samchain/econo-pairs-v1 huggingface dataset:
Due to this intervention, and mostly due to prudential policies pursued by the central banks with regard to financial stability and financial supervision, the region prevented not only twin crises in our banking systems and foreign exchange markets, but also any kind of meltdown. Nonetheless, this crisis has been a wake-up call. We agreed on this in our meeting last April, in Washington, among senior policy-makers from the region and from EU and IFIs. Now that we have managed to prevent the crisis, we must start the evaluation of the collateral damage of our response to the crisis. In this respect, it is very important to asses not only the long run sustainability of our region’s equilibrium, but also the effectiveness of our short run response. It is crucial to plan and implement our future moves intelligently for its reversal in line with new normalities. While we are not out of the woods yet, it is important to make sure that the past year’s fiscal appetite that characterised our region does not become part of this new normality. Actually, we need to do some deep thinking about aspects of our policy regimes – starting with the design of monetary policies, continuing with the way they are anchored and the building of due capacities for a greater effectiveness of monetary policy in the future. That is why we agreed to put in place today’s workshop, as part of a continuing process of reflection and reform.

It is important to note, however, that the main focus of an investment policy evaluation rests in the model of the Central Bank's actions. Having been responsible for the areas of Capital Markets, Currency, Operations Desks, and Corporate and Sovereign Credits, I am confident in concluding that there is a consensus in the world today that the Central Banks that have been assigned a multiplicity of functions and targets are doomed to fail. Successful Central Banks are those that have price stability as their only mandate. In this regard, I would like to emphasize that competence, seriousness and patriotism are a legacy of Arminio Fraga's administration at the Central Bank. There is no doubt that the implementation of a floating exchange rate regime and of the inflation targeting regime in Brazil at a critical moment for the Brazilian economy in 1999 are a hallmark in the history of Central Banks in emerging economies. The substantial improvement in transparency and credibility that has taken place over the past three years has been incorporated into the working structure of the Brazilian Central Bank. Arminio, thank you for the loyalty and professionalism you showed in the transition process. Although there are many instruments a government can use to implement its economic policy, the task assigned to the Central Bank is to keep the rate of inflation at a low level, mostly because the Central Bank has only one instrument, which is monetary policy.
Further, the prevalence of standing business relationships has seemed to mean that in practice transitory shocks can have more permanent effects on pricing. Indeed, despite a recent decline in repo rates, the effective federal funds rate has remained fairly stable at nine basis points below the top of the range. 30 Moreover, there have been various other recent shocks that may have influenced money market flows and structure, such as those from recently enacted tax reform measures. There are various opinions in the market on how things go from here. Some believe that we might see federal funds rates remain at a similar spread to IOR or rise somewhat closer to it—for example, due to a forecasted seasonal increase in net Treasury bill issuance heading into 29 In particular on June 20 and 21 our market intelligence and analysis of data suggest that LCR-motivated borrowing from FHLBs by a few banks placed modest upward pressure on traded rates in the federal funds market. A contributing factor was a decline in funds supplied into the market from the FHLBs, due to an increase in demand for advances around the mid-month tax date. Data on historical traded rates in the Eurodollar market are published with a quarterly lag as part of the New York Fed’s Quarterly FR 2420 Summary Statistics release.

I see this as a reasonable possibility, and therefore I think it might be possible that the decline in reserve balances has pushed up overnight rates a bit over time. 17 At this point, I see no evidence that we are at, or close to, the “steep” portion of the demand curve. 18 Let’s run through some places where evidence of such a possibility might be found. To begin with, if we were closing in on the “steep” part, I might have expected to see more above-IOR lending in the unsecured overnight markets, as at least some banks each day found themselves short of reserves and had to borrow them from another bank. In fact, the amount of such above-IOR lending remains low as a share of the overnight bank funding market, as shown in Figure 9. 19 I might also have expected to see shifts in bank payments behavior—for example, more daylight overdrafts or more effort by banks to “optimize” their payment flows— but I have not seen this either. But, most fundamentally, I might have observed a day-to-day relationship between shifts in the stock of reserves and overnight interest rates. Figure 10 shows a scatterplot of daily changes in reserve balances against daily changes in the spread between the IOR rate and the effective federal funds rate; there is no visible relationship. 16  The classic paper on this topic is Poole (1968).
In addition, the purchase programs have affected the duration of the portfolio. The securities that have been purchased by the Desk since November have had an average duration of about 5.5 years. With those purchases and the adjustments from the earlier purchase programs, the duration of the overall SOMA portfolio has reached about 4.5 years, which is somewhat higher than the typical level of between 2 and 3 years that was observed before the financial crisis. This combination of its larger size and longer duration results in a greater amount of interest rate risk embedded in the SOMA portfolio. 13 Of course, under the view that the asset purchase programs operate through a portfolio balance channel, this is precisely how the programs have an effect on the economy – by transferring risk away from private investors and onto the Fed’s books. The risks to the portfolio arise because the characteristics of the assets that have been purchased differ from those of the liabilities that have been created by those purchases. The assets held in the SOMA portfolio have fixed coupon rates that reflect longer-term interest rates. However, the purchases of those assets create reserves in the banking system, and the Federal Reserve pays interest on those reserves at a short-term interest rate that it  13  Note that the securities purchased under these programs involve no credit risk, given that they are issued by the Treasury or are guaranteed by government sponsored enterprises.

The relevant risk for the SOMA portfolio instead has to do with movements in interest rates at different maturities. BIS central bankers’ speeches  5  controls. The interest paid on reserves can be thought of as the “funding cost” of the portfolio. Today, because short-term interest rates are low relative to longer-term interest rates, this mismatch produces a very elevated stream of net income. In particular, the SOMA portfolio has a weighted average coupon yield of about 3.5 percent, which, if applied to a $ trillion portfolio, produces about $ billion of income at an annualized rate. 14 In contrast, the annualized funding cost of the portfolio at this time is only around $ billion. This cost is relatively low because of the near-zero level of the interest rate paid on reserves. In addition, the private sector holds nearly $ trillion of currency, which are liabilities of the Federal Reserve that bear no interest. 15 Thus, the SOMA portfolio should produce a considerable amount of net income over the near term. 16 Beyond the near term, though, the income that will be produced by the SOMA portfolio is uncertain. If short-term interest rates were to rise, the funding cost of the portfolio would increase relative to the fairly steady yield earned on the assets held, reducing the amount of net income from the portfolio. In addition, if longer-term yields were to shift higher, the Federal Reserve could realize capital losses if it were to begin selling assets.
Page 4  RTGS and ISO 20022: enhancing the quality of payments data In the UK the way that payments are made and settled is being transformed with the renewal of the Bank’s Real Time Gross Settlement (RTGS) Service. This is the critical infrastructure which delivers final and risk free settlement and virtually every sterling payment is settled over RTGS eventually. As an integral part of upgrading its hard payments infrastructure the Bank is joining to global push to enhance the soft infrastructure of payments by introducing ISO 20022 messages in the renewed RTGS and in CHAPS. As everyone at this conference will no doubt be aware ISO 20022 is a gamechanger for the financial system. It is an open international data standard that allows financial institutions to communicate through a common data language. It will enable financial systems to understand each other wherever they are in the world. One of you could walk down the road and send a payment from a local bank branch in Kaunas and the information conveyed within the message would be the same information as available to my local bank here in London. ISO 20022 also allows for more structured and enhanced data, which can be user driven. In other words it can develop according to the user’s needs either through adapting the language by adding new data fields or by adapting to meet different technology needs.

They enhance the public’s understanding of what central banks do and why they do it. Sovereign wealth fund The SNB’s balance sheet has expanded sharply since 2008. It is this growth that inspired the idea to set up a sovereign wealth fund to manage the SNB’s foreign exchange reserves. A number of different options are being proposed for the structure of the sovereign wealth fund. Although proponents’ goals differ quite considerably, they all draw parallels with the sovereign wealth funds of countries such as Norway. However, comparisons with Norway are misleading, since this country supplies its sovereign wealth fund with tax revenues, licence fees and dividends from the oil sector. When companies in a country discover new natural resources, the country becomes richer as a result of the revenue generated and its wealth increases. By contrast, the exceptional growth in the SNB’s balance sheet since 2008 is primarily attributable to foreign currency purchases based on monetary policy considerations. We bought foreign currency in order to limit the appreciation of our own currency, thereby putting more Swiss francs into circulation. Such an expansion of the money supply, however, does not create any real value. This difference between oil revenues and foreign exchange reserves is important when contemplating setting up a sovereign wealth fund. Norway is able to transfer oil-sector tax revenue and other receipts into its sovereign wealth fund, because they constitute profit for the country as a whole. The SNB’s foreign exchange reserves, however, do not represent profit.
It is the role of research to guide policy reviews and policy models for sustainable economic policies that can promote growth in the presence of stable prices and financial system. The news about successful trails of the Covid-19 vaccine candidates, hoping that many more would result successful in the near future, brings much needed relief. However, as I mentioned before, uncertainty remains not only regarding production, distribution and the success of vaccine campaign in the real world, but also regarding the shape and speed of economic and financial recovery once COVID-19 is defeated. Yet, other risks like climate change, along with natural disasters, loss of habitats and arable land, demographic and pandemic risks represent significant long term challenges for global economy. They pose significant risks for our economies of the South east countries as well. We would need to dedicate more research resources to the study of these phenomena and their implications for the economy, price and financial stability in our countries. I am sure they will become important topics of this workshop in the future. During the recent years we have seen that research based on surveys and micro data has provided important information for the financial situation of families and business, their sources of financing, payment instruments, savings and economic and financial behaviour. I would like to call your attention that this same information is useful for understanding financial inclusion and financial literacy in the country. They are two different aspects for wellbeing of families and business and the stability of our economy.

However it is without doubt also a result of activities like this, which introduce or staff to the relevant work that is done in academia and other central banks. Whether you are from Academia or central banks, we are grateful for your continued interest and thankful for your participation. We hope that you and your colleagues will continue to join our workshop in the future, hopefully, in a COVID free world. Hence, we can go back to our traditional ways of the past, and give you the opportunity to present your works at Bank of Albania, engage with our research and introduce yourself to our beautiful Tirana, Albanian culture and the delicious taste of Albanian cuisine. Wish you the best and the most productive event! 3/3  BIS central bankers' speeches
First, it has re-emphasised the role of gold in stating that (I quote) “Gold will remain an important element of global monetary reserves”. Second, it has provided the market with some reassuring guidance concerning the sensitive issue of central banks’ gold sales and lending. Far from destabilising the market, the Washington Agreement brought more transparency to the gold market, and helped foster sounder conditions in the price formation process by reducing uncertainty and overall volatility. It is true, however, that the initial market reaction to the joint statement was extreme. The immediate impact of the Washington Agreement was all the more dramatic as a number of market participants (gold mines, hedge funds) had accumulated big and, I would say in some cases, excessive, short positions. The fact that the short sellers had to rapidly square their positions induced a brief period of higher volatility, but also created the conditions for a more orderly market and thus, during the last months, gold prices have fluctuated in a relatively narrow range. On balance, I do think that the joint statement has had a stabilising effect on the gold market thanks to enhanced transparency and clarity concerning central banks’ intentions. Let me now turn to the second topic of my speech: the euro after 18 months. 3  BIS Review 61/2000  II. The euro after 18 months  Some years ago, the possibility of a single currency in Europe was met with complete scepticism, especially in the United States.

This Banque de France view is now widely shared by the central banking community  1. Concerning gold holdings:  The ECB’s decision in July 1998 to hold 15% of its reserves in gold, taken from the gold stocks of the national central banks, was generally seen as a positive signal in a market hitherto inhibited by fears that governments might decide upon new gold sales. This was evidence that gold remains an important element of global monetary reserves. 2. Concerning gold selling and gold lending:  The Banque de France and the Bundesbank have been a driving force behind the 1999 joint statement on gold, which is fully consistent with our traditional position. And I quote: –  “The undersigned institutions will not enter the market as sellers, with the exception of already decided sales. –  The gold sales already decided will be achieved through a concerted programme of sales over the next 5 years. Annual sales will not exceed approximately 400 tons and total sales over this period will not exceed 2,000 tons. –  The signatories of this agreement have agreed not to expand their gold lendings and the use of gold futures and options over the period.” (End quote.) The so-called “Washington Agreement” has clarified the intentions of the Eurosystem as well as of the Sveriges Riksbank, the Swiss National Bank and the Bank of England with respect to their gold holdings.
Inflation and the transitory effects The CPI is used by the Riksbank to target inflation mainly because it is familiar, published monthly with a short time lag and seldom has to be revised. However, using the CPI as a target variable is liable to face monetary policy with explanatory problems. The past year is a case in point. The low rate of inflation stemmed mainly from transitory effects; the consolidation of government finance and increased confidence in economic policy helped to strengthen the exchange rate. During 1996 it proved possible to lower the instrumental rates almost 5 percentage points. Altogether, in 1996 decreased interest costs and the stronger exchange rate had a downward effect on the CPI of around 1 percentage point. In some countries the inflation target is assessed in terms of the CPI with various components excluded, for example indirect taxes and subsidies or mortgage interest costs. It may then be asked whether the CPI is the most appropriate target variable and whether some measurement of underlying inflation might be preferable. An advantage of focusing on a single underlying indicator is that it might help the Riksbank in its contacts with the general public and make monetary policy more transparent. Analysis and debate would be concentrated on factors that monetary policy influences. BIS Review 32/1997  -2-  This, however, presupposes the existence of an underlying yardstick that can take every conceivable transitory effect into account. Such measurements are difficult to construct.

With inflation too high, we are focused on restoring price stability, while maintaining a strong labor market. Before I go any further, I should give the standard Fed disclaimer that the views I express here are my own and do not necessarily reflect those of the Federal Open Market Committee (FOMC) or anyone else in the Federal Reserve System. Shared Impacts It's striking to think that just two years ago, the U.S. economy was reaching the trough of the COVID-19 recession. Back then, we were living through unprecedented lockdowns. And we had no way of knowing that this would be the shortest recession on record, or that the rebound would be so dramatic. If we think about the global pandemic as a common factor, shutdowns, contractions, and rapid rebounds were the shared impacts across countries around the world. But so were supply-chain bottlenecks, shortages in semiconductors, and backlogs at portsissues we grapple with today. And just like the United States, other countries have experienced imbalances in demand. Since the initial lockdowns, people have spent more of their money on electronics, cars, and furniture-and less on entertainment, travel, and restaurants. 1/5  BIS - Central bankers' speeches  Many nations also showed considerable resilience of economic activity through the Omicron wave. But global risks remain. The BA.2 variant is now fueling a rise in cases in some countries, including China, Hong Kong, and the United Kingdom. Their experiences bear close monitoring.
In this context, the Road Map 2018 reviews the policy actions that have been pursued during 2017 and more importantly, proposes policies and actions for the forthcoming period. Accordingly, the outline of the Road Map 2018 is as follows: Section 2:  The Central Bank’s monetary policy strategy and policies for 2018 and beyond  Section 3:  The Central Bank’s policies related to the financial sector performance and stability in 2018 and beyond  Section 4:  Key policies related to strengthening the broader economy through the Central Bank’s agency and ancillary functions  Now, let me elaborate on these sections in a detailed manner. 8  2. Monetary Policy Strategy and Policies for 2018 and Beyond The Central Bank is entrusted with the task of maintaining price stability. Price stability remains a key fundamental in fostering an environment conducive for sustained growth and securing rising living standards for the people. The Central Bank seeks to achieve its price stability objective through the conduct of monetary policy. Based on the current monetary policy framework, we have been able to maintain inflation in single digits for close to a decade. Going forward, the introduction of an effective Flexible Inflation Targeting (FIT) framework will improve our capacity to deliver price stability. This will provide a more propitious environment for growth and employment generation.

Our motivation towards adopting inflation targeting as the monetary policy framework was signaled a number of years ago, as we recognised it as the most appropriate way to escape from the high inflation-low growth trap. The weakened relationship between money and inflation and deepening financial markets were among the major factors that encouraged this move. Under the proposed FIT framework, the Central Bank will aim to preserve price stability of the economy by targeting an inflation range of 4-6 per cent. We believe that this target range is desirable for a country like ours in view of the vulnerability of the economy to supply or external shocks. We will employ market-based instruments, particularly the policy interest rates and open market operations (OMO) of the Central Bank, to influence market conditions and to navigate inflation in the targeted mid-single digit range. Variables such as overall monetary expansion and credit disbursements to the private sector by commercial banks will remain as key indicative variables to guide monetary policy conduct. We have now progressed into a time-bound plan to make this leap towards FIT a reality. The period starting from 2018 will be vital in laying out required reforms to facilitate a smooth transition to a FIT framework. In this context, we have identified three important pillars as the building blocks for adopting a FIT framework; 1. Strong Central Bank mandate and credibility 2. Effective monetary policy conduct 3. Strong fiscal policy support and commitment Now let me discuss some key elements and building blocks of FIT.