samchain/econo-pairs-v1 huggingface dataset:
This mix of exaggerated confidence and low real interest rates encouraged investors into riskier assets and banks into riskier lending, epitomised by the US sub-prime housing market. That was compounded by a lack of incentive for care in extending loans, if they were then packaged up and sold on to others. In August 2007, the economic weather turned distinctly autumnal. Falling US house prices and rising sub-prime defaults led to nervousness about the value of assets backed by those mortgages. Moreover, losses associated with sub-prime loans began appearing in places noone had anticipated, revealing how opaque many financial instruments were. The markets for these assets closed and their prices plummeted, putting pressure on the balance sheets of the financial institutions holding them, while wholesale funding dried up. And the wide dispersal of the suspect assets meant these balance sheet pressures were quickly transmitted internationally. In the United Kingdom, banks became increasingly cautious in lending, adding to downward pressure on housing and commercial property prices, and slowing growth. But at that stage, it was still possible to envisage a relatively modest slowdown, with financial intermediaries making the necessary balance sheet adjustments in an orderly fashion. However, the turmoil in credit markets was not the only factor the Bank’s Monetary Policy Committee had to contend with. Oil prices, already high at the start of 2008, hit $ a barrel in July, while a broad range of other commodity prices rose sharply.

Charles Bean: The economic outlook Remarks by Mr Charles Bean, Deputy Governor of the Bank of England, at the National Farmers’ Union Conference, Birmingham, 16 February 2009. *  *  *  The weather is at the forefront of farmers’ minds but rarely crosses that of a central banker except when, as two weeks ago, a dump of snow brings London to a standstill. But economists’ lack of interest in the weather was not always the case. William Stanley Jevons, one of the great Victorian economists, thought sunspot activity was the key to understanding economic cycles. Sunspots affected the weather, which in turn determined crop yields, demand and output in what was still a largely rural economy. No one takes this theory of cycles literally. But it is a useful metaphor for the way unforeseen shocks can switch an economy from one path to another. Today, the global and British economies have suffered such a shock, though one that is man-made in origin rather than extra-terrestrial. The origins of the crisis lie in the balmy economic weather prevailing in the decade or so before mid-2007. Growth was steady and inflation low and stable in the United Kingdom and other advanced economies, while rapid development in China, India and other emerging market economies was lifting millions out of poverty. Economic stability boosted confidence and encouraged an expansion of credit. Moreover, high levels of savings in some Asian economies, coupled with loose US monetary policy, drove global real interest rates unusually low.
2  Source: “Trade Transformed: The Emerging New Corridors of Trade Power”, Citibank (Oct 2011) & McKinsey. 3  Source: “Under Pressure: Funding in an Uncertain World”, Allen & Overy (Oct 2011). BIS central bankers’ speeches  1  arising from revised Basel capital rules. Nevertheless, we are unlikely to see sudden dislocation in the Asian financing landscape because of the following: 6.1. First, Asian banks remain well-capitalised, and notwithstanding cost/deleveraging pressures, international banks will want to preserve their Asian franchises given Asia’s stronger growth potential relative to other regions. 6.2. Second, bank financing in Asia will adapt. Some banks have already begun to explore certain risk-transfer mechanisms (e.g. credit insurance) to continue extending credit, while complying with stricter capital rules. Other banks have shifted to “originate and distribute” models which allows them to play a role in long-term financing even as they scale back their provision of long-term loans. We expect banks in Asia to continually explore new models to remain relevant and constantly develop its expertise to meet Asia’s financing demands. 6.3. Third, growing role of non-bank capital to complement bank financing: The signs are very promising. From 2007-2011, the proportion of aggregate capital raised by private equity growth funds in Asia Pacific has almost doubled from 32% to 62%. On debt markets, we have seen strong issuance activity in Asia Pacific ex-Japan.

As an additional way of sharpening incentives, individuals could be recognised or rewarded, locally or nationally, for passing certain volunteering milestones – 5,000 hours, 10,000 hours etc. If we wanted a more systematic way of calibrating the UK honours system, what better metric than the credit balance in an individual’s IVA? Conclusion So let me briefly sum up. Whether seen from an economic or social perspective, volunteering is big business, with annual turnover well into three-figure billions. But it is a well-hidden jewel, whose social worth is rarely the subject of a public valuation. One of the purposes of this lecture was to provide such a valuation, however imperfect. If the value of volunteering remains largely out of sight, it is likely also to remain out of mind. The potential economic and societal benefits from volunteering then risk remaining untapped. Yet with a nudge, that volunteer army could swell further. Indeed, I hope some of you here tonight might swell the ranks by signing-up to PBE as a volunteer. My message to you is that, by doing so, we – individually and societally – stand to receive. 38  Booth et al (2013).
This action increases the amount of Treasury bills in circulation, thereby creating a greater stock of investible assets for nonbank money market investors – an outcome that tends to put upward pressure on Treasury bill rates and potentially other term money market rates. 38  Domestic depository institutions are subject to a regulatory leverage ratio that is calculated as an average over the quarter and thus experience less variation in balance sheet costs at the end of quarters. 39  The Federal Home Loan Banks (FHLBs) are one type of institution that requires this feature for some of their cash holdings. Prior to liftoff, the FHLBs, which have access to unremunerated deposit accounts at the Federal Reserve, were able to use this to support their negotiating position with borrowers at quarter-ends, but now with rates further above zero it is less effective in this regard. 40  ON RRP does not always provide a completely firm floor on the tri-party repo market. For example, late-day funds can generate some softness. Also, there is evidence that some lenders in repo markets are reluctant to frequently switch their counterparties. However, ON RRP is otherwise a close substitute to repo with a private counterparty. In particular, since all tri-party repo is unwound at the same time, there is no possibility of early return of funds, which, as I mentioned earlier, is a significant benefit some federal funds and Eurodollar borrowers are able to offer. 41  Prime funds’ share of participation is significantly larger on quarter-end dates.

Miguel Fernández Ordóñez: Recent decisions adopted by the Bank of Spain Testimony of Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, before the Parliamentary Committee on Financial Affairs, Madrid, 2 April 2009. *  *  *  Honourable Members of Parliament, Let me begin this testimony by thanking you for the opportunity to explain the recent decisions adopted by the Banco de España as supervisor of the banking system in relation to Caja de Ahorros de Castilla La Mancha (CCM). Last Saturday, the Executive Commission of the Banco de España adopted the decision to replace the governing bodies of the institution with three provisional central bank nominees. On Sunday, 29 March 2009, the government, in an extraordinary meeting of the Council of Ministers, passed a Royal Decree-Law authorising guarantees by the Treasury for a maximum amount of € billion backing the loan the Banco de España could grant to CCM. These two decisions have allowed CCM to continue operating normally and to meet all its payment obligations and commitments. This solution was adopted once a "private" solution to CCM's problems under the Savings Bank Deposit Guarantee Fund had been deemed inviable. As you know, CCM has held talks (exploratory in some cases, more advanced in others) with other savings banks with a view to participating in a merger process giving rise to a new economically and financially viable institution. In this connection, assistance from the Savings Bank Deposit Guarantee Fund had been envisaged to smooth the process.
Goods in consumer and producer channel 7  7 Consumer goods, producer prices (HM PI)  6 5  5  Consumer goods, import prices (IM PI)  4  6  4  Goods CPI  3  3  2  2  1  1  0  0  -1  -1  -2  -2  -3  -3  -4 jan-98 Jan 98  jan-99 Jan 99  jan-00 Jan 00  jan-01 Jan 01  jan-02 Jan 02  jan-03 Jan 03  jan-04 Jan 04  -4 jan-05 Jan 05  Note. 12-month changes in per cent. Inflation measures computed according to Statistics Sweden’s new method. Sources: Statistics Sweden and the Riksbank  5. Product price, intermediate goods and profit margin in Swedish manufacturing sector 6  20  5  18  4  16  3  14  2  12  1  10  0  8  -1  6  -2  4  -3  Intermediate goods  Product price  Profit margin level (right scale)  -4  2 0  1995  1997  1999  2001  2003  Note. Intermediate goods and product price are annual percentage changes, profit margin is the level in per cent of the value of gross output. Source: National Institute of Economic Research. BIS Review 25/2005  9  6.

In theory, the market should respond to a breakdown in monetary or fiscal discipline by demanding higher risk premium for the sovereign debt issued by those countries that are not behaving in a prudent manner. However, market discipline also seems to have broken down in many instances. For example, right after Greece joined the Euro Zone, the market was somehow attracted by the so called convergence play and for 8 years from 2001–2008 it ignored the fundamentals of Greece and its Single A rating and traded Greek sovereign debts as a Triple A credit, with a spread of as low as 8 basis points above German Bunds in February 2005. Looking back, the rationale for this kind of convergence play defies common sense and any analysis of fundamentals. However, the breakdown of the market discipline had played a key role in encouraging and facilitating continued erosion of fiscal discipline of the national authorities by conveying the wrong signals about the market tolerance, and appetite for their sovereign debts. As an illustration, the sharp fall of interest cost (10-year government bond yield) from over 10% in the mid 1990s to a low of 3% in the mid-2000s had also helped lower the cost of Greek Government borrowings and created the illusion of the affordability and sustainability of the rising pile of government debts. There are many reasons why market forces are failing to impose discipline when national authorities or firms fail to behave prudently.
Speech  Embargo 8 October 2020, 11.30 am  What constitutes sound money? Economic Conference, Progress Foundation  Thomas J. Jordan Chairman of the Governing Board ∗ Swiss National Bank Zurich, 8 October 2020 © Swiss National Bank, Zurich, 2020 (speech given in German)  ∗  The speaker would like to thank Romain Baeriswyl and Peter Kuster for their support in preparing this text. He also thanks Simone Auer, Petra Gerlach, Carlos Lenz, Alexander Perruchoud and the SNB Language Services. Page 1/8  Ladies and gentlemen As the title of today’s event clearly states: supplying the economy with sound money is a constant challenge. I am therefore particularly pleased to have the opportunity to examine the issue of ‘What constitutes sound money?’ with you in more detail here. After all, as Chairman of the Governing Board of the Swiss National Bank, I represent an institution that is responsible for providing our country with sound money, a task we have performed since our foundation 113 years ago. Sound money is crucial in a society that is shaped by the division of labour and the exchange of goods and services – as has been demonstrated not least by the experience gained with a wide range of monetary orders over many centuries. Today, money is used in virtually all economic transactions. A sound monetary system is an essential prerequisite for a modern economy, for efficient trade and for social stability.

It is therefore not enough for just central bank money to be sound money; bank deposits must be sound as well. When is central bank money sound money? But let us first consider the money that serves as the anchor of our monetary system. These days, central bank money is paper money: 4 there is no defined obligation as regards convertibility into gold, which makes the issuing of money completely flexible. 5 This brings considerable advantages. It allows central banks to adjust supply in line with demand and thus to keep the value of money stable over time. 6 Thanks to this flexibility, in crisis situations a central bank can make an important contribution to damage limitation by supplying additional 2  3 4 5 6  Just over two years ago, the Swiss electorate rejected the sovereign money initiative and its proposed change to a system based purely on central bank money. Prior to the vote, the SNB had also highlighted the disadvantages of such a move. Cf. inter alia Jordan, Thomas J. (2018), How money is created by the central bank and the banking system, speech at Zürcher Volkswirtschaftliche Gesellschaft, Zurich, 16 January, and Jordan, Thomas J. (2018), Why sovereign money would hurt Switzerland, speech at the Swiss Institute of Banking and Finance at the University of St. Gallen, St Gallen, 3 May. In addition to central bank money, the coins issued by the Confederation are also legal tender.
They have been helped by a switch by customers from time deposits to savings and current accounts as the opportunity cost of holding liquid balances has fallen. By some reckonings surplus deposits in Hong Kong are the highest in the world in relation to GDP. A lot of these funds have been invested in increased holdings of debt securities, which now account for about 22 % of the total assets of retail banks compared with only 8 % at the end of 1997. The upward sloping yield curve has encouraged this process and made it profitable. Another approach adopted by a number of the retail banks has been to develop sources of non-interest income by moving into the wealth management business. This means using the branch network to cross-sell products like mutual funds, insurance and securities to the client base. These  1  Relates to “retail banks”, which comprise all locally incorporated banks and branches of foreign banks which are active in retail and commercial banking in Hong Kong. BIS Review 21/2003  1  efforts are paying off, particularly for the larger banks, and are now having a discernible impact on the bottom line. A less successful aspect of the increased emphasis on the consumer has been the foray by a number of banks into the credit card business. Prior to 2002, this provided the only area of buoyant lending growth in Hong Kong.

This is something on which individual banks will have to take a view, but I would like to offer some general advice. First, banks should accept that profits for 2003 may not reach budgetted targets as a result of the outbreak; and they should not strain too much to make up the difference. When profitability comes under pressure, it is important to avoid the mistakes that might arise from over-aggressive business tactics. Keep the bank healthy from a capital and liquidity point of view in order to benefit from the business recovery when it comes, as it surely will. Banks should also monitor closely the financial position of their customers and adopt a supportive attitude to those experiencing financial difficulties as a result of the SARS outbreak. This means being prepared to offer temporary relief arrangements to borrowers who find that they cannot service their debts in the current environment. This should not be seen as soft option for customers since the banks will certainly not benefit if those customers go bankrupt. Nor do I suggest that relief should be offered indiscriminately. The long-term viability of the customer or his business, his track record and his willingness to cooperate with the bank are all factors to be taken into account in deciding whether to restructure debts. Each case thus needs to be looked at on its merits.
The proposal to transfer responsibility for exchange rate policy from the Riksbank to the government makes it more difficult for the Riksbank to safeguard the value of money effectively and thereby contribute to a favourable level of interest rates and also - when this does not endanger price stability - to stimulate the economy and employment. In a world with free capital flows there is a direct link between monetary and exchange rate policies. The two policy fields may have conflicting goals. Moreover, if the government, via exchange rate decisions, can affect the ability of the Riksbank to fulfil the inflation target, there may be misunderstandings about where responsibility for the operation of monetary policy lies. In my opinion it may be reasonable - though this, too, is questioned by some economists - for the government to decide the type of exchange rate system Sweden is to have in relation to other EU countries, whether the krona should join the European exchange rate mechanism or remain flexible. There is a close connection here with the rules and regulations BIS Review 32/1997  -8-  that apply in the rest of the EU and the matter is very much a political issue. But within a given exchange rate system, it is the Riksbank that should decide an appropriate rate for the krona or the band within which it may move.

Overall, the improvement in banks’ funding situation, has not led to increased lending to the non-financial private sector, which has declined in recent months. Admittedly, part of this weakness is due to low demand factors. And here also, some fragmentation can be observed. Among countries: credit distribution is more active in Germany or France than in Italy or Spain. And among borrowers: big corporates can issue at very favourable rates while at the same time, too many SMEs are deprived of necessary financing. This divergence is a source of concern, especially since, in our economies, SMEs play a dominant role in fostering innovation and employment. This situation may not reflect a weakness specific to the euro area. In all advanced economies, banks are engaged in a process of balance sheet repair and deleveraging. Recent numbers show major advances for European banks in their efforts to strengthen their capital base, in line with Basel III requirements and, in particular for big international banks, quite comparable to capital strengthening in US banks (when differences in accounting standards are neutralized). To put it simply, in the euro area, banks are responsible for 80% of total financial intermediation, twice as much as in the US. Consequently, the impact is much stronger on the real economy. What can central banks do? Our actions are guided by the following elements. Inflation is firmly under control. Policy rates are very low. In practice, most central banks today are operating close to the zero lower bound.
For discussions of how the crisis has affected views on monetary policy and the work of the central banks, see for instance Blanchard, Dell’Ariccia and Mauro (2013). BIS central bankers’ speeches  9  I began by noting how easy it is to get caught in what I called the prevailing paradigm. But if we had fastened in a monetary policy paradigm prior to the crisis, where we believed that we had found the right solutions, I think that we are now in a situation where there is an unusually large sense of caution when looking ahead. We have all been thoroughly shaken up. The crisis had not been predicted, and inflation targeting alone could not prevent it. We now need to learn lessons from this and to analyse in-depth the relationship between monetary policy and financial stability and how it can best be taken into account in monetary policy. At the same time, it is of course important to ensure that we don’t, as they say, throw the baby out with the bathwater, and that inflation targeting and all the good it has done are abandoned. It is without doubt a rather revolutionary period we are in and it will be very interesting to follow how central banks and their activities develop over the next ten years – even if I myself will be watching from the side-lines. Figure 1.

As Adam Posen said: “People cannot observe nominal GDP when they go to the store”.16 Of course they cannot observe inflation either, but they nevertheless often have an idea of how prices are developing and can base their expectations on that. The product of real GDP and the GDP deflator will reasonably be somewhat more abstract to relate to. I think that this also sows doubt regarding the possibility to get a target for nominal GDP to really work as a nominal anchor in the way that the inflation target undoubtedly has. It may also be worth bearing in mind that the global financial crisis entailed a shock of a size and dimension that has rarely been seen. Rather than interpreting the slow recovery as a failure for monetary policy, perhaps one should see it as a situation where the shock was so powerful that it would have been difficult for monetary policy to manage it in a different and better way, regardless of what forms the policy had been conducted under and what it had  14  See, for example, Goodhart, Baker and Ashworth (2013), Gerlach (2013) and Posen (2013) for a more detailed description of the arguments against introducing a target for nominal GDP. 15  See also, for example, Bean (2013) and Posen (2013). 16  Posen (2013), p. 62.