samchain/econo-pairs-v1 huggingface dataset:
Until the beginning of 2012, the path of the SNB’s conditional inflation forecast lies above that of the previous quarter’s forecast. This is attributable to the assumption of higher oil prices compared to the previous quarter and somewhat higher import prices. Assuming an unchanged three-month Libor of 0.25% over the forecast horizon, the SNB expects average inflation rates of 0.9% for 2011, 1.0% for 2012 and 1.7% for 2013. Over the course of 2012, the path of the new forecast is lower than that of March because of the latest appreciation of the Swiss franc and the slightly slower development of international growth. Towards the end of the forecast period, inflation rises briskly and exceeds the upper bound of 2%. This shows that the current expansionary monetary policy cannot be maintained over the entire forecast horizon without compromising price stability in the long term. Due to the risks mentioned previously, the conditional inflation forecast is, however, associated with a high level of uncertainty. Global economic outlook Economic growth continued worldwide in the first quarter, although there were considerable regional differences. As in the previous quarters, the emerging economies recorded the highest growth rates. In the euro area, particularly Germany, the recovery was supported by strong export and investment activity. In the US, by contrast, high energy prices weighed on sentiment and held back growth. In addition, the persistent crisis on the real estate market is hampering the economic recovery. In Japan, there was a significant decline in GDP as a result of the earthquake.

BIS central bankers’ speeches  3  Conditional inflation forecast of March 2011 and of June 2011 Percentage change in national consumer price index from previous year Inflation Forecast March 2011 (with Libor at 0.25%) Forecast June 2011 (with Libor at 0.25%) % 3 2.5 2 1.5 1 0.5 0 –0.5 2008  2009  2010  2011  2012  2013  2014  Observed inflation June 2011 2008  I nf l at i on  2009  2010 Q2  Q3  Q4  2011  Q1  Q2  Q3  Q4  Q1  Q1  Q2  Q3  Q4  Q1  2.5  2.7  3.0  1.6  0.0 - 0.7 - 1.0 - 0.2 1.1  1.0  0.3  0.3  0.6  Q2  Q3  2008  2009  2010  2.4  - 0.5  0.7  Q4  Conditional inflation forecast of March 2011 with Libor at 0.25% and of June 2011 with Libor at 0.25% 2011  For ecast Mar ch 2011, Li bor at 0.25% For ecast June 2011, Li bor at 0.25%  4  2012  2013  2014  Q1  Q2  Q3  Q4  Q1  Q2  Q3  Q4  Q1  Q2  Q3  Q4  0.4  0.5  1.2  1.0  0.9  1.0  1.1  1.3  1.5  1.8  2.1  2.5  0.5  1.4  1.3  1.0  0.9  1.0  1.2  1.4  1.6  1.8  2.2  Q1  2.6  Q2  Q3  2011  2012  2013  0.8  1.1  2.0  0.9  1.0  1.7  Q4  BIS central bankers’ speeches  BIS central bankers’ speeches  5
I reiterate that these are not proposals of the Banco de España; the aim of my institution is to help this Committee in its work by setting out the measures applied in other countries. Taking first some of the measures that affect pension spending, some countries have opted to raise the legal retirement age. Measures here have been on three fronts. Firstly, early retirement conditions have tended to be tightened. And this is where the complement to the aforementioned structural reforms is greatest: pension system rules should generate the right incentives to remain in the labour market, and it should also be sought to maximise this permanence through continuous employee training and wage flexibility, tailoring wage rises to productivity. There have also been incentives to continue working beyond the legal retirement age. And finally, decisions have been made to put back the legal retirement age, although only a small number of countries have admittedly adopted this measure. This is so in Germany, where a gradual increase in the retirement age from 65 to 67 has recently been approved. The various simulations available indicate that this is a measure with a strong effect in terms of reducing pension spending. Secondly, and continuing on the expenditure side, other countries have opted to raise significantly the number of years of contributions used to calculate the amount of the pension (the "regulatory base"). Here, the application of a similar measure in Spain would draw us closer to other European countries.

Miguel Fernández Ordóñez: Taking of stock of the Toledo Pact Testimony by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, before the Non-Standing Committee for the Monitoring and Assessment of the Toledo Pact Agreements, Madrid, 15 April 2009. *  *  *  Five years since the last assessment of the Toledo Pact, and under a new assessment process initiated by Parliament in 2008, I appear today before this Committee to convey my views on the situation of and possible reforms to the pension system. These opinions are the summary of a note drafted by the Banco de España Research Department, which will shortly be forwarded to you. Before I begin, I should stress that the content of the Toledo Pact, i.e. the pension system and its reform, does not come under the purview of the Banco de España. Defining specific reforms to the pensions system is an eminently political matter and is thus for the legislature to decide upon. Accordingly, the note the Research Department is finalising and whose content I shall outline for you today should not be considered as a reform proposed by the Banco de España. It is simply a summary of what may be taken as a consensus among experts regarding the diagnosis of our pension system and its attendant problems, and the potential means for tackling them. Indeed, the summary is an update of that presented before this same Committee by the Director General of the Research Department in 2000.
These generally carry a higher yield than the assets purchased in the course of the intervention, typically low-yielding U.S. Treasuries. The difference in yields results in a net fiscal cost. 4  BIS central bankers’ speeches  Second, the need for U.S. fiscal consolidation implies that there will have to be offsetting increases in investment and the U.S. trade balance as the recovery proceeds. To illustrate this second point consider the following accounting identity: The public sector balance + the private sector balance = the current account balance Right now the identity holds as roughly: –10 percent of GDP public sector balance + 7 percent of GDP private sector balance = –3 percent of GDP current account balance.5 If the public sector balance must over time move from around –10 percent to around –3 percent to stabilize the federal debt-to-GDP ratio at tolerable levels, then the private sector balance and the current account balance must move by roughly 7 percentage points of GDP to take up the slack. Assuming that the consumption share of GDP still needs to fall over the medium term, the adjustment in the U.S. private balance will have to occur primarily in terms of rising residential or business fixed investment. There does seem to be room for business investment to expand significantly when firms become more confident in the economic outlook, provided that the United States remains a competitive location for investment. But residential investment is unlikely to climb very much for some time given the chronic overhang of unsold homes.

Mr. George comments briefly on the global economy and on recent economic performance in the United Kingdom Speech by the Governor of the Bank of England, Mr. E.A.J. George, at the Dinner with the Lord Mayor for Bankers and Merchants of the City of London on 11/6/98. The past year, since we last enjoyed the generous hospitality of the Mansion House, on this great City of London occasion, has been a testing time. It has been characterised by major imbalances in both the global economy and here in the United Kingdom - which have complicated the task of policy-makers everywhere, including the task of the Bank of England’s now legitimised Monetary Policy Committee. Internationally there has been good news in the enviable performance of the United States - Goldilocks - economy, with continuing robust domestic demand growth and further falls in unemployment, with so far remarkably little inflationary pressure. To the extent that this performance can be sustained, it provides substantial underpinning for the global economy as a whole. And there has been encouraging news, too, in the re-emergence of domestic demand growth in the Continental European countries as they prepare to take the final step to monetary union. That is a promising context for the launch of a strong, credible, currency and I wish the European Central Bank every success in its historic task. Domestic expansion with monetary stability within Europe is in the interest of us all. Elsewhere though the international situation has been decidedly less benign.
Today, however, I want to devote the limited time available to talking about electronic money within the internet itself, so I shall not be discussing card-based money any further. Many people speak of the arrival of the internet era as a revolution in business practice. From the particular viewpoint of making payments, I prefer to regard it as a step along an evolutionary path rather than as something revolutionary. Our distant forefathers were sceptical about the introduction of banknotes in place of metallic tokens and coins; and our more recent forefathers were worried as to the reliability of cheques as a substitute for cash when they first appeared. Even during the span of my own working life I can recall initial resistance by some to credit cards and debit cards on suspicions about the security of the arrangements, as well as opposition to autopay and direct debit schemes for fear of granting to a third party too general an authority to debit one’s bank account. But each of these innovations has, in the event, been assimilated and has taken its place in the range of accepted payment instruments. I would expect e-banking to follow suit, as just another step along the evolutionary path. But it is perhaps worth pausing to consider whether there is anything intrinsically different about e-banking which demands special attention from the central bank.

Central banks or their government shareholders enjoy a steady stream of profit from the issue of currency in the form of notes and coin - the so-called seignorage. It is noteworthy that the public’s demand for currency has been much less affected over the years than one might have expected by the emergence of successive new forms of non-cash payment such as cheques and cards. And personally I would doubt whether the development of cyberpurses, cybercash and cyberpayments would have much impact on cash in circulation, at any rate in the near term. But suppose I am wrong. Suppose there is a complete revolution such that cybercash, including electronic stored-value cards, substantially displaces physical currency within a few years. How should central banks react? In such circumstances, central banks would lose an important source of income and would have to find ways of replacing it. Perhaps some central banks would lose their financial independence and become dependent - or more so than hitherto - on subvention from the government budget. But in a broader sense they should welcome the development because it would be evidence that the economy as a whole was enjoying a more efficient and less expensive means of money holding and transmission.
Elsewhere, it followed adoption of the IASC’s International Accounting Standard 39 (IAS 39) in January 2001. The banking crisis of the past two years has brought that evolution to a halt. As pressures on banks’ balance sheets have intensified, subdued lending growth has raised concerns that recovery may be retarded. A debate has begun internationally on rolling back fair value to arrest this downward trajectory. Once again, central bank governors, politicians, regulators and countries have been prominent in their criticism of fair value. Some fear that fair value is poised to enter the third dip on its rollercoaster journey. Fair values and market prices What have been the underlying forces leading fair value to be at first lauded, then questioned and periodically abandoned? At the heart of this is the vexed question of whether market prices are a true and fair assessment of value. In theory, market prices ought to be a full and fair reflection of the present value of future cashflows on an asset. This is the fulcrum of the Efficient Markets Hypothesis (EMH). Market prices, if not perfect, are at least efficient aggregators of information – a one-stop shop for appraising value. This simplicity makes EMH powerful theory. But its real power is its widespread application in practice. EMH has not just monopolised the finance textbooks; it has also dominated the dealing rooms. If the EMH were to hold strictly, the fair value debate would be uncontentious. Marking of assets to market would be proper recognition of their economic value.

Fourthly, is reinforcing buffers to withstand future shocks. This is a key area of the international reform package that aims to significantly raise the resilience of the international financial system and to promote sound risk-taking activities. The standards will see financial institutions holding larger amounts of capital, including buffers which can be drawn down as losses occur. At the same time, the standards will also require banking institutions to significantly strengthen their liquidity and funding positions. Collectively, these standards aim to strengthen the banking institutions’ ability to continue to support orderly credit intermediation, particularly during periods of instability. While carrying more equity entails greater costs of capital for banks especially in the short-term, this investment will support a more stable financial system and overall global economy as well as build the confidence of consumers and investors, particularly during periods of stress. In view of these imperatives, this is a timely juncture for the industry to reflect and take charge of the efforts to rebuild and strengthen the foundations for more sustainable finance. Critical to this is the realisation that the creation of long-term shareholder value is consistent with, and not at odds with prudent risk taking and responsible business practices. Indeed, financial institutions with a regional footprint in ASEAN have the potential to contribute to the development of the financial systems in countries where they operate. There will be tremendous payoffs to be reaped from pursuing such sustainable strategies.
In addition, the regulations state that share capital and retained earnings, so-called Core Tier 1 capital, should make up the main part of the Tier 1 capital as it is these types of capital that can best cover losses. This vague ruling on how much Core Tier 1 capital a bank must have has led to a number of problems. Not least, it has enabled regulatory bodies around the world to stretch the rules to satisfy the banks and has thus started a race to the bottom – that is a race to low capital levels. Many countries have accepted Core Tier 1 capital levels as low as two per cent. This means that it has been possible to make up the remaining six per cent with cheaper capital instruments of poorer quality. Unlike ordinary share capital and retained earnings, these socalled hybrid instruments have debt-like properties which mean that they can only be used to cover losses when a bank has failed. Core Tier 1 capital, on the other hand, can be used to cover losses under normal circumstances when a bank survives. Not only have the generous capital requirements helped to undermine the ability of the banks to absorb losses, they have also made it possible for banks to substantially expand their  1  The Basel Committee is the international body that has established frameworks for bank regulation since 1974. The committee consists of 27 member states represented by national central banks and supervisory authorities.

The level of the countercyclical capital buffers will be determined  6  This refers to Core Tier 1 capital in relation to risk-weighted assets. 7  FSB (2011), “Policy Measures to Address Systemically Important Financial Institutions”, 4 November 2011. 8  See, for example, Financial Stability Report 2012:1, Sveriges Riksbank. 4  BIS central bankers’ speeches  by the relevant authorities on the basis of quantitative and qualitative assessments. Among other data, the quantitative assessment will take into account the so-called credit gap, which is how far credit growth deviates from an estimated trend. But this is a fairly rough measure of the degree of risk in the system, and other measures and assessments may also be fairly important. The aim of the countercyclical capital buffers is primarily to strengthen the banks and the resilience of the financial system. One effect of introducing the buffers will be to moderate the fluctuations of the credit cycle. In an upturn, substantial credit expansion will activate the buffers, which means that the banks will gradually have to hold more capital. This will restrict lending and thus reduce the risk of exaggerated credit growth and rising asset prices. In a situation in which lending is being tightened, the banks’ capital will be freed up as the buffer requirement is reduced. The banks will therefore not need to reduce their lending to the same extent, which would otherwise reinforce the downturn.
Sterling’s exit from ERM in the autumn of 1992 led to an overhaul in the way monetary policy was conducted, with the adoption of an explicit target for inflation, and a number of moves to make the process of policy-making more transparent through the publication of minutes of what was popularly known as the Ken and Eddie show, and a new Inflation Report, produced by the Bank. 3  What was special about the 1997 arrangements? In the event, 1992 marked a break with the past. But while the policy innovations of the 1993-97 years were showing promise, the framework remained relatively informal. And decisions about interest rates stayed in the hands of the Chancellor. The change in Government in 1997 led to a far-reaching effort to institutionalise and depoliticise monetary policy arrangements. A new Bank of England Act stipulated that the objective of monetary policy should be domestic price stability, and only ‘subject to that’ to support the Government’s objectives for output and employment. The Act left responsibility for setting an annual remit for inflation in the hands of the Chancellor; but it gave the Bank ‘operational independence’ to set interest rates to meet this target. Interest rate decisions were to be taken by Committee of nine, which was to include four appropriately qualified external members. With these changes, the UK had a fully articulated, credible domestic monetary policy framework, underpinned by statute, which gave the Bank, through the Monetary Policy Committee, an independent role in meeting an explicit inflation target.

Perhaps the most controversial frameworks took the form of commitments to meet targets for the growth in the money supply. These were meant to act as rules, which would tie the hands of politicians, but they proved ineffective, not least because the underlying economic relationships broke down. There were also periods – notably the 1970s – when there was no discernible monetary policy framework at all; when monetary policy was in eclipse and Governments relied on incomes polices to control inflation. These, too, were a dismal failure. 1  Inflation has averaged 2.5% since 1997, with a standard deviation of 0.8%. In the two decades to 1992, it averaged 9.6%, with a standard deviation of some 5.6%. Over the past decade, output has grown steadily, averaging 2.8%, with a standard deviation of 0.7%, compared with an average of 2% and a standard deviation of 2.5% over the seventies and eighties. BIS Review 20/2007  1  All these frameworks suffered from one of two basic problems. They either lacked credibility, or they lacked sufficient flexibility for policy-makers to respond intelligently to events. So it is little surprise that they were associated with two decades of poor macroeconomic performance.
Miroslav Singer: Sovereign debt crisis in Europe – assessing the current European instruments – addressing the challenges ahead Speech by Mr Miroslav Singer, Governor of the Czech National Bank, at the European Parliament Committee on Economic and Monetary Affairs Public Hearing, Brussels, 23 January 2012. *  *  *  Members of the European Parliament, Thank you for inviting me to this forum and giving me this opportunity to comment on the European Financial Stability Facility (EFSF). The last few weeks have brought us three new events that are rightly or wrongly regarded as game changers and I would like to discuss the EFSF in the context of those events. They are: 1) the ECB’s long-term loans to commercial banks and the widening of the range of guarantees which the ECB accepts from commercial banks for them, 2) the fiscal pact and 3) the rating downgrades. I would like start by saying that the provision of liquidity to commercial banks in Europe by the ECB gives us time to define more precisely the mission, design and operation of the Facility as well its position among the institutions charged with resolving the debt crisis. If we want to reduce the probability that some European nations and their banking groups will face liquidity problems that they cannot solve by obtaining funds from the market, we need to eliminate the following uncertainties relating to the EFSF: 1. It is not clear what benefits we expect from the EFSF or how it is supposed to generate them.

In this way, I trust, we can reconcile those who feel left out, including many of the protesters gathered in Frankfurt this week, with a process of integration that has already generated so many benefits for three generations of Europeans. Let me conclude. This building is a credit to all those who have worked to bring it to fruition. It is a landmark for the city of Frankfurt. And it provides the ECB with an impressive new home to pursue its mandate. But it also stands as a powerful symbol of what European integration is about. It reminds us of where we have come from and where we have come to. Of the horrors that can happen when we split apart, and the huge steps forward we can make when we work together. So let us not undo what has been achieved. Let us not hanker for the past. Let us draw on the past to unite us in the present – to build a complete Union that can deliver the stability and prosperity we need. We as the central bank will do our part in this process by ensuring the integrity of our single currency. Our shared money is the most tangible sign of the trust we place in one another. As the ECB’s first President, Wim Duisenberg, put it at the launch of the euro more than 16 years ago: “A currency is far more than just a medium of exchange … A currency is also part of the identity of people.