samchain/econo-pairs-v1 huggingface dataset:
So there are sound economic arguments for an inflation target that is not lower than 2 per cent. To sum up, it is these considerations I have in my mind when I talk about the importance of keeping our eye on the ball. Basically, it is a question of constantly being very clear about the guiding role of the inflation target in the design of monetary policy. The lower bound of the repo rate is less than zero Regarding negative interest rates, I presented my own view on the matter in a speech around this time last year. 6 I think that the difficulties with negative rates are not so much a question of purely economic aspects, but rather of what is feasible according to social conventions and possible to create understanding for. For example, the biggest problem is probably not the one that is commonly highlighted, namely that the general public would choose to empty their bank accounts and only hold cash, as soon as the interest rate is negative. Holding savings in cash is, when it comes down to it, both troublesome and costly and given that most people in Sweden have started to abandon cash, it is not something that would seem particularly natural. The pain threshold here is probably relatively high, from a purely economic perspective.

Consequently, it is not “the tenths” themselves that are important – and they are of course even less important under more normal circumstances. But when confidence in the inflation target is at stake, even tenths can send signals and this is something I think one is well advised to consider. Let me stress that I of course believe that my colleagues on the Executive Board also take arguments like these into consideration. However, it can certainly be the case that we make different assessments of how important they are. This is natural and in a way the whole point of an executive board. What I am presenting here is my way of looking at things and my personal assessments. A necessary condition for maintaining confidence in the inflation target is, as I see it, that the monetary policy we conduct and plan to conduct means that we anticipate inflation being 2 per cent at least at the end of the forecast period we are considering. If the inflation forecast is not 2 per cent even in this time perspective, the monetary policy, on which our inflation forecast is based, is wrong and we must adjust it. But as I was just discussing, this is not always enough – it is not a sufficient condition.
But even if the Governing Council does object, it cannot change the decision, but has to send it back to the Supervisory Board, which can either change the decision or call upon a mediation panel to resolve the difference of opinion. I can see that countries which join the banking union from outside the euro area might have some concerns. While they would have their seat on the Supervisory Board, they would not have a seat in the Governing Council. So, would they lose control over decisions that might directly affect their banks? Well, that would certainly not be in the spirit of the banking union. There are thus safeguards to avoid just that. Let me give you an example. If the Supervisory Board drafts a decision which affects a member from outside the euro area, and if that member disagrees with the decision, it can formally state its objection. Thus, the Governing Council is made aware that there are diverging views and has to take them fully into account. Now, what if the Governing Council objects to a draft decision, and the affected country does not agree with the objection? In such a case it could, for instance, call upon the mediation panel to resolve the issue. What I want to say is this: if a country from outside the euro area were to join the banking union, its voice would be heard at all stages of the decision-making process.

As you may be aware, Zambia has in the recent past recorded macroeconomic stability and growth in the economy, reflected in low and falling inflation, relative stability in the Kwacha exchange rate, falling lending rates and positive real GDP growth rates underpinned by strong private sector investment in all growth or priority sectors. Further, the financial sector has been stable, and continues to post growth. In 2006, the performance of the Zambian economy continued to be encouraging as it registered a positive growth of 6.2% in real GDP, marking the eighth consecutive year of positive real growth. You will note that over the period 2001-2006 growth in real national output averaged 5.0% per annum and was above the average population growth over the  BIS Review 113/2007  1  same period, while inflation declined to 8.2% in December 2006 from 15.9% in December 2005. Distinguished journalists, it is worth-mentioning that the growth, which has been broad-based has extended beyond the recovery of the mining sector and shown resilience to adverse shocks, such as droughts and record increases in oil prices, Agriculture, construction, transport and communications, and tourism sectors have been the other key contributors to the sustained increase in economic activity. A lot of progress continue to be made on the inflation front, as shown in September 2007, when inflation declined to 9.3% despite having risen to 12.7% in March.
The world economy continues to grow and the US economy remains robust despite the interest rate hikes by the Fed and the slight softening in the property market that ensued. The Asian economies are deriving increasing benefits from China's vitality. An economic upturn is also visible in Europe, especially in Germany, even though it is still moderate. In addition, the fact that world growth is generating more demand for investment goods is creating a particularly favourable situation for our exports. We may expect a positive spin-off from this good foreign trade performance for all areas of the Swiss economy – in production as in employment. To date, the rise in sales abroad has been handled through substantial gains in productivity, but we may hope that this will now be followed by a resumption of investment in equipment, along with increased recruitment. Consequently, the overall economic climate in Switzerland is likely to continue improving over the next few months, thereby supporting consumption. We project growth of slightly over 2% for the year as a whole. This return to growth does not constitute a threat to price stability. Our forecasts indicat that average inflation for this year is likely to be about 1%, and the outlook remains just as favourable for 2007. Compared with other countries, Switzerland will continue to enjoy a privileged position in this respect. What may we expect from monetary policy? The inflation forecast we published in March clearly indicates that the current interest rate level is incompatible with long-term price stability.

What is more, the world economy is still characterised by profound imbalances, such as the deficit in US external accounts and the lack of flexibility in the Chinese monetary system. Turning now to monetary policy, there were often considerable disparities in 2005, for instance, the progressive hikes in the rate of interest in the United States at a time when monetary policy in Europe was characterised by a waiting-game approach. Despite these potentially destabilising factors, financial markets remained relatively calm. In currency markets, the dollar picked up in the wake of tighter US monetary policy, while the yen moved only slightly against the Swiss franc. The exchange rate of the euro against the Swiss franc fluctuated within a narrow range, thereby reflecting the strong convergence of fundamentals in Switzerland and the euro area. Over the past few months, the Swiss franc has even trended downward – a decline that is hard to explain given the low rate of Swiss inflation as compared to the rest of Europe. If this trend  2  BIS Review 34/2006  were to accelerate and give rise to an excessive relaxation in monetary conditions with respect to economic developments, a normalisation of interest rates would become even more essential. Generally speaking, the capacity of financial markets to absorb shocks and to cope with imbalances is one result of globalisation and the progress in financial intermediation. In addition to stimulating goods markets, globalisation has also enlarged and deepened financial markets, and is doing so to a growing extent.
The potential tokenisation of money and development of new ways of transferring it in transactions has major implications for the Bank of England. It is not just that we are responsible for ensuring that payment systems work seamlessly and without disruption in the UK, crucial though that is for financial stability. It is also, and more fundamentally, because we are ultimately responsible for ensuring that each of the monies circulating in the UK – and at present we have around 800 private banks, building societies and credit unions issuing money[8] - are both robust and uniform. By robust, I mean that users can have confidence that the money will be useable and accepted in transactions. By uniform I mean denominated in the same currency unit – Sterling – and seamlessly exchangeable for any other money in circulation on demand and without loss of value. Against that background, I want to look at four areas where the tokenisation of money is now being explored. The first is stablecoins used for payments, the second is the tokenisation of commercial bank deposits, the third is the next stage of the Bank of England’s work on issuing a Digital Pound and the last is the Bank’s work to ensure to ensure these new forms of money are robust and uniform. The emergence, in the world of crypto assets of so-called stablecoins is at the forefront of developments in the tokenisation of money.

Thanks to deregulation, more Swedes have been able to borrow at a reasonable rate of interest, making it possible for a larger number of people to own their own homes and to better distribute their consumption over their lives. In this respect developments in Sweden have largely followed those in the US and the UK. Of course such deregulation - or rather reregulation - is not problem-free. The fact that a greater number have the opportunity to borrow also implies increased risks in the financial system. But in the absence of risks, growth opportunities also decrease. The important thing therefore is that the risks can be managed in the event of a crisis, which, for instance, requires strong consumer protection. Here Sweden has also been at the fore by being the first to publish regular stability reports for the financial sector, with a view to avoiding any reoccurrence of a systemic collapse similar to that at the beginning of the 1990s. There are now signs on the Continent that the pace of financial market reform has increased. This is partly because the EU Member States, as a part of the Lisbon strategy, have agreed to implement the Financial Services Action Plan. Only last week new steps were taken to harmonise securities trading between the EU Member States through the signing of the Investment Services Directive. This affords both private investors and institutions greater opportunities to trade on exchanges other than those in their own country.
Christian Noyer: A founder’s perspective on the euro as a global currency Speech by Mr Christian Noyer, Governor of the Bank of France, at the joint conference “The euro at ten: the next global currency?”, sponsored by the Peterson Institute for International Economics and Bruegel, Peterson Institute for International Economics, Washington DC, 10 October 2008. *  *  *  Good afternoon. It is a great pleasure to be here today with so many friends and colleagues to celebrate ten years of the Euro as a global currency. I must confess this is not exactly my idea of a quiet and peaceful anniversary. When I was privileged to be designated as ECB's first Vice President, I would never have imagined that I would be sitting now, as a member of the Governing Council, dealing with the worst financial crisis in the last eighty years. Actually, one of the main gratification of the job during the crisis has been the quality of our collective interaction and deliberation in the Governing Council, based on our willingness, in very challenging circumstances, to share judgments and exchange views in a spirit of friendship and mutual respect. I am very proud to be part of such a group. Together, we have been able to make quick decisions and adjust flexibly to fast changing environment, without ever giving up on our mandate and our mission. Obviously, the Euro area, like the rest of the industrialised world, is going through a very rough patch.

But I tend to come out from this episode with some confidence in the appropriateness of our current arrangements. In addition to Central Banks, Governments in all countries have judged appropriate to act and try to restore financial stability through a broader set of policy actions. Initiatives have been taken first, to recapitalize banks through infusion of public money and, second, to foster confidence in deposit guarantees. In an European framework, such actions involve mainly national decisions which had to be made, in many cases, with some urgency. Hence the impression that, at least initially, the coordination may not have been perfect. But things are falling progressively into place and I am confident that any remaining issues will be quickly dealt with, according to the roadmap and joint principles recently adopted by ECOFIN Ministers. 2  BIS Review 122/2008  So I would encourage all market participants to take a step back and, as Jean-Claude Trichet said “collect themselves” to look at the whole package of measures which have been publicized. True, they have been announced through a succession of public statements. But, taken together, they represent decisive steps and a coherent package towards restoring confidence. I am convinced that their impact on the real economy and future growth is going to be extremely significant. Overall, it is fair to say that the euro has passed the test and comes strengthened out of the current difficulties.
Per cent 12  12  9  9 China  6  Central Europe  6 3  3  0  0 1991  1993  1995  1997  1999  2001  2003  Sources: Statistics Norway and Norges Bank  A steadily larger share of Norway’s consumer goods imports come from China and Central European countries. Growth in imports from China was provided with an additional impetus after China became a member of the World Trade Organization in 2001. Imports from Eastern Europe have also continued to grow. There are many economic agents in Norway that are benefiting from globalisation. Consumers are enjoying lower prices for goods and services. Input prices have fallen and companies can sell their products in new markets. But there are also costs. Norwegian businesses and jobs may lose in the competition. The challenge lies in moving idle resources to new business activities. This requires adaptability and a sound cost policy. Monetary policy The operational target of monetary policy, as defined by the Government, is inflation of 2½ per cent over time. The target is symmetrical - it is just as important to avoid an inflation rate that is too low as an inflation rate that is too high. The inflation target provides economic agents with an anchor for inflation expectations. BIS Review 11/2004  5  Chart 7. Consumer prices and mainland GDP Percentage growth.

Constant 2000 prices 1200  1200  1000  1000 Trend Actual  800  800  600  600 1980  1984  1988  1992  1996  2000 2003  Sources: Statistics Norway and Norges Bank  Monetary policy credibility Expectations play an important role in price and wage formation. Expectations concerning inflation and economic stability are of crucial importance for the foreign exchange market. Inflation expectations also influence wage demands and pricing in the business sector. With confidence in monetary policy, expected inflation in the long term will be close to the inflation target. This alone contributes to stabilising inflation. Surveys indicate that enterprises, the social partners and other economic agents expect inflation to be 2½ per cent over time. Financial market participants also expect that inflation will be 2½ per cent ahead, as implied by long-term bond yields. A flexible exchange rate The krone exchange rate is an important channel for monetary policy. The krone fluctuates. This is not surprising because other countries’ currencies also fluctuate. The krone exchange rate is the price of our currency measured in a foreign currency. Developments in other countries are just as important for the krone as developments in the Norwegian economy. Capital flows freely and flows can change rapidly. This can spill over to exchange rates and interest rates as well as output and employment. A structural feature of open economies like the Norwegian economy - with a national currency - is that the exchange rate fluctuates.
As a result, central banks tend to prefer a monetary policy strategy that lies somewhere between these two extremes, avoiding excessively large interest rate adjustments but not hesitating to adjust when this is called for. The Riksbank normally formulates monetary policy with a view to inflation one to two years ahead. This unfortunately means that the repo rate has to be set with the aid of forecasts and forecasts can err. Moreover, there is always the possibility of price shocks that are a-cyclical but still affect the rate of inflation. A forward-looking policy has the advantage, however, of permitting an implementation that is smoother yet firm. The Riksbank reacts to the inflation forecasts in a determined manner but as the forecasts include an assessment of the extent to which inflationary impulses are transient, over-reactions are avoided. The supply shocks I referred to earlier as having occurred during the past year are examples of price fluctuations that, with the monetary policy strategy the Riksbank has chosen, can occasion deviations from the inflation target. This is not the first time inflation has been affected by occasional factors. In the late 1990s, for example, successive deregulations of electricity and telecom markets resulted in deviations from the target, the difference being that at that time the gap was on the downside. What has happened now is the opposite. With our monetary policy strategy, this is a natural case of striking a reasonable balance between maintaining the fixed value of money and avoiding excessively large fluctuations in economic activity.

It is of paramount importance that the decision on ERM II entry be taken only when macroeconomic fundamentals provide for a realistic deadline for the entry into the euro system in, say, two or three years' time. Still, there are some really good arguments for as rapid a possible EMU accession... For an accession country, it is important that the experience of past enlargements has shown - high rates of real convergence can be achieved in connection with the EU accession. There are several explanations for this phenomenon, including full integration into the single market, reduction of various political and economic risks etc. Adopting the euro can support economic integration through a higher correlation in economic cycles - as well as lower transaction costs and lower risk premiums. It is also clear that EMU participation reduces monetary uncertainty. For instance, had it not been for the EMU, European financial markets could probably have been much more turbulent during the Asian and Russian crises and the recent slowdown of the global economy. For an accession country, a rapid ERM-EMU accession could mean a further rise in its international credibility - take, for example, the developments in Greece who clearly benefited from ERM2 credibility in 1999, after the Asian crisis.
On the positive side, the EU economy proved to be more resilient than expected in the face of the large negative terms-of-trade shock from Russia’s war in Ukraine and growth forecasts for 2023 were revised upwards. However, developments last autumn in the UK gilt market and, more recently, in the US and Swiss banking sectors remind us of the need to remain vigilant in regard to vulnerabilities in a challenging and rapidly changing macro-financial environment. In this context, let me explain the ESRB’s view on the key risks affecting the European Union’s financial sector. The aforementioned ESRB Warning set out four key risks to EU financial stability:3 • The challenging macroeconomic outlook coupled with elevated geopolitical tensions underscores the importance of a prudent management of credit, market and funding risks in the banking business. • An environment of still subdued growth prospects and elevated inflation may put firms' and households’ balance sheets under stress. • Vulnerabilities in the non-bank financial sector could trigger asset price corrections and amplify volatility. • System-wide cyber incidents remain a severe threat. The Warning has promoted a closer monitoring of risks by national and EU authorities that are members of the ESRB. Let me now offer an update of our current assessment. The EU banking sector remains strong in terms of its aggregate capital and liquidity position.

11.05.2023  The financial system: current situation and challenges IE University – Banco de España – Federal Reserve Bank of Saint Louis Conference: Current Challenges in Economics & Finance Madrid Pablo Hernández de Cos Governor  Thank you very much to the organisers for inviting me to this conference. Today, I will be addressing you in my capacity as Chair of the Advisory Technical Committee of the European Systemic Risk Board (ESRB),1 a role which brings a deep EU-oriented perspective, complementary to my regular responsibilities as Governor of the Banco de España and member of the Governing Council of the European Central Bank. The macrofinancial risk landscape and the banking sector The macrofinancial risk landscape has changed in recent months and continues to evolve. In a relatively short period of time we have moved from low inflation and low interest rates to persistent high inflation and rising interest rates. This shift poses new and enhanced risks to financial stability. To heighten awareness of these risks the ESRB adopted a Warning2 on vulnerabilities in the EU financial system in September 2022. This is the first general warning (i.e. addressed to all EU Member States) that has been issued by the ESRB since its establishment in 2010. Over the last seven months some economic developments have surprised to the upside, while some vulnerabilities timely identified in the Warning have come to the fore.