samchain/econo-pairs-v1 huggingface dataset:
There is an international discussion, mostly on an academic level, about monetary policy becoming more effective if the central banks’ policy rates were to be made very negative – that is, if the lower bound could in principle be eliminated entirely. 10 But personally I do not regard this as a practically implementable solution. Negative policy rates are already regarded with scepticism and it is easy to imagine how opinion would be if they were cut so far that the general public’s deposit rates also passed beyond the zero mark – or, even worse, if one with various electronic money solutions were to force people to “pay to save”. 11 I definitely believe that there is scope to cut the repo rate somewhat further if necessary. But one cannot ignore the fact that this scope is limited. It is of course also possible to make further purchases of securities, but even there it is reasonable to assume that the positive effects will wane sooner or later and the complications will gradually increase. I would like to emphasise, to avoid any misunderstanding, that I still count on inflation developing in line with the Riksbank's forecast and attaining 2 per cent safely within the current forecast period. But it is nevertheless important and necessary to seriously consider and evaluate alternative scenarios. It may take longer to attain the target...

For instance, the Riksbank is one of few central banks to publish its own forecast for the policy rate and possibly the only central bank where the minutes state which Board member has said what during the monetary policy meetings. 1  Inflation has been low for longer in Sweden than in many other countries In recent years, international interest in Sweden as an object of study has been more due to economic developments here, and to the measures the Riksbank has taken, rather than the changes in the monetary policy framework. Despite the Swedish economy developing relatively well since the global financial crisis 2008-2009 (see Figure 1), inflation began to fall earlier in Sweden than in the rest of the world. This has meant that inflation has undershot the target and been lower than in many other countries for a long time (see Figure 2). This has in turn contributed to the Riksbank considering it necessary to cut its policy rate below zero,  * I would like to thank Mikael Apel for his help in writing this text, Elizabeth Nilsson for translating it into English,  Goran Katinic for help with the slides and Björn Andersson, Gina Bayoumi, Claes Berg, Charlotta Edler, Gabriela Guibourg, Marianne Nessén, Marianne Sterner and Anders Vredin for their valuable comments. 1 Another completely fresh example is the Riksbank’s thoughts on introducing a digital currency (see Skingsley, 2016). 1 [20]  which only a few other central banks have done so far.
The Governing Council regularly recalibrates the net purchases under the pandemic emergency purchase programme (PEPP) based on a joint assessment of financing conditions and the inflation outlook. At its meeting in September, the Governing Council assessed that the prevailing level of financing conditions, in conjunction with the slight improvement in the medium-term inflation outlook, allow favourable financing conditions to be maintained with a moderately lower pace of net asset purchases under the PEPP than in the second and third quarters of this year. The Governing Council also confirmed in September its other measures, namely the level of the key ECB interest rates, the forward guidance on their likely future evolution, the purchases under the asset purchase programme, the reinvestment policies and the longer-term refinancing operations. It stands ready to adjust all of its instruments, as appropriate, to ensure that inflation stabilises at its 2% target over the medium term. Europe’s response to the coronavirus shock During the COVID-19 crisis, fiscal policy support has been critically important in containing the economic fallout, with fiscal and monetary policy reinforcing each other. Going forward, ambitious, targeted and coordinated fiscal policy should continue to complement monetary policy. As the recovery solidifies, fiscal measures need to become more targeted and the quality of public finances should be improved. Moreover, fiscal measures should go hand in hand with structural reforms in order to lift long-term growth. The Next Generation EU programme is of utmost importance here.

Recognizing that the reason that investors have generally stayed away from bonds issued by Asian entities is due to their low liquidity and low credit ratings, APEC is currently active in the design of instruments that can be traded in these markets, through its work on securitization and credit enhancement. Given that at present, a number of bonds issued by Asian entities are below investment grade, the use of securitization and credit guarantees to enhance the quality of these issues can act as a near-term solution to giving these issues a credit quality acceptable to investment managers, and give them the needed initial exposure to private investors. The introduction of these new instruments – which would attain a credit quality acceptable to investment managers by achieving a high rating from international rating agencies – would also benefit the international financial community by providing investors with a greater diversity of products and instruments for investment. More importantly, it would enable smaller corporate entities – who would otherwise be limited to financing themselves through short-term commercial bank lending – to access bond markets and find a source of funding more suitable to their needs. Cross guarantees A means of helping economies with less developed local bond markets to issue debt in the regional market may be through the use of cross guarantees.
Second, the Committee stands ready to make further asset purchases should the outlook warrant them. Just as with movements in Bank Rate in more normal times, a pause in monetary loosening does not necessarily mean that loosening has come to an end. It will all depend on how the outlook for inflation evolves. Looking further ahead, the Committee at some point will need to reduce the current exceptional degree of monetary stimulus. Some commentators have suggested that the MPC has been less forthcoming than other central banks in explaining its exit strategy. But to a large extent this reflects the fact that we have less to communicate. The Committee has two instruments through which it can withdraw the stimulus, raising Bank Rate and selling assets. Unlike some other central banks which need to create new instruments to drain excess reserves or alter the terms of existing facilities, the structure of the Bank’s operating framework means these two instruments can be used at any time, in any order. And the strategy guiding our policy decisions will be unchanged – monetary policy will continue to be determined by the outlook for inflation relative to target. The most difficult decision will be to decide the timing of the withdrawal, but that is always the case. The aftermath of the financial crisis posed many questions for the theory and practice of monetary policy.

It was vitally important that the Monetary Policy Committee was able to introduce a new policy instrument at the point at which Bank Rate reached its effective lower bound. This instrument had to be credible, both in terms of its economic impact and the willingness of the Committee to use the instrument in force. My own view is that the speed with which the asset purchase programme was introduced and the scale of the programme played an important role in reaffirming the MPC’s commitment to achieving the inflation target and reinforcing the belief in our ability to do so. 4  See, for example, Thomas (1997). 5  See Fisher (2010) for a more detailed discussion of these operations. 4  BIS Review 29/2010  Estimating the effects so far So what impact have our asset purchases had to date? That’s the two hundred billion pound question. Unfortunately, it is hard to provide a definitive answer. To be clear this is no different from our inability to assess precisely the impact of the reduction in Bank Rate from 5% to 0.5%. Or indeed of any macroeconomic policy measure. Without knowing what would have happened in the absence of a policy action, it is not possible to identify its incremental impact. But what is different is that this policy instrument is relatively untried and untested. So the demand to provide some insight into its impact is that much greater. This demand is quite understandable, but difficult to satisfy.
For a couple of decades we had failed to keep price and wage increases in check. However, a fixed exchange rate relationship is not, of course, compatible with an inflation rate that systematically exceeds that in the country to which the exchange rate is tied – sooner or later the exchange rate relationship must collapse. The rapid increases in wages and prices also repeatedly came into collision with the fixed exchange rate and the result was that the Swedish currency was devaluated on several occasions from the mid-1970s onwards. The economy was thus characterised by "boom-bust-cycles” with alternate strong acceleration and sudden braking. However, the fact that the fixed exchange rate did not work as a nominal anchor in Sweden does not mean that it could not function well in other countries; it has unquestionably done so in many cases. So let me therefore move on and mention some general advantages and disadvantages of the two methods 3 . 2  See Easterly, W. and S. Fischer, (2001), “Inflation and the Poor”, Journal of Money, Credit, and Banking 33, 2 (part 1), 160178. For a more detailed account of the advantages of low, stable inflation, see for instance King, M., (2002), ”The Inflation Target Ten Years On”, Speech at the London School of Economics, November 19. 3  A more detailed discussion of the advantages and disadvantages of these and other monetary policy regimes can be found in, for instance, Mishkin, F.S., (1999), ”International Experiences with Different Monetary Policy Regimes”, Journal of Monetary Economics 43, 579-605.

As a result, the ECB has a clearer and more credible inflation target, since this 2% target eliminates the possible impression of asymmetry that could stem from the previous target (“below, but close, to 2%”) and seeks to provide a clear anchor for inflation expectations. As I will highlight later on in my talk, this definition also confirms the medium-term orientation of monetary policy that already existed under the previous strategy. This medium-term orientation provides room for inevitable short-term deviations of inflation from the target, as well as for lags and uncertainty in the transmission of monetary policy. Moreover, the flexibility embedded in this medium-term orientation also allows for an appropriate monetary 5  policy response to inflation deviations from the target that takes into account the origin, scale and persistence of the underlying shocks to inflation. Second, the ECB has taken into account the monetary policy implications of the lower bound on interest rates. In particular, the new strategy establishes a requirement for especially forceful or persistent monetary measures when the economy is close to the effective lower bound, in order to prevent negative deviations from the inflation target from becoming entrenched. This may also imply a transitory period of overshooting in which inflation is moderately above target. I will also refer to this key aspect of the new strategy in the third part of my talk today. And third, the ECB has made explicit that the set of policy rates remains its primary monetary policy instrument.
I have, since those events, heard two views that, as a central banker responsible for financial stability, give me considerable concern. The first is that there was ‘nothing really to see here’. After a brief period of disruption, understandable given the nature of the shock, markets returned to normal and indeed were able to support the economy through the pandemic. Implicit in that view, of course, is that absent central bank intervention markets would have returned to order and stability. I simply do not believe that is the case. One cannot of course know for certain what would have happened if central banks had stood aside. But by the time central banks were forced to step in, market flows had become almost entirely one way. In a period of huge uncertainty, once the flight to safety had become a dash for cash, there was no-one other than central banks able and willing to step in to catch the falling knife. Absent the massive intervention I described above, core markets would have continued to seize up and the liquidity crunch would have become worse. Indeed, though concerned with bank rather than market liquidity, the experience of the Great Financial Crisis was certainly that once powerful and adverse liquidity dynamics set in, they do not go away by themselves. The second view that gives me some concern is that in a severe shock, in a tail event, it is the role of central banks to underpin market liquidity.

All these underpinnings shape what we are, namely Asia’s leading international financial centre (IFC), asset management centre and risk management centre. And it’s also this broad-based leadership that makes Hong Kong well placed to help the Mainland achieve the objective of promoting RMB internationalisation, while at the same time further reinforces our status as an IFC in the process. This is precisely the mutualism I just referred to. 8. At this point it’s worthwhile to first take stock of where we stand as an offshore RMB hub: • We have the largest offshore RMB pool of over RMB800 billion, providing liquidity support to globa Hong Kong is a trade settlement hub, processing RMB6.3 trillion in 2020, up 18% from 2019, and c to date. •  •  •  Hong Kong continues to maintain its top position in offshore RMB FX trading, with an average daily t in April 2019 according to the latest BIS Triennial Survey. This is equivalent to 30% of global trad Mainland. The city has maintained its leading position for RMB SW IFT payments, with more than 70% of glob processed through Hong Kong. The dim sum bond regained momentum in the recent few years after a slowdown in issuance arou witnessed encouraging developments over the past few years, such as with the regular bond and bill of Finance and the People’s Bank of China (PBoC). The upcoming issuance by Shenzhen municipal g yet another new category of Mainland issuers. Time to give internationalisation another push 9.
Incentives to game risk weights can be constrained by imposing floors and/or by using standardised approaches for certain categories of assets.22 Some countries already make use of such approaches, including the US, the UK, Germany, France and Spain. The stress-testing regimes operating in a number of countries are also a way of cross-checking, and backstopping, the models used by banks. In a world of uncertainty as well as risk, having this portfolio of approaches for dealing with avoidance incentives - some discretionary, others rule-like - makes sense. Evidence on the incentive effects of financial regulation is almost always drawn from looking at banks’ experience either side of a change in policy. By then, however, any unintended or undesirable consequences of this change will already have been felt. Regulatory policy is in a perpetual catch-up loop, the bloodhounds in pursuit of the greyhounds. In an ideal world, it would be possible to gauge in advance how a regulatory change may reshape incentives, in particular risk-taking or regulatory-avoiding incentives. One approach to doing so is to use experimental methods. Experiments have previously been used to examine how different pay structures affect loan officers’ risk assessment and lending decisions (Cole, Kanz and Klapper (2015)). They have also been used to examine the effect of specific interventions on behaviour in other areas of public policy (Halpern (2015)). Recently, the Bank of England has conducted a lab experiment to assess how the design of pay regulation may affect risk-taking behaviour and project search effort (Harris et al (forthcoming)).

Similarly, there are also lessons to be learned in regard to the experience in the communication of supervisory stress test results in Europe and the United States. Conclusion Given the dynamics of the financial markets today, more effective engagements between policy makers and the industry, both within and across borders have never been more important so as to bring about a greater awareness of key financial stability issues, to further sharpen supervisory and management judgements and to promote greater collaboration on multiple fronts. Enhanced prospects for greater global financial stability depend on a sustained commitment to these priorities. Ultimately, the goal is to strengthen our collective ability to anticipate and respond effectively to developments that affect financial stability, not just in these present challenging times, but through what will likely be an extended period of global adjustments going forward. 4  BIS central bankers’ speeches
The broken line is the Riksbank’s forecast from the Monetary Policy Report in October 2013. Sources: Statistics Sweden and the Riksbank. Figure 2. More expansionary monetary policy  Repo rate  5  5  4  4  3  3  2  2  1  1  0  0 07  09  9  11  13  15  Unemployment  9 8  7  7  6  6 5 07  09  Main scenario  11  13  Lower policy rate  15  4  3  3  2  2  1  1  0  0 07  8  5  CPIF  4  09  11  13  15  Household debt ratio  180  180  170  170  160  160  150  150 07  09  11  13  15  Own calculations  Note. Forecasts from the Monetary Policy Report, October 2013. Repo rate, per cent, quarterly averages. The CPIF, annual percentage change, quarterly averages. Unemployment, percentage of labour force, 15–74 years, seasonally-adjusted data. Real interest rate, 1 year, per cent, quarterly averages. Debt ratio, per cent of disposable income. Effects on CPIF and unemployment according to the Riksbank’s macro model, Ramses. Effects on debt ratio according to own calculations – see footnote 14. Sources: Statistics Sweden, Riksbank and own calculations. BIS central bankers’ speeches  11  Figure 3.

Joseph Yam: Changes in Asia – a brief look at the dynamics within the region Statement by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, and Alternate Governor for Hong Kong, China in the Asian Development Bank, at the 40th Asian Development Bank Annual Meeting, Kyoto, 6 May 2007. *  *  *  I would like to thank the Government of Japan and the people of Kyoto for their hospitality in hosting this year’s Annual Meeting of the Asian Development Bank (ADB). I would also like to congratulate Mr Kuroda on his re-election as the President of the ADB. This year marks the 40th anniversary of the ADB. Over the past four decades, Asia has achieved remarkable development, particularly in terms of economic growth and the reduction of poverty, and clearly the ADB has contributed significantly to this achievement and has established itself as a regional financial institution of strategic importance. Asia has undergone remarkable changes too over the past four decades and in many ways, in particular in terms of the economic dynamics within the region, and between the region and the rest of the world. Changes have been particularly marked in the past decade or so, under the influence of globalisation and the revolution of information technology. There has, for example, been rapidly increasing trade integration, encouraged obviously by the high degree of freedom in international trade, and consequently increasing economic interdependence within the region. Changes always present new challenges and opportunities.
Monetary policy did not get traction quickly, in part because the authorities were worried that producing higher real interest rates to stem the decline in the exchange rate and offer a higher return to attract flows back into the country would exacerbate the confidence problem, by causing a deeper contraction in growth. BIS Review 91/2006  1  In some cases, a history of high inflation, fiscal profligacy or default magnified the difficulty of restoring confidence. In almost every case, this dynamic was exacerbated by political conditions, a looming election or leadership succession that raised uncertainty about the competence and credibility of future economic policy. Things look dramatically different today. If you compare an aggregate or typical emerging market balance sheet today with the equivalent from a decade ago, the improvement is striking in a number of dimensions. Current account balances have gone from substantially negative to positive. External debt has fallen as a share of GDP. Reserves have grown to remarkable heights and are now a substantial multiple of short-term external debt, annual external debt service, or other traditional metrics of the scale of potential claims on reserves. Public debt burdens are higher, but the composition of debt is less risky, with longer maturities, a greater share denominated in the currency of the sovereign, and more fixed rather than floating interest debt.

Access to Markets Third, Southeast Asian economies need to boost external demand by strengthening their access to the major developed markets. In the short term, there is little we can do about the cyclical downturn. But for the longer term, favourable and assured access to key trading partners will allow Southeast Asian countries to maximise benefits from free trade and globalisation, and make themselves more attractive to investors. One basic approach is to promote multilateral trade, and contribute to a successful outcome of the Doha Development Agenda of the World Trade Organisation (WTO). But we need to complement the multilateral approach with bilateral Free Trade Agreements (FTAs) with our key trading partners. This is why Singapore is actively pursuing an FTA strategy. We have concluded FTAs with New Zealand, Japan, and the European Free Trade Area (EFTA), and hope to conclude agreements with the US and Australia very soon. Singapore’s aim is not just to boost our own trade links with our FTA partners, but also to catalyse broader economic engagement between ASEAN and its trading partners. This is indeed happening. After New Zealand concluded its FTA with Singapore, Australia and New Zealand proposed starting a Closer Economic Partnership Agreement with ASEAN. Last year, ASEAN and China agreed to set up an ASEAN-China FTA within 10 years. Weeks later, Prime Minister Koizumi of Japan proposed a Japan-ASEAN Comprehensive Economic Partnership, to be modelled on the Japan-Singapore bilateral agreement.