samchain/econo-pairs-v1 huggingface dataset:
7  6  Chart 6a  Chart 6b  Stylised effect of drop in discount rate  Decline in expected growth  Chart 6c  Chart 6d  Rise in two sided uncertainty  Rise in downside tail risk  This obviously depends on the sizes of the changes involved. Chart 6(c) simulates the effect of increasing the standard deviation of annual growth from 2% to 3%. Given that, even over the past twenty years, the true figure – for both world and UK growth – has been around 2%, that’s a fairly significant rise. Chart 6(d) shows what happens when you raise the perceived probability of an economic “disaster” by only 1% point (from 3% to 4%) and, although the simulated disaster is indeed very bad (a 20% drop in output) it’s not out of line with some of those that have occurred in the past (Barro 2009)). BIS central bankers’ speeches  Now these are extremely stylised simulations and one should obviously take them with a pinch of salt. Even within this basic framework there are plenty of other things that might have reduced the equilibrium risk-free interest rate.

2/3  BIS central bankers' speeches  Both the Banking Union and the Capital Markets Union are the key components of what we call with Jens Weidmann a genuine “Financing Union for Investment and Innovation”: this idea is a way of better channeling our abundant resources – our EUR 340 billion savings surplus in 2018 – towards the concrete needs of the European economy: the energy transition, SMEs’ equity or digital innovation. This unified branding has the merit of highlighting the purposes of this Union to the general public: investment and innovation, or in other words the financing of the future. III. Some pillars of a European financial sovereignty In the longer run, we should build three key pillars of the future European financial sovereignty. First of all, the EU needs to strengthen its position as rule maker through enhanced equivalence regimes. Brexit has given new momentum to this topic: a comprehensive reassessment of current equivalence regimes is essential given the scope of the relationships between the EU and the UK. Beyond the issue of Brexit, the review of equivalence regimes also provides an opportunity to improve them. There is a need for greater transparency in the procedure for granting equivalences, within a comprehensive institutional framework. The monitoring and control of equivalence decisions could also be improved by granting more power to ESAs, and by providing the European Commission with more gradual options through flexible tools in the case of regulatory divergence: for example, temporary, partial or conditional lifting of equivalences.
However, this adverse result was influenced by the negative extraordinary adjustments made during the year at some of the system’s main institutions.3 Excluding these adjustments, the sector’s profitability would be positive, albeit considerably down on the previous year, with ROA standing at 0.3% and ROE at 4.3%. The decline in the sector’s return on ordinary activities essentially owed to the reduction in net interest income and fees and, particularly, the increased provisioning in anticipation of credit impairments. Meantime, the appreciation of the euro against other currencies, particularly those of some emerging countries, has lessened the contribution made to results by business abroad, whose figures, measured excluding the exchange rate effect, have been more stable. In the year as a whole, losses due to provisions for impairment losses on financial assets amounted to € billion, up on the 2019 figure. In any event, the bulk of this increase was recorded in the first half of the year,4 and slowed significantly from June. The sector’s results were positive in 2021 Q1, albeit largely conditioned by the positive extraordinary results arising from a merger.5 These extraordinary elements aside, the 3  In particular, the two largest institutions recorded adjustments to goodwill for an amount in excess of € billion, along with other adjustments such as those linked to tax assets € billion). As a result of the approval of its merger, another institution recorded a fair value adjustment for an amount exceeding € billion in its year-end accounts, in accordance with accounting regulations.

For example, on-line brokers often provide clients with detailed information regarding market conditions and the execution of orders. Greater transparency on the part of brokers reduces the information asymmetry between brokers and customers. As a result, customers may be able to obtain better execution prices, not least because they can more easily see the prices quoted by various brokers. 2  BIS Review 27/2001  Although the electronification of financial markets can bring benefits to customers, some risks are also associated with it. The first type of risk is by nature operational. Advances in information and telecommunications technologies have made it easier than ever before to set up exchanges for financial products, for example on the internet. In the early stages of their development, the new trading systems need to be thoroughly tested so as to ensure maximum security. In particular, it is important for them to be able to withstand turbulent market conditions, including periods of exceptionally high trading activity and market volatility. The second kind of risk arises from the possibility of a disorderly segmentation of financial markets. As new trading systems are developed, the possibility exists that trading activity becomes spread over a number of exchanges. Competition between exchanges is generally beneficial. However, customers may, at least over a transitory period, be faced with some difficulties in accessing the new exchanges. Until the changeover is complete, customers may thus be unable to always obtain the best execution prices.
The continued run-down in inventories limited production and resource utilization and therefore curbed the effect of the recent rapid growth on inflation. Moreover, high unemployment rates have continued to suppress domestic demand. Accordingly, aggregate demand conditions have continued to support disinflation. Figure 23: GDP  Figure 22: GDP Growth by Periods  (Seasonally Adjusted, at 1998 Prices,  (Percent)  Billion TL) 27  15 9.4  10  8.4  6.2 5.3  7.2  6.9 4.7  5  2.8 0.9  24 1.0  0  21  -5 -5.7  -6.5  -10  -7.0  18  -15  -14.3  12 34 12 3 41 23 41 23 4 1 2 34 12 34 1 2  Source: TURKSTAT. 2009-2  2009-1  2008-4  2008-3  2008-2  2008  2008-1  2007  2006  2005  2004  2003  2002  2001  -20  2003  2004  2005  2006  2007  2008 2009  Source: TURKSTAT, CBRT. On the production side, value added fell year-on-year across non-farm sectors. The 3.1 percent value added in services provided the most negative contribution to GDP growth (Figure 24). On the spending side, the adverse impact of private demand on annual GDP growth substantially decreased compared to two preceding quarters. Meanwhile, the unfavorable trend in private investment expenditures continued in the second quarter and private investment became the demand component that made the most negative contribution to GDP growth (Figure 25).

One of the examples of this is the fact that we did not utilise the scope for rate cuts that - according to a stricter interpretation - deregulation and other supply factors had created during the last few years of the 1990s. The clearest example of how we attempted to convey that our inflation targeting policy was flexible rather than strict was the clarification of monetary policy that the Executive Board published in 1999. In that, we explained that it may be appropriate in some situations - e.g. in the event of large shocks and deviations from target - to refrain from bringing inflation back to target too quickly in order to mitigate the adverse consequences for output and employment.1 We expressed this in terms of there being reasons to occasionally depart from our simple policy rule - that the repo rate is normally raised if inflation one to two years ahead is forecast to be above 2 per cent, and vice versa if inflation is forecast to undershoot the target. Explicit framework as basis The strategy that we in Sweden have chosen for dealing with the “flexibility problem” could, in simplified terms, be described as that we, when we have found it necessary, have in various ways modified and adapted a framework - mainly represented by an explicit symmetric target, regular publication of detailed decision-support data including forecasts, and a simple policy rule for how the repo rate is normally adjusted against the background of the forecasts.
2  BIS Review 157/2010  14% to over 21% in the last 20 years. 6 This shows just how well Swiss companies – including small and medium-sized enterprises – have diversified their markets in the past few years. But the pie is only so big and the total is always 100%. This means that the share of exports to industrialised countries has inevitably decreased. In particular, Switzerland’s dependence on the European market has declined. Especially countries such as Germany, France and the United Kingdom have lost some of their relevance as export destinations. Switzerland is not alone in experiencing a shift in its market share in favour of emerging economies. This is merely a reflection of the growing significance of these countries for the global economy. 7 Accordingly, many EU countries have witnessed similar developments. There are, however, two very divergent developments responsible for this aggregate trend; both of which proved highly beneficial for Switzerland in dealing with the latest crisis. While many European countries intensified their trade relations with the emerging economies of Eastern Europe as part of the EU’s expansion eastwards (cf. chart 1a), Swiss exporters focused more on the Asian market (cf. chart 1b). As a result, Switzerland’s share of exports to emerging Asia – not including the four tiger economies – practically doubled in the last 20 years, and recently amounted to around 6%, compared to around 4.5% for the EU. 8 Chart 1a  Chart 1b  Sources: IMF Direction of Trade Statistics (DOTS) 9 , Federal Customs Administration (FCA).

Accordingly, trade in machinery, metals and textiles were particularly hard hit during the crisis. 14 Meanwhile, demand for non-durable consumer goods – and this includes pharmaceutical products – remained relatively stable. As you can imagine, there were probably very few patients who restricted their medical treatment due to the recession. As a result,  14  However, it was precisely these industries which had, in the preceding years, already become considerably less significant for Switzerland’s goods exports. BIS Review 157/2010  5  Switzerland’s large share in exports of pharmaceuticals had a stabilising effect and helped avoid an even greater drop in Swiss goods exports. Ladies and gentlemen, in addition to the diversification towards Asia, the longer term structural change in the composition of Swiss goods exports thus also proved beneficial during the crisis. 2.3  Quality matters  The third aspect I wish to address today is the quality of Swiss goods exports. As a rule, the “Made in Switzerland” hallmark is used to denote excellence. But do Swiss exports actually deliver high quality? Quality is not easily measured. Given the lack of alternatives, economists generally express the quality of goods in terms of “unit values”. Literally speaking, this represents the average price per unit of weight, for instance per kilogram. I, too, will use this unit of measure. However, this unit makes more sense if groups of similar products are examined.
Over time, and as long as inflation is on average in line with prior expectations, the change in the ratio of debt to GDP (b) is given by (r – g)b – d, where d is the primary deficit. This is stable – for given d it tends over time to revert to a steady state level (b* = (g-r)/d) – only if the term multiplying b is negative, i.e. g > r. With risk-free real interest rates comfortably below zero in developed economies this condition seems to be fulfilled at the moment, though that’s not always been the case. When r > g the debt ratio is no longer stable – unless d changes accordingly, small changes in r or g would put b on an unstable path. For more on the implications of g > r see Blanchard (2019) and Mehrotra and Sergeyev (2019). 12  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  12  The blue line in Chart 8 depicts the results of a stylised experiment in which inflation rises permanently, and without any warning, by 1  Chart 8: Surprise inflations can reduce public sector debt though when g > r the effect is ultimately temporary  percentage point (from 2% to 3%). There’s a corresponding rise in inflation expectations, and therefore nominal interest rates and bond yields as well, but only at the time inflation itself goes up.

Sources: ONS, IHS Markit/CIPS, CBI, Bank of England and Bank calculations. Chart 3c: Government balance also cyclical  Chart 4: When the monetary regime is stable policy rates are more responsive to economic growth and inflation is less volatile  Sources: ONS and Bank calculations. Based on GDP growth and inflation smoothed over 2-year periods, and Bank Rate changes over 2 years. Sources: Thomas and Dimsdale (2017), Feinstein (1991), O'Donoghue et al (2004), ONS and Bank calculations. In the interim, and especially during and between the two world wars, the correlation between interest rates and economic growth was lower and the volatility of inflation higher. This is as you’d expect. To stabilise  7  With the nominal price of the metal fixed, the effective target for the price of goods and services in a gold standard regime is the inverse of its real equilibrium price. A rise in the supply of metal, from new discoveries for example, leads to inflation in the CPI (allowing the real price of gold to fall). If demand for gold rises (for example because of strong economic growth more generally), without any increase in the supply, the CPI tends to fall. Subject to these variations, a gold standard amounts to a target for the level of the CPI. 8  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  8  inflation the monetary authority needs to lean against the cycle, at least when it’s driven by swings in demand8.
Therefore, we urge the EPC and CAS members to swiftly agree on concrete proposals for a permanent governance structure with regard to security certification for cards and terminals. Last, but not least, I would like to stress that, from a European perspective, it is of strategic importance to adopt a more coordinated approach to global standard-setting bodies, such as the ISO and EMVCo. These requirements should lay the foundation for a competitive European cards market. However, I personally believe that the European cards market would also benefit from the power of choice. Therefore, a duopoly in the European cards market is not the outcome that I would prefer to see for the SEPA project, which brings me to New Year’s resolution number three. New Year’s resolution number three: let’s move forward with an additional European card scheme The Eurosystem has been calling for an additional European card scheme for four years. Therefore, we are closely monitoring the work of the three initiatives that have been launched. It is important to emphasise that we have not selected any “favourite” out of the three projects, but treat all three equally. All three face some of the same challenges: the  2  BIS Review 159/2010  main challenge is certainty as regards the potential business case. Some clarity has been provided with regard to the sensitive issue of multilateral interchange fees (MIF) thanks to the agreements reached by the EU Commission with VISA and MasterCard.

We know there are effective fintech solutions to this which leverage off the credit of the payer. In such circumstances, and more broadly where fintech moves further into more traditional banking areas such as peer to peer and other lending, the Bank recognises that we need to think about and take forward a proportionate, activity-based regulatory response. Let me turn to the second gap in relation to a lack of client focus: an engagement gap, if I can put it that way. This manifests itself in a number of ways, as noted during the many insightful interventions during our panel sessions. Perhaps Julia Black put it best when she described the dangers of groups of professionals talking just amongst themselves. This has been part of the issue with financial reform – a sense that reform was a pre-packaged process built on discussions between regulators, banks, and investors, with sympathetic academics adding in their words of support. Part of the reason for our broader discussions today is to ensure we move out of this state of affairs. And of course, once we bring in other perspectives, it changes our own perspective and underscores just how hermetically sealed the industry in its broad sense can be. Let me say a couple of words on this. It should be recognized that the industry has made tremendous strides to address a number of issues.
Over recent months, inflation has proved more persistent and become more broad-based than had initially been expected. Consequently, we have witnessed a turnaround in monetary policy at a global level as central banks have begun to tighten their policies. The SNB, too, has tightened its monetary policy and has lifted its policy rate back into positive territory. With the transition to a positive rate environment, the SNB has had to adopt a new approach to implementing its monetary policy in the money market. Our new approach features two elements: reserve tiering, also referred to as tiered remuneration of reserves, and reserve absorption by way of open market operations. 1 This new approach takes into account the structural changes that have occurred in the money market since we were last in a positive rate environment. In particular, under these changed conditions, the new approach allows us to pursue our objective of keeping secured short-term Swiss franc money market rates close to the SNB policy rate. Tonight’s event offers an excellent and timely opportunity to discuss our new approach in detail. After reviewing the rationale for adopting the new implementation approach, we will give you an overview of how the new approach has played out so far. Why did the SNB return to a positive policy rate? Let me start by giving you an overview of why the SNB has tightened its monetary policy. Until recently, consumer price inflation had been both low and relatively stable for roughly three decades.

Yet, looking back, the crisis also has its silver linings: the painful adjustments that followed prompted governments to strengthen economic fundamentals, enhance banking systems, deepen local bond markets, and build up foreign reserves to cope with potential external shocks. Because of these developments, the region has been able to emerge from the recent global financial crisis relatively unscathed and is now one of the key driving forces supporting the global economic recovery. 5. But we cannot afford to be complacent, as we are now confronted with a new round of challenges in uncharted waters. The unprecedented monetary easing in the advanced economies has led to global excess liquidity. And with the robust recovery of the emerging  BIS central bankers’ speeches  1  markets, there are powerful push and pull factors driving investors to search for yields in developing economies including Asia. From Q3 2009 to Q4 2010, the net capital inflows to emerging Asia1 amounted to $ bn, the largest inflows in recent years. 6. The strong capital inflows and resultant abundant liquidity have led to exchange rate appreciation, fuelled credit growth and driven up asset prices in the region. With output gaps closing, inflationary pressures are accelerating in a number of Asian economies. Capital flows also complicate the macroeconomic policy responses. While exchange rate appreciation and monetary tightening could theoretically cool down the economy, in practice, they may attract even more speculative inflows to profit from interest rate arbitrage and currency appreciation. 7.
Morris, I (2011), “Why the West Rules – For Now: The Patterns of History and what they reveal about the Future”, ISBN: 978–1846682087. Mullanaithan, S, and Shafir, E (2014), “Scarcity: The New Science of Having Less and How It Defines Our Lives”, ISBN: 978–1250056115. Nordhaus, W (2015), comments made as discussant in “The Economics of Secular Stagnation” session at the annual AEA meeting on 3 January 2015, available at: https://www.aeaweb.org/webcasts/2015/index.php. OECD (2014) , “Trends in Income Inequality and its Impact on Economic Growth”, OECD Social, Employment and Migration Working Papers No. 163, available at: http://www.oecd.org/els/soc/trends-in-income-inequality-and-its-impact-on-economic-growthSEM-WP163.pdf. Piketty, T (2014), “Capital in the Twenty-First Century”, ISBN: 978–0674430006. Pinker, S (2012), “The Better Angels of Our Nature: A History of Violence and Humanity”, ISBN: 978–0141034645. Putnam, R (2000), “Bowling Alone: The Collapse and Revival of American Community”, ISBN: 978–0743203043. Ramsey, F (1928), “A Mathematical Theory of Saving”, Economic Journal Vol 38 No 152. Rebelo, S (1991), “Long-run policy analysis and long-run growth”, The Journal of Political Economy Vol 99 No 3. Romer, P (1986), “Increasing Returns and Long-run Growth”, Journal of Political Economy Vol 94 Pages 1002–37. Sachs, J (2014), “Sustainable Development Economics”, available at: http://www.projectsyndicate.org/commentary/promote-sustainable-development-economics-by-jeffrey-d-sachs2014–11. Simon, H (1971), “Designing organizations for an information-rich world”, in: Martin Greenberger, “Computers, Communication, and the Public Interest”, pp 38–52, John Hopkins Press. 16  BIS central bankers’ speeches  Solow, R (1956), “A Contribution to the Theory of Economic Growth”, The Quarterly Journal of Economics Vol 70 No 1.

Dwellings completed in newly constructed buildings (units) 80000  70000  60000  50000  40000  30000  20000  10000  9  0  1  2  3  4  5  20 0  20 0  20 0  20 0  20 0  20 0  8  19 9  6  7  5 19 9  19 9  4 19 9  19 9  3 19 9  19 9  1  2  0  19 9  19 9  19 9  8  7 19 8  9  6 19 8  19 8  5 19 8  19 8  3  4 19 8  2  19 8  0  9 19 7  1  8 19 7  19 8  7 19 7  19 8  6 19 7  19 8  5 19 7  0  Source: Statistics Sweden  BIS Review 105/2006  7  5.
I wish you a productive and joyful conference ahead. 5

The interest rate applicable to the long-term financing facility, which aims to stimulate lending, was reduced and an expanded asset purchase programme was announced. This programme includes, in addition to the purchases of asset-backed securities and covered bonds issued by the private sector, purchases of bonds issued by euro area central governments, agencies and European institutions. The size of this expanded programme is ambitious, with monthly purchases amounting to € billion. The purchases will commence in March and, in principle, it is intended that they will be carried out until September 2016, although the Governing Council of the ECB has given itself the option to continue to make purchases if the path of inflation is not consistent with its aim of achieving inflation rates below, but close to, 2% over the medium term. The programme requires that, to be eligible for purchase, securities must be at least investment grade, or if not, that their issuers are under an EU-IMF financial assistance programme. These conditions are similar to those applied in the requirements for collateral to be eligible for monetary policy operations and those envisaged, in August 2012, in the announcement of the sovereign bond purchase programme known as Outright Monetary Transactions (OMTs). Of the additional asset purchases, 12% will be purchases of bonds issued by European institutions and the other 88% will be purchases of bonds issued by central governments and agencies of countries in proportion to their shares in the ECB’s capital key.