samchain/econo-pairs-v1 huggingface dataset:
In this sense it is an advantage to us that the crisis is not "home made" and that it has not yet developed to the same point here as in many other countries. A key to the measures that may become necessary in Sweden is whether traditional monetary policy, that is keeping the interest rate low, will be sufficient. The significant factor for demand in the economy is the real interest rate, that is the nominal rate minus expected inflation. Inflation expectations among households and companies are thus important. The most important thing is to avoid a situation in which the credibility of the inflation target is undermined and the players in the economy expect to see long-term deflation, that is that prices will continue to fall during the foreseeable future. Even if the nominal interest rate has been pushed down to the lowest possible level, the real interest rate may still be too high to stimulate demand. The Riksbank's monetary policy framework is a strength in this context. The fact that we have an established, numerical target for inflation probably makes it easier to keep inflation expectations well-anchored on the positive side of zero. Surveys also indicate that expectations are well in line with the target a few years ahead. In the shorter term they are lower, but there is nothing particularly strange about this – inflation in our own forecasts is lower too. Nor should we forget that the Riksbank is not the only authority that influences interest rates in the economy.

In that case, financial stability concerns would dictate that your firms need to be dramatically downsized and simplified so they can be managed effectively. It is up to you to address this cultural and ethical challenge. The consequences of inaction seem obvious to me – they are both fully appropriate and unattractive – compared to the alternative of improving the culture at the large financial firms and the behavior that stems from it. So let’s get on with it. Thank you for your attention. 7  See 12 U.S.C. § 1829. BIS central bankers’ speeches  7
Yet, much remains to be done and we are determined to keep at it. I recognize fully that there can be no return to pre-crisis business as usual – whether on the part of the financial sector or on the part of regulators like ourselves. All in all, there is a lot to keep my colleagues busy even in normal times. Macro conditions The statement issued by the Federal Open Market Committee earlier last week presents a sober assessment of the state of the U.S. economy. Economic growth so far in 2011 has been quite a bit slower than we expected earlier in the year. While jobs growth picked up early in the year, in the last few months conditions in the labor market have deteriorated again and the unemployment rate has edged up. Household spending has flattened out, and  2  BIS central bankers’ speeches  the housing sector is depressed. Business investment in equipment and software is expanding, but investment in corporate offices and other commercial buildings is weak. Some of the weakness in economic activity in the first half of the year was due to temporary factors such as the hit to household income from higher food and energy prices, and supply chain disruptions following the tragic earthquake in Japan. These restraining forces have abated and thus, we should see stronger growth in the second half.

Page 3/4  Continued influence on general economic debate This leads me to the third reason for honouring Otmar today, which is his continued influence on general economic debate. To use a sporting analogy: while, in his younger years, Otmar is said to have been an excellent sprinter, he is actually a marathon runner. He shows no signs of slowing down. And his voice is widely heard. One very important issue for him is central bank independence. He argues that central banks should be aware of what they can do and what is beyond their influence. And they should communicate this limitation to the public. If they promise more than they can deliver, they will undermine their credibility. Otmar is particularly concerned about central banks taking on too many tasks for which they have no mandate. This puts their independence at risk. I completely agree. Central bank independence will only endure as long as the public is convinced of its benefits, and trust that the central bank is exercising its power responsibly. I am certain that central bank independence is essential, both for maintaining price stability and for ensuring stable and healthy economic growth. However, it is not a given. Rather, the support for central bank independence must continuously be earned anew. Today, Otmar will speak about central bank communication, another very important aspect of central banking. This has attracted a lot of attention in the literature over the last two decades.
Second, to facilitate market adoption, MAS also started publishing, on a daily basis, Compounded SORA rates for 1-month, 3-month and 6-month tenors, and a SORA Index.7 These provide market participants with a standardised and simplified way of obtaining compounded rates for any given tenor, and can easily be referenced in new SORA products of different maturities, to suit the needs of different customers. Third, to provide a market-based pricing reference for SORA cash products, and spur hedging activities through the SORA derivatives market, MAS has broadened our suite of money market instruments by issuing floating rate notes based on SORA (MAS SORA FRN). We are encouraged that the first two MAS SORA FRN auctions were met with strong market demand. Fourth, to facilitate price discovery in a nascent SORA derivatives market, MAS established in June, a daily auction process for SORA Overnight Indexed Swaps (or OIS) and SOR-SORA Basis Swaps up to 5-years in tenor. These are the key instruments for developing the SORA derivatives market and for facilitating a transition from SOR derivatives. Going forward, MAS will extend the auction tenors, and  make available this process to the wider interdealer market. 11 But MAS’ efforts alone are not enough to achieve a successful transition from SOR to SORA. The financial industry and its stakeholders have a critical role to play, given that you are the ultimate end-users.

Execution needs to be well-sequenced and tightly coordinated. I would like to share three key pillars that can support a smooth transition: Preparing early at the individual firm-level Coordinating well at the industry-level Communicating clearly and effectively at the customer-level 16 First, at the individual firm-level, both banks and corporates must be ready to carry out this transition. This includes identifying risk exposures, putting in place appropriate contractual fallbacks, ensuring systems readiness, understanding the features of new SORA products, and ultimately, transacting in these products. Indeed, we have seen some early wins. MAS is encouraged by the success of our three local banks in completing SORA commercial loans9 with early adopters such as CapitaLand and Wilmar. We are also heartened that OCBC had launched a retail mortgage loan, while DBS had launched a business property loan, both referencing the compounded SORA rates published by MAS. Riding on these successful  pilots, we hope to see more banks start originating new SORA loans across the broader industry. Against this, MAS will be stepping up supervisory engagement to ensure banks are well prepared for the transition. MAS had conveyed its supervisory expectation of banks through a regulatory survey conducted earlier in the year, on the progress of banks’ preparations for the transition. This engagement will continue and will include elements such as systems readiness, legacy transition plans, and pace of adherence to industry guidance established by the SC-STS.
This hyper-connectedness between citizens, corporations and the cities they live in will give rise to new disruptions. The Arab Spring protests for example, were facilitated by the widespread access to mobile technologies. Citizenry today are able to quickly organise themselves around special interests and put pressure on governments and businesses. BIS central bankers’ speeches  3  But the digital revolution cuts both ways. Always-connected users leave data trails that make them easier to track and to be analysed, and many corporations now have more access to citizens’ personal data than do the governments. Last year, Facebook worked with the FBI to bring down an international cybercrime gang responsible for more than $ million in damages to computer networks. Power dynamics are changing and traditional state institutions will need to share power and evolve new modes of cooperation with such companies. Even so, the trend of more data and greater openness will continue. There are good examples of how governments are leveraging technology in Asia. The Korean government is working with networking giant Cisco to build the world’s first smart city by 2015. New Songdo City will occupy a manmade island and will incorporate millions of sensors and computers to monitor every aspect of the city’s operation. Recognising the enormous potential, Singapore tapped into the data revolution quite early in the game. As an example, the Data.gov.sg initiative, brings together 5,000 data sets from over 50 government agencies, and makes that data stats available to the public.

Our “Singapore Real-Time” vision aims to grow data related services and develop the data industry. In 2011, the MIT Senseable City Laboratory obtained a research grant to launch the “LIVE Singapore!” project. This project provides a platform to pool real-time information from several government agencies and to present them in visually compelling ways. Conclusion Ladies and gentlemen, I have sketched out several key trends which I believe will have the greatest impact on the world, and highlighted how Singapore is responding to these trends. The future landscape will not just be shaped by the flow of goods and money, but also by the flow of ideas. This conference is therefore a very useful platform to bring together thought leaders and successful individuals from the East and West, not just to discuss future trends, but to seed and drive the exchange of powerful, world-changing ideas. On this note, let me wish everyone a rich and exciting discussion at the conference today. Thank you. 4  BIS central bankers’ speeches
The latter normally describe the consequences for monetary policy of developments being better or worse than the situation described in the main scenario, but where the alternatives are not normally too far from the main forecasts. In the Financial Stability the scenario is rather more exaggerated. So where do we stand now and where are we heading? Let me briefly summarise where we stand now in terms of risk focus; the liquidity problems have been dampened, while credit risks and feared loan losses are increasingly in the limelight as economic prospects have deteriorated. Credit risks and the size of loan losses are of course closely interlinked with economic activity. So I shall now, not least for this reason, move on to talk about economic activity – the assessments made by the Riksbank at the most recent monetary policy meeting in April and the nuances in the views of future economic developments that I put forward at the meeting. BIS Review 73/2009  3  Things could be better or worse It is natural in times like these to paint a gloomy picture and focus on downside risks. And I am probably the last person to deny that such risks exist. It is also natural that the focus of the monetary policy discussion should be on what a central bank can do when the policy rate approaches zero and further stimulation may be necessary as this is to some extent “uncharted territory” for us. But let me now change perspective and adopt a slightly more positive tone.

The third important factor that contributed to the overheating of the Icelandic economy was the reduction in both direct and indirect taxes which, in addition to relatively large increases in general pay, led to a rapid increase in real disposable incomes. All of this happened during a period of an international liquidity glut and historically low interest rates which further facilitated domestic demand growth. The expansion of private consumption and the investment in the aluminium production capacity and the related power sector led to a widening of the current account deficit. It  BIS Review 52/2008  1  reached the equivalent of more than a quarter of GDP in 2006, a phenomenally large deficit both in Icelandic economic history and by international comparison. The part of the deficit that resulted from the investment in aluminium and power evaporates as construction is completed and exports of aluminium picked up as of late last year. However, the larger share of the deficit, which resulted from other domestic demand, will only subside as restrictive economic policies have their intended effects. The current account deficit fell towards 15% of GDP in 2007, it will remain more or less unchanged this year but fall further in 2009, aided by the depreciation of the króna which I will touch on later. Needless to say, inflationary pressures emerged early in the expansion phase. The Central Bank began to tighten policy in the spring of 2004.
(b) LCF survey data scaled to match National Accounts (excluding imputed rental income, income received by pension funds on behalf of households and FISIM). LTI ratio is calculated using secured debt only as a proportion of gross income. (c) Repeat cross-section methodology used, with no controls for other factors, or how households may have moved between LTI categories between 2007 and 2009. Chart 3. UK banks’ sterling write-offs on (a) lending to individuals  Chart 4. Household debt to income ratio and (a) consumption growth over 2007-12 Adjusted consumption growth 2007-12, Per cent  10 8 6 4 2 0 -2 -4 -6  United Kingdom  -8 -10  0  Sources: Bank of England and Bank calculations. (a) Write-offs of sterling lending by UK MFIs to UK individuals. Write-offs are net of recoveries. Non seasonally adjusted. (b) Consumer credit consists of credit card lending and other unsecured lending (other loans and advances) and excludes student loans. (c) Lending secured on dwellings. 100 200 300 Household debt to income in 2007, per cent  400  Sources: Flodén (2014) and OECD National Accounts. (a) Change in consumption is adjusted for the pre-crisis change in total debt, the level of total debt and the current account balance. See Flodén, M. (2014), ‘Did household debt matter in the Great Recession?’, available at http://martinfloden.net/files/hhdebt_supplement_2014.pdf. 17  All speeches are available online at www.bankofengland.co.uk/speeches  17  Chart 5. GDP distributions through time, conditional on composite indicators of indebtedness and asset prices  Chart 6.

10  Woods, S. (2017) ‘Looking both ways’, remarks prepared for the May 2017 Building Society Association Annual Conference, published 10 July 2017. http://www.bankofengland.co.uk/publications/Documents/speeches/2017/speech988.pdf 11 ‘The Return of the Regulator’ here is not a reference to the west coast gangsta album, released in December 2001, by Warren G.  12  All speeches are available online at www.bankofengland.co.uk/speeches  12  We’re using our powers – which, alas, don’t extend those of Jedis – to ensure it’s the latter. We are putting defence lines into the economy. Lines that guard against the spiral of complacency by lenders. There are three. The first is pro-active supervision of the banks and building societies to avoid the spiral of complacency. Banks and building societies regulated by the Bank of England account for 80% of credit card and personal loan credit and 40% of car finance. We have asked the boards of all lenders to prove that they have safeguards against entering the spiral;  Safeguards against being unduly influenced by current good performance;  Safeguards to ensure rising levels of debt are taken account of when they assess whether a borrower can repay;  And safeguards against assuming the used car market will behave as it did in the past. The second defence line is regular ‘stress-testing’ of lenders to make sure they have the strength to deal with very severe recessions without cutting back their lending.
Subsequently, growth in non-reserve liabilities such as currency and reductions in the Fed’s securities holdings caused reserve levels to decline. As the level of reserves has come down, we stepped up our monitoring of the effect of reserve levels on interest rates. The level of reserves consistent with “ample” is inherently highly uncertain, so we have been actively looking for signs that reserves might be growing scarce. Along with in-depth analysis of conditions in money markets, we conduct surveys of banks and other outreach to market participants to understand the factors that influence the demand for reserves.4 To smooth the transition to a level of reserves consistent with the framework, the FOMC announced a slowing of the pace of the reduction in securities holdings at its March meeting this year and stopped it outright at the July meeting.5 Based on a variety of metrics and information, the supply of reserves appeared ample during the summer and into early September. The funds rate traded well within the target range and money markets functioned well. Recent Developments in Money Markets With the stage set, I’ll turn to market conditions over the past month and the Fed’s actions. Conditions in money markets became highly volatile about a month ago. Secured and unsecured rates moved higher and became more disparate on Monday, September 16, and this intensified the following day. We had expected a number of factors—including corporate tax payments and the settlement of newly issued Treasury securities —to put some upward pressure on short-term rates.

As prepared for delivery  Good afternoon, everyone. When I give a closing keynote I try to bear in mind that you’ve been listening for hours to complex and technical material. I wish I could say that I’m here to offer some light relief, but, alas, no. The topic I’m going to address this afternoon is both complex and technical. It’s the recent turmoil in the repo markets and the Fed’s actions to address it. I’m going to start by laying out the Fed’s operating framework for carrying out monetary policy. This will take me into aspects of the “plumbing” of the financial system, which may seem like an esoteric topic to many, but it’s one of critical importance, so please bear with me. I will then go over the money market turmoil from a month ago that led the New York Fed to conduct open market operations to stabilize short-term interest rates. I’ll conclude by describing the path forward as laid out in the Fed announcements this past Friday.1 Before I go any further, I should give the standard Fed disclaimer that the views I express today are mine alone and do not necessarily reflect those of the Federal Open Market Committee or others in the Federal Reserve System. Monetary Policy, Interest Rates, and Ample Reserves As a prelude, it’s worthwhile to step back and remember how this all connects to the Fed’s overarching monetary policy goals. The Federal Reserve has two goals set by Congress: maximum employment and price stability.
But the difficulty in spelling out underlying reasons must not become an excuse for lack of analysis and preparation. In order to make cross-border crisis management work, we may have to consider sacrificing some mystery – even if only amongst ourselves – for greater effectiveness. The most recent cases of official emergency liquidity support to UK banks occurred in the early 1990s, when the Bank lent to a few small banks in order to prevent wider loss of confidence in the banking system. The Memorandum of Understanding (MoU) between the Treasury, FSA and Bank which sets out our current roles in maintaining financial stability makes clear that decisions on support operations now rest with the Chancellor, acting in the light of advice from both the Bank and the FSA. Following the early 1990s experiences, Eddie – now Lord George – discussed various options for intervention. 3 He argued that, in deciding whether to provide support, the authorities should: explore every option for a commercial solution before committing public funds; structure any support such that losses would fall first to shareholders and any benefits fall first to the authorities; not, in normal circumstances, lend to a firm known at the time to be insolvent; and, look for a clear exit from provision of the lending. These guidelines go more to the question ‘how’ rather than the question ‘when’ the authorities should intervene, and they were drawn up before the globalisation of banking and capital markets had got fully underway.

But remote events do happen – and by their nature we cannot always see them coming. Researchers at the World Bank have recorded 13 borderline or full-blown financial crises since the late 1970s, involving at least one Financial Stability Forum (FSF) member country. 1 And there are well known incidents not on the list: including the 1987 crash, the less developed countries’ debt crisis and LTCM’s near collapse. So we are fortunate in having a time of relative calm to work out together how we should react when a problem does arise. And we have in the FSF a body that was established “to co-ordinate the efforts of …various bodies in order to promote international financial stability, improve the functioning of markets, and reduce systemic risk” 2 . In its first 7 years, much of the FSF’s focus has been on the identification and assessment of risks in a rapidly changing financial system; it has played a valuable role in building a common understanding among authorities and among market participants of what the risks are and how they can be reduced. However, that level of progress has been less apparent on putting in place arrangements for handling and resolving cross-border crises. During that period a number of countries, including the UK, have improved their processes for handling financial crises – including for crises sparked by business continuity events.