samchain/econo-pairs-v1 huggingface dataset:
Flow of funds data suggest that the US corporate sector is holding around $ – or 7% of total corporate sector financial assets – in cash. That has led to a reduction in US investment grade net bond issuance and an associated shortage of high-quality corporate assets, at a time when relative demand for those assets is strong. And there has also been a reduction in US T-bill issuance, amid ongoing concerns about the extension of the US government’s debt ceiling. Similarly, serious concerns about the creditworthiness of a number of euro-area sovereign issuers have led to a reduction in the quantum of euro-denominated assets perceived to be “safe”, with some US money funds reducing their exposures to European banking sectors. And a number of other structured and synthetic assets, which had been rated AAA prior to the crisis, have recently been shown to be unworthy of that accolade. 7  As described by Janet Yellen in her recent speech “Assessing potential financial imbalances in an era of accommodative monetary policy”.

Already before the 2008 crisis, central bankers firmly believed that price stability is a necessary – and for some even a sufficient – condition to ensure financial stability. This view is referred to as the ‘Jackson Hole consensus’. Following the financial crisis, financial imbalances were seen as a huge source of disruption which decision-makers needed to remedy, questioning the relationship between monetary and financial policy tools and objectives. Let me give two polar views on that. A first approach, in line with the ‘Jackson Hole consensus’, is to clearly separate monetary stability from financial stability. In line with the Tinbergen rule and the Mundell efficiency principle respectively, one policy should fulfil one objective and each policy tool should be assigned to the objective it can fulfil the best. In this regard, monetary policy would not be efficient at mitigating financial imbalances but would not generate them either. On the other side, an extreme approach is to consider that both policies are strongly intertwined and that their respective objectives could be merged: in this case, monetary policy could reduce risk taking and target asset price bubbles. I consider that full adherence to the separation principle and the combining of objectives are both approaches that are too radical to conduct monetary and financial stability policies. The implementation of unconventional policies has blurred the frontier between the two objectives. Let me quote here my colleague Vice-President Vítor Constâncio: “Macroprudential policy and monetary policy rely on separate tools and aim to achieve different objectives.
Challenges still remain. For example, we have to work out and implement efficient solutions across countries that have different start points, practices and regulatory frameworks. But it is encouraging that governments are more seized with this problem, and more ready to collaborate with one another, than ever before. Singapore has taken the lead in several of the regional initiatives. Financial institutions here should also take part actively. This is the time to engage regulators and government officials in the region, to enter their growing markets and position yourselves for the business opportunities that the initiatives create. As a leading foreign exchange centre with a critical mass of global fixed income and equities expertise, Singapore can service international investors operating in Asia. Our market is well placed to facilitate the hedging activities that are essential for risk management and improving market efficiency. BIS Review 39/2004  5  These will complement the domestic markets in the countries of the region. Our strong legal system and the availability of international legal expertise and product structuring teams equip us to structure complex cross-border transactions. The growing wealth management industry will also generate a steady source of funds for regional investment products. Human capital A major issue that concerns all parts of the financial sector is human capital. A distinguishing characteristic of a successful financial centre is that it attracts talented and dynamic professionals from a broad range of disciplines and experiences. They make the financial centre what it is.

The relaxation on the policy on payment gateway would promote greater competition in the payments system while the flexibility accorded on the issuance of credit cards would enable the partnering of licensed institutions with non-banking institutions in offering greater choices to consumers. Ladies and Gentlemen, In conclusion, I would like to re-emphasise that banks should continuously seek to educate and familiarise consumers in the use of electronic and other technology based banking applications which are more efficient and cost effective. The occasion today is an important step towards maximising banking convenience that technology can offer to the consumers. I am delighted to take part in today’s  2  BIS Review 22/2003  launch and would urge the participation of all financial institutions in this effort to promote the use of electronic payments in the country. Thank you. BIS Review 22/2003  3
Figure 3 CPI Inflation (*)  Core inflation (*)  (annual change, percent)  (annual change, percent)  6  6  6  6  5  5  5  5  4  4  4  4  3  3  3  3  2  2  2  2  1  1  1  1  0  0  0 11 12 13 14 15 16 17 18 19  0 11 12 13 14 15 16 17 18 19 Dec. 2016 Report  Mar. 2017 Report  (*) The grey area, starting from the first quarter of 2017, corresponds to the forecast. Sources: Central Bank of Chile and National Statistics Institute. 6. Activity has been somewhat weaker than expected. According to recent data the output gap is currently larger than we anticipated in December. GDP grew by 1.6% in 2016, in line with what was anticipated. However, revised national account data suggests the economy was somewhat stronger towards the beginning of 2016 and weaker towards the end of the year, leaving a low starting point for 2017 and a higher base of comparison for the beginning of the year. The new data also point to weakness in investment-related areas and in sectors that tend to be more persistent, such as business services (Figure 4).

Measured in real terms, its current value does not seem to be an outlier either (Figure 7). 5  Figure 7 MSCI: Latin America  Real IPSA  (fixed-base index: January 2013=100)  (fixed-base index: January 2001=100)  120  Colombia  Peru  30 13  14  15  350  90  250  250  60  150  150  30  50  Brazil  90  60  350  120 Mexico  Latin Chile America  16  50 01 03 05 07 09 11 13 15 17  17  Sources: Central Bank of Chile and Bloomberg. 13. The prolonged strike at La Escondida, the world´s largest open-pit copper mine, will have a very important effect on the first quarter GDP figures. It already did in the Imacec of February, which showed a yoy contraction of 1.3%, with a fall of 17.1% of its mining component. Since the strike ended in late March and resumption of production is not immediate, figures for that month will also be affected. Adding up the continued weakness in construction, the economy could experience an expansion close to 0% in the first quarter of the year. However, one should not forget that the strike at La Escondida, while very relevant to explain the first quarter figure, is a one-off event that is not expected to generate significant spillovers on activity elsewhere in the economy, nor on inflation. 14.
4  Commodity cycles may be linked to global business and financial cycles at critical junctures, but commodity long cycles are more related to technological progress, changes in the composition of demand, and global trade patterns (see Figure 2). 20 15 10 5 0 -5 -10 -15 -20 -25 -30 1980  Figure 2: Commodity super cycles and global conditions (†)  1985  1990  1995  2000  2005  2010  2015  40 30 20 10 0 -10 -20 -30 -40 -50 -60  EMEs Business Cycle AEs Business Cycle VIX (inverse, standardized, 10x) Comm. PX Cycle (excl. Fuel) [RHS] (†) Business and commodity prices based on HP filter. Source: Central Bank of Chile based on IMF and FRED databases. The experience of Chile since 2000 Chile has been traditionally exposed to global cycles, speeded-up growth in the mid-1980s, once a major financial crisis led to a major upgrade in financial regulations. This bonanza period was halted by the Asian Crisis in mid-1997. The Central Bank tried to sustain the Chilean currency, by then under crawling bands, in the middle of a substantial external shock. This led the Central Bank to raise the interest rate to 14%, by then a real interest rate. Thus, the financial system face overnight rates of nearly 100%. The Chilean economy enters into a recession in late 1998. Floating ER was added to forward-looking inflation targeting, and then complemented by a Structural Balance-based fiscal policy in the early 2000s.

This makes the connection between financial flows and economic activity operate through changes in the composition of demand and output, rather than “internal devaluations” which became especially fruitful for several Eurozone and EME countries in the past decade. The role of commodity prices Some EMEs, in particular those with large commodity sectors, may at certain episodes display a decoupling of capital flows from global financing conditions. This seems to have been the case in the aftermath of the Global Financial Crisis, in which the general risk-off attitude contrasted with the relative strength of commodity exporters due to China’s contribution to global growth. Indeed, the quick recovery in energy, food, and metal commodities beginning in 2010 led to a surge in growth and capital inflows to commodity-exporting EMEs that starkly contrasted with the depressed macroeconomic conditions that characterized the slow recovery of AEs. It is tempting to link the decoupling of economic and financial conditions of the 2010-13 episode as a sign that EMEs were beginning to overcome some of their past institutional weaknesses and policy mistakes. But the events triggered by the taper tantrum episode recommend taking this interpretation with a grain of salt. Indeed, such events mark a clear reversal in the outlook of EMEs and the direction of external financing to these economies, once again following closely the downward trend of global commodity prices. 2  See Elías Albagli, Luis Ceballos, Sebastián Claro, and Damián Romero (2018), “Channels of US Monetary Policy Spillovers to International Bonds Markets,” forthcoming, Journal of Financial Economics.
Overall, real gross domestic product (GDP) grew at a bit under a 3-1/2 percent rate in the second half, up from an average pace of growth of about 2 percent over the previous three years. Moreover, we’ve seen some more solid consumer spending, which should provide further impetus to overall growth this year. In the labor market, job growth has been solid and the unemployment rate is down to 6.7 percent. That is well below the 8.1 percent rate that  BIS central bankers’ speeches  1  prevailed when we instituted the latest round of large-scale asset purchases in September 2012. However, we aren’t out of the woods yet. The harsh weather of this past winter – by which I mean the North American polar vortex – makes the recent data difficult to interpret. That said, some of them have been on the soft side. Balance sheet scars from the financial crisis are still weighing on the economy. Fiscal policy is a restraint on economic growth. And economic activity abroad is not robust. The good news is that all of these headwinds appear to be dissipating. But risks remain. And we still have large resource gaps. For example, the unemployment rate is still well above the 5-1/4 percent rate I think it should be in the long run. At the same time, inflation is only 1 percent – well below the FOMC’s longer-run target of 2 percent. Accordingly, monetary policy is highly accommodative, and needs to remain so for some time.

Your Honour, apart from Zambian delegates, this international seminar has drawn participation from several other countries including: Angola, Ghana, Kenya, Lesotho, Madagascar, Malawi, Mauritius and Mozambique. Other participants are from Namibia,  2  BIS Review 26/2008  Nigeria, Sweden, Tanzania, Swaziland and Uganda. With this wide participation, I have no doubt that the seminar will be thought-provoking and highly participatory, given also the high calibre of resource persons from institutions such as the International Monetary Fund and the Bank of International Settlements. I therefore wish all of you good deliberations and a memorable stay in Livingstone and Zambia in general. It is now my privilege to call upon His Honour the Vice President of the Republic of Zambia, Mr Rupiah Banda to deliver the official opening speech for the seminar. Your Honour Sir! Thank you. BIS Review 26/2008  3
Øystein Olsen: Use of models and economic theory in Norges Bank Lecture by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), at the Department of Economics, University of Oslo, Oslo, 8 September 2011. *  *  *  The lecture is based on previous speeches and newspaper articles. A brief comment on recent developments is included in the final section. Please note that the text below may differ slightly from the actual presentation. Allow me to start by thanking you for your invitation to give this year’s Schweigaard lecture. Anton Martin Schweigaard was one of the leading statesmen of 19th century Norway. He was a jurist, a politician and an economist. Although “revival of productive forces” and “expansion of national wealth” were to Schweigaard important objectives for economic policy, most important was the promotion of “moral progress”, “public decency” and “the perfection of political and legal institutions”.1 I doubt that Schweigaard was always impressed by the perfection of political institutions, perhaps in particular the institution of Norges Bank. Schweigaard grew up in modest circumstances in the small market town of Kragerø on the coast of southern Norway – a town severely affected by the British blockade of Norway during Denmark-Norway’s involvement in the Napoleonic Wars in the early 1800s. Norges Bank was established in 1816, the year after the Wars ended. The Storting decided that a compulsory silver tax would be levied to provide capital for Norges Bank.

That could potentially create some turmoil for international markets including ours and in the process we could see some potential for dislocation which is why Sri Lanka has decided to reach out to multilateral agencies like the IMF and the World Bank to assist us in terms of sheltering or protecting the economy against any adverse developments that may occur in the near future as a consequence of any turmoil in international capital markets if and when US policy makers decide to raise interest rates. That is one hurdle we have to look at. The second hurdle I would say is the lack of a structural change the way international, particularly developed countries of the world, are managing their economic affairs. A lot of the changes that we have seen in the last 5 years has had to do with monetary policy and the aggressive easing of the monetary policy. But on the fiscal side, you haven’t seen any structural changes in countries like the United States and most European countries that took the world into the great recession in 2008 as a consequence of their housing  2  BIS central bankers’ speeches  bubbles. That structural change in terms of improving productivity, reducing the size of social security programs and retooling their economies to become more productive has still not started and until that happens we don’t have a sustainable basis for global growth to grow apace.
The role of the central bank in this process is the comfortable one of a knowledgeable observer, posing relevant questions in working groups and committees and pointing out inadequacies in suggested solutions. There is much to say about this process, but I shall have to leave it for a different occasion. 2. Day-to-day oversight  The second strand of financial stability work is the day-to-day oversight. This may be described as resting on three pillars: •  the first pillar is the supervision of individual banks,  •  the second pillar is the surveillance of systemic stability,  •  and the third pillar is payment system oversight. The first pillar is clearly the responsibility of the supervisors, whether they are a separate FSA or, as in many countries, a department within a central bank. The supervisors collect data from the banks, analyse these data and make on-site inspections. Prudential supervision performed by a competent authority must be the basis for all day-to-day oversight. The second pillar is the joint responsibility of the FSA and central bank. The division of responsibility is really one of perspective. While the FSA bases its work on individual institutions, the central bank looks at the banking system as a whole and attempts to assess the risks that could arise in it both in the short and the long run. Of course, there is overlap in the tasks of the FSA and the central bank, but it is often fruitful to approach a problem from somewhat different angles.

Central banks need to acquire a better understanding of how the banks manage their liquidity, how they select their sources of funding and the effects this has on their resilience to disturbances. The analysis of stability also needs to be supplemented with methods for stress tests, that is, ways of analysing the sensitivity of banks to shocks. Another area that will prove challenging for both stability analysis and risk management preparedness in the future is the ongoing integration in Europe and, more generally, banks’ tendency to set up cross-border establishments in many countries. I see great scope for close international cooperation on these issues, both in terms of developing methods for analysis and for other aspects of stability surveillance and crisis management. I would like to thank the Bank of Indonesia once again for devoting an international conference to these important topics. Thank you! 4  BIS Review 58/2003
Jean-Claude Trichet: The European Monetary Union and the euro Speech by Mr Jean-Claude Trichet, Governor of the Bank of France, at the Financial Forum 2003, organised by The Wall Street Journal Europe and The New Economy Forum, Madrid, 25 February 2003. *  *  *  Ladies and gentlemen, it is a great pleasure and an honour to be with you today, on the occasion of the “Financial Forum 2003”, organised by the New Economy Forum and the Wall Street Journal Europe. I would like to present my views on the successful set-up of the euro, on the economic and financial integration of Europe and on the challenges that the euro-zone will confront going forward. The Euro: built on a successful set up Set-up of the Eurosystem The single monetary policy is formulated and implemented within a sound institutional framework, the Eurosystem, comprising the European Central Bank and the twelve national central banks of the euro area. Three principles underpin the Eurosystem: independence, transparency and decentralisation. The independence of both the European Central Bank and national central banks is enshrined in the Treaty. When exercising their powers and carrying out their tasks and duties, neither the central banks of the Eurosystem nor any member of its decision making bodies shall seek or take instructions from Community institutions, from any government of a Member State or from any other body. Independence refers to institutional, operational and financial independence.

The growing interest for attending the Conference confirms once again the significant contribution of the Conference to the enrichment of the knowledge and exchange of experience of the representatives of the central banks in regional and international frames. Nevertheless, the Conference would not be a unique treasure of knowledge and experience, if it did not include the representatives of the domestic financial system and the payment service providers, which by their continuous active participation and involvement in the panel discussion, contribute to the thematic comprehensiveness of the Conference. The Conference will cover the latest developments in payment and securities settlement systems, as well as payment services on global, European and national level. In the global context, Mr Klaus Löber, the esteemed expert from the European Central Bank, will elaborate on the new developments in the area of implementation of the PFMIs, work on retail payments, cyber security, digital innovations and correspondent banking. These are very important issues for central banks given that we also promote the safety and efficiency of payment, clearing and settlement, thereby supporting financial stability and the wider economy. In addition, the developments in the compliance area regarding the prevention of money laundering, financing of terrorism, insider dealing, fraud, corruption and other criminal offences are in the focus of the Conference, as well. In this context, we appreciate the contribution of Mr Oliver Schufmann, the representative of Commerzbank, who will present their experience regarding the compliance activities.
This confidence in the euro obliges us to act together. I would like here to welcome another recent positive commitment from political leaders: the Franco-German agreement in Meseberg. The message is clear and threefold: i. The Eurozone needs, besides Monetary Union, a strengthening of the Economic Union. If not, monetary policy would remain the only game in town, and be at risk of being overburdened by the next recession. ii. Economic Union needs public risk sharing – an enhanced ESM and a euro-zone budget – as well as private risk sharing. Let me also stress this one, adding Banking Union – with a fully credible resolution mechanism – and Capital Market Union. CMU – which we strongly advocate with President Jens Weidmann and the whole Governing Council - fortunately is in the Declaration too, with a commitment to realise “decisive progress”. iii. Europe needs a Franco-German impetus. Both countries took their responsibility, still on time. It is now up to the 19 to elaborate a common and operational package. The Euro-zone should seize this moment: it’s now or never. II. Policy-induced uncertainty  The global and European economy is confronted by two possible policy shocks: trade and fiscal policy. Since we are currently enjoying the World Cup, it seems appropriate to call these policy-induced own goals. Rise in protectionism The first of these is the risk to the global trading system of the rise in protectionism.

Page 2 sur 5 The Euro-system staff projections of economic growth of 2.1% in 2018, 1.9% in 2019 and 1.7% in 2020 remains consistent with an ongoing solid and broad-based recovery; the French economy, which is sometimes considered to be a good proxy for the Euro-area average, is likely to follow a similar growth path with 1.8%, 1.7% and 1.6% in 2020 according to the Banque de France. On the inflation outlook, as part of the SAPI criteria, recent ECB and Euro-system staff projections have become more and more stable giving us increasing confidence that the improving economic growth we have seen will translate into rising wage and price inflation. In other words, whilst we might be a bit less certain precisely where we are in the cycle, we are more confident that we are heading in the right direction on inflation. Monetary policy decisions When would the Governing Council end the net asset purchases? When would it announce this decision? These were questions left hanging and the subject of market speculation before our meeting in Riga. Besides the famous and important three “Ps” – perseverance, patience and prudence - the Governing Council’s decisions were also guided by three “Cs”: credibility, consistency and clarity. Each element is important.   Credibility: Our actions are credible because they stick to our mandate and our economic forecasts, in particular with respect to the inflation outlook.