samchain/econo-pairs-v1 huggingface dataset:
Thomas Jordan: Challenges facing the Swiss National Bank Speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, to the General Meeting of Shareholders of the Swiss National Bank, 27 April 2012. *  *  *  Mr President of the Bank Council Dear Shareholders Dear Guests Also from a monetary policy perspective, the Swiss National Bank (SNB) has experienced another difficult year. In 2011, the escalation of the European sovereign debt crisis triggered a very substantial appreciation of the Swiss franc. In order to avert major damage to the Swiss economy, and work against the threat of a deflationary trend, the SNB had to react fast with exceptional measures. I would like to begin by giving you a review of economic developments and monetary policy in 2011. Then I will present our assessment of the international economic outlook and its impact on the Swiss economy. I will also outline the outlook for price stability. I will conclude by explaining the SNB’s reflections on current monetary policy. First, let me begin by reviewing the events of last year. Review of 2011 In terms of the economic cycle, the year 2011 certainly began well. Overall, economic activity was lively, and the situation on the labour market improved further. Despite the appreciation of the Swiss franc in 2010, goods exports were robust during the first few months of the year. However, in spring 2011, the international economic recovery stalled. This was attributable to several different factors.

Although copper still accounts for a relevant portion of Chilean exports, an important number of new markets for a variety of products have been opened thanks to both the unilateral efforts of trade liberalization and the significant spread of bilateral trade agreements with the major economic countries and zones. Finally, a sound financial system, with globally integrated, well-capitalized, and adequately-regulated banks. Actually, the regulation of the domestic banking system prevented some of the most notorious credit excesses that happened in advanced economies, or in the past of many emerging markets, including Chile. 1  Banco Central de Chile (2007). 2  See Marcel et al. (2001) for a discussion of the budget rule. BIS central bankers’ speeches  1  I will continue my presentation speaking about how all the shocks we have seen the last few years have affected the Chilean economy and the policy responses we have put in place. Then I will describe the recovery process and I will finalize presenting some thoughts on the lessons that can be drawn from our recent experience and some challenges I see for the future. The run-up to the financial bust By March 2008, Bear Stearns had already gone bankrupt and the risk of a higher stress episode at the world financial markets had increased greatly. Due to the risks of a potential sudden stop if the financial crisis should worsen, and in a context of a severe appreciation of the Chilean peso, in April, the Central Bank decided to start accumulating reserves through sterilized intervention.
Charles Bean: The economic outlook Speech by Mr Charles Bean, Deputy Governor for Monetary Policy of the Bank of England, to the Council of Mortgage Lenders, Mortgage Industry Conference & Exhibition, London, 3 November 2011. *  *  *  Good morning and thank you for that kind introduction! In the very early part of this year, with the recovery from the 2008–9 recession seemingly becoming more solidly based and inflation running at double our 2% inflation target, the Bank’s Monetary Policy Committee, of which I am a member, was edging towards starting to withdraw some of the considerable monetary stimulus we had injected during the downturn. Indeed, as recently as our May meeting, a third of the Committee were voting to raise Bank Rate from its emergency level of 0.5 per cent. Although I did not join them in voting to raise Bank Rate, I did view the arguments for and against a tightening as being finely balanced. Now, just a few months later, the Committee has unanimously voted to re-start its programme of asset purchases financed by the issuance of additional central bank reserves, also known as quantitative easing. In my address this morning, I thought I would say a few words about why the Committee’s view of the outlook has shifted so dramatically and what we can expect additional purchases to achieve. As I said, earlier this year the recovery seemed broadly on track. But, as time has passed, so it has seemed less secure.

As you will no doubt know, quantitative easing aims to depress a range of longer-term yields and raise asset prices, so boosting demand. Our analysis suggests that our first £ billion of asset purchases reduced the yields on gilts and corporate bonds by around a percentage point2. Studies for the United States, using a similar methodology, find comparable effects from the Federal Reserve’s large-scale asset purchases, which is comforting. The asset purchases also have the effect of boosting banks’ holdings of the most liquid asset, central bank reserves, which may be of particular value at the current juncture. While one cannot be confident about the impact of our earlier purchases on the real economy, our analysis points to a peak effect on output of 1½–2 per cent and of ¾–1½ percentage points on inflation. At this juncture at least, we have no reason to believe that, suitably pro-rated, the current phase of purchases will be greatly different in their effect on either asset markets or on the real economy. 2  For a summary of the evidence, including references to related studies, see Michael Joyce, Matthew Tong and Robert Woods (2011), “The United Kingdom’s Quantitative Easing Policy: Design, Operation and Impact” Bank of England Quarterly Bulletin, 51(3), 200–212. BIS central bankers’ speeches  3  Several commentators have suggested that the effectiveness of quantitative easing could be enhanced by spending the newly created money on something other than government debt.
But Teesside also gives grounds for optimism. Productivity and jobs-wise, it is one of the fastest growing in the country. With support for skills and technology, the like of which is being provided here at the Materials Processing Institute, that progress can continue and those differences in productivity and unemployment can be closed. In the North-East, there are good grounds for believing the glass is half-full. If that could progress here in Teesside could be replicated nationally, the UK’s fortunes really could be transformed. Those regional micro-economies would converge, their colours would merge, their glasses would fill. Economically and socially, the prize could scarcely be larger. 16  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  16  Annex Chart 1: Nominal GDP per head (2014)  Chart 2: Average weekly pay (2016)  Source: ONS Regional GVA; Bank calculations. Source: ONS Annual Survey of Hours and Earnings (ASHE); Bank calculations. Pay is measured as median gross weekly earnings of full-time employees. Chart 3: Median household net wealth (2012/14)  Chart 4: Car ownership (2014)  Source: ONS Wealth and Asset Survey; Bank calculations. Source: Eurostat (2016); ONS; Bank calculations. The chart shows the number of registered passenger cars by region divided by the number of households. 17  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  17  Chart 5: Labour productivity (2014)  Chart 6: Research and Development spending per head (2013)  Source: ONS Regional Labour Productivity; Bank calculations. . Source: Eurostat (2016); ONS; Bank calculations.

The today initiative is a significant event, to sustain the growth of financing for this vital part of the economy and it will help to soften the negative impacts of the world economy slowdown. I encourage the banking system and the other players of the market to undertake similar initiatives in order to not impede the financing of small projects, which owns the possibility to be transformed into profitable enterprises. At the same time to maintain a stable and long-term progress of the country, in line with its European aspirations, the banking system should go on the way toward the perfection of service versus the clients, the intensification of communication and public education. Bank of Albania believes that the sources of the stable growth for the mid-term and long-term period consist not only on the encouragement of the work productivity increase or of the investments in industry and construction, but also in other strategic sectors. For the Albanian economy as a developing economy, domestic investments and foreign direct investments in strategic sectors as tourism and infrastructure shall be a real foundation to the economic growth. The positive chain effects are expected to be reflected on the preservation of the steady growth rhythms. Hence, the overall macroeconomic stability will be seen as a precondition in promoting the further intensification of the domestic and foreign investments.
Too many Malaysian households have been thrust into vulnerable financial positions that might have been mitigated, due to high debt levels, low buffers and poor financial habits that left them sorely unprepared to cope with unexpected shocks during the pandemic. When confronted with having to deal with their financial difficulties, many struggled to take appropriate steps to gain control of their situation and make good choices. As a result, individuals have had to resort to drawing down on retirement funds, or incurring higher debt just to get by. And there are still too many who continue to fall prey to desperate financial scams and fraud. Indeed, the need to double down on financial education has never been clearer. We need to build stronger resilience among all Malaysian households. We need to equip and empower Malaysians with the right knowledge and skills to confidently make responsible financial decisions at key stages of their lives. We need to promote healthy attitudes towards financial management. And in Kofi Annan’s words, we need to build a bridge to hope for every Malaysian who has been affected by the pandemic crisis – not just to tide over the immediate challenges that they face, but to provide for their future financial security. With this in view, this Community of Practice aims to help FEN members and the broader financial education community develop effective responses to meet the challenge of delivering lasting and impactful financial education to society. The Community of Practice agenda today focuses on two key areas.

 The growth potential should be enhanced also by an increase in capital flows and stock, the absorption of EU funds and a better allocation of resources via investment prioritisation.  Achieving convergence is not enough, as convergence should be sustainable, balanced and equitably distributed.  Real convergence should be pursued not only in terms of income, but also in terms of output structure, by means of the level and composition of budget revenues and expenditures. 3   Good European practices should be used to fight tax evasion and strengthen financial discipline.  In the medium run, a balanced primary budget should be ensured and the MTO (medium-term objective) should be again pursued; public debt should be maintained at sustainable levels and inappropriate incentives leading to over-indebtedness of private sector and households should be avoided.  It is necessary to improve the access to financing. 83% of households have 6% of deposits, whereas 0.3% of households hold 25% of deposits. Housing loans have been accessed by only 1% of very low income earners (the 1st quintile) and by only 4% of relatively high income earners (the 4th quintile). 12% of the highest income earners (the 5th quintile) have accessed housing loans.  A roadmap is necessary for joining the euro area.  The public goods that should be preserved and even strengthened include: the country’s security, financial stability, investors’ confidence. European Union – Romania joint agenda for 2019  Conclusion of Brexit negotiations.
The government recognised that the repeated devaluations were ineffectual. Confidence had been lost. In Norway, inflation had also soared without a fall in unemployment. Even if it was costly to restore credibility, in reality we had no choice. 29 The alternative was to bring the country even closer to the brink of financial chaos and runaway inflation. The devaluation in 1986 would become the last in the series. Internationally, the 1980s ushered in three innovations that would become decisive for the design of modern monetary policy as we know it today. -  First, market deregulation led to freer cross-border capital flows. Promises could no longer be relegated to the future. Failing credibility was promptly reflected in higher interest rates and weaker exchange rates. Nixon’s disinflation plan to bring down inflation at some point in the future would have had immediate consequences. On the other hand, it also became clear that a credible and transparent monetary policy could be more effective precisely thanks to financial markets’ swift reactions. 30  -  Second, the notion of central bank autonomy regained favour. The political authorities, who wanted to show the world that they were committed to delivering their promise of price stability, did as Ulysses and tied themselves to the mast. The mechanism was central bank independence and Norway was no exception. The new Norges Bank Act of 1985 gave Norges Bank the authority to set the interest rate.

This prevented him from steering the ship towards the sirens himself, and the crew were prevented from hearing him when he would later succumb to temptation and order the ship to be steered towards the sirens’ island. The story cannot be directly transferred to economic management, but the concept of “tying oneself to the mast” is used in promoting mechanisms that prevent short-term objectives from taking precedence over long-term objectives. Precluding the possibility of breaking a promise makes the promise more credible. Ensuring accountability for promises made through reporting and review can be a mechanism that ties us to the mast. A central bank’s most important task is to ensure a stable value of money. The value of money relies on responsible economic policies. For a central bank to be able to keep its word and deliver a stable value of money, it must have the backing of the political authorities. Otherwise, the central bank will not be able to keep its word. In the long term, the instruments available to the central bank allow it to deliver only the promise of a stable value of money. Earlier, this promise was kept by regulating the amount of money issued. Today, the instrument is the interest rate. The central bank cannot steer real wages, the labour supply, employment or the level of unemployment in the long term. But it can contribute to curbing short-term cyclical fluctuations if price stability is firmly anchored. Throughout history central banks have attempted to bind themselves to the mast in different ways.
This reform includes a strengthening of the corrective arm of the Stability and Growth Pact, with the setting of a ceiling on public spending and the introduction of greater coordination in countries’ budgetary processes. In the corrective arm, greater significance is accorded to the debt criterion and the sanctions system has been reinforced. Members are obliged to reform national fiscal frameworks and set up independent fiscal authorities, which must conduct public assessments regarding the implementation of national budgetary rules. Overall, the reform echoes the latest economic literature, which stresses that it is the design and not only the mere existence of fiscal rules that has a bearing on their effectiveness. However, the new framework of governance is now more complex and the room for discretionality in its application remains ample. Its effectiveness will thus depend on such application being strict. Full article available in Spanish: https://www.funcas.es/Publicaciones/Sumario.aspx?IdRef=1-01141 For more information on the reform of the economic governance in the Economic and Monetary Union see Caballero, García Perea, Gordo (2011) available in Spanish: https://www.bde.es/f/webbde/SES/Secciones/Publicaciones/InformesBoletinesRevistas/BoletinEconomico/11/Ene/Fic h/art5.pdf 6/9  coupled with and complemented by an appropriate balance in overall economic policymaking. Actually, beyond accession criteria, this notion was also enshrined on an ongoing basis through the Stability and Growth Pact and, later on, with the Macroeconomic Imbalance Procedure.

Europe is particularly badly affected, as temperatures here continue to rise above the mean and, despite our efforts to reduce CO2 emissions, we lag far behind in terms of what we need to do to adapt to some of the inevitable consequences. It is time we face the facts. As citizens, as institutions, and as all actors in the economy – including of course banks. It is essential that banks share with their stakeholders detailed information on their exposures to C&E – risks. Only then can we all effectively work together to address the consequences of climate change. This is why today I would like to draw your attention to another important landmark in the ECB’s supervision of C&E risks: the publication of our second stocktake on the transparency of banks’ disclosures of their C&E risk profiles. The European and international agenda on climate Publishing this update is part of our supervisory agenda on climate. As you know, C&E risks have been one of our supervisory priorities for some years now and we have started treating them just like any other prudential risk. In this context, we have been rolling out a series of corresponding supervisory activities. In 2020 we published our guide on climate-related and environmental risks, which outlined our supervisory expectations relating to the management and disclosure of C&E risks. In 2021 we published a self-assessment benchmarking report.
Yet upside risks persist here, stemming mainly from the possibility of further increases in oil prices – given the instability of the market – and from the potential emergence of second-round affects in a more buoyant economic setting. But the fact that the level of output is still below potential provides leeway for the recovery to continue for some time without generating excessive inflationary pressures. In any event, the European Central bank will remain watchful so as to prevent risks to price stability in the medium term from materialising. The Spanish economy Throughout last year and in early 2006, the expansionary cycle of the Spanish economy continued and intensified, in contrast to the difficulties experienced in the euro area as a whole in emerging from the phase of low growth currently in train. Spanish GDP increased by 3.4% in 2005, while employment advanced at an equally high rate of 3.1%. In both cases, these rates were several tenths of a point up on the previous year's figures. Moreover, 2005 saw the publication of the new Spanish National Accounts base 2000 figures, which meant a considerable upward revision of economic growth since 1995 and, especially, since 2000. These new estimates reflect more appropriately the dynamism of the population and of employment these past few years, and they show a more buoyant economy more closely in step with the expansionary behaviour seen in other economic variables such as credit or tax revenue.

Any assessment of the consequences arising from the greater exposure of the Spanish economy to changes in house prices and in interest rates would be incomplete were it not also to allude to the parallel developments reinforcing the economy’s capacity to face potentially adverse shocks in any of these variables. In this respect, it should be underscored that the behaviour seen in recent years in the main indicators of the activity, profitability and solvency of domestic credit institutions is helping mitigate the financial risks bearing on the course of our economy in the medium term. These institutions are therefore well positioned to absorb the potential impact of shocks such as those indicated without seeing their capacity to ensure the financing of economic growth affected. Undoubtedly, the prolongation of the phase of robust demand has contributed to widening the economy's external imbalance, increasing the need to resort to foreign saving to finance private-sector spending. Overall, the external deficit, whether measured by the current account balance or by net borrowing, reached a new all-time high last year. As is known, belonging to a monetary union substantially changes the meaning and consequences of the current account balance. The breaking of the link between the exchange rate and the economy's external imbalance gives greater prominence to how this imbalance is financed. Here, the funds needed to bridge the gap between national investment and saving are being routed essentially via the issuance of securities by banks and, especially, non-bank financial institutions.
Barbro Wickman-Parak: The repo rate path – experiences three years on Speech by Ms Barbro Wickman-Parak, Deputy Governor of the Sveriges Riksbank, at the Danske Bank, Stockholm, 17 June 2010. *  *  *  Around three years ago the Riksbank began publishing its own forecasts for the repo rate, and there were many reasons for doing this. It made the forecasts more consistent and it was now easier to evaluate the Riksbank’s forecast in relation to those of other analysts. We were also given an opportunity to describe alternative paths for economic developments, which was a good educational tool that further contributed to increasing transparency. Publishing a whole path for the repo rate was also one step towards becoming more open and clear. It also improved the chances of steering longer term expectations . Experiences so far show that the work on the repo rate and its publication have functioned well. The monetary policy discussions focus more on long-term issues, and they now concern the whole repo rate path rather than an individual decision. This is good. Today the repo rate path is a natural part of monetary policy. Moreover, the repo rate path has served us well during the crisis, in that we could clearly signal that the interest rate was expected to remain low over a long period of time. Market participants’ expectations of the repo rate have rarely been exactly the same as the Riksbank’s expectations. My assessment so far is that the deviations have not been a problem.

Also, economic research outside central banks – which is not driven by direct “daily” topics – proved ultimately valuable for policy too. For example, some ideas developed in Krugman (1998) and Eggertson & Woodford (2003) on policy at the Zero Lower Bound, inspired by the economic stagnation in Japan, entered the United States and Euro Area policy debates years after their publication. The Banque de France Foundation has accompanied all these significant trends. By fostering research conducted by international teams. By sponsoring research unrelated to immediate Banque de France needs, but which would ultimately prove beneficial for our policies. In that respect, I do expect that the Foundation will still play an important role in the next decade in promoting excellence in research in the field of monetary and financial economics. I also hope – and this will be my conclusion – that this is no wishful thinking either. 2  BIS central bankers’ speeches  Once again, let me thank all the participants, speakers, discussants and chairs that have joined us today for such fruitful talks and congratulate the young researchers who received a well-deserved prize for their work. A special thanks also to all the actors of the Foundation, whose constant help and dedication to their missions are precious and appreciated. Now is time to have lunch and I believe a buffet has been prepared. Thank you. BIS central bankers’ speeches  3