samchain/econo-pairs-v1 huggingface dataset:
In the autumn of 2005, in conditions of inflation observed and projected to be “normal”, the ECB’s monetary analysis began to record a change in the composition of M3 growth: from a model of growth explained by money demand factors – that we would define as irrelevant to the evolution of spending and prices – to a dynamic associated with increased credit creation – that is, to banks’ money supply factors. These changes were accepted as indications that the tenor of monetary policy, despite the moderation of inflationary pressures observed and projected, had become too lax. A new cycle of monetary policy tightening was initiated in December of that year, based on considerations inspired by the monetary pillar, where monetary and financial stability is an intermediate objective for attaining a more balanced development of macroeconomic variables and hence price stability over the long term. In a globalised world, the international financial crisis has not spared the euro area. But today we know that preventive action by the ECB, implemented mainly by considering monetary indicators, has mitigated the impact on incomes and inflation.6 The two operations of three-year refinancing (LTROs) The monetary analysis has also been an essential strategic tool in diagnosing and managing the crisis. In this regard, the analysis that led to the more recent non-standard monetary policy measures can illustrate how the systematic monitoring of banks’ liabilities – money in its broadest sense – can provide guidance on the risks faced by the economy as a whole.

Zdeněk Tůma: Monetary policy governance - comments on the institutional set-up of inflation targeting in Albania Speech by Mr Zdeněk Tůma, Governor of the Czech National Bank, at the Bank of Albania Open Forum on "Preconditions for launching inflation targeting in Albania", Tirana, 1-2 December 2005. *  *  *  Monetary policy is without any doubt one of the most powerful tools for macroeconomic management. While the theoretical background for target-setting is well established, the task of making practical arrangements for conducting policy in order to achieve targets in an efficient way is certainly a very difficult one. Designing a well-functioning system for decision making is thus at the very top of the agenda for any central bank striving to establish a sound monetary policy framework. It is therefore highly commendable that the Bank of Albania is addressing the related issues well in advance. Today, I would like to make several comments on the issues where I feel the Czech National Bank can pass on some observations and know-how based on its almost eight-year experience with decision making under an inflation targeting regime. The discussion about the proposed institutional set-up in Albania provokes a more general debate about the properties of the ‘ideal’ monetary policy decision-making system. Such a discussion of this general issue could reveal some practical implications for the Bank of Albania.
The introduction of euro notes and coins will have additional positive effects on the economic development in Europe, as it will be easier to compare prices and confidence in the new currency will be strengthened. Moreover, the euro is to be regarded positively not only with regard to the Swiss economy but also Swiss monetary policy. The Swiss export sector will profit from lower transaction costs, and currency devaluations - as previously implemented by some European countries in order to improve their competitiveness - will be a thing of the past. Swiss monetary policy will benefit from the fact that a large economic bloc now exists in Europe which pursues similar goals in terms of monetary policy. All in all, exchange rate fluctuations between Switzerland and the EMU countries should thus remain below the levels seen before the launch of the euro. Furthermore, the markets will realise in due course that there is no reason why the Swiss franc, with regard to the role as a safe haven currency, should be assessed differently than the euro. This realisation should reduce the risk of sharp appreciations. As a result of the introduction of euro notes and coins, the euro will increasingly be used as a means of payment in the tourism sector and the hotel and restaurant industry as well as in foreign trade, to some degree simply as a substitute for the D-mark.

In the following, I would like to describe the development of inflation over the past few months and explain our latest inflation forecast in more detail. The dotted curve in the graph shows our inflation forecast of June 2001. At the time, we expected inflation to climb slightly to 1.6% by mid-2002 and, subsequently, to recede gradually towards 1.2% by the beginning of 2004. This forecast was based on the assumption of a robust development of the world economy and a stable three-month Libor rate of 3.25%. We assumed at the time that the economic slowdown experienced in the United States and Europe would be overcome as early as in the second half of 2001 and that the Swiss economy would be able to perform according to its potential. The price of oil was expected to stand at approximately USD 25 per barrel. Our forecast of June overestimated the inflationary development of the last few months. Year-on-year inflation, as measured by the national consumer price index, dropped to 1.0% in the third quarter 2001 from 1.5% in the second quarter. In October inflation amounted to 0.6%, and to 0.3% in November. This sharp decrease can be mainly attributed to the marked fall in oil prices and prices of other foreign goods. Moreover, upward price pressure on domestic goods also eased markedly in November after still having been substantial until October. The dashed curve in the graph shows our latest inflation forecast. The table contains the average annual inflation rate according to the new forecast.
In the Swedish banking crisis, the public interest was secured by special crisis legislation So, how do we fare in this respect? Well, let us take a look at some real crises. I will start with the case with which I am most familiar, the Swedish financial crisis in the early 1990s. I got involved in the management of the crisis in my capacity as an official at the Ministry of Finance. At the time, the country had severe macroeconomic and financial problems, with a number of banks reporting losses. Moreover, the banks were finding it increasingly difficult to obtain financing in the international capital markets, a source of funding they were heavily dependent on. The international counterparties reduced their exposures not only to those banks that were having fundamental problems, but to Swedish banks in general. In order to avoid a collapse of the banking system, it was necessary to take action. We tried several measures to contain the “silent run” on the banks. What proved effective was the declaration by the government that the banks would meet their debt obligations as they fell due. This general guarantee, as it has been called, did not take the form of a legally binding guarantee, but was merely a political commitment that the creditors would not suffer losses. At the same time it was necessary to deal with the banks in distress. And it was quite obvious that we could not do this within the normal court-based insolvency procedure.

But I think that we could go further in the direction of setting up minimum requirements for a crisis resolution framework for banks and other institutions covered by the financial safety net. Here one can draw some parallels to the work on fiscal policy frameworks, where the EU has come a long way in terms of coordination and codes of conduct in the event of macroeconomic crises. Where do we go from here? It is time to sum up. My message is that it is important for us to get in place an efficient regulatory framework for weak banks. A framework which combines the need to maintain stability and minimise costs to the public sector in the short term with the requirement for long-term market discipline. Returning to the health-care metaphor I started out with, we need to be able first of all to deal with the ordinary flus and broken bones of the financial system. But we also need to be prepared to deal with a more serious event. A possible outbreak of avian flu in the financial system. I have tried to outline the broad lines of such a framework.
Christine M Cumming: Macro overview of the United States Remarks by Ms Christine M Cumming, First Vice President of the Federal Reserve Bank of New York, at the European Economics and Financial Centre, London, 15 February 2011. *  *  *  It is a great pleasure to be here to speak to you today about recent developments in the U.S. economy. I’d like to thank Professor Hannah Scobie and the European Economics and Financial Centre for organizing the seminar in this beautiful historic setting, and thank the Member of Parliament, Geoffrey Clifton-Brown, for presiding over and sponsoring this meeting. The views I will express are my own and do not necessarily reflect the views of the Federal Reserve Bank of New York or the Federal Reserve System. I have organized my talk into six observations about the U.S. economy. First, in considering the nature of the recovery from the financial crisis and recession, which many call the “Great Recession,” it is important to take note of the severity of the downturn from which we are recovering. Even though the United States has experienced six consecutive quarters of positive growth of real gross domestic product (GDP) since the official end of the Great Recession, the level of output remains well below the business cycle peak. The economic history of such combined financial crisis and recession experiences is that recovery is often slow and protracted; this one seems no different.

The domestic legislative and regulatory requirements are largely in place, and firms have provided their plans to implement them in time for the government’s 2019 deadline. Firms are working to implement the plans. There are many challenges ahead. We will work closely with firms as they change their structures and transfer business activity, assets and liabilities between entities. They must manage the impacts on customers, employees and other stakeholders. The implementation process coincides with a period of heightened uncertainty before the UK – and therefore the banking system – adjusts to a new relationship with the European Union. I won’t pretend this is a perfectly happy coincidence: in an ideal world we would not restructure our banking system and extricate ourselves from the EU at the same time. But the execution risks of managing these changes simultaneously are outweighed by the benefits of increasing firms’ resolvability and removing the public subsidy from banks. So it is full steam ahead. Alongside ring-fencing, the other major reform which is progressing through implementation, and is key to making big banks resolvable without recourse to the taxpayer, is bail-in. Here in the UK work on this is being led by my colleague Sir Jon Cunliffe, and we will shortly publish our final policy. 5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5  At these two frontiers, and across the whole reform programme, we must secure the progress that has been made as memories of the last crisis fade.
Have we made major progress towards that? Yes. First, the UK, the EU, the US and many other jurisdictions now have or will soon have the legal powers to break up and wind up failing banks with far less threat to the economy as a whole. These powers include the ability to “bail in” a bank’s creditors, making them not the taxpayer responsible for a failed bank’s losses once a bank’s equity has been exhausted. I should say here that it is crucial that the European Parliament now gives its final approval to the proposed resolution directive. And that the directive and the new “bail in” rules form the bedrock of the new Single Resolution Mechanism for the Banking Union in the Euro Area. Second, in the UK and US legislation – Vickers and Dodd Frank has been passed, structurally separating the activities that systemic banks are allowed to carry out. The aim is to ensure that riskier activities are not cross subsidised by, and do not jeopardise, the essential activities these banks carry out in the domestic economy. The EU is also considering how to address this issue following the Liikanen report. Third, and for the major international banks, with operations in many countries, we are moving towards international agreement on how these giants can be safely resolved. This means standards to ensure banks fund themselves with debt that is in a form that can be safely bailed-in should the bank fail.

In truth, there had been growing pressure throughout that autumn for a leaders’ meeting as the sheer scale of the financial crisis became clear and catastrophe followed catastrophe – Fanny and Freddie, Lehman, RBS – throughout the autumn of 2008. When George Bush announced the summit in October 2008, the focus was on the financial sector. Had the huge injections of public capital into insolvent firms and the public guarantees of liquidity for illiquid ones, stabilised the crisis especially in New York and London? But by the time the leaders met in mid-November, it was clear that not only was the financial sector on its knees but also that the world economy was in imminent danger of falling off the cliff. Leaders were facing not just a financial crisis but the possibility of a global economic depression of 1930s proportions. And it was, I think, that very frightening illustration of our economic interdependence that gave the Washington Summit and the summits that followed it the political energy not only to lay out a programme of reform of international financial regulation but also to commit to a time-bound action plan to meet it. I should note here, that – to paraphrase Harold Wilson – in politics one commits to an action or a date but never both. The G20 Summits of 2008 and 2009 committed to both actions and dates.
Another crisis is inevitable – it is just a matter of time – and the Fund must stand ready to support its members when that happen. In this regard, the review of access limits and the development of crisis prevention instrument, such as the Rapid Access Line (RAL) and the Financial Stability Line (FSL), are critical and should be given priority. •  The third is in facilitating a global dialogue such as the IMFC meetings. It is probably wishful thinking to expect a large diverse group such as this to agree on policy coordination strategies. Nevertheless, even the more modest goal of learning from one another has great value by serving to deepen our understanding of the issues, which should not be underestimated. The Fund’s governance reform 9. In an increasingly integrated global economy, the distribution power within the Fund must adapt to reflect the growing weight of developing and emerging market economies in order to make the Fund more effective as an institution. Giving voice and ownership to member countries will increase the legitimacy and efficacy of the IMF. In this regard, we have indeed come a long way from where we started two years ago. We thus would like to thank the IMF Executive Board, management, and the staff for their dedication and hard work in delivering the current quota and voice reform package before us. 10. We welcome the flexibility and compromise shown by the members of the Executive Board in agreeing to the package we have at these Spring Meetings.

Banks should take advantage of the attractive economic opportunities obtaining in Zambia to improve financial inclusion and thereby attract new customers and a higher deposit base. I am certain that over time these places will be their most profitable centers as places like Lusaka will only yield narrow margins due to stiff competition. BIS central bankers’ speeches  3  Ladies and gentlemen Allow me to again extend my gratitude to the Chief Executive Officer of the First Capital Bank for inviting me to this auspicious occasion. It is now my honour and privilege to officially declare the First Capital Bank Zambia Limited and its head office officially opened. I thank you for your attention. 4  BIS central bankers’ speeches
In such a world, by adjusting the level of the federal funds rate, the FOMC could be fully confident that it could generate the appropriate financial conditions necessary to support achievement of full employment and price stability. In fact, the response of financial conditions to changes in short-term interest rates is not rigid and predictable. Instead, as we shall see shortly, the linkage between the federal funds rate and financial conditions changes over time, as it is influenced by a whole host of other factors. Recent evidence suggests that even the relation between short-term and long-term rates has shifted substantially over the past 15 years.4 Moreover, at times, we have observed cases in which financial conditions did not move in the same direction as the monetary policy stance. Let me highlight two recent divergences which indicate that we need to keep a separate eye on the evolution of financial conditions. The first occurred in the mid-2000s. In June 2004, the FOMC decided to begin raising the federal funds rate target in order to remove policy accommodation. It raised the target in 25-basis-point increments at 17 consecutive meetings, pushing the rate up from a starting point of 1.0 percent to a peak of 5.25 percent. Despite this tightening of monetary policy over two years, financial conditions failed to tighten in a similar manner. This can be seen by looking at the behavior of well-known measures of financial conditions during this period (Exhibit 1).

Therefore, in strengthening the effectiveness of institutions, it is about putting such institutions in an environment in which they are able to rise to the demands for performance and discipline. This therefore places emphasis on following a certain order, rules and regulations that would bring value to society. While mature and developed economies have benefitted from effective institutions, the changing global and national landscape that is becoming increasingly more interconnected now demands for new institutional arrangements for the way in which engagements or interface takes place. Equally important are the arrangements for the management of the new emerging challenges. Experience has shown us that this can be highly challenging when it involves changes in relationships when the structures of institutions have not changed. Such institution building is particularly important for public policy decision making. This is particularly  BIS central bankers’ speeches  1  relevant when coordination arrangements for inputs from the different parts of the public sector become necessary. For the economies in the emerging world that are at a different phase of development, the creation of strong and effective institutions is even more pressing. Not only do existing institutions need to be strengthened but new institutions need to be built to facilitate the effective functioning of the economy. We have heard this morning in the tribute to Dr. Puey, his tremendous role in institution building in Thailand and his role in the Asian region.
Mr. Yam focuses on how Hong Kong is coping with financial turmoil Text of the “Inside Asia Lecture 1998” by the Chief Executive of the Hong Kong Monetary Authority, Mr. Joseph Yam, JP, organised by The Australian, Sydney on 23/11/98. Introduction  It is a great pleasure to be in your beautiful city once again, and an honour to have the opportunity to speak to such a distinguished audience. Sydney and Hong Kong - both vibrant international cities with spectacular ports - have much in common. We enjoy growing cultural and economic links and, although some 4,500 miles distant, we are both part of the same region. Less happily, our economies have both taken a hammering from the financial crisis that has recently rocked the region. My focus in this talk will be on how the regional crisis has affected Hong Kong, and, equally important, on the ways in which it has not affected Hong Kong. The Asian Financial Crisis  The complex causes that so suddenly turned the Asian miracle into an Asian mess will no doubt be debated for many years to come. The devastating effects of the massive exodus of capital from the region have been clear enough. In the worst hit economies currencies have devalued by as much as 70%. Stock markets have declined to the levels of ten years ago. Asset prices have sharply deflated, economies have contracted, and unemployment has risen. The region is going through its worst financial crisis since the Second World War.

And the larger aim of this co-operation should be not just to draw up defensive measures, but to create positive opportunities for building a new global financial order appropriate to the needs of the twenty-first century. BIS Review 98/1998
To mitigate the volatility of capital flows and especially short term flows and reap the benefits of capital account liberalization, one should adopt a risk management strategy that involves a system for monitoring and assessing the risks and liquidity of the economy as a whole, including at a sector level. The international community may assist in developing best practices related to reserve and debt management: let me quote for example the more stringent publishing obligations on net foreign exchange reserves adopted within the context of the IMF Special Data Dissemination Standard (SDDS) or the IMF and the World Bank initiative to promote good practices in reserve and sovereign liability management. 1.2  Clarify the principles governing crisis resolution and the distribution of roles among actors  I would like to give you my views on two issues at stake which are of great importance and strongly inter-related, i.e. the role of the IMF and the involvement of the private sector. 1.2.1  The IMF should remain at the centre of the process for crisis resolution  Whatever the prevention features, crises will still occur in the future. In that respect, I would like to focus on the roles of the IMF as regards both international lending and crisis management. -  As regards its lending role, in my view, the IMF cannot act as an international lender of last resort. First, it has only limited resources that can not match private capital flows; second, the perception of such a role would increase moral hazard.

There is probably some merit in an overall review of regulatory, accounting and tax rules and regulations, as well as of codes of good conduct and good practices, and of structural developments of market themselves, to identify possible amendments and improvements that could help protect and enhance the behavioural and conceptual diversity of modern financial markets. 6  BIS Review 49/2001