samchain/econo-pairs-v1 huggingface dataset:
Also, from the standpoint of fairness, it seems reasonable to have society as a whole share the burden of the costs that some citizens are already bearing most directly. In this respect, only fiscal policy has the instruments suited to attain these objectives with measures that are immediate, focused and tailored to an uncertain and uneven duration. Monetary policy should also operate vigorously to ensure appropriate financing and liquidity conditions for the various economic agents. In the case of the euro area, this means eliminating the possibility of bouts of financial fragmentation among its different members. This is particularly important in a setting in which economies’ financing needs will increase most significantly as a result of the crisis. In parallel, the micro- and macroprudential policies of the financial system should operate to ensure a suitable flow of credit to the economy and, in turn, to preserve financial stability. The aim is that financial institutions should continue ensuring the flow of credit to crisis-hit households and firms. For example, they should be allowed to use the capital buffers built up in recent years precisely to this end. A parallel objective is to prevent the increase in credit, market and operational risk arising from the strong downturn in activity from ultimately generating financial stability problems. Further, the fact the crisis is global calls for a coordinated response by countries. The temptation to resort to protectionist policies should be avoided. That can only hamstring the fight against the pandemic, and delay and weaken the awaited economic recovery for all.

Victoria Cleland: Global action to enhance cross-border payments Speech (virtual) by Ms Victoria Cleland, Executive Director for Banking, Payments and Innovation of the Bank of England, at the Silk Road Cash & Payments conference, Almaty, 29 March 2023. *** Cross-border payments are crucial to the smooth functioning of the global economy, and their importance is growing in our ever more interconnected, global digital economy. The value of cross-border payments is forecast to increase from almost $ trillion in 2017 to over $ trillion by 20271. Yet cross-border payments are typically, though I want to stress not always, slower, more costly, less transparent, and harder to access than domestic payments. And this impacts not just big wholesale players but consumer and remittance payments too. There are instances of payments taking up to 10 days2 and costing more than 10%3 of the payment value, and all too often with timing and cost unknown upfront. The G20 made enhancing cross-border payments a priority in 2020 and developed a roadmapOpens in a new window for delivering improvements. Since then, organisations from around the world have come together and made significant strides to lay the foundations for enhancing cross-border payments.
The ECB is contributing here with its work on options and discretions in the CRD IV/CRR framework, but you as legislators can also play an important role to complement our action. Second, we should implement the missing elements of the international regulatory agenda. I will come back to this. Third, we need to complete the banking union with the European Deposit Insurance Scheme (EDIS). The European Commission’s proposal sets out a clear roadmap towards a single EDIS, which I strongly welcome. It already provides safeguards against moral hazard, and ensures that banks pay for their own risks. I understand that you will discuss the proposal  BIS central bankers’ speeches  3  later today. I am sure that the European Parliament as co-legislator will play a decisive role in this process of strengthening and completing the banking union. Fourth, progress needs to be made to foster private risk-sharing via financial markets. We have therefore strongly supported the European Commission’s initiative to establish a capital markets union (CMU) from the very start, as you will remember from my introductory remarks to this Committee last year. A well-functioning, diversified and integrated capital market would support the transmission of our monetary policy, create deeper and more liquid markets, and increase the shockabsorbing capacity of the European economy, thereby contributing to financial stability. The revitalisation of the securitisation market is an essential element of this agenda, as it can free up capital for lending and thus increase funding for the real economy.

But that has more to do with the difficulties in producing exact forecasts of deregulations and their price effects than with the effects of deregulations differing in some more principled sense that warrants treating them differently from other shifts in relative prices. 3. The inflation target and rising productivity growth  3.1  Effect on demand and direct downward effect on inflation 2  Another type of structural change occurs when productivity growth rises . Higher trend productivity implies a permanently faster growth of total output. At the same time, as the productivity growth subdues unit labour costs, in a process of this kind inflation tends to be pushed down, at least initially. The return on capital rises and stimulates an expansion of the capital stock. In addition, the equilibrium real interest rate tends to move up in order to maintain the balance between saving and investment. The background to this is that demand for capital is assumed to rise when investment is perceived as more profitable in the light of higher productivity. In recent years some observers have concluded that rising productivity growth contributes to a decreased risk of inflation, a smoothing of cyclical fluctuations and a virtually endless continuation of the upswing. That is not so, as we shall shortly see. A path of this kind is, of course, highly desirable, leading as it does to higher real incomes and prosperity. But it faces monetary policy with troublesome problems and it is in the actual process of adjustment that the difficulties arise.
This assessment derives from studies conducted by the Eurosystem but also from the reports published by “ECB Watchers”, with whom, incidentally, the ECB has regular contact, notably in the context of annual conferences. Research carried out by these “ECB Watchers” show for example that on average, the Eurosystem’s monetary policy decisions were very well anticipated by financial markets, whatever their orientation, at least two weeks in advance, and fully factored in at least a week before. A comparison with the Fed, moreover, does not reveal significant differences between the two institutions with regard to the ability of markets to anticipate the monetary policy decisions of the two institutions. That points to the transparency of the single monetary policy. In particular, the fact that the ECB has chosen channels other than the publication of  BIS Review 113/2007  7  minutes of the meetings of the Governing Council has not prevented it from reaching a high level of predictability. As regards the frequency, since the inception of the euro in 1999, the Eurosystem has changed its policy rates 25 times (8 cuts, 17 hikes), which is on average close to the usual average frequency of interest rate changes 1 . However, compared to the Federal Reserve, in particular since 2001, the frequency of the changes is by far lower. Does this necessarily imply that the Eurosystem does not move enough or too low?

Such demand shocks can be triggered by structural changes in the behaviour of economic agents or result from portfolio shifts or financial innovations in the context of financial globalisation. There are indeed some signs that a money demand shock occurred at the beginning of the 2000s in the euro area, as illustrated by an apparent structural shift in the trend velocity of money, which summarises the relationship between money, output and the price level. (see Figure Annex page 8). A tentative explanation is that our economies are becoming more and more "financial" in the sense that the ratio of financial wealth to GDP is constantly increasing. Since economic agents – especially financial intermediaries and corporates – need to keep part of their total financial assets in liquid holdings, there may be a structural increase in the demand for money (everything equal). The euro and the integration of European capital markets may have accelerated this evolution. As an illustration of the uncertainties facing euro area monetary policy makers, one possible consequence of current events in credit markets may be to trigger a re-intermediation process, i.e. an expansion of banks' balance sheets which may further complicate our reading and interpretation of monetary and credit dynamics in the months to come. As you can see there is a need to continuously reassess and diversify the tools used in our monetary analysis. 4. Predictability and frequency of policy actions  Contrary to some preconceptions, most monetary policy decisions have been perfectly anticipated by the markets.
The CPIEFE will decline steadily until the second half of 2017 and will take longer to hit 3% (figure 2). This inflation path relies on two assumptions: first, a fairly stable real exchange rate around its current levels, which are estimated to be in line with fundamentals; second, that although the output gap will exceed the December estimate for some time, it is projected that, for the aforesaid reasons, it will begin to close towards the end of this year. Activity growth ended 2016 in line with the December forecast, although characterized by a steeper slowdown during the year, which is expected to continue well into 2017. On 20 March, the Bank published the first National Accounts figures based on the new benchmark compilation that uses the base year 2013. This change is intended to update the way the evolution of the national economy is gauged, incorporating new estimation methodologies, changes in international standards and new sources of information. The Bank makes these changes regularly every five years, according to the respective international standards set by the IMF and the OECD. The most salient changes are depicted in a box in this Report, and all the details can be seen in several documents uploaded on our website. The new data, which included a very small revision to 2014 and 2015 growth, confirmed the further weakening of the economy in the last quarter of the year, and at the same time modified the growth trajectories of the already published quarters of 2016.

Beyond the yearly shadow banking monitoring exercises, policy makers intended to make sure that no part of the financial system would be left unregulated and that a similar set of rules should apply to a similar set of risks. For the sake of a better regulation of globally systemically important institutions, some progress remains possible in the monitoring, and the need for relevant data in particular as regards the better understanding of inter-linkages among G-SII. Cross-sectorial consistency was seen as a key factor to prevent any opportunity for regulatory arbitrage and preserve appropriate level playing field. The Financial Stability Board following the G20 recommendation has launched an ambitious regulatory program which aims at better controlling risks which are related the shadow banking sector. Indeed, the US have recently adopted a regulatory framework for Money Market Funds (July 2014). Other reviews are still ongoing, I am thinking of the assessment of risks and systemicity of asset managers whose assets under management have experienced a major growth these last few years, or the rapid development of ETFs providing real time liquidity on their liability while their matching assets have a lower liquidity. In Europe, this global initiative translated into a number of regulatory initiatives such as the Securities Financing Transactions Regulation (repos and SFTRs) or the Regulation of Money Market Funds. The final objective was to turn the shadow banking sector into a safer and regulated “market-based financing”. 2.
On average over the past decade the UK ran a current account deficit of around 2% of GDP, increasing in the years immediately before the crisis. That is about double the post-war average, but compares favourably with the United States, which had a deficit of around 5% of GDP before the crisis. Sterling’s depreciation has already boosted the UK’s external balance sheet, and net trade should benefit too over time. Arguably, more serious imbalances were internal. Perhaps surprisingly, they did not show up in unusually strong output or consumption growth, in contrast to the inflationary booms that preceded earlier busts. In the five years leading up to the crisis, annual GDP growth averaged around 2½%, similar to the post-war “trend”. Much the same was true for household consumption growth, and its contribution to GDP even declined slightly during 2005–07. But, with slower income growth, the household saving rate actually fell throughout this period. Household balance sheets expanded rapidly, with debt and house prices rising in tandem. Access to cheap and readily available finance, and a willingness to borrow, led to household debt rising to over 150% of annual income. That inevitably made the household sector more vulnerable to adverse shocks; that is what leverage does! But there were also important distributional shifts. One way of thinking about the rise in house prices and increase in debt is as a transfer of wealth between older (house-seller) and younger (buyer) generations.

9  See Tucker P M W (2006), “Reflections on Operating Inflation Targeting”, a speech at the Graduate School of Business, University of Chicago, May 2006. 10  Tucker (2009e), op. cit. BIS Review 21/2010  7  carried away beyond anything warranted by fundamentals. Regulators need to be a bit less disposed to find fundamental explanations for any degree of financial appreciation, and a little more alert to market participants themselves saying, as many did, that risk is underpriced. That does not of itself mean that monetary policy should be more timid in trying to repair deficiencies in nominal demand. But it does underline the need, as I said a few years ago, to take care that the remedy for one set of imbalances does not lead to another. And this is especially important if, as would seem to be the case, monetary policy is capable of generating prolonged periods of stability at an aggregate level that lead financial market participants to believe mistakenly that the world is less risky than is actually the case. It is all very well saying that the cognitive biases of economists and the authorities should change slightly, and that our mindset should at times be a bit more lateral. But do we, in actual fact, have any instruments for doing anything about threats to stability from credit bubbles that are not associated with burgeoning nominal demand and inflationary pressures? That is precisely what the “macroprudential instruments” debate is about. There is increasing interest in these possibilities.
Measures to promote growth would certainly be instrumental in ensuring the smooth future functioning of our economy, but they would also allow us to develop a climate of confidence necessary for today’s investment and consumption decisions. Their impact on the economy would thus not be negligible. As for monetary policy, its role in this area can only be to provide price stability, an essential factor for confidence and macroeconomic efficiency. Dawn of a new era Ladies and gentlemen, as the President of the Bank Council indicated earlier on, the National Bank is at an historic turning point today. As of tomorrow, our institution will be governed by new legislation. The new National Bank Act will enter into force in less than 24 hours. Our operational framework, our range of instruments, our organisation and our duty of notification will all be affected. Likewise, our mandate will be - perhaps not modified - but at least made more explicit. Article 5 of the new Act stipulates that “The National Bank shall pursue a monetary policy serving the interests of the country as a whole. It shall ensure price stability. In so doing, it shall take due account of the development of the economy”. The objective of price stability is not new. In fact, the National Bank has always been guided by this goal in its activities.

The desire to guarantee the purchasing power of our currency underpinned the link established in the past between the franc and gold, and it was this same concern that led Switzerland, in 1973, to abandon the fixed exchange rates of the post-war period, which were undermined by widespread lack of discipline. The objective of price stability is now inscribed in law, which reinforces its legitimacy. Our monetary system is thus now as clearly defined as it used to be under the gold standard. We define price stability as an annual rate of inflation of less than 2%. We were able to maintain such stability in the course of the past year, and I am pleased to note that this objective has been reached in each of the past ten years - an unparalleled achievement internationally. It is a modest, but highly important, contribution to the prosperity of our country. Our history has shown that inflation - or deflation - can have damaging effects that often cause suffering to the most vulnerable members of our society. One of Switzerland’s traditional values is this concern for price stability. It is a significant achievement that the National Bank will endeavour to preserve in the years to come. The new Act also stipulates that we must take due account of the development of the economy in setting any course of action. There can be no doubt that monetary policy has short-term repercussions on economic activity.
Market standards can be effective if they:  -  Articulate clearly the market’s collective view of best practice, with worked practical examples to clarify grey areas;  -  Are grounded in, and are reinforced by, relevant regulatory frameworks and requirements;  -  Are kept current; and  -  Are given teeth by incentives that foster adoption and adherence. An Early Assessment of the FMSB’s work  So how is the FMSB doing in establishing common standards of market practice that are well understood, widely followed dynamically relevant? The FMSB is already making an important contribution. 7  “Hard infrastructure” refers to the way in which markets are organised. “Soft infrastructure” refers to the standards and norms, including regulation, market standards and codes, by which markets operate. 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  Drawing on the expertise of its members, the FMSB has finalised standards that codify best practice with respect to: reference price transactions, commodity binary options, and new bond issues. A standard on risk management transactions for new bond issues is nearly final, and an earlier draft standard on FX stop-loss orders has been absorbed into the FX Global Code. In each case, potential conflicts of interest are mapped to high-level principles designed to mitigate them. For reference price transactions, emphasis is placed on transparency with clients on mechanics and potential conflicts, and on mitigating the risk that the wider transactions of dealers could be market moving.

Participating will also have the added advantage to have first-hand knowledge of the decisions made in this context and thus avoid having partial and/or distorted information communicated by parent banks in accordance with group-level agendas. The second argument relies on the fact that, in many of the non-euro area new Member States, the domestic banking systems are dominated by banks headquartered in the euro area – in the case of Romania, for example, euro area banks account for 80 percent of the banking system’s assets; the same is true for the Czech Republic and Hungary (where foreign-controlled banks hold above 80 percent of total assets) and to a lesser – though still significant – extent in Bulgaria and Poland (around 70 and 60 percent respectively). Subsidiaries and branches of these banks are often important enough so that they are deemed systemic at the host country level, even though their balance sheets are small relative to their parent entities. Non-euro countries are therefore already well integrated into the European financial market. Clearly, the objective of preserving the integrity and ensuring the smooth functioning of the European financial market is not something that concerns only the euro area, but is relevant at the EU level. In this context, it is hardly surprising that Romania embraced the Banking Union idea – it makes perfect sense that the reality of a significant, even systemic, cross-border presence in the banking systems of non-euro area countries is matched by effective cross-border supervisory and regulatory institutions.
Considering that the increases in unprocessed food and tobacco prices – which are beyond the control of monetary policy account for 5 percentage points of current annual inflation, it is clear that there is sizeable room for disinflation from this channel (Figure 31). BIS Review 159/2010  13  Factors that are beyond the control of monetary policy, such as fluctuations in unprocessed food prices and tax adjustments related to tobacco products, created significant forecast uncertainty by increasing the volatility of consumer inflation. This, in turn, has created a challenge for us to understand the underlying inflation correctly and to manage expectations. In this context, I believe that it would be useful in terms of transparency and predictability, to share with the public the assumptions we make relating to the said groups while making forecasts and our inflation expectations excluding these groups. Accordingly, we assume that annual inflation in unprocessed food products will be 17 percent for end-2010 and 9 percent for the following two years. Meanwhile, the annual rate of increase in the tobacco and alcoholic beverages group index is expected to be 24 percent at end-2010 and to hover around levels consistent with inflation targets in subsequent years. Within this scope, we expect the inflation indicator excluding unprocessed food and tobacco and alcoholic beverages to follow a volatile trend in the first half of 2011 due to the base effect and to gain stability slightly above 4 percent in the medium term (Figure 32).

BIS Review 159/2010  7  Recent data suggest that the recovery in domestic demand is slightly stronger than expected and that a more moderate growth process was assumed in the second half of the year. Indicators pertaining to private sector demand indicate that private sector consumption and investments continued to rise rapidly in the third quarter in annual terms (Figure 21). Consumption and investment expenditures are likely to accelerate in the final quarter of the year with the support of the counter-cyclical stance of monetary and fiscal policies as well as strengthening capital inflows. The steady rise in credits confirms continuing recovery in economic activity (Figure 22). Another noteworthy point about this period is that credit expansion continues to extend across a greater part of our economy in terms of both sectors and scale. Low interest rates and easing credit risk indicators suggest that credit growth will be strong, and therefore, the credit channel should continue to underpin domestic demand over the forthcoming period. 8  BIS Review 159/2010  As supply-side constraints have widely subsided, we believe that credit realizations rather reflect the dynamics pertaining to credit demand. The Loans Tendency Survey suggests that the borrowing motivation of firms tends to change in the post-crisis period. Firms used to demand credits to facilitate debt rollover or to finance their working capital during the crisis. However, as the effects of the crisis tapered off, loans for rolling over debts decreased while loans for investment purposes increased (Figure 23).