samchain/econo-pairs-v1 huggingface dataset:
As pointed out by Markus Brunnermeier, the willingness of central banks to continue making large purchases of private assets long after the end of the Global Financial Crisis has led to “a build-up of private debt, depressed credit spreads, distorted price signals, and high house prices from increased mortgage lending.” [12] The second concern is the feedback loop from these vulnerabilities constraining future monetary policy options. If these vulnerabilities are significant, the central bank may be concerned that the tightening of monetary policy necessary to bring down inflation to target could trigger financial instability – in other words, financial dominance. A practical way monetary policy could minimise the risk of financial dominance is to use inflation targeting more flexibly. A criticism of inflation targeting is that it has been too much of a straitjacket on monetary policies: for example, keeping interest rates low for long to get inflation up to the target of 2% led to a build-up of financial vulnerabilities. I think the problem is not with inflation targeting per se but with not using it flexibly enough. There are two ways in which inflation targeting can be pursued more flexibly to minimise financial vulnerabilities. One, take time to bring inflation back to target. The BIS, for instance, advocates lengthening the monetary policy horizon to take financial stability consequences of monetary policy more fully into account. [13] But allowing inflation to persist for too long away from the target runs the risk of unhinging inflation expectations.

We will continue to be actively involved in the finalisation of the international reforms. The combined package of national and international reforms represents a decisive step in the process of resolving the ‘too big to fail’ issue in Switzerland. BIS central bankers’ speeches  1  Domestically focused banks: adequate resilience, despite substantial increase in mortgage exposure This brings me to the domestically focused banks. For these banks, whose activity centres on Swiss lending and deposit-taking business, I would like to highlight three developments. First, these banks’ risk exposure to the Swiss mortgage and residential real estate markets rose markedly in 2015, with their mortgage lending volume growing at a similarly robust pace as in the previous year. In addition, they further increased their affordability risk and interest rate risk exposure from maturity transformation, against a background of slightly higher imbalances on the mortgage and residential real estate markets. Second, in 2015, these banks’ interest rate margins stabilised at a low level, after having fallen steadily and significantly since the start of the low interest rate period at end-2008. This stabilisation is remarkable, given that pressure on interest rate margins continued last year. Swiss money and capital market rates fell once again in 2015. At the same time, the interest paid by banks on customer deposits remained largely unchanged. Thus, the difference between these two interest rates – the liability margin – narrowed further.
The City of London has been making a positive and constructive contribution to their development by doing what it does best: providing a lead through innovation; and setting the standard for excellence. As a result, all the available evidence continues to indicate that, since the launch of the euro, London has fully maintained its market share. Let me give you a few figures. •  There are 482 foreign banking institutions in London, around double the number in Frankfurt, and more than double the number in Paris. •  The wholesale euro payment system in London, CHAPS euro, has recently accounted for 19% by value of cross-border payment flows in TARGET, the pan-European payment system. This figure has grown from 15% since the launch of the euro, and the UK now accounts for more crossborder payment flows in euro than any other country, except for Germany, even though the UK is not participating in EMU. •  London is estimated to have a 32% share of global foreign exchange turnover, compared with 5% for Germany and 4% for France. •  London's global market share of over-the-counter derivatives is around 35%, compared with 5% for Germany and 6% for France. •  Over 98% of the euro short-term interest rate contracts on the three major European derivatives exchanges (in London, Frankfurt and Paris) are traded on LIFFE.

It cannot subordinate its legal mandate of maximum employment and price stability in the United States to alternative international goals. But, given the role of the United States and the U.S. dollar in the global economy and financial system, the Federal Reserve is—and indeed, needs to be—mindful of the international effects of its policy. That is because those consequences can have important potential spillbacks to the U.S. economy and financial markets. The bond market “taper tantrum” of 2013 highlighted that prospective changes in U.S. monetary policy could affect the EMEs—particularly those with existing vulnerabilities—and how those consequences, in turn, could spill back to the United States. This episode underscored the need for clear communication and transparency around U.S. policy so that expectations can adjust smoothly and be appropriately calibrated to what is likely to occur. As you know, the Federal Reserve has become increasingly transparent in recent years, in part to mitigate such risks. Good communication and transparency is always important during periods of conventional policy normalization. But, good communication and transparency may be even more important when one begins to unwind unconventional monetary policy actions, such as balance sheet policies with which we have little prior experience. Moreover, I would surmise that adjustments to balance sheet policies undoubtedly affect asset prices in ways that differ from changes in short-term interest rates. Earlier this month, we announced an addendum to the FOMC’s Policy Normalization Principles and Plans.3 In this addendum, we spelled out how the balance sheet normalization program would work.
But there was little evidence of an additional very sharp tightening in the supply of credit last autumn that could explain the sharp fall in activity in the six to nine months after the collapse of Lehman’s in 2008Q4 and 2009Q1. There are two candidate, and mutually inclusive, explanations for the large impact on output. Expectations of future credit availability may have worsened sharply. Or, more plausibly, there may have been a more general increase in uncertainty as a result of the nearmeltdown in the financial sector, leading to an increase in precautionary savings, the postponement of planned investment projects and a running down of inventories. But either way, globalised supply chains ensured that the shock to demand was transmitted worldwide. History suggests that downturns associated with financial crises tend to be both deeper and longer-lasting than average. Reinhart and Rogoff (2008, 2009) have mapped the macroeconomic characteristics of the present financial crisis against preceding episodes in both advanced and emerging market economies. Their results can be summarised as follows: asset price collapses tend to be deep and prolonged; the aftermath of banking crises tend to be associated with substantial and prolonged falls in output; the downturns typically lead to a substantial build-up in public debt; and the antecedents of the present crisis appear remarkably similar to those in previous episodes. Fig.

These include: •  Stable macroeconomic environment as reflected in single digit inflation, reduction in lending interest rates and a stable exchange rates  •  Amendments/Harmonisation of financial sector legislation such as the Development Bank of Zambia (DBZ) Act, the National Savings and Credit Act (NSCA), the Pensions and Insurance Act, the Building Societies Act (BSA) and the Banking and Financial Services Act (BFSA) in 2005. •  Establishment of a credit reference bureau in 2006; and Promulgation of microfinance regulations in 2006. Honourable Minster – The production of market knowledge on the supply and demand for financial services in Zambia was identified as one of the priority areas under the FSDP. In this regard, FinMark Trust of South Africa was contracted by our cooperating partners the Swedish International Development Agency (Sida) and the United Kingdom’s Department for International Development (DFID) to undertake this important activity and subsequently, the FinScope Zambia 2005 Survey, a comprehensive demand-side survey of consumer interactions with financial markets in Zambia, was conducted in November 2005. The main objective of the survey was to measure access to and use of financial services, along with how people manage their finances and what drives their financial behaviour. Honourable Minister and Invited Guests - This morning we are here to share with you, the findings of the FinScope Zambia 2005 Survey. These findings are expected to play an important role in profiling demand for financial services in Zambia.
We are also heavily preoccupied with deposit insurance and the outcome of that exercise may influence the way in which the three tier structure is modified – most obviously, whether the deposit threshold for DTCs should continue to be set at $ 8. Also on the back burner for the time being is consideration of whether there should be any change to the minimum paid-up capital requirements for locally-incorporated AIs. This obviously is tied in to some extent with the reform of the three-tier structure, as if we did amalgamate the RLBs and DTCs into a single class we would have to decide what the minimum paid-up capital requirement for the class should be. This is something we will have to consider in due course, but we are of course well aware that a higher requirement would have implications for some of the smaller DTCs, and we will certainly have regard to this. Aside from any change related to the reform of the three-tier structure, we don’t at present have any other plans in relation to the minimum capital requirements, although at some point we may want to consider updating them in line with inflation. 9. On the third initiative I mentioned, the credit reference agency, some of you may know that we have established a working group to take this initiative further.

A number of banks see the logic in this and support our proposals. Others remain less enthusiastic. But we are consulting the industry further on this and I hope that something that is acceptable to all can be arrived at. 11. Next is the issue of the review of the Code of Banking Practice, in relation to which it is suggested in David’s letter that some people are unhappy about the stance taken by the HKMA. On this, I am afraid, I have rather less sympathy than on other issues with those who raise concerns. I do not believe that any of the changes promoted in the Working Group, such as in relation to credit cards and also to fees and charges, are unreasonable. Indeed, most banks seem to have accepted the rationale for changes such as the $ card loss limit, which brings Hong Kong into line with international practice. I believe that the banks must appreciate that issues relating to terms and conditions and other aspects of customer service are a legitimate matter of public interest and concern. In the past, it is true, the HKMA has not been as closely involved in consumer matters. This, however, is something that is changing, not because we particularly desire it but because it seems to be what the public expect. We plan, therefore, to review our involvement in this area so as to determine exactly what our role should be. 2  BIS Review 3/2001  12.
Although there are no candidates at present, it would be open to other non-bank issuers to go down the same route – in which case, if we received an application, we would want to be sure that the issuer was financially sound and that the card scheme itself is sound in terms of chip security and risk management policies and procedures surrounding it. When it comes to electronic banking channels, our regulatory approach is, at this stage, less specific in nature. The first step is to know what the banks are actually up to in areas such as internet banking. We therefore issued a letter to authorised institutions in 1997 saying that while banks do not need to  BIS Review 108/1999  4  seek formal approval from the HKMA to offer their services through the internet, they should discuss with us in advance their plans to do so. This is to enable the HKMA to assess whether the institution’s proposed internet banking system is sound and the service provided through the internet will have adequate security. Note that we are not looking for absolute security. This does not exist in either the electronic or physical world of banking. However, the level of security should be “fit for purpose”, i.e. appropriate to the type of transactions to be conducted. The important thing is for the banks to undertake a rigorous analysis of what their security needs are in the context of the particular service that they are planning to offer.

Our position, put simply, is that we do not believe that customers should be responsible for any security breach or system problem that is not due to negligence on their part, and we have requested that this should be reflected in the contractual agreements for internet banking services. Reputational risk Risk of damage to the bank’s reputation goes along with the other risks I have mentioned. It can arise, for example, from operational risk even if customers suffer no actual damage. If a hacker successfully 3  BIS Review 108/1999  breaks into a bank’s website and makes alterations, the bank concerned can suffer substantial damage to its reputation although customers’ balances are safe and the hacker has not obtained any financial benefit. This does not only affect the individual bank concerned but may also undermine confidence in the security of e-banking more generally and therefore slow down development in this area. Systems breakdown, even if only temporary, is another example of how banks may be affected by bad publicity. Given the fact that the element of trust is so fundamental to banks’ business, banks will find it increasingly important to adopt measures to manage reputational risk and incorporate public relations strategies into their overall risk management framework. Banking risks As I have already mentioned, an internet-based bank is faced with the same types of banking risk as its traditional counterparties. In some ways, the internet may heighten these risks.
Might this be a reflection of the rather larger share of high labour input service industries in the UK and a lower share of manufacturing? Not really, because the pattern appears to hold at a sectoral level as well. This evidence points to the importance of raising productivity growth, supported by investment, in order to make it easier to handle the debt legacy of Covid and offer some protection against the risk that the decline in the labour supply during the pandemic proves more persistent. There is an interesting issue of whether such a change is already under way as part of the immediate response to Covid. Online retailing is an example of a sector where the impact has 4/5  BIS central bankers' speeches  included higher productivity and investment to support the more digital service. Over the pandemic period, investment in intellectual property products (which includes things like investment in software and research and development) has held up better than other types of investment, particularly compared with investment in commercial buildings and transport equipment. This supports the idea that a move to digital is underway. It is too soon to tell to what extent changes seen over the last year or so will persist and further expand. But I think it is fair to say that more investment to support growth will be needed and that is why the Bank, Treasury and FCA have emphasised working with the financial sector to ensure the supply of productive finance to support investment is available.

Let me conclude with a reflection on monetary policy. The economy is bouncing back rapidly, which is good news. With that has come a rise in inflation, and we expect that rise to continue in the near term as we go through the rest of this year, such that CPI inflation is expected to pick up further above the target, owing primarily to developments in energy and other commodity prices. I have set out the reasons why we expect this rise in inflation to be a temporary feature of the bounce-back. The reasons for taking this view are well-founded, it is not a vain hope or a matter of whistling in the wind. It is important not to over-react to temporarily strong growth and inflation, to ensure that the recovery is not undermined by a premature tightening in monetary conditions. But it is also important that we watch the outlook for inflation very carefully, which of course we do at all times, particularly for signs of more persistent pressure and for a move of medium term inflation expectations to a higher level. And if we see those signs, we are prepared to respond with the tools of monetary policy. Over the last sixteen months we have used monetary policy decisively to respond to an unprecedented crisis which was disinflationary. We were able to act in this way because the framework of monetary policy and the record of its use are robust. This credibility gave us the scope to act in a crisis.
QUESTION from Reuters: Your press release allows for a gradual downgrade in the key rate. Is this to say that a 25 basis point reduction in future is the new normalcy? ELVIRA NABIULLINA: Thank you very much. It is true that we have decided on this magnitude of reduction – 25 percentage points after long time. A short while ago, I floated the idea of a smaller step as we transition progressively to a single-digit rate. This is understood to be standard practice when the key rate is below 10%. Yet, this is not to say that each policy meeting will decide in favour of a 25 bp reduction. I leave open the possibility of a further 0.5 bp reduction provided that the right conditions are in place; however, I envisage that a 0.25 reduction is likely to be more acceptable in the near future. QUESTION from Interfax: Two questions, please. First. Last autumn, the Central Bank issued a public statement that it was crafting guidance for civil servants, in an effort to mitigate the volatility of the exchange rate. Can you please update us on the status of this guidance? For which civil servants is this intended? Does this initiative remain current in light of recent statements that suggest a general over-strengthening in the ruble and that they weigh in on the exchange rate? And another question, if I may. Recently, we have heard heavy criticism against Rosstat. What is the Bank of Russia’s view of Rosstat statistics?

I trust that the outcomes and insights gained from each of the above pilots should help enrich our perspective and refine our focus and priority of the Pilot Programme in subsequent years. CBDC Expert Group Besides the Pilot Programme, the HKMA is also fostering closer government-industryacademia collaboration on CBDC research. We plan to form a CBDC Expert Group to bring together leading professors from local universities, who will come from different fields, such as computer science, business and law. I am glad to tell you that we have already received very positive response from the academia and have started the preparation work with these top-notch experts. The HKMA will work with the Expert Group to study different important issues, such as privacy protection, cybersecurity, and interoperability, and other technical and business aspects surrounding CBDC. While members of the Expert Group do not have any  2/3  BIS - Central bankers' speeches  formal advisory role, they will provide us with valuable insights and contribute to our future deliberations on CBDC. Closing In closing, I would say that Project e-HKD is a hugely complex and challenging undertaking. I said earlier that the project goes well beyond just technology. It will take our collective wisdom and effort to create innovative use cases so that in the end, if eHKD were implemented, there could be widespread adoption so as to achieve the network effect required of any successful retail payment instrument. This is going to be a long and winding journey.
Overall, market expectations suggest that interest rate hike cycles are nearing their end in a significant group of emerging economies. Moreover, several of them are expected to cut rates during 2023, particularly those that started raising their rates earlier (figure 10). In this context, global financial markets continue to show significant volatility. The local financial market has been adjusting to a lower risk scenario, with a significant drop in interest rates in pesos. Compared to early September, nominal 10-year papers posted decreases in the order of 125 basis points. Shorter-term rates —i.e., 1- and 2-year overnight index swaps (OISs)— fell by around 250 basis points in that period. At the same time, the spread with respect to international rates narrowed significantly. This behavior of nominal rates has arisen in a context of deteriorating economic expectations for 2023 and a reduction in expected inflation. Furthermore, the decomposition of long-term interest rates shows a growing preponderance of external risk factors, while domestic risk factors have decreased (figure 11). In any case, real rates show movements of a smaller magnitude. 4  The nominal exchange rate has continued to fluctuate significantly in recent months. Compared to the previous year-end, the peso depreciated by around 1%. Finally, domestic bank credit continues to be slow, amid a constrained supply and limited demand. The different credit categories show low annual variations by historic standards, while interest rates remain high. The third-quarter Bank Lending Survey indicates that credit supply conditions have become more restrictive, in the face of tight demand.

The shift to a new policy took place between 1993 and 1995. 3  BIS Review 59/1999  However, it should be added with regard to the failed defence of the krona, that experiences of free capital movements were not especially extensive. The Government and the Riksbank and political analysts in Sweden did not have any experience of the conditions for economic policy in a globalised world. The new stabilisation policy regime The Government formulated the goal for monetary policy itself in January 1993. Inflation was to be maintained at two per cent per year with a tolerance interval of +/- 1 per cent. The goal is symmetric. It is as important to bring inflation up to two per cent when actual inflation is under two per cent as it is to bring down inflation when it is higher than the target. This can be said but a lot of practical issues remained to be resolved and the answers are not at all obvious: 1. How is inflation to be measured: by CPI, the GDP deflator, or some other measure of price movements? 2. Shall the Riksbank have other objectives besides price stability? 3. Shall policies be directed at controlling the money supply or inflation directly? 4. How is confidence to be established in the Riksbank’s policy and expectations about low inflation? 1. The inflation target The Riksbank’s objectives has been expressed in the following way in legislation: “The objective of the Riksbank’s operations shall be to maintain price stability.