samchain/econo-pairs-v1 huggingface dataset:
However, the uncertainty around this expectation is large – at $ billion it is almost as large as the entire size of the large-scale asset purchases announced in November 2010 or the Maturity Extension Program announced in September 2011.6 This likely reflects uncertainty about how the economy will evolve and how the FOMC will adjust its purchases in response to changes in the economic outlook or the costs and benefits of the policy. Implementation of the current asset purchase program In implementing the current purchase program, the Desk has operated in a similar manner as in past programs. As always, outright purchases in Treasuries and agency MBS are conducted through operations that seek to acquire securities at competitive prices while minimizing any market disruptions. There are some key differences between our Treasury and MBS operations that I would like to discuss. As counterparties in our operations, you know that outright purchases of Treasury securities are conducted through large-scale, multiple-security auctions via the Desk’s FedTrade platform, which allows all primary dealers to place multiple offers across all eligible securities simultaneously. Purchases of MBS, on the other hand, are currently conducted using TradeWeb, a commercial trading platform.7 The platform allows buyers to solicit offers for one security at a time from up to four counterparties, so the Desk includes dealers in operations on a rotating basis. As a result, the Desk purchases MBS in a series of smallerscale, more frequent auctions.

There are also many indications that the covariance between Sweden and the euro area will increase further if we join the Eurosystem, as trade and integration with the euro countries would be strengthened. Increased trade and greater openness to the outside world have positive effects on the development of growth and incomes. In my opinion, the European integration of which EMU forms a part should not stop at the borders of the EU, but be the first step towards greater global openness. Conclusion I have today accounted for the current monetary policy situation in Sweden and the assessments that formed the basis for our decision last week to leave the repo rate unchanged. A low inflation rate (2%), which is the target for monetary policy, does not in itself create good growth and welfare; it should rather be seen as a fundamental condition to ensure that other parties - trade and industry, organisations, government and parliament - are successful in working to improve Sweden’s economy by various different means. In other words, it is an extensive and complicated interplay that will determine how well a country’s economic potential is realised. The Riksbank does its best to ensure that monetary policy provides a contribution here. Thank you for listening! 1  EMU commission of enquiry report SOU 1996:158. BIS Review 37/2002  7  1.
To go back to my earlier imperfect metaphor, we want to test whether the track and the cars can cope with an unlikely but plausible combination of adverse circumstances. And you will note that a major part of the adverse scenario is a rise in unemployment and a crash in house prices. We want particularly to test this because housing mortgage debt is around two-thirds of UK banks’ domestic lending. And this brings me onto my second example. Last week, the Financial Policy Committee announced two important measures to address the risk that continued momentum in the housing market could pose to household indebtedness and thence to the economy and to financial stability. I think it is important to understand why the FPC is concerned about the housing market: what we are and are not responsible for and what we can and cannot do. We cannot address  4  BIS central bankers’ speeches  the imbalance between the supply and demand for houses in the UK. The Bank cannot build a single house. Nor should we take responsibility for house prices. It is the risks to financial stability and to the economy we must focus on. The main risk we see arising from the housing market is the risk that house prices continue to grow strongly and faster than earnings and – and this is an important “and” – this increase in prices leads to higher and more concentrated household indebtedness.

But the official sector could possibly mitigate their cost by establishing a coherent framework for crisis management, with payment suspensions as one of the tools. None of this is at all to suggest that the issue of standstills - in or outside the Bank of England - is fully articulated and concluded. It is a difficult area requiring contributions from all sides and the  BIS Review 70/2000  8  intellectual argument is ongoing. Finding the right balance between rules and discretion, in this area as in so many, remains a key issue for policymakers. There is work to be done on the modalities of how standstills might operate in different crisis cases. What is the role of the IMF in the standstill process? Does the process need to be underpinned by statute or would non-statutory principles suffice? And when might a standstill require capital controls to guard against leakage? The Bank is currently working on some of these issues, practical and conceptual. I would encourage those among you with an interest in international public policy to help us in addressing them, joining the growing number of, in particular, US academics who are exploring this topic. It is very much a live debate and I have no doubt these issue will be discussed at length, at and around the World Bank and IMF Annual Meetings in Prague later this month. Conclusion I have now talked myself - quite literally - to a standstill.
"The Risk Controllers: Central Counterparty Clearing in Globalised Financial Markets" 2  All speeches are available online at www.bankofengland.co.uk/speeches  2  These reforms are of course interlinked. If banks depend more on CCPs to manage their counterparty credit risk from derivative exposures, they need to be sure that CCPs are resilient and can absorb default shocks, especially at times of market stress. And CCPs – which exist to reduce risks faced by their member banks – depend on the resilience of their members. CCPs have a major interest in resolution regimes being in place that would allow their members to fail without triggering default and disruption. Central clearing  The financial crisis exposed complex and opaque webs of bilateral derivatives contracts both between financial firms and with real economy end users. These were often poorly collateralised or not collateralised at all. As asset prices fell sharply and concern about counterparty credit worthiness grew, bilateral margin calls acted as one of the main amplifiers of stress. Increasing and more unpredictable margin calls generated more selling pressure, further price falls and greater uncertainty. Instruments primarily designed to reduce risk, acted in the crisis as an amplifier of risk. Greater central clearing reduces systemic risk in derivatives markets and increases the resilience of the derivatives network. It replaces the complex web of bilateral trades with a more efficient network in which firms can offset positions to reduce the overall counterparty credit risk in the system.

The aim, as I have said, is to enable the bank’s critical economic functions to continue, without taxpayer support, while it is being resolved. A great deal has been achieved. 10  All speeches are available online at www.bankofengland.co.uk/speeches  10  We now have agreed international standards covering the design of resolution regimes, the amount of ‘bail-inable’ resources banks must hold, and agreement with industry participants to ‘stay’ termination rights by counterparties in derivative and repo transactions if resolution is in train. Alongside this we also have international guidance on how to ensure continuity of access to FMIs as well as on the mechanics of executing a bail-in. The UK now has in place a comprehensive and effective bank resolution regime that implements the EU’s Bank Recovery and Resolution Directive (BRRD) and the international standards. The Bank of England has been established as the UK’s resolution authority with a wide range of powers to ‘bail in’ shareholders and creditors of failed banks. The biggest UK banks have begun to issue bail-inable debt at scale and are well on their way to meeting the target for loss absorbing resources in resolution. 7  Key policies and guidance to firms have been issued, notably on operational continuity and on the internal distribution of loss absorbing resources. Last October the Bank, with the publication of the Purple Book, the Bank set out in detail its approach to resolution and how it would tackle a failing bank.
Chart 12: Pay growth has tended to track unemployment, but with notable exceptions, including during 2014, and moderation recently 6  -2  Private sector regular pay (LHS, oya) Unemployment rate (RHS, inverted scale)  5  -3  Per cent  -5  3 -6  2  Per cent  -4  4  -7  Oct 15  Mar 15  Aug 14  Jan 14  Jun 13  Nov 12  Apr 12  Sep 11  Feb 11  Jul 10  Dec 09  May 09  Oct 08  Mar 08  Aug 07  Jan 07  Jun 06  Nov 05  Apr 05  Sep 04  Feb 04  Jul 03  Dec 02  -9 May 02  0 Oct 01  -8  Mar 01  1  Source: ONS and Bank calculations  It is possible that the rate of unemployment at which the economy can operate without generating accelerating inflation is lower than previously thought, meaning less pressure on wage growth at any given jobless rate. This could be, for example, because job matching has become easier with new technologies or with greater labour mobility afforded by a recovery in housing market liquidity. Equally, changes to unemployment insurance could have encouraged more intensive job search by those out of work. Set against that, analysis by Bank staff suggests a decline in matching efficiency in the past two decades, suggesting balanced risks to our assessment that merit continued monitoring.

Secondly, when inflationary problems loomed in the past, inflation expectations – amongst businesses, households and in financial markets – increased, both signalling and bringing about the incipient rise in inflation. Today, we appear to enjoy well-anchored inflation expectations, which will affect price-setting behaviour in the ways I have touched on. Indeed, modern economic models of various kinds – inside and outside the Bank – tend to assume policy credibility, anchoring mediumterm expectations. If that were so, the medium-term outlook for inflation would be assured. In fact, credibility is not something that can just be assumed. It has to be achieved, and continually reachieved, by policymakers – through our actions, and reasoned explanations of them. For that reason alone, policy inevitably remains a judgmental process – not one mechanically tied to a particular model, but one that draws on a wide range of inputs, including the insights of our business contacts. Learning is, accordingly, inherent in our mission. Over the next few years, if the economy escapes being buffeted by shocks, we will learn quite a lot. In the meantime, notwithstanding the uncertainties, we have to make judgments and explain them.
With the view of enhancing the transparency and tradability in the secondary market, measures are being taken to introduce a new primary issuance system for Treasury bills. A distinct electronic trading platform, with a central counter party (CCP) arrangement for government securities, along with required legal 35  reforms to deepen and broaden the secondary market for Treasury bills and Treasury bonds, as well as a mechanism to disseminate secondary market information on debt instruments through the proposed e-trading platform and a clearing house are to be established. In addition, the Medium Term Debt Strategy (MTDS) is to be further streamlined with the assistance of multilateral agencies. Further, we will introduce amendments to the Local Treasury Bills Ordinance (LTBO) and Registered Stock and Securities Ordinance (RSSO) to ensure smooth and efficient functioning of the debt management system. In view of the increased volatility in global financial markets, we also intend to reduce the threshold for foreign investment in rupee denominated Government securities from 10 per cent of the outstanding Government securities stock at present to 5 per cent. Management of the Employees’ Provident Fund In discharging powers and duties vested with the Monetary Board in relation to the largest superannuation fund in Sri Lanka, Employees’ Provident Fund (EPF), the Central Bank has strived to improve the services provided to its stakeholders, while ensuring the enhancement of the return to members and the safety of the Fund. During 2018, the EPF continued its fund management activities to enhance returns by aligning the investment strategy with market conditions.

Nevertheless, the impact is quite uneven across banks, owing to differences in factors such as the composition of loans to the private sector and of the sovereign loan portfolio, their international presence and the coverage of the ICO guarantee programme. In particular, in the portfolios of loans to NFCs and sole proprietors, the impact varies considerably according to firm size and economic sector.33 Loans to individuals are also important, as in business in Spain they account for more than half of the total loan portfolio.34  33  The larger differential impact on smaller firms reflects their lower capacity to absorb shocks, as their sources of revenue and financing are less diversified. The reasons for the cross-sector differences include the distinct impact the energy price increase has on each sector, and also the differences in the sectors’ sensitivity to the macroeconomic downturn and in their initial financial positions. 34  The expected loss rates in the mortgage portfolio remain limited, owing to the nature of the loans and their associated collateral, and the scenarios therefore envisage a smaller impact for this business.
More profound are the fundamental changes associated with the globalisation of finance, which has resulted in a more connected and inter-dependent world. Since the onset of the crisis, the policy response at the national level has been extensive and on an unprecedented scale, aimed to restore the functioning of the financial system and to arrest the steep deterioration in economic activity. Monetary policy was eased substantially, with interest rates brought down swiftly to historical lows. The cumulative fiscal expansion during the period 2007–2009, amounted to close to an average of four percent of GDP. Meanwhile, financial sector policies gave priority to stabilising financial markets and restoring credit flows. While an economic depression has been averted, monetary accommodation has continued with large scale financial market interventions to support the recovery. Fiscal policy, however, shifted to address fiscal sustainability and the increased public indebtedness, following the massive stimulus and support to the financial sector. The challenge is to achieve this consolidation, while ensuring that the economic recovery and market confidence are not undermined. On the wide-ranging financial reforms to address the weaknesses that led to the crisis and to strengthen the resilience of the financial sector, the emphasis has been on enhancing regulation and addressing macro-financial concerns to avoid the build-up of financial imbalances. These policies have also been supported by wide-ranging changes to the legislative framework and institutional structures. An area of policy that has not been as extensive is the cross-border dimension of policymaking, despite the growing inter-dependence between economies.

Chile) External prices (in $  -4.2 3.2 3.2 2.6 2.6 6.9 2.0 -0.4 -9.8  0.4 2.9 3.1 2.3 1.6 6.7 1.6 -1.2 -2.5  LME copper price $ WTI oil price $ Brent oil price $ Gasoline parity price $ Libor $ (nominal, 90 days)  249 49 52 467 0.3  220 43 44 389 0.8  2017 (f) 2018 (f) Dec.16 Mar.17 Dec.16 Mar.17 Report Report Report Report (annual change, percent) 1.9 1.1 4.6 -0.5 -0.5 2.8 3.2 3.3 3.4 3.5 3.0 3.3 3.4 3.5 3.5 2.3 2.6 2.8 2.8 2.9 1.6 2.3 2.3 2.3 2.3 6.7 6.2 6.4 6.0 6.2 1.7 1.5 1.7 1.6 1.7 -1.8 1.4 1.3 2.3 2.5 -2.7 1.1 2.1 1.7 1.3 (levels) 221 235 255 240 250 43 54 50 55 50 44 56 52 57 52 389 461 457 464 444 0.7 1.5 1.5 2.5 2.5  (e) Estimate. (f) Forecast. Source: Central Bank of Chile.
Second, our accommodative monetary policy has ensured very favourable financial conditions: lending to firms and households has continued to grow in the euro area, although at a reasonable pace – +2.3% for firms and +2.2% for households in January 2017 – and borrowing costs have significantly declined. Third, [slide 3] the economic recovery is firming and broadening. Fortunately, this appears to be a worldwide trend: our G20 communiqué in Baden-Baden last week started with the words “We met at a time when the global economic recovery is progressing", while also stressing that significant risks and uncertainties remain. Euro area monetary policy has played its part in this recovery, and the latest ECB staff projections foresee higher GDP growth for the region, at 1.8% in 2017. The euro area unemployment rate dropped to 9.6% in January of this year, its lowest level since 2009. And the recovery is also broadening across euro area countries, including in France: despite some temporary political uncertainty generated by the upcoming elections, France’s economic outlook is improving. The country has also not been inactive over the past few years when it comes to reforms: pensions have been reformed, corporate charges have been cut considerably, and labour laws have been made more flexible. Like you, I would like France to pick up the pace of reform; I say it frequently in my own country. But you shall not regard your French neighbour as “unreformable”.

Medium-term inflation expectations per se have remained firmly anchored around levels consistent with price stability. This is in line with our reading of survey-based inflation expectations. The second message is that markets are, however, deeply sceptical that inflation can surprise much on the upside in the future. This is corroborated by survey-based measures, which show that, since the financial crisis, survey participants have been more concerned about deviations in the direction of lower inflation and less concerned about deviations in the direction of higher inflation.7 Another way of looking at this is to consider the option-implied distribution of average inflation over the next five years. You can see this on my next slide in the case of the euro area. Although this distribution reflects expectations over a nearer horizon, it re-emphasises the point that investors assign only a small probability for inflation to surprise much to the upside. But it also demonstrates convincingly that markets have by and large priced out deflationary risks in the euro area. As you can see, when we announced the APP in January 2015 these risks were considered to be very different. I see two main factors that may help explain why investors and professional forecasters are currently casting doubt on positive inflation risks.
Már Guðmundsson: Currency and exchange rate regime options Introduction by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, to a report issued by the Central Bank of Iceland on Iceland’s currency and exchange rate policy options, Reykjavík, 7 September 2012. * 1.1  *  *  Introduction  In the near future, Icelanders must make important decisions concerning the framework for the currency and monetary policy, the structure of the financial system, and the degree of integration with the world economy. These decisions must be taken in view of what can be learnt from the financial crisis and from previous monetary policy implementation in Iceland. Iceland has applied for membership of the European Union (EU) and, if membership materialises, it will define a clear path for most of these issues. If Iceland does not join the EU, the choices will be different. In both instances, Iceland must lift the capital controls that are currently in place. According to EU rules, this must be accomplished before accession. The experience of recent decades shows, however, that completely free movement of capital comes with significant risk. To reduce that risk, it is necessary to develop a regulatory framework that prepares the Icelandic financial system for the volatility that can accompany free movement of capital. That regulatory framework may entail some restrictions on Iceland’s financial integration with other countries, particularly as regards domestic financial institutions’ freedom to conduct international business. The scope of such restrictions will depend, however, on which currency option Iceland chooses.

Meanwhile, in Europe, which is heavily dependent on Russia for energy, rising prices of oil and natural gas are the biggest concern. And in the Middle East, there are fears of a wheat shortage, given the region's reliance on wheat from Russia and Ukraine. The one bright spot regarding inflation is that longer-run inflation expectations remain well anchored. This anchoring is seen in both market-based measures of expected inflation and in surveys of households and economists. For example, the New York Fed's Survey of Consumer Expectations has fielded special survey questions on fiveyear-ahead inflation expectations since 2019, and these expectations have hardly budged since the start of the pandemic.2 In addition, the pass-through of inflation surprises to revisions in three-year-ahead inflation expectations is about half as large as it was before 2020. 3 That is, medium-term inflation expectations in this survey are less responsive to inflation shocks than they were before the pandemic. Economic Outlook Faced with rising inflation but otherwise strong economies, the Federal Reserve and other central banks have been moving away from the extraordinarily accommodative stances they took in early 2020. Last year, many emerging market central banks raised their policy rates. In December, the Bank of England followed suit, followed by the Bank of Canada this March. Closer to home, the FOMC decided a little over two weeks ago to raise the target range for the federal funds rate by a quarter of a percentage point.