samchain/econo-pairs-v1 huggingface dataset:
On the first of these, 1996-1997, a high level of interest rates in the previous years had without doubt contributed to both a drop in the general level of demand and to low inflation. The period was also characterised by an occasionally heated debate on monetary policy. The reason the Riksbank decided to keep policy tight at the time was that credibility for inflation-targeting had not yet been established. The two subsequent periods, 1998-1999 and 2004, were completely different. On both these occasions the repo rate had been relatively low the years before at the same time as the general level of demand was growing fast. The main factors generating the low inflation were changes on the supply side of the economy: deregulation, lower import prices and surprisingly rapid productivity growth. The Bank’s policy had hardly been called into question at all when it was conducted in 1996-1997; it was only in retrospect that the criticism came, and this has largely been the pattern in recent times, as I mentioned earlier. If one wants to argue that the Riksbank has systematically conducted excessively tight policy one should reasonably be able to show that other forecasters called the Bank’s policy strongly into question when it was formulated. So, in my opinion, there are on the whole fairly natural explanations for why inflation on average has been somewhat below target over the past ten-year period.

It is not because the Riksbank has considered deviations below target to be less serious than deviations above target; instead, it is partly because we have undergone an adjustment from a high-inflation to a low-inflation regime, which affected policy in large measure during the first of those three episodes, and partly because inflation on different occasions has been depressed by supply factors that neither we nor others have been able to predict. Allow me to conclude the retrospective part of this speech by underlining that I value an open, lively debate on monetary policy. I have previously pointed out before the Committee that we would be happy to come here more often and that we are open to other forms of discussion than this one. If the Committee’s members have ideas to improve the material that we present, we would be interested in hearing them. The Riksbank is also considering initiating an annual forum for monetary policy debate, where our assessments and policy can be discussed against the background of regular independent evaluations of the forecasts that we – and other participants in the general debate – have produced. The current assessment Cyclical upswing continuing With that I shall now look forward and briefly discuss the assessment of economic and inflation prospects in our latest Inflation Report and the decision we took yesterday regarding the repo rate. BIS Review 18/2005  3  As usual I shall begin with a brief look at the international situation. Economic growth abroad has remained high.
16 But as the September 2015 G20 communique 17 highlighted, there is a need to further explore market-based ways to speed up the incorporation of such clauses to the outstanding stock of debt. (iii)  Reducing large cross-border exposures  A commitment to bail-in rather than bail-out creditors of sovereigns can only be credible if losses can be absorbed safely without significant spillovers across borders. Sovereign exposures receive special and in some cases preferential treatment in prudential regulation, with low or even zero capital requirements and exemptions from large exposure limits. It is hardly surprising then that they make up an important part of banks’ balance sheets. Claims on foreign public sectors reported by BIS-reporting banks as a share of their total foreign claims have risen from 17% in 2004 to 25% at end-2014. 18 The Basel Committee has recently started a review of the treatment of sovereign exposures in the Basel Standards. This is an important part of the resolution agenda – reducing international spillovers from sovereign debt restructurings will make it more feasible to implement them when needed. Conclusion Promoting cross border capital flows as a means of allowing resources to flow to where they will be best used is a logical extension of the arguments David Hume first put forward in favour of free trade more than 250 years ago. However, such flows leave nations exposed to a “capital stop”, in much the same way that banks can experience a run on their deposits.

Third, the Bank should not take decisions that discriminate between different companies and sectors. There may well be  BIS central bankers’ speeches  3  good reasons for discriminating in some circumstances but that is a decision properly reserved to elected politicians. By buying gilts we leave the private sector to decide in which directions the money we create should percolate through the economy. Any positive impact of asset purchases will benefit all companies, large and small, through its impact on overall demand. Our programme of gilt purchases has helped large companies to reduce their reliance on the banking system and obtain finance directly from equity and corporate bond markets. In fact, the majority of Britain’s largest companies can borrow more cheaply in capital markets than the average of the largest six banks. Smaller and medium-sized companies (SMEs), however, are constrained to borrow through the banking system. And there is special concern about their ability to obtain credit – I share that concern based on my experience of meeting many such firms during visits to all parts of the United Kingdom and hearing reports from the Bank’s regional agents. We have made this point repeatedly at hearings of the Treasury Committee in Parliament. Over the past year the stock of SME borrowing has shrunk by around £ billion or 5%.
Durmuş Yılmaz: Overview of the Turkish economy in the light of new global realities Speech by Mr Durmuş Yılmaz, Governor of the Central Bank of the Republic of Turkey, at the International Arab Banking Summit (IABS 2010), Istanbul, 18 June 2010. *  *  *  Esteemed governors and distinguished guests, At the outset, I want to express my gratitude to the Union of Arab Banks along with Turkish Banking Association, Banking Regulation and Supervision Agency and the World Union of Arab Bankers for their efforts in organizing this summit. As the Central Bank of Turkey, we are honored to be a part of this prestigious event congregating such an esteemed group of participants. In this keynote speech, first I want to discuss the post-crisis episode in a global context. Then I will continue with the extent to which the Turkish economy has been affected by the downturn in global economy. Finally, I will conclude with the opportunities and prospects in our region in the light of the new global realities. Dear participants,  As we all observe from the latest data, signs of recovery have continued in the first half of 2010, albeit at variable speeds across countries and regions. Coordinated efforts of the global community have been so far successful in averting a downward spiral similar to the one experienced during the Great Depression. Although global economy is back on its feet, there are several risks involved in this recovery process and many challenges lie ahead.

The Central Bank of Turkey has played a leading role in the modernization of payment services in Turkey. It has developed secure, reliable and efficient inter bank payment and settlement systems. According to a recent IMF report, payment systems in Turkey have a sound legal basis and the country is “in observance of the great majority of the provisions of the Committee on Payment and Settlement Systems and Core Principles for Systemically Important Payments Systems”. The Middle Eastern countries have made significant progress in this area. For example, Saudi Arabia is a member of the Committee on Payment and Settlement Systems like Turkey and tries to improve its payment systems infrastructure by establishing new payment systems with respect to the needs of its financial markets. Egypt has a project of establishing a real-time gross settlement system. There are also some other low value – large value payment systems in other countries. As you already know the regulation on International Bank Account Number (IBAN) has been implementing in Turkey and the use of IBAN is effectively overseen by the CBRT since 2008. The use of IBAN in region countries like Lebanon and Saudi Arabia contributes to the effective and safe money transfers between Turkey and these countries. A sceptic might say: “What counts is the profit one makes and the economic gains one gets. It does not matter whether we like each or not.” In our case this approach is wrong.
They are firmly grounded on actual requirements and stem from the simple fact that climate-related risks are on the rise and need to be tackled seriously by the whole financial sector. Incorporating climate-related risks into ongoing supervision and stress testing This is why we have already asked banks to conduct a self-assessment against the supervisory expectations outlined in our Guide and draw up action plans for aligning their practices to them. The assessment covers 112 institutions, representing 99% of total assets under our direct supervision. All banks have already handed in their self-assessments and are now finalising their action plans. We are currently assessing banks’ submissions and will be challenging them in all of these areas. Where we see that banks are not managing their exposures to climate-related risks in an adequate manner, we can and will draw on the full supervisory toolkit at our disposal to correct that situation. Just as we do for any other material risk. We have already started work on incorporating climate-related risks into our Supervisory Review and Evaluation Process (SREP) methodology. This year the outcomes of these assessments will not be translated into quantitative capital requirements across the board, but we may impose qualitative or quantitative requirements on a case-by-case basis. We expect that the actions we are taking in 2021 will result in banks being adequately prepared for the full supervisory review which we will conduct in 2022.

But this did entail making a decision - on the basis of insufficient information about the causes and depth of the crisis - that could have burdened the government budget with at least a hundred billion kronor. That is an experience we do not wish to repeat. Sweden recovered from the crisis on that occasion and in many instances our way of resolving it has served as a model for other countries. The crisis also focused attention on the work for financial stability. With the growing complexity of payment systems and the financial sector’s expansion, financial stability has become an increasingly important issue for the Riksbank, as it has for other central banks around the world. A review The bank crisis spawned a certain amount of self-criticism, not least in the Riksbank. In practice, the Bank had not backed up its function of promoting a safe and efficient payment system with any systematic analytical work. The problems that arose had taken the Riksbank, along with many others, by surprise. So we started to build up knowledge and an analytical capability in the field of stability. The work was initiated on a modest scale with just a handful of staff. It had a narrow focus on the early detection of weaknesses in the banking system that might lead to another bank crisis. The Riksbank also decided to publish a report that would discuss the situation for bank sector stability. Internal reports had been produced earlier.
Table 3: Target hit rate, calibration of individual regulatory tools and resulting false alarm rate  False Alarm  RWCR  False Alarm Rate  LR  Rate (%)  Calibration  70  3.82  29.3  8.61  58.5  0.99  70.7  75  4.14  39.0  8.66  58.5  1.05  82.9  80  4.15  39.0  8.71  61.0  1.06  82.9  85  5.00  75.6  9.04  68.3  1.12  87.8  90  5.66  82.9  9.83  73.2  1.17  87.8  Rate for LR Calibration (%)  Calibration  for RWCR Calibration (%)  NSFR  False Alarm Rate  Target Hit  Calibration  for NSFR Calibration (%)  Now suppose that the regulator can draw on more than one regulatory metric – for example, a LR, RWCR and NFSR. This now requires the setting of three cut-off thresholds and so gives more degrees of freedom. But the objective otherwise remains the same, namely achieving a particular hit rate for signalling bank failures while minimising false alarms. Chart 18 and Table 4 show the results from these multi-constraint simulations.

We will continue to Sustain Stability and Serve Singapore in the years to come. Thank you. BIS central bankers’ speeches  5
Not only did this reliance on short-term funding create the potential for a firm to fail in an extraordinarily rapid manner when faced with a loss of market confidence, but it also served as a channel through which the effects of those failures were widely propagated throughout the broader financial system. I will focus my brief remarks on describing the structural vulnerabilities associated with shortterm wholesale funding, laying the groundwork for our discussions at today’s workshop. As always, my remarks reflect my own views and not necessarily those of the Federal Reserve System. As this audience knows, in the two decades leading up to the financial crisis, the global financial system underwent a rapid transformation. During this period, there was a shift from bank-based financial intermediation to capital markets-based financial intermediation, and an increase in the scale and complexity of securitization activities. In the pre-crisis period, the growth of securitization was accompanied by an increasing reliance on short-term funds raised in wholesale markets to finance securities and activities essential to securitization. This ranged from the use of repo funding to finance inventories of securities held for market-making purposes to the issuance of asset-backed commercial paper by conduits created to acquire and hold securities. Both demand and supply factors drove the increased use of short-term wholesale finance. On the supply side, the growth of savings from corporations and institutional investors in need of deposit-like products in which to place their cash balances created a plentiful source of funds.

William C Dudley: Risks of wholesale funding Welcoming remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the workshop on the “Risks of Wholesale Funding”, New York City, 13 August 2014. *  *  *  Michael Fleming, Jamie McAndrews, Susan McLaughlin and Joseph Tracy contributed to preparing these remarks. It is a pleasure to welcome you to the New York Fed today to discuss the important issue of wholesale funding. As you all know, the financial system plays an essential role in modern economies, and liquidity is in turn critical to the functioning of the financial system. Because financial intermediation is critical to economic activity and intermediation is dependent on funding and liquidity, disruption to funding and liquidity can cause severe damage to the economy. The experience of recent years revealed serious flaws in the system. Risk was mispriced and there was a build-up of excesses before the crisis. Structural weaknesses in the financial system then amplified the effect of the sharp decline in U.S. house prices, and the result was a widespread financial crisis and a deep recession both here and abroad. The extensive use by financial firms of short-term wholesale funding was one critical factor in the crisis.
By purchasing commercial paper, it offers to provide short-term loans – loans that will need to be paid back – to companies of investment grade standing before the virus disruption. It provides an alternative – backstop – source of finance for larger companies in the event that markets are disrupted. The Scheme has lent £ to 68 companies. More importantly, it has also authorised borrowing limits amounting to £ to 199 companies accounting for nearly 2.3 million jobs. The knowledge that this backstop to funding markets is there removes the need for larger companies to run to the banks to insure themselves against market disruption. By standing ready to lend to larger companies, we have protected the space banks have to lend to the wider population of companies. Financial Response II: Support for bank lending  The package of measures to support bank lending has gone much further than just protecting their capacity to lend. [See slide 4 of accompanying deck]  Banks have been given the funding for new lending. The Term Funding Scheme with additional incentives for SMEs (TFSME), provides 4 year funding for banks, at rates very close to Bank Rate, to match any increase in lending. The scheme provides additional incentives for lending to small and medium sized businesses, with £ of cheap funding for every £ increase in such lending. Crucially, the Government has provided banks with guarantees on new lending. The Coronavirus Business Interruption Loan Schemes guarantee 80% of new lending by banks.

Under CRD IV, national authorities shall take account of other variables in addition to the credit-to-GDP ratio.2 The four key indicators are also in line with the new Norwegian regulation, which states that the basis for the buffer decision from Norges Bank “shall contain an overview of the credit-to-GDP ratio and the extent to which it deviates from the long-term  1  The trend is estimated using a one-sided Hodrick-Prescott filter (lambda = 400000) extended by a forecast. The mean is for the entire period in the chart. 2  Articles 135(1)(c) and 136(3)(c) of Directive 2013/36/EU (CRD IV). BIS central bankers’ speeches  3  trend, as well as other indicators, and Norges Bank’s assessment of systemic risk that is building up or has built up over time”. Under the regulation, Norges Bank shall take account of guidance from the European Systemic Risk Board (ESRB). The ESRB is currently working to formulate guidelines for setting the buffer rate. Norges Bank and Finanstilsynet are actively participating in this effort. Once the guidelines are in place, recommendations from the ESRB on methodologies and benchmarks for setting the buffer rate will be included in the basis for the buffer decision. In line with the recommendations from the Basel Committee on Banking Supervision and the regulatory framework, there should not be a mechanical relationship between developments in the indicators and Norges Bank’s advice on the buffer as relationships in the economy are too complex. The advice will always be based on qualified judgement.
Hong Kong’s banking sector, with its strong reputation and long involvement in mainland business, stands to benefit greatly from the liberalisation in this area, providing that it can position itself to make the best out of the opportunities. In the monetary sphere, the various predictions about the future development of the renminbi in the light of WTO membership - which include the possibility of greater exchange rate flexibility - would most likely have positive implications for Hong Kong’s economy as a whole, and should create no difficulties for Hong Kong’s entirely separate and soundly based currency. The role for Hong Kong in the context of a WTO that includes China, would, I believe, give even fuller scope for the qualities that, in the assessment of the Cato Institute, make Hong Kong the freest economy in the world. All of this therefore leaves a small question in my mind about the title of this BIS Review 68/2000  6  conference, and I hope the organisers will forgive me for raising it. The phrase “Hong Kong’s Legacy, China’s Future” has a bit of a morbid ring about it. It suggests that we in Hong Kong are bequeathing something to China before we breathe our last, and that you are assembled here for a funeral, or at least a deathbed scene. This cannot, surely, be the intention behind the conference.

At the extreme end of the spectrum there are those who believe that China’s WTO entry will be one more nail in the coffin, one more noose around the neck, for Hong Kong: that the diversion of business that will result from the now well-advanced infrastructural development in China’s coastal cities and the direct access provided through WTO membership heralds the demise of Hong Kong’s historical role as intermediary between China and the rest of the world. In support of this, the impressive physical developments in Shanghai, the readiness - and the skill - with which our colleagues on the mainland are embracing the English language and the internet, the important regulatory reforms are all cited as if it will only be a matter of a couple of years or so for all the business now going on in Hong Kong to be lifted up and poured into the millions of square feet of gleaming new office space now waiting in Pudong. The outlook is, I think, somewhat more complicated, and a great deal more positive, than this scenario suggests. And it is worth adding that we have seen so many nails hammered into Hong Kong’s coffin that the coffin is now more metal than wood.
The yield on 10-year German government bonds continued to decline from mid-year under the influence of the ECB’s bond purchases. A moderate decline in yields was also observed in Switzerland. For example, the latest reading shows the yield on 10-year Confederation bonds just below the mid-year values, at around –0.6% (cf. chart 2). On the foreign exchange markets, the persistent downtrend of the US dollar has been the dominant theme in recent months. On a trade-weighted basis, the dollar has depreciated by over 7% since the end of June. Against the backdrop of predominantly positive risk sentiment, the dollar was less in demand as a safe-haven currency. The rise in inflation expectations in the US is also likely to have contributed to the depreciation of the dollar. The euro, by contrast, has appreciated by almost 3% on a trade-weighted basis since mid-year. It strengthened in particular following the announcement of the EU recovery fund, which market participants interpreted as a sign of stronger fiscal cohesion within the euro area. Trading in the pound sterling has been volatile over recent months in light of the ongoing Brexit negotiations; the currency has appreciated over 2% on a trade-weighted basis since mid-year. The Swiss franc trended mainly sideways on a trade-weighted basis during the summer months, before coming under renewed appreciation pressure in the autumn due to the second coronavirus wave and heightened uncertainty ahead of the US elections.

Carmen’s influence on the profession is also reflected by the fact that she has coined a number of terms that have since become part of economists’ vocabulary. Every student of international macroeconomics learns about ‘twin crises’ – situations in which banking and  Page 2/4  currency crises occur simultaneously. The term goes back to a paper written by Carmen and Graciela Kaminsky, which demonstrated that these two types of crises often go hand-in-hand and reinforce each other. Another well-known term coined in Carmen’s work is ‘debt intolerance’, which refers to the tendency of emerging market governments to default at relatively low levels of debt. Carmen’s research is distinguished by her extensive efforts in collecting and compiling historical datasets. This is best exemplified by her famous book ‘This Time is Different: Eight Centuries of Financial Folly’, co-authored with Ken Rogoff, who by the way gave the Karl Brunner Lecture in 2016. Based on a vast dataset covering several centuries, the book documents the way in which financial crises have repeated themselves over and over again in history, often following similar patterns. Even when the signs of an impending crisis are there for anyone to see, people usually find good reasons why ‘this time is different’. Such a failure to learn from history often turns out to be the breeding ground for the next crisis. With their book, Carmen and Ken accomplished the seemingly impossible task of writing an international bestseller consisting mostly of economic data and analysis.