samchain/econo-pairs-v1 huggingface dataset:
Third, OMTs will focus on the shorter part of the yield curve, and in particular on sovereign bonds with a maturity of between one and three years. This underscores the monetary policy nature of such outright transactions, the principle of which was foreseen in the ECB Statute. And it buttresses the OMTs’ aim to address reversibility premia which, as I argued above, have tended to manifest themselves at the short end of the term structure, while addressing the fact that credit risk embedded in longer-term yields should reflect the credibility of countries’ economic and financial adjustment programmes. Fourth, there are no ex ante quantitative limits on the size of OMTs. This makes clear that the ECB is committed to do whatever it takes, within its mandate, to preserve the solidity and irreversibility of the currency. Fifth, the ECB accepts the same (pari passu) treatment as private or other creditors with respect to bonds purchased in the context of OMTs. Finally, the liquidity created through OMTs will be fully sterilised. This reflects the role of OMTs in counteracting destructive self-fulfilling equilibria rather than altering the aggregate liquidity stance. The main features of the framework for OMTs outlined here address by design also three concerns or questions sometimes voiced in relation to outright purchases of government bonds by a central bank. The first concern can be summed up in two questions: are OMTs a form of monetary financing of governments and will inflation be unleashed? The answer to both questions is: No. In fact, quite the opposite.

To address this situation, the ECB has taken a number of non-standard measures, and two weeks ago it announced the modalities for undertaking Outright Monetary Transactions in secondary markets for sovereign bonds in the euro area. I will describe the rationale for this decision and argue that it is a key element to ensure a lasting “monetary dominance” in the euro area, compliant with the Treaties. Channels of monetary policy in normal times and crisis times In normal times, monetary policy works primarily through inter-temporal financial arbitrage. In the Eurosystem, this arbitrage covers two different time dimensions. There is the weekly arbitrage cycle, through which the volume of central bank liquidity is reallocated across  1  I would like to thank Roberto Motto, Stefano Nardelli, and Massimo Rostagno for their contributions to the speech. I remain solely responsible for the opinions expressed herein. BIS central bankers’ speeches  1  banks trading in the money market in the period between two consecutive weekly Eurosystem main refinancing operations (MROs). The reason for this reallocation is that – as a matter of routine, at least – the Eurosystem provides reserves at weekly intervals. While the banking sector’s need for reserves in the aggregate may not change significantly within a week, the cash needs of individual banks do fluctuate at higher frequencies, probably daily. 2 So banks with liquidity deficits in the infra-weekly period need to borrow from banks with liquidity surpluses. The price at which these trades of liquid reserves between banks occur, i.e.
In the medium term, various elements suggest that investment will regain strength. For the time being, the lower basis for comparison that the adjustment will leave in its 2019 growth will help to raise the 2020 record, the year for which the baseline scenario estimates a 5.1% growth in GFCF. The capital-to-GDP ratio has remained low in recent years (under 22% in real terms), with productive investment—excluding mining and housing— that practically grew zero in the 2016-2018 period. Plus, that the strong immigration of recent years reduced the capital/labor ratio. Absorbing this greater workforce requires adjusting the capital stock, so that, absent a more significant change in the vision about productivity, and/or the various costs associated with the formalities of investment projects, it should resume its former dynamism. The domestic conditions to finance this greater investment are favorable: local interest rates have remained low (Figure 9), something that will be reinforced with the decision of the last Monetary Policy Meeting. In the same way, external financing conditions have remained favorable and, in fact, the interest rates of US Treasury bonds are also low. All this occurs in a context of no imbalances in the local financial system, no elements hindering the flow of financing, and a bounded fiscal deficit. All in all, the first-quarter evolution of investment puts a note of caution in case the slowdown proves more persistent, especially because of the higher uncertainty abroad. For now, this has reduced asset prices and, with it, the incentives to invest.

Indeed, it is unusual for any economy to experience a change in the production factors of the magnitude and speed that immigration has triggered in Chile in the last three years. It is also unusual for an increase in potential growth to be accompanied by a reduction in the neutral MPR, which in this case has occurred due to the magnitude and persistence of the fall in interest rates in the world. In previous episodes of CPI basket changes, we had not seen so important corrections to the inflation measurement as this latest one. Faced with this unusual configuration of circumstances, the Central Bank of Chile needed to be rigorous in its analysis, clear in its conclusions and quick in its response. It was helped by the research work and the updating of his models that have been progressing for some time. But once all the pieces of this puzzle have been assembled, the Board has preferred acting over postponing a decision. It is an unusual action in the face of unusual circumstances. Central banks today are not prone to surprising the markets and ours is no exception. We do not seek surprises for the sake of them, and certainly we have not concealed anything in our communications of recent months regarding the analysis that we have conducted, nor have we distracted attention away from it. However, after accumulating evidence and reaching a downright conclusion about its implications for monetary policy, we saw few advantages and many more costs in postponing.
With the support provided through expertise and funds, the agreed programme with the IMF has aimed at drawing up an appropriate monetary and fiscal policy mix, correcting fiscal imbalances, improving the balance sheets of economic agents, and implementing an ambitious structural reforms programme, to support the long-term development of Albania. The Bank of Albania assesses that the Arrangement has achieved its major objectives: correcting structural imbalances and setting the country on a steadier path to longterm development. Economic growth has been improving in the recent years, driven – among others – by the combination of the monetary stimulus and fiscal consolidation, reduction of risk premiums in the economy and improvement of the balance sheets in the real sector of the economy. From a longer-term perspective, the structural reforms and the improved business climate should open the way for faster, more balanced and stable growth. In addition, excluding the effects of supply-side shocks, inflation has trended upward recently. The improvement of economic activity, implementation of a prudent monetary policy and a better anchoring of inflation expectations render us confident for the stable return of inflation to our 3% target. Lastly, Albania has made notable progress with regard to strengthening other economic and financial equilibriums. Safety nets in the financial system have been strengthened. The institutional framework that shapes the coordination, design and implementation of measures for safeguarding financial stability has been improved. The legal framework that disciplines contract enforcement has been improved.

In this context it is not the present exchange rate that is decisive, but how we see it developing in a slightly longer-term perspective. There is no reason to depart from the basic assessment we made earlier; there are still strong reasons in favour of a stronger krona. It is not merely that Swedish macro data in general has developed well over a number of years compared with, for instance, the euro area; most forecasts indicate that this development will continue. Sweden is also one of the countries that has had the highest trade surplus as a percentage of GDP over a number of years, which is one indication among many that the value of the krona has been relatively low. However, even if we should not – as I see it – change our basic assessment that the krona will strengthen, its value at present is rather different. There is therefore reason to take into consideration a risk scenario for inflation linked to a weaker exchange rate. Just as the Riksbank emphasised during 2003 and 2004 that the strong krona was one reason behind the low inflation rate, there is reason to point out that the weakening of the krona this year, particularly if it persists, could result in higher inflation,” said Mr Heikensten. ”All in all, I do not at present see any reason to change my view of inflation now to any great extent, compared with the October assessment.
In the financial system, this involves putting in place more comprehensive regulatory frameworks, complemented by enhanced surveillance arrangements and relatively more intrusive supervisory oversight. It also involves having wide-ranging policy tools, including macro-prudential policies, to mitigate and manage the risks emanating from excesses in the financial system. As the experience in the advanced economies has shown, the source of imbalances can arise in a number in segments of the economy, including from the household, the financial and the public sectors. This underscores the importance of prudence; to ensure that growth is underpinned by sustainability and not excesses. A further lesson is to build buffers during the good times to better position us to withstand future shocks. Equally important for policy in the emerging economies is to put in place the necessary foundations for long-term growth. This involves few areas of significance. The first is to create a competitive environment that allows for greater economic flexibility. This includes reforms for a sequenced and gradual removal of distortions prevailing in the economy, lowering the costs of doing business, and to streamline the involvement of the public sector in businesses. The second is to accord importance to investments in modern infrastructure, and to enhance technological readiness that will enable the economy to prepare for the changing economic and financial landscape. Another area of significance is to ensure balanced and inclusive development.

While important progress has recently been made in Europe on the arrangements that will contribute to containing significant high-risk events, and in paving the way towards a more sustainable and integrated European region, its immediate-term effects on economic recovery is likely to be limited. There are several factors that are containing the potential for sustained growth in these economies. This can be classified into seven categories. Firstly, is the gradual process of unwinding the excesses that had been built up over several years. These include the high degree of indebtedness by households, the financial sector and the public sector. Secondly, is the significant long-term structural adjustments that are needed to regain relative competitiveness. This will involve greater efficiency and innovation within existing industries, and the shifting of resources out of industries in which these economies no longer have comparative advantage, into new industries which have comparative advantage. While the  BIS central bankers’ speeches  1  former may result in economic gains, it may not necessarily be accompanied by increased employment, and the latter may result in temporary economic dislocation and increased unemployment. Thus, even if such policies were to yield results, they may not produce a robust recovery of economic activity and a reduction in unemployment in the short and medium term. The third is the need for the introduction of new institutions and the transformation of existing institutions to render them relevant to the changed environment.
Lars Nyberg: The repo rate - Spring 2002 Speech by Mr Lars Nyberg, Deputy Governor of Sveriges Riksbank, to the Swedish taxpayers’ association in Malmö and Kristianstad, 22 April 2002. *  *  *  I should like to begin by thanking you for the invitation to this discussion and the opportunity to develop some ideas on the Swedish economy as it looks in spring 2002. I shall start with the Riksbank's most recent Executive Board meeting on 18 March, where we decided to raise the repo rate by 0.25 percentage points to 4.0 per cent. It may seem as though the interest rate hike did not come at the most appropriate point in time, as economic activity is still weak. Why did we raise the rate so quickly and before most other central banks had done so? Moreover, we, in common with most of the analysts in the market, expect the inflation rate to fall during the spring. Why did we raise the repo rate when inflation is on its way down? These are questions that I shall try to answer today. Some analysts also consider that the Riksbank has made a sudden U-turn in its assessment of inflation and so I thought I would explain a little about how our view has changed and why. However, it was not actually a major change and cannot really be regarded as a total U-turn. Why was the repo rate raised when inflation is on its way down?

However, the picture of the global economy is nevertheless much brighter than it was in the autumn and the signs of a turnaround are becoming more distinct. Developments in Sweden The signals of a general recovery in Sweden have also become more tangible. According to Statistics Sweden's sales index, the retail trade's sales volume rose in January, compared with December 2001. During the most recent three-month period (November-January) industrial production and order intake  2  BIS Review 25/2002  had increased, compared with the immediately preceding three-month period. The manufacturing industry is optimistic with regard to the coming months and the retail trade is expecting sales statistics to remain high, according to the National Institute of Economic Research's economic barometer. The expansionary fiscal policy contributes to a strong development in households' disposable income and forms a basis for both higher private consumption and increased savings. Exports increased gradually during the period, but relatively cautiously, both because the international upturn in activity is rather tentative to begin with and because the krona is expected to appreciate. According to the Inflation Report, GDP was estimated to increase by 1.6 per cent this year and then accelerate to between 2.5 and 3 per cent in the coming years. Despite the weaker demand last year, employment continued to develop strongly and unemployment declined slightly. Both the number of hours worked and the number of those employed increased during 2001. Part of the favourable development in employment may, however, stem from the increased absence due to sickness.
2023 International Symposium, National Association for Business Economics – Paris, 22 May 2023  Monetary policy transmission: where do we stand? Speech by François Villeroy de Galhau, Governor of the Banque de France  Page 1 sur 14 In the Euro Area, inflation has begun to fall back, from 10.6% in October 2022 to 7% in April, after 6.9% in March, and is expected to recede by the end of the year. But it will still be too high. And while headline inflation has been declining, underlying price pressures show persistence. The Governing Council has already taken prompt and forceful actions to tighten the stance of monetary policy. The primary question today is not so much how much further we need to go with interest rate hikes, but how large is the pass-through of what is already in the pipe. Today I’d like to elaborate on this and review the two steps of the transmission of our monetary policy (i) first to the financing and monetary conditions, and (ii) ultimately to real economy and inflation. I will then draw some conclusions for monetary policy (iii). I. The transmission of monetary policy to financing conditions has proven relatively rapid and overall in line with past tightening cycles The increase in policy rates since 2022 has been exceptionally rapid by any historical standards: 7 hikes in less than ten months, amounting to +375 basis points, in addition to our progressive exit from unconventional policies which began even earlier.

From my previous experiences, especially as head of the Directorate General Operations, and presently also, as President of the French Banking and Insurance Supervisory Authority, I measure what your contributions can provide in operational terms (risk assessment) and also in terms of analysis (research, advice, BACH data base). The works of your Committee, and so to say its affiliates, is useful and I would like to take the opportunity of this plenary meeting to encourage you to keep the same stance. From the perspective of a NCB, your contributions are important in so far they provide platforms for exchanging our thoughts, our know-how and, last but not least, for exchanging data within the Eurosystem but also with statistical institutions, witness in that regard is all what is being done with the European Group Register managed by EUROSTAT and now with the Committee for Monetary Financial and Balance of payment statistics. Obviously, Balance sheet and Profit & Loss information, or more generally information on non-financial companies, have a real bearing on our institutions in line with a twofold objective: assessing individual companies and using aggregated company data to perform macro economic analyses or researches. First, it is important for micro-analyses in the assessment of individual companies using classic ratio-based firm analysis methods. This can help us to evaluate our collateral, or portfolios of banks if we are involved in banking supervision.
Andrew Haldane: Patience and finance Speech by Mr Andrew Haldane, Executive Director, Financial Stability, Bank of England, at the Oxford China Business Forum, Beijing, 9 September 2010. *  *  *  I am grateful to Geoff Coppins, Richard Davies, Salina Ladha, Pippa Lowe, Gareth Murphy, Rhiannon Sowerbutts, Nick Vause and Iain de Weymarn for background research and comments. In the East, it is said: “One moment of patience may ward off great disaster One moment of impatience may ruin a whole life” [Chinese Proverb] In the West, it is said: “I often make more money when I am snoozing than when I am active” [Warren Buffett] These observations have common conceptual roots. Underlying both lies patience. Patience, or its alter ego impatience, is a key factor shaping inter-temporal decisions. Whether to save or spend, trade or invest, work or quit, stick or twist. As such, patience has important implications for the evolution of economic and social systems. This paper considers the role of patience in decision-making, in particular financial decisionmaking. Patience is not static; it evolves. This paper brings together lessons from economics, history, psychology, neurology, sociology to assess patience and its implications for the evolution of economic and financial systems. Evidence from social and economic systems points to two evolutionary paths. Along one, patience becomes self-reinforcing. For example, financial liberalisation may encourage patience and improve inter-temporal choice, unlocking growth. But there is a second path, along which impatience is self-reinforcing. Financial liberalisation can also unlock impatience, generating over-trading and under-investment.

I believe that Europe has a major project ahead of it to recreate a broad, deep and liquid public debt market that is completely and unambiguously free from insolvency risk. 2  BIS central bankers’ speeches
This would have had serious consequences for indebted households and businesses, as well as causing turmoil in the labour market and, ultimately, even more instability in the economy. Other central banks have periodically needed a very tight monetary stance to bring inflation under control. For example after 1980, roughly a quarter of a century ago, the US federal funds rate was significantly higher for a while than Iceland’s current policy rate. This proved necessary in order to rein in inflation that was also higher then than in Iceland today. This policy was successful and the US has not faced a serious challenge from inflation since. Ideas for an economic panacea have also been aired, typically involving the adoption of the euro. The Central Bank has already stated its view that adopting the euro would be imprudent except by joining the EU. Even though Iceland were to decide to apply for EU membership, it would not be able to enter into the Monetary Union until several years later, after fulfilling all the accompanying conditions which include criteria for inflation, interest rates and exchange rate stability. Experience shows that no concessions are made from these conditions. It is also important to remember that membership of a larger currency area does not eliminate the need for sensible economic policy. What changes is that monetary policy independence is lost. Decisions on consumer prices and unit labour costs relative to abroad would be transferred to the respective markets.

They therefore provide a sufficiently good indication about future developments to enable the Board of Governors to make decisions on the basis of them. Better forecasts have not been available. Nonetheless, the Central Bank has frequently been criticised for the quality of its forecasting and the allegedly incorrect monetary policy decisions based on them. For example, the Bank came under harsh fire for raising the policy rate in the second half of 2006. It was claimed that the forecasts were wrong and the hikes therefore unnecessary. In some cases, critics selected limited and minor areas of Central Bank forecasts which they considered to be based on incorrect assumptions, and dismissed the entire forecast as a result. Now that the year is over, it is obvious, of course, that the Bank’s forecasts did not fully hold. For instance, in July 2006 the Bank forecast higher second-half inflation than proved to be the case. Explanations for the deviation include the appreciation of the króna after the middle of the year, the effect of lower global fuel prices on the price level, and the fact that wage settlements made in the middle of the year did not provoke wage drift on the scale that the Bank had forecast in July. The first two factors were hardly foreseeable, and it should be pointed out that the Bank’s overforecast for wage drift was not far from that made by the social partners themselves when the wage settlements were signed.