samchain/econo-pairs-v1 huggingface dataset:
Our analysis identifies three key factors: first, there are differences in the goods component of the CPIEFE, which point to a lower transfer to local prices from the peso depreciation throughout 2018. This may be explained by the fact that during this period the variation of the peso/dollar parity responded to movements of the global value of the dollar, as opposed to past parity variations (e.g. in 2017) that responded to idiosyncratic shocks to Chile (figure 2). The difference in the pass-through coefficient of forex variations to inflation according to the origin of the former was widely documented in a box in the March 2016 Report and today we see it reflected in the recent behavior of inflation. Second, there are also differences that could be more linked to supply factors in some markets of products and services. One example is the increased competition in the car industry, as well as the emergence of lowcost alternatives in passenger air transport, as seen in the behavior of the CPIEFE for services. The same applies 2  to the increased competition in special offers of telecom packages mobile phone services. Some of these phenomena have been captured by the new CPI thanks to some of its methodological improvements (figure 3). Third, the labor market presents greater slack, resulting from the massive immigration of recent years. Last December, the INE published the new population projections that use information from the 2017 Census, which ratified the significant increase in the immigrant population beginning in 2015.

Similarly, those extending loans will find it more difficult to assess the real value of collateral security and the borrower’s wealth. This situation must be corrected sooner or later, and when bubbles burst the risk of debt crises and financial instability is high. We have seen examples of this in Norway and in other countries. If we allow imbalances to develop in the domestic economy, this may trigger major capital movements with wide fluctuations in the exchange rate and long-term rates. Distributional effects of monetary policy The distributional effects of changes in nominal interest rates figured prominently in discussions concerning interest rate policy in the 1970s. There is probably a basis for saying that the consideration of distributional effects was an important reason behind the low interest rate policy. However, as developments were to prove, this was not the right approach. The low interest rate policy contributed to increased disparity. People are affected in different ways by a change in interest rates. Households with considerable debt will, ceteris paribus, be adversely affected by an increase in interest rates because they must use a higher proportion of their income to service the debt. However, the increase in interest expenditure in  BIS Review 92/2000  8  relation to household income is about the same for all income groups. This is because households with high income generally have a higher level of debt.
There was also some unease that small countries could be affected if the larger ones did not maintain discipline. Here, too, developments have given cause for concern, at least as regards the implementation of the regulations. Allow me to add a third argument. During the decades before the start of Monetary Union, economic policy in the EU was dominated by Germany. This was because of Germany’s size, of course, but it was also due to Germany’s economic success over several decades and its stable economic policies. There was almost a moral dimension to Germany’s actions. I still remember the meeting in the Monetary Committee when it became clear that Germany’s public finances in the coming years would be as weak as Italy’s. The dynamics in the room changed as if by magic. Since then no country has been able to take over the leader’s mantle. In such a situation peer pressure can easily turn into peer protection. Let me now turn to the future. In doing so I have tried to be constructive and limited myself to proposals I believe to be politically feasible. I will be happy to return to any of the subjects I will bring up. I. My first point concerns the division of labour and the cooperation between fiscal and monetary authorities. This is firmly established in the Treaty. The only uncertainty relates to the responsibility for exchange rate policy. Of course all parties must respect the existing rules.

The most obvious answer is to look at the stated rationale and motivation associated with the policy change. For example, the analysis by the Basel Committee on the long-term economic impact of stronger capital and liquidity requirements accepted the potential costs of higher loan spreads and reduced output levels, so this can be viewed as movement to the left along a frontier. It is also useful to think carefully about the expected impacts—both desired and undesired—and make ex ante predictions. What is the likely behavioral response? How might the balance sheet and the income statement change? What might financial markets reflect? At the risk of taking this simple framework too far, let’s think about what might happen to market indicators in each of two scenarios—a movement toward the frontier that makes policy more efficient and movement along the frontier toward a less conservative policy stance. If the former is really an elimination of inefficient constraints (move from C to B, for example), one might expect equity prices and Sharpe ratios to rise, while CDS spreads or bonds ratings are flat as opportunities expand and risk doesn’t increase. By contrast, in a movement along the curve, say from A to B, one might expect equity prices to rise as intermediation opportunities increase, while CDS spreads and ratings deteriorate as risk increases. One might expect to see measures of increased distress in some states of the world over time.
When it comes to monetary policy, we must restore balance to the economy and bring inflation down to 2 percent on a sustained basis. Earlier this month, the FOMC raised the target range for the federal funds rate to 4-1/2 to 4-3/4 percent, the eighth consecutive increase. The FOMC said it anticipates "ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In determining the extent of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. "3 The Committee also said it will continue to reduce its holdings of Treasury securities and agency debt and agency mortgage-backed securities, according to the framework it announced last May.4  3/5  BIS - Central bankers' speeches  One aspect of inflation that's important for achieving and sustaining price stability is the anchoring of inflation expectations.

These adjustments have allowed us to learn how ON RRPs might be used to support the monetary policy objectives of the FOMC. Our testing has demonstrated that ON RRP operations can set a soft floor on short-term interest rates. That is, while some trades may occur below the ON RRP offering rate, the volume-weighted averages of most money market rates have been above the ON RRP rate on nearly all days (Figure 2). Data across a range of money markets provide evidence that changes in the ON RRP rate affected pricing for both unsecured and secured instruments and that the operations successfully set a floor on short-term interest rates. While market participants are aware of the success in producing a floor from such volume-weighted rates as the fed funds effective rate and GCF Repo Index®, the Desk has been also examining detailed transaction-level data for evidence that the ON RRP sets a floor on nearly all overnight money market transactions. 12  The payment of interest on reserves has been in place since October 2008, although the Federal Reserve Board recently requested public comment on proposed technical changes to the methodology for calculating IOER. The proposal intends to enhance the effectiveness of changes in the IOER rate in moving the federal funds rate into the target range when changes in those rates do not coincide with the beginning of a reserve maintenance period. Further information is available at http://www.federalreserve.gov/newsevents/press/ bcreg/20150413a.htm.
Both the Riksbank and the market have often made substantial overestimates of the repo rate in their forecasts (see Figure 5). 12 Although the market's forecasts were better than the Riksbank's during the period 2011–2013, the pattern is essentially the same – substantial overestimates and inaccurate forecasts. A brief remark is in order here. Sometimes one gets the impression from the debate that it is only the Riksbank that has produced inaccurate repo rate forecasts, while most analysts, including the market, have been quite successful. Apparently, this is not the case. One may perhaps object that the market may not produce forecasts of its own, but merely assumes that the Riksbank will follow its reporate path. But the experiences of the period 2011–2013 indicate that this is not really the case. I think this is a useful picture to bear in mind. If one wants to implement a makeup strategy in a situation where the repo rate is at the lower bound, it is probably necessary to use a more convincing approach than Delphic forward guidance. The alternative to Delphic forward guidance is called Odyssean forward guidance. This name is also taken from Greek mythology and refers to Odysseus, who had his men tie him to the mast so he would not be tempted by the song of the Sirens and steer his ship towards the cliffs.

Since last November, the three-month Libor had been held at the desired level of 0.25%. However, from mid-May it began sinking rapidly and is currently well below that level. The fall in the rate is a sign that the banking system is currently holding a very large amount of liquidity. My colleague, Jean-Pierre Danthine, will talk about this in greater detail. Interest rates on the capital market have also fallen. In June, yields on 10-year Swiss Confederation bonds fell to a record level. The low capital market interest rates reflect a higher demand for Swiss government bonds. In addition, long-term inflation expectations continue to be firmly anchored. Private companies are also benefiting from low interest rates on capital markets. Credit risk premia have fallen further and rates of interest on bank loans are also at a very low level. Since the last monetary policy assessment, the Swiss franc has appreciated against the euro. It has simultaneously depreciated against the US dollar. As a result, the trade-weighted external value of the Swiss franc has only slightly increased. The expansionary monetary policy is also reflected in the monetary aggregates. Thus, the monetary base rose to a record CHF 128.6 billion in May, and growth of the monetary aggregates is continuing at a high level. For example, M2 was growing at 10.2% in May and M3 at 7.1%. Credit growth also increased further. After slowing to 2.7% in September 2009, the rate of growth increased to 4.1% in April.
We are facing an alarming loss of biodiversity We can no longer ignore the warnings of a “Silent Spring”.i We are currently facing a global change in fauna and flora: some are rarefying or disappearing, while others are now thriving in environments that were until recently not suited for them. The figures are quite telling: 25% of studied species are threatened with extinction; scientist are talking about an ongoing 6th mass extinction, the first one caused by humankind. Yet, biodiversity is key to the resilience of ecosystems, which provide unaccounted for but essential services that sustain life on our planet, what we call “ecosystem services”. To put it in economic terms, they include the provision of basic but essential goods such as food, wood, water, etc., but also regulation services such as climate regulation, water purification or pollination. The deterioration of nature through deforestation, plastic and chemical pollution and overconsumption obviously alters the provision of those services. Since  Page 2 sur 13 1970, 14 out of the 18 categories of ecosystem services have declined according to the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES). Some of these ecosystems are critical to human life and activity: pest and disease control is an alarming example, with scientists warning of an “Era of pandemics” if we do not tackle the biodiversity crisis.ii  2.

*** To conclude, let me quote one of the most famous Dutch painters, Van Gogh, writing to his brother Theo from the south of France in 1879: “art is man added to nature – nature, reality, truth, but with a significance, a conception, a character, which the artist brings out in it”. Just like in Van Gogh’s art, it is becoming urgent that we find a way of life (in France we say “art of life” [art de vivre]) that allows men to live harmoniously within nature. We have to ‘re-embed’ our economies into nature, also in the name of our long-term economic interest. It will take time and hard work, as I stressed: this is one more reason to start soon. Thank you for your attention. Page 13 sur 13  References i Rachel Carson (1962), ‘A Silent Spring’. ii IPBES (2020), Workshop Report on Biodiversity and Pandemics. iii Dasgupta, P. (2021), The Economics of Biodiversity: The Dasgupta Review. (London: HM Treasury). iv Herweijer, C., Evison, W., Mariam, S., Khatri, A., Albani, M., et al. (2020), Nature Risk Rising: Why the Crisis Engulfing Nature Matters for Business and the Economy, World Economic Forum. v Costanza, R., De Groot, R., Sutton, P., Van der Ploeg, S., Anderson, S. J., Kubiszewski, I., ... & Turner, R. K. (2014), Changes in the global value of ecosystem services. Global environmental change, 26, 152-158. vi NGFS and INSPIRE (2021), Central banking and supervision in the biosphere: An agenda for action on biodiversity loss, financial risk and system stability.
Still, the services component of inflation continues to be the largest contributor to its increase, so medium-term risks remain present, due to the closing of output gaps and the tight labor market (figure 2). Market inflation expectations have moderated for the short term and remain around 3 percent over the projection horizon. The baseline scenario foresees GDP growing this year between 4 and 5 percent, which is the same range forecast in March. Although the economy outgrew forecasts in the first quarter, the worsened external conditions will result in output slowing down more deeply than  BIS central bankers’ speeches  3  forecast in March. Still, GDP growth will not drift substantially away from the trend, which the Board estimates at 5 percent. This projection also considers that y-o-y growth in consumption will moderate further, in line with decelerating labor income and less expansionary lending conditions than some months ago. Interest rates on consumer loans have risen lately, coinciding with a decline in the y-o-y growth of these credits. In addition, the Survey on Lending Conditions of the first quarter revealed greater constraints in the supply of consumer loans by some financial institutions. Demand for consumer loans continued to rise, according to this survey. For investment, the more persistent construction and infrastructure component – largely associated to the execution of mining and energy projects – suggests that it will remain strong in the coming quarters.

These criteria are necessary because our models are uncertain and because confidence in monetary policy cannot always be taken for granted. The criteria do not conflict with Svensson’s monetary policy research, but can be regarded as a bridge between the model and reality. Allow me to show you how the criteria were used in the work on the March Monetary Policy Report by outlining the thought process involved. Although the charts I will be presenting are a simplification , they serve to illustrate our working methods. Norges Bank’s assessment of the current situation and the forecasts – with below-target inflation and a considerably negative output gap – might, under criteria 1 and 2, indicate in isolation that the interest rate should be set very low and even be negative towards the end of 2009. This is illustrated by the green line. However, the Executive Board chose to take a less drastic course of action on the basis of the other criteria taken into consideration. Criterion 3 states that previous methods of operation should be taken into account and that the interest rate should normally only be changed gradually. With emphasis on interest rate smoothing in the loss function (i.e. criteria 1+2+3), the result is the black line. This interest rate path is still low, and lower than the path that was in fact chosen. Criterion 4 states that monetary policy should be robust and criterion 5 that cross-checking should be carried out.
Economic activity in the third quarter is estimated to have increased by 0.4% compared with the previous quarter. In 2010 we expect to see a moderate recovery. This is in line with the latest Eurosystem staff projections, which were published last Thursday. However, this expectation remains surrounded by a high level of uncertainty. In the view of the Governing Council, the risks to the outlook remain broadly balanced. As regards price developments, inflation and inflationary pressures have remained low over recent months. In line with our expectations, inflation rates turned positive again in November, reaching an estimated 0.6%. Looking ahead, we expect inflation to remain moderate over the policy-relevant horizon, in line with a relatively slow recovery in demand. 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 below, but close to, 2% over the medium term. Our monetary analysis confirms the assessment of low inflationary pressures over the medium term. In particular, we see that money and credit expansion continues to decelerate. In the case of loans to households, the latest data provide further confirmation of a levellingoff at low rates of growth. The growth of loans to enterprises follows turning-points in the business cycle with some lag. The still subdued levels of production and trade, coupled with broader uncertainty regarding the business outlook, will dampen firms’ demand for bank financing also in the coming months, especially for short-term loans.

Our experience with regard to the effects arising from EU banking groups’ activity in response to EBA’s requirements has provided a useful lesson for the future. In meetings on the Vienna Initiative II, we have many a times iterated that macroprudential policies undertaken in the euro area must take into account the relevant impact on non-EU host countries where systemically important EU bank subsidiaries operate. The home-host cooperation framework must help achieve better policy harmonization in the future, or, at least, provide for an early exchange of information in order to allow host countries to prepare in response to potential shocks. Furthermore, the functioning of supervisory colleges should provide for an effective exchange of supervisory information, and barriers to successful participation by non-EU host countries must be eliminated through combined efforts. Your institutions’ position on each of these issues is extremely valuable to provide a comprehensive view of the implications of EU authorities’ policies and banking groups’ activity in our region, as well as to assess the implications of the banking reforms currently underway in the EU. More specifically, I think that it would be useful for us to discuss along the following lines: •  What mechanisms may we use to revive credit growth in our economies, and what contribution do you expect by EU authorities and EU banking groups in this regard? •  How can we practically establish a permanent mechanism for coordination with the ECB, in the framework of the Banking Union?
Bank deposits are already uniform, robust money in the UK – indeed they account for 85% of the money in circulation for retail purposes and are generally acceptable for wholesale transactions. We have a comprehensive regulatory regime, deposit insurance and resolution and insolvency procedures to protect bank depositors. Commercial banks settle between each other in Bank of England money which helps to reinforce uniformity. Nonetheless, the tokenisation of bank deposits raises some important questions. Currently, money issued by a commercial bank can only be held by someone that has an account at that bank. It is not directly transferable from one holder to another unless both parties have an account at the same bank. In order to transfer money from the holder of an account at one bank to the holder of an account at another bank, there needs to be a transaction between the two banks which ultimately settles in Bank of England money across our books. New ledger technology developed in the crypto world could allow tokenised bank deposits to circulate freely as ‘tokenised deposit money’, in what might be thought of as a digital banknote issued by a private bank’. They would constitute claims on the issuing bank that could be held, for example in a wallet, without the holder having to have an account at the issuing bank. This raises some difficult issues about how deposit insurance would operate in the event of failure of the issuing bank. Could a bank maintain a single customer view of those who held its liabilities?

In addition, detailed EU guidelines must be in place before PSD2 can have its intended effect. PSD2 takes account of two new types of payment services: payment initiation and account information services. Payment initiation permits third parties (in addition to customers and customers’ banks) to initiate payments from customers’ accounts. A third party may, for example, be a company that offers a payment application for smart phones. Account information means that third parties gain access to customer account information and can provide customers with aggregated online information for multiple payment accounts. This change separates ownership of the account systems from the provision of payment services. This is intended to facilitate innovation and competition for customer services, on top of the account infrastructure. Payment initiation and account information may be offered as independent services or as part of a wider array of services. Platform-based service providers in particular will likely explore the possibilities for offering payment services bundled with other services. PSD2 will, in principle, promote a more efficient payment system. At the same time, we must be prepared for the possibility that an altered market structure and technological innovation may lead to new vulnerabilities and risks. This may necessitate further regulations. Norges Bank will consider measures if they are required. The aim must be the continued existence of a robust and efficient payment system. 1/5  BIS central bankers' speeches  The payment market is characterised by network effects and platform competition.