samchain/econo-pairs-v1 huggingface dataset:
To force nominal wages below their already depressed level would have meant much higher unemployment, a greater erosion of living standards, a marked degree of “undesirable volatility in output” (contrary to our remit), and a risk of inflation falling well below the target in the medium term. With the freedom granted from having our own currency, the mix of tight fiscal and loose monetary policy is necessary for a rebalancing of the economy. Because of the measures taken to reduce the enormous fiscal deficit here at home, UK sovereign debt funding costs have actually fallen relative to those in Germany since the start of last year. Of course, there can always be differences of judgement about the overall stance of policy, but to change the broad policy mix would make little sense. Of course, at some point, Bank Rate will need to rise to more normal levels in order to ensure that inflation returns to its 2% target. There has been, as you know, a lively debate among the members of the MPC as to when that point will come. The Committee is watching extremely carefully for any signs of a pickup in domestically generated inflation and it will take action as soon as it is appropriate to do so. So far, subdued rates of increase in average earnings, as well as remarkably – some might say disturbingly – low growth rates of broad money have provided strong signals that inflation will fall back in due course. Banks are still contracting balance sheets and reducing leverage.

And here the FPC has a crucial role to play. By drawing attention to system-wide developments, it can strengthen the hand of  BIS central bankers’ speeches  3  the supervisor in dealing with a particular institution. Requiring prudential changes will be easier for that supervisor with the public guidance and support of the FPC. The granting of new powers to the Bank of England leads naturally and properly to questions about how we should be held accountable. The same challenge arose when the Monetary Policy Committee was set up. We took that head on and we responded. As the Treasury Committee concluded in February, “The Monetary Policy Committee and the Bank of England have repeatedly demonstrated their commitment to transparency. They have seen their engagement with the Treasury Committee as a means of securing accountability”. We will show equal commitment to accountability for the FPC and the PRA, and I look forward to discussing with the Treasury Committee how that might best be achieved. The Bank must be fully accountable to Parliament and the public. I know that some of you are concerned about the powers of the Governor. But with decisions taken by committees and enhanced accountability, those powers are not what they were. In the 1880s, the Metropolitan Railway wanted to extend the line to Amersham and Chesham. That meant acquiring land from the then Governor’s estate at Chorleywood. The Governor insisted that the company build a private station next to his home to expedite his travel to the City.
The proceeds from the gold sales are placed in a bond portfolio, whose composition differs from that of our currency reserves. Approximately 65% of the portfolio is invested in Swiss franc bonds or hedged against exchange rate risks. The rest consists of bonds denominated in euros (25%), US dollars (3%) and other currencies (7%). The average duration of the portfolio is about three years. This investment profile takes account of the SNB's legal framework and of the fact that future beneficiaries will want their return denominated in Swiss francs. The market value of the gold proceeds amounts to approximately Sfr 8 billion. Since it was created in May 2000, this portfolio generated an average annual yield of 4.3%. The legal provision still prohibiting the National Bank from acquiring equities has in fact rather well served the interests of the future beneficiaries of the free assets, as stock markets have been on a decline since May 2000. Next September, the Swiss people will have to decide on the appropriation of the free assets. There are several conceivable scenarios: either the so-called gold initiative is accepted, or the counterproposal of the Federal Council is accepted, or both proposals are rejected. Each scenario has different implications for the date of transfer of the free assets and for the SNB's balance sheet.

The guideline for fiscal policy implies that the central government budget deficit shall be equivalent over time to the expected real return on the Government Petroleum Fund. The new guidelines for economic policy received broad support in the Storting. The guideline specifying that only the real return on the Petroleum Fund is to be used means that the capital in the Fund is not depleted. The capital in the Petroleum Fund will increase as long as there is a positive cash flow (to the central government) from petroleum activities. When the conversion from petroleum assets to financial wealth has been completed, the objective will still be to restrict withdrawals so that the real value of the Fund’s capital is maintained - in principle, indefinitely. The guideline thereby provides a long-term anchor for fiscal policy. The guideline provides a stable framework that contributes to curbing fluctuations in the Norwegian economy that are caused by converting petroleum assets into investment at home and abroad. The guideline has been adhered to in the past two years. As mentioned, the largest conversion of our national wealth in the next thirty years will be from oil as recoverable reserves to oil as financial wealth. The question might, of course, be raised as to whether an alternative option would be to keep our wealth in the form of oil and extract what we needed. Whether this would be profitable or not depends on oil price developments compared with the return on financial assets.
Two levels of short-term interest rates 1.0  1.0 Average interest rates in the repo market for government bonds Treasury bill, 3 months Forward rate, 3 months  0.5  0.5  0.0  0.0  -0.5  -0.5  -1.0  14  15  16  17  18  -1.0  Note. Per cent. The forward rate reflects the expected level of the repo rate over the next three months. Sources: Macrobond and the Riksbank  13 [16]  Figure 5. Central banks’ cost-free capital 35  35  Equity 30  30  Coins and notes  25  25  20  20  15  15  10  10  5  5  0  RB  Fed  ECB  SNB  0  Note. Per cent of GDP Sources: Respective central bank and national statistics sources  Figure 6. The Riksbank’s government bond holdings 400  400  350  350  300  300  250  250  200  200  150  150  100  100  50  50  0  15  17  19  21  23  25  27  0  Note. Nominal amounts, SEK billions. Forecast up until June 2019, then a technical projection with the assumption that no further reinvestments are made. The development of the holdings is also affected to a certain extent by the market prices of the bonds and which bonds the Riksbank chooses to reinvest in.

Now we are observing renewed tensions, as the costs of supporting financial sectors, fiscal stimulus and automatic stabilisers brought the focus to public finances across many countries both within and outside the euro area. BIS Review 70/2010  1  With hindsight, the financial crisis has reminded us that the seeds of financial instability are often the same: balance sheet mismatches, high leverage (on or off balance sheets) and very rapid growth of financial institutions. Essentially all of these elements were at play in one form or another in this episode. Now what are the lessons for financial stability monitoring and assessment frameworks as implemented by the responsible authorities? A first observation I would like to make in this respect is, that we, as other central banks, had been drawing attention in our semi-annual Financial Stability Review, which Lucas was overseeing for many years, to the risks that were building up. For at least two years before the turmoil began, we issued clear warnings about vulnerabilities that were building up on account of an increasingly aggressive hunt for yield which was underpinning significant under-pricing of risks across a variety of asset classes, not only credit derivatives. And, I should also say that, the same warnings were communicated by several other central banks. A second observation is that in parallel with our financial stability assessments, we also repeatedly warned euro area governments of the risks of not consolidating fiscal positions in accordance with the rules of the Stability and Growth Pact.
In currency board arrangements, domestic inflation is directly linked to inflation of the country of which its currency is pegged, and then the anchor for inflation will be the exchange rate. In such strict exchange rate targeting regimes, the country’s business cycles in terms of growth and inflation would be fully synchronised with the other country’s business cycles. In these countries, monetary authorities have very little leeway to use monetary policy as a countercyclical policy measure to stabilise growth and inflation in the domestic economy. In the other extreme end, monetary policy frameworks are based on fully fledged inflation targeting regimes where inflation is directly anchored through inflation targets and interest rate policy, while maintaining fully floating exchange rates. Under this arrangement, the exchange rate acts as the shock absorber to minimise the impact of external shocks on the real economy. In such regimes, central banks have more autonomy to use interest rates as an instrument to counter any cyclical economic shocks. There are many central banks that have a combination of these two extremes, where some are closer to inflation targeting and others being closer to exchange rate targeting with soft pegs with some leeway to use interest rate as an instrument to manage inflation and growth. One cannot argue that one regime is superior to the other. It all depends on country circumstances, and even within one country, monetary policy frameworks move in different directions at different  4  times.

It has been the endeavour of this report to propose a type of central bank which, with proper skill and understanding in its management, will establish monetary conditions in Ceylon that may make possible, as never before, the fuller use of the nation’s human and material resources and a rising standard of comfort for all.” History has judged us before! I will leave it up to you to judge us in future as well! Bibliography Bernanke Ben S. and Michael Woodford (eds), The Inflation Targeting Debate. Cambridge Massachusetts: National Bureau of Economic Research Studies in Business Cycles, 2005. Bernanke, Ben S., Thomas Laubach, Frederic S. Mishkin, and Adam S. Posen (eds), Inflation Targeting. Princeton: Princeton University Press, 2001. Blinder, Alan, Central Banking in Theory and Practice, Cambridge Massachusetts: The MIT Press, 1996. Central Bank of Sri Lanka, 40th Anniversary Commemorative Volume of the Central Bank of Sri Lanka, 1950-1990. Colombo: Central Bank of Sri Lanka, 1990. Central Bank of Sri Lanka, 60th Anniversary Commemorative Volume of the Central Bank of Sri Lanka, 1950-2010. Colombo: Central Bank of Sri Lanka, 2011. Central Bank of Sri Lanka, Annual Report. Various Years. Central Bank of Sri Lanka, Road Map: Monetary and Financial Sector Policies, Various years. Colombage, Sirimevan, The Political Economy of Central Banking in Sri Lanka. Prof. H. A. de S. Gunasekera Memorial Oration, University of Peradeniya, October 2017. 23  Government of Ceylon, Sessional Paper XIV: Report on the Establishment of a Central Bank for Ceylon (Exter Report). 1949.
Distance of debt level 2020/21 to 60% Maastricht Criteria  3  Strong adjustment  No adjustment  4  -10  0  Gradual adjustment  2 1  20  30  40  ROM  LIT  HUN  LAT  CZR  POL  MKD  BIH  SLO  CRO  BUL  ALB  35  LAT  LITH  15 MK  PL  AL  25  RO  BIH  5 -5  SRB  HU CRO  0 -1  10  45  7  5  -20  BUG  8  6  -30  -15 -25  SLO -35  SRB  IMF DSA Debt change 2021/2020 - 2015  -2  -45  *Size: 0.5 - no adjustment; 1 - gradual; above 1 - strong. ** "-" is above "+" is below the benchmark. ***  To sum up, it appears that ECB policy accommodative actions affected the financial conditions in the region. Reduction of the main policy rate allowed a room for policy rate reduction in the region thus contributing to lower costs for borrowing of the private and public sector. Part of the injected liquidity through asset purchase programs seems to be allocated on the CESEE financial markets, enabling cross– border capital flows that underpinned the process of recovery of asset prices and reduction of the borrowing costs.

One approach to this challenge would be for the Bank to return to basics and improve the three channels of financial intermediation, namely, banking, equity and debt, through a number of measures. First, the Bank could increase investment in the financial infrastructure in Asia. Just as physical infrastructure, such as airports and highways, facilitates the movement of people and goods, financial infrastructure, such as the payment and settlement systems for the banking and securities sectors, facilitates the safe and efficient movement of money. The importance of a robust payment and settlement system in this region is underscored by the events of 11 September. Secondly, the Bank could expand the technical assistance programme to assist economies in restructuring the banking sector. Small and medium-sized enterprises employ the most workers in Asia and they are mostly dependent on bank financing. The banking sector in Asia, devastated by the Asian financial crisis, has not fully recovered. Banks understandably are adopting a very conservative lending strategy towards companies with a lower credit rating, such as Small and Medium-sized Enterprises. The Bank’s assistance in speeding up the banking sector reform would help SMEs to get back on their own feet, thereby reducing unemployment and poverty. Thirdly, the Bank could expand assistance in building up the institutional capacity of individual economies to improve corporate governance in the private sector. Emphasis should also be made to improve the auditing, disclosure and transparency standards of publicly-listed companies.
In Malaysia, our vision of the development of the financial sector over the next ten years is outlined in our Financial Sector Masterplan. The plan includes the strategic direction and strategies for the development of the Islamic financial sector. Finally, greater cooperation among the regulators is necessary in order to ensure that the Islamic financial system is not subject to vulnerabilities and abuses. In this respect, sharing of information among the regulators including across borders is important especially in a more globalised and liberalised environment where financial transactions and activities have become more complex and globalised. In this regard, there is a greater need for regulators to continuously exchange views and share information on key issues and developments faced in their own financial jurisdictions. Another important aspect is in regard to the development of the international Islamic financial market. Although this market is to be driven by the market players, a greater role is expected from the  6  BIS Review 3/2004  regulators and central banks to support its expansion. In this respect, the encouraging support shown by various regulators and central banks in making the launching and issuance of the sovereign sukuk papers a success represents an important progress that has been achieved. These initiatives will bring about a more coordinated effort in achieving market development and stability. VI. Conclusion  Our quest to develop a dynamic Islamic financial system is to achieve the ultimate objective for Islamic finance that contributes significantly toward the overall development of our economies.

In contrast, between 1999 and 2008, the real effective exchange rate generally remained below its long-term average. It had started to increase around August 2007, then gaining over 30% between that time and the end of June 2011. With these numbers in mind, the additional changes registered this summer are quite extraordinary. Between early July and 9 August, when the Swiss franc reached its historic peak, its real value climbed another 17%. Estimates show that the currency was then almost 40% above its long-term average and more than 50% above its pre-crisis level.15 It can be argued that the Swiss franc is strong because the Swiss economy is faring well in absolute terms and, most importantly, in comparison with many of the country’s neighbours. Indeed, the Great Recession was less pronounced in Switzerland than in most other developed economies. The ensuing recovery was also relatively dynamic. The Swiss economy was one of the first advanced economies to return to the pre-crisis level of GDP and, in striking contrast with many other countries, Switzerland emerged from the crisis with solid public finances. Indeed, this explains why, in the crisis years, the country’s overall debtto-GDP level fell below 40%. Exchange rate movements, like those observed this summer, strongly suggest, however, that such explanations do not suffice. Slow-moving economic fundamentals or macroeconomic drivers can almost certainly not account for the sudden large movements of our exchange rate in July and August.
I’ll start with retail lending. It is important that we see balanced growth in retail lending. I said at the beginning of my speech that it is important not to reach dangerous levels of household debt burden. We are now being forced to pay attention to unsecured lending again. Here 2/5  BIS central bankers' speeches  are some figures: in March of this year, debt on unsecured lending increased by 1.9% in just one month. According to preliminary data, it grew by another 1.6% in April. If such rates persist, then the annual growth will be about 20%, which is much higher than the growth of household incomes. We are already seeing an increase in debt burden. Now households are directing almost 12% of disposable income (11.9%) to servicing loans. This is 1 percentage point more than it was pre-pandemic, when we were already rather concerned about unsecured lending. We do not want this trend to grow, so we have returned to the macroprudential policy we pursued before the pandemic. This involves the following requirement: more capital on loans granted to borrowers that already have loans. But we understand that such macroprudential measures ‘eat away’ at banks’ capital, which could be used to expand lending in other segments and cover losses on restructured loans. What’s more, these measures affect different banks in different ways, that is to say, they almost don’t have a discouraging effect on banks with a large capital reserve, while they seriously impact those banks that have a small capital reserve.

We must, of course, take advantage of the fact that everything is being digitalised in Russia and look for ways we can move to a qualitatively new level here. You mentioned outdated regulations. Yes, there are outdated regulations. But please let me remind you that we have a permanent working group that is working on these issues. It is something like the Government’s ‘regulatory guillotine’. We have already revoked some of the norms, and we are prepared to go further with greater intensity. We are waiting for your proposals. Perhaps the association should intensify its work in this regard. We are ready. Outdated norms are of no use to anyone. Let’s look at remote services. You mentioned this and many banks have raised the issue. We understand that being able to open an account and use other services remotely is an important area. In this regard, the development of the Unified Biometric System is one of our key projects. We recently had a meeting with banks. And our approach, the Central Bank’s approach is that this system should be developed independently, equidistantly from all players. Opportunities should be given to various players to participate in it and use it. As for banks with a basic license, Mr. Aksakov also spoke about this. Banks with a basic license will be the focus of our attention because there are questions banks with a basic license need to answer. In my opinion, the decision to create them was made in a timely fashion.
So many of the traditional imperatives for EMEs remain, but the Bank of England’s analysis shows that keeping one’s house in order won’t be sufficient, the neighbourhood too must change. 26 It is in the interest of advanced economies to moderate push factors. As EMEs have grown as a share of the global economy, so too have ‘spillbacks’ to advanced economies. The projected rise in capital flow volatility because of structural changes in the global financial system could take 1.2 percentage points off EME growth by 2030, all else equal. Rising ‘spillbacks’ to advanced economies means growth there could also be at least 0.2 percentage points lower.27 And while it is unrealistic to expect advanced economy policymakers to internalise fully spillovers from their actions on emerging markets, given their domestic mandates, AE monetary policies will increasingly need to take account of spillbacks. The spillover from a one standard deviation tightening in US financial conditions now reduces GDP for the average emerging market economy by around 0.2%, twice its 1990-2004 average. And the spillback from a 1% hit to EME GDP now drags on US activity by 0.15%, compared to 0.1% in 1990. 26  Some economists have called for monetary policy rules that constrain the actions of sending-country central banks under some circumstances, see Rajan, R (2019), Rising Tide, Finance and Development, June.

I am happy to say that quite some research on the interaction of these two policy areas has been undertaken here at the ECB. [1] In particular, two papers of the Research Task Force are dedicated to this issue: one documents the macroeconomic impact of macroprudential policy measures and its interaction with monetary policy[2]; a second one sheds light and quantifies the transmission between monetary policy and bank stability. [3]  On-going research at the ECB Moreover, ECB research has showcased the particular importance of remaining vigilant about banks’ resilience in episodes of increasing cyclical systemic risk. Recent work quantifies how exuberant credit and asset price dynamics lead to large downside risks to bank-level return on assets, putting a banking system’s capital at risk over the medium term. [4] The quantification of bank capital at risk can support the calibration of macroprudential instruments. In turn, by subjecting the banking sector to specific shocks, a macroprudential stress-testing framework can help in assessing the capital shortfall in times of stress. Whereas traditional stress-testing frameworks focus on initial capital shortfalls, macroprudential stress-testing frameworks quantify the propagation of costs for banks and the real economy over time. This is the aim of the macro-micro approach, which takes into account the heterogeneity in banks’ reaction functions. [5] More generally, stress-testing has become a key instrument in the macroprudential and financial stability toolkit for assessing risks to the banking system in adverse conditions.