samchain/econo-pairs-v1 huggingface dataset:
They can often help the MPC understand what lies behind puzzling movements in the official data or in the business surveys. And, though the evidence they provide is more qualitative rather than quantitative, they can give us early warning of major cyclical developments. The outstanding example here is in the aftermath of the collapse of Lehman Brothers and the subsequent near-seizure of the global financial system in early October 2008, when our Agents reported many of their contacts saying that “orders had fallen off a cliff” – the first real indication of the severity of the contraction that was to follow over the next nine months. The sharpness of that contraction, as well as its unexpected nature, can be seen in Chart 1, which plots the path of four-quarter real GDP growth on top of the fan chart associated with the MPC’s projection for growth, conditioned on prevailing market interest rates, made in August 2008. Given that each shade of green corresponds to 10% of the possible outcomes and the whole fan covers 90% of the possible outcomes, it can be seen that the MPC had  BIS Review 142/2010  1  collectively assessed the probability of contraction over the four quarters to 2009 Q2 as about a half, but the probability of growth being less than –1½% as just 1 in 20. Now the MPC does not attempt to calibrate the probabilities associated with tail events precisely.

High-quality research boosts the central bank's credibility and improves the quality of its policies. The remit of this activity is the presentation and discussions of the current research projects conducted at the Bank of Albania over this year, along with the researches performed in other central banks, prestigious international and Albanian universities, as well as in financial institutions. It is an excellent opportunity to get feedback and new insights from colleagues in homologue institutions working on the same topics and dealing with similar challenges to ours. I am pretty sure that this workshop will be worthwhile to better understand the origin and complexity of challenges we are facing, and design the right policies to address them accordingly. Over these years, the workshop did change and grew in many different ways, in turn so did the challenges and opportunities faced by us. This event takes place at a particularly difficult time: while we are still facing the complexities of the gradual phasing out of the policies implemented during the pandemic, new risks have dramatically taken center stage. 1/4  BIS - Central bankers' speeches  Despite the limited direct exposure of Albania to Russia or Ukraine, the macroeconomic scenario changed almost overnight following the Russia's war in Ukraine. Albania is now facing the challenges arising from the surge in international prices of energy, tighter global financial conditions, which are likely to persist and the economic slowdown in Europe.
This in turn biases upwards the expectations of future short-term rates and hence steepens the whole term structure. [14] Communicating about a decrease in the lower bound makes rates possible that were previously perceived to be infeasible and, ceteris paribus, decreases expected future rates. By this reasoning, the lower bound itself – that is, the extent to which the central bank is willing to go negative if needed – becomes a policy parameter. [15] Another potential way in which rate decreases in negative territory may have a more distinct effect is the accentuation of yield-seeking investor behaviour as in the Hanson-Stein setting that I described earlier. Those financial market participants that have a strong aversion to negative rates on short-term assets or an institutional need to avoid them altogether would seek to climb up the maturity ladder. This increased demand for longer-term debt would increase prices and decrease term premia. That is, the rate cut in negative territory would lead to a more accentuated search for yield that could amplify the yield curve reaction compared with what is observed on average in positive territory. Through a similar mechanism negative rate policy can also be seen as complementary to our bond purchase programme (whose impact on the yield curve I will discuss in more detail later on). [16] In particular, the negative deposit rate reinforces the incentive of banks to actively seek higher-return alternatives rather than passively absorbing the excess liquidity created by quantitative easing.

In total, 1300 tons were sold. The decision to reduce our gold holdings by half was taken for two reasons that were highlighted by experts as early as 1997: First the SNB arguably had more gold than it needed. Switzerland's official gold holdings per capita were five times higher than those of the next G10 country. Second, the SNB had - on a mark-to-market basis - excess capital reserves that were no longer required for monetary purposes. As a result, the decision was taken to sell 1300 tons of gold. In May 2000, as soon as the legal framework had been amended to allow market sales, the SNB started it gold sales operations. We adopted a very transparent strategy and tried, within the constraints of the Washington Agreement, to maximize the proceeds of the gold sales in Swiss francs. The average selling price of USD 350/oz was 17 dollars higher than the average London fixing of the selling period. Of course, with today's prices around 600 USD/oz, you might think that we revisit our sales program with mixed feelings. As a matter of fact, price forecasts, which are inevitably subject to great uncertainty, did not feature prominently in the SNB’s decision to sell gold. The timing of the gold sales was largely influenced by factors that the SNB did not fully control. Once we were allowed to sell, we started our program within the window of opportunity that had been negotiated with other central banks under the first Washington agreement.
1  1 [8]  need a broad discussion of what it means when central government’s presence on the payment market’s supply side risks disappearing along with cash. Introducing an e-krona would entail taking a new step and the consequences of this must be analysed carefully. But accepting a situation in which the general public no longer has access to any form of central bank money would also be a step into the unknown. Issuing digital Riksbank money, an e-krona, as a complement to cash would be one way of avoiding this situation. The alternative to an e-krona would be for central government to intervene with more detailed regulation of the market to ensure society’s different interests are met. But this too would have its problems, as I shall discuss in more detail. The largest and smallest payments: the Riksbank’s role today and in the future Traditionally, the Riksbank has been responsible for the underlying system in which all payments in Swedish kronor are settled, the RIX system. This system was created to manage large-value payments in a highly secure manner. In addition, the Riksbank’s banknotes and coins have been used for the very smallest payments. The payment market is currently undergoing a large number of major changes that are affecting both of these ‘systems’. As cash usage declines, almost all consumer payments in shops are now made by card. This market is completely dominated by Visa and Mastercard and much of the infrastructure is located outside Sweden’s borders.

(2018) ”När slutar svenska handlare acceptera kontanter?” (When will Swedish retailers stop accepting cash?) Swedish Retail and Wholesale Council research report, 2018:1. 5 [8]  On the payment market, we have what is basically a similar situation, requiring major investments in IT infrastructure, which easily leads to a monopoly situation with one dominant company. So far, however, cash has always been available as an alternative that restricts the monopoly’s chances of exploiting its power. 14 Often it is central government that is responsible for production on markets with natural monopolies, but a private company can also have a monopoly at the same time as the state intervenes and regulates prices. 15 If the company were allowed to set the price itself, excess profits would arise, in addition to which quantities of the product would be too small and/or the quality too poor, as in all monopoly situations. On the payment market, there are also economic advantages in the participants using the same infrastructure. For the consumer, it is convenient if the same solution works everywhere the consumer makes a payment. We would prefer not to need one card for each shop, another for parking, using public transport and so on. This means that so-called network effects arise, as the more people who join the same system, the better it is for everybody in the system. However, this also means that it is difficult to set up normal competition on the market.
This is important, not just because of the growing influence of these economies – nor even because the leading international forums are currently dominated by the very economies that are now in the deepest trouble – but because the ordinary people of developing economies are usually the ones who suffer most in a global financial crisis. International co-operation will also, I hope, act as a countervailing influence against any repeat of the disastrous mistakes that were made in the 1930s. There has so far been a resistance to trade protectionism, although the idea has begun to gain some ground as a  BIS Review 12/2009  3  spurious answer to economic distress. There is a risk that the idea will spread to the financial sector, particularly if there is political pressure to include protectionist measures in rescue packages for troubled banking systems in the developed economies. I need hardly point out that – no less than trade protectionism – such a trend would deepen the hardship of the developing economies, many of which rely heavily on international finance. It would also be a matter for serious concern in financial markets across the world. One of the central aims in building a more robust international financial architecture must be to ensure that there can be no excuse for resorting to financial protectionism as a solution to global or national crisis. This will be a year of hardship and anxiety throughout the world. Much effort will be spent in fire-fighting and managing expectations.

Joseph Yam: HKMA congratulates the Central Bank of Malaysia on 50 years of achievements Address by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the Ceremony for the 50th Anniversary of Bank Negara Malaysia: "50 Years of Central Banking – Stability and Sustainability", Kuala Lumpur, 8 February 2009. *  *  *  YANG AMAT BERHORMAT PERDANA MENTERI MALAYSIA Dato' Seri Abdullah Haji Ahmad Badawi YANG BERBAHAGIA KETUA SETIAUSAHA NEGARA Tan Sri Mohd Sidek Haji Hassan Dear Governors, Distinguished Guests, Ladies and Gentlemen, It is an enormous honour and pleasure to be invited to speak at today’s ceremony. The honour is a special one because over the years Bank Negara and the Hong Kong Monetary Authority have worked in close partnership on many projects, to the extent that a deep friendship has been built between our institutions: with that friendship has developed great admiration on the part of my colleagues and myself for Bank Negara’s many achievements. The pleasure is not just in having the opportunity to visit once again this beautiful and hospitable country, but also in being able to pay tribute to a valued colleague and dear friend, Governor Tan Sri Dr Zeti Akhtar Aziz. Governor Zeti's strong and inspired leadership of Bank Negara for most of the last decade has turned it into a first-rate central bank and a great force for good in this region. We are all mindful that we celebrate this 50th anniversary in the midst of intense global financial crisis.
I would now like to address some aspects that a central bank has to consider in such a scenario also when looking to the long term. We can only speculate as to the long-term monetary policy implications of protectionism. That said, in a world that would be clearly less open, it would be impossible to rule out changes in the macroeconomic relationships. This is anything but trivial for central banks. Familiar reaction patterns could change, and common indicators could be rendered meaningless. For the SNB, the main questions in this context relate to how prices and production would behave in an economy that is more closed off from the outside. Domestic influencing factors could become more important regarding inflationary pressure, with the significance of global factors decreasing. After all, globalisation has a dampening impact on prices in that it exposes domestic companies to international competition. 6 If they were to be shielded from foreign competition, this downward pressure on prices could be expected to ease. Domestic shocks could thus have a more direct impact on inflation, and monetary policy would have to address this. Another particularly relevant question for the SNB is whether – and to what extent – the channels via which our monetary policy takes effect on the real economy and on prices will be affected if the world becomes less open. In a largely closed economy, the importance of the exchange rate as a transmission mechanism would decline. Conversely, the significance of the interest rate channel would probably increase.

Another was the greater weight of the sectors most affected by these measures. But the impact is also the outcome of the smaller size, on average, of our firms. SMEs are less adaptable to this shock, given that they usually face greater obstacles in gaining access to external financing; their fixed costs are, in proportion to their turnover, higher; and their levels of digitalisation are generally lower, which hampers their access to remote working. The first two editions of the Banco de España’s Survey on Business Activity confirm these circumstances. The impact of the crisis has been very uneven, as the sectoral outlook evidences. Thus, while effective social security registrations1 were, in February, 6.8% down on their prepandemic level, the figures were significantly worse in the sectors whose activity has most been restricted, such as hospitality, retail trade, artistic and recreational activities, and some other services. For example, in the hospitality industry, the level of effective registrations was almost 50% down, whereas in health care and in general government it was 4% higher. Moreover, the sectors most affected by the crisis employ, on average, workers with lower educational levels. In fact, the decline in employment among the lower qualified amounted to 15.1% in 2020 Q4, compared with the slight increase among those with higher studies (0.4%). Also of note was the fall in employment among young adults (aged 16-29), at 10.4%, compared with the 1.4% increase among the over-45s.
William C Dudley: The road to recovery – Puerto Rico and the mainland Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the E-3 Summit of the Americas: Export Trade Basics Forum 101, San Juan, Puerto Rico, 1 April 2011. *  *  *  Good morning. I am pleased to be back in Puerto Rico to speak to you and meet with various communities in the Commonwealth. Each visit gives me a chance to deepen the Bank’s relationship with the island. Last year I visited La Cantera and met with community leaders, business people, academics, bankers and government officials. This year I visited Goya Foods – the oldest Hispanic-owned plant in our country with subsidiary facilities in my home state, New Jersey, and upstate New York. I will also meet with a similar wide range of people to talk about what we do and to hear first-hand the economic and financial issues important to Puerto Ricans so that I can best represent all my constituents in my work at the Fed. Your beautiful island is unique within the Second Federal Reserve District. For me, personally, being here also recalls special memories of my childhood visit with my parents. I thank the organizers for inviting me to speak at the Export Trade Basics Forum, to help kick off the week-long summit on Education, Exports and Entrepreneurship that begins next week.

In the third quarter, the disinflation process lost pace due to the tax measures to restore fiscal balances. 2  BIS Review 143/2009  In addition, phased-out tax cuts on durable consumption goods were one of the featured developments with regard to consumer prices in the third quarter. All in all, the decline in prices of core goods remained below previous levels (Figure 4). In the third quarter of the year, the rate of increase in services prices continued to slow down in the face of weakening domestic demand and the fading of high base effect caused by supply shocks in the previous year. Seasonally adjusted data suggest that the main trend of services inflation is at historically low levels, this prevailing across all sub-groups. It is especially noteworthy that monthly rent inflation continued smoothly along a downward path (Figure 5 and Figure 6). Nevertheless, we expect that the services sector will enter a gradual recovery trend, however prices will continue to increase at a moderate pace in the last quarter of the year. Figure 5: Services Prices  Figure 6: Services Prices  (Seasonally Adjusted, 2-Month Averages)  (Percentage Months)  2.0  16  1.8  Services  1.6  Rent  14  Change,  First  Nine  2006-2007 average 2008 2009  12  1.4  10  1.2 1.0  8  0.8  6  0.6 0.4  4  0.2  2  Source: TURKSTAT, CBRT.
Yet efficient market forces ‘should’ eliminate these disequilibria by having wages adjust to ensure full employment always and forever. Monetary Policy is not only a response to these rigidities; it is made effective by them. 9 But economists of a more nuanced persuasion pointed out as far back as the 1950s that this logic is flawed. See Lipsey, R and Lancaster, K (1956), “The general theory of the second best”, Review of Economic Studies, 24(1). 10 Their world imagines self-interested, atomistic agents, coolly calculating odds over all future possible states of the world, writing and trading contracts with each other, all frictionlessly enforced, all achieving mutually beneficial – indeed socially optimal – outcomes. Arrow, K and Debreu, (1954), “Existence of an equilibrium for a competitive economy”, Econometrica, 22 (3). 11 The bankers who played a leading role in developing the credit derivatives market declared “Credit derivatives are a mechanism for transferring risk efficiently around the system” and that defaulted loans that would have knocked a hole in a bank’s balance sheet ten years ago were “now hits that we have spread around the system, and represent tiny blips on the balance sheet of hundreds of financial institutions”, see p99, Tett, G., “Fool’s Gold”, (2009). 4  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  4  The impossibility of completing markets was not the only practical problem with the pre-crisis approach.

That is because more than $ trillion of assets are held in funds that promise daily liquidity to investors despite investing in potentially illiquid underlying assets.32 In other words, they are built on the lie that markets always clear. To assess the risks of fire sales and contagion across emerging and credit markets, authorities need to gather and share data on asset management. In this context, the FSB expects that consistent and decisionuseful measures of leverage will be developed to support an effective global risk assessment. I would encourage industry to engage with the upcoming IOSCO consultation on this issue. The FSB is also refining its Systemic Stress Initiative to explore how funds and other non-bank financial institutions might collectively act in ways that amplify shocks.33  30  IMF Article IV Consultation for the People’s Republic of China (2018). See Boston Consulting Group estimate of global AUM in Global Asset Management 2018. 32 See FSB Global Shadow Banking Monitoring Report (2017). 33 The Bank of England is working to better understand such dynamics as well. See Baranova, Y., Coen, J., Lowe, P., Noss, J., and Silvestri, L. “Simulating stress across the financial system: the resilience of corporate bond markets and the role of investment funds”, Bank of England Financial Stability Paper, (2017).
Banks have improved their capital positions and profitability since the euro area crisis, and the stock of non-performing loans continues to decline at a moderate pace. But further improvements are needed in parts of the banking sector if banks are to achieve sustainable rates of return. In particular, overcapacity and cost inefficiencies weigh on many banks’ long-term profitability prospects. The better performance of some banks within the euro area, and in jurisdictions facing similar economic and financial conditions, illustrates the importance of addressing structural issues. The current interest rate environment has various implications for the resilience of the banking sector. Banks have benefited, and will continue to benefit, from the lower credit risk for borrowers, and from the higher asset valuations associated with lower interest rates and 1/2  BIS central bankers' speeches  better macroeconomic outcomes. This has helped support bank profitability across the euro area since the deposit facility rate turned negative in 2014. However, the negative interest rate policy also entails costs for banks, and these could increase the longer negative rates are in place, the lower policy rates are set and the larger the amount of excess liquidity held by banks. These vulnerabilities could crystallize if economic growth is much weaker than expected, or if weak growth persists for longer than expected. We thus welcome the measures taken by the banking sector in recent years to improve resilience, and support efforts to further strengthen resilience while conditions are benign.

Let me expand a little on these vulnerabilities: Repeated downward revisions to the economic outlook and accommodative monetary policy actions on both sides of the Atlantic have put downward pressure on global bond yields across the whole maturity spectrum. For the first time in history, large parts of the yield curve for many euro area sovereign bonds, in particular those issued by governments with high credit ratings, have entered negative territory. It is often said that low or negative interest rates inflate asset prices as investors search for yield and take on more credit and duration risk. Equity and corporate bond prices, for instance, have appreciated across the globe over the past decade as yields have followed a path of long-term decline. Abrupt corrections, especially in equity markets and markets for lower-rated bonds remain a risk, particularly in the face of high economic and political uncertainty. Low funding costs can encourage firms to increase their leverage, which might intensify vulnerabilities in the event of an economic downturn. This risk has increased as the economic outlook has worsened and the share of triple-B ratings has grown. Concerning the second vulnerability, in several countries debt in the public and/or nonfinancial private sectors is lingering at levels that are high by historical and international standards. This leaves public and private finances exposed to the risk of a sudden change in market sentiment or deteriorating macroeconomic conditions. Third, parts of the banking sector continue to exhibit weak performance.