samchain/econo-pairs-v1 huggingface dataset:
In sum, for the first time after years of crisis, we can discern the possibility of a gradual and sustainable recovery, the outcome of the progress made in correcting the imbalances that we had built up and of the structural reforms undertaken, whose results we are beginning to see. The task is not complete and much work remains to be done, both in Europe and in Spain. Hopefully, however, the progressive perception of the improvement achieved will act as a powerful spur for us to persevere on the road we have taken. 2  BIS central bankers’ speeches

Unemployment has steadily fallen since then and the inflation rate has returned towards 2%, which is the Federal Reserve’s inflation target. Only then could the FOMC stop increasing its balance sheet, raise the Federal Funds rate from its floor and so initiate an exit strategy. Obviously we, in the Eurozone, are not at the same point of the business cycle but we are travelling along the same road for monetary policy. Some consider these unconventional policies in the euro area are counterproductive because ultra-low interest rates hurt savers and banks. However, we have monitored closely banks’ profitability and – taking into account ALL elements of monetary policy  BIS central bankers’ speeches  3  – there is in 2015 no evidence that this is doing harm overall. Moreover, the global longterm real rate of interest has been falling for around 30 years reflecting an imbalance between a strong desire to save and a relative scarcity of those willing to borrow to invest. As we all know, this imbalance is extremely acute in Germany where this surplus is in the order of 8 % of German GDP. Above all, we cannot base our decisions on their outcomes for particular groups but on the common good. Economic activity does not depend only on savers but also on entrepreneurs, workers, homebuyers and borrowers who benefit from low interest rates. Eventually, these policies will lead to levels of inflation more consistent with our mandate and will call for higher interest rates both in nominal and in real terms.
The ECB monetary policy response to the upturn in inflation In December 2021, the ECB’s Governing Council embarked on monetary policy normalisation, with the gradual withdrawal of the extraordinary monetary stimulus measures implemented during the pandemic, once these had succeeded in countering the adverse impact of the pandemic on the projected medium-term inflation path. The measures taken by the ECB are part of the new strategy approved in 2021, which established a symmetric medium-term inflation target of 2%. This framework took shape in the form of forward guidance which makes the first interest rate rise subject to: (i) expected inflation standing at 2% over an 18-month horizon; (ii) it holding at 2% in the medium term; and (iii) the course of underlying inflation being compatible with inflation stabilising at 2% in the medium term. Net purchases under the asset purchase programme (APP) were also linked to these conditions, with the guidance stating that interest rates would only rise some time after the net purchases come to an end. 3  On that basis, first, in March we discontinued net purchases under our pandemic emergency purchase programme (PEPP) and we agreed to gradually reduce net purchases under our APP. Second, in June we decided that as the three conditions established by our forward guidance for raising interest rates had been met, net purchases under the APP would end on 1 July, and we informed of our intention to raise policy rates by 25 basis points (bp) in July and again at our September meeting.

However, the historical experience, even of the world's major currencies - US dollar, Japanese yen or the currencies now merged into the euro, for example - is that a floating regime provides no assurance of a stable real rate. In practice, the market does not steer the rate in a continuously rational manner. There is also a tendency, even if the authorities are prepared to conduct some intervention, for floating rates to overshoot occasionally, especially when at the mercy of potentially massive international capital flows and herding behaviour in financial markets. Indeed, in certain circumstances floating may magnify rather than reduce short-run volatility in competitiveness, thereby unsettling the environment for making judgements about costs and prices, and hence for business planning. BIS Review 17/2002  3  The advantage of a fixed rate is that, if credible (and I take Hong Kong's 18-year track record as a leading example of that), it provides an unambiguous and highly transparent real-time indicator of whether monetary policy is on track or not, as well as a solid anchor for planning purposes. But, as with floating, it provides no assurance of a stable real rate. And the disadvantage is that the entire burden of relative cost-price adjustment falls on domestic costs and prices. Inflation is likely to be more volatile than under, say, inflation targeting accompanied by floating. Moreover, notably, the fixed regime may require downward flexibility of costs and prices if the nominal exchange rate becomes too strong for whatever reason.
This relationship between funding and market liquidity is also evident when we examine the relationship between the dispersion of Treasury yields relative to a fitted Treasury yield curve and Treasury bid-ask spreads (Exhibit 12). Large dispersions of Treasury yields from what is implied by a fitted yield curve may indicate funding liquidity strains, as market participants find it more difficult to arbitrage relative price distortions. 7 Again, we see a strong correlation between the sizes of the yield curve errors and of bid-ask spreads during a financial crisis, but not during non-crisis periods. The drop in the availability of dealer-funded repo financing also appears to have led to less efficient arbitrage between closely related asset pairs, such as on-the-run and off-the run Treasuries, corporate bonds and credit default swaps, and Treasuries versus interest rate swaps. The price differences or yield spreads between the more capital intensive and less capital intensive assets have widened. For example, we can see this in the difference between the fixed-rate paid on a 10-year interest rate swap and the secondary market yield on a 10-year Treasury note (Exhibit 13). Whereas historically this spread has been positive – reflecting the fact that an interest rate swap has more credit risk than a Treasury security – the spread has been negative since September 2015. Market participants suggest that this shift has occurred because the higher capital requirements have made it unattractive for dealers to arbitrage away this dislocation.

When and how the central bank intervenes – and what the appropriate preconditions should be to maintain market discipline and mitigate moral hazard – are important open questions. As always what I have to say today represents my own views and not necessarily the views of the Federal Open Market Committee or the Federal Reserve System. 1 Turning first to the issue of market liquidity, the evidence that market liquidity has diminished is mixed. Some market liquidity metrics have not changed much in recent years. For the U.S. Treasury market, quoted bid-ask spreads in the inter-dealer market have remained stable since 2010 at their pre-crisis levels (Exhibit 1). And, order book depth, while lower now than  1  Tobias Adrian, Nina Boyarchenko, Michael Fleming, Catherine Kung, Ernst Schaumburg, Joseph Tracy, Erik Vogt and Nathaniel Wuerffel assisted in preparing these remarks. BIS central bankers’ speeches  1  in 2012 and 2013, does not appear low by historical standards (Exhibit 2). 2 For the corporate bond market, some evidence even suggests improving market liquidity. For example, excluding the financial crisis period, the realized bid-ask spread calculated from TRACE data has been trending down since the early 2000s (Exhibit 3). 3 But these metrics don’t tell the whole story. In particular, we have significant data gaps that make it difficult to comprehensively measure market liquidity. For example, in the U.S. Treasury market we have poor visibility into dealer-to-customer transactions.
This is a small change, well within normal variations from one year to the next. Government revenues - and thus the budget surplus - would increase by almost 1% of Norway’s annual GDP. If the increase in petroleum revenues is used in Norway, it corresponds to almost half of the annual growth in the non-oil economy in a normal year. If the private sector of the economy is also expanding, and the economy is already close to capacity, this policy would swiftly lead to strong pressures on the resources in the economy. This would result in a rise in wages and prices, and would also lead to unstable conditions in the foreign exchange market. The Government Petroleum Fund shall serve as a buffer against short-term fluctuations in oil revenues. As large portions of the revenues from oil activities accrue to the state, fluctuations in oil prices and oil revenues will primarily result in changes in allocations to the Petroleum Fund. Since all of the capital in the Petroleum Fund is invested abroad, such changes will in principle not influence  1 2  See Auerbach et al (1993). See Report to the Storting No 1 (2000-01), the National Budget for 2001. BIS Review 105/2000  4  the level of activity in the economy. This makes the Norwegian economy more robust to fluctuations in oil prices and thus less dependent on oil, even in the short run. Some of the petroleum revenues are therefore used to finance central government budget expenditure.

We generally recommend that banks take a particularly judicious approach to paying dividends as there is continued uncertainty linked to the pandemic and capital may be required in the future to absorb losses. Therefore, before paying dividends, it is vital to assess future capital needs based on conservative estimates. Now about the funding situation. It has also levelled out. In general, over the first seven months of 2020, the funds of legal entities increased by almost 3% (by 2.9%). Concurrently, there was a significant inflow (+27%) of funds of state organisations. Household contributions during this period demonstrated divergent dynamics. At the start of the pandemic, especially in March, there was an outflow of funds (people formed cash reserves at the outset of the lockdown period). However, as early as June—July, the situation had stabilised. On the one hand, this is due to the peak of the epidemic passing and the gradual recovery of people’s income, and, on the other hand, the substantial support provided by the Government’s welfare payments. The active growth of funds in escrow accounts (more than 330 billion rubles since the beginning of the year) lent additional support, and this is noticeable, to deposits, thanks to the development of project financing for housing construction. Therefore, this year deposits have already increased by 514 billion rubles 3/7  BIS central bankers' speeches  in the banking system, or 1.6%. The overall level of liquidity in the system remains high.
Africa Meeting of the Econometric Society  Introductory Speech of Mr. Abdellatif Jouahri Governor of Bank Al-Maghrib  Rabat, July 11 2019  Honorable guests, Distinguished researchers and professors, Dear friends and colleagues, Ladies and gentlemen,  First of all, I would like to assure you that I will not venture giving a lecture in front of such an audience. I am here today more to listen. That being said, I would like to start by expressing how pleased I am to welcome you in Bank Al-Maghrib and to wish our visitors from abroad a wonderful stay in Morocco. I would also like to thank all officials for joining us, the distinguished researchers for kindly accepting to speak at the plenary sessions and the mostly-young researchers for coming from different spheres to present their works. I also extend my warmest thanks to Econometric Society which approached us to organize this conference, thus paving the way for a valuable cooperation between both teams. We view this meeting as an opportunity for us as a central bank, as well as for all the national institutions here represented today, to inquire about the progress made in economics research, namely with regard to quantitative economics. It is also an opportunity to strengthen the bonds with the academia and initiate new cooperation relationships.

Joseph Yam: Asia’s ability to cope with the continuing challenges of globalisation Statement by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority and Alternate Governor on the Board of Directors of the Asian Development Bank, at the 37th Asian Development Bank Annual Meeting, Jeju Island, Korea, 15-17 May 2004. *  *  *  Mr President, I join other Governors in: first, thanking the Government and the people of the Republic of Korea for their warm hospitality in hosting this year’s Annual Meeting; secondly, thanking the Bank’s management and staff for the excellent arrangements made; and thirdly, welcoming our two new members - Luxembourg and Palau. Mr President, on the governance of the Bank, I would like to commend the Bank for adopting a number of reform initiatives in the past year to enhance accountability and efficacy of operations. Greater transparency and accountability in all aspects of the Bank’s operation is to be welcomed. Measuring, monitoring and managing development results are essential. The creation of the independent Operations Evaluation Department will enhance the credibility of the Bank’s achievements. These initiatives will put the Bank in a stronger position in meeting the many tasks ahead. On the region, Mr President, I would like to focus just on the continuing challenges arising from globalisation and the ability, or rather the lack of ability, of Asia in coping with them. The Asian financial turmoil of 1997-98 demonstrated this vehemently.
Although only 26% of the oil produced in Africa was used locally in 2003, energy consumption increased by 44% in Northern African countries (ADB and UNEP, 2003). However energy consumption of liquid fuels comes at a cost. The carbon dioxide (CO2) pollution as a result of energy consumption in Africa was approximately 3.5% of the global emission of CO2, (UNEP, 2003). Growth in demand in the fishing sector has ultimately resulted in the threat of the sustainability of particular coastal and marine populations. To-date the per capita fish catch worldwide has remained static since 1972, however, this measure for Southern Africa has declined significantly (UNEP 2003). Globalisation has resulted in the specialisation of economies in areas in which they have a comparative advantage. The prevalence of cheaper labour costs has led African countries to primarily move towards the role of producing goods in labour intensive sectors such as agriculture and mining. The demand for cash crop exports from African countries by the developed world has equally soared. However the use of pesticides in cash crop production in order to maintain certain international standards has the potential to reduce soil quality due to toxic residue build up. Future population growth, expansion in the agricultural sector, and general economic expansion in Africa will see heightened competition for water resources among these sectors. Competition for water resources between households, industry, and agriculture is expected to increase in future, as currently 25% of the population is living in areas already facing severe water stress (UNEP, 2003).

Despite the ratification of these protocols by some African countries, it is worth noting that rich countries with 16% of the world population emit 51% of the worlds green house gasses (UNDP, 2003). The Kyoto Protocol is yet to be implemented due to non-ratification by some key developed countries, who happen to be the emitters of substantial amounts of the worlds greenhouse gases (Russia ratified the Protocol in September 2004). A United Nations Forest Forum (UNFF) was established in 2000 to promote the management, conservation, and sustainable development of forests. The institution effectively serves to monitor national, regional, and global developments of forests. United Nations Organisations such as United Nations Environmental Program (UNEP), United Nations Development Programme (UNDP), United Nations Convention to Combat Desertification (UNCCD), and the World Bank have done a commendable job in implementing multiple projects that aim to promote environmental sustainability in Africa. These organisations provide both financial and technical support to programmes designed to promote environmental sustainability in Africa. African governments have pledged to support such programmes. 6. Recommendations  From the foregoing, it is clear that environmental protection goals should be realised in order to achieve sustainable economic growth.
And last, but by no means least, this luncheon and our presence here today reflect the progress of globalization. I am glad to say it is a progress that we have made together. Ladies and Gentlemen, It is also undeniable that Thailand has shown a strong commitment to global economic integration. Thailand’s economy and openness have grown together hand-in-hand. But openness brings forth not only benefits; it also invites challenges. As such, we must embrace globalization with our eyes open for potential risks and pitfalls. Although globalization has brought considerable gains over the last decades, the path traveled has not always been smooth. In fact, it has been strewn with risks, some predictable and some not. Nearly ten years ago, Thailand was in the midst of a financial crisis that had been caused by a number of factors. The most telling one was the premature liberalization of the financial sector. That round of financial liberalization encouraged significant capital inflows and massive over-investment, creating financial vulnerabilities which eventually led to abrupt reversal of flows in the period that followed. I am sure many of you can recall the event vividly. And further back in time, nearly twenty years ago, Thailand was embroiled in a global oil crisis that thrust the world economy into a period of recession and high inflation. During both episodes, the prognosis for globalization seemed grim. Nevertheless, Thailand emerged from these crises with a renewed commitment to global economic integration and internal reform. The situation today is nowhere near as grim.

Chart 1 illustrates how the growing proportion of nonprime first mortgage loans helped fuel the sharp rise in home prices. As home prices rose and the stock market performed strongly, household net worth rose sharply. Households responded by borrowing more and saving less. After all, why save when the rise in home prices was adding to your wealth and the housing equity created by the rise in home prices could be easily tapped for funds as needed? The use of home equity as a source for funds to support consumption is evident in the fact that the homeowners’ equity as a share of home values was essentially flat over this period (Chart 2). This indicates that homeowners were borrowing against their accumulated gains. The surge in home prices pushed up the ratio of household net worth to disposable income to nearly 640 percent and the personal saving fell below 2 percent (Chart 3). The surge in home prices was fueled by products and practices in the financial sector that led to a rapid and unsustainable buildup of leverage and an underpricing of risk during this period. These dynamics in turn provided the fuel that caused house prices and consumer spending to rise much faster than income. As shown in Chart 4, the share of GDP accounted for by consumption and residential investment climbed to a peak of 76 percent in 2005 from 71 percent in the mid-1990s. The boom, of course, was unsustainable.
Banks lost the capacity to move riskier assets off their balance sheets, at the same time they had to fund, or to prepare to fund, a range of contingent commitments over an uncertain time horizon. The combined effect of these factors was a financial system vulnerable to self-reinforcing asset price and credit cycles. The system appeared to be more stable across a broader range of circumstances and better able to withstand the effects of moderate stress, but it had become more vulnerable to more extreme events. And the change in the structure of the system made the crisis more difficult to manage with the traditional mix of instruments available to central banks and governments. First repair, then reform What should be done to reduce these vulnerabilities? Our first and most immediate priority remains to help the economy and the financial system get through this crisis. A range of different measures of liquidity premia and credit risk premia have eased somewhat relative to the adverse peaks of mid-March. Part of this improvement – this modest and tentative improvement – is the result of the range of policy actions by the Federal Reserve System, the U.S. Treasury and other central banks. Part is the consequence of the substantial adjustments already undertaken by financial institutions to reduce risk, raise capital and build liquidity. These actions by institutions and by the official sector have helped to reduce the risk of a deeper downturn in economic activity and of a systemic financial crisis.

However, monetary policy is probably most effective when the central bank communicates its monetary policy intentions directly rather than commenting on others’ interest rate expectations. By publishing the strategy interval and our own interest rate forecast, we give the public more information about our intentions. This should – we hope - make future interest rates more predictable and monetary policy more effective. Therefore, the strategy interval and the interest rate forecasts are important elements of our communication strategy. In addition, it is easier to interpret and evaluate our forecasts based on an interest rate assumption that we consider to be realistic. 3. The balance between the objectives: criteria for a good interest rate path Important components in the assessment of what constitutes a good interest rate path are expressed in a set of criteria: If monetary policy is to anchor inflation expectations near the target, interest rate policy must be geared to moving inflation towards the target. Inflation should be stabilised close to the target within a reasonable time horizon, which in our view is normally 1-3 years. Provided inflation expectations are on target, the inflation gap and the output gap should be in reasonable proportion to each other until they close. Looking ahead, the inflation gap and the output gap should normally not be positive or negative at the same time. 2 Given the low inflation rate, we have decided to keep interest rates at a low level and have at times considered an even lower interest rate.