samchain/econo-pairs-v1 huggingface dataset:
As the scale of the Bank’s balance sheet persisted however, it became increasingly clear that we needed to do more to bring our risk framework up to best practice. That was for three main reasons, each linked to the drivers I listed a moment ago. First, the increasing complexity of the Bank’s operations meant that we needed more effective ways to measure the risks we were taking, add them up across the different specific operations, and evaluate them against an explicit statement of the Bank’s risk tolerance. Second, the increasingly contingent nature of our risks meant we needed much better forward-looking tools for evaluating how those risks might crystallise in different scenarios, and ensuring we had sufficient resources to respond. And, third, the need to hold ourselves accountable, identify potential blindspots and safeguard against groupthink in our internal work, required more effective internal challenge and reporting mechanisms. In the summer of 2015, we therefore set up a brand new second line financial risk challenge function, staffed using some of our risk experts who previously helped the PRA to challenge commercial banks: bringing the ‘Golden Rule’ to life. We developed a framework of risk tolerance, measurement, assessment, reporting and challenge tools across the full range of credit, market, counterparty and liquidity risks facing the Bank, basing 6  More details on these functions are available in the Bank’s annual report on the Sterling Monetary Framework, available at http://www.bankofengland.co.uk/markets/Documents/smf/annualreport16.pdf. 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  them where possible on industry best practice.

More recently, the balance sheet expansion has primarily reflected outright asset purchases and long-term lending schemes of unprecedented scale and duration, designed to deliver monetary stability when interest rates are close to zero. Other major countries have seen increases of similar scale: Chart 3 for example compares the expansion in the Bank’s balance sheet with that of the US Federal Reserve. These expansions, though primarily focused on maintaining monetary rather than financial stability, are arguably further examples of the central bank as firefighter: injecting liquidity when other market-based channels are blocked. Chart 4 shows how closely the increase in the size of the Bank’s balance sheet mirrors the decrease in the scale of sterling lending to households and firms by UK banks in recent years: a strikingly similar picture to the stylised relationship in Chart 1. 3  For a discussion, see for instance Ian Plenderleith’s Review of the Bank of England’s Provision of Emergency Liquidity Assistance in 2008–09 (http://www.bankofengland.co.uk/publications/Documents/news/2012/cr1plenderleith.pdf). 4 See John, S, Roberts, M and Weeken, O, ‘The Bank of England’s Special Liquidity Scheme’ (http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/qb120105.pdf ). 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  Chart 4: UK central and commercial bank  Chart 5: Permanent shift in the Bank’s firefighter role?
Mr Bäckström discusses international financial stability Speech given by the Governor of the Sveriges Riksbank, Mr Urban Bäckström1, at a seminar at the South African Reserve Bank in Pretoria on 9 August 1999. *  *  *  Introduction Financial stability is a topical subject in the light of events in the past decade – years that saw financial problems in a number of European countries as well as in Mexico and Asia, the devaluation of the rouble and suspended payments in Russia, considerable turbulence in western financial markets and financial unrest in Brazil. The crisis in the international financial system developed, to cite President Clinton, from being “just a few small glitches in the road” into “the worst financial crisis in fifty years”. The problem is that crises will always be intrinsically difficult to forecast. Recall that the scale of the Mexican crisis in 1994 was foreseen by very few. In South-East Asia the onset, duration and scope of the recession were all missed by the forecasting community. In the last spring, no one had anticipated the extent of the turmoil in financial markets that would be generated by the Russian devaluation and moratorium. The ways in which rising credit spreads led to losses by highly leveraged investors, liquidity shortages and the virtual drying-up of some markets were generally not foreseen. The track record shows that there are many things we do not understand and cannot predict.

Their behaviour in this respect is more reminiscent of how the Riksbank acted in the early stage of the flexible exchange rate regime. The operations of other central banks, in the UK and Australia, for instance, are more akin to the Riksbank’s current practice. Comparisons of exchange rate fluctuations in different countries with a flexible exchange rate provide little evidence of any clear effects from differences in the monetary policy strategies. The Canadian dollar, for example, does not seem to have been more stable even though the Bank of Canada has focused more on the monetary conditions and made greater use of interventions. BIS Review 48/1999  2  Forces behind the flexibles exchange rate At the time of the departure from the krona’s fixed exchange rate in November 1992, the real tradeweighted exchange rate was overvalued. Inflation in Sweden had been higher than elsewhere for a considerable period and this had successively eroded competitiveness. When the flexible regime was introduced, the krona depreciated markedly; in the first six months the nominal TCW index weakened about 20 per cent. In that inflation in Sweden had already been brought more or less into line with the rest of the world and there were signs of expectations that it would remain relatively low, such a marked nominal depreciation exceeded what was needed to restore a reasonable competitive situation. Having previously been overvalued, the real exchange rate accordingly swung abruptly to an undervalued level and remained there for a long time.
Denis Beau: Financial inclusion in the digital age - how to make a difference? Panel opening talk by Mr Denis Beau, First Deputy Governor of the Bank of France, at the Singapore Fintech Festival 2019, Singapore, 13 November 2019. * * * Good afternoon Ladies and Gentlemen, I am very happy to be here with you today to introduce this session on financial inclusion and I would like to thank the MAS for offering me the opportunity to contribute to this conference. Inclusion is an essential topic for the financial sector, and more broadly for society as a whole. It’s essential because it’s about making sure everyone can have access to financial services. Because without this access, there is no or only limited ways for people to take part in the formal economy, to build up capital, to buy goods and services, to develop an entrepreneurial project. It is essential because it’s not just about more growth for the financial sector or  even for the economy as a whole, it’s also about reducing inequalities and making sure that more fragile populations,households and businesses, are not left out of economic development. Of course, Fintechs have a huge role to play in financial inclusion. They can provide new solutions, but they also raise new challenges, with new players entering the financial world and new ways of looking at customer relationships.

There is then a risk that the Riksbank would lack the means to manage its stabilisation policy task. On the other hand, if we continue to have very low interest rates at the same time as the growth rate is high, there is a risk of imbalances arising in the housing market. Conducting flexible monetary policy means being prepared to deal with this type of economic shock. The bank is therefore working on further clarifying the principles published in 1999 that explain how the Riksbank’s inflation target will be applied and the considerations that sometimes need to be made between inflation, stability in the real economy and stability in the financial system. This does not involve any fundamental changes in monetary policy strategy but may make it easier to understand how monetary policy is applied. 7/7
I think, though, that we should be prepared for less output growth in the next few years than we expected before the crisis struck. The same can be said for profits in business overall, not to mention the financial sector, where return on equity was puffed up through leveraging that represented an unacceptable level of risk. It should also be borne in mind that economic policy based on an unrealistic level of growth in potential output has decidedly negative consequences. But let us return to Iceland in the here and now. There have been a number of positive developments in the Icelandic economy in the past few months. We have managed to put a floor under the exchange rate: since the beginning of the year, the króna has appreciated by over 12% in trade-weighted terms, and nearly 17% against the euro, without any intervention by the Central Bank. External imbalances have disappeared, and the underlying current account balance is now in surplus. Inflation has fallen from about 18% at the beginning of 2009 to the present 4½%. It is moving rapidly down to the Central Bank inflation target of 2½% and, excluding the effects of tax increases on price levels, will be at target early next year. Concerns that the Icelandic Government will fail to pay instalments on foreign loans in 2011 and 2012 have vanished as the foreign exchange reserves have grown, as I will expand on in a moment.

Before I turn to Iceland’s situation now and in the near future, I would like to place us in a wider international and historical context. Iceland is truly a small country, and individual positive or negative shocks can trigger economic short-term developments that deviate markedly from those in the rest of the world. But in the end, the possibilities are always limited by global trends. Since the latter half of 2009, the global economy has begun to grow again after the recession that followed the peak of the 2008 financial crisis, but there are still a number of questions about what will come next. Output growth varies greatly from region to region, with a number of emerging economies soaring ahead while many of the developed economies hit hardest by the crisis are not growing fast enough to reduce unemployment, and near-term developments are a source of concern. At work here, to some extent, is the long-term tendency for the divide between emerging and developed countries to narrow. The trend is not necessarily a linear one, though; it tends to play out in fits and starts. But in my opinion, more is involved. Last month I had the opportunity to attend a conference held annually in Jackson Hole, Wyoming, by the US Federal Reserve Bank of Kansas City.
21  Table 1: Fiscal and monetary policies to increase commercial credit (*) Country  Fiscal  % GDP  Monetary  % GPD  United States  Forgivable loans to small and medium enterprises (SME)  3.4  Bank credit (TALF, MSLP) and purchase of corporate bonds (PMCCF - SMCCF)  7.3  Germany  Loans with federal and state guarantees  25.3  France  Loans with guarantees, includes reinsurance value  15.2  Secured loans, part of the amount estimated by the IMF  --  Italy  33.8  TLTRO loans from the ECB. Long-term refinancing to the banking sector (up to 3 years) conditional on non-financial corporate loans  Spain  Guaranteed loans, excludes facilities for lowincome households  9.6  UK  Guaranteed loans  16.8  TFSME loans.

By doing so, they missed the negative effects and excesses that arise from the herd behavior of the financial institutions, many times a consequence of the pro-cyclicality that is inherent in the financial activity and the regulatory framework itself. The attention of the supervision was focused on the banking sector, but insufficient attention was given to its interaction with the non-banking financial sector, that by being much less regulated, in the meantime was increasing in size and importance. Also, as part of their general and commending goal to focus their supervisory approach on the most important risk sources of the financial industry, but also as a sign of their objective difficulty to keep the pace with the financial markets developments and innovations, the supervisory authorities relied more and more on the market discipline and on the sophisticated and unclear risk models of the financial industry, that also proved to be deficient. Some times, the structure of the supervisory authorities has proven to be fragmented or too complicated, giving rise to regulatory arbitrage by the market players. Other times, the resources needed to effectively perform the supervisory role have been limited, negatively affecting the supervisor’s performance. But this crisis showed that risk came also from other sources, out of the direct control of the supervisory authorities in a given jurisdiction. For example, the increasing asset prices were fueled by ample liquidity and credit conditions, which were often affected by international developments and financial flows.
In this respect, in the opening months of this year, the Government set in train various regional and local government support mechanisms in order to smooth the refinancing of their existing debts or payment to trade creditors. The financing mechanisms agreed also require fulfilment of adjustment plans. It is now crucial to insist on strict compliance so that this type of aid does not provide inappropriate incentives. The consolidation strategy must, finally, be completed while keeping in mind the mediumand long-term factors affecting public finances, particularly those deriving from the pressure  6  BIS central bankers’ speeches  exerted by population ageing on certain items of expenditure. In this connection, following the enactment in July 2011 of the Social Security Reform Law, an appropriate definition of sustainability is needed as soon as possible so that the system’s parameters may be automatically adapted to demographic changes. In short, the current budgetary imbalance has become one of the main obstacles to growth of the Spanish economy. Correcting it is urgent and unavoidable. What is thus needed is a fiscal adjustment strategy based on commitments made at European level. This strategy has to be accompanied by a strengthening of the national budgetary framework, as reflected in the constitutional reform, and by the application of the medium and long-term reforms that enable the challenge of population ageing to be addressed.

By contrast with extrinsic drivers of persistence, greater intrinsic inflation persistence is something that monetary policy can – and should – address. Drivers of inflation persistence At this point, I will focus on one specific inflationary shock that we have recently faced, namely the significant rise in imported energy prices stemming from Russia’s invasion of Ukraine and its implications for European wholesale natural gas prices. [12] Once we focus on intrinsic inflation persistence, by nature we have to focus on a specific shock. It is the change of economic responses to that shock – in particular, changes in price and wage setting behaviour – that determine how the intrinsic persistence of headline inflation will evolve. Drawing on a previous talk,[13] let me first establish four relevant features of the shock. (1) It came as a genuine surprise to monetary policy makers, in the sense that it was neither anticipated nor anticipatable at anything other than a short horizon. [14] (2) The resulting rise in European wholesale gas prices was transmitted to UK CPI inflation (via both direct effects on household energy bills and indirect channels through the energy costs of producers of goods and services) in the course of a few months, and thus substantially more quickly than the typical 12-24 month lag in monetary policy transmission. [15] (3) The shock was very large by historical standards.
Caleb M Fundanga: Innovative financial products on the Zambian market in relation to credit interest rates and the private sector development Remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the Zambia International Trade Fair Symposium on “Innovative financial products on the Zambian market in relation to credit interest rates and the private sector development”, Ndola, 30 June 2011. * 1.0  *  *  Introduction  Financial development contributes to economic growth in a very significant way and it has been demonstrated that countries with more developed financial systems tend to grow faster. Therefore, the financial sector is key to economic development and policies aimed at developing the sector would be expected to contribute to economic growth. 2.0  The current financial sector policy environment in Zambia  During the 1970s and 1980s Zambia pursued a policy of fixing interest rates for long periods and at relatively low levels, with the ostensible purpose of promoting growth. However, these administrative actions introduced economic distortions into the financial structure of the economy including the following:   The hindrance to economic growth arising from the inefficiency in the allocation of resources (with credit controls and distorted price indicators). These controls resulted in both low levels of domestically generated savings and investment, thereby reducing the economy’s growth rates.   The financial system remained generally under-developed with inefficient lending patterns that failed to achieve their distributional goals.

BIS central bankers’ speeches  5  7.0  Measures to reduce interest rates  Although interest rates have trended downwards in the recent past with commercial banks average lending rate at 26.2% in March 2011 from 54.5% in 2001, the reduction is not in tandem with the fall in inflation and yield rates on government securities. The Government and the Bank of Zambia continue to take measures to provide macroeconomic stability necessary for the reduction of interest rates in Zambia. Some of the measures undertaken so far include the following: (i)  Inflation: the other challenge with regard to lowering lending rates is to attain and sustain low (preferably single digit) annual inflation. An upward trend in inflation is undesirable, as it raises inflationary expectations causing banks to increase their lending rates. Prior to 2006 inflation in Zambia was persistently high and above single digit. However, from 2006 inflation has been contained in single digit except from the 2008 when the financial crisis resulted in the increase of inflation to 16.6%. Inflation was recorded at 7.9% in December 2010 from 30.1% in January 2001. This has resulted in a fall in interest rates with banks Average Lending Rate coming down to 26.2% in March 2011 from 54.5% in December 2001. (ii)  Domestic financing: to contribute to efforts aimed at lowering lending interest rates, the Government has adopted prudent fiscal policies with domestic borrowing significantly reducing over the recent years.
This is particularly true for European policy, in the context, for example, of the recently approved European recovery fund (Next Generation EU).14 The spending and investment arising from the use of this fund for projects capable of transforming our economies and for financing reforms to raise their sustainable growth capacity, will be fundamental to consolidate the economic recovery and reduce the potentially permanent consequences of the crisis. More in the medium term, it is crucial that this fund be converted into a permanent, common fiscal stabilisation instrument for the euro area. This would allow a joint fiscal response to macroeconomic shocks and provide a larger 12  See Box 2 of the “Quarterly report on the Spanish economy", Economic Bulletin, 3/2020, Banco de España, for a description of this announcement, and an assessment of its effects on the financial markets. 13 In this respect, see P. Hernández de Cos (2019); “the European economic policy response to a scenario of lower growth and inflation", the Governor’s closing address for the La Granda courses. 14 For an analysis of the impact on the financial markets of the various milestones linked to the EU recovery fund, see Box 5 of the "Quarterly report on the Spanish economy", Economic Bulletin, 3/2020, Banco de España. See also Arce et al. (2020) and Box 3.4 of the 2019 Annual Report of the Banco de España for a discussion of the role of fiscal policy coordinated at European and international level in the current context.

I am grateful to Sarah Breeden, Jon Cunliffe, Lee Foulger, Karen Jude and Ali Moussavi for their assistance in helping me prepare these remarks. 1 For more on resilience and its importance in recent times, see Markus K. Brunnermeier, “The Resilient Society”,  Endeavour Literary Press, 2021  3/3  BIS central bankers' speeches
I would like to add that it should also be possible to examine the areas of our work that are not directly concerned with monetary policy. Openness is something that permeates Swedish public administration and is one of the keystones of our principle of free public access to official documents. It means that the authorities’ activities should as far as possible be carried out in an open form. This also applies to the Riksbank, of course. But there are other types of more "informal” accountability that are facilitated by our openness, credibility and independent position. The information from the Riksbank also makes easier the often fairly lively debate on monetary policy conducted in the media. Through our independent position and our openness, we create very good conditions for a debate without any great risk that our credibility will be chipped away. The possibilities for accountability even in this more informal way are thus fairly large. The Riksbank’s responsibility as an authority also makes other demands on our actions. This applies, for instance, to the forms for how we make our interest rate decisions and how we communicate our monetary policy intentions – what is usually called “signalling” in central bank language. Our interest rate decisions must be taken in what I would like to call a "correct procedure” and it is important that our principal – ultimately the general public – has insight into the decision-making process.

Persistent mass unemployment, the structural causes  3  BIS Review 55/2000  of which were poorly understood, had for a long time led to the adoption of certain Malthusian attitudes: wariness towards technical progress as it could potentially destroy jobs, the avoidance of productivity-enhancing investments thought to contribute to higher unemployment and, lastly, efforts to reduce the available work force with a view to sharing the same number of jobs between a smaller number of people. Having thus sought to limit technical progress, the available work force and the capital stock, it is not surprising that, despite the considerable progress in recent years, Europe and France have seen that their non-inflationary growth potential was still not as high as would have been desirable. In Europe and in France, we are seeing a profound change in perspective and are moving away from Malthusian attitudes. The Banque de France and the entire Eurosystem can be counted upon to support this change. This is why the Monetary Policy Council continues to make the following recommendations: in the interest of currency and price stability and therefore of robust growth, sustainable because it is non-inflationary and effective in combating unemployment, it is now more than ever the time to: –  invest and ease the constraints on capital. Investment is essential in our economy, in which the capacity utilisation rate currently stands at about 87% and 31% of firms are experiencing production bottlenecks.