samchain/econo-pairs-v1 huggingface dataset:
Lower tax on productive capital or companies may lead to more companies being established and thereby raise potential output. Similarly, lower tax on labour or increased educational inputs may generate an increased supply of labour and also influence wage formation. These are examples of the numerous ways in which changes in tax and expenditure systems are likely to modify economic opportunities and promote conditions for good growth without the attendant capacity shortages that generate price pressure. Current fiscal policy The trade-off between monetary and fiscal policy — the policy mix, as we economists like to say — has improved considerably in the present decade. The rapid accumulation of government debt has ceased and the stock is now being reduced. While the consolidation of government finances has made the fiscal stance restrictive, it has been possible to lower interest rates and this in turn has stimulated investment, economic activity and employment lately. This is accordingly a considerable improvement compared with the early 1990s, for example, when factors such as very weak government finances led the Riksbank to keep interest rates up at a time when government debt was rising markedly. BIS Review 77/1999  2  Government debt and budget balance Per cent of GDP.

In addition, emerging-market rates have become extremely sensitive to global monetary policy developments. To contain repercussions on the Turkish economy, we designed a monetary policy framework composed of a wide interest rate corridor and an active liquidity policy. The CBRT’s wide interest rate corridor and the tight liquidity policy strengthened the resilience of the Turkish economy against global shocks and proved to be effective in pursuing the primary objective of price stability. The wide interest rate corridor enables us to raise shortterm rates temporarily above long-term rates when faced with shocks and to keep the yield curve nearly flat or inverted. Accordingly, Turkish lira-denominated long-term rates remain more stable and the economy becomes less sensitive to global long-term interest rate shocks. Moreover, a flat or inverted yield curve constitutes an effective monetary policy stance that supports disinflation. In fact, especially following the strong monetary tightening of early 2014, we all saw that the sensitivity of domestic markets to global interest rates weakened substantially and core inflation indicators have improved significantly (Chart 7). In the upcoming period, following the start of normalization of global monetary policies, volatility in long-term interest rates may decline permanently thanks to forward guidance policies. According to this baseline scenario, the need for a wide interest rate corridor in our country may diminish over time. In that case, we may simplify the operational framework of the CBRT’s interest rate policy gradually.
10 / 19  BIS central bankers' speeches  11 / 19  BIS central bankers' speeches  12 / 19  BIS central bankers' speeches  13 / 19  BIS central bankers' speeches  14 / 19  BIS central bankers' speeches  15 / 19  BIS central bankers' speeches  16 / 19  BIS central bankers' speeches  17 / 19  BIS central bankers' speeches  18 / 19  BIS central bankers' speeches  19 / 19  BIS central bankers' speeches

The financial crisis and the housing bust created headwinds to the recovery in part through adverse impacts on the mechanisms of monetary policy transmission. The topic of today’s workshop is important for understanding how to gauge and potentially improve the transmission of monetary policy to the household sector. It is important that we correctly identify and to the greatest extent possible quantify the forces that have been acting on the primary-secondary spread. This requires bringing a broad range of informed perspectives to the table, perspectives that many of you have. For this workshop to succeed, we need for you to be as open, frank and precise in your discussions today as possible. President Rosengren and I thank you for your participation in this effort and we look forward to the key findings from the workshop. BIS central bankers’ speeches  3
However, the timing of the rise has been repeatedly postponed in our forecasts and inflation has instead fallen. I will provide some perspective on why this has happened and discuss various factors that might explain this development. Low inflation in Sweden early on, but now also a global phenomenon Sweden is not the only country where inflation is currently low. Around half of all the OECD countries have had an inflation rate that has on average been below 2 per cent during the past two years. The trend also appears to be strengthening. During last year, inflation was  1  The CPIF is the consumer price index (CPI) with a fixed interest rate and aims to eliminate the direct effect of changes in the repo rate from the CPI. BIS central bankers’ speeches  1  below 2 per cent for around two out of three OECD countries. Of course, not all of these countries have an inflation target that is 2 per cent and in the countries which have an inflation target, this may be formulated in different ways. It is nevertheless clear that many central banks, in addition to the Riksbank, are currently undershooting their targets. However, inflation fell several years earlier in Sweden than in other countries, and Sweden is one of the OECD countries that has had the lowest inflation in recent years (see Figure 1). This is despite the fact that growth has been higher and the employment rate has not fallen as much as in many other countries.

The assumption underlying both reports was that the Central Bank’s key objective would continue to be price stability, as is mandated by law, and that the exchange rate of the króna would remain flexible, although it would not need to be entirely free-floating. I will not explain the grounds for these assumptions here, as they have been discussed widely, except to point out that it is unrealistic to entrust monetary policy with objectives other than those it has the chance to fulfil using the available instruments, and that adopting a fixed exchange rate would eliminate the advantages of an independent currency and independent monetary policy without eliminating the disadvantages. Therefore, policy formation lies in finding a framework that can work under the above-described conditions. There were a number of drawbacks to Iceland’s pre-crisis monetary policy framework. A major flaw was the lack of an adequate response to the excessive capital inflows that contributed to credit and asset price bubbles and domestic residents’ significant foreign exchange risk, which was to a large extent unhedged. Furthermore, monetary and fiscal policy were not well enough aligned, and the same can be said of other Government decisions that affected demand. The burden on monetary policy was therefore greater than it would have been otherwise, which further stimulated capital inflows. This, together with strong demand, pushed the real exchange rate higher than it would have been otherwise and exacerbated macroeconomic imbalances, as could be seen most clearly in a sizeable current account deficit.
Ravi Menon: Powering the next stage of Singapore FinTech Speech by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Singapore FinTech Festival “The Green Shoots Series – Leading Through a Crisis: Up Close and Personal with Mr Ravi Menon”, Singapore, 13 August 2020. * * *  Five years ago, we had a vision – to make Singapore a Smart Financial Centre. A financial centre where innovation is pervasive and technology is used widely – to increase efficiency; to create new opportunities; to manage risks better; and most importantly to improve people’s lives. A new buzzword was emerging on the scene – “FinTech”. We set our goal to become a leading global FinTech hub. At the core of our drive was a conviction that technology will fundamentally transform financial services … … that if our financial sector stood still, we would be swept away by the tides of technological changes. And the tides were coming in fast: digital and mobile payments; block chains; cloud computing; big data and analytics; AI and learning machines. Together with the industry, MAS set about creating a FinTech ecosystem that embraced both incumbents and insurgents. We wanted to facilitate the digital transformation of established financial institutions so that they can innovate and compete with the best. We also wanted to support FinTech firms outside the financial sector who were innovating new ways to provide financial services.

BIS Review 27/2004  1
Between August and October, probably on the peak moments of the last financial turbulences in the developed world, many central banks stopped the process of interest rate raises, and many also changed the direction of changes in their monetary policies to more expansive ones. In Chile, after raising MPR by 200 basis points during the first half of 2011 and stating that there were still some increases to be made, in August we moved towards a neutral stance. In October, considering the envisaged consequences of the deterioration of the international scenario, we announced that we would increase monetary impulse if we foresaw that this situation could have a negative impact on our economy. Thus, in January of this year we lowered the MPR by 25 basis points. Now we have announced that new monetary policy actions will depend both on our assessment of the effects of the international scenario on the domestic economy as well as on the evolution of the domestic economy itself. Allow me to present you our vision of what is going on in the world and how it will affect us. Particularly, to do so from a monetary policy perspective. The current international scenario The onset of 2012 has surprised us with a considerably calmer state of affairs than we expected a few months ago. The Eurozone situation is far from being solved. There are many challenges ahead, among them increasing productivity in many peripheral economies. Nonetheless, significant progress has been made.

Since imbalances persist on the Swiss mortgage and real estate markets, it is important that banks take adequate account of risks when granting mortgages. We are confident that the banks are aware of these risks. We are also confident that they will not use the latitude afforded by this access to capital to pay dividends or buy back shares, but rather to fulfil their economic function. In addition to facilitating lending, the SNB is helping to stabilise the economic situation through its expansionary monetary policy. To ensure appropriate monetary conditions, we must counteract increased upward pressure on the Swiss franc. We have therefore decided to scale up our foreign exchange market inventions – a tried-and-tested instrument – to shield the Swiss economy. Ladies and gentlemen, within the scope of its mandate, the SNB is doing everything it can, in cooperation with the Federal Council and the authorities, to mitigate the economic impact of the coronavirus crisis on the population and on companies. Page 2/2
The real need is to convey our reaction function, which publishing a path for Bank Rate would not obviously accomplish. We need to communicate how we are likely to react to the different types of shock that can drive the economy away from its steady state path. A complete specification is not feasible. We do not have a 100% correct model of the economy. And policy cannot sensibly be described by a simple mechanical rule but, rather, is determined by the judgment of policy makers, with the composition of the one person/one vote committee evolving over time. But at any particular time, some possible shocks – and so sources of risk to the inflation outlook – seem more important than others. As the Governor has announced, 29 the MPC is therefore planning to do more to explain our collective assessment of risks. 27  Before I was a member of the MPC, I was on the secretariat, so I have attended nearly every MPC meeting since 1997. 28  See response to question 285 in oral evidence to the House of Commons Treasury Select Committee inquiry on “the Monetary Policy Committee of the Bank of England: Ten years On”, April 2007. 29  King, M. A. 2007, “The MPC ten years on”, lecture to the Society of Business Economists, May. BIS Review 66/2007  7  Communications about the transmission mechanism, and the place of money within it Grasping our reaction function requires an understanding of how we think the economy works.

Jean Claude Trichet: Hearing at the Economic and Monetary Affairs Committee of the European Parliament Introductory speech by Mr Jean Claude Trichet, President of the European Central Bank, at a hearing before the Economic and Monetary Affairs Committee of the European Parliament, Brussels, 7 December 2009. *  *  *  Dear Madam Chair, Dear Members of the Committee on Economic and Monetary Affairs, This is our first meeting since the entry into force of the Lisbon Treaty. The new Treaty is a reason to celebrate: in Europe generally, here at the European Parliament, but also at the ECB. It will make the Union stronger, more effective and more efficient. The powers and responsibilities of the European Parliament increase. The ECB formally becomes an institution of the European Union, and all its essential features, above all its independence, are confirmed. Dans le cadre du nouveau traité, nous nous réjouissons de notre collaboration à venir avec le Parlement. La qualité de cette coopération a été exemplaire à mes yeux au cours de ces dernières années. Unsere heutige Anhörung ist drei wichtigen Themen gewidmet: erstens, unserer Einschätzung der aktuellen wirtschaftlichen Lage; zweitens, unserer Exit-Strategie zum Auslaufen der außergewöhnlichen geldpolitischen Maßnahmen, die wir in dem Höhepunkt der Krise eingeführt hatten; und drittens, dem Thema der systemischen Risiken im Finanzsystem. 1. Economic and monetary developments  The economic situation and outlook have continued to improve since my previous hearing before this Committee ten weeks ago. The euro area economy shows increasing signs of recovery.
In our assessment, the accommodative monetary policy has contributed to strengthening economic growth and creating the necessary conditions for maintaining price stability, through a number of channels. First, the accommodative monetary policy has contributed to lowering the interest rates in all the products in the financial market. The monetary stimulus is assessed to have been transmitted completely. The average interest rates on credit, deposits and 12-month T-bills in ALL were respectively 0.8, 0.5, and 1.5 percentage points lower than in the previous year. Second, the reduction of financing costs contributed to the expansion of credit. Credit portfolio in ALL to private sector grew by 10.2%, over 2016, while total credit grew by 3.2%. The growth of credit in the Albanian lek is a welcomed development, as it expands the monetary policy scope and serves to fostering financial stability, by reducing the economic agents’ exposure to the exchange rate risk. Despite this positive development, credit recovery remains sluggish, due to the limited qualitative demand and the banks’ conservative credit policies. For 2017, we expect a better performance of lending to the economy. The expansion of private demand is expected to absorb enterprises’ excess liquidity, thus increasing the incentives for boosting credit demand. Similarly, the credit supply is expected to rise, in line with the lowering of uncertainties and reflecting the implementation of the action plan of measures for reducing non-performing loans and measures for Sound Credit Growth.

Preparing a plan for reducing euroisation in our economy is a joint commitment by a number of authorities and the Bank of Albania is in the process of identifying measures that may be taken in this regard. Amid a complex and challenging economic and financial environment, the coordination of the monetary, micro and macro-prudential policies assumes primary importance in promoting monetary and financial stability. In 2016, the Bank of Albania has worked with the same intensity in all three aspects, aiming at an optimum calibration for them. Following, is an overview of our work for maintaining and promoting financial stability. 3. Promoting financial stability and sound lending In accordance with its mandate and institutional responsibilities, the Bank of Albania is jointly responsible for safeguarding financial stability in Albania. It communicates its assessment on the financial stability regularly, and coordinates its policies with other institutions, through the Financial Stability Advisory Group (FSAG). With regard to financial stability, during 2016, we continued to work for drafting a comprehensive framework of the macro-prudential policy and constructing macro-prudential instruments. This framework is based on recommendations of the European Systemic Risk Board and standards of the Financial Stability Board. Moreover, in accordance with its institutional mandate and responsibilities, the Bank of Albania is tasked with safeguarding the stability of the banking system and addressing potential risks that may jeopardise it.
Lorenzo Bini Smaghi: From Tuscany’s 19th century currency, the fiorino, to the euro – dialogue on international finance Speech by Mr Lorenzo Bini Smaghi, Member of the Executive Board of the European Central Bank, in the Sala Luca Giordano at the Palazzo Medici Riccardi, Florence, 15 May 2008. *  *  *  I’m very pleased to come back to Florence to consider a highly topical subject linked to the effects of the financial turmoil on the world economy. To understand the current economic situation and the current short to medium-term prospects we need to take a step back and consider the imbalances that were building up on our continent until mid-2007, imbalances that were evidently unsustainable and that underlie the corrections we are going through. We have to distinguish three main imbalances. In chronological order, the first one concerns international payments. Over the years, the United States has accumulated huge deficits on its current account which have grown out of a lack of domestic savings. The US economy was essentially growing by borrowing from the rest of the world. In 2007 the US current account deficit amounted to over 6% of its GDP. For years the problem of the sustainability of America’s external imbalance has been emphasised, especially in Europe, which feared the risk of a disorderly unwinding with destabilising effects on the financial markets.

The setting of working and wage conditions having regard to general or sectoral criteria, without taking into account the specific situation of each company, has been one of the main causes of our structural imbalance in terms of employment, and one of the factors that explains why Spain has always, even at times of greater economic activity and higher growth, had a far higher unemployment rate than the euro area, and indeed the European Union, as a whole. It will not be possible to reduce our structural unemployment rate in a collective bargaining framework that does not take into account productive, commercial and cost conditions, that is to say each firm’s conditions of competitiveness. The duality of our labour market – whose adverse effects on productivity, on decisions regarding investment in human capital and on collective bargaining itself nobody denies – cannot be scaled back if there continues to be a major imbalance between the labour costs (including firing costs) of permanent jobs and of temporary ones. Moreover, it is unlikely that we can manage to reduce duality and, in turn, to increase total employment – which must be the main priority – simply by raising the labour costs of temporary employment. 2. The reduction of public debt  Our second challenge is to contain the growth of public debt and, then, to reduce its volume.
•  Concern that instrument complexity and transaction volume could overwhelm settlement systems. Post 2008, these issues sound all too familiar, of course. Of particular note, the report stated that: A major source of concern derives from the difficulties in pricing new instruments and the possibility that many new instruments appear to be, at least to some degree, underpriced, that is, that gross income from the transactions is insufficient, on average, to compensate fully for their inherent risks. Since it may be necessary to accumulate experience over a variety of circumstances and cyclical conditions in order for market participants fully to understand and assess all elements of risk, this problem may appear especially before the market for a new product has reached maturity. The recent financial crisis in many ways represented the realization of many of these concerns. Some observations: •  1  2  The crisis demonstrated how the combination of poor underwriting, financial engineering, and leverage could transform what had been viewed as relatively safe markets for US residential mortgages, magnify risks in those instruments through securitization and leverage, and transmit the risks around large parts of the globe. Recent innovations in international banking (Cross Report). BIS central bankers’ speeches  •  The speed at which liquidity deterioration, market dysfunction and financial institution distress set in was breathtaking – far faster than experienced in earlier crises.

Measures to raise both the quantity and quality of capital at the large, systemically important firms, known as G-SIFIs, such as Basel III and enhanced prudential standards, are aimed at reducing the probability of failure. The work on recovery and resolution planning, as set out in the Key Attributes for Effective Resolution Regimes, a new global standard published in 2011, aims at mitigating the cost of failure by developing the institutional arrangements and concrete plans to place a failing G-SIFI into resolution. These initiatives at the global level have been mirrored at the national level in many countries. I’d draw special attention to stress testing in its role in reducing the probability of failure and to resolution planning in reducing failure’s social cost, because both represent an important shift of focus for the supervisory community. Both processes focus attention on the far adverse tail of the probability distribution of outcomes for a firm. Technology, financial modeling, and risk management theory and practice have greatly expanded and enhanced the supervisors’ ability to analyze and address those severe adverse outcomes. Another part of the regulatory reform agenda addresses weaknesses in short-term funding markets. Efforts here include seeking to reduce the reliance on intraday credit in the tri-party repo market, to strengthen risk management in the repo and other short-term funding markets, and to make progress toward developing a collateral liquidation mechanism to prevent fire sales of collateral in distressed markets.