samchain/econo-pairs-v1 huggingface dataset:
(2016), “The ECB's asset purchase programme: an early assessment”, Working Paper Series, No 1956, ECB, September; Eser et al. (2019), “Tracing the impact of the ECB’s asset purchase programme on the yield curve”, International Journal of Central Banking (forthcoming); and Blattner, T.S. and Joyce, M. (2020), “The Euro Area Bond Free Float and the Implications for QE”, Journal of Money, Credit and Banking, Vol. 52(6), January, pp. 1361-1395. For a discussion of the different transmission channels of the pandemic emergency purchase programme, see Schnabel, I. (2021), “Asset purchases: from crisis to recovery”, speech at the Annual Conference of Latvijas Banka on "Sustainable Economy in Times of Change", Frankfurt am Main, 20 September. 2. Partial reinvestments will be conducted broadly in line with the practice followed during the full reinvestment phase. In particular, the remaining reinvestment amounts will be allocated proportionally to  the share of redemptions across each constituent programme of the APP and, under the public sector purchase programme, to the share of redemptions of each jurisdiction and across national and supranational issuers. See ECB (2023), ECB decides on detailed modalities for reducing asset purchase programme holdings, press release, 2 February. 3. See also Schnabel, I. (2023), “Monetary policy tightening and the green transition”, speech at the International Symposium on Central Bank Independence, Sveriges Riksbank, Stockholm, 10 January. 4. For more information on the differences between a corridor and a floor system, see Åberg, P. et al.

SPEECH  Quantitative tightening: rationale and market impact Speech by Isabel Schnabel, Member of the Executive Board of the ECB, at the Money Market Contact Group meeting Frankfurt am Main, 2 March 2023 Eight years ago, we launched the asset purchase programme (APP). It was the first time the ECB employed quantitative easing (QE) to help secure price stability when the space for further policy rate cuts was becoming constrained by the effective lower bound. By now, there is a wealth of evidence suggesting that the APP was successful in lowering long-term interest rates, stimulating economic activity and raising inflation at times when price pressures were unusually weak. [1] As risks to medium-term price stability had increased sharply, we decided in June 2022 to end net asset purchases under the APP as of July. In December, we announced that the APP portfolio would decline at a measured and predictable pace as of March 2023. This became effective yesterday when we started limiting reinvestments of maturing securities. Until the end of June 2023, the APP portfolio will decline by € billion per month on average. [2] For our corporate bond portfolio, the remaining reinvestments will be tilted more strongly towards issuers with a better climate performance, in line with the goals of the Paris Agreement and without prejudice to our primary mandate. [3] In the second quarter of this year, the Governing Council will reassess the pace of APP portfolio reduction. I will start my remarks today by presenting the rationale for conducting quantitative tightening (QT).
But all other incumbents in society also have a responsibility to make their contribution, because we all benefit from  2/4  BIS - Central bankers' speeches  the macroeconomic stability. Unfortunately, we know that in these turbulent times, speculations have occurred more than once and caused nothing but harm to you, us, the entire economy. On this special day for us, when we celebrate a jubilee that is important not only for the National Bank, but also for the homeland and the entire nation, standing in front of you, I once again declare - the denar stability is guaranteed! Dear guests, We must always appreciate and respect the achievements of the past thirty years and to praise highly the contribution of all those who have been part of the central bank and managed to build and maintain an institution that is independent, transparent, highly professional, and esteemed in the international community. But I also thank all the incumbents of our society who have been fully aware that an independent central bank is a prerequisite for the future of our story. On behalf of the National Bank, allow me to express my genuine appreciation to the international financial institutions that lent our central bank a hand after the monetary independence and to this day have constantly supported us in our efforts to do our utmost for the Macedonian economy and citizens.

Just as an illustration and example, I would like to remind you that in early 2019, we adhered to the highest statistical data dissemination standard of the IMF, as the eighteenth country in the world and last year, the European Commission adopted a Decision assessing that the banking regulations and supervision implemented by the National Bank are in line with the standards of the European Union. This puts us on the list of only 26 countries in the world that adhered to these standards. Still, regardless of the commitment and the standards, without the trust and contribution of the citizens, no central bank can fully achieve its goals. That is why we are committed to transparency, both to them and to all economic agents, which is why transparency is one of our strategic goals. The National Bank is the second central bank in the world for which the IMF made an assessment according to the latest Transparency Code and we are glad that it found that our bank is implementing advanced transparency practices. Dear guests, Each historically significant anniversary puts us at a crossroads, and depending on what has already been achieved, requires from us to figure out which direction to take. Therefore, I must emphasize that regardless of how the country's European integration process will proceed, the European standards will continue to be our guide to the European family of central banks.
The financial markets are therefore in a state of permanent revolution in which globalisation and disintermediation have made the channels risk can take more complex and affected its traceability. This evolution can bring stability and resilience to the system only under certain conditions. The role of a central banker and supervisor is to list them, to inform the financial community of the systemic aspects of their development and to implement certain key policy measures. 1. CRT can improve distribution of risk and stronger resilience to shocks. How? The First benefit is linked to a process of “atomisation” of risk. Greater risk dispersion among investors may increase the resilience of the financial system in the event of shocks. Financial engineering has enabled credit risk to be extracted from banks’ balance sheets and broken down into portions of risk that are repackaged into portfolio products. This is the essence of securitisation mechanisms: the default of a large issuer has less chance of resulting in the default of its creditors, and default losses are absorbed by a large number of investors. Second, the emergence of powerful non-bank players to whom risk is transferred contributes to greater risk dispersion and market efficiency. One example is hedge funds, which have become large risk absorbers on credit markets. Their share in derivative trading is estimated at up to 25%. Hedge funds trade mainly on the riskiest segments and often buy equity tranches of CDOs, previously the preserve of banks. Another example is institutional investors (mutual funds and pension funds, insurance companies, etc.

One - the Krugman school - blames the values, institutions and policies of particular jurisdictions, and is country-specific, or at least region-specific. The other - the Sachs school - attributes the problem more to flaws in the global financial architecture: it says that, even if an emerging economy behaves reasonably soundly, global tidal waves that have little if anything to do with the fundamentals of that economy have the capacity to overwhelm its BIS Review 2/1999  –3–  markets and trigger financial collapse. The problem, then, is an international one, and it is interesting that Professor Krugman himself is moving more and more towards this explanation, particularly as cracks appear and crises erupt in other parts of the world with far-reaching and often unexpected effects. The debt default in Russia, for example, affected mortgage-backed securities as far away as the USA and Brazil. The threatened implosion of a heavily-leveraged hedge-fund in the USA caused major losses to European banks and posed such a threat to the US financial system that a special rescue package had to be orchestrated by the Federal Reserve Bank. There is no denying that individual economies must put their own houses in order. But it is increasingly clear that this alone is not enough. It is no longer a question of just the “Asian crisis” or even of the “Asian flu” infecting other parts of the world: the problems erupting throughout the world reveal serious defects in the fabric of the world financial system.
Members of the MPC will continue to monitor a wide range of indicators of domestic economic momentum, domestic costs, and importantly given our discussion today, the outlook for imported disinflation (as part of core CPI inflation amongst others) in determining the precise timing and path for Bank Rate. By doing so, we will retain our monetary sovereignty in a globalised world. BIS central bankers’ speeches  7  Chart 1 Headline and core inflation across the world economy Headline inflation  Core inflation  15-85 percentile Percentage change on a year earlier range 55  15-85 percentile range  Median  Median  45  Percentage change on a year earlier 26 22 18  35  14 10  15  6  5  2  -5  -2 1962 1964 1967 1969 1972 1974 1977 1979 1982 1984 1987 1989 1992 1994 1997 1999 2002 2004 2007 2009 2012 2014  1962 1964 1967 1969 1972 1974 1977 1979 1982 1984 1987 1989 1992 1994 1997 1999 2002 2004 2007 2009 2012 2014  25  Notes: Median of year-on-year inflation across an unbalanced panel of up to 64 countries for headline inflation and up to 50 countries for core inflation. The swathes show the 15-85 percentile interval around the median. Core inflation refers to CPI excluding energy and food. Source: OECD, Global Financial Data, DataStream, national sources and Bank calculations.

The 2% target is meant to act as a cushion against that risk. That cushion is not available at the moment in the euro area. If this situation persists, it could prove dangerous in a very uncertain economic environment. To sum up, the situation today calls for a very careful assessment in the balance of risks. Precisely because deflation is hard to reverse, even small probabilities should not be neglected and they should be fully factored into policymaking. Let me now turn to one of the tools recently used by many central banks in the world to respond to very low inflation: forward guidance. Central banks have been communicating for a long time about their vision for the future as well as their concerns and intentions. Forward guidance, however, brings something more. First, it implies some degree of commitment on the course of future actions. And, second, it broadens the scope of communication. Central banks try and specify how they will behave in the future, – what is called in the jargon their “reaction function”. The presumption is that this reaction will be different from that which could be expected when looking at their past behaviour or commonly accepted (Taylor) rules. Forward guidance raises several questions. First, how specific should it be? There is an obvious dilemma. If the commitment is unconditional, it will be very efficient in influencing short-term future expected rates, hence the shape of the yield curve, and, ultimately, long-term rates.
6 The Swedish National Debt Office offers a repo facility that in practice means that the short market rates on  government securities can hardly fall more than 40 basis points below the Riksbank’s policy rate. 7 From interest rate swaps one can calculate the expected average 3-month STIBOR rate five years ahead. And from pricing of RIBA and FRA contracts it is possible to calculate the expected difference between the STIBOR rate and the policy rate about two years ahead. The calculation of the expected policy rate is based on the assumption that the difference between STIBOR and the policy rate is expected to be the same during years three to five as at the end of year two. Thanks to Henrik Erikson of the Monetary Policy Department who has helped me with these calculations. 4 [30]  2017. This way of looking at data thus also supports the conclusion that the Riksbank's purchases pushed down the rate on government bonds by around 35 basis points. Figure 2. The rate on short government securities was lower than the policy rate SEK billion and basis points respectively (left figure ) and per cent (right figure)  Note. The blue field shows the volume of nominal government bonds owned by others than the Riksbank. Interest on repo transactions for nominal government bonds relative to the policy rate. The interest rate on repo transactions that pass over the end of the year may be affected by year-end effects. These rate listings have been removed.

If the Riksbank has not succeeded in building confidence, it would be much more difficult to conduct monetary policy today. I suspect that today's high inflation would have more easily become entrenched and been able to start a price-wage spiral. In that case, the Riksbank would have had to raise the policy rate even more this year, which would have resulted in a greater slowdown in the economy. The purchases in phase 1 may thus have reduced the risk of such a scenario. Is the Riksbank’s financial independence threatened? The valuation losses in Table 1 cannot be directly transferred to an annual result.36 However, since the value of the Riksbank's assets has fallen rapidly, the Riksbank will most likely report a major financial loss this year37 It is not unlikely that the Riksbank's reported equity in the next financial statements will be negative, at least if one disregards unrealised gains in the revaluation accounts for gold and foreign currencies (see Table 4) The fact that capital is shrinking or even becoming negative need not be a problem for a central bank. Some central banks, such as the Federal Reserve and the Bank of England, hand out all of the surplus to their principal and therefore have no capital except a small base fund and any risk provisions. And some central  35 The calculation is based on an alternative where the policy rate is the same.
ECB governance On 3 February 2003, the Governing Council of the ECB unanimously approved a Recommendation for a European Council decision, which is aimed at adjusting the voting modalities in the Governing Council in an enlarged euro area, in accordance with article 10.6 of the Statutes introduced by the Treaty of Nice. This adjustment became necessary so as to maintain the efficiency and timeliness of the Governing Council’s decision-making process. The Recommendation has been submitted to the EU Council. We hope that it will eventually be endorsed by the Heads of State and Government after both the European Parliament and the European Commission, which has already delivered its opinion, have been consulted. BIS Review 11/2003  1  As soon as the number of members of the Governing Council will reach 22, the total number of voting rights will be limited to 21. The six executive board members will have a permanent voting right and the NCB Governors will share the remaining 15 voting rights which will rotate among them according to pre-established rules. To ensure that all decisions taken by the Governing Council are representative of the euro area economy as a whole, Governors will be allocated to groups which differ with respect to the frequency with which their members will have voting rights. The allocation of Governors to groups will therefore be done in accordance with a ranking of their respective NCB’s, reflecting mainly the size of economies and of financial sectors.

I work in New York and live in New Jersey, where we know a thing or two about fiscal problems. Puerto Rico’s large public debt has the potential to reduce its growth prospects as the world economy recovers. Puerto Rico’s fiscal situation has deteriorated sharply over the last five years as the Commonwealth’s recession has deepened. Throughout this period, public debt has risen quickly as revenues that are sensitive to economic activity – such as income taxes – have declined. But the fiscal problem in Puerto Rico pre-dates the current crisis. Even when the economy was growing, public debt was growing even faster. This structural imbalance is difficult to sustain in the long run, and requires attention if Puerto Rico is to prosper. A critical factor here is ensuring that the Commonwealth’s tax system is designed to generate the revenue required to sustain government operations. Furthermore, any good tax system should satisfy three important criteria: simplicity, fairness and neutrality. The current system suffers from some problems that make it difficult to meet these tests and generate adequate revenue. In particular, high rates are levied on a narrow tax base. One of the key public services funded by these taxes is education. Workers need skills to produce the complicated technological products of the future. There is clear evidence that workers with the sort of flexible thinking skills not easily duplicated by computers have seen their productivity and earnings rise, a trend that is likely to persist in the future.
For example, EBA research on the ‘SME supporting factor’ introduced as part of CRR found no evidence that it was effective in reducing pricing or increasing lending. EBA-Op-2016-04 Report on SMEs and SME supporting factor.pdf (europa.eu) 7. That said, there is a legitimate question about how far the current capital framework should capture risks 20+ years in the future. I return to this point later on. 8. You may find it counterintuitive that the 2050 temperature outcomes do not differ wildly across these two scenarios – but that reminds us that changes in climate policy take a long time to feed through to climate outcomes. 9. Risks outside the scope of the exercise include traded risk for banks, and mortality risk for life insurers. It is worth noting that the impact could also be lower, most obviously because the modelling constraint of a fixed balance sheet in the CBES limited firms’ room to adapt to evolving risks. 10. Within the corporate sector, the industries with biggest losses from the transition are mining (including extraction of petroleum and natural gas), manufacturing, transport and wholesale & retail trade. The cumulative impairment rate on lending to these sectors averaged 35%. Insurers projected heavy corporate bond and equity losses in similar sectors, especially oil and gas. 11. It’s also probably fair to say that our ability to model the NAA scenario is more incomplete than the EA and LA scenarios – so there are greater risks of uncaptured or unanticipated losses in that scenario. Page 9 12.

According to one theory, similar mechanisms could emerge in response to an asymmetrical policy vis-à-vis asset prices. If central banks took action to stop asset prices falling below a certain level, the players in financial markets might attach less importance to a rigorous analysis of economic fundamentals. The strategy of waiting for bubbles to burst by themselves might then establish a climate that actually encouraged bubbles. This must of course be regarded as an unproven but interesting theory, and it certainly calls for a great deal more careful thought. Conclusion In my speech today I have dealt with some issues that at the moment are being debated particularly in the USA. This is not due to a special interest in developments in the USA but because the conditions 5  BIS Review 128/1999  under which monetary policy is pursued in the USA and Sweden are quite similar. Many of the problems and issues that are being addressed there are also of interest here, or may be so in the future. Therefore I feel that we have something to learn from them. As I see it, one important lesson is that monetary policy, at least today, should take a greater interest in the “long boom” than the “new economy”.
The oil price futures used in our forecasts turned out to be poor predictors in volatile oil markets.2  1  2  A recent BdF working paper argued that short-term unemployment is more meaningful than total unemployment when looking at the Phillips curve in the US. Cf. Ferrara L. and Sestieri G. in Banque de France, Quarterly Selection of Articles, No. 36, Winter 2014-2015. Bec, Frédérique and Annabelle De Gaye (Nov. 2014), “How do oil price forecast errors impact inflation forecast errors? An empirical analysis from French and U.S. inflation forecasts.” Banque de France Working Paper 523. BIS central bankers’ speeches  1  But downside surprises also occurred for core inflation suggesting the need for complementary explanations. One candidate is the continuous appreciation of the euro between mid-2012 and the beginning of 2014, which has lowered prices of many imported non-energy industrial goods. One can expect this impact to be transitory as the euro has subsequently depreciated since the middle of 2014. This depreciation reflects the differences in the growth cycle between the euro area and its main partners and accordingly the differences in monetary policy. Those explanations do not account for the slowdown in domestic prices, which must then be attributed to an increase in domestic slack. For the European Commission the output gap widened from −2% in 2012 to −3% in 2013.

Along with the above mentioned measures, in order to ensure orderly liquidity flow in the financial system and efficient functioning of credit markets by stimulating an increased foreign exchange liquidity flow in the interbank foreign exchange market, effective as of today the Central Bank has decided: a)  To extend the maturity of the FX deposit borrowed by the Banks within the predetermined borrowing limits from one week to one month,  b)  To reduce the lending rate from 10 percent to 7 percent for USD and 9 percent for Euro in the said market. In this challenging environment the way developing countries use their foreign currency reserves is of utmost importance. The Central Bank of Turkey, if deemed necessary, will continue to take additional measures prudently within its means in order to ensure the smooth functioning of the FX market and to support FX liquidity. Dear Guests, I would like to conclude my speech by giving some information about this conference organized with the aim of discussing the effects of globalization on monetary policy and inflation. The first session today will examine the linkages between globalization, monetary policy and financial stability. In the afternoon, second and third sessions will analyze the impact of globalization on inflation and business cycles. Sessions on Saturday will be more  2  BIS Review 144/2008  policy oriented. In the morning session, speakers will look at the topic of globalization and monetary policy challenges faced by emerging market economies.