samchain/econo-pairs-v1 huggingface dataset:
The policy rate in the UK has been 0.5 percent for some time. In the Bank of England’s assessment, a further reduction would not serve any useful purpose. 8 Nor has the ECB found it appropriate to reduce the policy rate further, but is prepared to expand its asset purchase programme if necessary. 9 Central banks also influence long-term interest rates For monetary policy to work, it must have an effect on more than short-term money market rates. The interest rates that influence inflation and employment are those facing enterprises and households. In economies with well-functioning money and credit markets, a reduction in the policy rate will relatively quickly push down market rates. In recent years, there have been cases where this did not happen. The most serious situation that has arisen occurred after the Lehman Brothers collapse. The resulting uncertainty led to very high risk premiums. Despite substantial policy rate cuts, market rates remained high. 8  Bank of England (2013): Note on Negative Interest Rates for Treasury Committee. 9  Cœuré, Benoît (2015), Member of the Executive Board of the ECB: “How binding is the zero lower bound?” (speech given on 18 May 2015), European Central Bank. 4  BIS central bankers’ speeches  In response, a number of central banks, particularly the Federal Reserve and the ECB, intervened directly in those money and credit market segments that had been hardest hit.

Ida Wolden Bache: A somewhat faster rise in the policy rate Speech by Ms Ida Wolden Bache, Governor of Norges Bank (Central Bank of Norway), during "Arendalsuka", on the outlook for the Norwegian economy and the policy rate decision, Arendal, 18 August 2022. * * * Accompanying slides of the speech. Good afternoon everyone and let me first of all thank Sparebanken Sør for allowing us to use this lovely building. This was once the Arendal branch of Norges Bank. The branch was closed in 1989, and at that time inflation in Norway was on its way down from a high level. Today, after a long period of low and stable inflation, inflation is again high. The central bank’s role is to ensure price stability and promote economic stability. The decisions we take affect people’s finances. I was acutely aware of this responsibility, as were the other members of the Monetary Policy and Financial Stability Committee, when we convened yesterday to set the policy rate. Chart: A somewhat faster rise in the policy rate After thorough discussions, we decided to raise the policy rate by 0.5 percentage point to 1.75 percent. The decision was unanimous. This means that we are raising the policy rate somewhat faster than indicated by the policy rate forecast published in June. The policy rate will most likely be raised further in September.
Among these were exuberant real estate prices, and a flourishing  BIS Review 87/2010  1  securitisation business, which facilitated excessive credit growth. A group of countries – including China, Japan, and oil-exporting economies – were saving too much, while others – such as the US – were heavily borrowing to finance consumption and investment. These developments were unsustainable in the long-run. At the same time, in an environment characterised by low interest rates, a global search for yield may have led investors to take on too much risk. On the micro side, it became apparent that market participants’ incentives were not aligned with the risks they were taking, and that some investors were not fully aware of the extent of their exposures, which contributed to the under-pricing of risk. In the banking sector in particular, deficiencies in the design of the prudential framework for banks, in the supervisory review of banks’ risk management procedures and in the rules for compensation and pay were some of the microeconomic factors leading to important vulnerabilities. III. Regulatory and supervisory initiatives currently under discussion  After witnessing the first global banking crisis since the Great Depression, it became clear that it was absolutely crucial to get the banking sector on a sound footing again. Policy makers responded rather quickly and forcefully to the crisis, which resulted in a wideencompassing reform agenda.

This points to the many benefits from leaning against the build-up of financial imbalances, while pursuing the price stability objective. To some extent, successful macro-prudential policy could alleviate the need for monetary policy to “lean against the wind” as regards unsustainable financial trends. The two policy areas should however operate with a clearly distinct set of tools. Effective governance arrangements need to be in place, so as to maximise credibility and preserve institutional independence. 6  BIS Review 87/2010  IV. Conclusions  Ladies and gentlemen, I started my talk with a reference to architecture and, as we progressed, I reviewed the many building sites – at various stages of development – of the reforming financial system. It will be very challenging to keep momentum in the reform agenda and to keep the activities of the many building sites on track as “battle fatigue” inevitably settles in. But the crisis has also painfully demonstrated that sound foundations are indispensable to withstand the occasional blows that hit the financial system. Therefore, it is all the more important to continue vigorously pursuing the ambitious financial reform agenda. I thank you for your attention. BIS Review 87/2010  7
The ECB has announced a quantitative reference value for broad monetary growth as measured by M3, the first reference value for M3 growth being set at an annual rate of 4.5%. This reference value is consistent with the maintenance of price stability over the medium term, while allowing for sustainable output growth and assuming a trend decline in the velocity of circulation of M3. In setting the reference value for monetary growth, the Governing Council emphasised its medium-term orientation. Substantial or prolonged deviations of current monetary growth from the reference value will normally signal risks to price stability in the medium term. The ECB does not intend to react to deviations of monetary growth from the reference value in a mechanistic way. In the first instance, such deviations are analysed thoroughly to infer any signals which they may give about the prospects for price developments. If the deviation points to a threat to price stability, monetary policy has to react in a manner appropriate to counter this threat. Although monetary data contain information which is important for monetary policy decisionmaking, monetary developments alone clearly do not constitute a complete summary of all the economic information necessary for appropriate policy decisions to be taken. Thus the Governing Council emphasises that it is important, in parallel with the assessment of monetary growth, to look at a wide range of financial and other economic indicators, including economic forecasts.

International financial crises that started in Thailand in 1997, in Russia in 1998 and in Brazil in 1999 and subsequently spread over to other countries in the region and even as far as to other continents, may serve as an example. Frederic Mishkin gives other examples of threats posed by globalization. 14 Financial liberalisation reduces the number of instruments which discipline the banking activities. This has led to credit booms in many countries, often financed by foreign entities and in foreign currencies. Credit booms have thus become a frequent source of banking crises. 15 Banking crises, on the other hand, have generated significant costs for the economy, inter alia, through the necessity of liquidity injections to some banks or through limiting the supply of loans to companies. Increased share of foreign capital in local financial markets raises their sensitivity to the developments on foreign markets. For instance, an increase in interest rates in another country may cause an outflow of short-term capital, and in consequence lead to an increase in interests rates and a decrease in liquidity on a local market. Banks operating on the global financial market are subject to higher competition, also due to the fact that investors compare the banks’ performance results on an ongoing basis. As noticed by Raghuram Rajan, banks nowadays focus more than ever on maintaining their income on a high level, at the cost of assuming higher risk. 16 Financial instruments traded by banks are becoming increasingly complex and thus less liquid and carrying higher risk.
All of this leads me to conclude that macroprudential policies – as currently designed – can be used to mitigate risks from abroad. By building domestic resilience, the countercyclical capital buffer can ensure spillovers from abroad are not amplified. The use of existing agreements around reciprocity can improve the available set of outcomes for everyone and can also help reduce imbalances in capital flows. Moreover, given the tendency for global credit growth to affect the probability of domestic crises, any macroprudential policy which tames the financial cycle in one country will have positive externalities for the world. 11  Details of the modelling and assumptions used are set out in Technical Appendix 3: Model of international policy reciprocity. As coined by IMF-FSB-BIS (2016). 13 In both cases, if an authority sets a countercyclical buffer greater than 2.5% of risk weighted assets, reciprocity becomes discretionary. 12  5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5  The changing nature of global capital flows  However, the focus of existing macroprudential tools on banks and banking flows means their ability to mitigate risks from abroad has its limitations. This is particularly true given the changing composition of global capital flows. While cross-border banking flows have declined, international marketable debt flows have increased (Charts 4 and 5).

The economy is probably approaching a normal rate of capacity utilisation. When inflation increases from a very low level, this will provide a basis for gradually moving towards a more normal short- term interest rate level in Norway. This may counter excessive credit growth and excessive pressures on domestic resources in the medium term. Interest rate developments abroad may have a considerable influence on movements in the krone exchange rate. The inflation outlook in Norway implies that Norway will not be the frontrunner when other countries increase interest rates. Interest rates were left unchanged at Norges Bank’s Executive Board meeting on 26 May 2004. Norges Bank’s key interest rate, the sight deposit rate, therefore remains at 1.75 per cent. According to Norges Bank’s assessment, with a sight deposit rate of 1.75 per cent at present, the probability that inflation two years ahead will be lower than 2½ per cent is greater than the probability that it will be higher. 3  Adjusted for the effect of the interest rate’s direct impact on house rents, changes in parental payments to day-care centres and for special factors relating to indirect tax changes earlier in the year. 4  Seasonally adjusted, three-month moving average recalculated as an annual rate. 6  BIS Review 34/2004
This requires being specific in terms of how savings can be made, and then firm and tenacious in the implementation phase. Second, we tend to focus public debate and promises on taxes, thereby confusing the symptom with the cause. This may be described as a sort of "Bermuda triangle" of fiscal frustration: (a) successive tax cuts since 2014 have fuelled our deficits and are now costing us around 2 points of GDP (b) however, French people actually express major political doubts about these tax cuts: they are never considered sufficient (c) the constant change in tax measures is economically ineffective as these changes make households and SMEs unfamiliar with them; tax instability and complexity interfere with the expectations of economic players. Page 7 of 19 II. At the same time, intellectual and academic investment have continued to decline Public initiatives that rarely go anywhere Over these same decades, public reform has been the focus of successive but diminishing expectations. In 1989, the government of Michel Rocard launched the "Renewal of Public Service” programme. The adoption of the Organic Budget Law (LOLF) in 2001 represented a great source of hope with its focus on performance and tracking results by public mission - without, alas, ever having been properly “adopted” in either public or parliamentary debate.

Moreover, after some years of subdued financial cycles, most cycles in euro area countries have normalised and in some countries they have even accelerated [SLIDE 4]. This is the case for France, and should it be a concern? In France, asset prices are currently rising in a context of low market volatility. Since low volatility and abundant liquidity may encourage risk-taking behaviour alongside search-for-yield behaviour, we must be vigilant against the risk of a widespread mispricing of financial assets that could hinder the economic recovery. To give you some numbers: residential real-estate prices are back in positive territory, with year-on-year growth of 2% in real terms, and the commercial realestate sector is still buoyant. Our main alert is on non-financial corporation debt, which is now 74.4% of GDP against 61.8% in 2010 [SLIDE 5]. Overall, private debt in France now amounts to 130.5% of GDP.2 I do not want to bombard you with numbers but the main difficulty now is for policymakers to disentangle from these positive figures what is a desirable consequence of our monetary policy stance and what clearly signals a potential financial risk that we must address. 3. – Policy makers: can monetary policy and macroprudential policy be best [better?] combined? As said, overall private debt in the euro zone has diminished as a share of GDP. But in some countries, the financial cycle is picking up, while at the same time inflation has been slowly 2/4  BIS central bankers' speeches  increasing, but remains below our target.
All in all, this gives a fairly unfavourable image of monetary policy and what it can achieve. So can’t monetary policy play a more positive role, for instance, by preventing  10  See, for instance, Koo, R. C., “How to Avoid a Third Depression”, Testimony before the Committee on Financial Services, U.S. House of Representatives, July 2010 and Krugman, P. and R. Wells, “The Slump Goes On: Why?”, The New York Review of Books, September 2010. That household consumption plays a key role in the recovery from a financial crisis is a significant result in, for instance, Barrell, R., E. Philip Davies and O. Pomerantz, “Costs of Financial Instability, Household-Sector Balance Sheets and Consumption”, Journal of Financial Stability 2, 2006. Crises tend to be more severe the higher the degree of borrowing is, and there appear to be effects on consumption over and above those stemming from lower disposable incomes and lower net wealth. 11  Amaral, P., “Households’ Balance Sheets and the Recovery”, Economic Trends, Federal Reserve Bank of Cleveland, September 2010. BIS Review 164/2010  5  bubbles and exaggeratedly highrisk lending? Yes, I believe it can, if one acts at an early stage. But at the same time, I believe that the main responsibility, or the first line of defence as one often says, for preventing credit-driven bubbles must be suitably-designed regulation and effective supervision. This is a stance that I believe I share with most people today.

Speech  Structural changes in energy markets and implications for inflation and monetary policy Governor Ida Wolden Bache's introductory remarks at the European Central Bank Forum on Central Banking on 27 June 2023 in Portugal. Good afternoon and thank you for inviting me to take part in this distinguished panel. In my remarks, I will offer some thoughts on how the structural changes in energy markets will affect energy prices, and more generally, inflation before turning to the implications for monetary policy. But let me start with some observations about my home country. Norway is an energy nation and a large oil exporter. Over the past decade, natural gas exports have increased in importance. Norway is highly integrated into the European energy market, primarily through trade in oil and gas, but increasingly also in the power markets. Since Russia’s invasion of Ukraine, Norway has become Europe's largest single gas supplier. Norway is also an important supplier of flexible hydroelectric power. Close cooperation with Europe reflects our common interest in wellfunctioning energy markets during the transition to zero emissions In the years to come, the petroleum sector’s significance to the Norwegian economy will likely decline as petroleum resources on the continental shelf are depleted. Lower activity in the petroleum sector will have consequences for the Norwegian business structure. Substantial investments as well as reallocation of labour and other resources across firms and sectors may be required. Along this path, the green energy transition can be a catalyst.
The Monetary Policy Toolbox in the UK Speech given by Dave Ramsden, Deputy Governor for Markets & Banking  Society of Professional Economists 21 October 2020  With thanks to Renée Horrell and Tom Smith for their assistance in preparing these remarks and to staff across Markets and BPI and elsewhere in the Bank for their many contributions, as well as to my colleagues on the MPC for their helpful comments and suggestions. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  1. Introduction It’s a pleasure to be speaking once again at the Society of Professional Economists’ Annual Conference. When I last addressed this conference it was two years ago, in person, in the impressive surroundings of the Bloomberg building near to the Bank of England. Today we’re meeting in rather different circumstances, and for many of us at least in slightly less impressive surroundings! I'm delighted that we are able to meet virtually, and I'd like to thank Kevin Daly and all the SPE team for their work to make this event possible. The theme of today’s conference is “Policy Challenges for the Global Economy”. What I want to do as my contribution to that theme is to give you my perspective, in my role as Deputy Governor for Markets, Banking and Resolution at the Bank of England and member of the UK’s Monetary Policy Committee (the MPC), on one part of our response to the particular policy challenges of the Covid pandemic.

Buying a large proportion of specific gilts could create local distortions in yields and restrict market liquidity. 5  6  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  6  £ of sterling non-financial commercial paper.11 And central banks in other jurisdictions have purchased a range of other asset types. Perhaps the best way to think of QE is not as a single tool but as multiple tools, each best suited to a different job. For delivering a defined dose of economic stimulus a large, steady programme of gilt purchases may be most appropriate. For addressing market dysfunction a faster or more targeted programme might do the job better. Our March QE announcement aimed at both these objectives at once and so combined elements of both these options – as Andrew Bailey put it, we went both “big and fast”. In this speech I have focused on QE as a monetary policy tool, in other words one which is used in pursuit of the MPC’s remit to maintain price stability. Our March intervention met this requirement, although one of its immediate objectives was to address market dysfunction, our ultimate reason for doing that was to counteract any tightening of monetary and financial conditions that might result from that dysfunction.
Chart 2: Central bank policy rates 2016 - 2007, change in pp  Policy Rates, end of period in % 20  ECB  2016  SRB  2011  2015  ROM  2010  2014  POL  2009  2013  MKD  2008  2012  HUN  2007  -1 -1.0  14  region average  16  ALB  18  0  -2  12 -3  10 8  -3.5  -4  6  -4.0  4  -4.5  -5 -5.0  2 -6  0 ALB  HUN  MKD  POL  ROM  SRB  -5.8  ECB  -6.0  -6.6  -7  12  Spread to the ECB rate in pp 10 8 6 4 2 0 ALB  CZR  HUN  MKD  POL  ROM  SRB  -2 average 2004-2007  average 2008-2012  average 2013-2016  Source: Central Banks’ internet pages. The eased monetary stance across of the central banks in the region led to loosening of the financial conditions for borrowing of the private sector. The scrutiny of the lending interest rate data reveals that the downward adjustment of the cost of credit is visible in all of the countries in the region.

A financial meltdown was averted, economic activity was supported and protectionism was contained. The chart shows the decline in world trade during the Great Depression compared to the much quicker decline in the recent crisis. 4  BIS Review 113/2010  Historical perspective II The decline in world trade during the crises of 1929–1933 and 2008–2010  But in the 1930’s, it took 3–4 years before world trade stopped falling, and the pickup in trade was slow. This time, a fairly quick rebound of trade has taken place. Some two years after the crisis started, world trade was more or less back to the pre-crisis level. IMF lending June 30, 2010  Early on, the IMF advocated forceful and coordinated measures that the G20 followed up with broad international efforts to stabilize the global economy. Without such prompt and comprehensive action, the consequences of the crisis would have been far greater. BIS Review 113/2010  5  It is in the interest of all that the large and systemically important countries discuss issues of common interest. Their successful collaboration benefits not only themselves, but also the rest of the world. G20, IMF and small countries  Among the G20 initiatives were the efforts to strengthen confidence in international financial institutions, the IMF in particular, to permit these institutions to play an effective role in tackling the crisis. Large financial resources were raised by IMF members, many outside the G20. Indeed, the G20 has used the IMF as an instrument of its policy implementation.