samchain/econo-pairs-v1 huggingface dataset:
Nevertheless, the unemployment rate in New York and New Jersey has risen to levels not seen in almost two decades. In New York City, employment has typically recovered more than a year later than the recovery of national employment and has, in the past, been led by a recovery of Wall Street employment. Although Upstate New York has seen little overall job growth for the past several decades, job losses in this downturn were not as severe as losses for the nation, in part, because the upstate metro areas did not experience a boom-and-bust housing cycle. In addition, Puerto Rico, which is also part of our District, has experienced a considerably longer and deeper downturn than the mainland or this region. Before I continue, it is important to explain the integral role of the Federal Reserve System in regional economies across the country. One of our key responsibilities here at the Federal Reserve Bank of New York is to connect the Federal Reserve System to Main Street across our District. Real activity takes place on Main Street in the form of the millions of decisions made every day by households and businesses around the country. When we talk to them, we learn how firms and consumers are experiencing the economy. That essential insight from Main Street informs the policy decisions that we make in pursuit of our goals of stable prices, full employment and financial stability.

But we have so much to learn from experts in other fields. Strengths as Blind Spots One of the most important lessons I’ve learned as a CEO is that there’s no fixed endpoint when it comes to shaping an organization’s culture. You can never take a step back and say, “We’ve finished the culture project. Well done! Now it’s time to focus our efforts elsewhere.” Culture is constantly evolving, and therefore needs to be constantly nurtured. One of the most challenging elements is that there’s no clear benchmark for success. And sometimes your greatest strengths can become your blind spots. As an organization with a public mission and regulatory responsibilities, the Fed needs to have a particular focus on compliance. But cultures with a heavy focus on compliance can breed a sense that individuals aren’t responsible for their actions. As a CEO, I’ve tackled these issues by focusing on principles and values rather than writing extensive policies that try to cover every potential decision. This puts a premium on individual accountability to do what’s right and creating an environment where everyone has the ability and responsibility to speak up. Somewhat paradoxically, focusing on principled decision making and accountability, rather than relying exclusively on rules and policies, can be the most effective safeguard against wrongdoing and unethical behavior. What’s the Way Forward? Creating a positive work culture is challenging and ongoing work. And there’s no silver bullet that can solve cultural problems overnight.
In so far as this occurs, it can be interpreted as meaning that the deposit guarantee scheme in practice subsidises risky lending, which would be unfortunate. The picture is, however, complicated by the fact that smaller banks contribute positively by increasing competition in the banking market. Larger banks may also be too large for the authorities to let them fail, which is also a problem. There are difficult considerations to make here. Experiences from the United States When the bank run on the US Silicon Valley Bank began, only about 6 per cent of its deposits were guaranteed by the US deposit guarantee scheme. The rest were unsecured deposits, primarily because they were for larger amounts. This is an example of the fact that deposits in many banks today do not only come from small savers. Many of them, including the Swedish ones, finance themselves to a large extent in the financial markets. Some of the market funding takes the form of direct deposits from financial actors and is not covered by any deposit guarantee and it is normally very volatile. Another part is funding is through the bank issuing securities with a specific maturity. These are therefore not immediately available and thus not exposed to the same risk as the deposit, but on the other hand give rise to a refinancing risk. The run on Silicon Valley Bank also highlighted that contagion effects can be large even when relatively smaller banks get into trouble.

Bank collapses in the USA and Switzerland The bank collapses in the United States and Switzerland in March created uncertainty in the global financial markets. To understand these developments, it is important to analyse the underlying problems. They are largely well known. However, there are also a number of new elements that may exacerbate the wellknown problems and that need to be analysed further. We want to avoid problems in the banking sector in one area spreading to other parts of the financial system or to other countries. At the same time, it must be possible to wind down banks with serious problems in an orderly manner. It is important to learn from crises. What we have now seen means that I think we will have to change some regulations. The financial regulatory framework is governed to a very large extent by global standards, so that is where the analysis must begin. Any future agreements reached at global level will also clearly affect the rules in the EU and thus in Sweden. Let me first focus on the more familiar problems and then return to what I see as new ones. In a sense, you can probably talk about the financial sector before and  2 See, for example, the discussion in Federal Reserve Bank of St. Louis (2022). 4 [30]  after the Silicon Valley Bank crash. I think it can be a watershed in the way we think about the design of some financial regulation.
This – along with the SNB’s willingness to intervene in the foreign exchange market – has helped to relieve pressure on the Swiss franc. The effect of the negative interest rate on the exchange rate is currently playing a decisive role in enabling the SNB to fulfil its monetary policy mandate. It allows the SNB to counter the aforementioned consequences of the Swiss franc appreciation on economic developments and inflation. Without the negative interest rate, inflation and economic growth in Switzerland would be lower. 3  Low interest rates and Swiss banks’ profitability The negative interest rate thus remains indispensable from a monetary policy perspective, and has, as explained, achieved the desired effect. A monetary policy geared to price and economic stability is also a precondition for a profitable, stable financial system. An environment of decreasing prices and low growth would lead to reduced demand for banking business and increased credit defaults, losses and write-downs. At the same time, the exceptionally low interest rates are fraught with significant challenges. Above all, over time they can have economically undesirable consequences for financial stability. We have arrived at the main topic of my remarks today, namely, how does the SNB assess the effects of low interest rates on financial stability? The answer to this question largely depends on the extent to which low interest rates affect banks’ profitability.

A second – and important – explanation can be seen in the red shaded area of this chart (slide 8). Domestically focused banks have reacted to the decline in liability margins by increasing asset margins by around 50 basis points. Specifically, following the introduction of negative interest, they raised rates for long-term mortgages (shown here in blue), while returns on long-term market investments (illustrated here using the ten-year swap rate in yellow) continued to fall. The banks have since managed to keep asset margins high, notwithstanding the fact that market rates have continued to decline. But there is another, equally important explanation for the limited impact of the low interest rate environment on the profitability of domestically focused banks: these institutions have increased their risk appetite. This applies particularly to affordability risk (typically measured using the loan-to-income ratio) in lending and to interest rate risk from maturity transformation. Let’s take a closer look at the current risk situation with respect to domestically focused banks in Switzerland. Affordability risk refers to cases in which a borrower can no longer afford to make interest and amortisation payments for a loan under unfavourable conditions. 5 A representative quarterly survey conducted by the SNB indicates that a substantial share of new mortgages exhibit high loan-to-income ratios. Moreover, this share has been rising since 2013. 6 Put simply, interest rate risk is the risk that banks will suffer losses as a result of rising interest rates.
But, given that it is 50 years since Stonewall, it’s clear we have more catching up to do. And this is where we owe OPEN Finance a great debt of gratitude. OPEN Finance gives us the tools we need to assess how we’re doing, and where we need to make progress. With the support of OPEN Finance, and the dedication of the Open Network at the New York Fed, we’ve introduced a number of new policies and measures that drive our efforts to make the Bank the open and inclusive employer we aspire to be. I’d personally like to thank David Ignell and Gil Carroll, presidents of our Open Network, for their work moving us forward. These efforts are important because they send a message to LGBT employees and the organization as a whole about our values and culture. I’d like to share one specific example. We recently created the option to add gender pronouns to our official e-mail signatures. This is a part of an organization-wide effort to raise awareness around the use of pronouns. On its own, it may seem like a small change, but it sends a loud message that part of respecting one another is using the correct pronouns. This effort has been well received, and a big part of that is because it’s created spaces for conversations that just weren’t happening before. But policies can only go so far.

And this is a journey without a final destination. When someone tells me “we’re done,” is when I know we have the furthest to go. It’s also a journey that is so much easier when we do not walk alone. Partners like OPEN Finance are crucial to our progress. Once again, I’d like to thank you for inviting me to open today’s forum. I know it’s going to be a productive and insightful day, and one full of the conversations we all need to be having more frequently. 1  LGBT Demographic Data Interactive. Los Angeles, CA: The Williams Institute, UCLA School of Law, January 2019. 2 James, Sandy E., Jody L. Herman, Susan Rankin, Mara Keisling, Lisa Mottet, and Ma’ayan Anafi. The Report of  the 2015 U.S. Transgender Survey. Washington, DC: National Center for Transgender Equality, chap. 9, 2016. 3 Human Rights Campaign Foundation, A Workplace Divided: Understanding the Climate for LGBTQ Workers  Nationwide, June 2018. 4 See for example: Hewlett, Sylvia Ann, and Karen Sumberg, For LGBT Workers, Being ‘Out’ Brings Advantages,  Harvard Business Review, July-August, 2011; and Hunt, Vivian, and Lareina Yee, Sara Prince, and Sundiatu Dixon-Fyle, Delivering Through Diversity, McKinsey & Company, January 2018. 3/3  BIS central bankers' speeches
The deployment of tokenised settlement assets across borders would also pose a risk to our monetary sovereignty, if it resulted in the use of stablecoins backed by foreign currencies or CBDCs. B- To reconcile competition and sovereignty, a “retail” central bank digital currency is obviously a potentially important lever. 1- This was the main aim of the investigation phase launched by the Eurosystem in July last year. Issuing a retail CBDC, nevertheless, raises a number of operational challenges. In particular because financial intermediaries, including banks, play a key role in the security and financial stability of our monetary and financial system. Introducing a CBDC must therefore neither result in the conversion of a significant proportion of bank deposits into assets held in CBDCs – in normal times as well as in times of stress – nor compete with banks in their day-to-day relations with their customers. These issues need to be addressed by design in the architecture and functionality of a digital euro, for example by introducing holding limits or by promoting an intermediated model. This is why it is essential that the financial intermediaries, along with the other stakeholders, be properly involved in the investigation phase that we are conducting: an expert advisory group has already been set up at European level,1 and this consultation will be extended to all stakeholders in the coming months, in particular via the European and French market bodies at our disposal. 2- But other levers will be needed to reconcile competition and sovereignty. First and foremost, the regulatory lever.

Denis Beau: From open banking to open finance Speech by Mr Denis Beau, First Deputy Governor of the Bank of France, at the France Payments Forum “The Europe of banking and financial services” – Paris Europlace – France Innovation, Paris, 24 March 2022. * * * Technological innovations, changes in demand, the arrival of new players: the changes underway in the financial sector are providing a strong impetus to relax the conditions of access to the market, in order to foster competition and thus encourage the development of new, more efficient and less costly services. In Europe, in the field of payments, this relaxation has already occurred. The EMD, the PSD1 and finally the PSD2 directives have all resulted in the emergence of more agile players, particularly in terms of data exploitation. The pressure to open up data now extends to insurance and savings: after open banking, we now speak of open finance. This pressure calls for further adapting the regulatory framework. But what should our guiding principles be? In the payments sector, the main objective of the directives I mentioned was to reconcile openness and security. While this challenge remains relevant for the transition from open banking to open finance, with digitalisation and the development of the platform economy, we have seen two other challenges emerge: reconciling innovation and integration on the one hand and competition and sovereignty on the other.
But past achievements will not extrapolate into future successes, unless we update our policies to meet changing conditions. Policies that worked in the 1970s and 1980s needed rethinking by the 1990s. In 1997, we began a comprehensive review of MAS’ policy framework and approach, which has led to fundamental changes. Our work is far from done, and we anticipate many challenges ahead. Credibility and dynamism – MAS’ approach to future challenges Monetary policy In monetary policy, certain verities are not likely to change. We will continue to manage the exchange rate as our principal policy variable. The primary objective will still be to maintain price stability and the purchasing power of the Singapore dollar, over the medium term. We will continue to guard against destabilising speculation in the Singapore dollar. However, the international environment has changed. We are witnessing larger capital flows and more volatile financial markets. G3 currencies have tended to undergo prolonged periods of misalignment, followed by sharp corrections. For a while after the Asian crisis, when currencies that were quasipegged to the US dollar collapsed in a disastrous contagion, a consensus was growing that the only sustainable exchange rate regimes for emerging markets are either a hard currency peg or a totally free float. 1  In 1973, we reduced the corporate tax for ACU interest earnings from overseas loans from 40% to 10%. We extended this to fees and commissions received by ACUs in 1976. BIS Review 67/2001  3  These corner solutions are not suitable for Singapore.

Economic activity in the third quarter is estimated to have increased by 0.4% compared with the previous quarter. In 2010 we expect to see a moderate recovery. This is in line with the latest Eurosystem staff projections, which were published last Thursday. However, this expectation remains surrounded by a high level of uncertainty. In the view of the Governing Council, the risks to the outlook remain broadly balanced. As regards price developments, inflation and inflationary pressures have remained low over recent months. In line with our expectations, inflation rates turned positive again in November, reaching an estimated 0.6%. Looking ahead, we expect inflation to remain moderate over the policy-relevant horizon, in line with a relatively slow recovery in demand. Indicators of inflation expectations over the medium to longer term remain firmly anchored, in line with the Governing Council’s aim of keeping inflation rates below, but close to, 2% over the medium term. Our monetary analysis confirms the assessment of low inflationary pressures over the medium term. In particular, we see that money and credit expansion continues to decelerate. In the case of loans to households, the latest data provide further confirmation of a levellingoff at low rates of growth. The growth of loans to enterprises follows turning-points in the business cycle with some lag. The still subdued levels of production and trade, coupled with broader uncertainty regarding the business outlook, will dampen firms’ demand for bank financing also in the coming months, especially for short-term loans.
As you may recall, in a Taylor Rule the nominal federal funds rate depends on an equilibrium or neutral real rate of interest – which is assumed to be constant over time – the deviation of the level of economic activity from estimates that would be consistent with long-run price stability and the deviation of inflation from the central bank’s target. As I have noted elsewhere, the Taylor Rule formulation has a number of characteristics that make it a useful input into the policy-setting process. First, it very explicitly focuses on the two parameters – the long-term inflation objective and the level of potential output consistent with that objective – that map directly to the Federal Reserve’s dual mandate objectives. Second, standard Taylor Rules are self-equilibrating. They respond to economic shocks and forecast errors in a way that pushes the economy back toward the central bank’s objectives. Market participants incorporating information about the rules in their price-setting decisions helps keep inflation expectations well-anchored. Third, academic research shows that Taylor-type rules typically perform quite well across a wide range of economic models. This is important because we want guides to policy that are robust; that is, guides that are not overly sensitive to model-specific assumptions about how the economy works, or how households and businesses alter their expectations and behavior in response to changes in monetary policy.5  5  6  See Conducting Monetary Policy: Rules, Learning and Risk Management.

BIS central bankers’ speeches  7  Conclusion In my remarks today, I have provided my current thinking about the U.S. growth and the inflation outlook, and the implications for monetary policy. To sum up, the U.S. economic outlook looks brighter, with growth likely to be somewhat above the trend of the past five years. The risks to growth appear generally balanced, without unusually high risks that growth will either be much stronger or weaker than my forecast. On inflation, I remain confident, despite the recent softening, that inflation will begin to move up towards our 2 percent objective next year. This move will not likely happen immediately, however, given the recent weakness in energy prices and the fact that non-energy import price trends are also likely to soften a bit over the near-term. With respect to monetary policy, I believe that market expectations as captured by the most recent New York Fed’s surveys of primary dealers and market participants are reasonable – with lift-off expected to take place sometime around the middle of next year. But, life is uncertain and my judgment of the appropriate timing could change in response to incoming data and other factors that change the economic outlook. When we do begin to tighten monetary policy, the pace of tightening will depend not only on the outlook but also on how financial market conditions respond as we begin to remove monetary policy accommodation. Financial market conditions are an important transmission mechanism of monetary policy.
5 08  09  Chart 8: 1970s – Real GDP and real lending  Annual growth  Annual growth  40  8 Mortgage lending (lhs) GDP (rhs)  30 20  6 4  10  2  0  0  -10  -2  Business lending (lhs)  -20  -4  -30  -6 -8  -4  0  4  8  12  Quarters from start of recovery (1975 Q4 = 0) * Lending series deflated using the GDP deflator. Household M4 lending is proxied with secured lending prior to 1980. Source: ONS and Bank of England  BIS Review 108/2009  13  Chart 9: 1980s – Real GDP and real lending  Annual growth  Annual growth  40  8 Mortgage lending (lhs)  30 20  6 4  GDP (rhs)  10  2  0  0  -10  -2  Business lending (lhs)  -20  -4  -30  -6 -8  -4  0  4  8  12  Quarters from start of recovery (1981 Q2 = 0) *Lending series deflated using the GDP deflator. Household M4 lending is proxied with secured lending prior to 1980.

Cycles of the past Let me start with the bad news. The Forum has assuredly not solved the problem of boom and bust in the commercial property market. Indeed, the environment today – slow recovery from a jarring commercial property bust – is eerily reminiscent of the situation twenty years ago when the Forum began. As Yogi Berra reportedly said, it is a case of déjà vu all over again. The Forum was born out of the commercial property crash of the early 1990s. Between 1989 and 1993, UK commercial property prices fell by 27%. This followed a long period of rising prices, high liquidity, expansive lending and weakening credit standards. These ingredients combined to create a classic pro-cyclical spiral. Higher valuations supported ever-larger  BIS central bankers’ speeches  1  loans on ever-finer terms, boosting valuations still further. When that pro-cyclical spiral went into reverse, it left banks, developers and investors all licking their wounds. Today, the situation is much the same. Commercial property prices are 37% below their peak. For secondary properties, they are more like 50% below their peak. This fall-to-earth came after a long wave of rising commercial property prices, deeper liquidity and rapid and, in many cases, imprudent lending practices. The subsequent crash has left banks, developers and investors not just licking their wounds but in some cases requiring life support. The commercial property bust has contributed to several UK banks departing the high street and the economy suffering its most painful contraction since at least the 1930s.