samchain/econo-pairs-v1 huggingface dataset:
In order to implement these changes, improve monitoring and analysis of unsecured money markets, and support supervisory objectives, the Fed recently proposed a number of enhancements to the FR 2420 data collection, which are intended to capture a larger share of fed fund and Eurodollar transactions. 27 These enhancements would add about 30 new 24  The FR 2420 reporting form is available at http://www.newyorkfed.org/banking/reportingforms/FR_2420.html. An April 8, 2015, Liberty Street Economics blog post provides additional analysis, available at http://libertystreeteconomics.newyorkfed.org/2015/04/the-fr-2420-data-collection-a-new-base-for-the-fedfunds-rate.html. 25  For information on principles guiding this international work, please refer to the Principles for Financial Benchmarks, Final Report (The Board of the International Organization of Securities Commissions, July 2013), available at http://www.iosco.org/library/pubdocs/pdf/IOSCOPD415.pdf. 26  The February 2, 2015, statement regarding planned changes to the calculation and the publication of an overnight bank funding rate is available at http://www.newyorkfed.org/markets/opolicy/ operating_policy_150202.html. 27  The proposal is available at https://www.federalregister.gov/articles/2015/04/07/2015–07920/proposedagency-information-collection-activities-comment-request. 10  BIS central bankers’ speeches  domestic institutions that are fed funds borrowers and lead to the collection of much more robust Eurodollar activity, including Eurodollar transactions from Caribbean branches that are managed and controlled by the U.S. offices of foreign banks. These proposed revisions are available for public comment until June 8, 2015, and implementation of the changes to the published rates will occur after revisions to the FR 2420 are complete, which is expected within a year.

The Committee said that it does not currently anticipate selling agency mortgage-backed securities (MBS) as part of the normalization process, but noted that limited sales might be warranted in the longer run to reduce or eliminate residual holdings. 2  BIS central bankers’ speeches  First: IOER. The Federal Reserve began paying interest on reserve balances in October 2008; interest rates on required and excess reserve balances have both been ¼ percent since mid-December 2008. 4 The Federal Reserve intends to use adjustments to the IOER rate – a rate it directly administers – as the main tool for moving the fed funds rate and other short-term interest rates into its target range. The IOER rate is essentially the rate of return earned by a bank on a riskless overnight deposit held at the Fed, thus representing the opportunity cost to a bank of using its funds in an alternative manner, such as making a loan or purchasing a security. In principle, no bank would want to deploy its funds in a way that earned less than what can be earned from its balances maintained at the Fed. Even though banks are the only institutions eligible to earn IOER, arbitrage should lift market rates up to the level of the IOER rate.
According to this forecast, and assuming that the SNB policy rate remains constant at −0.25%, the rate of inflation will temporarily decline before rising back to 2% over time. Had we not raised our policy rate in June, inflation would very probably have been well above this level over the medium term, and thus persistently outside the range of price stability. Our monetary policy decision in June must also be seen as a weighing-up of various risks. Tightening too soon or too strongly could have stalled economic development, and possibly even led to renewed deflationary risks. In Switzerland’s case, however, these factors were clearly outweighed by the risks of tightening too late. Waiting could have necessitated a more abrupt and stronger rate increase at a later date, with the risk of a more severe economic downturn and threats to financial stability. The SNB’s experience in the late 1980s and early 1990s, the most recent phase of higher inflation in Switzerland, shows that it can become necessary to pursue a markedly restrictive monetary policy with serious consequences for the real economy once inflation exceeds a certain level. Our substantial change in course at a comparatively early stage regarding the development of inflation, and the fact that we envisaged possible further tightening in the near future, were thus aimed at ensuring price stability over the medium term without placing an excessively heavy burden on the economy. This weighing up of various risks takes place in an environment marked by exceptional uncertainty.

On the one hand, micro price Page 5/16  data point to Swiss companies having adapted their pricing policy in recent months in line with the higher rate of inflation (cf. Chart 7). For example, there has been an increase in the proportion of goods and services in the Swiss consumer price index with rising prices, whereas the proportion with declining prices has remained virtually constant. On the other hand, our delegates for regional economic relations serve us well. Their one-on-one discussions with companies allow us to better understand price-setting behaviour. These talks show that companies’ long-standing reluctance to raise prices has largely disappeared. The change in their behaviour has resulted in prices becoming more flexible overall. This is facilitating the spread of price rises to other categories of goods and services. These findings make it clear that the increase in inflation should not be seen solely as a consequence of the temporary supply shocks triggered by the pandemic and the war. This strengthened our resolve in deciding to react relatively quickly to the rise in inflation. The longer-term outlook for monetary policy is also subject to high uncertainty. Structural factors such as the transition to a greener economy, rising sovereign debt worldwide, the demographic transition and ultimately also the fact that globalisation appears to have peaked – at least temporarily – could lead to persistently higher inflationary pressure in the coming years.
This theory, which Rey formulated with emerging markets in mind, could very well also be correct and relevant for more developed economies, like Sweden. My interpretation of such arguments is that monetary policy in Sweden then cannot deviate too far from monetary policy in the United States and the euro area without giving rise to an unjustified appreciation of the krona.23 Misinterpreted: Inflation is also low in countries with more expansionary monetary policy Inflation is also falling now in countries and currency areas where the central banks have conducted a more, sometimes much more, expansionary monetary policy than the Riksbank. I have sometimes heard these observations put forward as arguments proving that a more expansionary monetary policy would not have much impact. This is not a very convincing conclusion. To begin with, it is only a year or so ago that there was much international discussion as to why inflation was so surprisingly high.24 The background to this discussion was that the weak economic developments in many parts of the world did not appear to have any great effect on inflation. Despite the low demand in the economy and high unemployment, inflation remained at levels that did not appear compatible with historical patterns. 25 To some extent, one can probably say that monetary policy abroad was more successful in stabilising inflation than economic activity, at least for a period of time. Without the powerful monetary policy stimulus, inflation would probably have been much lower.

Martin Flodén: The low inflation – should we be worried and can we do anything about it? Speech by Mr Martin Flodén, Deputy Governor of the Sveriges Riksbank, at SACO (the Swedish Confederation of Professional Associations), Stockholm, 14 May 2014. *  *  *  Thank you to Björn Andersson, Charlotta Edler, Gabriela Guibourg, Kerstin Hallsten, Marianne Sterner, Christina Nyman, Stefan Palmqvist, Ulf Söderström and other employees at the Riksbank for valuable discussions and views on earlier versions of the text, and to André Reslow for help with data production. The views expressed in this speech are my own and are not necessarily shared by the other members of the Executive Board of the Riksbank. Those of you who follow the debate on monetary policy will probably not be surprised that the theme of my speech today is the low rate of inflation. This is the most important question for monetary policy right now. Over the past year, I have emphasised the importance of ensuring that inflation does not get stuck far below the target of two per cent and said that monetary policy therefore needs to focus on avoiding such a situation. Consequently, I entered a reservation against holding the Riksbank’s policy rate unchanged at the most recent monetary policy meeting in early April. Instead, I was in favour of a repo rate cut of 0.25 percentage points. Today I intend to focus on two issues. First, I wish to explain why I am worried by the low inflation rate.
We refer to this as the lack of a macroprudential perspective. 3 In general, we have not taken enough account of systemic risks; that is risk that can spread throughout the financial system. In a capital adequacy context, the lack of a macroprudential perspective is reflected in the fact that the banks have calculated their capital adequacy requirements on the basis of the risks to their own operations. They have thus ignored the negative external effects that banks may have on the system as a whole. This has led to a banking system with too high a level of risk and too small buffers in terms of capital and liquidity. It has also led to the risk of distorted market prices for risk, capital and liquidity. Another example is that the models that the banks have used to calculate their capital requirements for market risks systematically underestimate the risk of losses under stressed market conditions. As a result, the calculated capital adequacy requirements have been too low to enable the institutions concerned to manage the losses that occur in serious economic downturns, like the one we have just experienced. A third and closely-related example is that the banks have not held sufficient capital for the counterparty risks that they are exposed to in their derivatives trading. As financial assets, including derivatives, are accounted in accordance with the real value principle, changes in counterparty risks enter the banks’ balance sheets via their income statements.

Low inflation expectations However, as has been said, it is also important not to increase interest rates too early and thus dampen growth unnecessarily. A difficult question that the Riksbank must take a position on in its assessment of inflationary pressure is whether the relationship between growth and inflation has changed and, in this case, which factors have contributed to this. A concept that has been frequently discussed during the past year is the “new economy”. Discussion has above all centred on the American economy, which now seems to be at the end of a long period of high growth. It seems as if the USA has skipped an entire business cycle. This was in fact also the case in the 1980s. There was an upswing in 1982 and no downturn occurred before 1990-91. However, it is now speculated whether the new technology, IT investments and computerisation have changed transaction costs, management functions and production processes so that the growth in productivity has been durably increased and that growth has therefore been able to increase more quickly without leading to increased inflationary pressure. The hypothesis about the new economy has also been put forward with regard to the Swedish economy. However, it will be first in ten years’ time when researchers have long and many series of data to analyse that we make any more certain pronouncement about the actual situation.
Good analytical tools, however, can be helpful even in this respect, by enabling the simulation of different alternative scenarios in a consistent manner. After this general introduction, let me now briefly speak about the progress we have so far achieved in forecasting at the Czech National Bank. We now have more than five years of experience with inflation targeting. The new regime was introduced in a challenging situation, after a period of currency turmoil in May 1997, which ended the fixed exchange rate period and resulted in higher inflation and rising inflation expectations. The economy needed a new nominal anchor in order to return to a disinflation path. Inflation targeting was chosen as “the best of all bad” alternatives at the time. Such a sudden switch from a fixed exchange rate system to inflation targeting required a radical and fast change in the central bank’s mentality. This was perhaps the biggest challenge that the CNB had to face. Over the past five years it has involved much work on improving our forecasting tools, leading to substantial development in our internal analytical processes. These changes culminated a year ago, when the CNB settled on a new forecasting process. This integrates expert judgement and short-term analyses - which were the key pillars of the CNB’s forecasting tool-kit in the first years of inflation targeting - with a small-scale macroeconomic model developed by the CNB’s staff with the assistance of the International Monetary Fund.

9  All speeches are available online at www.bankofengland.co.uk/news/speeches  9  Chart 12 Impact of debt vulnerabilities on depth of economic earthquakes Cumulative impact on 5th percentile of GDP growth over next three years (pp)  0.5  0.0  -0.5  -1.0  -1.5 Impact of 10pp increase in credit to GDP ratio over past 3 years  Impact of 1pp widening in the current account deficit (as % of GDP) -2.0  Household credit  Corporate (PNFC) credit  External imbalance  Notes: Figure based on Aikman et al. (forthcoming). It shows the impact of an increase in each vulnerability indicator at time t on the 5th percentile of real GDP growth over the next three years. The cumulative three-year impact on the left-hand tail of GDP growth is shown. For household and corporate credit in turn, the impact of a 10pp increase in the credit to GDP ratio over the subsequent three years is shown. For the current account, the impact of a 1pp (relative to GDP) widening in the deficit is shown. For reference, for the UK 19802018, a one standard deviation increase in three-year credit growth was 5.9pp (household) and 8.1pp (corporate) and for the current account was 1.7pp. Using these estimates we can add up the different developments in debt to see what they might mean for the overall degree of underlying economic vulnerability. Chart 13 shows their sum total over time. Two points stand out from this chart. First, the sum of recent developments isn’t elevated.
And we’ve been on our own ever since. Iceland has a number of unique characteristics that complicate economic policy. The economy is extremely small. Its export sectors are homogeneous and prone to cyclical fluctuations. Most of its financial markets are relatively shallow and illiquid, which complicates price formation. Not only is our currency small, it is also bordered on both sides by two of the largest currency areas in the world – which cannot but make independent monetary policy conduct more difficult. And there are other factors as well. Icelanders demonstrate a decided herd mentality in their consumption decisions, which causes wide fluctuations in private consumption. With its small population, Iceland has a limited number of workers to do all that is needed – operate the healthcare, education, and administrative systems – and conduct monetary policy as well. Anyone discussing Iceland’s monetary policy concerns is bound to acknowledge these problems. On the other hand, it is clear that the greatest problems facing domestic monetary policy do not stem from the structural flaws inherent in Iceland’s history and geographical characteristics – flaws that are unlikely to change. The biggest problems are institutional, political, and – perhaps most of all – societal: They centre on fiscal policy decisions, collective bargaining agreements, and overall societal consensus. These we can change.

We are implementing Professional Conversion Programmes (PCPs) to pre-emptively reskill employees whose roles are impacted by change. We launched the IBF Careers Connect two months ago to help our workforce navigate career changes, acquire relevant skills, and be job-ready. We are working with SkillsFuture Singapore (SSG) and Workforce Singapore (WSG) on a Skills Framework for Financial Services that will provide individuals with information on employment, career pathways, occupations, job roles, emerging skills and competencies, as well as relevant education and training programmes. As leaders of our institutions and businesses, we have a special role to play. If each of us can commit to plan for our own workforce, to develop them and give them the best opportunity to stay relevant, the transformation of our workforce will be that much 2/3  BIS central bankers' speeches  smoother. Let us mobilise and inspire our staff to inculcate a growth mindset to stay competitive and step up to take action. To help do that, IBF is pleased to launch of the #FutureMeNow movement. This is a call to action, for industry professionals and leaders to take ownership and contribute to enabling our workforce for the future. Individuals can pledge to learn something, talk to someone about their career plans or be a mentor. IBF will work with the pledgees to realise their pledges. There are about 500 of us gathered here today. I invite you as industry leaders here tonight to be the first to be active multipliers.
If one waits so long in raising the policy rate in an economic upturn, it is likely that inflation will then overshoot the target for a period of time. The way I see it, the Executive Board of the Riksbank has taken a step in the direction of this kind of conditioning by opening up for inflation overshooting the 2 per cent target before it is time to make monetary policy less expansionary. For this type of strategy to function well, it must have the support of a majority, and it will be particularly powerful if communicated by a unanimous Executive Board. Interesting change of strategy by the Federal Reserve Safeguarding the symmetry of the inflation target, and thereby the inflation target per se, appears to have been an important motive for the changes made by the US central bank, the Federal Reserve, just over a month ago with regard to its strategy and objectives.15 The changes were the first to be made since 2012, when the inflation target was introduced, and the review that preceded the changes was motivated by conditions since then having changed in three important respects:  13 For a detailed review of the Riksbank’s experiences of publishing repo-rate forecasts, see Sveriges Riksbank  (2017). 14 In academic literature this type of strategy is usually called conditional “forward guidance”. 15 For a description of these changes, see Federal Reserve (2020) and Powell (2020), Clarida (2020), Brainard (2020).

When we make forecasts for the labour market, we also have to take into account the fact that the labour supply will increase when economic activity strengthens. This is a normal pattern. The Government’s policy will probably also mean that the number of persons in the labour force increases slightly more than has been usual in previous economic upturns. The fact that the labour supply increases will mean that unemployment will fall at a slower rate than employment rises. With regard to inflation, we expect it will fall over the coming six months. It is the large fluctuations in energy prices that make an impact on inflation in the short term. We cannot – and should not – do much about this type of short-term fluctuation in inflation. In the longer term we are expecting inflation to rise and be close to 2 per cent two years ahead. One might wonder, if inflation is now expected to fall in the short term, what reason do we have to believe that it will rise to 2 per cent in the longer term? One important reason for this forecast is that productivity growth should be more modest in future. Over the past two years we have been able to note that productivity growth has slowed down compared with the years before that. This indicates that productivity growth is about to slacken to a more normal level, seen from a long-term perspective.
It is in no way justifiable to allow bank customers or taxpayers to pay for either exorbitant profits or inefficient operations, which is happening in many countries in the euro area. There is no doubt that we in Sweden can also do more to promote competition in the financial market, not least when it comes to banking activities aimed at private customers and small firms. The largest market players continue to enjoy a high level of market concentration. However, the establishment of a number of new niche banks in the past few years and the recently raging price war on credit for tenant-owned apartments show that deregulation gradually leads to increased competition and consequently to lower prices for consumers. Continued reforms necessary To sum up, we have reason to be proud of the reforms introduced in Sweden over the last decade. They have resulted in Sweden today having a higher growth potential than several of the large economies on mainland Europe. At the same time, we cannot settle for what we have done so far. Sweden must continue to remain a step ahead on the reform agenda that the EU Member States  BIS Review 45/2003  5  decided upon in Lisbon in 2000 and which aims to make the euro area “the most competitive and dynamic knowledge-based economy in the world by 2010”. Reforms are under way in a number of countries in the euro area and will in the long run make the euro area countries more attractive to international investors.

Philipp Hildebrand: Global economic prospects and key challenges for monetary policy Summary of a speech by Mr Philipp Hildebrand, Member of the Governing Board of the Swiss National Bank, at the Money Market Event, Zurich, 23 March 2006. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch)  *  *  *  Summary Current economic developments are basically in line with the SNB’s expectations. Global economic activity is robust and the outlook is bright. The SNB expects broad-based growth of over 2% for 2006 and a moderate rate of inflation of approximately 1%. In addition to the usual economic risks, monetary policy today is faced with three key challenges. First, the effects of globalisation on inflation must be anticipated. Second, the way in which the interaction between globalisation and an ample supply of liquidity affects the price development of several assets needs to be analysed. The SNB's monetary policy concept enables it to take a long-term view and to recognise possible distortions early on. Third, identifying the neutral interest rate has become more difficult in today's environment. Many factors tend to support a lower neutral interest rate, while others would support a higher neutral rate. Against this background, the SNB will continue the gradual normalisation of its monetary policy. The scale and timing of this normalisation process will depend on further economic developments. Owing to a favourable inflation trend and well-anchored inflation expectations, we are in a position to cautiously approach a neutral interest rate level.