focus of the FOMC’s monetary policy deliberations over the past year. I am pleased that the start of this process—in contrast to the bond market taper tantrum of 2013—has been non-disruptive. The normalization process is now running in the background, essentially on autopilot, with short-term interest rates serving as the primary tool for adjusting the stance of monetary policy. Let me start with my main point: Although I agree with many of the authors’ findings in this year’s paper, I would take a much less skeptical view of the Federal Reserve’s balance sheet as a tool of monetary policy.
Central banks can also contribute to the function of money markets more broadly, by being willing to act early to address potential liquidity needs, and to support money market infrastructure more generally. I’ll end with a word on central banks’ “footprint.” Many of the developments raised in the paper and that will be discussed over the course of this conference have been a response to the needs of the day: having more reserves in the system is a reflection of the monetary policy stance required by economic developments; the leverage ratio has been developed as a part of the response to failure of the pre-crisis capital framework; and our intervention in risk-free benchmark rates is intended to avoid a co-ordination failure in which the most appropriate and robust benchmarks would not be adopted by the market. So while it is true to say that central banks’ footprint in money markets is larger now than in the days prior to the crisis, this has been out of necessity rather than design. As a tribe, central bankers retain a strong belief in financial markets’ ability to facilitate price discovery, allocate capital efficiently, and provide useful signals about the macro economy and financial stability. References Duffie, D and Krishnamurthy, A (2016), “Passthrough efficiency in the Fed’s New Monetary Policy Setting”, Preliminary version for presentation at the 2016 Jackson Hole Symposium. Fender, I and Lewrick, U (2015), “Calibrating the leverage ratio”, BIS Quarterly Review, December, pages 43–58.

Luis de Guindos: Interview in Expresso Interview with Mr Luis de Guindos, Vice-President of the European Central Bank, and Expresso, conducted by Mr João Silvestre on 15 April 2020. * * *  Is this the greatest crisis in living memory? According to the International Monetary Fund (IMF), this will be the worst downturn since the Great Depression. There is a great deal of uncertainty and, given this degree of uncertainty, we need to define and analyse several scenarios. The IMF’s baseline scenario is very similar to other public and private sector forecasts. It’s important to bear in mind that the impact on the economy, which will be huge, is concentrated in the second quarter of the year – as well as in March – and that the impact will be severe, but temporary. This temporary aspect is important. The calculations point to a contraction in the second quarter by as much as 20% compared with the previous quarter. And it will also have an impact on public finances and the financial markets. Despite the uncertainty you have mentioned, is a rapid recovery possible in 2021? The key factor is the duration of the lockdown – the longer it lasts, the greater the impact. We hope that the containment measures will start to be eased over the coming months, reducing the negative impact on the economy, and that we will see a return to positive growth rates in the second half of the year.
1  The “Desk” refers to the Federal Reserve Bank of New York’s trading desk, which implements monetary policy on behalf of the Federal Reserve System, as directed by the Federal Open Market Committee. 2  This figure is based on recent volume trends in the Federal Reserve’s FR2004 database. This figure is not adjusted for double-counting issues that arise from primary dealers reporting transactions with other primary dealers. FR2004 also represents an incomplete picture of liquidity provision in the Treasury market, as it only captures activity conducted by primary dealers. BIS central bankers’ speeches  1  Global investors use Treasuries for investing and hedging purposes, and as benchmarks for pricing other types of assets. In addition, many in the public and private sectors use Treasury yields to glean information about expectations for the future course of the U.S. and global economy. Treasury securities originate in the primary market, where the Federal Reserve Bank of New York, in its capacity as fiscal agent for the U.S. Treasury, works with primary dealers to facilitate the auction process.3 Auctions are open to primary dealers, their customers, and direct bidders.

In a comparison of the profile in 2016 with the profile in 2005 and 2010, the most striking feature is that interest burdens rise in many age groups. The age profile itself is little changed. A similar chart showing the distribution of higher interest expenses across income deciles would have shown the same picture. Even though many households will feel the effects of higher interest expenses, the increase will be manageable for most people. The share of households with high debt relative to income, low debt-servicing capacity and a high loan-to-value ratio is small, and lower than just a few years ago (Norges Bank (2017)). Chart: Higher bank deposits dampen some of the effect of higher debt How quickly an interest rate increase will lead to lower growth in consumption also depends on the size of households’ financial buffers. Buffers in the form of bank savings can be drawn down if interest expenses rise, reducing the need to adjust consumption. Even though some households have little in the way of financial buffers, many households’ buffers are larger than just a few years ago. Despite the rise in debt ratios between 2010 and 2016, an interest rate increase will lay claim to a smaller share of bank deposits, particularly for the groups with the highest level of net debt. This will counteract some of the effect a higher level of debt has had on 6/7  BIS central bankers' speeches  the impact of an interest rate increase via the cash-flow channel.
This applies for amounts of up to SEK 250,000 per customer and institution. It is only if the deposit has been made by another financial institution or in some cases if the amount is frozen that the deposit guarantee does not apply. This reasoning concerned what we could do in a situation where financial stability is threatened. Some central banks have recently been forced to take this type of measure. But none of the Swedish banks has had problems with its liquidity in the way I described in my example. So how do we view the current situation? Recent developments As I mentioned earlier, the financial turbulence has been included in our analyses for some time now, both with regard to monetary policy and financial stability. The Riksbank has regularly emphasised many of the risks in the financial system and what could happen if the financial turbulence should grow worse. The Riksbank bases its assessment on an analysis that focuses on the four major Swedish banks, as they account for around 80 per cent of the market. The Swedish banks have considerable equity, good profitability and limited loan losses. Our assessment is that there is a high degree of resilience to the international turmoil  BIS Review 119/2008  3  that has prevailed for some time now. But this is not the same as saying that the Swedish financial markets and banks are not affected by the situation. Of course they are.

However, I considered that this risk is slight at present, now that economic activity is slowing down. The labour market usually lags behind production in the economic cycle. Employment has risen rapidly in recent years and when demand and production slow down as quickly as they are now, my assessment was that companies are more likely to cut their workforces rather than raise prices substantially. The redundancies announced at the beginning of the autumn may be an indication that many companies have had to reduce their labour forces. To summarise, my assessment was that inflation would slow down sooner than was assumed in the Monetary Policy Update. It was therefore my conclusion that no further interest rate increase was necessary to bring inflation back on target within a reasonable period of time. Further, my assessment was that the repo rate might need to be cut more than indicated by the proposed interest rate path and I therefore entered a reservation against the new interest rate path. Some concluding thoughts The Riksbank, like many other central banks around the world, is currently facing difficult challenges. But although they are difficult, we are well-equipped to meet them. For instance, we have an entirely different starting point from that during the finance crisis of 1992, which largely concerned problems that had originated here at home. Today we are suffering contagion effects from problems in the US mortgage market, a market to which the Swedish banks have only small direct exposures.
Given these developments, the FOMC began adjusting the mix of its tools in December. The Committee, however, is maintaining the overall highly accommodative stance of policy. The Committee modestly reduced the pace of its monthly asset purchases from $ billion to $ billion in three separate $ billion steps. In addition, with the unemployment rate approaching the 6-1/2 percent threshold that was established in December 2012, the Committee decided it was time to update its forward guidance on the future path of shortterm interest rates. Our policy statement now emphasizes that when deciding how long short-term rates will remain at their current level, the Committee will use a wide range of information to assess the realized and expected progress toward our dual mandate goals of maximum employment and price stability. The statement also indicates that given the Committee’s current assessment of these factors, it likely will be appropriate to keep the fed funds rate at its current level for a considerable period after the asset purchase program ends. Furthermore, even after the economy lifts off and employment and inflation are near mandate-consistent levels, economic conditions likely will warrant keeping short-term rates below their typical long-run level for some time. The various asset purchases the Fed has undertaken since 2008 have expanded our balance sheet more than fourfold, to over $ trillion dollars. Moreover, according to the FOMC’s projections and the latest market expectations, by the time the policy rate increases, it will have been near zero for about seven years.

The very low inflation is prompting some to argue that policy normalization may have to wait still, but perverse effects need not be underplayed. But it is likely that policy normalization – understood as a return to positive real policy rates, will be quite a time consuming process, particularly in Europe. Major risks persist, or even grow, in the global economy; they are due to interconnectedness and synchronicity of business cycles, the search for yield that has stimulated big bubbles again, a propensity to resort to protectionism measures (which adds to fragmentation tendencies), the accumulation of systemic risks in non-banking markets. When it comes to monetary policy let me mention a few challenges. The models central banks use have baffled in quite a few instances; we still do not have clear answers as to why inflation is persistently so low in most of the Union, in spite of economic recovery. Financial stability concerns are increasingly on our radars. There are other puzzles, like the flattening of the Philips Curve and I would range here the fall of financial intermediation in some Non-member Sates –in Romania and Hungary in particular. This seems to be a clear case of credit-less recovery, but that may also be the outcome of financial integration – for international companies prefer to source credit on external markets (where these may be cheaper). The global financial cycle poses a major challenge.
Some economists have called for adjusting the inflation target, although in opposite directions: a few have argued for a higher target to avoid testing the Zero Lower Bound often (ZLB); others have called for a lower target, assuming lowflation is the New Normal. In both  2  BIS central bankers’ speeches  cases, hasty changes may only affect the CBs’ credibility and the expectation channel of monetary policy. We have more flexibility on the target horizon. This is the medium term and should not be confused with the 3-year horizon of the forecasts published by the ECB for instance, which may fall short of the target level; what matters is being on a path that is consistent with this medium-term mandate. Forward guidance and the announcement that rates will be “lower for longer” should provide reassurance over the CB’s determination to do “whatever it takes” to fulfill its mandate within this mandate. True, uncertainty about the causes of lowflation and low rates leads to uncertainty over the neutral rate and the need for accommodation; but the more uncertain our environment, the more important and useful it is that we be clear and predictable in order to reduce this uncertainty. According to simulations carried out within the Eurosystem and the BDF, clarifying that the future stance will remain accommodative for many years enhances the efficacy of Quantitative Easing (QE). Third challenge: how effective can non-conventional monetary measures be? The ZLB has proved not to be the effective lower bound.

Spreads and volatility have also been lower for longer, although there is some market discrimination between agents and between emerging market economies (EMEs), as well as periodic spikes in volatility, especially recently. Next, why are inflation or interest rates so low and how does this impact policy? First puzzle: inflation remains low in countries where unemployment is close to the NAIRU, like the USA, or where the output gap has been sharply reduced, like Germany; this may imply that the Phillips curve has a lower slope too. Yet, various studies by the IMF or the BDF show that, even if slopes have tended to flatten since the early 1990s, there has been no clear-cut change over the last years. BIS central bankers’ speeches  1  There are two possible explanations. The benign one is that transitory disinflationary shocks, e.g. due to commodity prices, temporarily shift the Phillips curve downwards. The worrying one would be a disanchoring of long-term inflation expectations, threatening the objective of price stability; such a disanchoring is suggested by the surprising correlation between spot oil prices and market expectations derived from inflation-linked swaps up to 5 years in 5 years. People can reasonably differ in their interpretation; hence the scope for healthy policy debates. As regards low policy or market rates, these are mainly seen as reflecting lower equilibrium, or neutral, interest rates. This leads us to the second puzzle: does the lower neutral interest rate result from cyclical or structural factors?