samchain/econo-pairs-v1 huggingface dataset:
The U.S. monetary policy framework that exists today has proven reasonably good at laying the foundation for price stability that is a necessary condition for sustaining growth at full employment over time. Although the world of central banks is still characterized by substantial diversity in the regimes they operate under, the actions of central banks reveal on average a much greater appreciation of the benefits of price stability and a greater willingness and ability to achieve it. These gains in inflation performance have been supported by a range of factors. Luck in the form of smaller shocks, technological change, other policy actions that contributed to more rapid economic integration and greater flexibility in how economies adapt to change, and greater financial resilience have all contributed to this improvement in inflation outcomes. But monetary policy seems likely to have played a decisive role, and part of that improvement reflects the sustained improvement in the institutional framework within which central banks operate. Credibility, particularly in monetary policy, takes time to establish, and can be easily compromised. It comes not just from what you say you will do as a central bank, but from what you actually do over time, and the results of those actions. It depends importantly on the competence and courage of those asked to lead central banks, on their capacity to be flexible and creative in response to our rapidly changing world, on their ability to communicate effectively and to acknowledge uncertainty.

And we uphold the integrity of the banking system. 12. 160-plus incumbent banks and new virtual banks — including banks built by tech giants — operate in our ecosystem. They may have different fintech strategies. They may try and grow their digital banking businesses in different ways. But it’s precisely this diversity that 1/4  BIS central bankers' speeches  makes the Hong Kong banking market so dynamic and well-positioned to drive innovation. This diversity is crucial to our vision of shaping Hong Kong into a global fintech hub. 13. So Hong Kong has embraced a new era for smart banking. But what will thenext era look like? How will we bring our vision to life? I think we’re all here today with those questions in mind. 14. At the HKMA, we know data will be vital to the future of banking. Data analytics is pivotal in customer authentication, credit assessment, and compliance monitoring. Indeed, data is key to almost every banking function. It is perhaps the most powerful tool for delivering the timeless banking principles I mentioned. As we head into the next era, data will enable better service, greater trust, and more efficient capital management. 15. Going back to my dining analogy, you could say data is banking’s “secret sauce”. It makes every meal better — no matter how you serve it. And that is why the HKMA is adopting a data-centric strategy to support the future of banking in Hong Kong. 16.
That went well beyond constructive pressure to improve efficiency to destructive agony. We’ve been only too well aware of that - we could hardly not have been; and we’ve not been insensitive to it either. We have consistently taken account of the unexpectedly persistent strength of the exchange rate in both our forecasts and in our monetary policy judgements. But when you come right down to it, for as long as economic conditions between one country and another diverge, whether for cyclical or structural reasons, there is a choice. Countries can either aim to stabilise their respective domestic economies, accepting that that may mean exchange rate volatility, or they can aim to maintain exchange rate stability, accepting that that may destabilise their respective domestic economies. These are the horns of the uncomfortable dilemma we have been on. I have no doubt, in terms of the macro-economy as a whole, that we have been right to persist in aiming to stabilise our domestic economy - the facts speak for themselves. It is possible - even perhaps likely - that our dilemma may now become less acute, at least for a time as the euro strengthens to a more sustainable level. Our best chance of maintaining that happier position - if indeed it occurs - is to persist in domestic stabilisation and structural reform alongside our European partners, but it is difficult to be confident at this stage that the dilemma will not re-emerge. BIS Review 50/2000  2

Their main concern is a perceived lack of diversification to ensure that the senior tranche can be indeed as safe as claimed because correlations among several countries’ debt could increase in a stressful situation (as occurred during the financial crisis). Also, it may be difficult to sell the junior tranche at coupons that do not fatally compromise the overall economics of the synthetic security issuance. Indeed, if the junior tranche had to be placed at a relatively high coupon, then the senior tranche would need to offer a lower coupon than Bunds, a doubtful selling prospect. This would likely render the economics of the SBBS as unviable, which would be very unfortunate. These obstacles could be overcome if, for instance, a small first loss tranche were to be covered by public guarantee, jointly provided by member states. Such contingent liability could be limited to a reasonable level. The success of the synthetic European Bonds would have significant benefits for financial integration and for the banking and capital markets unions. Alternatively, a European entity could issue e-bonds as a pure securitisation of sizable amounts of national sovereign bonds but with a preferred creditor status over national sovereign bonds. Such a structure would be less efficient and could increase the cost of issuing the nonpreferential part of national debt that is not included in the securitisation. However, this could even act as a disciplining device and would not necessarily imply an increase in the costs of the total debt issuance. The amounts achieved could nevertheless be considerable.
Although the upward pressure on commodity prices has taken a time-out with the slowdown in world growth, in a year or two it may very well be a problem that central banks will once again need to manage. At the same time, it is worth pointing out that this need not necessarily be a big problem. As I have observed, we now know a lot more about how monetary policy should be conducted than we did when I first arrived at the Riksbank in 1976 – in between the two oil crises. The problem of rising commodity prices can be managed within the prevailing framework for monetary policy. Essentially, it is a question of preventing what happened during the 1970s, namely that the inflationary impulses that the oil price shocks entailed were allowed to become entrenched and to spread to wages and other prices. But it is also important that the policy is not so tight that there are overly negative effects on production and employment. Of course, this is not an easy balancing act. But I can assure you that such deliberations lie behind every individual interest rate decision taken by the Executive Board. …the debate on monetary policy and house prices,... Another question that has arisen during my time as member of the Executive Board, and which is also fairly controversial, is how monetary policy should react when house prices and household indebtedness increase rapidly, which was the case in Sweden and many other countries until quite recently.

The inflation target for monetary policy, the fact that the Riksbank now has statutory independence and the fact that we now have sound public finances, a budget ceiling and balance targets for fiscal policy – all of this has contributed to much greater stability in the economy than we had in the 1970s and 1980s. The current regulations mean that economic policy as a whole can never seriously clash with the monetary policy target in the way it actually sometimes did during the period with a fixed exchange rate regime. Both public authorities and banks also learned a lot about financial stability during the crisis in the 1990s. The Riksbank now has an organisation that continuously analyses the stability of the financial system and maintains a preparedness to act in a potential crisis situation. This gives us the opportunity to detect and counteract at any early stage any changes and vulnerabilities that could lead to a serious crisis. It also makes it easier to manage the problems if a crisis were to occur. The experiences of both the Riksbank and others have definitely given us better resilience to the current global financial crisis than we would otherwise have had. There are several reasons why we now have greater credibility and better conditions to do our job efficiently. One is most probably that openness and clarity have long been, and still are, of central importance.
As regards gross capital formation, investment in housing will be spurred by the generation of employment and the availability of low-cost financing. This latter factor will also be conducive to business investment, further to the far-reaching clean-up of corporate balance sheets in recent years. With respect to external demand, exports may be expected to continue outgrowing the rate of expansion of the very markets on which they are targeted, which reflects the gains in competitiveness I referred to earlier. But I believe mention should also be made of a structural change, namely the most notable growth in the number of Spanish companies permanently – not just occasionally – orienting their activity towards foreign markets, without forgetting the gains in market share in their domestic markets, as gains in competitiveness enable firms to compete better not only abroad but also, obviously, in the domestic market against imports. Risks The Spanish economy has moved into 2018 on the back, we may say, of significant expansionary inertia. On the external front, and in Europe as a whole, we do not yet know and it is not easy to estimate the impact that the United Kingdom’s exit from the European Union may have, the impulses that the protectionist policies in various countries are prompting and the effects that may stem from the re-balancing of the Chinese economy.

However, substantial cross-country differences persist in this area, with unemployment levels ranging from below 4% in Germany to 20% in Greece. The favourable financing conditions associated with the extraordinary monetary policy measures implemented by the Eurosystem have no doubt been one of the essential determinants behind the economic recovery transforming into a vigorous expansion. To illustrate this, the estimates made by the Banco de España suggest that the monetary policy measures contribute to accounting for practically half the euro area economy’s observed nominal growth since mid-2014. Adding to this is the greater buoyancy of world trade, which recouped growth rates not observed in the five previous years. This result reflects the favourable cyclical juncture at which many advanced and emerging economies now stand, but also a true recovery in the sensitivity of trade to global growth, despite the protectionist threats that have emerged and that may put a brake on this fundamental engine for economies as open as the European ones are. The strength of exports has contributed notably to sustaining the greater buoyancy of the aforementioned investment. Another factor contributing to the expansion has been the headway in the ongoing deleveraging that households and firms have had to undertake. Currently, in the area as a whole, household and corporate debt is drawing closer to observed pre-crisis levels, with a greater correction in the more vulnerable countries being discernible. Fiscal policy, too, retains at present a more neutral stance, following the public finances consolidation process pursued.
Christian Noyer: Possible ways of improving the process of rating Speech by Mr Christian Noyer, Governor of the Bank of France, at the Symposium on financial ratings, organised by the Cercle France-Amériques, Paris, 12 December 2007. *  *  *  Ladies and gentlemen, It is a great pleasure and honour for me to speak at this conference organised by the Cercle France-Amériques and close the rich and lively round table discussions and the previous speeches on rating agencies and the financial crisis. In the current state of turmoil, rating agencies have attracted a large amount of criticism. My intention is not to enter into this discussion, but rather to make a few remarks on the rating process itself and the possible ways of improving it, in the light of the recent events. Preliminary remarks An essential function of financial markets is to collect and process information. This information is used to assess the risk and return on the various assets, and therefore to help price discovery and more generally to take investment and financing decisions. However, the process by which this information is factored into prices is complex. Economic agents do not all have the same access to data and processing capacities. There is therefore an asymmetry of information on the markets, which is at the root of well known market failures: adverse selection (whereby lower quality investments are more readily financed than “good” projects) and moral hazard (which encourages investors to take excessive risks).

After all, information is a  2  BIS Review 2/2008  public good and rating agencies are the providers of this good. But the case for further regulation has not as yet been compelling. First and foremost, we should consider the contents of possible improvements. I would pinpoint three areas, among others, for consideration: first, greater transparency of rating methods and the overall role of rating agencies in the securitisation process. Second, a marked difference in the metric used for rating bonds and structured products, which would restore confidence in ratings. This could be done in two ways, which could also be combined: either by adopting another rating scale for structured products (with another symbol for example); or by including an additional measure in the credit rating, in particular on its volatility in times of market or liquidity stress. Third, a specific rating for liquidity risk. I am aware that rating agencies are considering this, despite the difficulties of such an exercise. We must hope that the discussions currently underway in international fora, such as the FSF and groups of central bankers in which the Banque de France is actively involved, will restore the integrity of the ratings system, given its prominent role in the development of modern financial markets. Ladies and gentlemen, thank you very much for your attention. BIS Review 2/2008  3
The unemployment rate is still near 6.5 percent, low from a historic perspective, but the creation of salaried jobs has remained slow and surveys reveal increased uncertainty about the future behavior of the labor market. For companies, the greater pessimism has coincided with low profitability levels and investment conditions they see less attractive. Along with this, inventories are still judged as excessive despite repeated reductions in the past few quarters. As mentioned earlier, domestic credit cost has become more favorable, in line with the substantial reduction of the monetary policy rate that took place in the past year (figure 6). Long-term interest rates also declined significantly during the last year and a half, mainly responding to monetary policy actions (figure 7). Still, real annual growth in consumer and commercial lending is low, in some cases in its minimums of several years. The exception is mortgage credit, which is still growing strongly. The September Bank Lending Survey reveals a tightening of supply, but more importantly a drop in demand. The baseline scenario sees output growing 1.7 percent this year, marginally below the range foreseen in September. This reflects the aforementioned weakness of economic activity in the third quarter and its extension into the last quarter of the year. It also reflects that, so far, consumer and entrepreneurial expectations have failed to post the improvement that was expected some months ago.

By regions, it is worth noting the widening divergence between the United States – with a more consolidated recovery – and other developed economies, such as the Eurozone and Japan, which have made further downward revisions. In the emerging world, prospects are also weaker, with Latin America making the bigger downward corrections. In the baseline scenario, our trading partners are expected to grow 3.5 and 3.9 percent in 2015 and 2016, respectively (table 2). In the baseline scenario, external financial conditions and prospects will be less expansionary than they were this year, but will remain favorable from a historical perspective. In the United States, the Federal Reserve Board ended its asset purchase program and is expected to raise the federal funds rate in 2015, probably pushing US long-term rates up. The Eurozone and Japan have pursued a more expansionary monetary policy, because of weaker economies and deflationary risks, and further efforts in this direction are expected in the coming quarters. Thus, long-term interest rates in the main developed economies continued to recede or remained low. The better relative performance of the United States compared with the rest of the world has led to an overall strengthening of the dollar, affecting the other currencies, including the Chilean peso. In Chile, its trajectory has also been influenced by the adjustment of the local macroeconomic scenario, changes in monetary policy and the decline in copper prices (figure 8). The drop in commodity prices has triggered important changes in the world inflation outlook.
Nevertheless, there still remain a number of challenges for banks and financial supervisory authorities with regard to internal models. For instance, the calculation of a bank's risk-weighted assets may mean that several thousand parameters must be calculated. Therefore, it is almost unnecessary to point out that the complexity of the calculations of the banks’ capital requirement can be considerable. It is then natural that some form of safety net is needed, to ensure the banks’ risk weights do not fall too low. ...and a floor for risk-weighted assets will be introduced The Basel Committee has therefore discussed introducing a new floor for riskweighted assets that prevents them from falling too low. The Basel II Accord contained this type of floor, but it has been implemented in different ways in different countries and now needs to be revised. The new floor will in practice mean that no bank is allowed to have risk-weighted assets below a percentage of what they would have been if the Basel Committee's standardised methods had been used. Within the scope of these standardised methods, the banks are not given the opportunity to use internal models to determine risk weights. These standardised methods are currently used by smaller banks that do not use internal models. There are several other reasons for this proposal as well. In addition to the fact that a floor would contribute to increased transparency it will make it easier to compare banks’ capital levels over time. This will enhance confidence in bank’s capital ratios.

With regard to real GDP growth, it appears that the recovery in the euro area has continued into 2004, following quarter-on-quarter growth rates of 0.3-0.4% in the second half of 2003. Recently released data on production and demand as well as confidence indicators have been mixed, implying some short-term uncertainty, while preliminary information available after the tragic events in Madrid on 11 March does not suggest a major impact on confidence. We will continue to monitor the situation closely. On balance, there is currently no evidence challenging the assessment of continued, though modest, real GDP growth in the euro area over the short term. More fundamentally, the conditions remain in place for the recovery to continue in 2004 and to strengthen over time. First, global economic growth is robust and broadly based, both geographically and across sectors, thereby providing a positive external environment for the euro area. In this context, we expect euro area exports to grow significantly this year and next, despite some past losses in price competitiveness. Second, on the domestic side, investment should be helped by favourable financing conditions, an improvement in corporate earnings and spillover effects from global demand trends. Some signs of an improvement in fixed capital investment are already discernible in the Eurostat data for the fourth quarter of last year. As regards private consumption, growth in real disposable income should lead to increased spending, in particular because there are no financial constraints for households which would pose obstacles to higher expenditure.
Third and not least, national reflexes are still present, with countries reasoning vis-à-vis “their” banks and “their” financial centre. The result is that each European country, and the EU as a whole, are losing to the benefit of London and the United States – or to the benefit of foreign Bigtechs tomorrow. All in all we have to accept the idea that instead of a single European financial centre, we will have a polycentric network of financial centres – all the more since the digital era encourages it. And accept that there will be no winner-takes-all country, but several pan-European cross-border financial players. In this early 2022 nevertheless, there are at least four reasons to believe that we can breathe new life into Banking Union and CMU: There is growing awareness that European strategic autonomy matters and that financial sovereignty is part of it. This shift started with the Covid crisis but it is being underlined even more starkly now by geopolitics. The two “great transformations” ahead of us, digital and ecological, will require massive investments. This calls for common financing from not only public but also private sector. We should rebrand the CMU in a way that better reveals its goals: financing our two major transformations. I proposed some time ago to rebrand it “Financing Union for Investment and Innovation”, or “Financing Union for Sustainable Investment” – Christine Lagarde suggested a “Green Capital Markets Union”.

Monetary policy decision Before commenting our decision today, I would like to point out the changes that are shaping our current environment. In December 2005, when the present cycle of interest rate hikes began, we were concerned with the normalisation of the interest rate level – at the time the Libor was at 0.75% – while allowing the economy to reduce its level of unused resources. Our concern now is to ensure that monetary conditions are such that the healthy state of the economy does not jeopardise price stability in the medium term. We are still observing that the competitive pressure in the market is high, the labour market very flexible and that movement in the monetary aggregates is moderate. However, my analysis of the current situation has demonstrated that the inflation outlook has deteriorated in different respects since our last assessment: higher oil prices will have an impact on the consumer price index; economic performance, which is better than expected, will result in an improved utilisation rate and increase pressure on prices and, finally, a renewed weakening of the Swiss franc has neutralised the intended tightening in monetary conditions. Today's decision to raise the target range for the three-month Libor by 25 basis points takes into account this deterioration in the outlook for price stability. Inflation forecast graph I will now turn to the last part of my remarks. What is our inflation forecast?