samchain/econo-pairs-v1 huggingface dataset:
Fritz Zurbrügg: After the minimum exchange rate – new monetary policy challenges Speech by Mr Fritz Zurbrügg, Member of the Governing Board of the Swiss National Bank, at the Money Market Event, Zurich, 26 March 2015. *  *  *  The speaker would like to thank Dirk Faltin for his valuable support in preparing this speech. He also thanks Marco Huwiler and Peter Kuster for helpful comments. Accompanying charts can be found at the end of the speech. Ladies and gentlemen A warm welcome to our traditional Money Market Event in Zurich. We are delighted that so many of you accepted our invitation to attend. A year ago at this gathering, I spoke to you about the Swiss National Bank’s (SNB) investment policy. At the time, I touched only peripherally on monetary policy and the minimum exchange rate of CHF 1.20 per euro. It will come as no surprise to you that this year I have decided to devote my talk exclusively to monetary policy. On 15 January of this year, the SNB discontinued the minimum exchange rate to the euro. This step attracted a good deal of attention around the globe and triggered dramatic price movements on the financial markets for a short time. It has significant implications for large sections of Switzerland’s economy. For the SNB, too, the decision to discontinue the minimum exchange rate was a momentous one. I would like to take this opportunity to explain our rationale for discontinuing the minimum exchange rate in more detail.

Denis Beau: Financial markets - driving innovation and connectivity Opening remarks by Mr Denis Beau, First Deputy Governor of the Bank of France, at the Paris Financial Seminar, co-organised by the Hong Kong Monetary Authority and Paris Europlace, Hong Kong, 16 January 2019. * * * Ladies and Gentlemen, I am very pleased to open this seminar jointly organised by Paris Europlace and the Hong Kong Monetary Authority (HKMA). A new year is usually the time when we regain confidence in the future and in our collective ability to prepare for it. ***  However there are many uncertainties weighing on the global economic outlook. In Europe, there are still many uncertainties about the outcome of Brexit negotiations and the vote over the withdrawal agreement. Caution requires that we all be prepared for a no-deal scenario. Public authorities and most importantly market participants have all prepared serious contingency plans to address and master the cliff-edge risks associated with such a no-deal scenario. As a result, we can expect that those risks will be appropriately managed, without financial stability implications, should such a scenario occur. Outside Europe, global trade tensions are also generating additional uncertainties. Protectionism can indeed be a temptation, but in my view it should not be an option. Let’s be clear: our economies are increasingly integrated, and research conducted at the Banque de France suggests that a rise in protectionism on a large scale (i.e. a generalised trade war scenario) would have a negative impact on global growth.
Page 4/10  supervisory measures taken in the aftermath of the 2008 global financial crisis, the capital buffers and liquidity positions of most banks have improved in recent years. Let me conclude this section with two observations. First, crisis resilience requires more than good crisis management skills. Fending off a crisis depends not only on what policymakers do once the crisis has erupted. It also hinges on what has been done to render the financial system as a whole more resilient ahead of a new shock. Second, policy coordination and cohesion matter. Although the SNB has reaffirmed its important role as a crisis manager, monetary policy alone is not a panacea. We mentioned earlier the powerful effect of the concerted efforts of central banks to calm financial markets and instil confidence. The same is true at the national level. The unique nature of the COVID-19 crisis required an unprecedented combination of fiscal and monetary policy. Fiscal policy directly supported households’ and firms’ incomes, while monetary policy supported bank credit provisioning and dealt effectively with the risk of financial market turmoil. The two policy areas complemented each other while remaining within their respective remits. So far, we have discussed how the COVID-19 pandemic shock prompted the SNB to react with a set of timely and targeted policy responses. Let us now turn our attention to a different facet of the COVID-19 pandemic, namely, how it has catalysed digitalisation and what the implications of this development might be for the SNB.

6 Today, digitalisation and improvements in communication technology are pushing up demand for payments to be instantaneous and available round the clock. This demand is largely being driven by the proliferation of mobile payment apps. Instant payments are increasingly becoming the new standard around the world. 7 They will help to improve the efficiency of the payment system and enable synergies with new technologies and business models. The SNB is committed to instant payments. Last year, it helped launch the SIC5 project. SIC5 will introduce improved functionalities, such as a new settlement algorithm and higher processing performance. It will also include a new instant payments module to help make instant customer payments the new normal. To this end, the SNB has decided that participants with a high number of customer payments must be able to receive instant payments in SIC5. The SNB has thereby created the necessary framework conditions for ensuring that the cashless payment system in Switzerland remains efficient, secure and ‘future-proof’. 6 7  Cf. SNB press release of 11 January 2019, ‘Swiss National Bank sets criteria for fintech companies’ access to Swiss Interbank Clearing’. BIS, ‘Shaping the future of payments’, available at www.bis.org/statistics/payment_stats/commentary1911.htm. Page 6/10  Ultimately, however, the specific retail payment solutions will have to come from the private sector. To be genuinely effective, instant payment solutions must be implemented all the way to the end customer. Offering such solutions often requires significant adjustments to banks’ internal payment processes.
This means that periods in which ex ante saving exceeds desired investment might lead to periods of persistent unemployment. In this respect, the financial system plays an important role. Financial intermediaries match borrowers and savers. If the financial system is under stress and lending standards are being tightened, ex ante investment is likely to decline relative to saving, all else being equal. The financial intermediation process and the creation of credit is the primary channel through which monetary policy affects the economy. By influencing the volume of credit creation, monetary policy strives to keep ex ante saving and investment – alternatively, aggregate demand and aggregate supply – in rough balance. Too rapid a pace of credit creation would overstimulate investment relative to saving, potentially increasing the rate of inflation and this, in turn, could damage the economy’s long-run performance. Too slow of a pace of credit creation would likely lead to an ex ante shortfall of investment relative to saving, causing unemployment to increase. This analytical framework also applies to the global economy, but with an added level of complexity. At the global level, income equals output and saving equals investment on an ex post basis. However, for an individual country, saving can exceed investment or, alternatively, production can exceed domestic demand to the extent that a country’s exports exceed its imports. This requires that, for some other economy or group of economies, investment must exceed saving, or alternatively, domestic demand must exceed production and imports must exceed exports.

The world economy, including the euro area, is still undergoing a severe downturn, with the prospect of both external and domestic demand remaining very weak over 2009 before gradually recovering in the course of 2010. This assessment incorporates a number of adverse developments which are likely to materialise over the coming months, such as a further deterioration in labour markets. At the same time, available indicators of inflation expectations over the medium to longer term remain firmly anchored in line with the Governing Council’s aim of keeping inflation rates at levels below, but close to, 2% over the medium term. The outcome of the monetary analysis confirms that inflationary pressure has been diminishing, as money and credit growth have further decelerated in recent months. Against the background of these developments, after  BIS Review 56/2009  1  today’s decisions we expect price stability to be maintained over the medium term, thereby supporting the purchasing power of euro area households. Let me now explain our assessment in some more detail, starting with the economic analysis. Reflecting the impact of the financial market turmoil, economic activity continued to weaken in the euro area in the course of the first quarter of 2009, in parallel with the ongoing downturn in the world economy. This weakening in the first quarter appears to have been significantly more pronounced than projected in March. More recently, there have been some tentative signs in survey data of a stabilisation, albeit at very low levels.
First, Europe has developed a consistent corpus of regulation on extra-financial disclosure (taxonomy, SFDR, CSDR) to tackle climate-related risks. We also took our part as central bank by carrying out a pilot climate stress test – followed by a recent ECB exercise completed this summer. Meanwhile, Europe is also adapting to the challenges arising from the digital revolution through a dedicated framework: the objective is, first, to enhance IT security requirements for the entire financial sector (DORA), and second, to establish a European harmonised regulation for crypto-asset issuers and crypto-asset service providers (MICA). Yet I hear repeatedly from the banking sector that prudential regulation is now excessive, and too much of a burden. Let me explain why these claims seem unfounded. In the past ten years, the regulatory framework has done nothing to hinder the sound financing of the European economy: in France for example, the distribution of loans to households and businesses by the French banks has even increased; since end-2010, the outstanding amount of credit grew almost three times faster than GDP (57% vs 21%). As time passes, we must be careful not to succumb to the “temptation to forget”. This very specific phenomenon has a nickname in economic theory: it is called “disaster myopia”. In order to prevent this today, we must absolutely implement the Basel III accord.

A more accurate description of the red line is average wage growth for people continuously in employment, adjusted for any the impact of changes in average age and experience across the workforce. BIS central bankers’ speeches  13
Some of the key reforms introduced include an increase in the quantity and quality of minimum regulatory capital and the creation of capital buffers. New prudential requirements have also been introduced, such as the limits on large exposures, a maximum leverage ratio and two liquidity requirements, at the same time as the reform of the frameworks for evaluating market risk and securitisations has been launched. In addition, last December, a second wave of reforms introduced within the framework of the Basel Accords was completed. The focus of these measures has been the calculation 3/14  of risk-weighted assets, i.e. the denominator of the capital ratio, in order to improve the comparability of capital ratios across banks and jurisdictions. Another lesson of the crisis was that it is necessary to prevent and mitigate the effects of an excessive build-up of risk in the financial system as a whole. An exclusively microprudential based regulatory framework is clearly not sufficient to achieve this. New instruments were considered necessary to help moderate and address cyclical systemic risks (such as, for example, those associated with the credit cycle) and cross-sectional systemic risks (for example, those linked to the risk arising from, among other aspects, the size, complexity and density of the interconnections between financial institutions). With regard to cyclical systemic risks, a countercyclical capital buffer has been introduced, with a view to preventing risks arising from excessive credit growth at the aggregate level.

6/14  It should also be noted that the negative effects of protectionism tend to grow stronger over the long term, owing to the damaging impact of trade barriers on competition, productivity, technological innovation and potential growth. In the present context, characterised by the risk of heightened trade tensions, the review of the world trade negotiation rules and reform of the World Trade Organisation (WTO), the legal basis for the main trade exchanges in recent decades, are of even greater consequence. In fact, from a broader perspective, the latest political reactions against free trade come on top of a deeper, pre-existing crisis in the multilateral trade system. The security provided by trade rules enabled average tariffs between the United States, Europe and Japan to be cut from 22% in 1948 to 3% in 2000. However, in the latest round of negotiations between the WTO member countries, which took place in Doha in 2001, very little progress was made and structural problems currently affecting this system became apparent. These include, notably, the requirement for unanimity among the 164 members of the organisation for the approval of new provisions and the existence of a body of rules that has proved to be inadequate to manage the variety of challenges raised by China’s joining the WTO in 2001. A possible way out of the current crisis in the system of rules for world trade and the WTO that has been recently discussed would involve moving from a multilateral system based on unanimity to a more flexible approach.
Bean, Charles R. (2009), “The Great Moderation, the Great Panic and the Great Contraction”, Schumpeter Lecture, Annual Congress of the European Economic Association, www.bankofengland.co.uk. Borio, Claudio and White, William R. (2003), “Whither Monetary and Financial Stability? The Implications of Evolving Policy Regimes”, in Monetary Policy and Uncertainty: Adapting to a Changing Economy, Federal Reserve Bank of Kansas City Jackson Hole Symposium, 131212. 11  Walsh (2009) points out that when financial factors cause distortions, these distortions will in general introduce corresponding terms in a loss function for monetary policy that is a second-order approximation to household welfare. Curdia and Woodford (2009) present a model where the second-order welfare approximation is a standard quadratic loss function of inflation and the output gap between output and potential output, but where potential output is affected by financial factors. Then inflation and the output gap remain the target variables, with and without financial factors. The neutral rate in the model, that is, the real rate consistent with output equal to potential output, is then also affected by financial factors. 12  See Svensson (2003b) for further discussion of the important distinction between the response variables in the policy reaction function (the variables that the central bank responds to) and the target variables in the loss function (the variables that the central bank “targets” and wants to stabilize at their target levels).

Maintaining financial stability, including a well-functioning payment system, is, explicitly or implicitly, an important objective for central banks. In my overview of best-practice monetary policy in Svensson (2002), long before the crisis but during an ongoing debate about monetary policy and asset prices, I briefly discussed how this objective can be reconciled with flexible inflation targeting, how conflicts can arise and how they could be handled. 4 One question is whether financial stability belongs in the loss function for the central bank, together with inflation and resource utilization. I argued that a good way of handling this additional objective is as a constraint on monetary policy rather than as a separate target variable that appears in the loss function. The idea is that financial stability is normally pursued with different instruments, such as supervision and regulation, and is normally not a concern for monetary policy. Under normal circumstances, at least in industrialized countries, financial stability is good and does not impose any constraints on monetary policy. Only rarely, when financial crises occur, does financial stability impose constraints on monetary policy and force the central bank to modify its decisions.
Constantinos Herodotou: Current economic developments in euro area and Cyprus - the balancing act of monetary policy Speech by Mr Constantinos Herodotou, Governor of the Central Bank of Cyprus, at the Distinguished Speakers Seminar of the European Economics & Financial Centre (EEFC), London, 19 October 2022. ***  Introduction Dear guests, ladies and gentlemen. Thank you for inviting me to this seminar. It is a pleasure to have this opportunity to speak to you today. I will begin by providing an overall assessment of recent economic developments in the euro area, as well as the monetary policy decisions taken by the Governing Council of the European Central Bank in response to the new challenges of persistently high inflation and rising economic uncertainty. I will continue with the developments in the Cyprus economy and its banking sector, and how it responds to the challenges in this rapidly changing economic environment. Euro area economic developments In the euro area, GDP is growing at a slower pace this year than previously expected due to the negative geopolitical developments, caused by the war in Ukraine. Growth is hampered by soaring energy and commodity costs, low confidence and supply chain disruptions. At the same time, inflation has approached double digits, and a winter with possible energy shortages and high energy prices is on the horizon. Nevertheless, a recovering tourism industry, decreasing unemployment, and EU funding payments helped to boost activity and limit, to some extent, output loss.

On the supervisory front, we need to address the cross-border as well as growing cross-sector integration in our financial systems. Finally, sound fiscal policies also play a significant role in maintaining financial stability. I am glad that this conference provides a good opportunity to discuss these policy challenges and their implications in more depth. Thank you for your attention. BIS Review 8/2004  3
I think the first thing is you want to get some knowledge before you start to invest. And recognize that there are no quick, get-rich-quick schemes. If something seems to be too good to be true, it probably is. I remember when I got out of college, back in 1974, a long time ago, I decided – I had this very small amount of money that my great-grandmother left to me, I think it was $ and I decided I was going to go out and invest. And I have to say, at the beginning, I didn’t really know what I was doing. But I read a lot of books and I got really pretty well educated. There’s a lot of good books in the market, and I think you can actually educate yourself. And if you do that I think then you can start to gingerly start to invest. And you’ll learn as you go. It’s a long journey. I’ve learned things as I invested over the years. Now I don’t do anything, but I’m sort of retired from investing in my current role. But part of that I found that I kept learning it over a very long period of time. So, it wasn’t like the journey of knowledge was over at any point in time. But first thing is to find a really good book on investing, and read that.

So, 7 / 15  BIS central bankers' speeches  think of that as Bangladesh. That the messenger, who the person is who’s transmitting the payment, this is SWIFT, is secure. And the receiver. So in this case, the New York Fed is secure. That goes for anybody who is executing payments. It doesn’t have to be Bangladesh, through the SWIFT, to the New York Fed. It’s anybody executing a payment through any payment medium to any receiver. The thing that we’re trying to work on internationally is to try to make sure that everyone understands their responsibilities in that chain. So, it’s really important that the person executing the payment, that their facilities are secured. What seemed to be the case in the Bangladesh situation was their facilities were not secured, so someone executed a payment that looked completely authentic through the SWIFT pipes to the New York Fed. It was an authentic payment – it looked like an authentic payment when we executed on some of those payments – not all of those payments. So, we need to make sure that that first leg is buttoned up, and also we need to make sure that everyone understands their responsibility along that chain. So, this is something that we take very seriously. We’re working also with the institutions that we interact with.
Coupled with extremely accommodative monetary conditions globally, we can expect increasing inflow of funds to many emerging economies, including those in Asia, in search of yields. Managing this inflow so that it supports growth, and not drive excessive asset inflation, will be challenging. Policymakers will need a variety of tools. Economic restructuring in Asia Beyond the immediate challenges, the second set of issues that Asian policymakers will have to grapple with relates to the re-structuring of their economies. Business-as-usual policy will not work. The world has enjoyed a positive supply-shock with the entry of emerging economies into the global economy. We have had a period of Great Moderation. But this supply shock also creates new competitive dynamics, which will drive changes in the patterns of trade, production and growth in the coming years. The adjustments to these changes will be neither easy nor smooth. As unemployment in some advanced economies mount, the risk of trade and financial protectionism rises. Rapid changes in the real economy will generate greater uncertainty, and potentially greater volatility in financial markets. Over the next few years, Asia is likely to grow more slowly compared to pre-crisis days, when external demand from advanced economies weakens. To sustain growth, Asian economies with big domestic markets will need to continue with structural reforms to boost domestic demand. Smaller Asian economies will have to re-orientate their economies to respond to new opportunities in these markets.

Heng Swee Keat: The next stage – policy challenges in Asia Keynote address by Mr Heng Swee Keat, Managing Director of the Monetary Authority of Singapore, at the Paris Europlace International Financial Forum, Singapore, 26 October 2009. *  *  *  Governor Noyer, Your Excellencies, Ladies and gentlemen, Good morning It gives me great pleasure to join you today at this Paris Europlace International Financial Forum. Let me warmly welcome Governor Noyer and our overseas visitors to Singapore, and welcome Mr Bresson and your team for holding this Forum in Singapore. Policy challenges ahead A year ago, the global financial community was grappling with a severe crisis that hit every part of the globe and every sector. We were on the edge of an abyss. The timely and forceful action by authorities, including the use of unconventional monetary policy tools, helped avert the worst. In recent months, the global economy and financial markets are showing signs of stabilization. Though we are yet to see a firm or sustainable rebound in final demand, there is a sense of relief, even optimism. Now, what’s next? What will be the shape of the recovery, and what policy actions are appropriate? It is difficult enough to make policy judgments in normal cyclical downturns. It is even harder now that this downturn is not a garden variety recession.