samchain/econo-pairs-v1 huggingface dataset:
Paul Fisher: Central bank policy on collateral Paper by Mr Paul Fisher, Executive Director, Markets, and Member of the Monetary Policy Committee of the Bank of England, summarising recent discussions with a range of market contacts, London, 14 April 2011. This paper sets outs the Bank of England’s approach to collateral policy, which is driven by a combination of monetary and financial policy objectives and the need to protect the Bank’s balance sheet. *  *  *  I would like to thank Simon Ainsworth, Ronnie Driver, Charles Gundy, Sarah John and Alan Sheppard for their help in preparing this paper. The Bank of England, like most central banks, has two core purposes. The first is to maintain price stability, defined by a 2% CPI inflation target, mandated by the government on an annual basis. The second is financial stability, which entails detecting and reducing threats to the financial system as a whole. The Bank meets these objectives through the use of its balance sheet. It supplies banknotes and central bank reserves (the most liquid and risk-free forms of payment in the economy) to the banking system, in a process which helps to anchor short-term market interest rates around the Bank Rate set by the Monetary Policy Committee (MPC).1 And to support financial stability, the Bank provides liquidity insurance to the banking system as a whole.

DWF collateral is divided into four sets, depending on its underlying liquidity. Levels A and B are the same as the “narrow” and “wider” sets allowed in OMOs. Levels C and D go wider still (Table 1). The price for drawing depends on the collateral a firm has to offer: the less liquid the collateral, the higher the fee. Essentially, the haircuts play the role of protecting the Bank’s balance sheet while the fee plays the role of discouraging use except under stressed conditions and therefore avoiding market distortions in normal times. It also compensates the Bank for taking the liquidity risk. Table 1 Collateral eligible in post-crisis Bank operations  The Bank has been encouraging counterparties to “pre-position” collateral in the DWF, which allows us to conduct ex-ante due diligence and advise on the eligibility and likely advance rate of the collateral (ie the amount we would lend against it) were it to be called upon in a live draw. Pre-positioning provides counterparties with the insurance they need were an unexpected risk to suddenly crystallise. In that scenario, having a pool of collateral that has  5  4  See Fisher (2010), “Recent developments in the sterling monetary http://www.bankofengland.co.uk/publications/speeches/2011/speech487.pdf  framework”,  available  at  BIS central bankers’ speeches  already been assessed and is ready for use might significantly reduce the delay between an DWF draw-down application and the release of funds.6 That could be vital in a crisis.
This is a question that has been much discussed in recent years, both between central banks and within the academic world, as house prices have risen rapidly in many countries, including Sweden. This debate could in itself be a subject for a speech, so let me just briefly mention that the Riksbank’s view is that we do not consider it reasonable to completely ignore these risks, although it is not possible to give consideration to the risks in any simple manner in the normal forecasting process. We have therefore acted to reduce these risks to some extent and to contribute to a smoother adjustment in indebtedness and house prices. The approach we have chosen has in practice only meant a fairly marginal change in the timing of our interest rate decisions. Neither household indebtedness, house prices, nor other asset prices have any significance for monetary policy in themselves, apart from their effects on inflation and the prospects for the macro economy. The inflation forecast and future interest rate developments As I mentioned earlier, our work procedures have changed and developed over time. This is natural. We have had new experiences and been given new conditions along the way. As recently as three days ago, we members of the Executive Board of the Riksbank decided to change the assumption for the policy rate on which we base our forecasts – this is a step in our work on improving the bases for our monetary policy decisions and our communication.

The outreach has also been targeted at small and medium sized businesses. This process will also prompt the financial industry to increase innovation to strengthen their competitive position. This can be reinforced by market research to enhance the understanding of customers’ distinct financial needs and their risk tolerance and therefore enable the design of Islamic financial instruments that offer tangible benefits and value to customers. In addition, with increased disclosure and transparency on the manner in which Islamic financial transactions are being conducted and on how Islamic financial contracts are being executed as well as on the risk and return profiles of financial products, this will further strengthen the role of competition. In conclusion, the investment in the future needs to be undertaken by all the relevant entities in the Islamic financial sector - the industry, the regulators, the market participants, the academia and the international community. As a co-ordinated and concerted effort it will be mutually reinforcing in elevating the performance of Islamic finance. While the increasingly more competitive prevailing environment raises the pressures to produce immediate-term results, it is the investment in human capital and in research and development that will secure the long-term sustainability of the industry. It is these investments that will be the defining element of the future development of Islamic finance and its long-term success. BIS Review 47/2005  3
José De Gregorio: Autonomy of the Central Bank of Chile, 20 years on Presentation by Mr José De Gregorio, Governor of the Central Bank of Chile, at the commemoration of the 20 years of autonomy of the Central Bank of Chile, organised by ICARE, Santiago, 29 October 2009. I thank Luis Felipe Céspedes and Jorge Restrepo for valuable comments and ideas in preparing this presentation. *  *  *  The autonomy of the Central Bank of Chile is enshrined in the Constitution, specifically in the Basic Constitutional Act of the Central Bank of Chile enacted in October 1989 that constituted a fundamental change for the functioning of the Chilean economy. The Law stipulates that the Central Bank is an autonomous entity, of a technical nature, created in accordance with constitutional provisions, with full legal capacity, the full owner of its assets and of indefinite duration.

In the last decade, where inflation has been 3.2% on average, output volatility has dropped markedly with respect to previous decades (Figure 2). These results suggest that the conduct of monetary policy by an autonomous central bank has had a first-order effect on our macroeconomic performance. As for the inflationary process, the research findings are encouraging. The greater credibility of the Central Bank regarding its inflationary objective, which is confirmed directly in the market’s inflationary expectations two years ahead, has reduced the well-known tradeoff between inflation and growth. The evidence shows that today inflation is better anchored in future inflation expectations. Inflation looks less to the past and more to the target. This means that when shocks hit the  BIS Review 156/2009  3  economy, the adjustments entail a smaller stabilization cost and, therefore, more output stability, without jeopardizing the inflationary objective (Céspedes and Soto, 2007). Proof of the importance of the central bank’s autonomy and the associated gain in credibility has to do with the capacity to implement countercyclical policies. The stabilizing actions of an autonomous central bank allow it to confront negative shocks without sacrificing credibility. A good example is the recent Chilean experience. The substantial injection of liquidity and the subsequent sharp cut in interest rates as a response to the international financial crisis of September 2008 occurred within a context where inflation expectations over the policy horizon remained in line with the inflation target.
11 Boz, Gopinath and Plagborg-Moller (2017) show that a 1% appreciation of the dollar leads, all else equal, to a 0.6% contraction in trade volumes in the rest of the world. 6  All speeches are available online at www.bankofengland.co.uk/news/speeches  6  Third, a growing asymmetry at the heart of the IMFS is putting the global economy under increasing strain. Huge network effects mean the dollar has remained dominant in the IMFS despite the transformation of the global economy. At the time of the Latin American debt crisis, EMEs made up a little more than one third of global GDP. Since the last Fed tightening cycle, their share of global activity had risen from around 45% to 60%. By 2030, it is projected to rise to around three quarters. As well as being the dominant currency for the invoicing and settling of international trade, the US dollar is the currency of choice for securities issuance and holdings, and reserves of the official sector. Two-thirds of both global securities issuance and official foreign-exchange reserves are denominated in dollars.12 The same proportion of EME foreign currency external debt is denominated in dollars13 and the dollar serves as the monetary anchor in countries accounting for two thirds of global GDP.14 The US dollar’s widespread use in trade invoicing and its increasing prominence in global banking and finance are mutually reinforcing. With large volumes of trade being invoiced and paid for in dollars, it makes sense to hold dollar-denominated assets.

1.3 The necessary constraints on model risk that the package contains should not be gold plated in the European transposition 1/3  BIS central bankers' speeches  The Basel 3 Final Agreement constrains overly aggressive internal models thanks to the introduction of the output floor at the highest level of consolidation. The EU should beware of not adding unnecessary constraints that would increase the impact of the output floor in a superequivalent way. In addition, in Europe, Pillar 2 requirements also cover model risks – whereas it is not the case for US banks, which do not have a specific Pillar 2 add on in their capital requirements. We therefore have to find a way in Europe, in some form or another, to eliminate any overlapping capital charges. 1.4 The need for a stabilization of the regulatory framework after the implementation of Basel 3 finalization We are now coming to an end of this regulatory cycle with the implementation of the Basel 3 finalization. Back in November 2020, the GHoS clearly committed the BCBS to abstain from major regulatory changes in the Basel framework in the near future. We need that banks focus now on other challenges in particular those related to the sustainability of their business models and those related to the new risks such as climate related risks or cyber-risks. 2. The stress testing framework in Europe: past, present and future Now, let me turn to the topic of the stress test in this second part of my remarks.
we can buy too few imported goods for what we export. This could be corrected by strengthening the krona through a stronger nominal exchange rate or by price increases on goods subject to competition being kept lower than those in other countries. It is sometimes claimed in the economic debate that non-recurring effects of deregulation and increased competition could be utilised by the Riksbank altering its price stability target from 2% to a lower figure. However, this would involve temporary effects influencing the target formulation, which would erase the stability in the target formulation that has an intrinsic value. It is still possible to strengthen purchasing power with an unchanged operational target formulation by a nominal appreciation of the krona. It has sometimes been claimed that the “new economy” could lead to completely new economic relations. I see no reasons for such a change. It is more likely that technological developments lead to reality approaching the simplified assumptions that form the basis of many economic models, such as a large measure of competition and low transaction costs. Thus, most of the models the Riksbank uses today would function equally well or better if structural changes were to occur more rapidly in the future. Nor do I see any reasons why the Riksbank’s intellectual framework on monetary policy would need to be fundamentally changed if we were to have a period of strong growth in productivity.

The new technology made state-regulated monopolies less expedient and led to greater difficulty in upholding the regulations on the financial markets. At the same time, the deregulation processes were an important condition for the rapid success of the new technology. It is also worth reminding ourselves that the IT sector stands outside of the traditional Swedish labour market regulations. The effects may take some time The effects we have seen so far are probably the result of better economic policy and technology introduced earlier, such as computers, networks and mobile communications. However, the large productivity gains experienced in times of major technological transformation usually due not come until the transformation has reached a stage of maturity, whereby a general spread has been achieved through the new technology being used by at least half of all households and companies. With regard to the Internet, available figures indicate that Sweden has only recently passed this stage. Achieving  3  BIS Review 93/2000  the maturity stage with its large gains in productivity also requires that companies find organisational forms that utilise the opportunities provided by the technology. Tougher international competition may bring about this type of adaptation relatively quickly, but for me it is still not evident that Sweden is at a stage where the new technology has major macroeconomic effects. Further changes The majority of the effects of information technology may thus lie ahead of us.
Gent Sejko: The importance of studying technological and demographic developments disrupting labour, finance and markets Welcome remarks by Mr Gent Sejko, Governor of the Bank of Albania, at the 13th SEE Economic Research Workshop, Tirana, 5 December 2019. * * * Dear Ambassador Maître, Dear guests and speakers from academia, central banks and research institutions, Dear participants, It is a great pleasure for me to open the proceedings of the 13th SEE Economic Research Workshop, in which we present and open for discussion research projects undertaken by the Bank of Albania in the current year, and have the opportunity to get feedback from colleagues from academia, central banks and research institutions worldwide. This is a very important event for the Bank of Albania, since all the projects that will be discussed during the two days of the workshop are designed to help the analysis, decision making and implementation in the areas of monetary policy and financial stability as well as other central bank aspects. Based on this careful formal analysis, our policies have been successful in preserving monetary, macroeconomic and financial stability. Despite hardships, our economy has registered positive growth rates, and our banking system’s performance has been stable. The banking sector is well capitalized and profitable, non-performing loans have decreased and banks continue to support economic activity with credit, while managing potential shocks originated from the external sector of the economy. The agenda is rich and covers the most important areas of research related to traditional central bank activity.

These days, your participation in the workshop takes another and even more significant meaning in the wake of the tragic consequences caused by the strong earthquake. It helps to show that, despite many losses, we are resilient and will continue to work to overcome the emotional and economic hardships of this tragic event, shed the desperation, fear and despair, and return to normal activity. I wish the workshop a great success, and all guests and participants a pleasant stay in Tirana! 2/2  BIS central bankers' speeches
The Banque de France was the first to start a programme of eight experiments on a wholesale CBDC, notably with a number of Fintechs, to improve the functioning of the financial markets and institutions. If necessary, the Eurosystem could decide to issue a retail CBDC to ensure the general public have access to central bank money, especially in countries where cash payments are in decline. The ECB has created a high-level task force whose report we published ten days ago. We will now launch a public consultation, starting today, examine all regulatory and technical issues, and begin experiments at the national central banks – the Banque de France will contribute actively to this. Between now and mid-2021, the Eurosystem will decide whether to launch a project for a digital euro, which would start with an investigatory phase. And while we’re on the topic, let me just comment on the terminology used: you sometimes hear people talk about cryptocurrencies, but the term is a contradiction. You either have a currency, with all its functions and a public guarantee, or private crypto-assets. But there is no such thing as a cryptocurrency. 3/ A European mobilisation on private payment infrastructures thanks notably to the involvement of the major European banks in the European payments infrastructure (EPI) project. It is crucial that we go beyond the current national systems, and offer cross-border solutions together with a pan-European brand. There is no contradiction between the CBDC and the EPI. We could very probably need both.

However, indicators still pinpoint to existence of significant gaps compared to EU-28 in this area. Improvements in fiscal institutions, fiscal rules, public-private partnership, foreign financing partly in form of grants, improvements in public investment management frameworks are some of the possible “remedies” that might generate improvements in the infrastructure in the CESEE region. When it comes to the private sector, the focus has been put on innovative companies, which can fill the gaps in more sophisticated investments that can elevate the potential growth of the economies. Given the more limited access to banking finance for this corporate segment, alternative sources of financing are being explored, which requires concerted policy and private sector action in further and stronger development of financial markets and mobilizing available finance in a more efficient way. Bibliography 1. Transition Report 2015-2016 “Rebalancing Finance”, European Bank for Reconstruction and Development. 2. Central, Eastern, and Southeastern Europe - How to Get Back on the Fast Track?, Regional Economic Issues May 2016, International Monetary Fund. Winds of Change: Investment in Central, Eastern and South Eastern Europe, European Investment Bank, September 2017. 3. The Western Balkans: Reviving up the Engines of Growth and Prosperity, World Bank Group, 2017. 4. Report by the Working Group on Capital Markets Union, 2018, London. 5. Iorgova, S., Ong L.L., (2008), “The Capital Markets of Emerging Europe: Institutions, Instruments and Investors”, IMF working paper No. 08/103, International Monetary Fund. 6.
The policy rate increase in the United States last week is the most significant development of the recent past. In this context, in the baseline scenario that I will be presenting in a moment, the growth outlook for 2016 is revised downward and the convergence of inflation with the target is pushed back somewhat. This results in the September scenario being intensified, with stronger short-term inflationary pressures that should ease into the medium term. With this scenario in mind, in September we estimated that, to ensure the convergence of inflation with the target, it would be necessary to withdraw part of the monetary stimulus then in place. We began the process in October and continued it in December, taking the monetary policy interest rate (MPR) to 3.5 percent. In the baseline scenario I will describe, we considered measured adjustments that would be made at a pace that would depend on incoming information and its implications on the inflation outlook. The monetary policy stance will continue to be expansionary over the whole length of the projection horizon, in line with below-potential output growth and inflation declining to 3 percent. Let me now turn to our baseline scenario and the main risks we have described in the Reports I am presenting to you today. BIS central bankers’ speeches  1  Macroeconomic scenario Last November, the high basis of comparison led annual CPI inflation to 3.9 percent, down from a few months back.

François Villeroy de Galhau: Monetary policy in the face of the Covid crisis Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, to the Société d’économie politique, Paris, 25 May 2020. * * *  Ladies and gentlemen, I am very happy to join you today for this discussion, which although virtual, will be very real in terms of the strength of the ideas put forward. And I would like to extend my warm thanks to your Chairman Denis Ferrand for his kind invitation. The crisis we are living through is without precedent, in terms both of its brutality and its scale. In the face of this unparalleled storm and the uncertainty it is creating, central banks have responded and innovated, and they need to remain alert. These actions are sparking debate, and raising profound questions about monetary policy. In these troubled times, I think I should start with a reminder of the two anchors that moor our decision-making. I shall then turn to our current strategy, in order to clarify the order of priority for our objectives, and therefore for our tools. I. Two vital and permanent anchors: the mandate and independence In these turbulent times, the ECB is held fast by two crucial and permanent anchors: its price stability mandate and its independence.