samchain/econo-pairs-v1 huggingface dataset:
These are conditions in which it would be very easy for the financial markets, businesses and households to jump to the mistaken conclusion that monetary stimulus will soon begin to be withdrawn. Given the slack in the economy, the Committee is not in a rush. Assuming anchored inflation expectations, an orthodox central bank would not contemplate beginning to withdraw stimulus until the economy had reached “escape velocity”, which I have defined to mean “the economy growing, and being set to continue to grow, at a pace that gradually absorbs the slack in the labour market and within firms”.4 And at that point the central bank would assess the erosion of slack in the economy and thus the extent to which downward pressures on inflation were dissipating. Since my own policy deliberations have been framed in terms of “escape velocity”, I saw real merit in any MPC Forward Guidance being cast in terms of a threshold for real growth. Manifestly, this could not be a measure of slack in the economy; it would be clear what it was and was not. Once passed, it would prompt a rich assessment of slack and inflationary pressures, drawing on the widest possible range of indicators. The Committee decided on a threshold specified in terms of unemployment. The MPC’s threshold is what it says: a threshold for assessing inflationary pressures, although the Committee must maintain that broader assessment month-by-month, quarter-  2  See Woodford (2012), “Methods of Policy Accommodation at the Interest-Rate Lower Bound,” presented at the Jackson Hole symposium.

The benefits of FinTech applications in this field for financial stability may include: (i) increased market efficiency, in particular for Real Time Gross Settlement (RTGS) among large financial institutions, (ii) enhanced risk measurement of each bank and a more transparent financial system, (iii) lower trade costs, robustness against cyber-attacks, and less need for collateral, (iv) a stronger wealth-channel for monetary policy if more agents access financial assets and loans. Similarly, crowdfunding and P2P reduce systemic risk since they do not involve money creation through the conventional multiplier/maturity transformation mechanism of banks. While this may significantly limit the scale at which operations can develop, they can be an affordable alternative for businesses that are not covered by conventional financial institutions. FinTech market support tools can also contribute to financial stability to the extent that they can mobilize a larger volume of information to better assess credit risk and to mitigate it through smart contracts, guarantees and collateral. 10  Central Bank of Chile 29 June, 2017  Slide 14  Risks ▪ New systems may have unknown weaknesses that are not apparent in the trials—“flash crashes” ▪ Pressures for users of automated payments and transfers systems— “smart contracts” ▪ Cryptocurrencies poses a number of challenges to financial systems and central banks alike ▪ Perhaps the greatest risk of FinTech is that of cybersecurity  Risks [SLIDE 14] FinTech developments also pose a number of risks for financial stability and monetary policy.
M R Pridiyathorn Devakula: Maintaining stability with a nuanced approach Speech by Mr M R Pridiyathorn Devakula, Governor of the Bank of Thailand, at the Stock Exchange of Thailand, Bangkok, 20 September 2004. *  *  *  Distinguished participants, ladies and gentlemen, Let me begin by thanking the Stock Exchange of Thailand for inviting me here to speak today. You have already heard from our Minister of Finance a comprehensive framework for sustainable growth in the next five years, with an integrated set of targets for various sectors and various dimensions of the economy. This is a welcome initiative and an important policy development. The Bank of Thailand’s role is to ensure economic and financial stability in order to support continued growth of the economy. From our experience, monetary policy alone is not enough to achieve desirable stability. WE need to involve ourselves in two other areas, i.e. to guard against possible build-ups of financial imbalances and to further strengthen the financial sector. First of all, I will begin with our assessment of the current economic conditions to assure you that, in spite of the greater risks and challenges that have emerged this year, Thailand’s growth momentum continues to remain firm, with economic and financial stability intact. Key challenges have included increased external pressure from higher oil prices, rising global interest rates, and the potential impact of a slowdown of the Chinese economy.

Let me expand on these aspects. The normal operation of markets and financial intermediaries requires the availability of a broad spectrum of assets with sufficient liquidity and bounded counterparty risk, including so-called “safe assets”. This is even more the case in turbulent times, as investors tend to react to increases in uncertainty by turning to assets with a lower level of perceived risk. As Holmstrom and Tirole1 put it, a safe asset is an instrument that allows wealth to be transferred from one point in time to another without any nominal loss. If you allow me the metaphor, the supply of a broad enough set of assets is the infrastructure in an electricity grid. A large enough infrastructure is needed to ensure the grid’s smooth functioning, in  1  Holmstrom, B. and J. Tirole, “Private and Public Supply of Liquidity”, Journal of Political Economy, Vol. 106, No 1 (February 1998), pp. 1-40 (40 pages). 4/8  particular, to allow it to withstand episodes of high demand. If not, the system is prone to disruptions and even blackouts. There is a wide consensus regarding the existence of a secular shortage of safe assets at global level. To put it simply, there is not much highly-rated paper available once holdings in monetary policy portfolios are discounted. This phenomenon has become more acute since the outbreak of the European sovereign debt crisis, given that some eurodenominated sovereigns have seen their ratings downgraded, in part due to the persistence of an incomplete EMU.
We should trigger four accelerators: a macro accelerator, which would consist of a collective economic strategy shared by all euro area Member States; a micro accelerator, which would take the form of a Financing Union for Investment and Innovation, going beyond the CMU (Capital Markets Union); a fiscal accelerator, which would draw on a euro area budget. The fourth is not an accelerator in substance, but rather a “facilitator” for the first three: on institutions, a euro area Finance Minister and Parliament. These accelerators would contribute to the functions of economic policy, as described by Musgrave:2 allocation, stabilisation and distribution. The allocation function aims at making sure that resources are used in an efficient way. This would obviously be the role of the micro accelerator, but also of the fiscal one – through the financing of European common goods. The stabilisation function consists in the smoothing of the cycle and cushioning of the impact of crises, and this could be ensured mainly by the macro accelerator, but also by the micro one, thanks to enhanced private risk sharing, and possibly by the fiscal one. Finally, the distribution function is to foster an equitable sharing of income. This role could possibly fall to the fiscal accelerator but its implementation would require increased trust and greater economic convergence between euro area Member States in order to avoid a “transfer union” which would 1/4  BIS central bankers' speeches  be a one-way budget: in that case, I would understand German fears.

Yet, for this Financing Union to be effective, progress is still needed in four key areas: first, providing incentives for cross-border investments – mainly in equity – through accounting, taxes and insolvency laws; second, developing pan-European long-term saving products – with a key role for the insurance sector – and investment vehicles like European venture capital funds; third, completing the Banking Union; fourth, controlling financial activities and risks that are of vital importance for the euro area, such as supersystemic CCPs. And so, we could reach significant gains for digitalisation, SME’s scaling up or energy transition. Today, I will focus on the third area: completing the Banking Union. The Banking Union is a major step forward for the euro area and is now operational, based on the single rulebook and already two pillars: the Single Supervisory Mechanism (SSM) since end2014; and the Single Resolution Mechanism (SRM), since the beginning of 2016. Those two pillars will have to be complemented by a third pillar about Deposit Insurance, where we could find practical and reasonable compromises. But in addition, I will elaborate on two challenges that are less often mentioned: consistency, and consolidations. The first challenge is to achieve better consistency between regulation, supervision and resolution, at three levels: First, in the concrete mechanisms: finalising and simplifying the resolution pillar should be a priority.
To sum up, this isn’t likely to be a case of black (only total unemployment matters) or white (only short-term unemployment matters) with respect to compensation cost trends. I suspect that the degree of attachment falls on average as one is unemployed for longer periods of time. But, I don’t believe that this pattern of attachment is stable. It is affected by the nature of the business cycle and how and why people have become long-term unemployed. Before I turn to the implications of the economic outlook for monetary policy, let me leave you with a final thought on inflation and our inflation objective. I think there is some confusion as to whether the FOMC’s 2 percent inflation objective is a ceiling or not. My own view is that  BIS central bankers’ speeches  3  2 percent is definitely not a ceiling. Once we reach 2 percent, I would expect that we would spend as much time slightly above 2 percent as below it, recognizing that we will hardly ever be exactly at 2 percent because of the inherent volatility in prices. If inflation were to drift above 2 percent, all else equal, then we would tend to resist such a rise. But, if inflation were slightly above 2 percent even as unemployment remained far above levels consistent with maximum employment, then the unemployment consideration would dominate because we would be further from the unemployment objective than we are from the inflation objective. This should not surprise anyone.

As Chairman Bernanke noted in the press conference following the June 2013 FOMC meeting: “While participants continue to think that in the long run the Federal Reserve’s portfolio should consist predominantly of Treasury securities, a strong majority now expects that the Committee will not sell agency mortgagebacked securities during the process of normalizing monetary policy.” The balance sheet would shrink post-lift-off as Treasury securities matured and mortgages were prepaid, but outright agency MBS sales are no longer contemplated during the process of monetary policy normalization. Also, I think that the language in the June 2011 exit principles with respect to reinvestment needs to be revisited. The exit principles state: “To begin the process of policy normalization, the Committee will likely first cease reinvesting some or all payments of principal on the securities holdings in the SOMA.” There are two considerations that suggest to me that ending the reinvestments prior to lift-off may not be the best strategy. First, such a decision might complicate our communications regarding the process of normalization. Ending reinvestments as an initial step risks inadvertently bringing forward any tightening of financial conditions as this might foreshadow the impending lift-off date for rates in a manner inconsistent with the Committee’s intention. Second, when conditions permit, it would be desirable to get off the zero lower bound in order to regain some monetary policy flexibility. This goal would argue for lift-off occurring first followed by the end of reinvestment, rather than vice versa.
The use of internet and online shopping have increased in Sweden and are at a high level compared with other European countries. We now have access to more information than before and can compare prices of various products and various sellers very quickly. Previously, if you wanted to buy a new pair of shoes you had to go into several shops to compare prices. First you needed to have an idea of where to find a specific model of shoe, say a pair of Converse all-stars in size 39, and then you needed to travel round to find the best price. Now you can quite simply visit a price comparison site online and enter the name of the model and get price information, stocks status and suggested sales points that are online. This has reduced the search costs enormously.21  Companies’ pricing At the same time, e-commerce is changing the playing field for many trading companies and changing their pricing. Why should customers pay more for something in a shop when they can buy it cheaper online? 19 Heyman et al (2016). 20 Sveriges Riksbank (2018c). 21  The Swedish Competition Authority commissioned researchers Niklas Rudholm and Charlie Lindgren to analyse how price transparency through price comparison sites affects prices and price spread between companies. They used information from the comparison site Prisjakt to compare how prices of games differ between various online traders. They saw that the development of prices for a particular product was highly correlated among the largest companies.

I would first like to elaborate on the challenges we face as central bankers, then on our instruments and their effectiveness. I. Let me start with the challenges  a) As you all know, the Eurosystem’s primary objective is to maintain price stability, that is inflation rates below, but close to 2% over the medium term. However in the euro area, like in most advanced economies, inflation remains too low, despite the historically low interest rates: the harmonised index of consumer prices (HICP) indeed returned to negative territory, standing at –0.2% in February 2016, and underlying inflation, i.e. excluding energy and food, is only 0.7%. A certain number of factors are currently contributing to low inflation. Primarily, the euro area is faced with deflationary pressures associated with a series of economic shocks: firstly, the fall in oil prices, as well as the overall decline in commodity prices; secondly, the slowdown in growth in emerging economies and chiefly China; and, lastly, inadequate growth in the euro area with persistently high unemployment, which curbs wage rises and weakens demand and price growth. Moreover, structural factors, such as the ageing population, are also likely to exert downward pressure on the “natural” – or “Wicksellian” – interest rate. This rate can be defined as the interest rate consistent with the full employment of the factors of production. In this case, in order to achieve the right balance between savings and investment, markets rates must come down too.
This is because, unlike the unsecured TOIS fixing, SARON, as the secured overnight reference rate, is risk-free. Although the volume of SARON swaps is still small, many players are in the final stages of preparing to enter this market. Both the transaction volumes and acceptance of this market among market participants are expected to increase in the coming weeks and months. The Swiss National Bank is supporting and assisting in continued efforts to establish SARON on the Swiss money market. Page 2/5  Berne, 15 June 2017 Andréa M. Maechler  News conference  New code of conduct for global foreign exchange market transactions  That brings me to the new global code of conduct for foreign exchange market transactions known as the FX Global Code. Published at the end of May, this new code aims to define clear rules of conduct for all those transacting business on the foreign exchange markets, with a view to enhancing efficiency. A well-functioning foreign exchange market is in the interests of all market players, not least the central banks. Various central banks, including the SNB, have therefore been working alongside private sector partners to draft the FX Global Code. The code of conduct affects all foreign exchange market activities – from communications with market participants to risk management and the execution of transactions. As a global set of rules, the new code replaces all existing codes of conduct for foreign exchange markets and, as such, establishes clear and uniform guidelines.

Heightened political uncertainty has, however, occasionally left its mark on the bond and foreign exchange markets. For instance, demand for highly rated government bonds has remained strong since the start of the year. In addition, despite largely positive economic data, the inflation outlook for the major advanced economies is still muted. As a result, yields on highly rated government bonds have changed only marginally since the beginning of 2017  Page 1/5  Berne, 15 June 2017 Andréa M. Maechler  News conference  and have remained low (cf. chart 3). In Switzerland, too, the yield on ten-year Confederation bonds has remained essentially unchanged. On the foreign exchange market, the Swiss franc experienced repeated episodes of upward pressure as a result of heightened political uncertainty in Europe. The elections in the Netherlands and France, as well as the UK’s upcoming Brexit negotiations with the EU, generated increased demand for currencies considered particularly safe by investors. After the presidential election in France, the euro strengthened and pressure on the Swiss franc subsided. Since the beginning of the year, the euro has gained around 3%. The Swiss franc is now trading close to where it was at the start of the year, and thus remains significantly overvalued. Despite ongoing normalisation of monetary policy in the US, the dollar has depreciated roughly 5%. Establishment of SARON as reference rate for interest rate derivatives  Let me now turn to innovations on the Swiss money market.
I invite you all to rise and to join me in a toast of good health and prosperity to “The Lord Mayor and the Lady Mayoress”. BIS Review 29/2003  3

Last year, the Mainland of China ran a trade surplus of $ billion, equivalent to 4.5% of GDP. Foreign direct investment amounted to $ billion. Its foreign reserves are the second highest in the world. Its foreign debt amounted to only about 14% of GDP and consisting of mostly long-term loans from official sources such as the World Bank and the Asian Development Bank, and the debt service ratio at well below 10% of exports. The fiscal deficit in 1997 was small at below 1% of GDP and the monetization of such deficits is now prohibited. My contacts in Beijing have told me that even on the basis of very extreme assumptions with the amount of foreign direct investments and the growth rate of exports being halved in 1998, there will still be a balance of payments surplus. In the circumstances there really is no pressure to devalue the RMB. 17. The stability or otherwise of the RMB, understandably, would appear to some observers to have implications for the Hong Kong dollar’s link with the US dollar, particularly given the economic closeness between Hong Kong and the Mainland of China. But this does not necessarily mean that the Hong Kong dollar will need to move in sync with the RMB, in the highly unlikely event that the RMB is devalued. The Hong Kong dollar is linked to the US dollar and not to the RMB. The economic relationship has always been very close between Hong Kong and the Mainland of China.
European Central Bank: Press conference - introductory statement Introductory statement by Mr Willem F Duisenberg, President of the European Central Bank and Mr Lucas Papademos, Vice-President of the European Central Bank, at the press conference held in Frankfurt, 7 November 2002. *  *  *  Ladies and gentlemen, the Vice-President and I will report on the outcome of today's meeting of the Governing Council of the ECB. We have reviewed monetary, financial and economic developments and updated our assessment in the light of the information available. In view of the high uncertainty on future growth, and its implication for medium-term inflationary developments, the Governing Council has discussed extensively the arguments for and against a cut in the key ECB interest rates. The view has prevailed to keep interest rates unchanged. However, the Governing Council will monitor closely the downside risks to economic growth in the euro area. As regards the analysis under the first pillar of our monetary policy strategy, the three-month average of the annual growth rates of M3 was 7.1% in the period from July to September 2002, unchanged from the previous three-month average. The continuing strong expansion of M3 should be interpreted with caution, since it has been boosted considerably by high uncertainty in financial markets over recent months. At the same time, the low level of short-term interest rates continues to stimulate demand for the most liquid assets, which are included in the narrow aggregate M1.

The deviations enter the loss function quadratically. Large deviations from the targets are thereby deemed to be a considerably more serious disadvantage than small deviations. In the event of large deviations between inflation and the inflation target, or substantial imbalances in the real economy, the use of relatively strong measures may be appropriate. The trade-off between inflation stability around the inflation target and stable growth in output is expressed by parameter . The higher is, the greater the emphasis on real economic stability in relation to stability in inflation. With a is the definition strict inflation target, i.e. emphasis is only placed on inflation, is equal to zero. of flexible inflation targeting. Although the loss function has two add factors, both of which are given emphasis, a fundamental difference is that the monetary policy authorities can choose the inflation target but not the level of potential output. In practice, no central bank uses a loss function of this kind directly. What inflation-targeting central banks do in practice does, however, contain elements of the thinking behind this theory. 6  See the box “Flexible inflation targeting and indicators of pressure in the real economy” in Inflation Report 3/03, p. 46, for a more detailed description of the different indicators. 7  See for example Svensson, Lars E. O. (2002): “Monetary Policy and Real Stabilization”, in Rethinking Stabilization Policy, A Symposium Sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming, August 29-31, 2002, pages 261-312.