samchain/econo-pairs-v1 huggingface dataset:
It refers to a ball which pitches in such a position – the corridor – that the batter does not know whether to be playing off the back foot or the front foot. This, I will argue, is similar to the dilemma facing monetary policymakers on the Bank’s Monetary Policy Committee (MPC) today. Should monetary policy hold back until key sources of uncertainty about the economy have been resolved? Or instead push forward to prevent leaving it too late? Playing off the back foot Let’s start with where we have been. Since 2007, the UK and global economy has faced a barrage of financial bouncers of frightening pace and ferocity. The economy was on the back foot for much of this period. Output growth in the UK fell short of the Bank’s, and other mainstream forecasters’, expectations between 2008 and 2012. By the end of 2012, output in the economy was still 3% below its 2007 level. This was indeed a Great Recession. With the economy falling well short of expectations, monetary policy was required to shore up its defences, to prevent recession morphing into depression. That meant interest rates falling to unprecedentedly low levels, in the UK and globally – indeed, the lowest levels in the Bank of England’s 320-year history. This monetary medicine was then augmented with £ billion of asset purchases by the Bank from 2009 onwards, known colloquially as Quantitative Easing or QE. It is impossible to know for sure how the economy would have performed without this extraordinary monetary medicine.

You can learn more about how we use cookies by reviewing our Privacy Statement. horizon. Transitory responses of inflation to shocks imply uncertainty about future inflation, even far in the future. The  uncertainty criterion is about the relationship between the magnitude of uncertainty and the forecast horizon. It is closely related to the sensitivity criterion, in that permanent shocks to inflation are ruled out. The counterexample is if inflation follows a random walk process, whereby shocks have permanent effects on inflation, then uncertainty, as measured by the standard deviation from the distribution of future outcomes, rises linearly with the forecast horizon. Applying Theory to the Real World In the years up to and including the first year of the pandemic, inflation had been running consistently below the FOMC’s 2 percent longer-run target. Then, in the spring of 2021, inflation readings surged, bringing the personal consumption expenditures (PCE) inflation rate to around 6 percent, where it has remained through the first nine months of 2022. Consumer price index (CPI) inflation rose by even more. This episode represents a unique opportunity to assess the three criteria of well-anchored expectations during a period of high and volatile inflation.4 In empirically assessing the sensitivity and level of longer-run inflation expectations, one must specify what forecast horizon corresponds to the “long run.” Surveys don’t typically ask about inflation in the “long run,” but rather the inflation rate over a specific period of time.
With lockdown-easing having concluded, some services segments are still affected by restrictions on operating normally, and the proportion of workers affected by furlough arrangements continues to be a majority. This is the case of the accommodation, air transport and travel agency segments where, at end-June, the reach of ERTEs was still between 70.4% and 53.7%. The very high proportion of workers protected by an ERTE in these specific services segments is in striking contrast to the 8  percentages in manufacturing industry and construction (8.9% and 4.2%, respectively). That highlights the deeply asymmetric effects of this crisis on different productive activities. In absolute terms, at the end of Q2 almost half the workers on ERTEs were in the retail and hospitality sectors. In response to this situation and to the high uncertainty over the recovery, the ERTE support measures - initially programmed to end-June - have been extended, albeit with amendments, to the end of Q3. The new conditions include the possibility of increasing Social Security exemptions in the event of a fresh outbreak of the virus, which is an explicit acknowledgement of the uncertainty surrounding the recovery. These new conditions also attempt to square the objective to continue providing support to firms and workers temporarily affected by restrictions on operating normally with the aim of providing incentives for a progressive reallocation of employment towards activities with a better future outlook.

John C Williams: 901 days Remarks by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Securities Industry and Financial Markets Association (SIFMA), New York City, 15 July 2019. * * * As prepared for delivery Thank you for the kind introduction and the opportunity to speak this morning. It’s a particular pleasure to be sharing the stage with Andrew Bailey, who has played such an important role in leading efforts on establishing robust references rates to replace the London Interbank Offered Rate (LIBOR). This critical undertaking traverses markets and transcends jurisdictions, making international cooperation and coordination essential for success. Before I go any further, I need to give the standard Fed disclaimer that the views I express today are mine alone and do not necessarily reflect those of the Federal Open Market Committee or others in the Federal Reserve System. Where Have We Come From? Today I’m going to talk about the progress we’ve made, and the path that lies ahead. But first, given that 12 years have passed since LIBOR first became an acute area of concern, it’s important to remember why replacing it is so critical. LIBOR is based on submissions from individual banks. The volume of actual transactions that term LIBOR is based on is very small—totaling around $ million on a typical day.
An incentive for further structural reforms a/ The Euro is, per se, also a strong catalyst for structural reforms in all non-financial domains in Europe : a single currency facilitates the full comparison of prices, taxes and earnings. I think that the euro could encourage "cross-fertilisation" of best practice through stronger co-ordination of Member States' structural policies in areas such as labour markets, education and training, job creation incentives, effective welfare safety nets, etc. It is the reason why the European Council, meeting in Luxembourg in December 1997, explicitly mentioned structural policies among the items selected for reinforced co-ordination. The Lisbon European Council made a further contribution to the necessary medium-term strategy for structural reform in the Union. The emphasis put on deepening the single market, the setting of indicators allowing comparisons of best practices among the Member States, the fact that the Broad Economic Policy Guidelines will examine the structural issues closely : all these developments are going in the right direction. BIS Review 11/2001  5  All European countries must resolutely carry on the structural reforms they have already initiated. It must be acknowledged that a lot has already been done, in particular with implementation of the single market. However, continental Europe is still experiencing levels of unemployment that are too high, despite the fact that the jobless rate has been declining significantly in most of its economies for three years.

To reach that goal we have based our monetary policy on two “pillars”. As regards the first “pillar” we have set up a quantitative reference value, namely 4.5%, for the growth of the broad monetary aggregate M3; we have recently confirmed this rate of growth of 4,5 % as an important factor for stabilising expectations. It should be noted that the concept of a reference value does not imply a commitment on the part of the Eurosystem to mechanistically correct deviations in monetary growth in the short term. However, the reference value for M3 is consistent with, and helps to maintain price stability over the medium term. The second pillar of the monetary policy strategy is a very comprehensive set of indicators that are important in our eyes in signalling future price developments in the euro area. This strategy, which ensures a great deal of continuity with the monetary policies of the participating national central banks, appears to have been understood by financial markets and the public at large. In particular, the yields on long-term bonds denominated in euros indicate clearly that the Eurosystem has kept intact the legacy of credibility that it has inherited. d/ Finally, the credibility of the euro also results from the Eurosystem's constant efforts towards transparency and communication. I must stress here that the Eurosystem is one of the most transparent central banks in the world.
But, this evolution of digital money is about the technology of delivery; it has not ripped up the script of inside and outside money. The question for us all should therefore focus most on is whether we think there will be a demand for retail digital money in the future? And, here we should not suffer a failure of imagination. If we think the demand will exist, what form should it take? I think it would be preferable not to disturb the existence of both inside and outside money and the broad balance between them. But, this requires a number of things to happen and questions to be answered. It requires banks to be more active in thinking about digital commercial bank money and not leave it to CBDC. In any event, as we have set out in the CP, we think in this new world a central bank digital currency is likely to be needed to anchor the value of all forms of money, including new digital ones and to ensure the maximum opportunity for innovation in payments services. Moving on, let me now point to an area where we are at risk of contradicting ourselves. I said that assured value was a key principle of digital money. How does this fit with the idea that we could resolve failed banks and allow deposits (inside money) to take a haircut? One answer is that it depends on the size of the deposit above a certain threshold.

Petar Goshev: South Eastern European countries’ competitiveness and challenges on the road to EU Introductory speech by Mr Petar Goshev, Governor of the National Bank of the Republic of Macedonia, at the international conference “Competitiveness of the South Eastern European countries and challenges on the road to EU”, organized by the National Bank of the Republic of Macedonia, Skopje, 30 May 2008. *  *  *  Honored guests, Dear friends, I wish you a very warm welcome to the Conference of the National Bank of the Republic of Macedonia on the Competitiveness of the South Eastern European Countries and Challenges on the Road to the EU. Similarly to the several conferences and workshops organized by our Bank in the recent years, this one will also seek to develop a discussion on a very important topic for the countries in transition striving to reach the income level of the EU member states. Although real convergence is not directly in the focus of interest of the monetary authorities, the unbreakable tie between the nominal and real convergence makes this topic extremely important also from a viewpoint of the monetary policy. Therefore, at this Conference we will try to analyze once again the achievements of the new EU member states, particularly their experience, their successes, but also their failures regarding competitiveness of their economies on the road to EU and EMU membership.
This is the case irrespective of whether we have pan-European banks, or whether discrepancies remain in local retail markets. The case of the United States is illustrative. Even when strong inter-state banking limitations were in place – restricting retail banking activities to small local markets – the US banking system was, nevertheless, commonly viewed as a single system. Illustrative facts The progress made with integration in wholesale activities has been rapid and remarkable. First, a common euro money market has been in place since the early days of the euro. A large number of financial products can be traded easily with minimal price distortions, small enough to prevent arbitrage across countries. Likewise, data on cross-border trade flows provide a strong indication of market unification. In the case of the predominantly used unsecured interbank contracts, the share of counterparties from other euro area countries has more than doubled after the introduction of the euro. In addition, a large proportion of the activity in euro is conducted with counterparties outside the euro area, especially in London. The share of cross-border transactions is somewhat lower in the case of repo transactions, because of remaining legal and tax barriers and settlement difficulties. All in all, less  BIS Review 91/2001  1  than 40% of all interbank market activity is now conducted with domestic counterparties. In 1998, the share was still over 60%. Second, the wholesale payment infrastructure for the euro area – including TARGET, Euro I and Euro Access Frankfurt – is already very unified.

Christian Noyer: Banking in the euro area Speech by Mr Christian Noyer, Vice-President of the European Central Bank, at the 30th Anniversary of the Association of Foreign Banks' Representatives, Frankfurt, 8 November 2001. *  *  *  I am very grateful for the invitation to speak to you on the occasion of the 30th anniversary of the Association of "Foreign Banks' Representatives in Germany". Your Association has 117 members from a large number of countries. Several of the member institutions are counted among the 30 major European banks, or among banks from elsewhere with important operations in Europe. For many banks represented by your Association, the topic of my speech "banking in the euro area" is part of day-to-day business. It is also day-to-day business for the European Central Bank (ECB) and the Eurosystem as a whole, as we conduct our monetary policy operations and run the TARGET large-value payment system. The further integration of the European banking system and financial markets is in the interests of both banks and the central bank. For banks, it means the liquidity benefits of deeper and wider markets and lower costs when operating in several countries. From the central bank perspective, it enhances the efficient and consistent implementation of the single monetary policy. We already enjoy the benefits of a common euro area banking system in important respects.
1999-00351 DIR, or Heikensten, L., “The Riksbank’s inflation target – clarifications and evaluation” Sveriges Riksbank Quarterly Review No. 1, 1999. BIS Review 87/2006  3  Ultimately, it is the inflation forecast in relation to the target that decides monetary policy. How quickly the target should be attained is also decided by developments in the rest of the economy. The economic situation Let me go on to say something about the monetary policy situation and the prospects for inflation and economic activity. It is the inflation assessment on which we based the decision to raise the repo rate by 0.25 percentage points at our most recent monetary policy meeting on 29 August that I intend to discuss. An account of the discussion held at the meeting is contained in the separate minutes published last week. We observed in the Inflation Report published in June that economic activity in Sweden had strengthened, largely because of strong international developments, high productivity and expansionary monetary policy. Our assessment was that these factors would also continue to stimulate the economy. GDP growth this year was therefore expected to be high, which was supported by both the national accounts figures for the first quarter and the economic indicators for developments during the second quarter. There were also signals from the labour market that economic activity was continuing to improve, with an increasing demand for labour. We could also note that inflation had begun to increase, after having been strikingly low.

Joseph Yam: Financial stability issues, dollarisation and price dynamics Opening remarks by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at HKIMR Summer Workshop 2003, Hong Kong, 27 August 2003. *  *  *  Ladies and Gentlemen, I am delighted to welcome you to this first “HKIMR Summer Workshop in Money and Finance”. This is an event that we hope from now on will take place annually. The organisers have put together an interesting programme with three papers dealing with issues that are of current or potential importance for Hong Kong. The first paper, to be presented by Professor Charles Goodhart, focuses on financial stability issues. These issues are of particular interest to an international financial centre, as the success or otherwise in the maintenance of financial stability, and therefore the efficiency of financial intermediation, not only has an impact upon the domestic economy but also on the economy of the region that centre serves. The second paper, to be presented by Professor Genberg, deals with the subject of dollarisation. Dollarisation, in the traditional sense of the US dollar replacing or displacing the Hong Kong dollar as a medium of transaction in respect of domestic economic activity, is in my opinion unlikely to occur here in Hong Kong. This is notwithstanding the operation of a currency board system with the US dollar as the anchor currency. But, from another perspective, we are seeing continuing economic integration between Hong Kong and Mainland China.
Comparing policy actions across the Atlantic The best way to convey the message that monetary policy actions and liquidity management are by and large two separate things is probably to draw some lessons from a comparison of what has been happening on both sides of the Atlantic. While liquidity management strategies appear to have been roughly identical over the last few months in the US and the euro area, monetary policies seem to have diverged quite a bit, with the Fed cutting the fed funds target by 3% over three quarters down to 2.25%, while the ECB has maintained its repo rate unchanged at its pre-crisis level of 4%. Let us first take a look at liquidity management issues. Interestingly enough, in an attempt to rein in the soaring short term spreads on its money market (e.g. the 3-month OIS-BOR spread nosed above 100bp in December) the Fed adjusted its operational framework in a way that roughly closed the gap with its euro area counterpart. In particular, the new Term Auction Facility that the Fed implemented in mid-December enlarges both the range of eligible borrowers, from about 20 primary dealers to all banks that are judged to be in generally sound financial condition, and the range of eligible assets that can be brought as collateral to the auction, from T-bonds to corporate bonds and MBS. Consequently, longer term liquidity injections by the Fed now run along similar lines as the ECB’s ones.

In other words, a solid anchoring of inflation expectations remains a prerequisite for rate cuts in times of heightened financial uncertainty and downside risks to growth. I am convinced that in times of financial trouble it is all the more necessary to insure price stability. In that respect, the diagnosis regarding the state of inflation expectations is thus decisive in the current juncture. Usual market-based indicators such as Break Even Inflation Rates (BEIRs) are reliable indicators of long term inflation expectations 4 ; however, such market-based indicators may be plagued by unusually large risk or liquidity premia during a period of financial turmoil, which means that we have to be very cautious in our assessment. More concretely, this implies that the plummeting real rates and tighter BEIRs on some market (see for example the market for French indexed debt over the last few  4  Cf. for instance Coffinet and Frappa (2008) at the Banque de France, and Beechey, Johannen and Levin (2008) at the Board of the US Federal Reserve. 4  BIS Review 37/2008  weeks) may well be partly explained by such technical factors and not reflect any marked deterioration in the outlook for inflation. But we should obviously remain especially cautious in order to keep expectations firmly anchored. 3. 5  Last but not least, we should keep in mind that central banks, either viewed as the monetary policy-makers or as the Lenders of Last Resort, cannot and should not be held responsible for everything.
In implementing the minimum regulatory standards, the objective is not to achieve a single set of uniform rules, but rather to focus on implementing rules in the respective ASEAN member countries that are consistent with an agreed set of sound principles of regulation and supervision. This will entail efforts at the national level to align existing regulatory and supervisory regimes with international standards such as the Basel and Insurance Core Principles. In addition, the implementation of well-designed financial safety nets such as deposit insurance systems will further support the successful management and transition during the financial integration process. Surveillance mechanisms also need to be enhanced to be able to take into account the implications of cross-border transactions and the diversity of the market structures across the region which will affect the way risks are measured and managed. Traditional risk metrics may not be able to fully capture more layered risk complexions. As financial systems develop at an uneven pace across the region, and as regional exposures become more significant, more granular and broader risk metrics will need to be developed to capture differences in market structures and different business profiles in local markets which reflect prevailing economic and financial conditions. As an example, loan-to-deposit ratios vary considerably across the region, partly reflecting differences in the depth and sophistication of financial systems and to some the extent whether savers and borrowers have alternative avenues for investment and financing.

This is fully supported by the commitment of its leaders to a shared vision to make meaningful progress in the implementation of the AEC Blueprint. The vision for an economically and financially integrated ASEAN represents the aspiration of many policy makers, old and new. A recent take on this can be found in a document titled “The Road to ASEAN Financial Integration”, a study on the financial landscape and formulating milestones on ASEAN monetary and financial integration. This document endorsed by the ASEAN Central Bank Governors and approved by the Finance Ministers presents a clear, ambitious and committed statement by the region to collectively embark on this journey. In this respect, ASEAN has made meaningful progress in the identification, articulation and implementation of principles to advance financial and economic integration among its members. Work to craft the post-2015 plan is in progress, in line with the assessment of the current state of readiness in this region. As we enter the next phase, the principles that underpin ASEAN’s integration model will continue to be tested, and whether ASEAN reaps fully the benefits of economic and financial integration, will be very much determined by the collective actions of governments, policymakers and economic and financial agents, including those of us in this room today. In my remarks this morning, I will discuss the role of financial integration as both a key enabler and an outcome of the AEC.