samchain/econo-pairs-v1 huggingface dataset:
The needs are huge, and the goal of increasing assets held in retirement savings products from EUR 200 billion to EUR 300 billion is well within our reach. I would also stress the need to ensure that policyholders are adequately informed about retirement savings products, especially – as with all unit-linked products – if they do not include a capital guarantee. Within Europe, the forthcoming Solvency 2 review must include a full and frank assessment of the framework that has now been in place for three years. Of course, insurers have significantly improved their risk and capital management under Solvency 2, and the insurance market is now more resilient and better equipped to cope with financial crises. But these positives must not be allowed to overshadow the questions that need to be asked after such a radical change, particularly about the impact on equity investment and the financing of the European economy, along with issues relating to volatility and complexity. The very fact that we’re calling it a “review” for 2020 means that, by definition, maintaining the status quo cannot be an option. As the preparatory work gets underway, I would like to see every topic, even the most awkward, raised and dealt with. I urge insurers to play an active role in the consultations and I can assure you that the ACPR will make its presence felt in the coming discussions.

Remarks at the C. Peter McColough Series on International Economics, Council on Foreign Relations, New York City, May 24. 4  BIS central bankers’ speeches  Federal Reserve MBS purchases have succeeded in driving down mortgage rates to historically low levels. But these purchases would have had still more effect on the economy if pass-through rates from the secondary market to the primary market had been higher. As can be seen in Exhibit 3, the Federal Reserve’s purchases significantly narrowed the spread between agency MBS and Treasury yields, with the latest round of purchases notably effective in this regard. But, as shown in Exhibit 4 the spread between primary mortgage rates and agency MBS yields3 has widened and this has limited the drop in primary mortgage rates. The incomplete pass-through from agency MBS yields into primary mortgage rates is due to several factors – including a concentration of mortgage origination volumes at a few key financial institutions and mortgage rep and warranty requirements that discourage lending for home purchases and make financial institutions reluctant to refinance mortgages that have been originated elsewhere. On a related note, higher guarantee fees charges by Fannie Mae and Freddie Mac have increased the fixed cost of originating loans and this has also increased the spread between primary and secondary mortgage rates. Factors limiting pass-through warrant ongoing attention from policymakers.
I am glad that we were able to have the service of Prof. Peter Sinclair of university of Birmingham who h as served as Director, Centre for Banking Studies, of the Bank of England to conduct this programme. Ladies and gentlemen, let me highlight some interesting developments in the evolution of central banking and some challenges faced by central bankers. The role of central banks has evolved over past several decades. You may recall that the original task of central banks was not the conducting of monetary policy or supporting the banking system but financing government spending. The oldest central bank of the world, the Bank of Sweden was established in 1668 largely as means to finance military spending . The Bank of England was said to have been created in 1694 to fund a war with France. Even as recently as late 1940’s a labour chancellor of the exchequer, Stafford Cripps was said to have described the Bank of England as “ his bank”. Today, it is a taboo for most central banks to finance government deficits. Most countries have managed their affairs without a central bank for a long time. At the beginning of this century there were only 18 central banks. The USA managed without a central bank until 1913. Private banks issued their own currency notes and coins and banking crises were fairly frequent. The Federal Reserve Bank of USA was established mainly to supervise banks and act as lender of last resort.

Ajith Nivard Cabraal: Developments in the evolution of central banking and challenges faced by central bankers Inaugural speech by Mr Ajith Nivard Cabraal, Governor of the Central Bank of Sri Lanka, at the International Course on Central Banking organized by the Centre for Banking Studies, Colombo, 22-23 May 2007. *  *  *  Ladies and Gentlemen, I am pleased to be here to address you at the opening ceremony of this international course on Central Banking. Let me also welcome all the participants to the course and extend to the participants from overseas countries and Prof. Sinclair, a very warm welcome to our country. The Centre for Banking Studies(CBS) has provided training opportunities for officers in the financial sector in Sri Lanka over the last 26 years. It also has past experience in coordinating a number of international programmes of the SEACEN Centre, APRACA and World Bank held in Sri Lanka. Also several officers of central banks in SARRC countries have participated in the scheduled programmes of the Centre, though they were not specially designed for an international audience. This Central Banking course in fact is the very first international programme designed and conducted by CBS. I am glad that there are 14 overseas participants at this first programme. I congratulate CBS for successfully organizing it. I am sure that there will be more overseas participants in the forthcoming international programmes. Our plan is to invite eminent resource persons to conduct these international programmes.
For example, the CBO projects that debt service costs in 2027 will be more than $ billion—nearly 3 percent of GDP, more than double their current share.10  5/6  BIS central bankers' speeches  Finally, the retirement of the baby boom generation over the next decade will put considerable pressure on outlays. The CBO projects that, by 2027, outlays on Social Security and Medicare will rise to 6 percent and 5 percent of GDP, respectively—each more than a percentage point higher than in 2017. As the economist Herbert Stein once remarked, trends that are unsustainable must end. How, precisely, the United States chooses to address its fiscal challenges will have important consequences for the economy, monetary policy, and financial markets in the years ahead. To sum up, I am optimistic about the near-term economic outlook and the likelihood that the FOMC will be able to make progress this year in pushing inflation up toward its 2 percent objective. The economy has considerable forward momentum, monetary policy is still accommodative, financial conditions are easy, and fiscal policy is set to provide a boost. But, there are some significant storm clouds over the longer term. If the labor market tightens much further, it will be harder to slow the economy to a sustainable pace, avoiding overheating and an eventual economic downturn. Another important issue is the need to get the country’s fiscal house in order for the long run.

Two years ago the fiscal budget turned into surplus. That surplus has risen and in the budget proposal for the year 2000, which was submitted to Parliament at the beginning of this month, the envisaged revenue surplus is equal to 2.2% of GDP. In the view of the Central Bank, it is essential that the targeted budget surplus be realised. It is important for the credibility of the overall policy of the government and because it will have dampening effects on domestic demand and thus reduce the current account deficit. The foundations of the Icelandic economy have strengthened in recent years through effective natural resource management and increased diversification, including the expansion of services exports. Iceland has made great strides in economic management as indicated by the stability and favourable economic developments that have characterised the economy for much of this decade. Instrumental in the changes that have taken place has been the liberalisation, and I might say marketisation, of the economy. In our present situation it is of paramount importance to safeguard the stability of the economy and quickly reduce inflation again. The Central Bank will continue to pursue a monetary policy geared to that end. Credit rating The success in economic management did not escape the attention of the rating agencies. The Republic of Iceland was first assigned a rating by Standard & Poor’s and Moody’s in the late 1980s. The initial long-term rating from both agencies was in the middle of the single A category.
They must do so before the global regulatory community can be comfortable with their launch and widespread adoption. Central Bank Digital Currency  A very reasonable and important question is whether a better outcome would be for central banks themselves to harness much of the technological and IT systems innovation and directly digitise cash? A Central Bank Digital Currency (CBDC) would be an electronic form of central bank money that could be used 7  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  7  by households and businesses to make payments. Digital central bank money would surely address the decline in the use of paper money without the complications of creating the protections required around stablecoins? Yes and no is I suspect the answer. The question is a good one and should be considered (and is being so) but the answer is not in yet. It’s a very big question. Offering a CBDC would allow broad access to central bank money in a digital form. But any launch of a CBDC requires careful prior consideration to fully explore all the issues and implications in order to make an informed decision, including ascertaining that there would be demand for such a thing. CBDC, whilst offering much potential, also raises profound questions about the shape of the financial system and the implications for monetary and financial stability and the role of the central bank. There are fundamental questions in play.

I can speak from personal experience on this as a former Chief Cashier of the Bank of England. When I became Chief Cashier at the start of 2004 the value of notes in circulation (NIC) was £ When I moved on in March 2011 it was £ Today it stands at  3 4  UK Finance, June 2020, ‘UK Payment Markets 2020’. LINK, July 2020, Monthly Report. https://www.link.co.uk/media/1634/monthly-report-july-2020-final.pdf 3  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  3  £ It took 310 years to get to £ and then just over 16 years to move on to £ and it has not fallen.5  The paradox of cash is obvious: use in payments is declining but the value of the stock in issue is not. For the sake of brevity, I’m not going to discuss the possible explanations of the paradox here. Meanwhile, innovation in payments picks up pace. Traditionally, outside the use of cash, payments have been made in commercial bank money using systems that settle in central bank money across the reserve accounts held by banks. Central banks have increasingly brought these systems under regulatory oversight with the intention of ensuring appropriate legal finality of settlement and operational resilience. More recently, innovation has started to strain at this framework in a number of ways. I will set out three forms that this innovation takes, and why it raises questions. I will start with crypto-assets, such as bitcoin, which have appeared in the last ten years or so.
We need to ensure that the approaches of regulators are consistent across activities carried out by firms, and consistent across sectors where different types of firm happen to provide some similar services. 6. Accountability. This is particularly important in a system in which considerable discretion is provided to regulators, both to make rules and to supervise and enforce firms’ adherence to them. There is a strong economic case for giving such responsibilities to an operationally independent regulator with clear statutory objectives defined by Parliament. Like monetary policy, prudential regulation faces a time-inconsistency problem. Governments may have incentives to boost credit cycles to increase short-term nominal growth, causing problems in the medium- and long-term – indeed these problems may be more acute for financial regulation than for monetary policy, given that the cost of regulation tends to impact financial services firms in the short-term but the benefits tend only to be visible in the much longer-term (hence the importance of cost-benefit analysis requirements being placed on regulators). Of course independent regulators can get it wrong too, and have in the recent past – but an independent regulator with a clear mandate for stability can more credibly commit to robust prudential standards. Counter-intuitively, it may also be the case that an independent regulator has more scope to be proportionate while maintaining confidence, because a government may actually need to over-regulate in order to establish its credibility.

The other attraction of using the approach taken for the SMCR for future regulation is that it has been the preferred approach adopted by Parliament most recently when not constrained by EU regulation (for the rollout of the SMCR to insurers, which occurred in December 2018). This is an important consideration at a time of heightened debate, in a Brexit context, about so-called “Henry VIIIth” and “Cardinal Wolsey” powers. Although it is uncertain quite what those gentlemen’s views would have been on the output floor in Basel 3.1, my point is that making use of an approach recently chosen by Parliament seems to me to have considerable attractions relative to choosing something completely new and untested. Would it not, though, be easier and better simply to stick with the EU model through which we have recently imported a large volume of rules? This approach is radically different from the approach the UK has taken when left to its own devices. Indeed, the EU model, with a large body of technical rules set out in the equivalent of primary legislation, is quite different from how most of the world does it. For example, the EU and Switzerland were the only two members of the Basel Committee on Banking Standards where Basel 3 was implemented through primary legislation rather than the prudential authority’s rule-making powers – in major economies like the US, Australia and Canada the regulators did the implementation.
In the case of free assets, foreign currency investments are more diversified and are also partially hedged against exchange rate risks. Around half of the free assets are currently exposed to currency risks. The risks relating to the National Bank’s assets are primarily assessed and monitored using the value-at-risk method. Moreover, a number of different stress analyses are increasingly being carried out. In risk measurement, it is taken into account that the investment horizon, in particular for the monetary reserves, is a long-term one. Where monetary assets are concerned, gold price and exchange rate risks - notably those on the dollar - play a decisive role. Interest rate risks, while significant in their own right, are quite small by comparison. The overall risk with free assets is considerably lower. On the whole, the credit risks are relatively small. The National Bank’s investments are valued daily at market prices, thus making it possible to form an up-to-date impression of the earnings situation. Owing to the high degree of risk exposure to the gold price, the exchange rate and the interest rate level, the earnings situation can change dramatically from quarter to quarter and year to year. In this year alone, the quarterly returns on total assets fluctuated between +2.7% and -3.2%. So far this year, the National Bank’s assets have yielded 1.3% overall. Given its long-term investment horizon, short-term fluctuations generally do not present a problem to the National Bank. The long-run yield is of greater importance.

Philipp Hildebrand: Developments in the international financial markets and managing the Swiss National Bank’s assets Introductory remarks by Dr Philipp Hildebrand, Member of the Governing Board of the Swiss National Bank, at the end-of-year media news conference, Zurich, 16 December 2004. * 1. *  *  Developments in the international financial markets  Looking back at the year gone by, it becomes evident that two opposing price movements have dominated the markets: the strong depreciation of the US dollar on the one hand and the sharp rise in oil prices on the other hand. Developments in the bond and equity markets were, by comparison, rather restrained. In the past few weeks, the dollar has continued its downtrend that commenced three years ago, at which time the greenback was still worth over CHF 1.70. Given the structurally inflated US current account deficit, the sustained downward revision comes as no surprise. However, the fact that the revision to date has been relatively one-sided vis-à-vis the European currencies and the Canadian dollar is problematic. Major Asian currencies have either remained completely pegged to the dollar, such as the Chinese renminbi, or joined the dollar in its slide - at least to some extent - like the Japanese yen. This was only possible, however, at a price, namely huge dollar-buying efforts on the part of the central banks and governments in question. As a result of this asymmetric trend, European exporters are currently bearing the brunt of the additional competitive pressures stemming from the weaker dollar.
Jarle Bergo: Interest rate projections in theory and practice Speech by Mr Jarle Bergo, Deputy Governor of Norges Bank (Central Bank of Norway), at the Foreign Exchange Seminar of the Association of Norwegian Economists, Sanderstølen, 26 January 2007. Please note that the text below may differ slightly from the actual presentation. The speech does not contain new assessments of the economic situation or current interest rate setting. *  *  *  Thank you for inviting me once again to this venerable institution – Valutaseminaret. It is a pleasure to be here with you. This morning I had planned to discuss with you some issues under the broad heading of ‘Interest rate projections in theory and practice’. The most important task of monetary policy is to provide the economy with an anchor for inflation expectations – a nominal anchor. A credible nominal anchor in the form of low and stable inflation contributes to predictable framework conditions for economic agents. In Norway, monetary policy is oriented towards low and stable inflation with an annual rise in consumer prices of close to 2.5 per cent over time. In its conduct of monetary policy, Norges Bank operates a flexible inflation targeting regime, so that weight is given to both variability in inflation and variability in output and employment. Flexible inflation targeting builds a bridge between the long-term objective of monetary policy, which is to anchor expectations of low and stable inflation, and the more short-term objective of stabilising economic developments.

The reason may be that market participants have a different perception of the interest rate path that is necessary to stabilise inflation at target and to achieve stable developments in output and employment. Alternatively, the market may have the same short-term interest rate expectations as Norges Bank, but because of extraordinary conditions long-term bond prices are being pushed up and, consequently, long-term bond yields are being pushed down. 1  Forward interest rates - often referred to as implied interest rates - are calculated so that a short-term bond, when rolled over and reinvested at the implied interest rates, generates the same yield as a long-term bond. For example, if we observe today’s one- and two-year interest rates (‘short-term’ and ‘long-term’ interest rate respectively), the implied forward interest rate one year ahead will be expressed by the equation , where is the two-year interest rate, is the one-year interest rate and is the implied one-year rate one year ahead. The expectations hypothesis holds that the implied interest rate is equal to the market’s interest rate expectations and the expected return from rolling over short-term bonds is equal to the return on a long-term bond. However, if term premia exist, the expected return from rolling over shortterm bonds is different from the return on a long-term bond. If the term premium is positive, forward interest rates will overestimate expected future short-term interest rates, while they will be underestimated if the term premia are negative.
The Deutsche Bundesbank and the rest of today’s Eurozone members (the former Exchange Rate Mechanism members) may serve as a useful example. By imposing the uncovered interest rate parity predicts that the pegging central bank either follows the interest rate policy of the leading central bank or faces significant pressure on its exchange rate. Well, this is exactly what happened, for instance, in the 1980s when the Banque de France tried to lower its interest rate below that of the Deutsche Bundesbank, and again at the beginning of the 1990s when the Bank of England and Banca d’Italia did not want to follow the policy tightening of the Deutsche Bundesbank. In both cases the opening of a negative interest rate differential created depreciation pressures on the exchange rate. As you may well know, the British pound and Italia lira were subsequently forced to abandon the Exchange Rate Mechanism. The existence of exchange rate crises and speculative attacks thus serves as clear empirical evidence in favour of the uncovered interest rate parity. In addition, recent empirical studies based on advanced econometric techniques and using intraday data have shown that when the historical data are used properly the result may support the uncovered interest rate parity concept. The exchange rate plays a crucial role for the Czech economy as well and is therefore an important part of our forecasting devices. And yes, the core forecasting model we use relies on the uncovered interest rate parity equation.

In addition to these relatively direct effects, the price level will also be influenced by changes in prices for imported and domestically produced intermediate goods. •  The expectations channel to inflation Both price and wage inflation is affected by changes in expected inflation. One reason is that firms often set prices for several periods. The same applies to wage formation. Expected price changes will figure prominently in the calculation of expected future real wages. We have seen that an increase in the nominal rate of interest reduces inflation through various channels with varying lags. As a result, inflation expectations can also be expected to be redused. The expectation channel will therefore amplify the effect of monetary policy. The time it takes for a change in the interest rate to have an impact on inflation and demand will vary. It must also be stressed that in the course of the period in which a change in the interest rate affects output and inflation - and often before monetary policy takes effect - the economy will be influenced by a number of direct and indirect disturbances. Thus, the central bank’s control over inflation and production is far from perfect. 2b. What is a reasonable objective for monetary policy? The goal of economic policy tends to be a desire for maximum welfare for the country’s inhabitants. This goal is often expressed as a number of separate goals, such as (sustainable) economic growth, efficient utilisation of resources, equitable income distribution, price stability, viable regions, etc.