samchain/econo-pairs-v1 huggingface dataset:
Up to a certain amount, banks’ demand for central bank reserves is completely inelastic (due to central bank reserve requirements, internal and external liquidity regulation and other factors). Beyond this amount, however, the decision to hold excess reserves responds to risk-return considerations as for any other asset: if a bank decides to hold a certain amount of excess reserves, it is because their risk-adjusted return dominates that of other assets. As I mentioned earlier, while an individual bank can decide to hold less excess reserves, in the short run the banking system as a whole cannot dispose of excess reserves. Since, in equilibrium, supply must equal demand, if interest rates on central bank deposits (the riskfree remuneration of excess reserves) are at levels such that demand for reserves exceeds supply, banks will be willing to hold on to the excess reserves present in the market. This is likely to be the case in a situation of high risk aversion, where – like today – the risk premia demanded to hold risky assets are so high that their risk-adjusted return is lower than that offered by the deposit rate. If, however, banks become more willing to accept risks, their demand for excess reserves for a given deposit rate will decrease and they will look for more attractive alternative uses for these funds: riskier assets and/or loans.

Repairing the single market for capital is a collective endeavour in which the ECB has a role to play – but to be fully effective that role needs to be coordinated with the European Commission, European Supervisory Authorities and market participants themselves. Breaking the feedback loop between bank and sovereign credit should also be a priority. To this effect, steps should be taken towards a unified regime for bank resolution and beyond that, towards establishing a single European banking resolution authority. Finally, the “Financial Compact” should also include the completion of the single euro payment area. Payments are at the very heart of a corporate’s activity and I am not sure that they always get the attention they deserve. Nowadays, more than 50% of the trade of the 27 EU countries takes place within the EU – and that trade is mainly based on cashless payments. With the introduction of the single currency there could no longer be any differentiation between national and cross-border euro payments: they should all be “domestic”. The Single Euro Payments Area project, in short “SEPA”, came to fill this void; its aim is to establish a single market for retail cashless euro payments by overcoming technical, legal and market barriers, so that people can make euro payments throughout Europe as easily, securely and efficiently as within their own countries. Using the SEPA payment instruments, companies can make all euro-denominated payments centrally, from a single account, using the same format.
Just as monetary policy represents the first line of defence in managing the business cycle, regulation and supervision of financial institutions must be the first line of defence in maintaining financial stability. It is not sufficient for individual banks to be solid. Banks are closely interlinked. They obtain funding from common sources and from one another, and large portions of loan exposures are in the same markets. High credit growth can result in financial imbalances that have system-wide effects. System-wide risk is therefore far greater than the risk of individual banks. BIS central bankers’ speeches  15  The financial crisis showed the severe damage that can be caused when insufficient attention is paid to system-wide financial risk. Banking regulation has therefore been strengthened by including a macroprudential component. The instruments employed are not new, but an important difference is that banks are required to hold more equity capital than previously. The required level is based on the overall risks to the financial system. Some requirements may vary over time, such as the countercyclical capital buffer. The regulation of the Norwegian financial sector is in line with international standards. In recent years, a number of instruments have been implemented in Norway to mitigate risk in the banking system. In response to the sharp rise in real estate prices and household debt, the countercyclical capital buffer has been increased and bank lending standards tightened. Moreover, capital surcharges have been introduced for systemically important banks.

A lower policy rate may thus have less effect on lending rates than normal, weakening the impact of monetary policy. Over the past year, inflation among many of Norway’s trading partners has approached zero. For many years monetary policy was aimed at preventing high inflation, while it must now seek to avoid inflation that is too low. Central banks are in new territory. A period of low inflation is not necessarily a problem as long as confidence in the inflation target remains firm. But when the room for further policy rate cuts is close to being exhausted, steadily falling inflation could lead to a dangerous downward spiral. For every notch that expected future inflation falls, real interest rates rise. This has a contractionary effect on the economy. In recent years, concerns about falling inflation expectations have prompted central banks to cut policy rates further and to deploy unconventional measures. It has been argued that these monetary policy measures are necessary to avoid a further fall in inflation as a result of a stronger exchange rate. Interest rate cuts that lead to a currency depreciation push up inflation. But countries cannot all weaken their currencies at the same time. If many countries cut interest rates to boost inflation via a weaker currency, the benefit may not materialise, while interest rates remain too low with respect to other considerations. 14  BIS central bankers’ speeches  The financial crisis created unusually strong headwinds in the global economy.
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(2) Considers long-term interest rates on corporate and bank bonds with over 9-year duration, except for BBB bonds, which considers more than 8-year duration. Sources: Central Bank of Chile and LVA Índices. Figure 4 Stock-index volatility (*) (annualized percentage) 60 Hungary  July-December 2011  50  France Germany Spain Russia Brazil S. Korea Chile Turkey Mexico Australia Hong Kong U.K. U.S.A. Taiwan India Colombia N. Zealand Philippines China  40 30 20  Peru  10 0 0  10  20  30  January-June 2011  40  50  60  (*) Calculated with daily return of stock indexes, base 100=2010. Data at 16 December. Fuentes: Banco Central de Chile a base de información de Bloomberg. 8  BIS central bankers’ speeches  Figure 5 Retail sales and new car sales Emploment and unemployment rate (index, centered on mean of period (1)(2) (index, 2003=100) 1990-2010) 40 225 375 30 200 300 20 10  175  225  150  150 -10  125  75  100  0  0  -20 -30 -40 90 93 96 99 02 05 08 11  06 07 08 09 10 11 Non-durables  New cars  Employment  Unemployment  Durables (1) Sold in moving quarter. (2) Seasonally-adjusted series. Sources: Chile's National Automobile Association, Central Bank of Chile, Chile's National Chamber of Commerce, and Ricaurte, M (2011), “Indicadores de Mercado Laboral para la Comparación de las Crisis Asiática y Financiera Internacional,” preliminary document, Central Bank of Chile, June.
Bank liquidity remains at historically high levels, and this, coupled with the fierce competition for new lending business, has pushed down lending margins, particularly in the all-important mortgage portfolio. 1  BIS Review 93/2000  It is not only that the market is not growing as fast as it did. The traditional, local players are also beginning to encounter more pressure from global firms, non-bank entrants and competing sources of finance. The competitive environment is giving added impetus to the need for banks to consider how they can use the new technology, and particularly the internet, to drive down costs and broaden income sources. In Hong Kong around 20 banks have introduced transactional banking services for retail customers. Many have already introduced corporate banking services through the internet, or will shortly do so. So far the take-up of these services seems in general to be rather slow. However, a few banks have achieved reasonable levels of usage by customers either because they were early movers or because of their leading market position. Customer acceptance of the internet will undoubtedly grow. But it will not happen overnight, and the contribution to the bottom line will be slow to emerge. In the meantime, the banks will have to bear the extra costs of the investment in the new technology, while margins may come under pressure from the increased ability of consumers to shop around and compare prices.

Is the market not better handled by the private sector without public intervention? According to the law, the Riksbank is to promote a safe and efficient payment system. Like most central banks, the Riksbank is heavily involved in large value payments, running and providing credit to the RIX-system, where payments can be made in central bank money. Here the central bank role is simple to explain. But why should we be involved in the small value payments handled in the card market? Safety problems, although they may be important, are usually not systemic in nature. And in a well-functioning market, economic efficiency should be attained by the market itself, without public intervention. In my view, central bank involvement is appropriate only in the cases of market failure, coordination problems of some magnitude or the presence of obstacles outside the market itself. Usually, they 2 relate to efficiency rather than safety. Typically, we would ask questions such as 1. Are there legal and regulatory impediments to market development and innovation? 2. Are market conditions competitive? 3. Are security and operating standards and infrastructure arrangements efficient? 4. Are settlement services, however provided, safe and efficient? To answer these questions, we follow the market for retail payments and we try to exchange information and cooperate with other relevant public and private bodies. In the card payment market, issues of competition, pricing and security are of particular importance. I shall comment shortly on the first two of these.
The size of the gap, combined with the limited growth differentials, suggests that the process of real convergence will be a very slow one, likely to continue far beyond the tentative dates for EU accession and for the adoption of the euro. Hence, although differences in income levels are compatible with membership of EMU, it is important for accession countries to progress in the process of real convergence with the euro area. In particular, real convergence can help to create economic cohesion within EMU and promote integration between Members States. Further real convergence will also help to minimise the risks and the effects of asymmetric shocks. Against this background, it seems crucial that accession countries pursue structural policies that enhance the potential output growth of their economies. 2. Inflation developments  With regard to inflation developments, I should like to stress that, on the whole, the accession countries have made remarkable progress in bringing inflation down to single-digit rates. Inflation in the accession countries is expected to average around 6%-7% by the end of this year. However, reducing inflation from relatively low levels to even lower ones is clearly a difficult task. Evidence points to a number of micro and macroeconomic factors which affect current inflation rates in the accession countries. These include ongoing price liberalisation, privatisation processes, relatively expansionary fiscal policies and stubborn inflation expectations.

Corporates which used to solely rely on external financing can now explore the additional option of internal funding through their CTC setup in Hong Kong. 21. And, the qualifying profits derived from corporate treasury activities and transactions conducted by qualifying CTCs will benefit from a half-rate concession. In other words, the applicable tax rate will be cut from the current 16.5% to 8.25%. Broadly speaking, the scope of this concession encompasses corporate finance, liquidity  4  BIS central bankers’ speeches  management and risk management activities typically conducted by CTCs for their non-Hong Kong associated corporations. The concessionary tax rate at 8.25% will be among the most competitive in the region and can be obtained through simple election as part of a corporation’s tax filing process. In other words, no separate, complicated approval process will be involved. 22. And, I’m delighted to say the relevant bill to give effect to these changes is now with the Legislative Council and the Government hopes to have the bill passed by the middle of the year. Closing 23. Ladies and gentlemen, looking at today’s programme, I note that many of the themes I have mentioned will be addressed by treasury professionals in greater depth. I hope the upcoming sessions will inspire new ideas for treasury management, and I wish you all a very successful conference. Thank you. BIS central bankers’ speeches  5
that the krona has been affected by a net outflow of capital from Sweden. The development of the krona and the stock market has shown a strong correlation since the beginning of 2000. This is probably connected with foreign investors selling Swedish shares in line with falls on the stock market, which has affected Sweden more than other countries, as a large part of the stock market value is owned by foreign investors. Moreover, Swedish investors have bought a large amount of foreign shares, which is probably connected with the new pension system and the freer investment regulations for the AP pension funds. It has been possible for the AP pension funds to increase their foreign exchange exposure, i.e. the percentage of foreign assets, from 10 to 15 per cent with effect from this year. The funds can increase their exposure by five percentage points a year to a maximum of 40 per cent in 2006. On top of this comes a factor that is difficult to explain on the basis of classical exchange rate theories. The krona is affected to a large extent by general unease on the global financial markets. During times of financial unrest the krona weakens when investors leave the Swedish market for ones considered a safer investment. This was particularly noticeable during the Mexico crisis of 1995 and the Asia crisis of 1997-98. The recent unrest on the financial markets in connection with uncertainty over the global business climate has once again had a negative effect on the krona.

The key thrust of this plan is to develop a new real-time Retail Payments Platform that will serve as both a catalyst and enabler for innovative payments in Malaysia. This should meet the needs of consumers and businesses who increasingly expect payments on-demand where funds are available to the recipient immediately. In this regard, I would like to call upon the financial industry to jointly work with MyClear in the development of such new real-time Retail Payments Platform. Conclusion Payment and Settlement Systems are the foundation that underpin the financial market infrastructure and serve as a catalyst for economic growth. Hence, efforts to promote the  BIS central bankers’ speeches  3  resilience, interoperability and competition of such systems are of utmost importance. This has been and will continue to form the key thrust in Bank Negara Malaysia’s policy work in delivering our mandate of fostering safe, efficient and reliable payment systems. There are immense opportunities and new sources of growth including expanding financial accessibility to the underserved that is made possible from greater standardization and interoperability of the payment systems, as well as, innovation. Hence, in today’s rapidly evolving and highly competitive environment, the financial community should capitalise on such enabling environment, and collaborate through standardisation and interoperability, to lower costs, foster innovation and deliver better value proposition and choices to their customers. 4  BIS central bankers’ speeches
I believe that it may be difficult in practice to make the monetary policy decisions on the assumption that the financial stability policy is regarded as given, and vice versa.5 Let me also say, in this context, a few words in general about whether monetary policy and financial stability policy should be regarded as different types of policy with different goals and means. When regarded as principles and concepts it is of course the case that financial stability is quite different from stability in the inflation rate and the real economy, that is, what central banks with flexible inflation targeting strive to achieve. Logically, one could thus argue that monetary policy and financial stability policy are two different types of policy that should be conducted quite separately. But I am not sure how meaningful this distinction is in practice. Personally, I have not regarded financial stability as merely a goal, but just as much a means, or a condition, for attaining a stable real economy and stable inflation. Assessments of developments in the financial sector must, as far as possible, be included in the macroeconomic assessments. Financial unrest and instability often lead to demand in the economy being too low and inflation undershooting the target. If one considers that there are both ”normal” economic cycles and less frequent credit and debt cycles, the upturns in both cycles are not necessarily synchronised.

Our currency was created in 1850, and the coins of that time were in circulation in 1907, when the National Bank started operations. We still use these coins today for our day-to-day payments. This is tangible proof of our country’s monetary stability. “A franc remains a franc,” declared the President of the Swiss Confederation in a radio address one day after the 1936 devaluation, in an endeavour to reassure the Swiss people about the abolition of the gold standard. I am pleased to be able to say today – 100 years after the National Bank started business – that a franc has indeed remained a franc. All this could not have been achieved if our policy did not enjoy broad support in our country. I would therefore like to conclude by expressing sincere thanks; first of all to the federal and cantonal authorities for the support that they have given us, particularly in difficult times when we had to make unpopular decisions for the sake of monetary stability. Second, I would like to thank the business community for its understanding of our policy, even at times when we assessed the situation differently or when monetary constraints necessitated painful adjustments. And, finally, my thanks go to the Swiss people for their unwavering confidence in our institution and their support for our monetary autonomy over the last 100 years. BIS Review 71/2007  3  May the National Bank continue to enjoy such broad support!
Second, that the Committee has been not open enough. Let me start with the first criticism. From its first meeting in June 1997 to the end of that year, the Committee was unanimous on all six occasions. Output appeared to be above trend, the labour market was continuing to tighten, and there was a need to slow the growth of domestic demand in order to reduce pressure on supply capacity. Interest rates were raised at each meeting between June and August, and again in November. At that point the Committee was accused of acting like a “politburo”. But in January 1998 the first disagreement occurred. The Committee voted by five votes to three (the ninth member, John Vickers, did not join the MPC until June of last year) to hold interest rates constant. In February and March the Committee was evenly divided, and the Governor used his casting vote in favour of an unchanged level of interest rates. Disagreements continued and in June the Committee voted 8 to 1 to raise interest rates for, as it turned out, the last time in that interest rate cycle. By now, many commentators were disillusioned with the evidence of disagreements within the Committee. If I single out Philip Stephens from the Financial Times it is only because his description, written in July 1998, of unhappiness with the Committee was more vivid and articulate than most. He wrote:  5  BIS Review 63/1999  “The Committee has thus far lacked both leadership and predictability.

James McAndrews: Credit growth and economic activity after the Great Recession Remarks by Mr James McAndrews, Executive Vice President and Director of Research of the Federal Reserve Bank of New York, at the Economic Press Briefing on Student Loans, Federal Reserve Bank of New York, New York City, 16 February 2015. *  *  *  Accompanying tables and figures can be found at the end of the speech. Good morning and let me welcome you to our press briefing focusing on developments in the student loan market. My remarks will concentrate on the role of credit markets more generally during this economic expansion. As a reminder, these remarks reflect my own views, and not those of the Federal Reserve Bank of New York or of the Federal Reserve System. First, let me say a few words on the current economic outlook. Real GDP grew 2.4 percent over the course of 2014. As New York Fed President Dudley noted earlier this month, despite what appears to be a soft first quarter, we expect that real GDP growth will continue over the next couple of years at a similar rate, supported by solid underlying fundamentals and accommodative financial conditions. Unemployment should continue to decline and approach 5 percent by late this year. Because of the recent sharp fall in oil prices and the appreciation of the dollar, inflation will be very low over the coming months.