samchain/econo-pairs-v1 huggingface dataset:
The effects of this angst are already showing up in the investment numbers. An additional fly in the ointment, if you will, is the recently released downward revision for GDP growth covering last year and an announced estimate of a sizable downward revision to payroll employment. One implication of these revisions is that the economy’s underlying momentum was already somewhat less robust than previously thought, even before recent developments pointed to a less rosy outlook. The Path Forward So what will the response from the Fed be to all of these developments? Our role is to navigate a complex and at times ambiguous outlook to keep the economy growing and strong. As events unfold and conditions evolve, it’s critical we understand which developments are mere bumps in the road and those that will affect the outlook in a material way over the longer term. That means maintaining a data-dependent approach that takes into account the risks and uncertainty that are weighing on the economy. I will continue to consult everything from very granular data about individuals’ experiences of employment conditions, through to the macro projections for global growth. We need to consider all of the information available and be flexible in our response. Conclusion Low inflation is indeed the problem of this era. The current outlook of moderate growth, low unemployment, but stubbornly low inflation is a reflection of the broader economic picture—the July rate adjustment an appropriate response to ease financial conditions and support the economy.

The context of the Russian war in Ukraine challenges us to reinvent the dialogue with political authorities, for at least three reasons: because geopolitics are today a major determinant of the economy; because the energy markets, their regulation and pricing are key for inflation; and lastly because fiscal choices regarding subsidies to households or even to firms are far from neutral for monetary authorities. Another challenge, and a much more tough one, is that the populist ideology creates an atmosphere of general mistrust of institutions – and still more of independent ones. In the name of popular sovereignty, we would return to a power of elected sovereign that would be absolute – and not relative anymore. At worst, this would call into question our democracy and its necessary checks and balances. At the very least, it is imperative for us to be efficient in our mandate, and to increase our accountability. 2. Efficiency of our mandate Price stability, which is a prerequisite for long-term growth, is the primary objective of most central banks. Broader mandates nevertheless apply to some, notably the Federal Reserve with its dual objective on employment and inflation. Other central banks have expressed sensitivity to inequalities, or to other issues, and have therefore contemplated a broadening of their mandate. Some observers questioned this alleged “mission creep”, and wondered whether central banks have lost sight of their primary responsibility.
Since 9 August 2007, we at the ECB realised that we were facing a very serious situation and drew all the lessons for such events not to be repeated. The same experiences lead me to think that crisis management is essential and that it requires a lucid diagnosis as well as the ability to act not only wisely and decisively but also in a quick fashion whenever and wherever it is necessary. These are times where quick decisions are indispensable because the adverse consequences of a delayed – albeit right – decision may be considerable. Central banks, on both sides of the Atlantic, have in my opinion been lucid in their judgement of the situation, bold in their decisions and quick to take these audacious actions. Let me only mention yesterday’s decision to provide broad access to liquidity and funding in dollars. We are doing – and will continue to do – everything that is necessary to supply the requisite liquidity while preserving the solid anchoring of inflation expectations. However, we cannot, and should not, assume the role of executive branches. It is time for all of us to take action – private sector as well as public authorities – at the global level. From this standpoint, I am impressed by the concision of the Plan of Action that I signed, together with Ben Bernanke, Ministers and Governors of the G7 in Washington last Friday. This unusually concise five point plan shows that this is time for immediate action and not for eloquent rhetoric.

William C Dudley: Is the active use of macroprudential tools institutionally realistic? Panel remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the “Macroprudential Monetary Policy”, 59th Economic Conference of the Federal Reserve Bank of Boston, Boston, Massachusetts, 3 October 2015. *  *  *  It is a pleasure to be here today and to have the opportunity to talk about the potential use of macroprudential tools in the United States. Before I respond to Adam Posen, I’d like to make a few general comments on macroprudential tools. I am interested in such tools both as a U.S. policymaker and in my role as chair of the Committee on the Global Financial System of the Bank for International Settlements (BIS), a body that has done considerable work in this area in recent years. What I have to say today represents my own views and not necessarily those of the Federal Reserve System.1 The use of macroprudential tools has gotten considerable attention for several reasons. Some countries have implemented macroprudential measures with respect to the housing market that may have limited the extent of home price appreciation and made their financial systems more resilient when the boom unwound. Other countries have implemented countercyclical capital requirements that have made their banking systems more resilient. Thus, the hope is that U.S. policymakers can learn from these international experiences and incorporate effective macroprudential tools into our toolkit that could be used to limit financial stability risks.
The COVID-19 pandemic and recent developments in Ukraine, events that successively hit sharply the equilibrium state in each field of life worldwide, including economy and finances, trigger challenges to: managers of public finances; families and personal finances; as well, to everybody. This “New reality” for the 21st century has shocked financial markets and the increasing geopolitical tensions are continuing to generate consequences that may vary from relatively contained to very serious ones. Nowadays, almost the entire global economy is facing unexpected shocks, which have driven to hard and complex crisis. After a two-year pandemic period and the extraordinary measures undertaken by governments and financial authorities, the war in Ukraine has caused a new shock. These events, coupled with the implemented sanctions, have hit the global production, supply chain and public confidence, driving to an immediate effect in the upsurge of commodities 1/3  BIS central bankers' speeches  prices, like oil, petrol and food. It caused a chain of consequences, leading to an immediate and strong increase of inflation in worldwide economies, including the Albanian economy as well. To this end, they will impact the direct and indirect economic and financial equilibriums which demand for time and crucial interventions from authorities. In response, policy makers, governments and central banks across the world have already activated a set of measures for mitigating the impact of these successive and robust shocks on the economy.

£ character selection and Future Forum launch Remarks given by Mark Carney, Governor of the Bank of England  Science Museum, London Friday 2 November 2018  I am grateful to Clare Macallan and Jennifer Nemeth for their assistance in drafting these remarks and to Lizzie Levett, Emma Sinclair and Toby Davies for providing background information. 1  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  It is always a pleasure to visit the Science Museum. Its galleries and exhibitions showcase the rich history of human ingenuity in the sciences, technology, and medicine. You might think that the Bank of England has little in common with such lofty endeavours, but science spans all aspects of life, extending even to central banking. Within this Mathematics Gallery alone, there are multiple examples of where the worlds of central banking and science converge. Take the Moniac machine, which illustrates the circular flow of income around the economy using an assortment of pipes and coloured water. Or Babbage’s Analytical Engine, developed in collaboration with mathematician Ada Lovelace. This precursor to modern computers helped estimate mortality rates, techniques that are still central to underwriting life insurance policies today. The same life insurers that we regulate at the Bank of England. Among those who are supervising, modelling and policymaking, are the Bank’s very own scientists. Almost 10% of colleagues across the Bank have a science or maths degree and 1 in 10 of our graduates starting this year studied chemistry, biology or physics at university.
The financial flows (FDIs and borrowing of private and public sector) are projected to be sufficient to cover current account deficit and to provide some further accumulation of reserves. Thus the foreign reserves are expected to remain at comfortable level during 2013, indicating adequate capacity for maintaining the fixed exchange rate. In a medium run, we expect more positive effects of the FDI’s in the tradable sector on the exports, thus lowering the trade deficit, which is one of the main structural problems. The Macedonian banking sector has remained stable and sound despite the global financial and economic turbulences in the last few years reflecting orientation towards traditional banking activities at domestic market and stable domestic sources of financing. In May 2013, the total banks’ deposits were higher by 3.3% on annual basis, and what is very important,  BIS central bankers’ speeches  1  the trend of more pronounced growth in the Denar deposits relative to the foreign currency deposits from the previous three years continued. In May 2013, the Denar deposits were higher by 9.3%, while foreign currency deposits declined by 3.4%, on annual basis. Therefore, the level of euroization, measured through the share of foreign currency deposits in the total deposits went down from almost 55% in mid-2009 to 44% in May 2013, which is a positive indication for the confidence in the national currency and monetary policy credibility (providing more space for accommodative monetary policy).

In general, the current macroeconomic developments and the expected future outlook indicate a moderate recovery of domestic economy (considering expected developments for the economies of the most important trading partners and domestic drivers of growth), inflation rate in line with the expectations, a balance of payments position that ensures a comfortable level of foreign reserves and still slow credit flows. These assessments created an environment for monetary relaxation, as a contribution to higher credit growth and thus, support to the domestic economy. On that basis, in January, we reduced the key interest rate on CB bills from 3.75% to 3.5%, which is the historically lowest level. Since January 2013, the changes in the reserve requirement instrument came into force, through reduction of the base of banks’ reserve requirements by the amount of newly approved loans, but only for credits to sectors whose growth reduces the external vulnerability of the economy (net exporters and energy sector). This non-standard measure will be in effect until the end of 2014, when the need for further application will be examined. These changes in reserve requirements have already started to contribute to higher lending to previously mentioned sectors in the economy. Just last week, we have done yet another change in the reserve requirement by reducing the reserve requirement ratio on Denar deposits from 10% to 8% and simultaneous increase of the reserve requirement ratio on foreign currency deposits from 13% to 15%, as well as introducing 0% reserve requirement ratio on banks’ long term liabilities to nonresidents.
In this regard, the Bank of Albania considers remittances as an important source of income in the economy and a contributor to the Balance of Payments. From a narrower perspective, remittances are estimated to have a significant impact on Albanian households, for reducing the poverty and improving the quality of life. Even in the case of Albania, the studies performed by the Bank of Albania and the World Bank show that the income from remittances are allocated mainly for consumption, medication, and education, as well as for savings and investments, the latter mainly for residential properties. In addition to the above, the Bank of Albania treats remittances also from the perspective of their inflow channels in the Albanian economy. Recent studies show that the formal transfer channels dominate, mainly through money transfer financial institutions, and less through banks. In the meantime, remittances in cash remain at high levels, which is worth for an in-depth analysis. The World Bank survey conducted in 2016 concluded that the reasons for the limited use of the banking channels are the high costs on money transfers and the perceived cumbersome and complex procedures. To illustrate my point, according to this survey, the costs of remittances toward Albania are estimated at 9.4 per cent of the amount sent, compared to the 7.2 per cent average in the region. We are all aware that the more financial channels are used, the more finances penetrate in the economy.

The latter should aim at broadening the potential growth rate of Albania and underpinning its macroeconomic sustainability. In what follows I will elaborate on these issues, beginning first with a brief overview of the recent developments in global economy. The recovery of global economic activity persisted in the second quarter of 2010, while indirect or preliminary data show more moderate growth rates in the third quarter. Economic outlook remains highly uncertain due to the fiscal stimulus withdrawal and the private sector’s (unsatisfactory) soundness. Growth in advanced economies and in our main trading partners was moderate due to the correction of private sector’s balance sheets, weak lending and labour market, and low consumer confidence. The low capacity utilization rate has yielded weak inflationary pressures at a global level. The financial markets continue to show high levels of volatility in response to the concerns over the economic outlook and the long-term sustainability of fiscal indicators. In political terms, maintaining macroeconomic co-ordination at a global level and keeping open channels of the movement of goods, capital and technology, are considered priority measures to avoid a second recession. This would certainly provide substantial contribution to the Albanian economy, which remains a net borrower in the global market and that has benefited largely from the growth of demand and global trade in the form of higher exports in 2010. In light of these developments, and being largely affected by them, the Albanian economy has grown progressively over the year.
The failure to build adequate fiscal buffers during times of economic growth means that during recessions governments are forced to implement fiscal policies that are more pro-cyclical than would otherwise be the case. Some in this audience may respond that these policy requirements were evident to sharpeyed observers. Indeed, the ECB had been making these points for many years. But they were not so widely acknowledged as to make a difference. For every economic argument in favour of policy adjustment, a contrary one could be found justifying the path taken. This meant many euro area countries did not internalise the policy requirements of monetary union. In fact, almost the opposite policies were pursued in some countries. The lack of an adequate regulatory and macro-prudential framework meant that in many economies the banking sector supported an unbalanced and unsustainable expansion of credit during the period of low interest rates. The financial sector also became overleveraged and engaged in excessive risk taking. Although at the time many in the financial industry justified this with arguments about how financial engineering created possibilities for sophisticated risk diversification, a posteriori it has become evident that risk was seriously mispriced in the period before the crisis. National wage-setting and labour market regulatory frameworks have also proved to be inadequate. Rather than resisting nominal trends, before the crisis strong wages put pressure on price competitiveness, often justified by theories of catching-up effects. Fiscal discipline also proved too lax.

Markets expect quick, bold and “shock-and-awe” decisions on highly complex matters. They are exasperated that something can be agreed by leaders but take months to enter into force. Yet this is a necessary condition of operating in a system of 17 sovereign democracies. Decisions have to be explained, approval processes have to be followed, compromises have sometimes to be made. These dynamics were witnessed even in the US when Congress sent back the TARP in 2008. The net effect on the euro area, however, is that by the time decisions are eventually implemented the expectations of market have moved on. The impact of those decisions is then discounted. These market-democracy dialectics provide a second reason why a more integrated economic and financial union is so essential for EMU. The rationale for the original design of EMU – with centralised monetary policy, but decentralised economic policies – was linked to principles of subsidiarity and democratic accountability. This was consistent with the environment that prevailed 20 years ago. But these same principles now imply more Europe, not less. Subsidiarity is the principle that the centre should perform only those tasks which cannot be performed effectively at the national level. Can we really argue, in the current crisis, that the centre is not the more effective level to exercise, or at least coordinate, certain economic and financial policies? Democratic accountability is the principle that citizens should be able to hold their representatives responsible for decisions.
Crisis prevention – the role of monetary policy… In recent years, perhaps the most influential view of how monetary policy should respond to a rapid increase in the price of an asset, and a possible associated credit expansion, can be described as follows. Let us, for simplicity, say that we are talking about an increase in house prices that has gone hand in hand with a substantial increase in household indebtedness. Monetary policy should only respond to a rapid increase in house prices and borrowing if the central bank’s forecasts indicate that it will lead to problems such as overheating and excessively high inflation. If this is not the case, the central bank should wait and see, but be prepared to quickly ease monetary policy if the housing market were to collapse and demand in the economy were to fall drastically. The main argument for such an “asymmetric” response would be that central banks are not especially good judges of whether there actually is an asset bubble or not. The fact that bubbles are difficult to identify is of course true. Nevertheless, house prices and borrowing can in some cases rise so quickly and by so much that it is difficult for policymakers to remain entirely passive – even if it is not possible to ascertain that there is a bubble building up. If a severe downward adjustment in house prices were to occur later on, it is probable that monetary policy would receive much of the blame for having been too passive earlier.

Essentially, it all comes down to a choice between two alternatives. On the one hand, central banks can try to slow down a worryingly rapid price rise in the housing market by keeping interest rates higher than they otherwise would have been. The obvious risk is that if increasing prices actually are driven by fundamentals, then an incorrect assessment has  2  BIS Review 134/2008  been made and demand in the economy will be subdued unnecessarily. But if the assessment was correct, a rapid downward correction in house prices may be avoided, or at least mitigated, as well as a subsequent fall in demand. On the other hand, central banks can disregard the fears and refrain from raising the interest rate. If price increases in this case are due to fundamentals a needless slow down in demand will be avoided. But if prices are due, for instance, to over-optimism among households and lenders, then severe problems may occur in the future when there is a rapid downward adjustment of house prices and a subsequent fall in demand and inflation. Which of the two alternatives is preferable can always be discussed, and may quite likely vary from case to case. However, it is far from obvious that the best choice is always to wait and see when facing a rapid increase in the price of houses or some other asset.
For the New York Fed’s Markets Group surveys, see the July results at www.newyorkfed.org/markets/primarydealer_survey_questions.html and www.newyorkfed.org/markets/survey_market_participants.html. 6/6  BIS central bankers' speeches

Jean-Pierre Roth: Steps to strengthen the Swiss financial system Introductory remarks by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the news conference, Bern, 16 October 2008. *  *  *  Pursuant to art. 5 of the Swiss National Bank Act (NBA), the SNB shall contribute to the development of our economy and the proper functioning of our monetary system. This is why the SNB has decided to extend a loan not exceeding USD 54 billion to the special purpose vehicle (SPV) set up to take over illiquid assets currently held by UBS. A similar offer has also been extended to the CS Group, which has refrained from making use of such a possibility. For the SNB, this operation is highly unusual, both with regard to its scope and the reasons for it. Scope of operation As to the scope of the operation, USD 54 billion is clearly a substantial amount for the National Bank. I would like to emphasise, however, that the loan amount is entirely guaranteed by the portfolio assigned by UBS, i.e. securities valued at USD 60 billion in the UBS balance sheet. Given the fact that in the past twelve months, UBS has made aggressive write-downs on its risky positions and that its portfolio is fairly diversified (it does not only consist of toxic assets), we feel that the risk of further losses on this portfolio is limited.