samchain/econo-pairs-v1 huggingface dataset:
I also consider that one should examine the possibility to increase the instruments at the disposal of central banks so that other measures than raising the policy rate can be taken when the risk of financial bubbles is assessed as high. However, it is necessary to analyse very carefully what the consequences of such an increase would be for conducting monetary policy before one takes a stand on this issue. Measures that influence credit granting and interest rate spreads in different ways have an impact on the transmission mechanism for the actual interest rate policy, which ultimately means that the impact of monetary policy on the economy may be different, at least initially. BIS Review 162/2009  5  Do reliable “bubble indicators” exist, and what alternative means to the repo rate are available? Let me spend the rest of the time discussing both the question of whether there are reliable indicators that can warn when financial bubbles are arising, and the question of what might be suitable tools, in addition to the interest rate, to use if the need arises. In connection with the first question it is relevant to also ask why indicators of financial bubbles, if these exist, are not used already and why the market would not be better at valuing the risks than central banks. There are studies which point to the existence of indicators which can – more or less – capture bubbles that the market has not corrected, for one reason or another.

But calming global financial markets – and in the case of Switzerland, countering the heavy wave of safe-haven flows into Swiss francs – has been only one facet of the SNB’s policy response. The unique nature of the COVID-19 pandemic has also caused an unprecedented shock to the real economy. To mitigate this shock, central banks – in cooperation with the fiscal authorities – have created new instruments. The SNB during the COVID-19 crisis: same role, new tools Given the nature of the crisis, an important part of the policy response was to address the strains on the corporate sector, particularly among small and medium-sized enterprises (SMEs). In Switzerland, 99 percent of all firms are SMEs and they employ some 67 percent of the labour force. The lockdown measures resulted in a sudden stop for many businesses. There was real concern that economically viable SMEs, in particular, could be 1  The US dollar swap basis is an indicator of US dollar funding costs in foreign exchange markets. A large negative basis reflects a scarcity of US dollar funding. Page 3/10  forced into bankruptcy through no fault of their own. To address the problem, the Swiss Federal Council adopted a range of important measures, including the COVID-19 loan programme for companies. To be effective, financial support had to be fast and well targeted.
In the process, national incumbents are being challenged by a combination of ambitious foreign incumbents eager to exploit economies of scale and nimble, unencumbered new entrants sometimes specialising in niche products. A process that is likely to lead in time to greater consolidation at international level is currently manifesting itself in terms of fragmentation at the national level as local incumbents are challenged. 36 The end-game may well be lower transaction costs at both the trade and post-trade level and more concentrated (if not monopoly) cross-border infrastructure in each. But it may take some time to reach a new equilibrium. Central banks and regulators need not only to prepare for and perhaps help shape the end-game, but also address challenges arising during the transition. BIS Review 130/2007  5  5. 37 (i)  Issues and challenges for central banks and regulators going forward Two key challenges, in particular, will need to be met: Preserve enough influence to protect the collective interest while maintaining a level regulatory playing field  38 The resilience and efficiency of the core infrastructure is an important public good and, given the tendency to monopoly, the authorities need to ensure that they maintain sufficient influence to ensure resilience in this increasingly complex landscape. That requires consistent and objective criteria to be applied to new as well as established systems.

47 More generally, strong international cooperation in the sphere of risk assessment and crisis management responses is also clearly important. With increased links between infrastructure providers in different centres and the emergence of new cross13 border infrastructures, greater cooperation is also required in the conduct of oversight: not only in terms of assessment of particular overseen cross-border infrastructures against international standards, but also in identifying potential interdependencies between national infrastructures. While existing cooperative arrangements work well, the model needs to expand and continue to evolve. 6. Concluding remarks  48 The resilience of the infrastructure of wholesale payment, clearing and settlement systems to both operational and financial shocks remains a key requirement of financial and monetary stability. But the landscape is changing fast in response to technological change and the financial innovation and globalisation it allows. Cross border and global networks are squeezing our national monopolies and commercial banks are playing an increasing role.
8  BIS central bankers’ speeches  BIS central bankers’ speeches  9  10  BIS central bankers’ speeches  BIS central bankers’ speeches  11  12  BIS central bankers’ speeches  BIS central bankers’ speeches  13  14  BIS central bankers’ speeches  BIS central bankers’ speeches  15

The relationship between economic activity and the labour market Each economic cycle is unique, which became particularly clear during the most recent economic downturn. However, there are some patterns that often recur in economic cycles and forecasters have therefore often used them as a base in their forecasting work. For example, it is normal that changes in activity in the labour market occur with some time lag compared with changes in production. This is mainly because it is expensive for companies to adjust production to a new demand situation and to employ and give notice to staff. Firms may therefore initially choose to wait and see whether the change in demand is temporary. This means that the first thing to happen in an economic downturn is that productivity growth falls. Firms gradually adapt to the new situation by reducing the number of hours worked without reducing the number of employees. However, if the downturn is long-lived, the personnel force is also downsized over time. The time lag between GDP and the number of hours worked is usually one quarter in Sweden, while the time lag between GDP and employment is usually twice as long, that is, six months. A well-known relationship between economic activity and activity in the labour market was formulated by Arthur Okun in the early 1960s. 1 This describes a negative relationship between GDP growth and changes in unemployment, which has become known as “Okun’s law”.
So, during this period, the credit gap was not an early warning of the global financial crisis or the recession in the Baltic countries. Instead, it warned of an unsustainable development in Sweden, due primarily to credit growth in the Swedish household sector. 6  The mechanical application is called the BIS standardised approach and is described in the Bank for International Settlements, 2010, “Guidance for national authorities operating the countercyclical buffer” December. See also Juks, Reimo & Melander O. (2012), Countercyclical Capital Buffers as a Macroprudential Instrument, Riksbank Studies, December. 8  BIS central bankers’ speeches  Targeted capital requirements and measures to strengthen the buffers of households A number of measures have already been taken due to the increased indebtedness of households. The Riksbank has taken account of the risks associated with household indebtedness and the developments on the housing market in monetary policy. Finansinspektionen recently decided to introduce a risk weight floor of 15 per cent for Swedish mortgages, which can be seen as a sector-specific capital requirement. Measures have also been taken more directly targeting the demand side of the mortgage market. In October 2010, Finansinspektionen introduced a mortgage cap, restricting mortgaging a home to a maximum of 85 per cent of its value. The Swedish Bankers’ Association has also established principles according to which new mortgages exceeding 75 per cent of the value of the home should be amortised. However, household indebtedness is still high in both a historical and an international perspective, and more needs to be done.

It will better equip us to contribute to price stability while financial stability and a stable economic development are secured. At the same time, it should be emphasised that macroprudential policy does not resolve all the problems associated with the financial sector. Also, we do not know how efficient the new macroprudential tools will be; we will need to analyse and evaluate them afterwards. 12  BIS central bankers’ speeches
Second, in light of the diverse financial systems in the GMS, domestic regulations and policies need to converge to create a more integrated market. Take the payment systems, for instance. Currently, different systems among our countries mean that payment connectivity is not seamless. In other words, “PromptPay” does not speak “Wave” and “Wave” does not speak “Wings”. Adhering to harmonized standards and ensuring that each system is more able to link within an interoperable environment can help overcome this challenge. As a result, I encourage GMS policymakers to cooperate on diverse aspects of banking businesses. At the end of the day, this will make financial transactions within the subregion much easier. ***  4  Ladies and gentlemen, In the current VUCA world, with rapid technological changes, we, as policymakers or central bankers, would need to adapt ourselves and ensure smooth transition into this new business-driven paradigm. We therefore welcome those who want to seize these opportunities in the GMS. A solid platform of road, ports, power grids, and tourism infrastructures already exist in the GMS. Going forward, it is time to envision the GMS that is integrated in other dimensions too, particularly finance. This is why I view that financial connectivity is an important element in the next chapter of the GMS. As I mentioned, I see the GMS as a fresh graduate. At 25 years old, a great future is awaiting. Let us walk with her, help her unlock her potential, and lend her necessary supports to ensure her success and prosperity.

Actually, GDP data for the first half of the year and other indicators of economic activity suggest that demand for investment loans is on the rise and this outlook is consistent with the recovery in credit demand for investment purposes. Despite the relatively robust course of domestic demand, external demand remains subdued in line with the signals for a sluggish recovery in global economy. In other words, lingering problems in the global economy further accentuate decoupling between the pace of recovery in domestic and external demand. In this framework, the negative contribution of net exports  BIS Review 159/2010  9  in growth is predicted to increase. Moreover, forecasts for global economic activity, which have been revised in the last three months, indicate that there has been no significant improvement in the growth outlook of our trade partners (Figure 24). Therefore, revised forecasts were based on the assumption that external demand conditions would not display a significant change compared to the previous Report. Dear Guests, Continued recovery in economic activity fuelled by rapid growth in domestic demand underpins the improvement in employment conditions. Although the rapid recovery observed in non-farm employment since the second quarter of 2009 halted in the third quarter of 2010, leading indicators suggest that this is only temporary (Figure 25). Nevertheless, we expect unemployment rates to remain high for quite some time compared to the pre-crisis period due to the relative slowdown employment growth and high labor force participation rates (Figure 26).
Forums like this one provide a good opportunity for regulators to share information and insights, to discuss the issues and challenges at hand, explore potential areas for cooperation and lay the groundwork for future partnerships. Drawing on the experience and expertise of various countries, this forum provide a platform for participants to work together towards developing global best practice standards on consumer protection and education issues. I look forward to the outcome of your deliberations in fostering greater consumer protection and education. 4  BIS Review 86/2005

Overall, complexity may have resulted in more fragility, an evolution already foretold by Minsky who saw structural changes in financial systems over time as an essential cause of their vulnerability Complexity has deep implications for public policy and the future of financial regulation. •  First, about transparency. Improving transparency is the first item on the G20 international agenda, for financial regulation reform. Transparency is normally considered as a prerequisite to the existence of efficient financial markets. More recently, full transparency on aggregate positions and exposures by main financial intermediaries tends to be seen by financial supervisors as necessary to assess potential systemic risk. However, when the system is constantly morphing into new structures, and permanently changing networks, a comprehensive, but static vision may prove inadequate, because it will not eliminate the uncertainty stemming from the potential discontinuities embedded in market dynamics. What is needed, at least,  2  BIS Review 95/2009  is an overall understanding of the complex dynamics at work, which may be better reached through a permanent reexamination of their structure and constantly testing against very adverse circumstances. •  Second, robustness. A natural reaction to financial fragility is to strengthen the ability of financial institutions to withstand shocks by increasing their capital and liquidity requirements. While necessary, it is doubtful whether this "buffer" approach will help when uncertainty settles in. Then, the net demand for both liquidity and capital becomes infinite, because gross demand is unknown and hoarding creates little or no supply.
Stronger labor market conditions are perhaps the best means to improve the economic well-being of most Americans, particularly those who have been struggling and are most 2/7  BIS central bankers' speeches  vulnerable to economic downturns. And, as discussed in the Federal Reserve’s July Monetary Policy Report and in Chair Yellen’s accompanying testimony before Congress, it is encouraging that unemployment rates continue to fall for most demographic groups, including African-Americans and Hispanics. 2 At the same time, we should remain concerned that the jobless rates for those groups remain above the unemployment rate for the nation. Recent U.S. Census Bureau estimates of household income growth also provide some reason for optimism. Median real household income rose 3.2 percent in 2016, after strong gains the prior year. Gains were particularly notable among African-American and Hispanic households, and the poverty rate fell to near pre-crisis levels. While this is good news, I think we can all agree that we have a long way to go to improve income inequality and mobility in the United States. As I see it, these are among the most important issues we face as a nation. Income mobility and education Now, it is clearly the case that, given differences in individuals’ abilities, a free-market society will generate some level of inequality. However, there are persistent trends toward growing inequality and diminished economic mobility—and in my view, these are problematic.

The sustainability of the pension system – i.e. certainty as to the ability to fund it appropriately – is essential for giving stability to public finances and for the credibility of any programme to consolidate total public spending. For the system to be sustainable, it must find a way to accommodate its key elements, namely the retirement age, the means of calculating pensions and the so-called "sustainability factor". I hope and trust that political forces will continue working on this delicate and very important matter, in the spirit of the Toledo Pact agreed almost 20 years ago, and which has repeatedly been supported by our parliamentary institutions. The major budgetary figures and the macroeconomic aggregates for 2014 The 2014 Budget is the first to be drawn up following the entry into force of the latest European budgetary governance reform, which introduces into countries' budgetary procedures an assessment by the European Commission of draft general government budgets. In Spain's case, this reform will lead to the availability of a single document drawing together the main budgetary items of all levels of government, i.e. one that includes the regional governments. In a country as decentralised in terms of public spending as Spain, as decentralised or more so than other countries with a federal political structure, the preparation of this documentation is a fundamental requirement for the appropriate assessment of budgetary forecasts. According to the agenda set, this document will be available, at the European level, in the coming days.
1-65, September 2003. 2 Paul Krugman, It’s Baaack: Japan’s Slump and the Return of the Liquidity Trap, Brookings Papers on Economic  Activity, The Brookings Institution, Volume 29, Issue 2, pp. 137-206, 1998. 3 John B. Taylor, Discretion versus Policy Rules in Practice, Carnegie-Rochester Conference Series on Public  Policy, Volume 39, pp. 195–214, 1993. 4 For an early example, see Jeffery C. Fuhrer and Brian F. Madigan, Monetary Policy When Interest Rates Are  Bounded at Zero, The Review of Economics and Statistics, Volume 79, Issue 4, pp. 573-85, November 1997; for further references see Reifschneider and Williams (2000), and Clouse et al., 2003. 5 Board of Governors of the Federal Reserve System, FOMC transcript, June 30-July 1, 1998. 6 3/4  BIS central bankers' speeches  6 Jeffrey C. Fuhrer and Mark S. Sniderman, Conference Summary, Journal of Money, Credit and Banking, Volume  32, Number 4, Part 2, pp. 845-69, November 2000. 7 Bennett T. McCallum, Theoretical Analysis Regarding a Zero Lower Bound on Nominal Interest Rates, Journal  of Money, Credit and Banking, Volume 32, Issue 4, pp. 870-904, November 2000. 8 David Reifschneider and John C. Williams, Three Lessons for Monetary Policy in a Low-Inflation Era, Journal of  Money, Credit and Banking, Volume 32, Issue 4, pp. 936-66, November 2000. 9 Marvin Goodfriend, Overcoming the Zero Bound on Interest Rate Policy, Journal of Money, Credit and Banking,  Volume 32, No. 4, Part 2, pp. 1007-35, November 2000.

This despite the fact that the economy was in the midst of a productivity-driven boom, the longest expansion on record, and the prevailing federal funds rate was 5.25 percent. These papers and the ensuing discussions and debates planted seeds that would germinate in research and policymaking. Central banks across the globe ultimately used variations of nearly all of the tools discussed at the conference. Indeed, the topics of interest rate policies, targeting asset prices, asset purchases, and negative interest rates are among the most prominent discussions in monetary economics today. Importantly, this research made its way straight to policymakers within a few years—a quick turnaround by central bank standards! In January 2002, Marvin, Dave, and I reprised our roles from the conference in briefings to the FOMC.10 And in June 2003, Vince Reinhart briefed the FOMC on alternative monetary policy approaches—including asset purchases and forward guidance—to mitigate the effects of the ZLB.11 This was followed by a flurry of further research by academics and central bank economists that delved deeper into these topics.12  Putting Research into Practice This research had important practical lessons for policymakers in the United States and abroad following the global financial crisis.
Knowing how asset sales have influenced the market, the setting of Bank Rate can then be calibrated in order to achieve the inflation target over the medium term. In this context, trying to add some quantitative calibration of the impact of asset sales on the  Page 17  economy and price developments directly into our macroeconomic forecasts would amount to double counting. Concluding remarks Earlier this month, the Bank of England celebrated twenty-five years of independent responsibility for monetary policy, institutionalised in the creation of the Monetary Policy Committee. That celebration has come at a testing time for UK monetary policy, for the reasons I have outlined in my remarks today. With inflation forecast to rise into double digits following the very sharp rise in international energy and goods prices, this is biggest challenge the MPC has faced over the past quarter of a century. It is in these testing times that the anchor represented by the 2% inflation target comes to the fore. Supported by the independence accorded to the MPC to pursue that target, we are able to take the sometimes tough decisions to bring inflation back to 2% and keep it there sustainably. It is that commitment that has led me to support a tightening of monetary policy since I joined the Committee last September, and to signal today that this tightening still has further to run. The views expressed in this speech are not necessarily those of the Bank of England or the Monetary Policy Committee.

And if you think that you have no limits, then you are taught that there are limits by the Ricardian effects, by the financial markets themselves. FT: If you look to the medium term, how do we get to achieve a better balance? How do we avoid, if you like, another wave of volatility based around unrealistic asset prices, or an asset bubble? Trichet: Let us look at the time of the bursting of the internet bubble. There was a degree of excessive pessimism, if I can analyse the real situation after the internet bubble burst. I do not exclude that in terms of macroeconomic policies that were… FT: …in other words that we assumed things were really bad after the bubble burst, and therefore we erred maybe on the monetary side, perhaps…. Trichet: I am not criticising anybody, and I know to what pressure the ECB was resisting at the time. I was appointed at the end of 2003. As early as the beginning of 2004 three Heads of State and Government of large countries were calling publicly on the ECB to decrease interest rates. I suppose with the benefit of hindsight it would appear extraordinary, taking into account what happened afterwards, but it is documented.