samchain/econo-pairs-v1 huggingface dataset:
However, the development of the CPI cannot always indicate what monetary policy is needed at a particular time – no single inflation measure can do this. The Riksbank therefore uses different measures of underlying inflation to describe the trend rate of inflation and to justify the monetary policy decisions. Our most commonly used measure, with the rather difficult to pronounce name of UND1X, consists of the CPI adjusted for certain items that are affected by fiscal policy and monetary policy in a direct way. There are educational gains with using measures of underlying inflation. However, it can also create uncertainty as to how the inflation target is defined, even if we try to be clear about why a particular measure has been highlighted at a particular time. Such experiences have given us reason to think about how the need for various adjusted inflation measures can be reduced. One possibility could be to make forecasts covering longer periods. For the Riksbank the need to emphasise alternative measures of inflation growth has declined in that we have for some time now published forecasts of developments three years ahead instead of two years ahead. With a longer forecast horizon it is possible to illustrate more clearly when various shocks have effects that are temporary and how they dissipate over time without having any lasting impact on inflation. This makes it easier to explain whether or not the interest rate needs to be changed.

Compared with the assumption of an unchanged repo rate, market expectations normally provide a much more realistic forecast. But the assumption that the policy rate will develop in accordance with market expectations also entails some difficulties. Examples of problems include how one should measure market expectations and the communication of the interest rate path. It feels natural to move on from this now and go on to publish our own view of what would be a reasonable development for the repo rate. Basing the forecasts on the policy rate development expected according to the pricing in the financial markets was a major step towards greater openness and clarity. Now we are taking a further, but slightly smaller, step. There are several good reasons why we are now choosing to publish our own forecast for the development of the repo rate. The main one may be that we will have an even better tool for anchoring expectations. It will be easier to explain to the general public and the financial markets how we reason when making monetary policy decisions and how we see future interest rate developments. We will also avoid the communication problems that may arise if the central bank’s and the financial markets’ expectations of interest rate developments differ. But of course there are also potential problems. The forecast for the policy rate that we will present in connection with the inflation forecasts, is one we Executive Board members will make an assessment of together.
Jansson, Per (2018), “Monetary policy in less favourable times – what are the options?”, speech at Insurance Sweden, 4 December. 11 [15]  Krugman, Paul (2014), “Inflation Targets Reconsidered”, essay presented at the ECB Sintra conference, May. Lundvall, Henrik (2020) “What is driving the global trend towards lower real interest rates?”, Sveriges Riksbank Economic Review 2020:1. Nessén, Marianne and David Vestin (2005), “Average inflation targeting”, Journal of Money, Credit and Banking, 837–863. Powell, Jerome H. (2020), ”New Economic Challenges and the Fed’s Monetary Policy Review”, speech at “Navigating the Decade Ahead: Implications for Monetary Policy”, an economic policy symposium sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming, 27 August. Rosengren, Eric S. (2015), “Changing economic relationships: Implications for monetary policy and simple monetary policy rules”, speech on 16 April, Federal Reserve Bank of Boston. Sims, Christopher A. (2016), “Fiscal Policy, Monetary Policy and Central Bank Independence”, lunch speech at “Designing Resilient Monetary Policy Frameworks for the Future”, an economic policy symposium sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming, 26 August. Skingsley, Cecilia (2016), “A new playing field for monetary policy: What can a small, open economy expect?”, speech at the Legal, Financial and Administrative Services Agency capital market day, 19 May. Sveriges Riksbank (2017), “The Riksbank’s experiences of publishing repo rate forecasts”, Riksbank studies, June 2017. Summers, Lawrence H. (2016), “The Fed thinks it can fight the next recession.

Following this idea and backing it up in figures, please allow me to shortly through a glance back in the past. The soundness of the Albanian state in these last years, the economic growth and amelioration of the tax and customs entities performance, enabled the reduction of the budget deficit. This deficit fell from 11.4 percent of the GDP in 1998 to 6.9 percent in 2002. In 2003, it is expected to fall at the level of 5.8 percent of the GDP, whereas the draft-budget for 2004 has an even more ambitious objective: the reduction of the general budget deficit at the level of 4.8 percent of the GDP. This fiscal discipline has given its own results. It influenced the reduction of treasury bills interest rates, bringing about an overall reduction of interest rates in economy. The reduction of interest rates and the government’s demand for funds gave a greater respiration to economy crediting. It has extended more funds - at lower interest rates - to be used by the public sector. According to the data provided by the Bank of Albania, economy crediting increased at an average of 90 percent per year during 1999-2002. On the other side, the reduction of the Bank of Albania’s financing to state budget, gave positive impacts on the liquidity indicators in the system. Now the long-term monetary assets gave a straightforward contribution on keeping inflation at low levels. Inflation fell from 8.7 percent in 1998 to 2.1 percent in 2002.
The Single Resolution Mechanism Let me now turn to the establishment of a Single Resolution Mechanism (SRM), which constitutes the second pillar of the banking union and is a necessary complement to the SSM. It is crucial that the SRM is in place once the SSM is operational. There would otherwise be a danger of creating potential conflicts between supervisory and central bank perspectives. It would be a misunderstanding to believe that there will be no more troubles at banks as soon as responsibility for banking supervision is conferred to the ECB. On the contrary, non-viable banks will have to be closed down and resolved in order to prevent the “zombification” of the European banking sector. The viable parts of certain banks may nevertheless require transitional funding – which should not be mistaken for a bail-out. A single resolution mechanism is hence an essential condition. It will ensure timely and impartial decision-making focused on the European dimension and that resolution costs are borne by the private sector, thus putting an end to the expectation that taxpayers will foot the bill. The era in which the privatisation of profits and socialisation of losses was possible should belong to the past. The SRM should be equipped with a comprehensive set of enforceable tools and powers to resolve all banks participating in the SSM. This mechanism should under no circumstances be placed with the ECB, in order to nip any potential conflicts of objectives in the bud. However, the flow of information to the SSM must be safeguarded.

This will safeguard our independence and credibility as monetary policy maker and will ensure that monetary policy is not affected by considerations outside of the realm of monetary policy, for example the state of the banking sector. This is particularly important in the context of our emergency liquidity assistance (ELA), the provision of which is based on a sound and reliable solvency assessment. In the future, we will have these assessments at hand “in house”. Moreover, a strong resolution framework, with effective tools for orderly resolution, will in turn help to remove the pressure on the central bank to unduly prolong the life of banks through liquidity provision. Second, the banking union will help to unwind the reliance of the euro area banking sector on central bank intermediation. As mentioned, during this crisis we have activated a set of nonstandard monetary policy tools that – by nature – were intended to alleviate impaired monetary policy transmission and ultimately serve our primary objective to maintain price stability in the euro area. By alleviating funding pressures and undue risks in securities markets, our measures have provided temporary relief for the banking sector and complemented policy efforts on the financial stability front. However, our measures cannot and should not solve the underlying structural problems. This is a task for governments and the banking industry.
Lower interest rates induce investment, thus strengthening the productive capacity of the economy and making higher output and consumption possible. We expect that in the case of Poland the interest rate adjustment after eurozone accession will reduce long-term rates by more than one percentage point. Any estimation of the exact impact on investment, output and consumption is subject to several assumptions. Nevertheless the NBP’s analyses show that an interest rate reduction will be the main source of benefits from joining the euro (Borowski 2003). Research shows that the elimination of the exchange rate fluctuations and the coordination of monetary policy within the euro zone have been the main driving forces behind the financial integration in Europe (Fratzscher 2001; Galati and Tsatsaronis 2001; European Commission 2002; ECB 2006). Integration, in turn, promotes competition in financial markets, leading to an improved efficiency in financial intermediaries and a reduction in the cost of their services. A single currency provides domestic companies with an access to more liquid and deeper financial markets, which not only drives down the cost of capital, but also allows better risk diversification. Therefore, apart from stimulating economic growth, development of financial market also reduces output fluctuations. Since empirical research indicates that countries with relatively less developed financial markets benefit the most from financial integration (Giannetti et al. 2002), we believe that Poland should be among the largest beneficiaries of this process (NBP 2004). The benefit we know the least about is related to trade creation.

The chart shows an unweighted average for those institutions in the sample for which data are available on the given day. (b) The “no crisis” institutions are HSBC, Barclays, Wells Fargo, JP Morgan, Santander, BNP Paribas, Deutsche Bank, Crédit Agricole, Société Générale, BBVA, Banco Popular, Banco Sabadell, Unicredit, Banca Popolare di Milano, Royal Bank of Canada, National Australia Bank, Commonwealth Bank of Australia and ANZ Banking Group. The chart shows an unweighted average for those banks in the sample for which data are available on the given day. (c) The dotted black line is a suggested trigger level for contingent capital calibrated by minimising a loss function which takes into account both Type I and Type II errors. Type I error is the probability that conversion occurs despite capital not being required. Type II error is the event that conversion does not occur despite capital being required. The loss function places greater weight on Type II errors. Note that the loss function takes into account the full range of banks, not just the average score for each set.
The Norwegian economy had to go through an extensive turnaround operation in the late 1980s. Confidence in monetary policy and the Norwegian krone had to be restored in order to avoid persistently high inflation. It took a long time, and very high interest rates were required, before confidence in the nominal anchor was restored. 5. Conclusion  Through a sound, credible orientation of monetary policy, it is possible to attain an inflation rate that on average is equal to the targeted figure. By practising flexible inflation targeting, i.e. having a mediumterm horizon for the inflation target, we can also achieve a reasonable trade-off between inflation variability and output variability in the short term. But monetary policy has no lasting effect on output and employment. These are determined by the supply of economic resources - capital and labour. Technological developments, and our ability to use that technology, also play a decisive part. In the long run, monetary policy cannot influence output, employment or competitiveness beyond the benefits that follow from low and stable inflation. The economy requires a nominal anchor. The Government has laid out a guideline for monetary policy which implies flexible inflation targeting. This is a regime that has also won broad international support. This BIS Review is available on the BIS website at www.bis.org. 12  BIS Review 49/2002

All kinds of regulatory arbitrage, which would enable firms to relocate to other jurisdictions to bypass national regulations, should be avoided. In this regard, the European Union is currently building a harmonized regulation. Last September, the European Commission launched its proposal for a “Markets in Crypto-Assets regulation” (also known as MiCA). If this proposition is adopted by the EU, companies that issue crypto-assets or provide additional services will be subject to the same requirements, under the watch of supervisory authorities. For example, the crypto-assets intended as a means of payment will have to provide a predictable redemption right in sovereign currency for asset holders, which is deemed necessary for the protection of consumers. At the international level, a cooperative framework is gradually setting up in order to deal with the challenges raised by stablecoins. 2. Supporting initiatives to strengthen Europe’s sovereignty in payments such as EPI The second response is to support private initiatives that can have a constructive impact on market functioning, payment systems efficiency and help address European sovereignty in payments. The best example of this is the European Payments Initiative (EPI), a project led by a set of major European banks and processors aiming at creating a unified, innovative and autonomous European payment solution. The Eurosystem, as well as the European Commission, has been in support of this work right 2/4  BIS central bankers' speeches  from the start. 3.
Groupthink biases A related, but distinct, decision-making defect is confirmation bias or its collective counterpart, groupthink. As with other biases, the institutional structures of the MPC, FPC and PRA contain a number of safeguards. Committee-based decision-making, with individual accountability and with the chair voting last, reduces the risk of a single collective narrative. The degree of dissent across the MPC is also a positive diagnostic. Nonetheless, Committee-based decision-making, especially by consensus, does not remove the risk of conformity risk. Indeed, it could even propagate groupthink if cross-pollination becomes rather too effective. As an illustration, Michael McMahon from Warwick University has undertaken a detailed text-based analysis of MPC minutes to assess the importance of certain “topics” in shaping the MPC’s deliberations. Chart 13 plots the incidence of discussion in the MPC minutes of topics around “banks”. 61 For the decade prior to 2007, banking issues did not get much of a look-in. They typically accounted for only around 2% of MPC discussion time during the Great Moderation. With hindsight, given emerging pressures in the banking sector, this was a collective blind-spot. The Northern Rock crisis of 2007, and the failure of Lehman Brothers in 2008, made visible those pressures. In response, Committee-time devoted to banking issues rose to a peak almost ten times higher than the pre-crisis period. Today, discussion of banking issues has settled at levels below the crisis peaks, but above those in the pre-crisis period. The proportion of MPC discussion around banks bears a striking resemblance to marketbased measures of banking risk (Chart 14).

It has been argued that targeting a 2% inflation rate results in this zero bound constraint binding too frequently, inhibiting the effectiveness of monetary policy. 47 A higher target would loosen that constraint. This academic debate may run for some time. On the financial stability side, the position is less straightforward. There is no single, easily observable or quantifiable target for systemic risk against which to hold the FPC and PRA to  45  Bernanke and Mishkin (1997) first coined this term in the context of inflation–targeting. 46  Shiller (1997). 47  Ball (2014). BIS central bankers’ speeches  7  account. And the public at large often do not have well-defined or strong attitudes towards financial stability – except, perhaps, when things go wrong. Since 2012, the Bank has been surveying the general public on how they believe the Bank has performed in protecting the financial system. Some reassurance can perhaps be taken from the fact that this has moved from a net dissatisfaction score of 13 in 2012 to a net satisfaction score of 40 today. 48 Nonetheless, by itself this approach falls well short of having a clear objective against which the FPC and PRA can periodically be assessed. The FPC has begun publishing a set of financial stability indicators against which it assesses systemic risk and is held to account.
I expect that the choices made over the near-term can be implemented in a way so as not to forestall either a corridor or a floor system over the longer term. The experience we gain with operating monetary policy effectively with a very large balance sheet will undoubtedly inform that choice. But, that topic is putting the cart far before the horse. First, we need an economy that is strong enough to more fully utilize the nation’s labor resources and to begin to push inflation back towards the Federal Reserve’s long-term objective. Only then can the monetary policy normalization process proceed. Although we are making progress towards our goals, we still have a considerable way to go. Thank you for your kind attention. I would be happy to take a few questions. BIS central bankers’ speeches  7

Further details on the discussion at the meeting will be available when the minutes are published in three weeks time. I will not comment on monetary policy any further today. Following the release of the FOMC’s statement, market interest rates generally moved lower, which should help provide some additional support for economic activity and jobs. I would note, however, that conditions remain unsettled and the equity market in particular remains very volatile. BIS central bankers’ speeches  1  Regional economic conditions Turning to our region, the economic recovery continues to be slow, although much of the region is performing reasonably well compared with the nation as a whole. To frame our current situation, let me put this recession and recovery in the context of previous cycles. While this recession lasted longest, caused the deepest job losses, and has shown the slowest employment recovery of any post-war recession for the United States, it has not been the worst on record for the region. New York State sustained fewer severe job losses than the nation during the recent recession – a reversal of historical patterns. Upstate New York, which has struggled with sluggish economic growth in recent decades, has proven particularly stable. In fact, while job losses were quite severe during previous recessions, that was not the case this time around. Similarly, New York City’s job losses were more moderate than in previous recessions. New Jersey, on the other hand, saw steeper jobs losses than New York and a more tepid recovery.
The third major challenge is that financial institutions need to further strengthen their financial standing in the recovery path after the crisis. Preparing for the New Accord means cost impact from building capacity in terms of people, know-how, IT, data, and business model re-engineering. Therefore, strong leadership is crucial to propel the financial institution through the short-term difficulties, while at the same time steering the institution with long-term vision and strategy to ensure that the financial institution survives the challenge and complies with international best practices. As for the regulators, our task at the Bank of Thailand is no less challenging. In addition to the need to build up our own in-depth understanding and capacity to implement the New Accord, we are also responsible for mapping out the strategy for its adoption in such a way that the financial sector will be capable of serving efficiently and effectively both the modern and traditional sectors of the real economy. In a dual economy such as Thailand, having the right financial sector structure for financial institutions to serve the basic function of resource allocation and risk management is a very complex issue due to the various market imperfections where market mechanism fails - particularly when one is dealing with financing smaller clients, and clients in the less developed segments of the country. In the past such issues were swept onto the domain of specialized financial institutions, but today the financial innovation and sheer creativity have made it possible for private sector solution.

This is because the main reasons underlying the outbreak of the current financial crisis are deficiencies and mistakes in the establishment of economic policies along with the fulfillment of regulatory and supervisory activities. Nevertheless, we all know that the reconstruction of economic balances under normal conditions relies on the proper execution of these functions. Another factor leading to uncertainty is the enforcement of global financial and monetary measures of a size, speed and coordination that has never been witnessed before. This raises ambiguity pertaining to the responses to these measures from financial markets and economies in the upcoming period. In the current conjuncture there is a consensus that the recovery in global economic activity will not be anytime soon and what worries the global community is what will follow the crisis. The question about mechanisms to avert any future global financial crisis similar to the current one will completely occupy the agenda of academics and policy-makers in the near future. Moreover, the extent and pace of the reversion for financial measures and nontraditional monetary policy exercises against the financial crisis on the back of stabilization in economies will top agenda very soon. The global financial crisis has led to a significant slowdown in economic activity in Turkey as in other developing countries. A remarkable tightening in lending conditions and a surge in interest on loans were experienced during the worst period of the financial crisis.