samchain/econo-pairs-v1 huggingface dataset:
In this context, I know that I can count on French banks to strictly comply with their commitments made to the President of the Republic on 11 December regarding the capping of bank charges at EUR 25 a month for 3.5 million vulnerable customers. These measures apply now – at the latest in February – and they will be controlled throughout the year. The ACPR has made honouring this commitment a priority for its on-site and off-site inspections in 2019. The French Observatory for Banking Inclusion (OIB), which I chair, with the participation of consumer and social integration associations, will monitor the figures and take any necessary action. The OIB will also ensure that banks meet their commitments regarding the diffusion among these vulnerable customers of the “specific offer”, and its lower cap on bank charges (EUR 20/month 2/3  BIS central bankers' speeches  and EUR 200/year). 2019 will also mark the 30th anniversary of the Neiertz Act : we welcome the decrease in the flow of newly overindebted persons whose number has finally returned to its 1989 level, since it stood at 90,000 “first-time applicants” in 2018, against 140,000 five years ago! A more recent yet very promising development is our mobilisation in favour of green finance. In the first quarter of 2019, the ACPR will publish the results of its survey on climate risk management by banks and insurance companies.

The Network of central banks and supervisors for Greening the Financial System (NGFS), launched by the Banque de France in early 2018, is a considerable success. It has grown from eight to 24 participants on five continents. Its first report, which will be presented at a conference in Paris on 17 April, will provide new proposals for action. I would like to end with a few words about the Banque de France. Our institution is strongly committed to improving its performance. In 2018, the Banque de France cut back its net operating expenses by 8% compared to 2015, which represents an annual saving of EUR 100 million. And we are innovating in-house: the Lab, the Madre blockchain, or the success of our dematerialised ACPR authorisation procedure, which came into effect in November 2018. In these more turbulent times, our first responsibility is to stay the course both in serving the French economy and in pursuing our transformation. You can count on it: Happy New Year to you all and to our country! 3/3  BIS central bankers' speeches
In addition, a technology shock also may give a boost to stock prices by raising expectations about future corporate profits. As a result, a wealth effect also may stimulate spending before the economy’s capacity to produce has expanded. To sum up, we know that the funds rate had to increase to contain inflationary pressures, regardless of whether the economy was being dominated by demand effects or supply effects. But the uncertainty arises when we have to decide how much to tighten and when to start. This uncertainty boils down to the question of where FOMC actions should be along the spectrum of approaches ranging from strongly pre-emptive based mainly on forecasts of future developments - to more cautious - based mainly on emerging data. Ideally, policy should tend more toward the pre-emptive end of the spectrum because of the long lags between policy actions and their effects on inflation. If a central bank reacts early and correctly to an inflationary threat, it can alter inflation expectations and cut off the rise in inflation before it gets started. It looks like that’s what happened in the US in 1994. At that time, we were dealing with forecasts of higher inflation that were based not only on increasingly tight labor markets but also on low short-term real interest rates. So the Fed responded by raising interest rates substantially. In that case, inflation didn’t take off, and the economy moved smoothly into the favorable environment we’ve enjoyed in recent years.

New forecasts have not been prepared for this monetary policy meeting, but we have assessed new information against the forecasts we presented in March. Chart 3: International inflation has slowed Inflation among trading partners is also high but has eased in many countries in recent months. Gas and power prices have come down from the very high levels seen last year. Problems at some US and Swiss banks led to large movements in financial markets in March. Global equity indexes have risen since the March Report, and bond risk premiums have fallen. US and European households and firms appear to be finding it more difficult to obtain loans. Chart 4: The krone has depreciated High inflation has prompted central banks in many countries to raise policy rates quickly and more than in Norway. The Norwegian krone has depreciated in recent months and  1/2  BIS - Central bankers' speeches  is now at its weakest level since the onset of the pandemic in spring 2020. The krone is weaker than we projected in March. Activity in the Norwegian economy is high. Household consumption has continued to increase despite high inflation and higher interest rates. The employment rate is high and employment has risen further so far this year. The labour market is tight. Economic growth has nevertheless slowed recently. Unemployment moved a little higher in April, and the number of job postings has declined. Chart 5: Wage growth has risen The tight labour market has led to a pick-up in wage growth.
As I said before, it has been claimed that the Riksbank is creating liquidity problems for participants in the government securities market, and also that we are overstepping the mark and beginning to conduct fiscal policy. If new asset purchases were to concern assets other than government bonds, which is a possibility as the Riksbank's holdings of government bonds will be substantial for a foreseeable future, the criticism would probably intensify. Making monetary policy interventions aimed at various risky market rates is as I said a completely different matter than limiting oneself to interventions in government bond yields, which like normal repo-rate policy concern risk-free interest. But is it realistic to assume that an inflation target of 3-4 per cent is at all possible? When it comes down to it, central banks have had difficulty in attaining their current targets of around 2 per cent. My view here is that there are no obvious limits when it comes to the choice of level of the inflation target, in any case not regarding the percentages we are talking about. Inflation is determined in the long run by the monetary policy that is conducted on average and the effects of this policy on inflation expectations. Established “truths” of this kind are certainly reconsidered and revised now and then, but only after being refuted by extensive and comprehensive theoretical and empirical evidence. There is no such evidence available at present.

5 See, for example, Summers (2018). 3 [24]  from 0.75 to –0.5 per cent, the cut would be 1.25 percentage points, that is much less than the estimated 2.5–3 percentage points. 6  Raising the repo rate to have ammunition ready? Here I should like to briefly touch on a particular question before I go on. If one is concerned that the repo rate will not be sufficiently high when the next economic downturn comes, can one not just raise it to a suitable level now, as a preventive measure – so that there is ammunition available when needed? This is an argument sometimes put forward in the general debate. But unfortunately there are a number of problems with this argument. Firstly, the economy will of course be affected by interest rate increases. Growth would slow down and inflation would fall. If one raises the rate quickly and substantially, one might even cause the economic downturn one was ultimately aiming to prevent. But even if this was not the case then, secondly, a very probable scenario would be that inflation nevertheless fell substantially, perhaps down to 1 per cent or lower, that is, to the level it was at some years ago. This could in turn mean that the credibility of the inflation target was questioned once again and economic agents would begin to expect that inflation on average would be 1 per cent rather than 2 per cent.
2  BIS Review 158/2010  forward rates, to determine whether a higher or lower repo rate path than these market expectations is needed.   Then make forecasts of inflation and resource utilisation on the basis of alternative repo rate paths to determine which path best stabilises inflation and resource utilisation. As I discuss in more detail later on, these forecasts can be constructed using what are known as anticipated or unanticipated deviations, depending on whether or not the repo rate paths are expected to be credible.   Normally, the repo rate path that is included in the main scenario of the report should be chosen so that it best stabilises inflation and resource utilisation when it is credible.   Use as an initial basis the actual market rates abroad and market expectations according to implied forward rates, and only assume different policy rate paths for central banks abroad if there are particular and clear reasons for doing so. As I will discuss in more detail later on, other policy rate paths than the expected ones require special treatment to correctly determine the exchange rate effect. Stabilise inflation around the inflation target and resource utilisation around a normal level The booklet “Monetary policy in Sweden” states that the Riksbank, in addition to stabilising inflation around the inflation target, also strives to stabilise production and employment around sustainable paths, and thereby conducts a policy of flexible inflation targeting. Monetary policy thus involves choosing the repo rate path that best stabilises inflation and resource utilisation.

Lars E O Svensson: Some problems with Swedish monetary policy and possible solutions Speech by Mr Lars E O Svensson, Deputy Governor of the Sveriges Riksbank, at the Fastighetsvärlden’s conference, Stockholm, 24 November 2010. *  *  *  The opinions expressed here are my own and are not necessarily shared by other members of the Riksbank’s Executive Board or staff. I would like to thank Claes Berg, Karolina Ekholm, Stefan Gerlach, Jesper Hansson, Per Jansson, Pernilla Meyersson, Ulf Söderström and Staffan Viotti for our discussions and their comments. Johanna Jeansson, Lina Majtorp and Magnus Åhl have contributed to this speech. At the most recent monetary policy meeting in October, I entered a reservation against the majority decision. I, like my colleague Karolina Ekholm, instead advocated holding the repo rate unchanged and having a much lower repo rate path that rises steadily to a level of 2.7 per cent at the end of the forecast period. My reason for entering a reservation on this occasion and at earlier monetary policy meetings is because I see several problems with our current monetary policy. In this speech I shall present the problems I currently see in Swedish monetary policy, discuss these problems and describe the motives for my reservation, as well as proposing possible solutions to the problems.
When economic developments are instead mainly driven by changes in demand, the conflict between the price stability target and the ambition to subdue fluctuations in the economy is not as clear. If, for instance, demand falls, the result will normally be that inflationary pressures also decline. An expansionary monetary policy can in this situation contribute to stabilising both inflation and activity in the real economy. There may then be justification for aiming to attain the inflation target within a shorter period than two years. Of course, in practice it is not always easy to distinguish what shocks the economy has suffered and with an active monetary policy there is always a risk to reinforce, rather than subdue, fluctuations in the real economy. The fact that it also takes time before the full effects of monetary policy have become visible and that it is uncertain how much scope there is for monetary policy stimulation also makes it more difficult to implement the policy. One therefore should not expect monetary policy to be able to fine tune economic activity to any great extent. This description of what monetary policy can and cannot achieve is currently an accepted view that is well documented in the research field of flexible inflation targeting 1 . However, it is not possible to justify theoretically that the central bank should aim to bring inflation on target within a particular set  1  See, for instance, Svensson, Lars E.O.

The gradual shift in the policy towards – within the framework of the price stability objective – also taking into account fluctuations in economic activity meant that this focus on inflation at a particular point in time could be overinterpreted. It is the entire path for inflation and the real economy that is actually important in the monetary policy decisions, not merely the levels at the two-year horizon. Nor is it possible to ignore what happens beyond this horizon. The world will not come to an end in two years’ time. Interest rate and inflation forecasts can be interpreted in the same way as before to the extent that if the forecast for inflation two years ahead is above the target, it will normally mean that the repo rate will need to be adjusted at a faster rate than market expectations assume. The reverse applies, of  3  More exactly, it is assumed that the repo rate will follow implied forward rates, which can be gathered from the yield curve for debt securities with different durations. Implied forward rates do not exactly reflect market expectations of future repo rates as a result of the existence of term premiums and other forms of risk adjustment, but they provide a good approximation. For a more detailed description, see the box “Longer-term forecasts under the assumption that the repo rate evolves in line with implied forward rates” in Inflation Report 2005:2 and Alsterlind, J. & Dillén, H., “Monetary policy expectations and forward premia”, Sveriges Riksbank Economic Review, 2005:2.
The transition to net zero will likely entail the biggest economic and societal transformation since the Industrial Revolution. As the environmental scientist Vaclav Smil, in his book How the World Really Works, declares rather ominously, “We are a fossil-fuelled civilization whose technical and scientific advances, quality of life, and prosperity rest on the combustion of huge quantities of fossil carbon.” To transit from such a fossil fuel civilisation to a net zero world will require considerable economic restructuring, significant technological breakthroughs, and substantial financial investments. Getting to net zero will not be easy and will require five transformative changes: a price on carbon; a shift to cleaner energy; a greening of the economy; a pivot to transition finance; a sustainable lifestyle. 2/9  BIS central bankers' speeches  CARBON PRICING A meaningful price for carbon is the single most important measure to help decarbonise the economy. A carbon price can be achieved in three ways: a tax on carbon emissions; or a system for trading emissions permits; or regulatory limits on emissions that could be translated into an implicit carbon price. Without getting the price of carbon right, most sustainability efforts will not make economic sense and not gain traction. The right price on carbon sends a powerful signal across the entire economy: it induces consumers to reduce demand for carbon-intensive goods and services; firms to move to low carbon technologies; innovators to invent and develop new low carbon products and processes; and investors to fund and commercialise them.

Over the last decade, the pace of ice loss in the Arctic and Antarctic has tripled. This year, wildfires and heatwaves of unprecedented ferocity have swept across Europe, North America, and Australia, while record rainfall in countries ranging from India to America have caused devastating floods. Climate change is happening at a faster pace than predicted by early climate models. It is critical that we stop putting more carbon into the atmosphere by 2050. According to climate scientists, to avoid catastrophic and irreversible climate change, global warming needs to be kept within 1.5 degrees Celsius above pre-industrial levels. This in turn requires that global greenhouse gas emissions must reach net zero around 2050, meaning we remove whatever greenhouse gases we put into the atmosphere every year. This is what more than 190 countries resolved as part of the Paris Agreement in 2015. The world is currently far from a net-zero emissions trajectory. To limit global warming to 1.5 degrees Celsius, global greenhouse gas emissions must peak by 2025 and come down about 45% by 2030 relative to 2019 levels. We are currently not on track to achieve this. Even if all countries follow through on commitments made in the Paris accords, carbon emissions will come down by just 7.5% by 2030. This means 1.5 degrees Celsius is almost out of reach. According to the latest report by the United Nations Intergovernmental Panel on Climate Change (IPCC), global warming has already reached 1.1 degrees Celsius above pre-industrial levels, the warmest in 125,000 years.
The Federal Reserve Bank of Dallas is responsible for the Fed’s activity in the light green area – the Eleventh District – home to 27 million people in Texas, northern Louisiana and southern New Mexico. Roughly 96 percent of the district’s output comes from Texas. 2  BIS central bankers’ speeches  Here is a chart showing the disparate behavior of the economies in the 12 Federal Reserve Districts, as measured by employment growth. You will see that going back to 1990 – some 22 years – the Eleventh Federal Reserve District has outperformed the other Federal Reserve Districts in job creation. In terms of employment, the Dallas Fed’s district went into the recession last and was one of the first to come out. We have since punched through previous peak employment levels. Here is the job creation record of the so-called mega-states within the United States since 1990. And last, and just for fun, here is the record of Texas’ job creation over the past two decades versus resource-rich countries, such as Australia and Canada, as well as versus the major countries of Europe, the U.S. and Japan. BIS central bankers’ speeches  3  Indulge me for a minute here. I share these with you not to engage in stereotypical “Texas brag” or because St. Andrews has become a popular destination for recent generations of undergraduate scholars from Texas. I do so to illustrate a point, specifically the influence of fiscal policy on the effectiveness of monetary policy.

This intensified the economic slowdown, as highly leveraged businesses and corporates were cut off from their traditional source of funding. Developing the local bond market In the aftermath of the crisis, authorities in the region mounted an effort to redress the imbalance in the financial system. In Thailand, development of the domestic bond market was given a high priority, partly because of the necessity to fiscalize the cost of financial sector restructuring and partly as an alternative-funding source to reduce reliance on bank intermediation. A more developed bond market provides the economy with a more balanced financial infrastructure, thereby diversifying the risk of intermediation across a large number of institutions and market players. This so-called sharing of risks through pricing of risks and trading of risks is aimed to achieve a better structure and balance between bank financing, equity financing, and debt financing. Development of a liquid bond market also provides other benefits. It allows private and public sector issuers to finance long-term projects at lower cost, thus reducing maturity risks. A liquid government bond market also provides the basis for development of other segments of the financial sector that could draw in significant foreign participation – including forward and future markets, for example, which are needed to support risk management functions of banks and firms. Developments in these markets will not only make local bond markets a more desirable investment alternative to both local and foreign investors, but would be vital in the development of a local-currency bond market.
Today, we are near the juncture of achieving a key milestone, where formal setting is no longer required to mobilise intra-region fund flows such as in the case of ABF1 and ABF2. Instead the intra-regional investments are becoming more self-reinforcing. As a proof of this, we now have more anecdotal evidence on the rising proportion of the regional central banks’ reserves invested in Asian local currency debt. iii)  Credit risk assessment approach  As we tread into uncharted territories of new asset classes, there is a growing need to enhance analytical capabilities, resources and risk controls. For example, many central banks and institutional investors have gradually moved away from over-reliance on credit rating agencies to an internally-based credit rating assessment practice in portfolio management. In the wake of the US financial crisis and recent European sovereign issue, one would question the credibility of credit rating agencies in flagging the risks built up in banks and sovereigns, ahead of the crisis. Most credit rating agencies also tend to apply ordinal ranking of credit, rather than specific risk metrics that can be mapped to default probabilities or expected losses. In my view, one of the major weaknesses of credit rating agencies is their objective to establish rating stability by applying smoothing methodology that can potentially delay minor downgrades, but trigger cliff-like and abrupt downgrades in the event of sharp credit deterioration. The abrupt regrading of credits tend to spook markets and is certainly not good for investors with a heart condition.

Under this new normal situation, the agility of businesses and the economy to adapt and adjust to the challenging environment is critical. There are a number of possible adjustments which can be done including raising productivity and efficiency. In formulating public policy, policymakers are faced with the challenge to strike a fine balance in handling the capital flows and its impact to the economy. Because of the enormity of the flows, a combination of approaches had been adopted by emerging economies to manage capital flows. Even measures regarded as unorthodox at one time are now being implemented. Most countries  BIS Review 162/2010  1  have allowed greater currency flexibility; and many have ended up accumulating foreign reserves. These inflows were typically sterilised by the central banks to avoid pressure to domestic liquidity and price level. Regional market developments Turning now to the second part of my remarks on key developments in the regional financial markets. The ability of regional economies to weather the recent financial crisis has its root in the aftermath of the 1997–98 crisis. Many had use the past financial crisis period to embark on bold financial reforms and restructure their financial landscape. Of particular importance were the successful efforts and policy initiatives to develop the bond market. As a result of these initiatives, the depth and breadth of regional capital markets have reached a level of maturity which can now absorb and intermediate large and volatile flows without posing risks to financial stability.