samchain/econo-pairs-v1 huggingface dataset:
This affected employment, and the resulting uncertain labour market situation had a dampening impact on private consumer spending which rose at a below-average rate. The real estate sector, by contrast, benefited from the continuation of favourable financing conditions. Oil prices rose again at the beginning of the year, continuing to act as a brake on the world economy, and the situation remained particularly gloomy in Europe. Given these developments, it is most unlikely that the 1.5% growth for 2005 forecast in the last monetary policy assessment will be attained. However, signs of an improvement in the Swiss economy became evident in the first quarter of the year, with exports picking up in April and May. We expect this trend to be confirmed in the months to come, and now forecast real GDP growth of about 1% for the year 2005 as a whole. This delay in the recovery of the economy will have a dampening effect on price developments in the year 2006. Now I would like to outline my assessment of monetary developments, which remain more or less unchanged with respect to the assessment presented in March. The three-month Libor rate has remained at a low level for a long time now: it has been below one percent for almost three years, since July 2002. Real rates of interest for three month maturities have been negative for two years. Given the unusually low level of interest rates, the willingness to invest in liquid assets remains high and, according to our estimates, the money overhang persists.

This means that an increase in the Libor target range appears less urgent. Third, the level of uncertainty has risen. The economic outlook in Europe is more difficult to assess than it was in March. Although the price of oil declined in April and May, it rose again significantly in June, and high prices in the oil market could persist for some time to come. In addition, the decline in the level of long-term interest rates is not very consistent with a recovery in the economy. I will now briefly outline our new forecast for inflation. The graph depicts the current and the previous forecasts. The dashed red curve represents the new forecast, which covers the period from the second quarter of 2005 to the first quarter of 2008. The dash-dotted green curve shows the forecast presented in the last monetary policy assessment. Both forecasts are based on the assumption of a three-month Libor rate of 0.75%. The line representing the new inflation forecast begins slightly above the previous forecast, dropping significantly below it from next year onwards. The decline in inflation rates this year is due to a stabilisation in the price of oil. The lower level of inflation next year is attributable to weaker growth in economic activity. In 2007, inflation will rise rapidly because of the high level of utilisation of resources and the high level of liquidity. This means that, should the three-month Libor rate remain unchanged at 0.75%, inflation would reach 2.4% by the end of the forecasting horizon.
There is not a great deal that we can do – through monetary policy – directly to affect the supply-side of the economy, the underlying rate of growth that we can hope to sustain. Maintaining a stable monetary environment can certainly help, but that is essentially determined by the ingenuity and skills of our business managers and our workforce, by the whole range of Government policies and importantly too, Mr Chairman, by the imagination, energy and enthusiasm of organisations like your own Yorkshire Forward in developing and putting into effect your Regional Economic Strategy. Our job – as I say – is to keep overall demand in the economy growing broadly in line with supply-side capacity. BIS Review 2/2001  1  So how then are we doing? First on inflation. Since we came out of the last recession, in 1992, retail price inflation (on the Government’s target measure) has averaged 2.7%; it has in fact been marginally below the 2½% target for much of the past two years and was 2.0% in the latest 12 months to December. Short-term interest rates - which went up to 12% (and tentatively even to 15%) before we left the ERM in 1992 have been stable at 6% for the best part of a year. Helped by a decline in inflationary expectations, UK 10 year Government bond yields have fallen to around 4¾% which, apart from a brief period at the beginning of 1999, is the lowest they’ve been for nearly 40 years.

As you know, we have a branch office up here in Yorkshire, in fact in Leeds, which serves as a part of our network of eyes and ears and indeed voices at 13 locations throughout the UK. The new responsibility made us more conscious than ever of the importance also of visits around the country by senior members of the Bank in London, including members of the MPC and indeed our Directors, both to inform themselves about local economic conditions and to explain locally what it is that we are trying to do. That explains why you have been seeing much more of us in recent years and it explains in particular tonight’s invasion of Yorkshire, by 11 of our 16 Directors and 6 of the 9 members of the MPC. Tomorrow in Leeds will in fact be the third occasion on which our Court has held one of its monthly meetings outside London since the new legislation was introduced in 1998, a practice which we intend to continue. So that I hope explains why we are here – and I hope that you will avail yourselves of the opportunity to bend the ears of our representatives where you can – but preferably not until I’ve finished speaking to you!
The Swedish National Debt Office issued treasury bills to meet the demand that had arisen for liquid assets. Finansinspektionen amended the regulations for financial companies (to make it easier for them to strengthen their capital bases) and for insurance companies (to reduce shocks to the bond markets). The government and the Riksdag decided to extend the deposit guarantee scheme and to introduce a comprehensive stability plan. Important elements in the stability plan were a guarantee programme for the funding of banks and mortgage institutions, a stability fund, and principles for the management of capital contributions to credit institutions. The Swedish National Debt Office was given a central role in this work as responsible authority for the new guarantee system, the stability fund, and any capital contributions. The extraordinary measures were phased out The Swedish economy made a strong recovery in 2010 and the banks no longer needed to borrow from the Riksbank to manage their funding needs. The Riksbank thus phased out its comprehensive lending to the banks during the summer and autumn of 2010. This phasing out was comparatively simple because, unlike many other central banks, we had not purchased any securities. When the loans expired, the banks repaid their loans, with the whole process taking place comparatively smoothly. The repo rate started to be raised in July 2010.

This is how it was before the Executive Board was established. Furthermore, as I have already remarked, there should be a monetary policy committee, with or without external members, that takes monetary policy decisions. In addition, if the Riksbank and Finansinspektionen are merged, there should also be a similar committee or board to take decisions of the type currently taken by Finansinspektionen, with the exception of decisions dealing with macrofinancial stability, which should be taken by the monetary policy committee.11 This would give us an arrangement similar to the model presently being launched by the Bank of England.12 Finland also has a similar model, with the financial supervisory authority as a part of the Bank of Finland, but with its own board and head. The Riksbank should have a sufficient foreign currency reserve One issue that we in the Executive Board have not agreed upon is the issue of the size of the foreign currency reserve. Previously, under the present foreign exchange policy with a floating exchange rate, the foreign currency reserve has primarily been intended to support  11  In addition, there should be a financial stability council for inter-agency cooperation and the exchange of information. As an alternative for strengthening macrofinancial stability, the Swedish Fiscal Policy Council has proposed such a council, and, in its recently concluded mission to Sweden, the IMF advocated a committee of this kind.
In this context, the Governing Council assessed the PEPP’s potential impact and direct and indirect effects, and took into account comparative elements and counterfactual scenarios to ensure that it was “the most effective and efficient tool for providing additional monetary accommodation in the current environment”.4The Governing Council considered the PEPP to be the most appropriate instrument compared with a recalibration of standard policy tools, such as interest rate cuts. In the Weiss judgement, the European Court of Justice confirmed that the ECB must be allowed broad discretion in making these complex assessments, but within strict criteria. The PEPP complies with the proportionality principle as it is both suitable and necessary to attain the monetary policy objective. The PEPP contains important safeguards, such as stringent eligibility criteria also contained in the APP. However, on account of its flexibility, these stringent criteria are arguably fewer under the PEPP than under the APP. This is why the PEPP must be strictly temporary in nature (the temporary nature also becoming a stringent criterion) and targeted to comply with those strict criteria. Last of all, although the ECB decided not to apply issuer and issue limits, the allocation of public sector purchases will be guided by the capital key of the NCBs. The PEPP’s flexibility should not undermine the safeguards and limits set by the ECB in its 2/5  BIS central bankers' speeches  purchase programmes to keep within the constitutional red lines I mentioned earlier.

Lehman’s decline The New York Fed had no role in supervising Lehman Brothers. The SEC supervised Lehman’s broker-dealer pursuant to express statutory authority, and, as Chairman Mary Shapiro pointed out in her testimony before the House Financial Services Committee, the SEC also supervised Lehman’s parent holding company under a voluntary program called  BIS Review 112/2010  1  the Consolidated Supervised Entity (CSE) program. 1 The Federal Reserve had a business relationship with Lehman’s broker-dealer, but our transactions with the broker-dealer were for the most part repurchase agreements done for monetary policy purposes, and purchases and sales of Treasury and agency securities. In March, events in our financial system caused several responses that expanded the Federal Reserve’s business relationship with Lehman Brothers and certain other investment banks. First, the Federal Reserve announced, on March 11, 2008, what became known as the Term Securities Lending Facility (TSLF). The TSLF was designed to address a liquidity problem that we had observed with respect to certain types of mortgage-backed securities. The TSLF addressed this problem by enabling primary dealers to borrow from the Federal Reserve certain securities that they could more easily exchange for cash and secure these borrowings by pledging securities to the Federal Reserve that were less easy to exchange. This enabled the primary dealers to obtain much-needed liquidity from the market. Second, at around the time this program was announced, one of the primary dealers, Bear Stearns, was experiencing an extraordinary liquidity run.
It could undermine banks’ profitability and their ability to meet regulatory requirements, and ultimately affect their capacity to finance the real economy. The issuance of a CBDC could alsoreduce the role of banking intermediaries in client relationships, depending on the architecture chosen by the Eurosystem, which could restrict access to client information. To avoid these undesirable consequences, it is essential that commercial banks be involved. Their input is needed, for example, to set limits and/or remuneration disincentives for CBDC holdings. In addition, choosing an intermediated architecture would allow us to exploit financial intermediaries’ expertise in customer interface management, and thus preserve the essential role they play in this field. b- Avoiding impediments to the conduct of monetary policy  Choices will also need to be made to avoid any adverse consequences for monetary policy conduct. The introduction of an unremunerated retail CBDC with no holding limit could make it difficult for central banks to pursue a negative interest rate policy, as market participants would prefer to hold the CBDC instead of assets remunerated at negative rates. This effect could be avoided by setting an appropriate level of remuneration for the CBDC. c. Improving the efficiency and integration of payment solutions Choices will also need to be made to ensure that the CBDC complements existing payment solutions, so that it can increase the efficiency and integration of certain market segments. This notably applies to cross-border payments.

Denis Beau: The challenges of the digital euro Speech by Mr Denis Beau, First Deputy Governor of the Bank of France, at the conference "The new challenges of financial regulation”, organised by Labex Réfi, Paris, 19 November 2021. * * * Over the past two years, most central banks around the world have been giving increasing thought to the idea of creating a digital form of their currency, a central bank digital currency (CBDC), to maintain the stabilising role of central bank money in a rapidly changing payments landscape: according to the BIS, about nine out of ten central banks have reported that they have launched studies.To date, only two retail CBDCs have been introduced (in Caribbean archipelagos: the Sand Dollar in the Bahamas and DCash for the Organisation of Eastern Caribbean States), but over twenty pilot projects are underway around the world. This observation naturally raises questions about the timing, form and role of central bank money in tomorrow’s payments landscape and about the role of banks and commercial bank money in a world of stablecoins and central bank digital currencies.
In other words, the conditions exist for delegating the interest rate decision, but the central bank’s response pattern must be known, so that the fiscal authorities can take this into account. When the response pattern in monetary policy is known and remains unchanged over time, the social partners can also take any monetary policy response into account when wages are being determined. The “leader” in this interplay - the social partners - can take the “follower’s” - Norges Bank’s - response into account. This view is most relevant in centralised wage formation. In decentralised wage formation, monetary policy will instead affect wage growth via market mechanisms by stabilising aggregate demand. The current monetary policy guidelines will function well whether wages are determined centrally, locally or individually. The outcome of this year’s wage settlement, and the debate that followed, may indicate that the social partners have not yet internalised the response pattern in monetary policy ensuing from the mandate laid down by the Government and the Storting. Perhaps a stumbling block has been the choice of wage settlements at industry level and the large wage increases for employees outside the two largest employer/employee organisations (NHO and LO). On the other hand, the choice of settlement type is probably influenced by the participants’ assessment of the economic outlook. The high wage growth awarded to groups whose wages are determined through individual agreements indicates that the labour market has been tight.

Annual wage growth1) and unemployment2) Per cent 8  8 Annual wage growth  6  6 4  4 Unemployment rate  2 0 1993  2 0  1995  1997  1999  2001  1) Average for all groups, including the cost of additional vacation days 2) Registered unemployed and on labour market programmes as a percentage of the labour force  Sources: TRCIS, Directorate of Labour and Norges Bank Fafo og Makt- og demokratiutredningen 6. september 2002  High wage growth affects the exposed business sector in two ways. First, it erodes earnings and reduces employment. Second, monetary policy has to be tightened. This leads to an appreciation of the krone, with a further reduction in earnings and employment. BIS Review 50/2002  7  Annual wage growth in enterprises in the Confederation of Norwegian Business and Industry 8  8  Salaried employees1)  6  6 Total employees1)  4  2  2 0 1993  4  0 1995  1997  1999  2001  1) Includes costs of additional vacation days  Sources: TRCIS and Norges Bank Fafo og Makt- og demokratiutredningen 6. september 2002  It is combined wage growth for all groups that influences the outlook for inflation. However, substantial wage increases for some groups can trigger wage spirals. Wages for salaried staff in the business sector have exhibited sharp growth over several years.
I usually look at these five economic variables when trying to gain an impression of a country’s overall macroeconomic development and I will return to them often during my speech. During the 1970s a number of events occurred that had serious consequences for the Swedish economy. Oil prices rose substantially in 1973, which led to much higher inflation than could be considered justified by the actual oil price. Internationally, this became the start of a long period of low growth. In Sweden the government invested in economic stimulation to bridge over the coming economic recession. The central wage agreements signed for 1975-76 were therefore at a very high level, which together with wage drift and increased employer contributions meant that the wage costs per hour  BIS Review 21/2006  1  rose by a total of 38 per cent. Sweden’s competitiveness thus deteriorated substantially. Our labour costs per unit produced in industry in relation to the corresponding costs in other countries rose by around 25 per cent between 1974 and 1977. At that time, Sweden had an exchange rate regime with a fixed exchange rate. After World War Two, almost all western countries’ currencies were pegged to the United States dollar, which in turn had a fixed price against gold. The system came into force in 1944 and was called the Bretton Woods System.

Between 2011 and 2015, the number of cheques issued had reduced by 27%, from 205 million cheques in 2011 to 148 million cheques in 2015. At the same, the number of IBG transactions had increased by 147% from 60 million transactions in 2011 to 149 million transactions in 2015. This is a key milestone as the number of IBG transactions surpassed the number of cheques cleared for the first time. The IBFT transactions had also increased significantly by almost eight-fold from 5.8 million transactions in 2011 to 47 million transactions in 2015. This signifies greater public confidence in the use of e-payments. Such achievement is also indicative of how effective collaboration and coordinated efforts by the various stakeholders in the payment value chain could produce the intended outcomes. We should put in more effort to sustain the cheque reduction whilst promoting greater adoption of e-payments in areas where the usage of cheques is still relatively high. These areas include interbank card and loan repayment, over-the-counter cheque payments to government agencies and cheques usage in the takaful and insurance industry. Intensified efforts needed in the displacement of cash Our progress in promoting the use of debit cards as an alternative to cash however, has been modest. For the period between 2011 and 2015, there was only a marginal increase from 1 to 3 debit card transactions per capita and from 7 to 9 payment card terminals per 1,000 inhabitants.
Households in Red Car region earn income from working in red car firms. Because these firms have low productivity, they tend to pay low wages to these workers. And because, as a result, household incomes are low, workers can only afford to buy one red car and often having to borrow money from the bank. In other words, households in Red Car region have lower net wealth. Blue Car region is, in some respects, its mirror image. Firms produce blue cars using lots of machines and relatively few workers. To operate these machines, workers require high skills. Given this mix of machines and skilled workers, blue car firms have high levels of productivity. And as high levels of productivity translate into higher profits, blue car firms have less need to borrow from the bank than red car firms. 2  Meanwhile, households in Blue Car region benefit from higher wages, courtesy of their higher level of skills and productivity. These high incomes enable them to own two blue cars, often without needing to borrow from the bank at all. In other words, households in Blue Car region have higher net wealth than in Red Car region. The Role of Monetary Policy Now let’s hit this hypothetical economy with a nasty surprise – say a shock to the banking sector, which reduces its willingness to lend to households and firms, or increases the costs of doing so. This tightening of credit conditions affects households and companies in both regions, as both rely on banks to some degree.

Most of all, they are stoking fears of a fall in the purchasing power of money, paradoxically at a time when inflation (the key measure of the purchasing power) in developed countries is lower on average than it has been for years! Put simply, we have been warning about the risk of flooding for so long that we are now unable to explain that drought can be just as big a problem and that at times of drought you have to water the garden, not keep draining it dry. If the hosepipes are blocked, moreover, you have to use other means to supply the plants with water. If we do not succeed here, we central bankers will have great difficulty being credible in the future. 4/5  BIS central bankers' speeches  Literature: Holston, K., Laubach, T., & Williams, John C. (2016): “Measuring the natural rate of interest: International trends and determinants,” Working Paper Series 2016–11, Federal Reserve Bank of San Francisco. 5/5  BIS central bankers' speeches