samchain/econo-pairs-v1 huggingface dataset:
•  The creation of the euro is leading to larger and more integrated financial markets, improving the allocation of financial savings. 1. By safeguarding price stability, the Eurosystem contributes to the safeguarding and consolidation of savings. The primary objective of the monetary policy of the Eurosystem, as laid down in the Treaty, is price stability. This objective is founded on the conviction that price stability makes it possible to ensure the full efficiency of the price mechanism and to avoid both arbitrary redistribution of wealth as a result of inflation as well as the costs and distortions caused by uncertainty and periodical adjustments of nominal values. These positive effects of price stability obviously benefit savings. I personally see three aspects to this: an effect on the protection of the value of savings, an effect on their structure and allocation, and finally an effect on the distribution of saving within society. First, by aiming at price stability, monetary policy directly preserves the real value of a large proportion of financial savings. This is immediately obvious in the case of fiduciary money or sight deposits which are remunerated only a little or not at all (which accounted for 39% of the monetary aggregate M3 in 1999). However, fixed-term deposits are not totally safeguarded from inflation where their remuneration is fixed over a specified period or where they only adjust to market rates after a time lag.

In these areas, the role of the Eurosystem is always to uphold confidence in the currency, to contribute to the smooth functioning of the financial system and to encourage prudent macroeconomic policies, which influence the will and capacity to save. BIS Review 6/2000  4
Falls in some important prices, such as petrol and utility charges, mean that people will have more disposable incomes to spend on other goods and services. That may encourage producers of those goods and services to raise prices. Equally, companies will be under less pressure to reduce other costs, affecting their response to upward pressures on earnings growth. The Committee will be monitoring carefully the outcomes month by month. All I can say is that the Committee’s central view remains that inflation is likely to fall back in the second half of the year, possibly quite sharply. As ever, there are risks around that central view – in both directions. Some of the biggest risks surround energy prices, supply factors such as migration, the level of asset prices, and the extent to which inflation expectations will prove to be a fixed or dragging anchor. Pay growth is also important. As I said earlier, if investment and employment growth are to be maintained, the burden of higher costs on employers must either be passed back in the form of lower input costs or forward as higher prices. All of us – whether on the shop floor, in the board room, or in the public sector – are coming to terms with the fact that those higher costs imply a temporary, but only a temporary, slowing in the growth of our real take-home pay. That adjustment – difficult but inevitable – will be helped by the fall in energy prices since last autumn.

Initially, liquidity was added through the traditional discount window, and later through a wide range of new liquidity facilities that were developed. Up until the Lehman bankruptcy, the FOMC provided this liquidity without expanding the size of its balance sheet (Chart 13). As the crisis intensified following the Lehman bankruptcy, the FOMC significantly escalated its support for the economy. The FOMC could not provide additional support to the economy in the traditional manner by reducing the fed funds rate since the policy rate was already at zero. Instead, the FOMC initiated the Large-Scale Asset Purchase (LSAP) program. The objective was to ease financial market conditions to provide more support to the economy. Central bank purchases of assets raise the price and therefore lower the yield on these assets. These purchases crowd out some investors who shift their purchases to other assets, which lowers the yields on these assets, as well. In this way, financial market conditions are eased more generally. A consequence of the LSAP program was a rapid expansion of the central bank’s balance sheet. The combined monetary and fiscal support for the economy helped to arrest the decline in economic activity. As final sales began to stabilize, firms were able to manage down their inventories. The aggregate inventory-to-sales ratio rapidly declined to its pre-recession level (Chart 14). With their excess inventory worked off, firms needed to meet demand by increasing production. Aggregate industrial production rebounded – especially for durable goods (Chart 15).
11 This goes to show just how competitive Swiss industry really is in these markets. This positive outcome is due in part to Switzerland’s exceptional trade performance with China, with the result that Switzerland is one of the few industrialised countries that have not generated a deficit in its goods trade with China in recent years. 12 This confirms just how important the Asian market is as an export destination for the Swiss economy. And judging by Asia’s strong growth prospects, it is likely that it will become even more important in the future. The regional diversification of Swiss goods exports towards Asia turned out to be a considerable advantage in the recent crisis. Given that the global economic recovery first took hold in Asia – thanks in part to the many fiscal and monetary policy stimulus packages – Switzerland was able to reap the benefits of the fast-paced recovery. During the upturn, which began in mid-2009, more than one-third of the growth of Switzerland’s goods exports was attributable to the increasing demand in Asia – even though, as mentioned above, exports to this region still account for only around 15% of the country’s total goods exports. 2.2  The changing composition of goods exports  It isn’t just the regional focus of Swiss exports that has changed but also the product composition. This brings me to the second factor which promoted the development of Swiss goods exports in the recent crisis.

This divergence in the regional focus becomes even more apparent when Asia is viewed as a whole. This is because Switzerland maintains far closer trade ties with Asia’s industrialised countries than the EU does, particularly with the four Asian tiger economies of Hong Kong,  6  The USD value of goods exports to developing and emerging economies (excluding the tiger economies of Hong Kong, Singapore, South Korea and Taiwan) has grown by an average of 7.5% since 1990, i.e. it has quadrupled. Goods exports to industrialised counties increased by 4.7% annually during the same period, representing an increase by a factor of only 2.5. 7  From 1990 to 2008, the GDP of developing and emerging economies rose by an average of almost 8% (China alone grew by more than 10%). The GDP of the EU15, by contrast, rose by just 1.9% on average (US: 2.7%). 8  The USD value of Swiss goods exports to emerging Asia (excluding the tiger economies) has grown by an average of 9.1% since 1990 (since 2000: 18%). The corresponding growth rates for Germany amounted to 11.4% (since 2000: 17.8%), and for the EU, 9.6% (since 2000: 13.6%). 9  Including intra-EU trade. BIS Review 157/2010  3  Singapore, South Korea and Taiwan. Overall, Switzerland’s share of exports to Asia, including Japan, came to 15% last year – more than twice the EU average. 10 Furthermore, Switzerland is one of the few European countries – alongside Ireland, Sweden and Finland – to run a trade surplus with Asia.
It is worth referring here to Regulation No 2560/2001 of the European Commission, which established the principle of equal charges for cross-border payments and comparable domestic payments within the EU, which in turn has created an imbalance between bank fees and costs of cross-border payments. This imbalance can only be overcome if the handling of cross-border payments is reorganised to become as efficient and inexpensive as the handling of national payments, which is the primary goal of SEPA. An aspect which deserves particular attention in the discussion on SEPA is the harmonisation of the law within the payment area. The proposed Payment Services Directive (PSD) establishes the necessary legal framework for SEPA payments and will also apply to existing national payment products. The aim of the Directive is to harmonise the market access requirements for non-bank payment service providers. This will create a level playing field with enhanced competition in national markets. The Directive will provide clarity and certainty with regard to the core rights and obligations of users and providers of payment services. It will also provide the necessary legal framework for SEPA, as it will harmonise existing, and differing, national legal requirements.

We are still seeing robust economic growth, although it’s less strong than before. It will take longer for inflation to reach our objective, but it will get there. We are reacting to the developments we have seen so far, so we will keep rates at zero for longer, we will continue to reinvest payments from maturing securities in our portfolio, and we will grant banks liquidity at favourable conditions provided that they finance the real economy. If you’re asking me about another asset purchase programme, all I will say is that this instrument is now part of our toolbox, but it is not needed now. Do you think that European governments are pursuing appropriate fiscal policies under the circumstances? It’s difficult for a central banker to give detailed advice on fiscal policy, since fiscal policy is a matter for democratically elected governments. What I can say generally is that the current fiscal stance in the euro area as a whole is slightly expansionary and supports economic activity. The European Commission has invited those countries that have fiscal space, such as Germany, to use it in the way they consider most appropriate for their economies. Those who don’t have any fiscal space shouldn’t use it or pretend to have it. This applies not just to Italy, but also to France. Both countries still have some way to go to rebuild their fiscal buffers. Many market participants believe that Italy could be a source of crisis in Europe… It’s not for me to talk about politics.
In some countries, citizens have become indebted through the state – a national debt of more than 100 per cent of GDP is beginning to be common. In other countries, such as Sweden, the national debt is low, but instead private indebtedness is high. A large part of this development can be explained by lower interest rates. Households’ interest expenditure as a share of their incomes is not so much higher now than before, despite the large rise in debts. The debts have mainly been used to finance housing purchases, and, as the supply of housing has been relatively sluggish (although construction has been high in recent years), housing prices have risen substantially. But if we can explain part of the increase with low interest rates, does this mean it is not a problem? No, I don't think so. A high level of indebtedness leads to large risks – if interest rates rise, then households will have a much higher interest burden. 6 [25]  Monetary policy is conducted to attain an inflation rate close to the target and stable resource utilisation. The problem is that monetary policy has an impact through several different channels, including households’ consumption decisions, the exchange rate and investment. Monetary policy that is well balanced on the basis of inflation and resource utilisation in the economy as a whole can be problematic for a group of households that is highly indebted. In this situation, it is important that the banks and Finansinspektionen ensure that credit granting is sustainable.

Let me cite a few examples, -  The Task Force on Climate-related Financial Disclosures, created at the request of the Financial Stability Board but comprising in its entirety members of the industry. This Task Force has produced voluntary disclosure standards for companies in general, which are becoming more and more relevant, as investors, consumers and corporates demand sustainability-related information to make informed decisions. -  The European Commission Action Plan on Financing Sustainable Growth, which should contribute to making the EU a leading force in the global fight against climate change. -  The International Platform on Sustainable Finance. -  The Coalition of Finance Ministers for Climate Action, which comprises governments from more than twenty countries joining forces to address the challenges posed by climate change. We are also honoured to have with us Ms. Ana de la Cueva, Secretary of State for Economic & Business Affairs, who will close this conference and inform us about this initiative. -  Last, but certainly not least, I want to mention the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), created two years ago as a “coalition of the willing” and a voluntary-based forum. The NGFS has grown from 8 members to over 50 since 2017, which is a clear sign of its success.
These imbalances stand out as one of the most serious vulnerabilities faced by the domestic economy, as they are the main channels whereby the potential halt in external financing feeds through into exchange rate depreciation. Chart 6  Deposits and loans in foreign currency  non-financial corporations lei billion  households  2008  2007  2006  2005  2004  deposits in foreign currency loans in foreign currency net position 2008  2007  2006  2005  deposits in foreign currency loans in foreign currency net position 2004  40 30 20 10 0 -10 -20 -30 -40 -50 -60 -70  lei billion  Source: National Bank of Romania  BIS Review 5/2010  9  These developments reinforced each other, so that during 2005–2007 there were periods when inflation expectations coexisted with a markedly stronger domestic currency. Under the circumstances, the central bank was faced with a serious dilemma in terms of the newlyadopted monetary policy regime. Policy rate hikes, required for bringing expectations in line with the inflation target, attracted further foreign capital, which entailed the appreciation of the leu. Along with policy rate changes given the coexistence of upward pressures on the domestic currency and inflationary pressures, the central bank also increased required reserves in order to dampen capital inflows. Required reserves for foreign currency-denominated liabilities were gradually raised from 20 percent at the onset of 2002 to 40 percent in early 2006 (Chart 7).

The central bank monitors not only the absolute value of forex reserves, but also the derived indicators: foreign currency reserves expressed in months of imports of goods and services and the ratio of forex reserves to short-term debt remained unchanged or improved (Chart 8). Chart 8  Foreign exchange reserves with the NBR: derived indicators months  10 8  times official foreign exchange reserves - months of goodsand-services imports official foreign exchange reserves/ST external debt (right-side scale)  10 8  6  6  4  4  2  2  0 0 Jan.05 Jul.05 Jan.06 Jul.06 Jan.07 Jul.07 Jan.08 Jul.08 Jan.09 Jul.09 Source: National Bank of Romania, National Institute of Statistics  Thirdly, the magnitude and the timing of forex market interventions were also related to money market liquidity management, given that public deficit was financed, over certain periods, by resorting chiefly to the funds released under the arrangement signed with the EU, the IMF and other international financial institutions. The NBR provided banks with liquidity  12  BIS Review 5/2010  by way of open-market operations (Chart 9), while in the prior years, amid excess liquidity due to massive capital inflows, the central bank held the position of a net debtor position visà-vis the banking system. The rationale behind the forex market intervention in the abovementioned context was the attempt to fend off temporary reversals in the NBR’s creditor position vis-à-vis the banking system, which could have jeopardised the monetary policy transmission mechanism.
Zdeněk Tůma: EU enlargement and monetary integration Remarks by Mr Zdeněk Tůma, Governor of the Czech National Bank, at the 3rd ECB Central Banking Conference “The New EU Member States: Convergence and Stability”, Frankfurt, 21-22 October 2004. *  *  *  Ladies and gentlemen, It has been only recently since we had become members of the European Union. It is only natural that, once the immediate effects of the enlargement have subsided, policy-makers´ attention should shift towards the next step - monetary integration of the twenty-five current EU member states. The first thing to be considered when discussing European monetary integration is how the different countries will go about adopting the euro. There is no universal strategy that can be used by all new EU member states. The euro may either be adopted rapidly, or after a longer interim period. In the pre-EMU period, the emphasis can be put either on ensuring the low inflation required by the Maastricht Treaty domestically, or on importing it by fixing the exchange rate. The key factors that determine which strategy to adopt are, in my opinion, the size and flexibility of the domestic economy, the current monetary-policy regime and its credibility as well as the state of public finances. Specifically, small countries that have lived with fixed exchange-rate regimes for the last ten years, and have thus developed economies flexible enough to compensate for fixed exchange rates will most likely benefit from faster adoption of the euro.

For me today, it means that all current EU member states will contribute as much as they can to these improvements with their own ideas, knowledge and experience. The new ESCB members are prepared to contribute their share. They have gained a wealth of experience from a decade of economic transformation, a decade during which they used a wide variety of monetary policy strategies, from inflation targeting to currency boards, in order to deliver low inflation. Let me mention just a couple of lessons that were learnt: •  how to make decisions and produce good-quality economic forecasts when faced with large uncertainty (eg. about available data)  •  how to bring the economy back to low inflation after a series of supply-side shocks and how efficient communication is crucial in such circumstances  •  and that maintaining low inflation is much easier providing fiscal discipline and policy co-ordination can contribute to the task. These issues will surely be familiar to others. The knowledge gained during the transformation period will enrich the policy debates of the ESCB´s councils and working groups. This is how monetary integration will happen on a day-to-day basis both in countries that already use the euro and in those that will introduce it in the future. 2  BIS Review 70/2004
If its debt was so onerous that the government could not or would not finance it by conventional non-inflationary means, and if the independence of the central bank were sufficiently fragile, inflation could come to be viewed as just another tax, rather than something to be stabilised in its own right. In extremis, when the credibility of the macroeconomic framework is entirely lost, inflation expectations – indeed inflation itself – would be determined solely by the fiscal position. Even a notionally independent central bank could do nothing to affect it. Purchases of government debt by the central bank, for example, would do nothing to depress their yields. (Indeed, if they served only to reinforce the central bank’s subservience, thereby pushing up expectations of future inflation, QE could actually raise bond yields. Put another way, the policy can only work as intended to the extent the framework is credible – if it’s generally accepted that deficits are controlled by conventional fiscal measures and monetary policy is devoted to a fixed nominal objective.) There is also the potential, in this extreme situation, of a positive feedback between inflation expectations and inflation itself, and an associated risk of hyperinflationary spirals. When inflation expectations rise, the expected cost of holding zero-interest money goes up as well. Reluctant to hold on for very long to the paper the government is using to fund itself, people spend it straightaway, feeding the inflation and confirming those prior expectations.

How interest rates and bond yields respond to shifts in demand Concerns about “monetary finance” have arisen because policy has been eased at the same time the government’s deficit has gone up. The main problem with this argument is that the monetary stance and the fiscal balance are both cyclical – they tend to rise in upswings and fall in downturns. You’d therefore expect  6  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  6  them to be correlated this way. In fact, in the UK data, short-term interest rates have become more tightly correlated with economic growth since inflation targeting was introduced. Since the financial crisis, with policy interest rates pressed up against the effective lower bound, QE has instead become the marginal instrument of policy for many central banks. With much less of a track record to go on, it’s harder to demonstrate as clearly the cyclical behaviour of asset purchases (though the direction of the correlation – QE tends to happen when growth is weak – is clear enough). Nor is the pro-cyclicality of bond yields as evident as it is for short-term interest rates. Nevertheless, if an economic downturn were sufficiently widespread, and expected to persist for some time, it’s quite possible that expected future interest rates (and therefore bond yields) would decline of their own accord, even without the assistance of QE and even if one of the consequences of the downturn was also a rise in public-sector borrowing.