samchain/econo-pairs-v1 huggingface dataset:
As regards price developments, annual HICP inflation averaged 3.3% in 2008, which is much higher than in the previous two years and significantly above the ECB’s definition of price stability. However, headline inflation rates fluctuated sharply in the course of the year, peaking at 4.0% in June and July, mainly as a result of developments in international commodity prices. During the second half of 2008, annual inflation declined steadily and rapidly. In March 2009, it stood at 0.6%. By contrast, HICP inflation excluding energy and food posted a much smaller decline in 2008 and early 2009. Looking ahead, HICP inflation is likely to remain well below 2% in 2009 and may reach negative levels around mid-year. Such a phenomenon is expected to be temporary, driven mainly by base effects from past energy price developments, and would not constitute an episode of deflation, that is, a protracted  BIS Review 49/2009  1  period of decline in the price level that can adversely affect inflation expectations and aggregate demand. Looking at the policy-relevant medium-term horizon, HICP inflation is in 2010 expected to rise again but remain below 2%, reflecting mainly ongoing sluggish economic activity in the euro area and beyond. Monetary policy has been conducted in an extraordinary and rapidly changing economic and financial environment over the past year.

Our policy-making has been in a “nonstandard mode” for a considerable period of time. In October last year, we adopted a fixed rate tender procedure with full allotment for all main refinancing operations and longer-term refinancing operations with maturities of up to six months. In addition, the ECB expanded its list of assets eligible for use as collateral in Eurosystem credit operations. As a result, the size of the Eurosystem balance sheet has increased substantially during the financial turmoil, by around € billion between June 2007 and March 2009, mainly reflecting the expansion of liquidity provision to the banking system since last autumn. This is of particular significance for the euro area because the banking system plays a more important role in the financing of the private sector than in other major economies. At the same time, owing to the ECB’s liquidity management, overnight money market rates have fallen even more steeply than the key ECB interest rates since last October. Money market rates in the euro area are now very low, also in an international comparison. Overall, the provision and management of liquidity by the ECB have played a crucial role in the implementation of the ECB’s monetary policy. They have ensured that banks have adequate access to central bank funding so as to continue financing the economy and that liquidity constraints and perceived risks have not triggered a systemic crisis.
Although these imbalances declined slightly in 2016, they are still at levels similar to those in 2014, when the sectoral countercyclical capital buffer (CCyB) was set at 2%. 1 Final requirements refer to the requirements that will apply after expiry of all transitional provisions, and in particular to the qualitative requirements for going-concern capital. Page 2/3  Berne, 15 June 2017 Fritz Zurbrügg  News conference  Second, the average interest rate margin of domestically focused banks decreased in 2016, having stabilised at a low level in the previous year. This renewed reduction in the interest margin highlights the considerable pressure which these banks continue to face in their core business, in an environment of exceptionally low interest rates. At the same time, however, banks’ net interest income and reported profits increased. This is mainly because the growth in mortgage volume more than offset the reduction in the interest rate margin. Third, the resilience of domestically focused banks remains adequate. In terms of both riskweighted assets and leverage ratios, they are well capitalised by historical standards, and their capital surpluses currently exceed the regulatory minimum requirements. SNB stress tests indicate that the surpluses at most of these banks are large enough to absorb losses under adverse scenarios. That is the SNB’s evaluation of the current situation at domestically focused commercial banks; but what about our assessment of the outlook? Here, the predominant feature is again the margin pressure that I have just mentioned.

The pressure on interest rate margins will remain strong as long as interest rates remain exceptionally low. Thus, there will be strong incentives for banks to take on more risk. In the short term, an increase in affordability risk or interest rate risk may help to prevent a further decline in profitability. However, it would make banks more vulnerable to a large upward interest rate shock and to a correction on the mortgage and real estate markets. Greater risk-taking in lending could also lead to a renewed increase in momentum on the mortgage and real estate markets. This applies particularly to residential investment property, where upward pressure on prices could remain strong. If interest rates rise, there is the risk of a substantial price correction. This could result in credit losses at the banks that provide funding for such investors. This highlights the importance of the capital surpluses currently held by the domestically focused banks. Going forward, banks should set their risk appetite and their capital planning so as to ensure that they can absorb the losses that would arise under highly unfavourable but possible scenarios. Even under such scenarios, the banks must be able to perform their economically important functions – especially that of providing credit to the economy. The SNB will continue to monitor developments on the mortgage and real estate markets closely, paying particular attention to the residential investment property segment as well as to banks’ risk-taking in mortgage lending.
Since the supply of Exchange Fund debt, even at about $ billion, is limited, and there is a lack of other Government debt, the range of collateral against which lender of last resort support would be provided must necessarily be wider than in some other economies. There are three basic instruments that the HKMA would use to provide support: purchase of the institution’s placements with other banks; repos of eligible Hong Kong dollar securities; and a credit facility against the security of the institution’s residential mortgage portfolio. The details are set out in the policy statement and its annexes, and I do not intend to go into them here, but I do wish to highlight three points. First, given that the purpose of liquidity support is to provide a temporary breathing space to allow the institution to sort its problems out, any support provided through repos or through a credit facility would be provided for an initial term of no more than 30 days, although there would be a provision for it to be rolled over for a further 30 days. Secondly, the interest rate charged on lender of last resort support would be pitched at a level sufficient to maintain incentives for good management but not at a level so high as to defeat the purpose of the facility, which is to prevent illiquidity from precipitating insolvency.

It is almost impossible for those who are not undertaking full-time studies on the subject to keep pace with these developments. Yet, all of us who are interested in systems that stimulate business and keep the wheels of economies moving at a rapid space, would continue to have a strong interest in the subject. I am also hopeful that, the banking and financial community will continue to promote and foster these studies and practices since these provide the lubrication for the smooth functioning of our complicated financial systems in our ever-changing corporate regimes. We also know that a large portion of global business is in the banking sector. In addition, all business entities, maintain direct relationships with banks and financial institutions. In that context, the preeminent position that is applicable to the banks and enjoyed by them cannot be over-emphasized or under-estimated. Therefore, our efforts to enhance the governance capabilities and capacities within banks and financial institutions have to be at the forefront of our agendas. The trend in the world of targeting governance practices in the banking and financial sector to be at the cutting edge of prevailing practices worldwide is a significant step in the right direction and should continue to be so in the future as well. Let us therefore together and collectively dedicate ourselves to promote and apply good Corporate Governance principles and practices in our respective banking and financial sectors.
In turn, this in depth knowledge will allow supervisors to fully exploit the proportionality principle embedded in regulations for those viable projects that might finally exit the test environment. Because we should not forget that such test environment should have a temporary nature. Hence, for those projects that prove viable, the principle of same regulation for similar activities and risks should prevail. In any event, it is currently difficult to foretell how the development of these disruptive technological players will evolve in the future. Like any process of change, financial disintermediation will involve significant benefits for society; but it is not free from challenges for banks, for the regulator and, naturally, for the Banco de España itself, in its role as guarantor of financial stability. Among the benefits for those demanding funds, associated with a more diversified financing structure, are, on one hand, their greater stability in the face of shocks that affect specific institutions in the financial sector. Indeed, the international financial crisis highlighted the greater difficulties in gaining access to funding for those firms depending exclusively on bank lending, in contrast to those with a more diversified financial structure. These problems were more acute for those firms – chiefly SMEs – operating with a small number of banks more harshly affected by the crisis, since the possibilities of replacing their usual lenders with new banks was not always easy owing to asymmetrical information problems.

Since 15 January, we have repeatedly and thoroughly explained our reasons for discontinuing the minimum exchange rate and introducing negative interest on sight deposits at the SNB. Upholding the minimum exchange rate was no longer sustainable given the changes taking place in the international arena and the sharply diverging monetary policy stances of the world’s major currency blocks. In formulating our monetary policy, we are confronted with an exceptionally complex situation on international financial markets. What is more, the global economy is still grappling with the after-effects of the financial and economic crisis, not least in the form of high levels of uncertainty. These are the realities that the SNB – and the Swiss economy – are facing. Turning a blind eye is not an option. In this environment, we were aware that the discontinuation of the minimum exchange rate would cause Switzerland’s economy to slow. While the data from the first quarter confirm that this slowing process is now underway, the country’s economic development since 15 January has been broadly in line with our expectations. Our monetary policy is geared towards this challenging set of circumstances and is currently guided by our willingness to take an active role in the foreign exchange market and apply negative interest rates. This two-pronged approach is designed to weaken the Swiss franc. The SNB’s interventions in the foreign exchange market, which feed more liquidity into the banking system, reinforce the effect of both of these measures.
Mojmír Hampl: Central banks, digital currencies and monetary policy in times of elastic money Speech by Mr Mojmír Hampl, Vice Governor of the Czech National Bank, at the Official Monetary and Financial Institutions Forum (OMFIF) Roundtable, London, 11 July 2017. * * * Ladies and gentlemen, Good afternoon. Before I start in earnest, let me thank the OMFIF for the kind invitation to this event, which allows me to speak in front of such a distinguished audience. It is an utmost pleasure for me to be here. The topics of today’s session are threefold: cryptocurrencies, central bank digital currencies and monetary policy with elastic money. I’ll try to touch upon all of these topics and bind them together, yet I realise the task is challenging. Let me begin with a story from Prague. In our capital city we have a strong community of supporters and users of cryptocurrencies. Among libertarians, some of them my ex-colleagues or friends from the University of Economics in Prague, bitcoin is seen as a real, fully fledged alternative to the current monetary order. Indeed, I could show you a place in Prague where one can only pay in bitcoin. By the way, I appreciate the name chosen for the most popular cryptocurrency, bitcoin. In the era when the foundations of the monetary system were based on precious metals, people sometimes “bit the coins” to check whether or not they were counterfeit.

12.03.2019  Roundtable: “Sustainable Finance as the driving force of the ecological transition” Banco de España Margarita Delgado Deputy Governor  It is a pleasure for me to welcome you to the Banco de España for two reasons. First, because I believe the Bank should be a forum for discussing and bringing closer to society those financial matters that bear on and affect the well-being of all. The second reason has to do with the matter I shall broach today, which I consider to be particularly important and which is none other than the role finances can and should play in relation to combating climate change. As you all know, this is not a new objective. Indeed, at least since the 1992 Río de Janeiro United Nations summit, combating climate change has been a recurrent objective of international institutions. So, what has changed in the wake of the 2015 Paris agreement, and why has climate change also begun to be part of the financial authorities’ agenda? Mark Carney talked about the so-called “tragedy of the horizon”, in the sense that the horizons used in the evaluation of financial risks are shorter than those that should be applied to evaluate climate change. Yet these risks may be said to have moved onto our horizon; both the physical risks owing to the effects of climate change, and above all, the risks of transition towards a sustainable economy. The Paris agreement marked a turning point regarding the feeling of urgency in the fight against climate change.
Lessons and unresolved issues Before making my final remarks, let me mention briefly some of what I consider the main lessons and unresolved issues in relation to both the Icelandic banking crisis and cross-border banking more generally. •  The risks in cross-border banking were underestimated, especially the crosscurrency part. 10  •  The crisis had significant elements of a run on cross-border banking. In Iceland’s case, a partial run on deposits in foreign branches and subsidiaries also contributed. •  Sizeable cross-border banking operations in small countries with their own currency are too risky. •  The EU architecture for cross-border banking is profoundly flawed, as it allowed free flow of capital and banking services with domestic safety nets and crisis management. •  Either we regress (de-globalisation and the death of branches) or we move towards EU supervision, deposit insurance, crisis management and resolution regimes for cross-border banks. 10  Researchers at the BIS have done an excellent work in throwing light on this aspect. See for instance McCauley, Robert M. and Patrick McGuire, (2009). “Dollar appreciation in 2008: safe haven, carry trades, dollar shortage and overhedging”, BIS Quarterly Review, December 2009; Baba, Naohiko, and Frank Packer, (2009). “From turmoil to crises: Dislocations in the FX swap market before and after the failure of Lehman Brothers”, Journal of International Money and Finance, 28, 1350–1374; and McGuire, Patrick, and Götz von Peter, (2009). “The US dollar shortage in global banking and the international policy response”, BIS Working Papers, No. 291.

Statistics give a picture of rapid-fire growth over a very short period (see graph). From 2003 to 2007, the banks’ total assets grew from less than two times Iceland’s GDP to almost nine times. Right before their collapse, total assets amounted to eleven times GDP. Over 40% of total assets were in foreign subsidiaries, 60% of total lending was to non-residents, and 60% of income was from foreign sources. Over two-thirds of lending and over three-quarters of deposits were denominated in foreign currency, notably in pounds sterling. Around 85% of the banks’ foreign lending was in Europe, with half in the Nordic countries, a third in the United Kingdom, and a tenth in the Benelux countries. Currency composition of deposits 2007  Banks' balance sheet expansion and leverage % of GDP  Total assets/Equity  1000  18  Other; 14% ISK; 22%  900 17  800 700  16  600 500  15  400 14  300 200  13  100  EUR; 16%  GBP; 45% USD; 3%  0  12 2003  2004  2005  Total assets (left axis)  2006  2007  2008  Leverage ratio (right axis)  Consolidated accounts of three largest commercial banks. 2008 data is end‐June. Deposits to customers. From the largest commercial banks' consolidated accounts. Source: Central Bank of Iceland. Source: Commercial banks' annual reports, Central Bank of Iceland.
From this point of view, I welcome the six very important recommendation issued in April directed to supervisors, central banks and the financial sector: i) integrating climate-related risks into financial stability monitoring and supervision; ii) integrating sustainability factors into own-portfolio management; iii) bridging the data gaps ; iv) building awareness and intellectual capacity and encouraging technical assistance and knowledge sharing ; achieving robust and intentionally consistent climate and environment related disclosure ; vi) supporting the development of a taxonomy of economic activities. In the longer-run, when there will be a global convergence about the necessity to issue global standards and regulatory requirements, global standard setter such as the BCBS and FSB would need to take the lead on addressing climate change-related risks.12 1 Main  findings : Climate change: which risks for banks and insurers? acpr.banquefrance.fr/sites/default/files/medias/documents/as_cover_note_en.pdf Analysis and synthesis no. 102: “French insurers facing climate change risks” April 2019 acpr.banquefrance.fr/sites/default/files/medias/documents/as_102_climate_change_insurers_en.pdf  2 Analysis and synthesis no. 101, “French banking groups facing climate change-related risks”, April  2019acpr.banque-france.fr/sites/default/files/medias/documents/as_101_climate_risk_banks_en.pdf  2/2  BIS central bankers' speeches

These two countries have much in common, yet some things (and not only the Danube!) still separate us. As I have already mentioned on previous occasions, to a certain extent, the speed of convergence was, in the case of Romania, fuelled by the flexibility of our exchange rate regime. By contrast, adopting a currency board more than two decades ago, during a crisis, Bulgaria shifted to a fixed exchange rate regime, out of which the only exit strategy is joining the euro area. What we need in order to move forward on the convergence path towards euro adoption is, first of all, to understand there is no substitute for a coherent economic policy mix, which should remain so even in election years. We need economic convergence, but the process should be a balanced one, so as to preserve macroeconomic equilibria and safeguard competitiveness. It is important that Europe remains united. Therefore, I want to pay homage to Baron Snoy, who has been instrumental in promoting Romania’s and Bulgaria’s further integration into the Economic and Monetary Union. I have known him since the first event we hosted in June 2011, and have always found in him not only a wise man, dedicated to the European Project, but also a friend of Romania, with a vast knowledge of our history and culture. He has also played an important role in bringing together Europhile experts that are trying to find solutions to the daunting issues facing Europe nowadays.
20  All speeches are available online at www.bankofengland.co.uk/speeches  20  Annex Chart 1: Decomposition of long run UK GDP growth  Source: Hills, Thomas and Dimsdale (2016) “Three Centuries of Data - Version 2.3”, available here. Chart 2: UK labour productivity growth forecast revisions  Sources: ONS and Bank of England Inflation Report projections. Notes: Forecasts for hourly labour productivity. 21  All speeches are available online at www.bankofengland.co.uk/speeches  21  Chart 3: IMF advanced economy labour productivity growth forecast revisions  Sources: IMF and Bank calculations. Notes: Forecasts for productivity per worker. Chart 4: Long run UK total factor productivity  Sources: Hills, Thomas and Dimsdale (2016) “Three Centuries of Data - Version 2.3”, available here. Illustrative estimates prior to 1850 are based on data on the growth rate of technology between 1AD and 1750AD in “A farewell to Alms” by Gregory Clark. 22  All speeches are available online at www.bankofengland.co.uk/speeches  22  Chart 5: Decomposition of long run UK labour productivity growth  Sources: Hills, Thomas and Dimsdale (2016) “Three Centuries of Data - Version 2.3”, available here. Chart 6: Long run UK total factor productivity growth  Sources: Hills, Thomas and Dimsdale (2016) “Three Centuries of Data - Version 2.3”, available here.

And indeed not only are restrictions still in force in some areas of activity, but it is also proving necessary to reintroduce others as a consequence of the fresh outbreaks of the disease. In this context, the euro area outlook remains highly uncertain and the risks to the area tilted to the downside. At the same time, there are already signs that the pandemic may give rise to certain structural changes, although the full extent of these is, for the time being, difficult to know. In this context, for me the key for economic policies is to strike the right balance between supporting the recovery and spurring economic adjustment to the structural changes that will emerge after the pandemic. This means first maintaining support measures and avoiding cliff-effects. Indeed, after the pandemic many euro area countries will be facing the highest level of public debt in many decades. And facing this challenge will require a gradual fiscal consolidation programme once the economy moves back onto a sound growth path. In the short run, however, the damage caused by the premature withdrawal of support measures would exceed the possible cost of maintaining them until the recovery shows signs of sufficient strength. Notwithstanding, given the significant heterogeneity of the effects of this crisis, in particular in this recovery phase, support measures should be much more focused now and their timing adjusted to the duration of the crisis. In addition, we have to adjust the specific instruments used.