samchain/econo-pairs-v1 huggingface dataset:
Additionally, in December 2011, the Eurosystem announced further enhanced credit support in the form of two repo operations with maturity of up to three years. There are indications that especially these three-year longer-term refinancing operations (LTRO) have proven effective in preventing an abrupt deleveraging. They significantly helped in restoring confidence in financial markets by providing insurance on the ability for banks to rely on ECB liquidity. This has taken pressure off banks to fire-sell assets or to shrink their loan book. In fact, there is some evidence that banks who bid for liquidity at the three-year operations used this liquidity to address the roll-over risk implied by the issuance of debt securities or other funding instruments that will mature over the next few years. At the same time, there is some first evidence that the provision of long-term liquidity has helped in supporting credit provisions, especially in countries more affected by the sovereign debt crisis, therefore helping to address impairments in the transmission of monetary policy. The ECB has recently announced the details of Outright Monetary Transactions (OMT) in secondary markets for sovereign bonds in the euro area in order to address severe distortions in government bond markets which in particular originate in unfounded fears on the part of investors of the reversibility of the euro. OMT also aims to safeguard the monetary policy transmission mechanism in all countries of the euro area, thereby preserving the singleness of the ECB’s monetary policy.

True Finance – Ten years after the financial crisis Speech given by Mark Carney Governor of the Bank of England Chair of the Financial Stability Board  Economic Club of New York 19 October 2018  I am grateful to Alice Carr, James Benford and Clare Macallan for their assistance in preparing these remarks, and to Paul Brione, Chris Ford, Alex Michie, Harry Jackson and David Nicholls for background research and analysis. 1 All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  I. INTRO Last week, global financial policymakers gathered in Bali for the Annual Meetings of the IMF and World Bank. These meetings came a decade after the global financial crisis, two decades after the Asian crisis, and three decades after the Latin American debt crisis. Anyone spot a pattern? Despite the past decade of financial reform, many are asking whether anything has really changed. I am going to argue today that such weary fatalism is at odds with reality. That the radical programme of G20 reforms has made the global financial system safer, simpler and fairer. That these measures are creating a system that can serve households and businesses in bad times as well as good. That true change is creating true finance, a system that can deepen financial inclusion, better meet the needs of ageing populations and help fund the transition to a low carbon economy.
Settlement risks  BIS Review 46/1999  2  with repo transactions, however, are significantly lower because in our system, collateral must only be transferred between accounts by the central securities depository. This is a simple and straightforward process which - if necessary - could even be implemented manually. Consequently, we encourage banks to pay special attention to their holdings of repo collateral when engaging in their liquidity planning. Furthermore, we will considerably expand our repo basket by including selected foreign currency securities. This step which is primarily motivated by our intention to transact also with counterparties abroad obviously produces a useful sideeffect on collateral availability over year-end. It is our clear commitment to provide liquidity sufficient to smooth market developments before and at the transition. Of course, all banks, especially those which do not engage in repo transactions, can avail themselves of significantly increased lombard limits just for the year-end, if they wish so. As regards the distribution and the available stock of banknotes, we have made the necessary provisions. After having put a new banknote series into circulation recently, our inventories are more abundant than they would have to be even in a worst-case scenario. Final remarks Let me conclude by making two final remarks. Firstly, the need for successful active and reactive communication can hardly be overestimated. The millennium has an almost magical fascination which may stimulate crisis fantasies and is perfectly capable of triggering herd effects.

Yet, in a significant part of Asia, notwithstanding its financial clout, a significant part of domestic savings is still put under mattresses. A convenient and effective channel that could be used to absorb these savings, in a manner that commands the confidence of those who save, does not exist. Where some form of financial system exists for facilitating the important process of financial intermediation, it is usually a system that suffers from a preponderance of banks. This lack of diversity in the financial intermediation channels is widespread in Asia; and frustratingly so, particularly for those with responsibility for promoting such diversification, for the sake of efficiency as well as financial stability. The market capitalisation and turnover of domestic debt and equities, in absolute terms as well as relative to GDP, is generally low when compared with corresponding numbers in the developed markets. This is so even in Hong Kong, the pre-eminent international financial centre in the region. The domestic debt market there, in terms of the amount of debt outstanding in the domestic currency, is only about 45% of GDP, although this is partly the result of a long history of fiscal discipline. The emerging markets of Asia are aware of the important need for financial system development. This brings me to the third characteristic, which concerns the development strategies being adopted. Although these vary between different economies, having regard to the domestic circumstances, one underlying strategy common to all is financial openness.
I am, indeed, convinced that each of the six members will aim for as collegiate an attitude as possible. To me, this is already evident from the work to date. But it is also the case that, in making monetary policy, a variety of factors have to be weighted into an overall assessment of inflation’s future path. In weighing up the odds, different people may reach different conclusions, which need not be an entirely bad thing. It might even have the advantage of demonstrating that decisions on the monetary policy stance tend to involve assessments that are complex and tricky. From interviews and comments in the press, it is already evident that members of the Executive Board voice somewhat different shades of opinion in their inflation assessments. This, too, is something that all those who follow monetary policy will have to get used to. It is, moreover, an assurance that our discussions in the Riksbank will be properly informed about aspects of the BIS Review 14/1999  –2–  monetary policy stance. It is also consistent with the transparency that the Riksbank is striving for and which is a basic condition for the new legislation. The monetary policy situation Sweden’s economy in perspective In the years since the crisis in the early 1990s, economic development in Sweden has been rather good. Growth has been relatively high, yet inflation has been kept at a low level. Since summer 1993, annual GDP growth has averaged almost 3%.

In the euro area economies, the high unemployment levels and the need to reduce significant debt ratios curbed the expansion of demand, while the fragility of banking systems hampered the transmission of monetary policy measures to the real economy. These factors obliged the ECB to take a different tack and turn to so-called nonconventional measures. Firstly, the interest rates on ordinary monetary policy operations were successively cut, placing the deposit facility rate at a negative level of -0.4%, which currently remains in place. Secondly, the ECB introduced a new long-term financing facility for the banking system, which was linked to the granting of loans to households and firms. Thirdly, in 2015, the ECB took the historic step of launching a quantitative easing programme by means of the large-scale purchase of public and private assets. Currently, purchases are being made at a monthly pace of € billion, and this is expected to continue at least until next December, whereby at the end of the current year the scale of asset purchases will be drawing close to 22% of euro area GDP. Lastly, communication has become a most important instrument for influencing agents’ expectations and heightening the effectiveness of measures. Specifically, the ECB has incorporated forward guidance on interest rates and the purchase programme into its communication.
Chart 8). We do not have similar surveys of households, but it is safe to assume that they would likely favour even lower inflation. The public reaction to the recent rise in inflation clearly demonstrates that there would be little understanding among the general population for a higher targeted rate of inflation. A second possible adjustment would be to target an average inflation rate over a given period. Overshooting and undershooting inflation rates would have to be compensated for over time. This could better stabilise longer-term inflation expectations in that the aim would be a steady development in the level of prices. Why do we not compensate for past deviations from price stability? The Swiss economy has proven in the past that it can deal well with temporary inflation shocks, and that longer-term inflation expectations are well anchored. Compensating for past deviations from a targeted average value would only be possible with massive additional volatility in prices and output, especially given the strong global shocks to which Switzerland is exposed. Such an approach would also find little acceptance among the general public. The third possible adjustment relates to the choice of a point target instead of a range when defining price stability. This could help anchor inflation expectations more precisely and thus better stabilise inflation. Why do we refrain from adopting a point target? Having such a precise goal would unnecessarily complicate monetary policy implementation for the SNB.

The behaviour of prices in the euro area is also a cause for concern. Against a fragile macroeconomic background, as at present, very low inflation rates entail a danger that consumer and business expectations will stand excessively below the ECB’s medium- term price stability objective of 2% for the euro area as a whole. Contrary to the downside risks surrounding the growth projections for the international economy as a whole, those for inflation are more mixed and have given rise to different responses by various central banks. The US Federal Reserve and the Bank of England have begun to withdraw some of the exceptionally expansionary non-conventional measures they introduced at the height of the crisis. Conversely, the European Central Bank has gone in the opposite direction, deepening the expansionary stance of its monetary policy. The euro area monetary policy stance has taken the form of a series of measures adopted, in the main, at the June and September meetings of the ECB Governing Council, where conventional action has been combined with other exceptional and non-conventional measures. Among the conventional measures, official interest rates have once again been cut. The main refinancing operations rate currently stands at an all-time historical and technical low of 0.05%. The deposit facility rate moved into negative territory in June and was further lowered in September to –0.20%, thus increasing the cost for banks of holding immobilised surplus liquid balances in their accounts with the Eurosystem.
(a) Saving ratios calculated using the average consumption and disposable income levels for each group of households. Numbers in parentheses show their share of total income in 2007. Shares do not sum to 100 due to rounding. (b) High-debt mortgagors are defined as having outstanding mortgage debt of more than twice their annual disposable income. All other mortgagors are low debt. Chart 2: Ratio of UK exports to UK-weighted rest of G7 imports(a) Indices: 2003 Q1 = 100 140 Goods  130  Services  120 110 100 90 80 70  1994  1997  2000  2003  2006  2009  2012  Sources: Eurostat, Japan Cabinet Office, ONS, Statistics Canada, Thomson Reuters Datastream, US Bureau of Economic Analysis and Bank calculations. (a) Chained-volume measures of UK goods (services) exports divided by real imports of goods (services) in Canada, France, Germany, Italy, Japan and the United States, weighted using UK 2011 goods (services) export shares from the 2012 Pink Book. UK goods exports data have been adjusted for MTIC fraud by an amount equal to the ONS goods import adjustment. BIS central bankers’ speeches  7  Chart 3: Net international investment positions (% of GDP) Percentage point changes since 2000 Germany France Greece  Ireland Italy  60  Spain Portugal  40 20 0 -20 -40 -60 -80  -100 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012  Source: Eurostat.

The public’s recognition of this incentive may help hold down inflation expectations and cause inflation expectations to be more firmly anchored. In addition, TIPS may give the Treasury access to a broader investor base, which also may reduce the Treasury’s overall borrowing costs. The comparison between the prevailing interest rates on TIPS versus nominal Treasuries provides insight into the relative costs associated with issuing a marginal dollar of debt. But just as important is whether TIPS issuance, by displacing nominal Treasury issuance, reduces the level of interest rates that the Treasury pays on its nominal issuances. This would occur if TIPS were not perfect substitutes for nominal Treasury securities and if the demand for nominal Treasuries were downward sloping – that is, not completely elastic. The first condition almost certainly holds given the different attributes of TIPS versus nominal Treasuries. If they were perfect substitutes, then there would not be a liquidity premium for nominal Treasuries relative to TIPS. The second condition seems likely to hold since numerous studies have found that an increase in the net amount of Treasury borrowing leads to higher expected borrowing costs for the Treasury. How big might this effect be? That’s difficult to estimate. A few studies 6 have found that an increase in supply in a particular segment of the Treasury yield curve has contributed to a rise in yields.
During this process, we have been assisted and overseen also by important international financial institutions such as the World Bank and the International Monetary Fund. Beyond the non-performing loans issue, the banking system continued to be well capitalised, liquid and financially sound. The issue of non-performing loans will require some more time to resolve, but this should not keep us from the recovery of the credit activity at home. For as long the positive performance of the other above-mentioned indicators continues, the banking sector has room and the potential to credit convincing projects and investments. In my judgement, it is important to administer with courage and persistence the prevalent perception that non-performing loan have forced banks to adopt a very conservative approach to lending. To permanently address this problem, additional measures have been taken and will be taken in the future. I would like to briefly focus on the latest initiative in this regard: a coordinated plan between the Bank of Albania, Government of Albania, Association of Banks, and International Monetary Fund, consisting in two main pillars: The first pillar relates to the drafting and completing the legislation that regulates lending from the moment of concluding a contract until the final repayment, including disputes among the parties. These changes aim at making more precise in legal terms all procedures related to banking activity, bailiff services, borrowers and other relevant state institutions.

I listed these facts intentionally as the conference of this year is called “Do crisis change economic fundamentals?” These interventions are main actions central banks are allowed by the legislation, and recommended by the most modern theory. If these interventions fail to introduce a long-term positive equilibrium for the economy, then a question arises naturally: what else should be done? The answer is in the phrase “structural reforms”. While the phrase may have often been speculated, the truth firmly confirms: only the willingness to project and undertake courageous and visionary reforms is the golden key to success”. This fact was strongly emphasised in the final statement of the Ministers of Finance and central bank Governors of 24 most developed nations, (Financial Committee of the IMF) in the annual meeting of the IMF organised earlier this month in Lima, Peru. A secure sustainable long-term growth requires timely-implemented and well-sequenced structural reforms which remain critical to raise productivity, potential output, and living standards; they should bolster confidence in the economy and reduce social inequality. Concluding, I would like to underline the support of the Bank of Albania for a series of reforms undertaken recently as part of the medium-term agreement between the Government of Albania, Bank of Albania and the International Monetary Fund. Similarly to the rest of South East Europe, Albania needs a new path, in which investors will be able to see again profit opportunities.
These measures, in combination with sizeable macroeconomic policy stimuli, have set in motion a mutually-reinforcing process between financial system conditions and real economic performance, fostering improving economic prospects and a fading of systemic risk. One important reason for the lowered systemic risk has been an abatement of tail risk, which has been primarily due to the downside-protection by governments of financial institutions’ balance sheets. A recovery of risk appetite, underpinned by the reduced systemic risk, has contributed to the remarkable turnaround in the financial markets since March 2009. The improved financial conditions and the steeper yield curves have sufficiently strengthened the profitability of many financial institutions, especially the large ones, to such an extent that they have been able to absorb considerable write-downs on securities and loans, while still, on average, reporting material improvements in profitability over three consecutive quarters. In my presentation, I will highlight the main risks identified and assessed in the Review and the associated financial stability challenges. I will start with certain sources of risk stemming from the global macro-financial environment. II. Risks in the global macro-financial environment  Over the past six months, the adjustment of global current account imbalances has continued, driven by the global economic slowdown and the overall fall in commodity prices, especially energy, from the peaks of mid-2008. The current account deficit of the US is now projected to fall to 2.6% of GDP in 2009, which is almost 2.3 percentage points lower than in the previous year.

They follow current changes in prices, primarily petrol and food prices, and ruble exchange rate fluctuations. The third important factor we took into account is consumer demand. Lending underpins consumption but slowing wage growth constrains a rise in demand. Consumption growth slowed down after a short-term acceleration in November, which was likely associated with preemptive purchases of non-food goods in the run-up to the VAT hike. We can see it from retail sales figures. The rise in consumer activity does not exert pressure on prices. This, among other things, is an important reason of a moderate VAT pass-through to prices. The fourth factor is external conditions. A number of changes which only started to emerge in December, intensified at the beginning of this year. The US Fed and the European Central Bank eased their rhetoric as regards the monetary policy outlook. Improvements were seen in markets’ expectations regarding the negotiations of international trade restrictions. These factors supported emerging market currencies and reduced their risk premiums. We may say that external risks declined in this part. At the same time, geopolitical risks remain in place. Oil prices in the first quarter were higher than projected in the baseline scenario. However, risks are high that oil production will exceed consumption this year. Finally, overall monetary conditions have changed little if at all since the start of the year. Deposit rates have edged higher, while loan rates have stabilised.
While I commend the significant development of the SEG forum in the 19 years since its inception, I know we can do so much more to leverage on the experience of each member country here. There is definitely a role for SEACEN that goes beyond equipping member countries with the necessary skills to manage capital flows. For instance, SEACEN can provide thought leadership on the need for small open economies to have a broad policy toolkit in preserving monetary and financial stability in the face of volatile capital flows. SEACEN can take a leading role in intellectually challenging the prevailing view that capital flow measures should only be considered as a last resort. There is no monopoly on good policies and Asia has plenty to offer. SEACEN can lead the way. On this note, I look forward to an engaging and fruitful discussion among members in our sessions today. I believe the forum will be thought provoking, with important learning points that 2/3  BIS central bankers' speeches  will help us better weather the new waves of challenges ahead. Thank you. 1 Terms of Reference of the SEG. 2 Jon Kabat-Zinn (1994), Wherever You Go, There You Are. New York: Hyperion. 3/3  BIS central bankers' speeches

The recession was indeed deep, as Iceland lost just over 11% of output during the recession that ended in Q1/2010 and unemployment peaked at 8% in Q4/2010. The shift in the composition of demand was even more dramatic, as is witnessed by the swing in the current account from a deficit 17% of GDP in 2008 to a surplus of 8% in 2009. To a significant degree, this was induced by a drop in the real exchange rate amounting to 44% from the pre-crisis peak to the November 2008 trough. BIS central bankers’ speeches  3  The recovery began as previous imbalances were corrected and the economy found its bottom in the underlying strength of its traditional export sectors, the non-traded goods sector took advantage of the low real exchange rate, and the stabilisation of the economy and later real wage gains rekindled consumption. And then we have had the phenomenal growth in tourism in the recent years, which seems to be due to much more than the historically low real exchange rate. These figures show developments in GDP and employment during the recession and subsequent recovery in Iceland, with predictions extending into 2017 for GDP and 2016 for employment. For comparison, it shows the median and the 1st-3rd quartiles of the distribution of these variables for 30 other European countries, with Ireland and the UK highlighted. It shows that Iceland’s recession was significantly deeper than the median in Europe, and the same goes for Ireland, although to a lesser degree.