samchain/econo-pairs-v1 huggingface dataset:
Indeed, in terms of financial stability, the development is welcome news as any additional stimulation would only have aggravated imbalances on the mortgage and real estate markets. The third notable aspect relates to developments in the public sector, where the volume of outstanding bonds has fallen over the last ten years. Although the volume issued by the cantons and municipalities increased, that issued by the Confederation declined markedly. While public debt levels rose substantially around the world in the wake of the financial crisis, the Confederation has managed to reduce its debts over this period, thanks to regular budget surpluses. In the context of the Swiss franc bond market as a whole, however, the decline in the volume of outstanding Confederation bonds is comparatively inconsequential. So, in contrast to the domestic segment, which has grown overall, the foreign segment began contracting as far back as 2011. This is principally due to the fact that the financing needs of European banks have tapered off significantly since the financial and debt crisis. In the foreign segment banks are by far the most important issuers of bonds, as can be seen in chart 5; this applies particularly to European banks, which account for 70% of all issues. And in recent years, foreign banks have gradually withdrawn from the Swiss franc capital market. Another possible factor behind the contraction in the foreign segment could be FX swap market distortions.

Simon M Potter: Some observations and lessons from the crisis 1 Remarks by Mr Simon M Potter, Executive Vice President of the Research and Statistics Group of the Federal Reserve Bank of New York, at the Third Annual Connecticut Bank and Trust Company Economic Outlook Breakfast, Hartford, Connecticut, 7 June 2010. *  *  *  Introduction Among the many important lessons coming out of the global financial crisis that started in the summer of 2007, possibly the most important revolve around how complex the global financial system is, how quickly confidence in that system can deteriorate, and how difficult it is to come up with simple and robust solutions to stabilize the system in real time. My remarks today will break the progression of this crisis into four distinct phases. In doing so, my intention is to highlight some of the actions taken by the Federal Reserve to manage the crisis, and to offer what at least in retrospect seem to be clear lessons on how to promote financial stability outside the heat of a crisis.
Brexit and interest rates Speech given by Ben Broadbent, Deputy Governor Monetary Policy  London School of Economics 15 November 2017  I’d like to thank Mette E. Nielsen and Konstantinos Theodoridis for their valuable research assistance. I am also grateful for helpful comments from other colleagues. The views expressed are my own and do not necessarily reflect those of the Bank of England or other members of the Monetary Policy Committee. 1  All speeches are available online at www.bankofengland.co.uk/speeches  Introduction and summary Hello! It’s a real pleasure to come to the LSE to give this talk. It’s a great institution; I’m fortunate to have many friends here; last, but not least, it’s barely a hop and a skip from my office. So thank you for having me. It won’t have escaped your attention that the MPC raised interest rates earlier this month. It did so, in part, because of the referendum-related decline in sterling’s exchange rate. That has pushed up CPI inflation and will continue to do for some time yet, as the rise in import costs is passed through to retail prices. Our remit says we can accommodate such effects, and take our time in bringing inflation back to target, but only so long we also think there’s spare capacity in the economy. As unemployment has declined that position has become harder to maintain. We’ve been communicating this message for some time now.

The fourth principle is creating regulatory framework that promotes agility and innovation while preserving financial stability. Regulators must continually review and ensure that their governing frameworks remain relevant in the context of the fast-changing digital world. Outdated and inflexible laws and regulations need to be amended accordingly. With the advancement of technology, financial innovations usually start off small and scale up quickly. Regulators must therefore keep in mind the concept of proportionality, allowing themselves to be more tolerant towards low-risk financial activities and more scrutinizing towards activities that might pose risks to the financial system. We also need to keep in mind that financial products and activities are expanding across jurisdiction of different agencies. Regulatory framework must shift from entity-based regulations, which have formed the core of our regulatory framework, to activity-based ones. Most importantly, the regulations must be agile and able to adapt to the everchanging environment of the digital world. To give you an example, our regulatory sandbox scheme that was introduced less than two years ago might be too slow and out of sync with market requirements today. In response, we have decided to allow financial institutions to develop their own sandbox and move from the approval concept to registration concept, with a view to reducing time-to-market and increasing flexibility for innovation and investments. We have also amended our regulations governing banks’ IT-related services with the aim to facilitating 4  partnerships between banks and tech companies, and enhancing connectivity between banks and the digital world.
At the same time, over these ten years, we have gained insight into the functioning of the Norwegian economy under an inflation targeting regime. Inflation targeting is flexible, i.e. when setting the key policy rate, weight is also given to stabilising developments in output and employment. For monetary policy to contribute to stabilising developments in output and employment, there must be confidence that the inflation target will be reached. Inflation will not be at target at all times, but if there is confidence in monetary policy, expected inflation will be close to the inflation target over time, which in itself contributes to stabilising inflation. Norges Bank’s communication of monetary policy aims to stabilise inflation expectations by giving the reasons for and explaining interest rate setting. By publishing its interest rate forecasts and monetary policy strategy, Norges Bank has made it easier for others to understand and evaluate monetary policy. It is my objective to continue and enhance the Bank’s analysis and communication. Since March of this year our monetary policy reports have included a summary of the Executive Board’s discussion of monetary policy prior to the reports. Chart: Surplus liquidity in the banking system To be effective, the key policy rate must have an impact on market rates. Norges Bank supplies liquidity to banks to bring short-term money market rates down closer to the key policy rate. Surplus liquidity in the banking system is kept as sight deposits at Norges Bank. The redistribution of interbank liquidity does not function adequately.

The main changes in the State and Social Security Budget for 2016 are, on the revenue side, the application of the second phase of the tax reform designed in 2014 and, on the expenditure side, still in the context of observing the spending ceiling, certain expansionary measures such as the approval of a wage increase of 1% for public employees, payment of the second part of the salary payment eliminated in 2012, and the general increase in the average staff replacement rate to 50%. The 2016 Budget Plan presents an estimate of the impact of these measures on regional and local governments, which are the levels of government that manage the most labour-intensive public services. Noteworthy in the area of Social Security is the revaluation of pensions by 0.25%, in accordance with the application of the new revaluation index. In light of the macroeconomic developments envisaged and the above-mentioned measures, the 2016 Budget Plan anticipates growth of around 4.5% in overall general government revenue, which is slightly higher than projected nominal GDP. This would take the public revenue/GDP ratio to 38% in 2016, compared with 37.8% estimated for 2015. On the expenditure side, the State spending ceiling, the improvement in the economic situation and the application of the above-mentioned measures to overall general government would – according to the estimations of the 2016 Budget Plan – give rise to a decrease of 1.4 pp in the public expenditure/GDP ratio.
A serious problem for the Japanese authorities was that the Bank of Japan was granted independence not long before it became necessary for policy to be coordinated between MoF and the BoJ.18 Inevitably, the desire on both sides to respect the newly-won independence of the central bank came into conflict with the growing realisation that monetary policy was operating in a zero-interest rate environment. The clarity of communication about the objectives of monetary policy diminishes when it is no longer possible to identify clear and distinct responsibilities for the two institutions. A desirable long-term reform - central bank independence - led to short-term difficulties. 17  How large are these effects is an open question. The absence of a compelling general equilibrium theory of liquidity makes it difficult to produce reliable empirical estimates. For the purposes of the equivalence proposition the magnitude of the effect is irrelevant. 18  The legislation was published in 1997, and took effect in April 1998. 12  BIS Review 5/2004  VI. Conclusions  I am conscious that I have raised more questions than I have answered - perhaps that is what happens when you become a central banker. I hope I have not copied my room-mate at Harvard whose PhD supervisor wrote, “he chewed more than he had bitten off”.19 But the search for institutions that improve our ability to handle the two problems associated with public money - the impossibility and undesirability of committing our successors - is never ending, and our knowledge is limited.

Lars E O Svensson: Monetary policy with a zero interest rate Speech by Mr Lars E O Svensson, Deputy Governor of the Sveriges Riksbank, at SNS – Centre for Business and Policy Studies, Stockholm, 17 February 2009. The original speech, which contains various links to the documents mentioned, can be found on the Sveriges Riksbank’s website. *  *  *  The Riksbank conducts a policy of flexible inflation targeting, which aims to stabilise inflation around the inflation target and also to stabilise the real economy. To achieve this, the Riksbank sets the repo rate and publishes a forecast for the repo rate in the years ahead. The repo rate and the expectations of future repo rates that arise from the repo rate path affect market interest rates, which in turn affect aggregate demand and inflation. During the financial crisis, the functioning of the financial markets has deteriorated and the transmission mechanism from the repo rate path to inflation and the real economy has weakened. In order to improve the functioning of the financial markets and strengthen the link between the repo rate path, market rates, inflation and the real economy, the Riksbank has taken a number of special measures. 1 Although the discussion of monetary policy often focuses on the repo rate and the repo rate path, it is important to realise that it is the real interest rate and the real repo rate path that mainly affect aggregate demand, not nominal interest rates.
Thus, payments enabled by new providers have just started to take off, but it looks promising to become a new normal as they are expected to improve the user experience. How fast this segment of the financial system in the EU is developing can be witnessed by the approximately 300 new providers operating by midSeptember this year, which is just two years since the application of the new regulation-relevant regulatory technical standards under the PSD2 (Open Banking Report, 20212). Most of the companies that offer these innovative services are fintechs, but open banking also 3 1/3  BIS central bankers' speeches  offers a possibility for traditional banks. In fact the survey conducted by Accenture3 finds that three quarters (75%) of the banks see payments modernization as being driven by changes in the national payments infrastructure and regulation, which include improving bank-to-bank payments systems, new industry standards and open banking. The rapid move to digital payments has put additional pressure on banks, with three-quarters (75%) of bank executives saying that the pandemic has increased the urgency of their plans to modernize payment systems. Pressures are felt by the central banks as well. In response to changes in consumer payments preferences, the need to further increase efficiency of payments, as well as the disruption caused by COVID-19, the interest in central bank digital currency (CBDC) has also increased. In fact, last year was the launch of the first “live” digital currency in the Bahamas.

Therefore, as you celebrate this great milestone, we join you in anticipating further progress and effectiveness in the execution of your mandate. Mr. Chairman, the central theme of my address today is the important role that information plays in economics in general and in financial markets in particular. In 1970, some 39 years ago, or 4 years before the establishment of the Central Bank of Swaziland, an economist called George Akerlof published a paper called “The Market for Lemons.” By lemons he was referring to used cars in the United States of America. Akerlof, who would later win the Nobel Prize in Economics for his work, demonstrated how information asymmetries between two contracting parties, a used car seller and a used car buyer, could lead to an inability of the car dealer to sell cars. More broadly, the moral of his story was that information asymmetries that allowed for no credible assessment of value of a given transaction, could lead to market collapse – in this instance the market for used cars. Mr. Chairman, if we fast forward to the year 2008, and to the current financial crisis, we note that asymmetries in information between financial institutions, this time relating to the extent of exposure to and value of complex derivative products, led to a freezing up of credit markets, the eventual collapse of some important financial institutions, and the near meltdown of the entire financial system. In these events we can see the insights of Akerlof in his 1970 paper.
In any case, the bias and probabilities of external risk scenarios reinforce the need for a small and open economy such as Chile to maintain deep-rooted macroeconomic foundations, particularly a path of fiscal consolidation, sustainable debt levels and adequate capitalization of the country’s banking system. At home, we estimate that the risks to activity are unbiased. The economy has brought positive surprises in good measure because the possibility of a more dynamic behavior of investment identified in previous reports has materialized, short only of a more significant response from large-scale projects and the real estate sector. For its part, although the labor market could take a little longer than expected to recover, the latest data tend to provide greater robustness to the employment, wage bill and consumption projections. As for inflation, we estimate that the risks are unbiased. Although the risks in the international scenario and their negative implications have increased, the economy has shown more dynamism than expected and the short-term outlook for headline inflation has been corrected upwards. In this context, we consider that the current level of monetary stimulus is less necessary and may begin to withdraw it in the coming months. Thus, we reaffirm our commitment to conduct monetary policy with flexibility, so that projected inflation stands at 3% over the two-year horizon. Institutional advances and challenges As I pointed out at the beginning, this presentation to the full Senate has a special connotation.

On the one hand, private salaried employment is increasing at annual rates above 1%, something not seen for several quarters, and shows some dynamism in important sectors, such as construction and trade. On the other hand, evidence has been emerging that suggests that the effective growth of employment would be somewhat greater, since the labor market has been able to absorb a significant influx of immigrant workers. This figure is not yet captured by the employment surveys, which are based on population projections that have not yet been updated according to the 2017 Census. This leads us to evaluate that the lag we observed between employment and activity is beginning to dissipate (Figure 2). At the same time that private salaried employment has increased, the unemployment rate has increased too, as exemplified by the figures from the National Statistics Institute (INE) employment survey for the May-July moving quarter. This is so because during the phase of low growth of 2015-2017 many people became self-employed, others worked fewer hours than desired and others simply quit the labor market because they could not find what they were looking for. In recent months, this process has been reversed, with the workforce growing around 2.5%, more than the 1.5% of the period 2015-2017. It is important that in the next few months the speed of job creation, especially salaried jobs, match and hopefully surpass the workforce’s growth. Every September, the CBC revises its potential growth estimates.
Stefan Ingves: The monetary policy landscape in a financial crisis Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, at the Swedish Economics Association, Stockholm, 31 March 2009. *  *  *  Introduction "The monetary policy landscape in a financial crisis" is the theme of my speech this time. I thought for once that I would begin by showing you a picture. The slide shows an oil painting that was done in 1842 by the English artist William Turner.1 It is called ”Snow Storm – Steam-Boat off a Harbour's Mouth”. It is part of the collection at the Tate Gallery in London. The only thing you need to know about the painting just now is that Turner used a very special technique. He built up the picture gradually by painting several thin, semi-transparent layers on top of each other. He then added somewhat thicker, more pastose sections. As you can see, this layer-by-layer technique gave his paintings a special lustre and a special atmosphere. We would probably say that the atmosphere in this painting is dramatic. Turner's technique can also act as a starting point for a description of the situation today. Reality is made up of different layers. Every layer that is added or peeled away reveals a partly new landscape. We can compare the financial crisis to the snow storm in Turner's painting. In order to paint the picture of the complete storm we need to begin with a layer that describes the macroeconomic preconditions, the macroeconomic landscape.

But before I get into the details, let me say that I believe the LTCM episode and the supervisory response to it is fundamentally about two things: leverage and good judgment. Leverage is a fact of life in our financial world, and is a key part of the risk-taking necessary for the creation of wealth. But sometimes banks go too far in extending credit to their customers and counterparties. That’ s where good judgment comes in. I know - - I’ ve been there. I was a commercial banker for 22 years before becoming President of the New York Fed, and I can tell you that the most important decisions a banker makes are how to lend and to whom. Those decisions are not easy, and often involve many shades of gray. One of our aims as supervisors should be to see that banks are using the right tools to make those judgments. The importance of these issues extends beyond banks and their supervisors. Sound credit policies and procedures are essential not only for the stability of individual banks, but also – and more importantly – for the health of the financial system and the economy as a whole. This is because banks play a pivotal role in our economy as providers of credit. If banks make poor credit decisions with respect to a borrower, including a hedge fund like LTCM, the financial system and our economy will suffer.
But with more autonomous units, an internationally-active and  BIS Review 42/2004  1  complex bank has to expend more effort to identify, measure, and control the risks arising from its diverse and far-flung activities. Traditional rules of thumb used by management and supervisors to assess risks and to ensure the adequacy of capital to buffer risks are no longer adequate. And continuing financial success depends critically on how a bank responds to the risk management challenges. In response to these challenges, the successful banks have developed enhanced tools for measuring risks. These can be grouped into two broad categories. The first category of tools are those that give a bank the ability to discriminate among risks by differentiating the riskiness of customers, and of various banking facilities and products. The second category of tools includes those that give a bank an enhanced capability to quantify risks. The end of the road for Basel I In and of itself, the enhanced capability of institutions to differentiate and measure risks has been a welcome development. But, the increasing sophistication of institutions in risk management meant that the crude system of risk weights under Basel I became less meaningful in ensuring the adequate capitalisation of large, complex banking institutions. By the mid-1990s, less than five years from the official implementation of Basel I,1 it was apparent that Basel I was becoming less relevant for some banking institutions.

And even the banks, despite the fierce criticism from some firms who did not receive the financial support they expected, do not seem to have been as quick to pull the plug on their borrowers as they were during previous downturns. Overall, the fall in output does not appear to have done as much damage to employment and firm survival as one might have expected. At the same time, the implication of business surveys is that the degree of spare capacity in firms is rather less than implied by the fall in output. So estimates of the gap between overall demand and the economy’s capacity to produce goods and services – an indicator of inflationary pressure known as the “output gap” – are extremely uncertain at the current juncture. The “output gap” appears to be much smaller than the fall in demand alone would have suggested, but there is little evidence of widespread destruction of supply capacity. Whatever the balance between demand and supply, it seems that many firms have maintained prices, not cut them, in the face of weak demand. That may have been a rational  BIS Review 91/2010  3  response. In order to survive they needed to maximise their present cash flow and they would only have cut prices if the demand response was likely to outweigh the lost revenue. Comparisons with behaviour in previous post-war recessions are difficult, partly because inflation was much higher during those episodes.