samchain/econo-pairs-v1 huggingface dataset:
1 At the conference, Professors Carmen and Vincent Reinhart presented the results of a broad-based study of output growth and other economic variables during the ten years before and after economic crises (40–70 countries in connection with major global crises, and 16 individual country crises). 2 The findings are very clear: economic activity has a tendency to be much weaker in the decade after a financial crisis than in the decade beforehand. There are probably a number of explanations for this:  1  See http://www.kansascityfed.org/publications/research/escp/archive.cfm. 2  See Reinhart, Carmen M., and Vincent R. Reinhart (2010): After the Fall, http://www.kansascityfed.org/publicat/sympos/2010/reinhart‐paper.pdf. BIS Review 130/2010  1    GDP growth is often abnormally strong and, to a degree, unsustainable in the prelude to a financial crisis.   Financial crises are preceded by debt accumulation and followed by a long process of deleveraging.   Risk appetite subsides after a financial crisis, and what Keynes called “animal spirits” are tempered for a prolonged period of time.   Production capacity is destroyed in a financial and economic crisis.   Finally, economic policy becomes more complex, and there is more risk of error. Of course, these developments are not inevitable, and the ultimate outcome depends also on policy choices. For example, it is clear that a number of mistakes played a key role in shaping the disaster that unfolded following the crash of 1929.

In spite of the market’s grave concerns about the debt situation in many smaller European countries, and in spite of rising CDS spreads on those same countries and the tendency towards contagion and a herd mentality in the market, Iceland’s CDS spread has declined and is now considerably below those in the European countries whose debt problems have received the most press coverage. But output growth is slow in coming, and in that regard, Iceland is far behind most other countries whose GDP began to grow late last year. At the moment it is quite difficult to interpret the signs, which are quite changeable in the current post-crisis turbulence. For example, quarterly GDP figures and various other statistics are quite volatile, changing from one revision to the next – a problem that is global in scope at present. As a result, the Central Bank was sceptical when figures from Statistics Iceland indicated that GDP had begun to grow in the fourth quarter of 2009. The most recent numbers, which indicate a contraction, are more accurate, although I would not be surprised if the contraction proved somewhat smaller in the final figures. Most indicators suggest that we have hit bottom and that GDP will begin to grow in the latter half of this year, but I do not expect that growth to be strong. In order for GDP growth to gain any real momentum, investment must rise from its current historical low.
Previous empirical work examining the falls in US and UK long-term interest rates over the 2004–2006 period foundfalls in term premia to have played the dominant role.27 Those studies put forward two possible explanations for their finding: lower perceptions of macroeconomic uncertainty or an effect from a “search for yield” in a low interest rate environment. The correlation found here between changes in short interest rate and distant real forward rates suggest that the possibility that monetary policy can affect risk premia should be taken seriously. 27  See Joyce et al (2011), “Understanding the Real Rate Conundrum: An Application of No-Arbitrage Models to the UK Real Yield Curve” and Backus and Wright (2007), “Cracking the Conundrum”. BIS central bankers’ speeches  19

The upsurge of current and capital expenses over this period, financed by the expansion of the state deficit and the growth of public borrowing, affected considerably the economic activity, however in a short-term. Through the twice cuts of the key interest rate and the ongoing injection of liquidity, the monetary policy of the Bank of Albania manifested also a simulating character over 2009 and during the early months of 2010. The monetary conditions at home, under the presence of the exchange rate depreciation during this period, have progressively provided ground to the aggregate demand. However, monetary conditions have been and continue to remain in line with the medium term and long term stability of prices at home, serving also to the well functioning of financial markets and to the maintenance of financial systems stability. BIS Review 50/2010  1  In terms of the respond to the easing monetary policy and to the decrease of risk primes in economy, monetary indicators show improvement signs during the two first months of 2010. A decreasing trend of currency outside banks is materialized and a correspondent growth of deposits in the system. The resulted improvement of liquidity indicators of banking system and the reduction of the demand for funds of public sector are followed by the decrease of Government securities yields. The exchange rate also appears relatively stabilized, reflecting a slight correction of foreign trade indicators and of the country current deficit during the last two quarters.
This illustrates how the  1  BIS Review 15/2000  creation of the euro has opened up new funding sources for a wider range of issuers, and I have no doubt that the euro-denominated high-yield bond market will continue to grow as confidence in the euro bond market increases. A second reason for the large increase in issuance in 1999 was the increase in confidence of both investors and issuers as the effects of the emerging market crises subsided. With this increased confidence came increased appetite for credit, and this not only gave borrowers from further down the credit spectrum the opportunity to access markets - which they took - but also allowed issuers who had pulled out of the markets during those turbulent times to return. So overall it is satisfying to note that the bond markets were not only more active than they have been in previous years, but that they have also been accessible to a wider range of borrowers than in previous years. Finally, right at the end of the year - literally - we all faced the challenge of preparing for Y2K. As we know now, the world’s financial markets survived the dreaded Millennium Bug, thanks in large part to the efforts of very many of you, and your IT colleagues, in making sure that we would. And we at the Bank like to think we played our part too. Now I am not one of those who feel that all our work, yours and ours, was unnecessary.

From the perspective of underpinning policies, economic activity expanded, favoured by the following: The accommodative monetary policy and the favourable financing conditions, in both domestic and foreign markets; The fiscal consolidation, which has reduced the impact of the public sector on the domestic financial markets; and The structural reforms programme, which, irrespective of the short-term costs, have started to yield initial results. Economic growth has contributed to the overall improvement of Albania’s economic and financial balances. In line with our previous statements, the following is notable: Inflation edged up slightly, despite the containing effect of the sharp appreciation of the exchange rate, suggesting that the improvement of the cyclical position of the economy is beginning to be reflected in higher wages and other production costs; Albania’s external position has improved, reflected in the narrowing of the current account deficit;  Budget deficit remains low and public debt has trended down; Lastly, Albania’s financial system is stable. The Albanian banking sector shows stable or improving capital, liquidity and profitability indicators. Our analyses and stress tests suggest that the sector is resilient to potential stressful situations, thus guaranteeing its ability to withstand shocks. 1/3  BIS central bankers' speeches  Such analyses show that the foundations of the country’s development remain relatively solid. The analysis is reflected also in our projections. In the baseline scenario, these projections suggest that economic growth will continue in the medium-term horizon, production capacities will be utilised in fuller terms, and inflation will converge to the central bank target by 2020.
When rumours about some European banks’ exposure to the US subprime market in August 2007 strongly affected money market interest rates and trading volumes within just a few hours, the ECB reacted by providing liquidity to the banking sector on a short-term basis – first overnight, then for slightly longer maturities. This served to ensure that solvent banks would obtain the liquidity that was disappearing from other sources. The first overnight provision of liquidity by the ECB of almost € 100 billion was demand-driven and revealed the  3  See Allen, F, Chui, M., and A. Maddaloni, A., 2004. “Financial Systems in Europe, the U.S.A. and Asia.” Oxford Review of Economic Policy 20(4):490–508. BIS central bankers’ speeches  3  high uncertainty within the banking sector on the ability to obtain funding from private sources. In general, during the first year of the crisis, there was a high degree of uncertainty on individual exposures, but not yet a very strong perception of more severe problems in the banking sector as a whole. Central bank liquidity provision thus aimed at stabilising interest rates, and ensured that temporary liquidity problems of banks would not create problems for bank solvency. The Eurosystem was able to deal with these tensions by only slightly altering its operations under the standard operational framework. This was due to the fact that the number of counterparties to monetary policy operations has historically been very large in the euro area, and because the standard framework offers quite some flexibility.

Additionally, in December 2011, the Eurosystem announced further enhanced credit support in the form of two repo operations with maturity of up to three years. There are indications that especially these three-year longer-term refinancing operations (LTRO) have proven effective in preventing an abrupt deleveraging. They significantly helped in restoring confidence in financial markets by providing insurance on the ability for banks to rely on ECB liquidity. This has taken pressure off banks to fire-sell assets or to shrink their loan book. In fact, there is some evidence that banks who bid for liquidity at the three-year operations used this liquidity to address the roll-over risk implied by the issuance of debt securities or other funding instruments that will mature over the next few years. At the same time, there is some first evidence that the provision of long-term liquidity has helped in supporting credit provisions, especially in countries more affected by the sovereign debt crisis, therefore helping to address impairments in the transmission of monetary policy. The ECB has recently announced the details of Outright Monetary Transactions (OMT) in secondary markets for sovereign bonds in the euro area in order to address severe distortions in government bond markets which in particular originate in unfounded fears on the part of investors of the reversibility of the euro. OMT also aims to safeguard the monetary policy transmission mechanism in all countries of the euro area, thereby preserving the singleness of the ECB’s monetary policy.
Growth will also slow down due to the recent financial turmoil.   A lower rate of growth in Europe and the United States will slow down growth in Sweden too, as these regions constitute such important export markets for Swedish companies. This is one reason why monetary policy in Sweden was made more expansionary September.   We can expect monetary policy to remain expansionary in the United States, the euro area and the United Kingdom as it may be necessary to compensate for the fact that several countries will need to implement fiscal policy tightening in a relatively weak economic climate.   In my view, expectations that monetary policy will continue to be expansionary in the United States, the euro area and the United Kingdom have also had an expansionary effect on Swedish monetary policy. When the repo rate was set in September, I supported the decision to leave the repo rate unchanged and advocated a larger downward adjustment of the repo rate path than the majority. One of the important factors behind this stance was my view that Swedish interest rates cannot deviate too much from foreign rates without affecting the exchange rate, and the exchange rate is of great importance to inflation. Slowdown in economic activity abroad During the summer the financial markets have been characterised by considerable turbulence as a result of the sovereign debt problems in the euro area and the United States.

Speech  Embargo 6 September 2018, 6.30 pm  After the storm: ten years on, how weatherproof is the Swiss banking system today? University of Lucerne  Fritz Zurbrügg Vice Chairman of the Governing Board * Swiss National Bank Lucerne, 6 September 2018 © Swiss National Bank, Berne, 2018 (speech given in German)  *  The speaker would like to thank Till Ebner and Rita Fleer for their support in drafting this speech. He also extends his thanks to Nicole Allenspach, Jürg Blum and Jacqueline Thomet, as well as SNB Language Services. Page 1/14  Ladies and Gentlemen Almost exactly ten years ago, on 15 September 2008, Lehman Brothers, the fourth-largest US investment bank at the time, filed for bankruptcy. The ensuing storm engulfed the global financial markets with a ferocity and magnitude that took all market observers by surprise. The collapse of Lehman Brothers made it clear that many financial institutions could not withstand such a buffeting without government support. The financial crisis spilled over rapidly into the real economy, resulting in the deepest global recession since the Great Depression. We all have our own personal memories of this difficult period. Many of you are probably thinking of 16 October 2008, the day on which the Swiss authorities stepped in to support UBS with a comprehensive package of measures. Back then, I was working at the Federal Finance Administration.
As in Australia and Canada, by law the political authorities have the right to issue instructions to the central bank in matters of special importance. However, this right has never been exercised. The Norges Bank Act requires Norges Bank to inform the ministry when, in the opinion of the Bank, there is a need for measures to be taken by others than the Bank in the field of monetary, credit or foreign exchange policy. For example, in a scenario with a sharp and prolonged fall in oil prices, the krone exchange rate may remain outside the initial range for an extended period. If Norges Bank responds by raising interest rates in order to force the krone back to its initial range, monetary policy could trigger a recession of a type that will undermine confidence in the krone. Similarly, after an appreciation a situation may arise in which interest rates must be set at such a low level to return the krone exchange rate to the initial range that this results in higher inflation. The basis for exchange rate stability is weakened in both cases. Hence, Norges Bank cannot with open eyes orient policy instruments in such a way that they fuel inflation or lead to a deflationary recession.

The portion used by oil companies in Norway, partly to finance investment, also has an effect on the mainland economy. We can say that oil revenues enter the Norwegian economy through an external and an internal circular flow. The distinction between the external and internal circular flow is important for exchange rate stability. This means, among other things, that short-term changes in oil prices shall not influence the orientation of economic policy. If the distinction between the two circular flows were to break down, and the use of oil revenues were to fluctuate more in step with oil prices, we would have an unstable economy, and hence an unstable exchange rate. The Government Petroleum Fund thus has two objectives. It serves as a buffer for the mainland economy against fluctuations in oil revenues, and it manages a considerable portion of the government’s financial wealth. In addition to capital outflow from the Petroleum Fund, in recent years there have also been considerable capital outflows from various non-oil sectors. As in other Nordic countries, large asset managers such as life insurance companies and securities funds accumulated substantial holdings of foreign equities and bonds in the latter half of the 1990s. These portfolio investments abroad reflect a desire to diversify risk. The substantial net outflow of long-term capital from the private sector may partly reflect a thin Norwegian capital market. The Norwegian bond market is not very developed and the total value of equities in the Norwegian market in relation to GDP is very low.
While the goals for monetary policy are maximum employment and price stability, the economic decisions of households and firms generally don’t depend directly on the federal funds rate, since these parties do not participate in that market. Instead, their decisions depend on broader financial conditions, including the interest rates on home mortgages and corporate bonds, the performance of the stock market, and the foreign-exchange value of the dollar. As a result, for monetary policy to achieve its objectives, markets must function well enough to transmit the stance of policy, both from the markets in which the Federal Reserve directly transacts to its policy target, and then onward from that target to other money markets, and eventually to asset prices (bond yields, mortgage rates, equities, and exchange rates) that more directly affect real activity in the U.S. economy. Because the various money markets are important to achieving the Federal Reserve’s macroeconomic mandate, we monitor developments in them closely. In recent months, we have observed notable fluctuations in some term money market rates relative to the expected average level of the effective federal funds rate over the same horizon. This has been particularly true of the spread between three-month dollar LIBOR and equivalent-tenor expected future federal funds rates, as measured by overnight indexed swaps, or OIS, as shown in Figure 13, but is also the case with rates paid on borrowings such as commercial paper.

Some parts of the subregion sometimes have problems with floods, but in many parts there is permanent lack of even drinking water. Macedonia’s track record within the relations with the World Bank, can be assessed as quite successful. The World Bank has been one of the most important partners in the process of designing and implementing important structural reforms. The strong focus of the World Bank programs on the financial and the enterprise sectors, public administration, and business environment, has proved to be an important trigger and contributor to the productivity gains and real convergence of the economy. Personally, I am deeply grateful to the World Bank and the IMF for the contribution they have made in overcoming our existential problems. It is my personal opinion, however, that our need for the cooperation with and support of the World Bank is more than necessary. We have made some progress, but we have also encountered a lot of problems. The global crisis emphasized a number of structural issues that are bottleneck for the growth of the Macedonian economy. A comparative analysis shows that Macedonia has pretty low level of investments (on average about 15% of GDP during 1997–2007). Thus, further support which will lead to higher investments and higher stock of capital will play an important role for the long-term growth. We substantially lag behind those we want to keep up with. The unemployment rate is still staggering (32.4%).
Or, expressed in a different way, without the countryside uprising in the name of liberal ideas, 184 years ago, we might not have the SNB today. In my presentation, I will, for once, devote less attention to current monetary policy. Instead, I will examine the Swiss monetary system from a more long-term perspective. My aim is to show you the significance of sound money, and why it is a major pillar of our society. In this context, I will also take a critical look at four proposals to reform the monetary system. My reason for doing this is that interventions of this kind in an existing monetary order can have grave consequences for our country and the entire population. Talking of reform proposals: In the “Uster Memorial” document there is a demand which particularly appeals to me as a central banker, that, in the case of property charges such as tithes, it should be possible to transform them easily into mortgage claims whose interest level is appropriate. Appropriate interest rates or “appropriate monetary conditions”, as it is expressed in central bankers’ jargon – that is what modern monetary policy is all about. So you see that the demands made in Uster remain just as valid today.

In other words, the Swiss franc already faces competition, not only against the currencies of other countries but also against alternative non-governmental currencies. 8  4  For further information, cf. ‘Bericht des Bundesrates zu virtuellen Währungen’ (Federal Council report on virtual currencies, in German only) of 25 June 2014 (www.news.admin.ch/NSBSubscriber/message/ attachments/35361.pdf). BIS central bankers’ speeches  However, the key issue is rather different. A modern economy with a well-developed financial market requires a statutory means of payment. The Swiss franc is the official unit of currency in our country; Confederation coins as well as SNB banknotes and sight deposits are Switzerland’s statutory means of payment. Therefore these instruments must be accepted as payment in this country by every individual, without restriction, unless otherwise agreed. A statutory means of payment creates legal certainty and efficiency in everyday life. Consequently, the governmental Swiss franc is indispensable in Switzerland, even in a situation of competition with private currencies. Moreover, as long as a central bank fulfils its mandate diligently, I do not consider it likely that a private currency can pose any serious competition to a state currency. Return to a gold standard The second reform idea, the return to a gold standard, is directly linked to the financial crisis. In some circles there are fears of massive inflation in the short or long-term as a result of the unprecedented relaxation in monetary policy worldwide. The solution that is sometimes proposed is a return to a gold standard, in other words, pegging the currency to gold.