samchain/econo-pairs-v1 huggingface dataset:
BIS central bankers’ speeches  7  Figure 1 Inflation indicators (*) (annual change, percent) 8  8 Services EFE  6  6  4  4 CPI  2  2  CPIEFE  0  0  Good EFE  -2  -2  -4  -4  -6  -6 11  Jul. 12  Jul. 13  Jul. 14  Jul. 15  Jul. (*) As from January 2014, the new indexes with annual base 2013=100 are used, so they are not strictly comparable with earlier figures. Sources: Central Bank of Chile and National Statistics Institute (INE). Figure 2 Labor market (percent; annual change, percent) 12  12 Unemployment rate(1)  10  10  8  8 Wages (2)  6  6  4  Employment (1)  4  2  2  0  0  -2  -2 00  05  10  15  (1) Spliced series using monthly variation in February 2010. (2) For nominal wages, average ULC and IREM were used. Spliced series using monthly variation in February 2010. Sources: Central Bank of Chile and National Statistics Institute (INE).

What was the defining characteristic of this approach to policy, and other broadly contemporary frameworks developed by countries like Canada, New Zealand and Sweden? The best short answer is encapsulated in a term originally coined in 1997 by two US academics, Ben Bernanke and Frederick Mishkin (now Chair and member of the FOMC respectively). It is ‘constrained discretion’ 2 . Bernanke described this as “an approach that allows monetary policy-makers considerable leeway in responding to economic shocks, financial disturbances, and other unforeseen developments. Importantly, however, this discretion of policy-makers is constrained by a strong commitment to keeping inflation low and stable.” 3 In the UK, the Government is constrained by the institutional framework, which is set in statute. And the MPC is constrained by the need to meet the inflation target. But while the MPC are told what to do, they are not told how to do it. At the operational level, there is a lot of discretion. The commitment to meet the inflation target is fundamental, as a matter of law and economics. As long as it is credible, such a commitment will help to anchor people’s expectations about future inflation, and stabilise their response to unexpected shocks. But the scope to exercise discretion about how long temporary inflation disturbances will be tolerated is critically important too, for the performance and long term credibility of the framework. Of course it must be used with integrity – saying one thing and doing another, for short term advantage, is toxic.
As long as nominal interest rates are higher than inflation – and that’s been the case through history, more often than not – foregoing £ of spending today buys you more than £ worth of spending tomorrow. So this “postponement” effect doesn’t suddenly appear when expected inflation dips below zero: it’s always there, to varying degrees, and depends on the extent to which expected inflation lies below the nominal rate of interest, i.e. the real interest rate. Indeed, it’s partly by tweaking this incentive to save, via the short-term real rate, that monetary policy is in theory supposed to work. If confidence in the future suddenly declines, for example – something that would on its own tend to push up rates of saving – the central bank will tend to react by lowering interest rates and pushing back in the opposite direction, in order to sustain demand. The appropriate real interest rate will therefore change over time. And the relevant question, in this context, is not so much whether people expect any sort of deflation, but whether they expect it at a pace that exceeds whatever is the appropriate real interest rate at the time 2. If that were to happen, policy would run into the zero lower bound for nominal rates and central banks will find themselves reaching for unconventional policy tools. Similarly, debt dynamics are driven not by nominal income growth in isolation but how that growth compares with nominal interest rates 3.

SPEECH DATE:  26/03/2019  SPEAKER:  Deputy Governor Cecilia Skingsley  VENUE:  Entreprenörskapsforum, Stockholm  CLASS:  SVERIGES RIKSBANK SE-103 37 Stockholm (Brunkebergstorg 11) Tel +46 8 787 00 00 Fax +46 8 21 05 31 registratorn@riksbank.se www.riksbank.se  The effects of digitalisation on the economy* Thank you for the invitation to come here and speak at Entreprenörskapsforum. I cannot imagine a better place to talk about digitalisation and its potential effects on the economy. One example of technological advances and the effects of digitalisation is right here – in our mobile phones. Four out of five Swedes in the age range 16-85 had access to the internet via a mobile phone in 2018.1 It is difficult to imagine, but today's smart phones actually have greater processing power than the computers that enabled the Apollo moon landing in 1969!2 Smart phones also give us access to inconceivable amounts of information and entertainment that did not even exist in 1969. The answer to a question is only a few clicks away. As a consumer it is easy to see the value of these technological advances, although we do not in our daily lives use the capacity for anything comparable to the giant leap for mankind the moon landing entailed… The new technology provides us with entertainment, but not only that. It also affects our working lives and the economy in general.
Of course, safeguarding the soundness and discipline of fiscal policies that largely remain the competence of national governments presents a particular challenge. Ultimately, it must be ensured that twelve national budgets taken together are consistent with sustained stability for the euro area as a whole. In this regard the Stability and Growth Pact provides for a clear allocation of responsibilities between the Commission and the ECOFIN Council. The Commission is responsible for compiling the necessary information and analysis for effective multilateral surveillance, for formulating recommendations for decisions by the Council, and for overseeing the correct application of the Pact. The Council is responsible for taking the final decisions and it thus has the ultimate responsibility for enforcing the Pact. These two principles of surveillance and enforcement form the basic idea of the Stability and Growth Pact and must not be put into question. Having said that and in the light of the ongoing discussions on the future of the EU fiscal framework, let me re-affirm the ECB’s view that the Stability and Growth Pact is appropriate in its present form, but that there is scope for improving its implementation. Specifically, given that the experience with the Pact since 1999 has been mixed at best, there is a need to provide enhanced incentives to comply  BIS Review 71/2004  1  with the commitments under the Pact and to increase peer pressure towards enforcing the rules.

Kevin Stiroh: Introductory remarks at the Community Bankers Conference Remarks by Mr Kevin Stiroh, Executive Vice President of the Financial Institution Supervision Group of the Federal Reserve Bank of New York, at the Community Bankers Conference, Federal Reserve Bank of New York, New York City, 18 April 2018. * * * On behalf of the Federal Reserve Bank of New York, it’s my pleasure to welcome you to the 2018 Community Bankers Conference. This is the third Community Bankers Conference that I’ve attended since becoming the head of Supervision at the New York Fed and it is great to see the turnout continue to grow. This year we are fortunate to have nearly one hundred fifty representatives from community banks throughout the Federal Reserve’s Second District and more than forty regulatory colleagues from multiple federal and state agencies. Each year I look forward to this conference as it offers us, as regulators and supervisors, an unparalleled opportunity to exchange views and perspectives, to identify challenges and opportunities, and to promote a robust dialogue with senior managers and directors of smaller financial institutions in the Second District. This type of constructive engagement is critical for us as we work to promote a safe and sound financial system that supports a strong economy. The theme of this year’s conference—“Navigating Future Risks for Community Banks”—is centered on change, which is appropriate when one considers the broad set of forces transforming the U.S. financial system.
In the UK, the starting point has been robust domestic demand; the leveraged-buyout sector aside, generally healthy corporate balance sheets; somewhat more vulnerable household balance sheets; 21 and potentially stretched commercial and residential property prices. At the Committee’s November meeting, I explored the case for an “insurance cut” addressed to the downside risks from tightening credit conditions. The case for such a cut was strengthened by Bank Rate, at 5¾%, standing at a level that was most probably mildly restrictive. But that had to be weighed against the upward pressures on inflation stemming largely from the rise in energy and other commodity prices. Our November projections seemed to me likely to validate the expectation already embodied in the money market curve that Bank Rate would over time be lowered, representing some offset to the tightening in liquidity and credit premia. That being so, on balance, I concluded that an immediate cut was not necessary; and that “no change” would give the Committee a valuable opportunity to explain in the Inflation Report the implications of both the credit and commodity shocks, underlining that the Committee remains focused on anchoring inflation expectations and so achieving the inflation target over the medium term. Looking ahead, I noted the importance of distinguishing between, on the one hand, the passing through into the macroeconomy of the shocks that had already occurred to credit conditions and to commodity prices; and, on the other hand, the possibility of new shocks on either or both fronts.

Demand from the U.S. used to be the key driver for global oil prices. This is no longer the case. Research has shown that the Asia-Oceania region is now the world’s leading consumer of petroleum and other liquid fuels11. Recognising this, CSRC Vice Chairman Fang Xinghai accurately reflected in May 2016 that China is now “facing a chance of a lifetime to become a global pricing centre for commodities”12. 9 The emerging trend highlights that Shanghai and Singapore are facing an important crossroad ahead. As international financial centres in Asia, we can strategically position ourselves to play key roles in shaping the new Asian financial landscape. Both cities are the gateways to two of the most important economic regions in Asia – China and ASEAN:  The China story is a familiar and also fascinating one. By 2050, China could account for one-third of the world’s economy. China’s banking system could grow to become the largest in the world within 4 years by 20205. Today, global financial institutions are paying close attention to China’s increasing importance in global markets. As China’s financial markets progressively liberalise, their global influence will likely extend further. For a start, China’s 10 trillion stock market and 9 trillion interbank bond market, and this is in USD, will likely be included into global stock and bond indices over the next two years. Re-balancing of portfolios by global investors will lead to an upsurge of financial flows into China, enhancing the internationalisation of China’s financial markets.
Pablo Hernández de Cos: Long-term considerations in economic policy. The role of evidenced-based policies Speech by Mr Pablo Hernández de Cos, Governor of the Bank of Spain and Chair of the Basel Committee on Banking Supervision, at the acceptance of the 2021 Gran Cruz al Mérito en el Servicio de la Economía awarded to the Bank of Spain by the Consejo General de Economistas, Madrid, 19 October 2021. * * * I would like to begin by thanking the Consejo General de Economistas (Spanish General Council of Economists), its Chair, Valentín Pich, and, above all, the members of the panel for awarding the Banco de España the Gran Cruz al Mérito en el Servicio de la Economía(Grand Cross of Merit in Service to the Economy). This honour is an acknowledgement of all of us who work at the Banco de España; of the constant dedication and drive to always provide Spanish society with the utmost value, but especially during these uncertain times after the unprecedented economic impact stemming from the pandemic. With no complacency whatsoever, and mindful of the work ahead, this award shows us that we are on the right track towards achieving our goal of being an outstanding and dynamic central bank committed to society. This commitment is underpinned by a set of fundamental values that pervade the Banco de España’s culture and are reflected in our Strategic Plan: independence, transparency, public service, integrity and excellence.

The SNB in the centre of political debate Nowadays, credibility is even more important because of the fact that financial markets are extensive and closely linked. In the past, central banks were able to demonstrate their regulatory power by intervening in markets to influence rates and prices, particularly exchange rates. These days, they face global markets where the relative paucity of their means requires them to use tact rather than force to achieve their objectives. To this end, they depend upon their credibility. This smoothes out price volatility and makes it possible for monetary decisions to impact fully on market expectations. In other words, credibility is a precious monetary policy asset. We need to devote all our efforts to maintaining it. The SNB cannot merely rely on the good results it has achieved in the past. It must be able to convince markets of its determination to deploy all the means at its disposal to maintain monetary stability in the country, now and in the future. Nowadays it is generally recognised that a central bank is only credible if it can deploy its resources without having to obtain prior authorisation from the government, and without the risk of being penalised by the state authorities. This is why it is essential that a central bank be independent. In Switzerland, the independence of the National Bank is guaranteed under article 99 of the Federal Constitution and article 6 of the National Bank Act. This legal framework is sufficient. However, credibility is not merely a matter of legal independence.
Given the nature of this question, the inter-quartile range is best interpreted as dispersion rather than disagreement. The results around the height of the financial crisis are striking: the median response fell from just under 3 percent to just above 0 percent as many more respondents opted for the “stayed where they are now” option. Moreover, these low median expectations of wage growth appear unaffected by the recovery in economic activity. The dispersion of responses around the median is relatively high, although lower than before the crisis. The individual uncertainty around wage growth is lower than around inflation but interestingly does show some increases coincident with accelerations in economic activity during the recovery which we don’t find in individual inflation uncertainty. Turning to the second set of general questions I started with, knowing how consumers form expectations and revise them in response to new information is relevant for many aspects of monetary policy. As noted previously, the large cross-sectional variation in inflation forecasts  BIS central bankers’ speeches  5  across survey respondents is inconsistent with the traditional rational expectations framework in which all agents are assumed to share the same information set and expectations. This has led to alternative models in which this heterogeneity is explained by a reliance of agents on different models for forecasting, the use of different information sets and different capabilities for processing information. While in a full-information, rationalexpectations world there is no role for constant central bank communication, such a role becomes crucial in a world with learning.

Nevertheless, none of the current initiatives to update or replace existing wholesale payment systems are considering the adoption of DLT. The ECB and the BOJ, in their role as operators of important market infrastructures services, decided to conduct in-depth experiments to determine whether specific existing functionalities of their respective payment systems could run in a DLT environment. Findings in relation to efficiency show that, with regard to the specific aspects of RTGS services tested to date, a DLTbased solution could meet the performance needs of current large value payment systems. In conclusion, this joint effort of ECB and the BOJ has produced a thorough set of results that provide reasons to be optimistic with respect to the capabilities of DLT within payment systems. It is, however, important to bear in mind that this work has been conducted in a test environment; therefore, any assumptions regarding the capacity for DLT to be used in production should not be made from this report. Both, the Bank of England (2017) and Bank of Canada (Ho, 2017)) conclude that DLT is not yet mature enough for current adoption. Yet most central banks that are considering modernizing their core payment infrastructure stress the need to make new systems inter-operable with future DLT platforms. Looking beyond the immediate horizon, many industry participants see significant potential for DLT to increase efficiency and reduce reconciliation costs in securities clearing and settlement.
Easy money is bad for you Slide 1: Landes quote In his book The Wealth and Poverty of Nations the historian David Landes describes how the Spanish empire went into a long period of decline when the flow of Latin-American gold dried up in the mid-17th century. According to Landes, the moral of this story is that “easy money is bad for you. It represents short-run gain that will be paid for in immediate distortions and later regrets.” 1 As a country rich in natural resources, Norway has shared and tried to learn from this experience. Perhaps the quotation from Landes also rings true for all those who borrowed cheaply during the boom before 2008, and who now have to face the consequences. Windfall gains, like large and unsustainable capital flows from abroad, are double-edged. They provide short-term relief from hard choices, but may carry with them hardship in the longer term. Slide 2: Output gap: A boom-bust economy After the discovery of oil in the North Sea in 1969, government spending and social programs expanded rapidly in anticipation of future petroleum revenues. We sought to build a bridge across the post oil-shock recession in Europe. But it was a bridge to nowhere. Fiscal policy had fuelled a boom-bust economy. Inflation soared to double digits. A deep recession started in the late 1970s. Slide 3: Current account balance: Large external deficits The non-oil tradable sector struggled as costs had increased. By 1977, Norway’s current account surplus had turned into a deficit of 12 percent of GDP.

After taking a close look at the foreign exchange space with economists, traders, and market analysts, the NYIC team zeroed in on settlement of foreign exchange spot transactions as a first area of investigation. FX spot transactions are critical in the context of cross-border payments, and serve as a building block for longer, more complex transactions. Traditionally, settlement generally takes two days after a transaction, which leaves some room for improvement. By demonstrating improvements in settlement of FX spot transactions, the NYIC could address settlement time and risk, which would have implications to speed and access for the broader cross-border market. We are not the first to address this topic, of course, but the NYIC wanted to investigate it from the perspective of the Federal Reserve, through the lens of a wholesale CBDC. The NYIC developed a hypothesis that there is a distributed ledger technology solution for wholesale FX settlement that results in instant and atomic settlement in which a wholesale CBDC is the settlement asset. NYIC then built a working prototype and tested it. Results from the experiment indicated that settlement could occur in fewer than 10 seconds on average and that horizontal scaling was possible. This indicates that a modular ecosystem of ledgers has the potential for continued scalability, and that distributed ledger technology could enable settlement times well below the current industry standard of two days, with the added guarantee of atomic settlement.
Svein Gjedrem: Economic perspectives Address by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at the meeting of the Supervisory Council of Norges Bank, Oslo, 15 February 2007. Please note that the text below may differ slightly from the actual presentation. * 1  *  *  Introduction  The poet Rolf Jacobsen would have been 100 years old this year. He was particularly interested in geography. In an interview with Telemark Arbeiderblad in 1971, he stated that the Bible was a work of substantial importance, but that the same could be said about the comprehensive guide to public transport in Norway.14 In one of his geography poems, he writes: “When the sun is shining on China the stars are twinkling here. And the reverse. Asia is vast. Half the earth’s land mass [...]15 Yes, Asia is vast. The rapid expansion in China and other Asian countries is of growing importance to Norway. These countries are a major source of cheap consumer goods and services and demand for our raw materials. 14  Ole Karlsen (editor) (1993): Frøkorn av ild (Seeds of Fire). Om Rolf Jacobsens forfatterskap, Landslaget for norskundervisning, Cappelen Fakta. 15  Source: From the poem ”Når solen skinner på kinesere” (When the sun is shining on China) in Rolf Jacobsen’s collection of poems ”Nattåpent”. Gyldendal Norsk Forlag A/S 1985. BIS Review 15/2007  1  2  Interest rates, inflation and the business cycle  The Norwegian economy is now booming following the pronounced upswing since summer 2003.

The function of state banks has become more concentrated and their share of the credit market has been reduced from more than 30 per cent in the1980s to 8 per cent today. The first wave of banking deregulation in the mid-1980s was not particularly successful. It was only after the banking crisis and the tax reform that Norwegian credit and capital markets started to function efficiently. It became more profitable to channel capital to investment projects that yield the highest social return and locked-in capital was freed up for new industries and businesses. It became easier for entrepreneurs to start up and build up businesses and capital. Illustrative of the enterprise spirit in the period 1998-2003 – which was not a period of particularly strong growth – was the start-up of 12 new businesses for every 100 existing businesses, which was quite high compared with other countries. Norwegian credit and capital markets are relatively well developed today. Sound projects will always find funding. The main weakness is still to be found in housing, property and wealth taxation, which favours considerable overinvestment in dwellings and holiday homes. In addition to the changes I have highlighted, the framework conditions for the electricity market, telecom market, aviation and audiovisual industry have changed. Retail trade has been liberalised. State-owned companies were listed on the stock exchange and new forms of managing public entities were developed. 16  BIS Review 15/2007  Economic growth has also been bolstered by higher female labour force participation.