samchain/econo-pairs-v1 huggingface dataset:
It may just reflect the increasing patience that comes with advancing years, but I believe we have in fact made very real progress towards defining common objectives, and agreeing upon tangible steps that will help us towards achieving those objectives, in relation both to monetary, and broader macroeconomic, stability and to creating a more effective and more robust financial system. It is of course an endless journey, and no doubt we will from time to time run into rough waters. But I'm convinced that our snail will keep moving forwards – and that it will even learn to swim! 6  BIS Review 36/2001

It is essential that the market promptly receives the information which the Board of Directors consults when making its decision. The Bank of Russia will continue to publish its analytical commentary that summarises and estimates expectations of households, businesses and analysts, after ‘the week of silence’. Third. Monetary conditions are continuing to loosen. We expect that both previous and today’s key rate decisions will underpin this trend. Market expectations for interest rates shifted downwards on the back of the signals in the followup to the Board meetings in June and July. This was also driven by the shifting expectations for monetary policies of the US Fed and the ECB as the economic growth outlook for the US and euro area deteriorated. The decline in interest rates comes with an easing of non-price lending conditions in terms of maturities and volumes. The easing of both price and non-price monetary conditions contributes to expansion in lending. According to our estimates, corporate lending will rise by 7-10% while retail lending will increase by 15–20% this year. Fourth. Economic activity undershot the Bank of Russia’s expectations in the second and early third quarter. This results from internal and external factors. This made us revise our 2019 GDP growth forecast from 1.0-1.5% to 0.8-1.3%. An important external factor is a slowdown in growth of the global economy, which has proven more tangible than expected due to, among other things, the growing contradictions in international trade.
If you were a worrier like me, would you worry that we are putting off alternative approaches until new problems exhaust old solutions? Would you worry about how effectively we will respond if a digital currency achieves critical mass? Governor Quarles highlighted this latter concern in his recent remarks at the European Banking Federation.31 He noted that stable coins do not pose risk to financial stability today but that they bring with them the potential for scale that could pose regulatory challenges from a financial stability standpoint in the future. But knowing that regulators in the U.S. are already dealing with concerns over fraud and the prospect of other forms of misconduct related to digital currencies, and acknowledging  Governors Quarles’ concerns about financial stability, would it behoove us to start identifying areas of focus for crafting a regulatory response that is more proactive? Pablo Hernández de Cos, Chairman of the Basel Committee on Banking Supervision (BCBS) and Governor of the Bank of Spain, remarked in November that digital currencies “do not reliably perform the standard functions of money and are unsafe to rely on as a medium of exchange or store of value.”32 That sounds like a problem. We have dealt with a somewhat similar problem before. Under the National Bank Act, the United States chose to reform its currency system by adopting a new regulatory regime for national banks—the would-be issuers of stable private currencies (that is, national bank notes)—and by crafting requirements for these issuers to backstop their currencies with safer government-issued bonds.

Interest rates have been on the increase recently in most parts of the world and capital is not as cheap as before, although it can still be procured at very low rates. Conditions in capital markets in general are therefore more likely to tighten in the coming years. Influential as economic developments on both sides of the Atlantic may be for the Icelandic economy, the way we handle our own affairs is still important. The crucial consideration is to achieve a rapid reduction in macroeconomic imbalances and restore stability. To do so, domestic demand must be reduced. Part of this process will occur automatically with the completion of ongoing investments in the aluminium and power sectors. Much has changed since the meeting a year ago, some things for the better, and others not. The current account deficit run up last year will not be forgotten for a long time – it even managed to trump the most pessimistic forecasts. Fortunately, clear signs of a gradual contraction are now visible, but this improvement is likely to be slower than we had previously expected, especially on account of foreign debt service. The Board of Governors of the Central Bank decided yesterday to leave the Bank’s policy rate unchanged at 14.25%, at the level where it has been since December. By contrast, the day before last year’s annual meeting, the Board of Governors raised the policy rate by 0.75 percentage points.
But even with stricter regulation and supervision in place, this will not necessarily exclude monetary policy from having some role to play in the prevention of a financial crisis. Both instruments have their own advantages and disadvantages. I believe that one of the challenges for the future is to find an appropriate mix between monetary policy on the one hand, and regulation and supervision combined with macroprudential surveillance on the other. Let me elaborate on these points. Monetary policy may naturally play some role in the prevention of financial crisis. After all, the policy rate affects the cost of credit, as regulation does. Simply put, the banks’ lending rate can be described as a function of the central bank’s policy rate plus an interest rate margin or spread. The interest rate margin is a function of the compensation charged by the banks for administrative costs and capital costs, risk premiums and the banks’ profit margins. More stringent regulations will entail increased costs for the banks, and the interest rate margin and the lending rate will thus increase, as it will when the policy rate is increased. In this sense monetary policy and financial regulation are clearly intertwined. Thus, a central banker must always keep in mind that the increased use of regulatory tools will inevitably affect monetary policy in different ways.

I believe China should be able to sustain 8 percent annual growth over the next 20 years. China is drawing in investments, capital, technology, foreign management expertise and talent. It is investing heavily in education and human capital. Much of its growth is also internally generated and increasingly consumer-led. 12. China is forcing the pace of change throughout Asia. This is for the better. The Chinese dragon will usher in a new prosperous Asian Century. For example, as China grows, so will its appetite for imports. Credit Suisse First Boston expects China to become the second largest consumer market by 2014. That is less than 10 years away. The Chinese middle class is expected to reach 45 percent of the population by 2020, around 580 million or more than 4 times the current Japanese population. 13. However, China's growth will not be an upward-sloping straight line. The country faces very real challenges. In 2003 when I visited China, Premier Wen Jiabao explained to me the magnitude of problems facing China's development through the concept of 'division and multiplication'. China's wealth of resources became very small when divided by 1.3 billion people, while a small problem became huge when multiplied by 1.3 billion. Premier Wen also highlighted the divide between the coastal and inland regions and stressed that China's priority was on economic and social development. 14. China will also have to cope with the impact of development on the environment. Take for example the use of chopsticks.
Here a key argument was that I find it crucial to be very clear about the guiding role of the inflation target when designing monetary policy. If such clarity is lacking, there is a risk of a selfreinforcing process emerging leading to average inflation “getting stuck” at too low a level. Such a development would be problematic, not least as it would lead to the policy rate having to be negative for longer periods. I then discussed the current framework with an inflation target and a floating exchange rate as a point of principle. Here my main purpose was to remind people of the positive aspects of this framework, as my experience is that the debate over recent years has been biased towards emphasising the disadvantages. I discussed and responded to two arguments that have occurred in the debate: that the inflation target is no longer relevant as a benchmark for wage formation and that the krona’s development in recent years shows that the costs of having a floating exchange rate have now become too great. The framework with an inflation target and a floating exchange rate, which we launched in 1993, is not perfect in all situations and for all events. But unfortunately, no perfect system exists and the interesting question is whether there is a better alternative. This reminds me of Winston Churchill’s evaluation of democracy as a form of government:  11 Currency Rate Act (1998:1404), Section 2.

There should be a continuing place in the market for many transactions that do not qualify for the STC designation, including synthetic transactions, managed portfolios and pools that do not meet the granularity requirements. Turning to capital requirements, looking at historical losses on securitisation tranches, we think the calibration of bank capital requirements that the Basel Committee published in December is broadly right. But there is a case for some lowering of capital requirements for STC transactions on the grounds of lower structure risk. A stronger argument can be made that Solvency 2 standardised capital requirements for EU insurers are still too high, especially at longer maturities – although it should be noted that these will not apply to insurers using internal models. For banks and insurers, part of the issue with securitisation capital requirements is the comparison with covered bonds, which tend to be treated favourably in EU regulation. Issuers looking to raise secured funding may therefore see covered bonds as a more cost effective alternative to securitisation. Covered bonds have a legitimate role in the market as a source of stable long-term funding. But securitisation has the advantages of risk transfer and lower encumbrance of underlying assets. We would support moves to put securitisation and covered bonds on a more level playing field. To conclude, we support the European Commission’s current work on an EU framework for securitisation as part of the longer-term objective of growth in stable, market-based financing markets alongside bank lending.
Figure 2 Output gap for a number of forecasters Per cent 6  6  4  4  2  2  0  0  -2  -2  -4  -4 The Riksbank, Feb -10 NIER, Dec -09 European Commission, Nov -09 OECD, Nov -09 IMF, Oct -09 Ministry of Finance, Jan -10  -6 -8 -10 00  01  02  03  04  05  -6 -8 -10 06  07  08  09  10  11  12  The gaps for output and hours worked are calculated as the difference between actual and “potential” levels. The Riksbank’s estimates and forecasts for potential output and hours worked are inadequate and in great need of improvement and development.4 Such development work is currently underway. These measurements of resource utilisation are thus not particularly reliable. However, according to all available measurements, there is no doubt that resource utilisation is and will remain very low during the forecast period. Other forecasters’ output gap forecasts are shown in Figure 2. Several of the forecasts from other forecasters indicate an even lower level of resource utilisation than the Riksbank’s estimate. 3  See Sveriges Riksbank (2009) and Svensson (2009a) for details.

I confess that I then felt the need to go to the vault and feel with my own hands the gold bars – Romania’s last tangible reserve in those days (in December 1990, gold reserves stood at 68.7 tonnes, amounting to approximately USD 850 million) – for a boost of confidence that the rather complex economic situation might be successfully tackled. It is hard to believe that this really happened, especially now, when Romania’s international reserves amount to approximately 38 billion euros. I will now move on to less amusing memories of those times. The avatars of economic transition rendered difficult the mission of Romania’s central bank. Monetary policy, a fundamental task of the National Bank of Romania, was facing numerous difficulties and constraints, as the process of lowering inflation was often undermined by the need to pursue conflicting macroeconomic objectives or avert a full-blown banking system crisis. This was because Romania’s path towards a functional market economy was anything but smooth. Quite on the contrary, the process often shifted between step-ups and slowdowns, that is when it did not stall altogether. A major feature of the domestic economy’s reform was the priority given, at the onset of the process, to ensuring the country’s social and political stability. In this context, the preferred choice was a gradual strategy, with reforms spread over many years, so as not to spark major social tensions.
Plans put forward from time to time from the early-1990s, which proposed dropping zeros from the lira continually had to be postponed as the structural economic problems could not be solved, nor could the rate of inflation or the inflation expectations be brought down to acceptable levels. The chronic and high inflation experienced during this period gradually took its toll on banknote denominations and monetary values. As you all know, this process eventually not only led to the Turkish lira having the highest denominated banknote numerically all over the world, but also adversely affected someof its functions, namely as a medium of exchange and a store of value. Following the program under implementation, the distance covered in terms of economic stability prepared a suitable environment for monetary reform, and six zeros were dropped from the Turkish lira as of 1 January 2005 when the New Turkish Lira was put into circulation. 8  BIS Review 36/2005  The experiences of other countries that dropped zeros from their currencies differ in those which suffered from hyperinflation and those , which had relatively, lower rates of inflation. In the former, it can be seen that monetary reforms were generally carried out as part of the stability program, without waiting for inflation to go down considerably. Whereas, in the case of the latter, reforms were implemented after inflation was brought down sufficiently. In other words, reforms were carried out after a certain distance had been covered in the fight against inflation.

And if the merchant be a regular customer, a banker does not like to refuse, because if he does he will be said, or may be said, to be in want of money, and so may attract the panic to himself.” This sentiment is described more prosaically in Tables 3 and 4. They show that the risk premia demanded by investors to lend to all large banks rose very sharply during the crisis. For most banks the spreads on their senior unsecured debt had more than trebled in October 2008 relative to their levels at the start of 2007. Similarly, credit default swap premia – the cost of insuring a bank’s debt – shot up. All banks, irrespective of the precise nature of their business and balance sheet, were tarred with the same brush. Moreover spreads and CDS premia remain elevated today – almost universally, large UK and US banks face much higher borrowing charges compared to risk-free rates, and are seen as riskier entities, than prior to the crisis. The size, concentration and riskiness of banks have increased in an extraordinary fashion and would be unrecognisable to Bagehot. Higher reported rates of return on equity were superficial hallmarks of success. These higher rates of return were required by, and a consequence of, the change in the pattern of banks’ funding with increased leverage and more short-term funding. They did not represent a significant improvement in the overall rate of return on assets.
The interest on their deposits (in an account overnight or weekly via Riksbank Certificates) must follow the policy rate for monetary policy to function.30 When we raise the policy rate, our financing costs increase, while the return on our assets remains unchanged. These two ways of describing the effects on earnings lead to the same result over time, but the losses are recognised at different times. The Riksbank's accounting  29 I described the change in the balance sheet and the interest rate risk in Flodén (2016). 30 For example, if we chose not to pay interest on bank deposits, the short market rate would be close to zero. That would mean that the policy rate would be zero, and monetary policy would be much more expansionary than is currently necessary. 16 [30]  principles are based mainly on market valuation, which means that the entire effect on on the results will be reported in this year's financial statements, although these are losses that are actually expected to occur gradually as long as the Riksbank owns the bonds.31 Figure 11. The balance sheet then and now SEK billion  Note. Simplified picture of the Riksbank's balance sheet at the end of 2007 and at the end of 2021 respectively. Revaluation accounts and risk provisions are included in the item "equity". The light blue field refers to 'other', and mainly consists of claims and liabilities on the International Monetary Fund. Source: The Riksbank.

There is no doubt that tremendous efforts have been made in the wake of the financial crisis to reach our objective of financial stability, providing the policymakers with additional tools to build-in robustness into the global financial system, increase the loss absorption capacity of financial institutions and infrastructures, and limit the scope for contagion while new approaches to prevent systemic risk have been developed, namely macroprudential policies. However, due to the magnitude of the task, its difficulty and its complexity, global regulators had to proceed with a sequential approach, starting by the banking system where their knowhow was the best, and expanding gradually a framework to the rest of the financial system in concentric circles. As a consequence, we are currently facing three challenges that I would like to focus on: keeping the momentum for reforms, allowing for the diversity and ensuring the robustness of the global financial system. 1. Keeping the momentum  After such a long and intense conference day, you might already feel a sentiment of regulatory fatigue! Consequently, you might appreciate the feeling of regulators and financial intermediaries after more than 8 years of intense regulatory developments and debates! And yet, the latter are not completed nor their implementation! Banking regulation, which is almost complete now, will only come into force in 2018–2019, even though it has already been largely factored in by markets and banking institutions. But regulation is still under development for the rest of the financial system.
In other words, looking at a cross-section of UK companies, secular innovation (for the upper 1% or 0.1%) has co-existed with secular stagnation (for the remaining 99%). The two are engaged, not so much in a secular struggle, as a secular stand-off. Technological diffusion, and hence productivity growth, has been the casualty. There have been one or two recent studies which have been quoted as questioning the importance of this “long tail” issue for the UK. 71  These pieces use the same data used here. The problem arises not from the  data but from the (mis)interpretation placed on them by these studies. All of these studies show, very 67  Andrews, Criscuolo and Gal (2016). Department for Business, Energy & Industrial Strategy (2017). 69 Haldane (2017). 70 Productivity figures refer to the non-financial business sector, but other sectors for which data are not available over the full ten-year period are also omitted. 71 Swinney (2018), Giles (2018). 68  19  All speeches are available online at www.bankofengland.co.uk/speeches  19  clearly, that the UK has a significant long tail problem. Appropriately defined, they also demonstrate that this tail has lengthened during the course of the crisis. To give one example, my Bank colleague Patrick Schneider recently published a blog post showing that a good chunk of the slowing of productivity growth since the crisis could be accounted for by workers in the top quartile of the productivity distribution. 72  This is entirely consistent with the tale of two companies.

Of importance, is the need to recognise the on-going economic transformation that is taking place in the region and to facilitate a more balanced growth between domestic and external sources of growth, between public and private sector-led growth, between the balance of consumption and investment, and between the different sectors of the economy, regions and communities within the country. Facilitating a more balanced growth will contribute toward sustainability of the growth process. With new areas of growth emerging, and new business models being adopted, new and more differentiated customer requirements need to be met. The level of innovation will need to be accorded increasingly important attention. While for the most part, pricing for products and services need to reflect the costs and risks, the industry needs to recognise that in emerging market economies, the basis to do so should take into account the social agenda that is an integral part of the sustainable performance of the country. The ability to achieve socio-economic stability will produce a more balanced growth. Ultimately, the objective of increasing competition and therefore enhancing efficiency in pricing needs to be balanced against providing basic financial services to the less advantaged retail customers at very minimal costs. Such trade-offs need to be made and managed. This also includes enhancing access to financing to the various sectors in the economy, to both the large and small borrowers. In emerging market economies, providing other ancilliary financial services especially to small businesses will enhance the potential quality of such assets.