samchain/econo-pairs-v1 huggingface dataset:
Rodrigo Vergara: Chile’s latest Monetary Policy Report and Financial Stability Report Presentation by Mr Rodrigo Vergara, Governor of the Central Bank of Chile, of the Monetary Policy Report and the Financial Stability Report, before the Finance Commission of the Honorable Senate of the Republic, Santiago de Chile, 18 June 2012. The Monetary Policy Report of June 2012 and the Financial Stability Report of the first half of 2012 can be found at http://www.bcentral.cl/eng/index.asp  *  *  *  Introduction Mr. President of the Finance Commission of the Senate, Senator José García, senators members of this Commission, ladies, gentlemen. I am grateful for your invitation to the Board of the Central Bank of Chile to share our views on recent macroeconomic and financial developments, prospects and implications for monetary and financial policy making. These views are contained in detail in our Monetary Policy Report of June 2012 and our Financial Stability Report of the first half of 2012. For several quarters now the world economy has been suffering constant swings. We have said time and again that the causes and consequences of the financial crisis of 2008 are yet to be resolved. Thanks to a combination of economic policy responses and its healthy economies and financial systems, the emerging world succeeded in mitigating its effects and resuming a growth trajectory. But the developed world, especially the Eurozone, has been unable to regain its strength.

The Board of the Central Bank is firmly determined to adopt any measures needed to mitigate the adverse effects of a worsened external scenario, but it also must be careful not to allow medium-term inflationary risks to end up triggering an unwanted increase in inflation. In the baseline scenario that we believe to be the most likely, the world economy will remain weak and will give us less impulse than we expected a few months ago. Although the Chilean economy will be affected, it will continue to perform well. Inflation will stay around 3 percent. But the external risks facing said baseline scenario are significant. Let me now look into this setting in more detail, examining the risks we have identified in our Monetary Policy Report and our Financial Stability Report. 2  BIS central bankers’ speeches  Macroeconomic scenario As I just said, the external impulse on the Chilean economy in the next two years will be weaker than forecast in March. The poor performance of the developed world – for several quarters already – is being compounded with early signs of weakness in emerging economies, thus exacerbating the risks coming from abroad. I want to begin by the developed world. In the Eurozone, the new financial tensions have tightened credit constraints, while ongoing fiscal measures will not contribute to boost growth in the near term. The recession foreseen for the region this year will be deeper than previously estimated. The other developed economies will grow slowly.
Had we not done this, constant nominal interest rates amid falling inflation rates would have led to higher real interest rates and undermined anaemic growth even more. This would have significantly increased the risk of deflation. This is just as harmful as accelerating inflation. As Walter Eucken said: “Deflation distorts the price framework just as much.”1 1/5  BIS central bankers' speeches  Thus, price stability for the ECB means that we have to protect European citizens not only from inflation rates that are too high, but also from a deflationary spiral. This is reflected in our quantitative definition of price stability: an inflation rate of below, but close to, 2% in the medium term. We therefore acted in order to abide by this symmetrical mandate on price stability. But we are aware that we cannot lower our interest rates to an unlimited extent.2 As from a certain level, it becomes more attractive to keep cash – despite the associated costs – than to pay negative interest rates. And even if this point has not yet been reached, we are bearing in mind that further rate cuts into negative territory may have non-linear effects. The reactions of people in extremis cannot be anticipated. But we can also influence market interest rates in other ways. Thus, for example, with our asset purchases we have pushed the yield curve down.

Core inflation, on the other hand, which excludes food and energy, remained stable at 0.9%. For us, the overall inflation rate is the key figure because we protect the purchasing power of citizens, albeit in the “medium term”, not on a month-to-month basis. Given the current high variability of energy prices, indicators of the underlying price dynamics say more about future developments than about the overall inflation rate. We still assume that, because of energy prices, the overall inflation rate will rise until the middle of this year – reaching our “comfort zone”. But one swallow doesn’t make a summer. For in the second half of the year, it is likely to fall again and then reach 1.5% in 2018. So, subdued inflation will be with us for quite some time, but the spectre of deflation has disappeared from the radar of market participants. For this recovery to gain traction, we have to keep our word. The adjustments to our asset purchase programme will be implemented as announced in December – because, first, it contributes significantly to the economic recovery and stabilisation on the price front. And second, monetary policy in times of heightened uncertainty must be a guarantor of stability and 2/5  BIS central bankers' speeches  reliability by being credible. And yet, at the same time, how much longer can we continue to talk about “even lower rates” as being a monetary policy option?
7 Furthermore, Governing Board members have appeared on numerous occasions before parliament committees, on public panels, as well as in print and electronic media, to explain significant monetary policy measures, such as the UBS bail-out, as well as the introduction and discontinuation of the minimum exchange rate. However, transparency is not a goal in itself, but rather a means to achieve accountability, and it has its limits. It cannot be allowed to hamper the implementation or the effectiveness of monetary policy. An obvious example here is the discontinuation of the minimum exchange rate, when it was impossible for the SNB to give any kind of advanced warning of this decision without triggering speculative attacks on the EUR/CHF exchange rate. In short, it is a fiction that the SNB has unlimited power. It is a fact that Switzerland has a well-developed system of checks and balances obliging the SNB to transparently account for its decisions. Fiction IV: Financial stability is an impossible dream With this, let me turn to another field in which the SNB has taken on a more prominent role recently, namely, financial stability. Substantial efforts are underway to improve the regulation of the financial system, both globally and nationally. Sometimes, these efforts are greeted with scepticism, based on the view – or the fiction – that financial stability is an “impossible dream”. While I accept that there are conceptual and practical difficulties in fostering the stability of the financial system, I do not share this pessimism.

A case in point is the SNB’s decision to introduce the minimum exchange rate of CHF 1.20 per euro in September 2011, and then discontinue it earlier this year. As mentioned, in enforcing the minimum exchange rate, the SNB intervened heavily in the foreign exchange markets, and did not refrain from taking on significant balance sheet risks, particularly in 2012. At the time, interventions were necessary to counteract upward pressure on the Swiss franc resulting from substantial capital inflows and a lack of outflows due to flare-ups in the European debt crisis. Towards the end of 2014, the minimum exchange rate again came under increasing market pressure, requiring renewed interventions by the SNB. This time, however, the international environment was very different. While expectations of an interest rate rise in the United States were mounting and the dollar was appreciating, from mid-year onwards there were signs in the euro area of further monetary policy easing, and the euro started to weaken across the board, pushing the EUR/CHF exchange rate close to the CHF 1.20 per euro floor. On the back of these developments – also reflecting the collapsing interest rate differential – Swiss franc investments again became relatively more attractive. Given these circumstances, and in view of quantitative easing in the euro area, the continuation of the minimum exchange rate policy would have meant a permanent, potentially uncontrollable expansion of the SNB balance sheet.
At the same time, the APP is said to have withdrawn increasing volumes of high-quality liquid collateral from the market, exacerbating pricing tensions, especially for special bonds. 1/5  BIS central bankers' speeches  While monetary policy may, in some circumstances, exacerbate repo market tensions, I believe it to be far from the only factor at play today, or indeed the most important one. The situation in the repo market today in fact reflects a confluence of longer-term trends that have affected both the supply and demand for good collateral. I will review some of these trends in a moment. Before doing so, I would like to recall an important point. Our mandate is clear: to deliver price stability. This is our primary objective and the sole orientation for our policy. What we aim to do is to act in a way that is necessary, proportionate and that limits side-effects. This is why we have designed our programmes in such a way as to deliver our objective without creating excessive distortions in market functioning and price discovery. And it is also why we have taken measures to mitigate some effects of our measures on repo markets. These measure, too, are governed by the principle that they must be necessary and proportionate, as well as not being in conflict with our price stability mandate.

Yves Mersch: Ructions in the repo market - monetary easing or regulatory squeezing? Speech by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the GFF (Deutsche Börse Group Global Funding and Financing) summit, Luxembourg, 26 January 2017. * * *  Introduction There is no doubt that European repo markets today are operating in unprecedented territory. In the past year we have faced the extraordinary situation of collateralised transactions taking place well below the ECB’s deposit rate, and not just for the highest-rated issuers. There are increasing signs that this is indicative of market stress. Though market depth remains relatively stable and the bid offer spreads are not a major liquidity restriction, the decreased average ticket size seems reflective of collateral scarcity in some market segments. If one looks at the distribution of trades taking place by rates towards the end of last year, while German collateral usually traded at around –70 bps, it traded at –4.88% at year-end, reflecting increased demand for “special” German bonds (while overall turnover declined about 50%). In a “special” the repo contract specifies a particular bond to be exchanged for cash, rather than the specification of a broad collateral class such as ‘German government bond’. As a result, specials tend to trade at lower interest rates. The volume of trades conducted at special rates also increased in other markets, pushing the distribution of rates lower. Average French collateral rates have moved from –45 bps before summer 2016 to below –60 bps before Christmas.
News conference on new 20-franc note  Berne, 10 May 2017 Fritz Zurbrügg  Introductory remarks by Fritz Zurbrügg  Ladies and gentlemen It is a pleasure to welcome you to our news conference. My colleague Thomas Wiedmer and I are delighted to present the Swiss National Bank’s new 20-franc note to you today. We showed you what it looks like just a few minutes ago – I hope you like it. Personally, I really like the way it has turned out, and I know that both of my colleagues on the Governing Board are also very pleased with the result. I shall start with a brief review of our experiences with the ninth banknote series so far; the 50-franc note – the first denomination in the new series to be released – entered circulation over a year ago. I shall then make some observations about the theme and design of the 20franc note, before handing over to Thomas Wiedmer, who will go through the security features and present the accompanying information material. We presented the new 50-franc note in April 2016 and, as expected, it attracted a great deal of public interest. Not only had it been 20 years since the last banknote series was released, but the new notes also contained features that clearly set them apart from earlier series. For starters, they feel different due to the new substrate. Furthermore, an entirely new design approach was adopted.

Given the elevated level of prices relative to earnings at the start of the decade and the further sharp increase in the middle of the decade, constraints on the availability of credit, both lender-imposed and regulatory, are likely to have held back activity. Building a sufficient deposit is one of the biggest constraints facing most first-time buyers. Only 19% of renters across the UK have sufficient savings to afford a 5% deposit on the median first-time property in their region. In London and the South and East, high house prices relative to earnings mean that potential first-time buyers have to save even larger deposits in order to be able to afford their mortgages. For regions outside London and the South and East, first-time buyers’ deposits are typically 48% of their incomes. In London and across regions in the South and East on average, this is 121% and 80% respectively. 13  Since June 2014, the FPC has recommended a limit of 15% on the proportion of new mortgages extended at or above 4.5 times a borrower’s income. Building on the FCA’s rules, the FPC has also recommended that lenders assess whether borrowers could meet their mortgage payments if their mortgage interest rate switched to the contractual reversion rate and increased by 3 percentage points. 14  The FPC published its most recent review of the housing tools in the December 2019 Financial Stability Report.
One thing I would say if you do do it, you better have a mechanism in place to make sure that those large securities firms that are left actually are well-regulated, well-capitalized, have enough liquidity, and have access to a lender of last-resort. One of the problems that we had in the financial crisis is there wasn’t a good method to lend to securities firms. By law, the Federal Reserve discount window – this is the facility that we have open to commercial banks – were not allowed to have that discount window open to securities firms. So, in the crisis, we had to do extraordinary lending activities to securities firms. We need a better lender of last resort backstop for securities firms. If you decide to repeal Glass-Steagall and separate commercial banks from securities firms, that’s not something that I would recommend, but if you were to do that, make sure you have a way of backstopping the securities industry, too, so if a big securities firm gets in trouble it doesn’t threaten the entire financial system. Dr. Olajide Oladipo: Thank you. I’ll be expecting questions from students, too. Audience Member: Not a student. President Dudley:  9 / 15  BIS central bankers' speeches  But you’re a student of something, right? Audience Member: My concern is MWBEs. I feel that the racist element within our capitalization has not allowed us to participate in the economy on an equal level by having access to capital. The government’s asking for 30% on major projects.

And recently, it was reported that North Korea was able to illegally transfer monies from a Bangladesh account at the Fed to an account at the Philippines. What’s being done to protect funds that are held not only at the Fed but also at other financial institutions? President Dudley: Well, that’s a good question. Cybersecurity is a really important activity for us at the Fed. We want to make sure that not only is the Federal Reserve well-protected but also the banks that we supervise are also well-protected against cyber-risk. This is a particularly hard risk to evaluate on any given day because we’re trying to improve our defenses, but the bad guys are also improving their capabilities. So, we do a lot of different activities within the bank to make sure that we’re secure from a cyber-perspective. For example, we phish our employees, and we send them emails that sort of suggest that if you’ll click on this, and if you click on this you get a message from our Information Technology Department that you’ve been phished and you learn that you have to be a lot more careful about what you actually click on. That’s important because a threat can both come from outside, but it can also come from within. The other thing we’ve done is we’re spending a lot of time internationally to try to make the financial system safer by making sure that the payment executer, their systems are secure.
Pablo Hernández de Cos: Graduation Ceremony - Centro de Estudios Monetarios y Financieros Speech by Mr Pablo Hernández de Cos, Governor of the Bank of Spain and Chairman of the Basel Committee on Banking Supervision, at the Class 2020/2021 graduation ceremony, Centro de Estudios Monetarios y Financieros (CEMFI), 1 July 2021. * * * Good afternoon class of 2021. Good afternoon dear colleagues and friends. It is a pleasure for me to participate in this graduation ceremony together with Juan José Fernández Muñoz, Coordinator of Studies and Programs of Universidad Internacional Menéndez Pelayo, Samuel Bentolila, Director of the Master’s Programme, and Rafael Repullo, Director of CEMFI. I would especially like to thank Juan José Fernández Muñoz for being here today. The partnership with Universidad Internacional Menéndez Pelayo, dating back to 2006, has been instrumental in improving our ability to attract excellent students and the quality of our graduate programme, and I am very grateful for this. The Master’s programme of the class graduating today was severely disrupted by the COVID19 pandemic. In early March 2020, just before the end of the second term of the programme, all teaching activities were moved online. During the summer of 2020 CEMFI made all the necessary investments and established a set of safety protocols to be able to go back to onsite teaching. These efforts paid off handsomely. Most courses this year were taught on-site, with a minimal incidence of COVID-19 and, fortunately, no serious cases at all.

William C Dudley: Is the active use of macroprudential tools institutionally realistic? Panel remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the “Macroprudential Monetary Policy”, 59th Economic Conference of the Federal Reserve Bank of Boston, Boston, Massachusetts, 3 October 2015. *  *  *  It is a pleasure to be here today and to have the opportunity to talk about the potential use of macroprudential tools in the United States. Before I respond to Adam Posen, I’d like to make a few general comments on macroprudential tools. I am interested in such tools both as a U.S. policymaker and in my role as chair of the Committee on the Global Financial System of the Bank for International Settlements (BIS), a body that has done considerable work in this area in recent years. What I have to say today represents my own views and not necessarily those of the Federal Reserve System.1 The use of macroprudential tools has gotten considerable attention for several reasons. Some countries have implemented macroprudential measures with respect to the housing market that may have limited the extent of home price appreciation and made their financial systems more resilient when the boom unwound. Other countries have implemented countercyclical capital requirements that have made their banking systems more resilient. Thus, the hope is that U.S. policymakers can learn from these international experiences and incorporate effective macroprudential tools into our toolkit that could be used to limit financial stability risks.
These movements reflected the euro’s recovery following the French elections and the attendant easing of political uncertainty. The Swiss franc’s depreciation against the euro and the US dollar since September reflects the fact that it is currently less sought after as a safe haven, because of increased confidence in the euro area’s recovery and the vitality of the global economy. However, we still consider the situation on the foreign exchange market to be fragile. The SNB’s willingness to intervene as necessary therefore continues to be important. In her remarks, Andréa Maechler will go into more detail on the market environment for the Swiss franc. Monetary policy outlook  Ladies and gentlemen, let me summarise my key points. Inflation in Switzerland remains modest, and the recovery of our economy is continuing at a gradual pace. Inflation expectations are well anchored. The rise in oil prices and the weaker Swiss franc have pushed up our short-term inflation forecast slightly. In the longer term, however, inflationary pressure in Switzerland has not increased. Our expansionary monetary policy remains appropriate in order to underpin the recovery, and thereby ensure price stability, while taking due account of economic developments. The SNB is therefore maintaining the negative interest rate, as well as its willingness to intervene in the foreign exchange market as necessary. Ladies and gentlemen, thank you for your attention. It is now my pleasure to give the floor to Fritz Zurbrügg. Page 4/4

This will be built up in good times, when credit growth is higher than normal, with the aim of creating airbags to protect the banking sector in troubled times. So far, this is the instrument on which international agreement has been reached in the field of macroprudential policy, that is a policy that comprises measures to prevent financial crises that are directed at the system as a whole. A leverage ratio requirement will also be introduced under which, irrespective of risk weights, a bank's assets may not exceed 33 times its own capital. A leverage ratio requirement represents an extra safety measure that also limits the banks’ possibilities to use internal risk models to actually keep risk weights down. Basel III also sets quantitative standards for the banks’ liquidity, a short-term (Liquidity Coverage Ratio, LCR) and a long-term (Net Stable Funding Ratio, NSFR). The short-term measure means that every bank should have sufficient liquid assets to survive for at least 30 days in a stressed scenario. The long-term measure, in principle, limits the gap between the maturity of a bank’s assets and the maturity of its liabilities. The standards stipulated in the Basel III Accord will be implemented in national legislation during the 2010s and should be implemented in their entirety by 2019, with several interim targets along the way. 2  BIS central bankers’ speeches  Establishing better regulations on the banks’ capital and liquidity represents a major step forward.