samchain/econo-pairs-v1 huggingface dataset:
Nevertheless, in the last couple of years, most measures of inflation expectations, be they survey-based or market-based, have pointed in the same direction of a prolonged period of too low inflation, well below our target of being close to but below 2% over the medium term. As a consequence, monetary policy has become progressively more accommodative. First, in a context of fixed rate full allotment introduced on the 15th of October in 2008 to offset liquidity risk in the market by ensuring banks’ continued access to liquidity, we have introduced forward guidance to avoid an unwarranted tightening of the effective monetary policy stance. Initially implemented in July 2013, this guidance was “firmly reiterated” in early 2014 and remains in place today. Second, the Eurosystem introduced targeted longer-term refinancing operations (TLTROs) and the asset purchase programs for covered bonds and asset-backed securities in June 2014, with the goal of improving the transmission of our monetary policy. Third, the main refinancing rate was cut to 5 basis points and the deposit rate entered into negative territory in two steps (–20 basis points). However, by January this year it was clear that economic recovery as well as monetary and credit indicators were too weak to bring medium term inflation close to but below 2%. Marketbased measures of inflation expectations, even if prone to liquidity shocks, had been falling further below the target and at longer term horizons. The Governing Council was determined to act boldly to counteract the risk of a too low for too long inflation.

BIS central bankers’ speeches  3  This creates an additional source of funding for banks which in turn increases the supply of credit to the private sector. A last channel is the signaling effect. By acting decisively and more aggressively than anticipated, we hope to lift inflation expectations. Conclusion Let me conclude with my assessment of the impact of the QE. So far, recent indicators suggest that our quantitative easing has had a positive effect on inflation expectations. This is true when looking at market-based measures at short term horizons, although less so at long term horizons. Looking at the recent release of the ECB survey of professional forecasters, there is an upward trend in inflation expectations over the medium to long term. But, as shown by the US experience, re-anchoring inflation expectations takes time. The Eurosystem is ready to go further if necessary to deliver on its mandate of maintaining inflation close to but below 2%. But monetary policy will be more effective if, at the same time, governments increase the potential growth rate by implementing ambitious structural reforms. 4  BIS central bankers’ speeches
Also, as long as our primary objectives are not threatened, we should do what we can to support other objectives of economic policy. These include favourable economic growth, high employment, etc. It means that we should conduct monetary policy in such a way that we do not cause unnecessary fluctuations in production and employment. In practice this again comes down to difficult empirical questions which need to be weighed up carefully. If we see that financial imbalances are building up, and come to the conclusion that these either threaten the security of the payment system or risk leading to an abrupt real adjustment in the future, with negative consequences for economic growth or employment, we then have, in principle, a motive for taking action with the interest rate. Whether the knowledge that we can act diminishes the risk of "bubbles", is a different question, but it is a link in the chain of argument which strengthens the case for monetary-political activism. Another thing is that this is naturally not a simple decision to take in any given situation. There are also possibilities of working with other instruments, for example, capital requirements on financial institutions, supervision, etc. Our Financial Stability Reports are intended to play a role in this context. They should bring problems of this sort into the open, partly with the intention of attempting to contribute to improvements on a voluntary basis.

Perhaps markets have - after all - learnt something from previous crises in Europe and Latin America. They did not see the crisis coming but once it started, they reacted more rapidly. 4. Crisis management I will now turn to the issue of how to resolve a crisis, once it has erupted. It is obviously necessary to tackle macro and micro problems in parallel since the two are interlinked. As I stated earlier, I believe that the origin of the Swedish crisis was primarily macroeconomic, due to policy mistakes in the 1980s and early 1990s, and triggered by the policy shift to a low inflation regime. (Although there were also structural weaknesses in the financial sector). The solutions were also primarily macroeconomic in kind. Once the krona peg had been abandoned, demand got a stimulus. The task confronting policy makers was to restore the credibility of economic policy. This required in our case, given the weak fiscal position, very strong fiscal measures (some 8 per cent of GDP 1994-98). But it also called for a consistent monetary policy. However, and this is important to underline in the present context, if the financial problems had not been managed properly, they could easily have been a drag on the macro economy. For example, by taking prompt action it seems that we largely avoided a “credit crunch”, which was a possibility that worried people a lot at the time. Credit volumes obviously fell, but this could be explained by the reduction in demand.
François Villeroy de Galhau: External imbalances - challenges and policy responses Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the "Financial Globalisation" conference, Central Bank of Ireland Symposium, Dublin, 2 February 2018. * * * Accompanying slides Speech elaborated with the contributions of Antoine Berthou, Matthieu Bussière, Laurent Ferrara, Sophie Haincourt, Francesco Pappadà and Julia Schmidt Ladies and Gentlemen, First and foremost, I would like to congratulate the Central Bank of Ireland on the 75th anniversary of its creation, and especially my colleague and friend Governor Philip Lane. I am delighted to be part of this conference dedicated to “Financial Globalisation”, with such distinguished speakers and panellists. I would like to share with you a few thoughts on global current account imbalances and in doing so I will take mostly a policy perspective. The stylised facts are well known so I will be brief [Slide2]. Starting from the late 1990s, the world economy was characterised by very substantial growth in global current account imbalances. Despite a process of rebalancing and short-term movements mainly related to commodity prices that started with the Great Recession in 2008– 09, these imbalances have remained large and persistent. Consequently, net international positions have continued to increase [Slide 3]. The euro area is one of the regions where developments have been particularly striking [Slide 4]. Although countries such as Spain or Italy have rebalanced their current accounts, imbalances still persist, mostly due to the large surpluses of Germany and the Netherlands.

We experienced an economic contraction for five consecutive quarters and property prices plunged by more than 60%. Many families found themselves trapped in “negative equity”, and the unemployment rate was above 8%. Hong Kong began to recover in 2003 after six years’ hard struggle. I am sure that this experience is still fresh in our memory. 4. Japan is another good example. It enjoyed rapid economic development after World War II, quickly becoming a powerful industrial nation. During the late 80’s when its stock and property markets were booming, a huge bubble was created, which we only realised afterwards. Few people spotted the emergence of a bubble at the time, and the extraordinary and irrational exuberance was interpreted as the “Japanese miracle”. We all know now that what a disaster this “Japanese miracle” was for its people. Twenty years on, the Nikkei Index still hovers around the 10,000 level, only a quarter of its peak of 39,000, while the average residential land price in six major cities is equivalent to only a third of its level two decades  BIS Review 167/2009  1  ago. Of course, there are other structural problems that have prevented a Japanese recovery for such a long period. 5. The current global financial crisis was caused by the bursting of the property bubble in the US, which left many financial institutions under stress.
As we complete the final miles of our marathon journey, I am confident that the New Accord will be worthy of our efforts. Thank you. BIS Review 52/2002  7

Inflation expectations remain firmly anchored in line with our aim of keeping inflation rates below, but close to, 2% over the medium term. The firm anchoring of inflation expectations remains of the essence. Monetary policy will do all that is needed to maintain price stability in the euro area over the medium term. This is the necessary and central contribution that monetary policy makes to fostering sustainable economic growth, job creation and financial stability. All the nonstandard measures taken during the period of acute financial market tensions, referred to as “enhanced credit support” and the Securities Markets Programme, are fully consistent with our mandate and, by construction, temporary in nature. We remain firmly committed to price stability over the medium to longer term. The monetary policy stance and the overall provision of liquidity will be adjusted as appropriate. Accordingly, the Governing Council will continue to monitor all developments over the period ahead very closely. Let me now explain our assessment in greater detail, starting with the economic analysis. After a period of sharp decline, euro area economic activity has been expanding since mid2009. Euro area real GDP increased, on a quarterly basis, by 0.2% in the first quarter of 2010. The available economic data and survey-based indicators suggest a strengthening in economic activity in the second quarter of 2010 and the available data for the third quarter are better than expected.
7  little evidence that global factors can fully explain the weaker relationship between domestic slack and inflation. 16 Second, among other globalisation developments, greater trade openness, wider involvement in global value chains, an accumulation of foreign assets and liabilities, broader dependence on international funding sources and increased synchronisation of asset prices could have implications for the transmission of domestic monetary policy. For example, the evidence available shows that financial globalisation has strengthened the exchange rate channel of monetary policy and that this has more than offset the weakening of the interest rate channel through global financial cycle effects. 17 18 More open economies experience larger valuation losses and wealth effects on their external balance sheets in response to an exchange rate appreciation. In contrast, globalisation may also have reduced the exchange rate pass-through (ERPT) to import prices, on account of growing competitive pressures in export markets. Similarly, deepening global value chains may also have contributed to the decline in ERPT. 19 Third, the impact of globalisation on the natural rate of interest is also the subject of debate. On the one hand, one of the key determinants of the natural rate is productivity, a key driver of long-run economic growth and, as such, a crucial consideration for monetary policy. In the case of the EU, there is evidence that, overall, trade openness has had a positive effect on productivity and innovation. 20 And this increase in productivity growth would have raised the natural interest rate.

Geopolitical risks could also have a bearing on the EU’s foreign direct investment and portfolio exposures . The EU’s main investment partners are other advanced economies. However, certain factors make it difficult to identify the ultimate investors in the EU, given that a sizeable portion of incoming foreign direct investment comes from offshore centres or is intermediated by special purpose entities. Thus, the empirical analyses 6 that have sought to shed light on the origins of foreign direct investment into the EU on an ultimate investor basis find that exposures with respect to the US and China can be significantly understated. Regarding portfolio flows, research7 aiming at restating holdings from a residency-based approach to a nationality-based approach found that in 2017 the euro area holdings of Russian and Chinese debt tripled when issuance via tax havens was accounted for. 5  Euro pean Co mmission (2020). “Critical Raw Materials Resi lience: Charting a Path to wards greater Security and Sustainability”. COM (2020) 474. 6  Alcidi, C., Po stica, D. and Shamsfakhr, F. (2021). “Analysis o f Develo pments in EU Capital Flo ws in the Glo bal Co ntext”. Centre fo r Euro pean Po licy Studies. 7  Co ppo la, A., Maggio ri, M., Neiman, B. and Schreger, J. (2021). “Redrawing the Map o f Glo bal Capital Flo ws: The Role o f Cro ss-Bo rder Financing and Tax Havens”. The Quarterly Journal of Economics , Vo l. 136(3), pp 1499-1556.
It is therefore not entirely correct to compare the income  3 In the research literature, one often tries to distinguish the independent, “pure” effect of monetary policy from  the effect of the monetary policy that systematically reacts to changed circumstances. This is done by identifying monetary policy “shocks”, that is, changes in monetary policy that are unexpected, given how the central bank normally reacts to changed circumstances. The size of the monetary policy effect will thus depend on, among other things, the assumption of how monetary policy normally reacts. 5 [14]  and wealth distribution after a period of expansionary monetary policy with the distribution prior to these measures being taken. The point of comparison should rather be how the distribution would have looked without the expansionary monetary policy. Another difficulty is what time perspective one should have to determine the effects of monetary policy. I have argued that it is important to take into account the total effect of monetary policy on the economy. Asset prices are affected relatively rapidly, but it takes time before the total effect of monetary policy has an impact on the real economy and ultimately inflation. Moreover, a common starting point when discussing the effects of monetary policy is that in the long term it is neutral with regard to real economic quantities such as growth, unemployment and income distribution. In this perspective, one can therefore argue that monetary policy should only have minor distributional effects, if any at all.

If inflation is higher than expected, borrowers benefit from the value of the debts being eroded, while lenders and those with large savings are correspondingly disadvantaged. This type of arbitrary distribution between lenders and borrowers was common during the 1970s and 1980s. The inflation target, together with the reforms of the fiscal policy framework and the changes in wage formation in the 1990s, has contributed to inflation in Sweden both coming down to a lower level and becoming more stable than before. The same has happened to inflation rates around the world. It is therefore not surprising that the question of the distributional effects of inflation and monetary policy disappeared from the economic policy debate.   I would like to thank in particular Björn Andersson, who has helped me produce this speech. Carl Andreas Claussen, Charlotta Edler, Cecilia Roos-Isaksson, Stefan Laséen, Tomas Lundberg, Marianne Sterner, Ulf Söderström and Anders Vredin have contributed with valuable comments. 1 [14]  Distributional effects topical again However, in recent years the question has become topical again. One reason for this is a growing insight that the distribution of income and wealth may have considerable significance for the effects of monetary policy on the economy as a whole. And it is therefore important to understand the relationships better. Another reason why this has become topical again is the rising asset prices and the effect that monetary policy has on the distribution of income and wealth.
Sudden price adjustments could result in many investors simultaneously wishing to rebalance their portfolios, for example by divesting higher-risk assets in favour of lower-risk ones. In turn, this could create additional turbulence. On the other hand, one risk that we did not foresee was the funding problems that the banks would face during the crisis. We had certainly emphasised that the Swedish banks’ unusually large dependence on market funding was making the banking system vulnerable. But it came as a surprise to find that the financial markets would be affected to such an extent that the banks would have to borrow extensively from the Riksbank to manage their funding needs. The financial crisis The financial crisis hit Europe with full force in September 2008, when the US investment bank Lehman Brothers filed for bankruptcy. The background to the crisis is well-known, so I  2  The Riksbank has carried out stress tests since the start of the last decade. In 2006, we published for the first time stress tests in which we tested credit risk among the Swedish banks and reported the results by bank. As far as I know, at that time, we were alone among the world’s central banks in openly reporting the results of stress tests by bank. The United States carried out stress tests of this kind in 2009, when the crisis was already a fact, and the European Union followed suit in 2010. 2  BIS central bankers’ speeches  will not go into it here.

It may reshape the mechanisms for making secured payments: instead of settlement occurring across the books of a single central authority (such as a central bank, clearing house or custodian), strong cryptographic and verification algorithms allow everyone in a DLT network to have a copy of the ledger, and give distributed authority for managing and updating that ledger to a much wider group of agents. The Bank is undertaking work to understand the implications of new digital or e-monies and new methods of payments and financial intermediation as part of the One Bank Research initiative 6. Machine learning also promises to transform financial services and widen the potential players in payments. Banks will increasingly be able to automate interaction with customers. As ever more data is analysed and algorithms that “learn” replace rules-based programming, a number of areas such as credit assessment, risk management, fraud detection and product personalisation will increasingly rely on technology. Many banks are already embracing these changes, but many non-bank players with ready-made access to a wide range of customers and their data are well positioned to compete. Alongside the potential opportunities offered by changes in technology, there are also potential risks. For example, the demand for real-time retail payments can make it harder to implement effective defences against money laundering, terrorist financing, identity theft or other forms of fraud. More connected, IT-intensive networks provide more channels for cyber attackers to target and greater risks of contagion.
I listed these facts intentionally as the conference of this year is called “Do crisis change economic fundamentals?” These interventions are main actions central banks are allowed by the legislation, and recommended by the most modern theory. If these interventions fail to introduce a long-term positive equilibrium for the economy, then a question arises naturally: what else should be done? The answer is in the phrase “structural reforms”. While the phrase may have often been speculated, the truth firmly confirms: only the willingness to project and undertake courageous and visionary reforms is the golden key to success”. This fact was strongly emphasised in the final statement of the Ministers of Finance and central bank Governors of 24 most developed nations, (Financial Committee of the IMF) in the annual meeting of the IMF organised earlier this month in Lima, Peru. A secure sustainable long-term growth requires timely-implemented and well-sequenced structural reforms which remain critical to raise productivity, potential output, and living standards; they should bolster confidence in the economy and reduce social inequality. Concluding, I would like to underline the support of the Bank of Albania for a series of reforms undertaken recently as part of the medium-term agreement between the Government of Albania, Bank of Albania and the International Monetary Fund. Similarly to the rest of South East Europe, Albania needs a new path, in which investors will be able to see again profit opportunities.

The second criterion states that companies that through their acts or omissions are responsible for unacceptable greenhouse gas emissions can be excluded. This conduct-based climate criterion has yet to result in any exclusions. One of the issues that has proved demanding is whether a basic norm for ethically acceptable emissions can be defined. Another issue has been whether it is unethical to emit considerably more than the industry average if the emissions are part of an emission trading system. The Ministry of Finance provided important clarification of the application of the climate criterion in this year’s annual white paper on the GPFG. The clarification provides a solid basis for moving forward on the criterion. Conclusion The impact of climate change is already substantial. In 2018, extreme weather events affected about 60 million people.5 At the same time, the number of fatalities after severe storms and flooding has decreased in recent years. This is partly due to better disaster risk management. Chart: Lower Manhattan, 30 October 2012 The picture shows a Lower Manhattan in darkness after Hurricane Sandy made landfall in October 2012. One building obviously had a backup power system when the power supply failed – the headquarters of the investment bank Goldman Sachs. Let us take this as a reminder that contingency solutions must also be put in place for the economy, and not just to deal with power cuts. Extreme weather, policy measures and technological innovations have financial consequences for households, businesses and investors.