samchain/econo-pairs-v1 huggingface dataset:
The FPC’s judgement is that, if risks were to build above standard, then increasing the CCyB above 2% and bearing this cost would better optimise the balance between primary and secondary objectives. The cost would be warranted because, by building resilience, it would reduce the likelihood and severity of future downturns.28,29 The grey triangles in Chart 18 estimate GDP-at-risk (proxied by the 5th percentile of the forecast distribution of GDP in 3 years’ time, conditional on risks at time t on the x-axis), versus on the y-axis the Bank of England’s 1-year ahead median GDP forecast at time t. The blue line illustrates how this trade-off could have changed if in 2004 capital levels (as measured by the total capital equity ratio) had been increased from 2004 levels. GDP-at-risk in 2004 (proxied by the estimated change in the level of GDP expected by 2007, based on information in 2004, at the 5th percentile of the  27 The CCyB is a particularly powerful policy tool in this regard because it can be removed altogether in a stress. Banks entering the capital conservation buffer, by contrast, are subject to restrictions on their dividends and other capital distributions. 28The FPC’s CCyB decisions are informed by results of the Bank’s annual concurrent stress tests of the UK banking system. These tests provide a gauge of the sensitivity of banks’ balance sheets under stress.

In contrast, the US and the euro area have generally faced Divine Coincidence since the global financial crisis (Charts 9 and 10)  16  All speeches are available online at www.bankofengland.co.uk/news/speeches  16  Chart 8: Divine Coincidence in the UK pre-crisis, but rarely post-crisis  6  Inflation (%)  4  2 -5 -4 Output gap (%)  -3  -2  -1  0  1  2  0  Pre-financial crisis Financial crisis and after  -2  Charts 9 and 10: Divine Coincidence generally held in the US (left chart) and euro area (right chart) 5  Inflation (%)  4.5  4  4  3  3.5 3  2 -8  -6  -4  -2  1 0  Pre-financial crisis Financial crisis and after  Inflation (%)  0  2  2.5  4  Output gap  2 -4.00  -2.00  1.5  -1  1  -2  0.5  -3  0  -4  -0.5  -5  -1  0.00  2.00  4.00 Output gap  Pre-financial crisis Financial crisis and after  Source for Charts 8-10: Bureau of Economic Analysis, CBO, Eurostat, IMF and Bank calculations. 17  All speeches are available online at www.bankofengland.co.uk/news/speeches  17  3. Time horizon Although both committees must promote the government’s economic objectives subject to achievement of their primary objectives, the MPC has very limited ability to influence trend growth. Monetary policy transmission impacts fade after 3-5 years.
This depreciation of our currency, however, is an optimal response to the new circumstances, as it implies an adjustment of relative prices and thus contributes to the rebalancing of sources of growth across economic sectors. In other words, it shifts the growth dynamic from domestic demand to exports. In this scenario, Chilean inflation has returned to the vicinity of 3 percent (bear in mind that last year it was most of the time in the lower part of the Central Bank’s tolerance range: 2 percent) (figure 3). So this big depreciation of the Chilean peso has not altered the forecast that inflation will remain in line with the target over the policy horizon. This reflects that the pass-through coefficient, which measures how much of the depreciation is translated into higher prices, so far has not created unwanted propagation to inflation. Of course there are items that immediately reflect any exchange rate movements, like fuels, for example. But the passthrough to core inflation trends and expectations is not so mechanical. On one hand, there is evidence suggesting that it depends on the economy’s cyclical conditions, meaning that in the present circumstances, where gaps are being formed, this pass-through should be small. On the other hand, said coefficient has shrunk over time as the inflation targeting scheme has consolidated. Thus, the credibility of monetary policy also reduces the coefficient, allowing us to project that, beyond short-term effects, inflation will stay near the target over the policy horizon.

Figure 6 Gross fixed capital formation (annual change, percent) 60  60  40  40  20  20  0  0  -20  -20  -40  -40 09  10  Total investment  11  12  Construction & other works  13 Machinery & equipment  Source: Central Bank of Chile. BIS central bankers’ speeches  9  Table 1 International baseline scenario assumptions 2012  2013 (f)  GDP growth Trading partners' GDP World GDP at PPP  3.4 3.1  3.6 3.3  3.4 3.0  3.4 3.0  United States Eurozone Japa China India Rest of Asia (excl. Japan, China and India) Latin America (excl. Chile)  2.8 -0.6 1.9 7.7 5.1 3.8 2.7  1.9 -0.4 1.1 8.1 6.3 4.3 3.3  1.7 -0.4 1.8 7.6 4.1 3.8 2.6  1.9 -0.4 1.6 7.7 4.5 3.9 2.4  LME copper price $ Brent oil price $  361 112  350 108  332 109  332 109  Terms of trade  -4.1  -0.4  -3.9  -3.2  March'13 Report  Dec.'13 Report  March'14 Report  2014 (f) March'13 Report  Dec.'13 Report  IPoM Mar.
Beyond ensuring that the financial system is resilient to climate risk, we need to make the financial sector a force for good – namely, to facilitate the transition towards a lower carbon economy. If the world is to reach net zero, the financial sector needs to be at the vanguard. Many financial institutions pledged net zero goals in the lead-up to COP26 last year. This is remarkable against the backdrop of a world that was still struggling to emerge from a global pandemic that had disrupted millions of lives and livelihoods. It shows seriousness of commitment. The GFANZ is a powerful expression of that collective will to do the right thing for the planet. While net zero is a 2050 goal, the critical decade for climate action is this – 2020 to 2030. To achieve net zero by 2050, the world must decisively bend the emissions curve and achieve substantial reductions by 2030. This is not a far away problem. The time for action is now. The setting up of the GFANZ Asia-Pacific Network is timely. Asia is where the battle against climate change will be won or lost. Energy demand in Asia is expected to double by 2030 on the back of economic growth, urbanisation, and rising affluence. Some 45 million people in Southeast Asia still do not have access to electricity. Fossil fuels will continue to play an important role in meeting the energy demands of Asia, at least for the next few years.

For if we can successfully help Asia transition to net zero, it will go a long way in getting the world to net zero. Thank you very much. *****
Policies and measures will be formulated to not only increase the capacity and the capability of the Islamic banking players but also to set the stage for Malaysia to be an active player in global developments in Islamic banking and finance. Ladies and Gentlemen, New players, new technologies, the push to globalisation and continuing deregulation are still driving change in the financial services industry. Productivity, service quality, customer satisfaction and cost are key factors that drive the performance in a financial services organisation. In this uncertain world, the drive towards excellence can only be realised if strategic steps are taken today to enhance capability and capacity, thereby securing the well being of the banking industry and thereby the ability of the industry to contribute to the overall economic prosperity of our nation. On this note, Ladies and Gentlemen, I wish you a successful Summit. Thank you. BIS Review 33/2002  5

Such committees have been set up in practically all EU Member States, normally under the leadership of the central bank, following the recommendation made by the European Systemic Risk Board, on which all EU regulatory and supervisory authorities and central banks are represented. With regard to resolution functions, Spain has already adapted to European regulatory requirements. In this connection it has adopted a structure in which the resolution preparation and planning tasks are assigned to the sectoral supervisors [the Banco de España for banks and the CNMV (National Securities Market Commission) for investment firms], and those relating to the implementation of resolution measures are assigned to the FROB (Fund for the Orderly Restructuring of the Banking Sector). As you know, the FROB is also responsible for the management and ultimate divestment of the stakes the State holds in the capital of banks subject to restructuring plans as a result of State aid granted during the crisis. These arrangements are admittedly more complex than those adopted in most Member States, which have placed all resolution functions – preventive and executive alike – under the remit of the national prudential supervisor. In Spain, coordination between the resolution authorities and between these and the prudential supervisor is so far functioning smoothly.
Changes in monetary and financial conditions Overall, monetary conditions are a reflection of our expansionary policy, especially with respect to interest rates and the monetary aggregates. BIS Review 167/2009  1  The Libor is currently at the level targeted since March this year, i.e. 25 basis points, a level which can be regarded as a floor. The fact that it was impossible to bring the rate down any lower than this led us, in March, to introduce other instruments in order to make our monetary policy as expansionary as the circumstances demanded. Monetary conditions have become more expansionary via the interest rate channel in particular. Indeed, credit premia on the capital markets have declined steadily since the beginning of the year. As yields on Confederation bonds have remained low, other long-term yields have also trended downwards. It has thus become cheaper for companies to raise funds by borrowing on the capital market. In addition, our figures show that financing in the form of bank loans has also become more attractive following the decline in the Libor. In real terms – i.e. after factoring in expected inflation – interest rates are even lower. The Swiss franc has appreciated slightly in trade-weighted terms, as a result of the recent weakening of the dollar. However, it has remained stable against the euro, which shows that the monetary policy followed since March has been effective.

With the anticipated bumper harvest of maize coming on the market as the marketing season opens this month, maize prices are expected to fall and assist in keeping food inflation in check and overall inflation at a single digit level. The challenge will be to anchor inflation at these single digit levels throughout this year and beyond. In order to do this, continued implementation of appropriate monetary and fiscal policies as well as maintaining relative stability of the exchange rate would be vital plus increased production of goods and services. Ladies and Gentlemen, recently, the exchange rate market has been characterized by a general appreciation of the Kwacha against major foreign currencies. This has been mainly due to increased supply of foreign exchange on the market relative to demand. The key factors underlying the increased foreign exchange supply include:  BIS Review 72/2006  1  ii. increased copper output and exports as well as record high prices. Copper exports volume has in recent year registered sustained growth, increasing from 353,000 metric tons in 2003 to 423,000 metric tons in 2005. The price of copper rose to US $ per tonne in December 2005 from US $ per tonne in December 2004. By May 19, 2006, the price of copper had increased to US $ per tonne,  iii. increased non-traditional export earnings, from US $ million in 2003 to US $ million in 2005,  iv.
An unwarrantedly tight monetary policy According to the Riksbank’s booklet “Monetary policy in Sweden” (2010a), and the Sveriges Riksbank Act and its preparatory works, monetary policy shall aim to stabilise inflation around the inflation target and resource utilisation around a normal level. But in practice the Riksbank appears to have conducted a tighter monetary policy than is justified, given our task, over several quarters. The arguments put forward for conducting this policy are that growth is good, interest rates are very low and need to be normalised, that we need to signal to house-buyers that interest rates will increase, that the rise in house prices and household debts needs to be limited, and that financial imbalances could build up if we do not conduct such a policy. At the same time, our forecast for inflation (measured as the CPIF inflation rate) has been low in relation to the inflation target, and our forecast for unemployment has been high in relation to a reasonable interval for equilibrium unemployment. Moreover, research and practical experiences indicate that the interest rate increases that have been made and are planned will probably have only minor effects on house prices and household debts – and if anything, negligible effects on financial stability. Several problems with Swedish monetary policy In my opinion, there are now several problems with monetary policy in Sweden:   Monetary policy appears to have been aimed at trying to limit the increase in house prices and in household indebtedness.

It reached the target and was curtailed by the end of last year. Thereby, we backed up the capability of the banking system to lend to the economy, but avoided risk accumulation triggered by excessive regulatory easing. We have managed to preserve households’ confidence in financial institutions: instead of a bank run we saw ruble deposits growing by 25%. What are our current objectives? It is the interest rate policy that will allow us to achieve the 4% inflation target by the end of 2017. Our inflation targeting principle is that the Bank of Russia does not curb inflation at all costs, but considers the economic environment and financial stability issues when taking decisions. I insist that the policy of dragging inflation down to 4% is in line with the general economic policy designed to create conditions for the economic growth. Lending will see a transition from structural liquidity deficit to structural liquidity surplus, and this is a very important development. So far, the Bank of Russia issued loans to banks which reached up to 4 trillion rubles last year. Now, as the budget spends the reserve funds, the Bank of Russia will absorb this liquidity (through deposit operations, among other things) to keep the interest rates manageable, and we are already preparing a trial issue of Bank of Russia bonds. This tuning of monetary policy instruments will ensure manageability of interest rates in the money market, in lending and in the economy as a whole. On the development of the banking sector.
At the start of the sustained rise in equity prices, stock dividend yields exceeded the yields on Treasury bonds and this was perceived as normal, partly reflecting the searing experience of the Great Depression. Instead, corporate earnings rose relatively steadily, supporting dividend growth. This observation led investors to bid up stock prices and push down dividend yields and this proved – more or less – sustainable. Even today, the yield on the S&P 500 index is below the 10-year Treasury note yield. 6  BIS Review 43/2010  tools available might include limiting loan-to-value ratios, limiting debt service-to-income ratios or increasing the taxes on housing transactions. Several Asian and some European countries have used such tools to limit speculative real estate activity, apparently with some success, although the counterfactual cannot be known by definition. 10 To limit a subprime lending boom, the authorities might wish to enforce strict underwriting practices, including verifying purchasers’ incomes and enforcing rigorous appraisal valuations. Increasing the ability of investors to short the assets in question might also be helpful. In terms of macroprudential tools, I’d also include tools that influence how the financial system operates and functions. Such tools might include supervisory measures that set liquidity and capital requirements for financial institutions and other intermediaries. They might also include tools that try to limit the overall buildup of leverage in the financial system. For the equity market, macroprudential tools might include margin rules for cash, options, futures and equity over-the-counter derivatives.

The next step is for the policymaker to evaluate what tools might be available to curb the imbalances that have been identified. The idiosyncratic nature of the innovations and belief systems associated with particular bubbles implies that the tools used to respond to each bubble will likely have to be different and tailored to the features of the particular bubble in question. 7  See Eli Ofek and Matthew Richards. 2003. “Dotcom Mania: The Rise and Fall of Internet Stock Prices.” Journal of Finance LVIII, no. 3 (June): 1113–37. BIS Review 43/2010  5  Finally, the policymaker needs to conduct a careful cost-benefit analysis, weighing how successful a particular policy might be in restraining the rise in asset prices versus how costly it would be to remain passive, letting the bubble grow and then potentially burst disruptively. Many factors will affect the outcome of this analysis including the magnitude of the potential asset bubble and whether the potential asset bubble is occurring in the equity or debt markets. In this analysis, the policymaker is likely to find that compared with equity market bubbles, credit market bubbles are more prone to generate higher costs when they burst. Thus, the benefits of preventing credit bubbles from forming and collapsing are likely to be higher. Credit bubbles that burst threaten the stability of the financial system much more directly than equity bubbles. 8 That is because much of the debt is held by banks and securities dealers that are highly leveraged.
Notwithstanding some more encouraging recent signs, there is still a possibility that continuing imbalance between domestic and external demand will need additional sedation or that it will eventually precipitate a sharp fall in the dollar and US asset prices. But the dollar has come off its recent peak and some of the exuberance may now have gone from equity prices - including some of the froth from the “new economy” sector, so the risks of sharp correction may be less than they were. Elsewhere, in Japan, after a long convalescence, there may now at last be some better prospect of a gradual but self-sustaining recovery in private sector demand. And there has been more substantial evidence in recent months of strengthening domestic demand and output growth across the Eurozone. That fully justified the European Central Bank’s gradual shift away from its earlier accommodating monetary policy stance; it may also have contributed to the beginnings of a recovery of the euro exchange rate towards a more comprehensible level. We are certainly not yet out of the woods - there is a long way to go before anyone can feel confident that we are in fact in sight of a more sustainable balance between the major industrial economies. But I am more hopeful that we are now at least moving in the right direction. And that is encouraging news for the UK. On a macro-economic overview, our own economy remains in pretty good shape.

Eddie George: A snapshot of developments in the global economy  Speech by The Rt Hon Eddie George, Governor of the Bank of England, at the Lord Mayor’s Dinner for Bankers and Merchants of the City of London at the Mansion House, on 15 June 2000. *  *  *  I spoke last year - somewhat hopefully, even optimistically for a central banker - about the still nascent global economic recovery from the Asian crisis and its aftermath. But, more characteristically, I worried about the international imbalances affecting the major industrial countries, and the related imbalance within our own economy. The good news, my Lord Mayor, is that the global recovery has turned out to be rather stronger than we dared to hope a year ago. The world economy is currently growing at around its long-term trend rate - of 4% or rather more - and is expected to continue to grow close to that rate over the next couple of years. Although global inflation has meanwhile so far remained generally subdued, monetary policy in the major industrial countries - which had been directed to stimulus during the period of sharp world economic slowdown - has, to varying degrees, reverted to being less accommodating with the equally sharp recovery.
Conclusion  Asset price developments are a serious cause of concern for central banks since they may impinge upon both price and financial stability. And I would like to stress what I feel is the highly complementary nature of price stability and financial stability objectives: price stability is the bedrock on which financial stability is built. However, in my opinion, it is clearly not opportune to introduce asset prices into a monetary policy rule the central bank should commit to or in the central bank’s reaction function. Besides the reasons I already mentioned, another issue is: which asset price should we take into account? Should we limit to stock prices, or extend the rule to housing prices, exchange rate, the cost of capital and so on? I would also not support the idea of introducing asset prices into the measurement of inflation or the definition of price stability. My first reason is that the nature of goods and services on the one hand, and assets on the other hand, is quite different, and so is the information contained in their prices. Another reason is that asset prices are highly volatile, much more volatile than other prices, especially in the current context of low inflation. Consequently, it might be difficult to implement a sound monetary policy by focusing on highly volatile indicators. Finally, it is highly questionable that one could determine scientifically what an asset price equilibrium value is.

Moreover, asset prices fluctuations or changes might also activate some confidence or expectations channels that may in turn influence households’ or firms’ spending decisions. For all of these reasons, asset prices have a particular role in the conduct of monetary policy. How should central banks react? Does this mean that monetary policy should react directly to asset prices? Or, more precisely, should asset prices be directly taken into account by the central bank’s reaction function? This issue is still debated amongst researchers and academics; my feeling is that we should remain extremely cautious about it, perhaps because it would be like opening Pandora’s Box if we started setting our key policy rates according to asset price changes. Another reason for being extremely cautious is that assessing asset prices’ valuations is a very challenging exercise. And what matters is not only the asset price level per se, or the pace of its change, but also its deviation from a highly hypothetical fundamental value, which basically is hard to measure or determine. Although, from time to time, it may seem that asset price dynamics are not really correlated to overall economic development, it is generally hard to assess whether these dynamics are rooted in some deep fundamental changes or whether asset prices evolve according to some “pathological path”.