samchain/econo-pairs-v1 huggingface dataset:
At this point, it is impossible to say what these banks’ next interest rate decisions will be. On Thursday, April 10, the Central Bank will publish its next issue of Monetary Bulletin, which will contain its newest macroeconomic and inflation forecasts. At that time, the Board of Governors will announce its next policy rate decision. The global financial markets have been in a state of flux in recent months, primarily because of the crisis in the US sub-prime mortgage market. Securitised assets based on sub-prime lending proved much more risky than previously believed, even by credit ratings agencies, which had given various collateralised debt obligations their highest ratings. But when they were put to the test, it emerged that they were far from reliable, and banks all over the world that had invested heavily in them lost staggering sums of money, amounts that are practically unheard of. In some instances, the losses were such that they compromised the banks’ equity position and forced them to seek out new share capital. A large number of banks have had to write off billions of US dollars, and some have even been forced to write off tens of billions. And in all likelihood, the effects will continue to emerge. Last year’s changes in the global financial markets were swift. For a long time, liquidity had been ample, interest rates low, and risk appetite high.

For Icelandic banks, it is therefore extremely important that CDS spreads decline, even though it is not clear what could cause it to do so in the current climate. 4  BIS Review 25/2008  At the end of last month, Moody’s Investor Service announced that the outlook for the credit ratings of two Icelandic banks had been downgraded from stable to negative, and that the outlook for the third bank remained negative. A decision on whether their credit ratings would be changed was to be expected within the month. This announcement came perhaps as no surprise, in view of the changes in the banks’ credit ratings from Moody’s over the past year. If they are downgraded by one notch, Glitnir and Kaupthing will revert to the credit rating they enjoyed before Moody’s announced the implementation of its so-called Joint-Default Analysis methodology early last year. Landsbanki’s current rating is two notches above that a year ago. In contrast with Moody’s, Fitch Ratings recently affirmed its ratings for Iceland’s banks and changed its outlook for Kaupthing Bank’s rating from negative to stable. It should be noted that many banks have been subjected to changes in their credit rating outlook. For example, Standard & Poor’s changed its outlook for many of the world’s largest and bestknown banks from stable to negative. Among the banks affected were Deutsche Bank, Dresdner Bank, Barclays Bank, UBS, Credit Suisse, and others of their ilk.
Furthermore, as of March there were still almost 3 million fewer jobs than at the end of 2007, and the ratio of employed Americans to the working age population was actually lower than it was at the end of the recession. Also, in an indication that employment is far from healthy, job finding rates have changed little since the recession. New York Fed staff research agrees with the broad consensus that cyclical factors are the major reason for the continued weakness in labor market conditions. In sum, these developments lead me to expect sluggish real GDP growth over the course of 2013 of about 2 to 2½ percent. As such, I anticipate that the unemployment rate will decline only modestly through the rest of the year. In the near term, there is considerable uncertainty about the outlook, particularly because the multiplier effects from fiscal drag and sequestration are still unclear. This uncertainty should gradually decline – for better or for worse – over the coming months, as the sequester’s impact takes hold and more economic data come in, giving us a clearer picture of the forward momentum of the economy. Inflation, as measured by the personal consumption expenditure deflator, is currently well below the Federal Reserve’s objective of 2 percent. There is substantial slack in the labor market and in the markets for goods and services, and underlying measures of inflation are subdued. Moreover, peoples’ expectations of inflation remain well anchored at levels consistent with our 2 percent longer-run objective.

William C Dudley: The outlook for the national and local economy Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York and Chairman of the Committee on the Global Financial System (CGFS), at the Staten Island Chamber of Commerce, Staten Island, New York, 16 April 2013. *  *  *  It is always a pleasure to speak with the business community given your important role in the community and in the region. I am particularly pleased to have the opportunity to speak to the Staten Island Chamber of Commerce and to be part of this distinguished panel. Thank you for inviting me today. As you know I have the honor of serving as the president and CEO of the New York Fed, one of the 12 Federal Reserve Banks that together with the Board of Governors in Washington make up the Federal Reserve System, our nation’s central bank. As head of the New York Fed I am vice-chairman of the Federal Open Market Committee (FOMC), the body that sets our nation’s monetary policy. The Fed was founded 100 years ago in 1913 to advance economic and financial stability. Over this century our nation’s economic output and standard of living has increased greatly, but the United States also faced many different challenges – ranging from the Great Depression of the 1930s to the Great Inflation of the 1970s and most recently the financial crisis.
However, the potential effects of the latest sharp Swiss franc appreciation should certainly not be underestimated. We have great respect for the businesses and their staff who are now having to make challenging adjustments. At this time, the Swiss economy must – more than ever before – build on its structural strengths and flexibility. Doing so will enable it to preserve its international competitiveness and, with it, the prosperity of our country. Apart from the exchange rate, future economic growth will depend on further developments in the global economy. In this respect, the outlook appears more favourable than in 2011. The US economy is in better shape. In the euro area, the latest economic figures also give cause for more optimism. Nevertheless, considerable risks also exist now, with the Ukraine conflict and the debt problems in Greece. Due to the new exchange rate parameters, the SNB’s conditional inflation forecast has also moved down significantly. For 2015, we anticipate inflation of –1.1% in Switzerland. As the stronger Swiss franc leads to a decrease in import prices. In addition, the very substantial fall in oil prices will move energy inflation deep into negative territory. However, both of these effects are temporary. According to our inflation forecast, the negative inflation phase will be short-lived. Sustained negative inflation or, indeed, a deflationary spiral, are not to be expected. Nevertheless, neither inflationary nor economic developments are optimal. We would prefer slightly positive inflation and more economic growth.

It can be argued that index funds distort the price of the targeted indices and that, as a result, the indices end up creating rather than measuring performance. ·  Last but not least, the impact of risk management techniques on market dynamics is particularly enlightening with regard to the question of asset price overshooting. Value-at-risk calculations have become a crucial element of the standard approach used by market participants to evaluate the risk inherent in their market activities and to set up exposure limits. Of course, central banks and financial institutions should continue to encourage the use of these instruments. But, in times of financial turmoil, the growing use of sophisticated risk management techniques by financial intermediaries might have had the paradoxical effect of amplifying the initial shock, exhausting liquidity and contributing to contagion  3  M. BORDO, B. EICHENGREEN, D. KLINGEBIEL and M. S. MARTINEZ-PERIA: “Is the Crisis Problem Growing More Severe?”, CEPR, September 2000. 4  BIS Review 28/2001  phenomena. Regardless of the intrinsic qualities of these risk management tools, we see that their growing use in the same fashion by all market participants may have produced pernicious effects. When market players rely on converging risk evaluations, they tend to take the same decisions at the same time, thus amplifying the initial shock to prices and trading volumes. All those factors have one consequence in common: they encourage homogenous behaviour and reactions to the detriment of the diversity that is indispensable to the smooth functioning of financial markets.
Note too that, judging by the behaviour of forward inflation rates, financial markets too consider this to be a real phenomenon: five years ahead, the expected value of eP/P* is around 16% lower than it was at the start of 2016. 2 This ratio then has to be divided by the same ratio in our trading partners. Obviously for every domestic shock described here, the exchange rate is affected symmetrically, and in the opposite direction by the same phenomenon in the rest of the world. 3 The ease with which this happens is what determines the slope of the supply curve in Charts 2 and 4. In the limit, if resources can move seamlessly and costlessly between sectors, the supply curve is flat. But this reallocation could take a long time. Empirically, over cyclical horizons, the correlation between exchange rates and demand disturbances is clear. 4 Arguably, the recent appreciation of the US dollar owes something to the expectation that the incoming administration will loosen fiscal policy. 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  as four-year moving averages. The graph also illustrates quite how weak the currency is at the moment (the green dot on the right-hand side) given the recent robustness of domestic demand growth (the blue dot). Among other things this framework has important implications for the link between exchange rates and “imbalances”.

Brexit and the pound Speech given by Ben Broadbent, Deputy Governor Monetary Policy  Imperial College, London 23 March 2017  I’d like to thank Matt Corder, Chris Salmon, Michael Saunders, Greg Thwaites and Anthony Veal, along with other colleagues, for their helpful comments and assistance. I reserve particular thanks for my Economic Advisor Alina Barnett. 1  All speeches are available online at www.bankofengland.co.uk/speeches  Introduction and summary The vote to leave the EU led to a big drop in sterling’s exchange rate. One consequence is a rise in import prices and a squeeze on households’ real income. We may already be seeing the impact of that squeeze on retail spending, which in real terms fell quite sharply around the turn of the year. While it’s hit the income of households, however, the depreciation has come as a boon for many exporters. In sterling terms goods export prices rose 12% through the course of last year. This will significantly have boosted exporters’ profitability and with it the incentive to invest in extra capacity. In general, it’s not really right – not enough at least – to think about the impact of a change in the exchange rate in isolation. Asset prices are volatile in the short run, sometimes inexplicably so. But over time they tend to move for a reason. They’re driven by deeper things that can have important effects of their own.
Roles of the Bank of Thailand in developing the bond market A High-level Domestic Bond Market Development Steering Committee was set up by the Government in January this year. The committee is chaired by the Finance Minister and comprises high-level representatives from both the public and private sectors, including the Bank of Thailand. The aim of the committee is to promote the development of the domestic bond market in five key areas, namely, (1) the primary market (2) the secondary market (3) taxes (4) market infrastructure and (5) market information. As for the Bank of Thailand, we have been tasked with the responsibility to develop an active secondary market. To meet this challenge, the Bank of Thailand has mapped out a multi-year strategy from which our work plan for bond market development this year will focus on six areas. First is the development of the private repo market. The repo market will provide bond market participants with the tools to hedge their bond position, as well as to manage liquidity more effectively. The private repo market will also provide an important link between the money market and the bond market, meaning that liquidity in the secondary bond market can be substantially improved once a well-functioning private repo market is in place. Second, the Bank of Thailand will coordinate with the Thailand Securities Depository to set up a "Bond Lending and Collateral Management Unit" to activate the bond lending business. This again will help facilitate the private repo market and enhance overall market liquidity.

In such a scenario, the net result in the short term will not necessary be falling inflation - it could just as well be rising inflation. This is one of the risks in this context. Another risk that has not been discussed much yet refers to a longer-term perspective. Changes create both winners and losers. Lower purchase prices for a business owner or for us consumers may involve a lost profit margin for other companies. An increase in productivity may involve redundancies and that companies which are unable to keep up with developments are wiped out. The structural transformation thus contains not only possibilities, but also social maladjustment that must be dealt with by the labour market, the capital markets, the education system, etc. What does this mean for monetary policy? I intend to discuss four areas that have figured in debates on monetary policy and the ‘new and old’ economy: the effects on interest rates, the effects on purchasing power, the economic relations and the Riksbank’s intellectual framework. It would not have been possible for interest rates to lie at the current levels if price stability had not lowered the risk premium that lenders require for the uncertainty factor. In addition, the reduction in public borrowing and declining indebtedness has led to real interest rates being pulled down. But would this still apply if we had a higher growth in productivity in the future? One effect of higher growth and increasing investment could be rising real interest rates.
The Benefits of Higher Capital Requirements  The assumptions underpinning the marginal benefits of higher capital in the LEI study were as follows: banking crises occur, on average, once every 20-25 years; the median estimate of the cumulative discounted costs of a crisis is around 60% of annual pre-crisis GDP; each percentage point increase in the capital ratio reduces the probability of a banking crisis by a smaller amount, ranging from 1.4% to 1% (for a capital increase from 10% to 11%) to 0.4% to 0.3% (for a capital increase from 14% to 15%); and, finally, the level of bank capital has no impact on the severity of crisis. 10  All speeches are available online at www.bankofengland.co.uk/speeches  10  Since the LEI report, a rich seam of the literature has emerged on the determinants of crises and their severity (∆). Some of the most illuminating pieces of this research have drawn on evidence from a long historical time-series and across multiple countries (for example, Jordà et al (2013), Taylor (2015)). The key findings are as follows. First, credit booms are probably the single most important determinant both of the likelihood of crises and of economic performance in the recovery after them (Schularick and Taylor (2012), Jordà et al (2013)). A sustained 1 percentage point increase in the credit-to-GDP ratio raises the probability of crisis from 4% to around 4.3% per year.

To ease and empower the user in manipulating and utilizing these new data we launched a new visualization tool developed in Power-BI. The lesson learned is also that to keep up with the changes and react promptly, we must continue encouraging the digital transformation of our organizations, incorporating advanced analytical techniques, and providing more timely and granular information that considers heterogeneity to complement conventional statistics. As the access to new large-volume databases and the use of granular data almost always poses the challenge of confidentiality, the Central Bank of Chile has sought to implement best practices and safeguards to exploit such information. With this objective, we established a Data Governance Agenda, led by a Strategic Committee that reports directly to the Board and whose executive management is located in the Statistics Division. Likewise, we are working on our Big Data Strategic Project, which contemplates a centralized data repository that all user areas can access. 2  Climate and distributional challenges Central banks actively participate in different initiatives to respond to the demands derived from climate change. In April 2022, the Intergovernmental Panel on Climate Change (IPCC) stressed the critical role of climate data in effectively aligning the financial sector with science-based decarbonization and adaptation goals.
This half percentage point of potential growth can be achieved by a medium- to long-term reform path: the efficient firefighters of the crisis must gradually hand over to the architects. A third of the necessary progress could be achieved through two European-level transformations (II) – via investment, digitalisation and the associated productivity gains –, the rest would depend on two challenges specific to France (III). II. Two Schumpeterian transformations for Europe  Europe, like the rest of the world, will have to achieve two major transformations in the next decade: the digital revolution and the climate transition. The Covid crisis has obviously accelerated the former, and fortunately has not slowed down the efforts regarding the latter. Compared to the rest of the world – and in particular the United States – our Europe is lagging behind with the first transition, and still ahead with the second. But it suffers above all from a structural handicap: its lack not of economic weight – which we have, together – but of speed; Europe has unfortunately had less growth than the United States for the past thirty years, and less capacity for economic renewal. In a speech last March at the College of Europe in Brugesii, I voiced the wish that we should finally reconcile the two great European economists of the 20th century: Keynes – who has provided us with much inspiration in the Covid crisis – and Schumpeter – the man of innovation, whom we will need in order to achieve these two transformations.

The necessary coordination at national level must therefore be combined with mechanisms to ensure the agreement is able to cater to the existing productivity and activity-related differences across firms and sectors.8 Equally, where the standard of living of certain segments of households is hit particularly hard by rising energy costs, the incomes agreement should naturally seek to mitigate their straitened circumstances. In short, these considerations reveal the need to avoid overly sweeping measures to implement a potential incomes agreement that might prove too rigid for certain groups of agents. Third, any approaches that automatically link wages to past inflation or indexation clauses are also to be avoided9. The aim is precisely to reduce the risk of triggering a wage-price feedback loop. In this regard, workers with collective bargaining agreements registered up to March this year that provide for any form of wage guarantee clause linking the final wage increases agreed in 2022 to developments in inflation are admittedly in the minority. Nonetheless, the figure (30%) is notably higher than it was at the end of 2021, when it stood at 17%. Of even more concern is the fact that this figure rises to 50% of the total when considering the agreements entering into force in 2023, albeit still referring to a small number of agreements in this case. Fourth, any incomes agreement should provide for multi-year wage increase and job protection-related undertakings. This would offer households and businesses some certainty in their spending and investment decisions.
Another aspect that needs to be mentioned is being paranoid about the worst that could happen. This is sometimes referred to as productive paranoia. Central bankers need to excel as risk managers – knowing what could go wrong and prepare for the worst that is yet to come. In part it involves building the buffers to prepare for the unexpected events before they happen. When I am asked the question about how we are going to manage ‘the lift off’ – the normalisation of interest rate by the Federal Reserve in the United States – my response is that it is not what we will do now but what we have done before it happens that will see us through this period. It is not only the buffers that have been built but also the capability that has been developed that will better allow us to intermediate and thus absorb the shock. This will enable us to withstand the volatile financial flows that are already occurring in anticipation of this eventuality. Sometimes there are also Black Swan events. These are defined as those developments that have a low probability of happening and that is difficult to predict and anticipate. Being paranoid and building the resilience against such shocks will contain its damaging effects. Therefore continuous rigour needs to be applied all the time, during the good times and the challenging times. Vigilance, detecting developments that could signal danger, early recognition of risks are all important.

Also knowing how your risk profile changes over time will avoid one being taken by surprise. Central banking is therefore not for the faint of heart. It not only demands the high levels of energy – not just the physical energy, but that of the emotional, spiritual and the mind. When tested to the limit, it is from these sources of energy from which the strength is derived. Investing in these sources of energy will avoid its depletion. Energy should not be taken for granted. Then there is the courage that is needed. It is derived from your convictions and values that you hold, reinforced by your sense of purpose and what motivates you. At the Leadership Energy Summit Asia in 2014, I spoke of having the ability to generate and ride on the positive cycle of leadership energy. In mobilising energies in the organisation to be aligned to achieving an outcome, it generates a second round of energy burst from others in the organisation. The continuous positive energy loop provides continuous motivation and momentum in a two way direction and intensifies energy in the organisation. It is a mutually reinforcing phenomenon that I have experienced in the Bank time and again. 2  BIS central bankers’ speeches  Let me conclude my remarks. The demands on leadership is immense. In the current international and domestic environment, it also requires leadership energy that is sustainable.