samchain/econo-pairs-v1 huggingface dataset:
What it shows is that when there is a supply shock such that total inflation (including food and energy) exceeds core inflation, two years later total inflation tends to be lower – when supply shocks such as oil prices drive up total inflation relative to core, the total tends to come back down toward the core inflation rate. Figure 9 performs similar analysis but focuses on the future core inflation rate, instead of the total. It shows no strong relationship. When total and core inflation diverge, core inflation tends to stay put. In other words, in recent years, when something like an oil shock causes total inflation to diverge from core, there was no consistent implication for the future core inflation rate. The shock to total inflation did not become embedded in core inflation. Why is all this important? If supply shocks tend to have a transitory impact on headline inflation, and do not pass through to any meaningful extent into core inflation, then monetary policy need not respond to the price increases caused by the supply shock. Currently, we have experienced sharply higher food and energy prices. If the relationship we document over the last 13 years continues, we should expect the impact on inflation to be transitory – and that total inflation will converge back to core inflation, which remains well below 2 percent. To digress, it is likely the case that supply shocks have become transitory because of the way in which monetary policy has tended to respond.

But there are a couple of Covid-related distortions that have been pushing up on this growth: there is a large base effect from the fall in average earnings last year, and a compositional effect from the pattern of impact of Covid on activity across the economy and how that relates to typical pay rises by type of job[2]. All of that said, we think the rate of growth of earnings in an underlying sense is probably around the 4% level – higher than we saw before Covid, and somewhat higher than we would expect to see in these economic conditions. But, there is another interesting development. The dispersion of pay growth has risen quite markedly – so for the high numbers we read about, there are also low ones. I am going to come back to this point. The final piece of the economic picture I want to cover is inflation. Having been well below target last year and into this year, it has risen above rapidly, to 3.2% in August. Much of the latest rise reflects base effects from last year, but we have also seen unusually strong rises in some items, including some foodstuffs, used cars and accommodation. Our forecast in August had inflation rising to 4% by the end of this year, and developments since then mean that inflation is likely to rise to slightly above 4%. The major contributors to the further increase are not base effects but rather the strength we are now seeing in goods and energy prices.
This raises the question of the sustainability of this debt, and of the impact of an upward shock to interest rates or a downward shock to activity, especially in an increasingly uncertain macroeconomic context (trade tensions, Italian budget, Brexit, yellow vests). Given the situation, it was essential to avoid an infinite debt spiral. In December 2017, the Haut Conseil de Stabilité Financière, under the chairmanship of Minister Bruno Le Maire, thus decided to lower to 5% of their equity the ceiling of the main banks’ exposures to the most indebted large companies. It also decided to raise the countercyclical capital buffer of French banks, by 0.25% in June 2018 and again by 0.25% in March 2020. This countercyclical buffer, expressed as a percentage of core equity and applied to French exposures, aims at enabling banks to build up a capital reserve to maintain their supply of credit in the event of a turnaround in the financial cycle, the buffer then being immediately released. However, these binding instruments apply only to banks, while non-bank intermediation is playing an increasing role in financing the economy. According to the ECB, the loans and deposits of investment funds have risen threefold since 2011. Macroprudential policy thus needs to be adjusted to better take account of this new dimension. The HCSF is firmly committed to this goal. Its powers enable it to intervene outside the banking sector and it has started designing stress tests that cover all sectors. B.

1 Source: Dealogic 2 Source: Société Générale 3 Source: Baromètre du crowdfunding en France 2018, Financement Participatif France and KPMG 4 Source: Autorité des marchés financiers 5 Current account surplus over the 12-month period ending in January 2019 (source: ECB)  4/4  BIS central bankers' speeches
We have reported our Scope 1, Scope 2, and part of our Scope 3 emissions over the past three financial years. Scope 3 emissions from MAS’ outsourced currency operations, namely currency production, processing, and transportation are currently not included. We are working with our currency vendors to better understand the carbon profile of these activities, and we will report them in the future. MAS’ carbon footprint has declined over the last two years but the magnitude was amplified by the COVID-19 pandemic. MAS’ carbon emissions declined 47% from FY2019/20 to FY2020/21, mainly due to a near collapse in air travel due to the COVID-19 pandemic. Emissions in FY2019/20 saw a decline of 8% from FY2018/19, reflecting in part the impact on air travel during the start of the pandemic. We will develop a roadmap to set out our targets and strategies for emissions reduction. We will, by next year’s sustainability report, set targets for emissions reduction in 2025 and 2030 and consider the earliest possible timeframe to achieve net-zero emissions. We will develop strategies to reduce the major contributors to our carbon footprint, namely 7/9  BIS central bankers' speeches  electricity consumption, air travel, and currency operations. MAS has made good progress in reducing energy consumption and will continue to do so. Our electricity consumption peaked in 2013 and has declined by 23% since through a variety of measures to enhance the energy efficiency of the central air conditioning and lighting systems in the MAS Building.

Unemployment has steadily fallen since then and the inflation rate has returned towards 2%, which is the Federal Reserve’s inflation target. Only then could the FOMC stop increasing its balance sheet, raise the Federal Funds rate from its floor and so initiate an exit strategy. Obviously we, in the Eurozone, are not at the same point of the business cycle but we are travelling along the same road for monetary policy. Some consider these unconventional policies in the euro area are counterproductive because ultra-low interest rates hurt savers and banks. However, we have monitored closely banks’ profitability and – taking into account ALL elements of monetary policy  BIS central bankers’ speeches  3  – there is in 2015 no evidence that this is doing harm overall. Moreover, the global longterm real rate of interest has been falling for around 30 years reflecting an imbalance between a strong desire to save and a relative scarcity of those willing to borrow to invest. As we all know, this imbalance is extremely acute in Germany where this surplus is in the order of 8 % of German GDP. Above all, we cannot base our decisions on their outcomes for particular groups but on the common good. Economic activity does not depend only on savers but also on entrepreneurs, workers, homebuyers and borrowers who benefit from low interest rates. Eventually, these policies will lead to levels of inflation more consistent with our mandate and will call for higher interest rates both in nominal and in real terms.
Chart 3 shows a swathe of alternative indicators of capacity utilisation drawn from business surveys. They suggest that the margin of spare capacity within firms is now relatively modest. As far as the labour market goes, the rise in unemployment has been only a little over two percentage points, notably less than in earlier UK recessions even though the fall in output has been greater; see Chart 4. Together, these observations suggest a far more modest margin of unused resources and, by implication, a substantial depression of potential output resulting from the Great Contraction. There is, however, an important qualification. The counterpart to the modest rise in unemployment is a much smaller fall in employment than would have been expected on the basis of past experience, in part reflecting a high degree of wage moderation in the private sector. This can be seen in Chart 5, which contrasts the evolution of employment and output with the experience during the recession of the early 90s, when output fell less but employment more. The corollary is that productivity growth has been extremely weak during this downturn. That is in stark contrast to the United States, where productivity growth has remained strong and there has been a large shake-out of labour. Now this could be indicative of a fall in potential output. But it could also indicate a considerable degree of labour hoarding, which would be consistent with a rather greater margin of underutilised resources than suggested by Charts 3 and 4.

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.
Ong Chong Tee: Strengthening trust in our capital market Keynote speech by Mr Ong Chong Tee, Deputy Managing Director (Financial Supervision) of the Monetary Authority of Singapore, at My Money Seminar, Singapore, 16 November 2019. * * * 1 Ladies and gentlemen, good afternoon. It is my pleasure to join you in this afternoon’s My Money public seminar. My Money was an initiative back in 2009 of the national financial education programme MoneySense, in collaboration with the Association of Banks in Singapore (ABS), the Securities Investors Association of Singapore (SIAS), and the Singapore Management University’s (SMU) Sim Kee Boon Institute for Financial Economics. 2 The name of the programme itself, My Money, underscores the importance of taking personal responsibility for one’s own finances— be it spending, savings or investments. 3 This afternoon, I will focus my remarks around some issues related to the retail investor. A retail investor must know his or her own return objective and risk tolerance. He should understand the products that he is looking to invest in, and how these products can achieve his investment goals. 4 Other stakeholders also have an important part to play. These will include the banks, fund managers and other financial service providers that are involved in the creation, marketing and sale of financial products. Regulators like MAS and SGX RegCo are of course also integral in that they set the ground rules for participants in the marketplace.

The time needed to complete an investigation varies according to the complexity of each case. In complex cases, issues often cut across the domain of several agencies. Take for instance, a case of alleged corporate irregularities. These could range from issues of mis-selling to inadequate or false disclosures, or improper application of accounting rules, or there may also be breaches of fiduciary duties. A single case could span potential breaches of different regulations and laws, such as financial advisory regulations, securities law, company law, listing rules, accounting rules, and the Penal Code. Often, our investigators have to retrieve and review a lot of data. Where a case has a cross-border dimension, the relevant agencies will also have to seek the assistance and support from our foreign counterparts. Our investigations must be thorough and rigorous to be fair to all parties concerned. 26 MAS will strengthen our co-ordination with ACRA and CAD in the surveillance of our capital markets and in investigations. We have set up a joint forum between MAS and ACRA to review accounting-related and disclosure issues. As mentioned earlier, MAS’ enforcement team already has a joint investigation arrangement with CAD where our investigators collaborate closely. Our agencies will, in addition, work closely with SGX RegCo as they are the frontline marketplace regulator. 27 Industry groups also have a role as advocates of good governance and practices. SIAS, ABS and the Singapore Institute of Directors (SID) are good examples.
FinTech companies and tech giants can take market shares from established banks. This can result in sweeping changes in market structure. But this does not mean that banks will become obsolete. The services offered by the new participants and the new means of payment I have discussed so far are based on our current monetary system. What is lent and saved will still be Norwegian kroner created by regulated banks. Will cryptocurrencies give rise to a new financial system? Chart: Cryptocurrencies – another kind of money A more radical scenario is that cryptocurrencies not pegged to the krone gain a larger role in the monetary system. Cryptocurrencies are characterised by decentralised settlement, without the need for a central counterparty that must be trusted by all. Ownership of funds is determined by access to cryptographic keys and not title to a bank account. This technology can make money programmable so that it can be used in so-called “smart contracts”. In some cases, such as for Bitcoin, the system limits the total quantity of money that can be created. Bitcoin, is an example of a cryptocurrency without a fixed exchange rate against anything else, which could entail wide swings against other currencies. But a growing array of “stablecoins” are also being launched, which are intended to have a fixed exchange rate against a country’s bank money. An example is Diem, whose backers include Facebook and which will exist in several versions, each pegged to its main currency.

With the right to create money comes obligations. Competition from new participants Chart: Competition from new participants Many of the services banks offer can be provided by others. In recent years, the competition to provide financial services has taken a new turn. The competition comes from both specialised FinTech companies and from global tech giants (BigTech) such as Amazon, Apple and Facebook.7,8 Technological advances are paving the way for new ways of paying. In addition, payment services have become more of a competitive arena. It will now be up to customers, and not banks, to decide which payment solutions will be linked to their bank account. Payment services have become of greater strategic importance for banks as well as other participants. There is increased competition not only for the way we pay, but for the means of payment.9 An example is the e-money offered by PayPal. This is a means of payment that can only be used within closed systems, and that can be converted into bank money at a fixed rate. E-money is often well integrated with other widely used applications and offers efficient payment solutions, for example across borders. Increased use of new means of payment may make banks’ deposit funding less stable. If keeping large sums in new kinds of money becomes more attractive, the money deposited into our accounts will be quickly converted and remain in our current account for a shorter amount of time.
Yet despite all that change the three key benefits of financial co-operation identified by Strong and Norman remain at least as relevant today as they did a century ago:  -  First, more central banks than ever before value the safe, confidential, reliable access to overseas reserve currencies, assets and payments offered by their peers. Safe – because central banks are free from insolvency in their domestic currency, are rigorously focused on minimising operational risk, and settle all payments in central bank money. Confidential – because central banks treat the information they receive with the greatest discretion, and are not subject to commercial incentives or conflicts of interest. And reliable – because central banks understand the policy priorities of their peers, and stand ready to provide the highest level of continuity of service. Today the Bank of England provides banking services to over 150 central banks and international financial institutions around the world – ten times more than in 1917. Those services include sterling payments, call and term deposits, and custody of securities and gold. The Bank’s gold repository remains the most active central bank service in the world, reflecting the United Kingdom’s lasting role as the pre-eminent wholesale gold trading centre. -  Second, access to central banking services underpins the international monetary system. Although the major economies no longer maintain fixed exchange rates, the international trading system relies  6 7  A version of the original March memorandum is held in the Bank of England Archives.

The euro area repo market has also been largely unscathed by the pandemic, remaining a fully functional market even at the peak of the crisis. According to data from the International Capital Market Association (ICMA), the total value of the outstanding repo contracts has barely changed from December 2019 to December 2020 at EUR 8,300 billion (including both repo and reverse repo transactions). This is an all-time high with a repo market size up by more than 40% in 10 years. However, the euro area repo market can be affected by collateral scarcity and seasonality, especially at the end of the year, considering also the important share of Hold-to-maturity investors. In this regard, Eurosystem has made available government bond holdings for securities lending since April 2015. The Eurosystem securities lending programme has been successfull in helping to normalize market rates and in acting as a backstop facility for market participants. For instance, in April 2021, EUR 71.5 billion of public sector bonds were lent out on average with a breakdown of EUR 59.5 billion against securities and EUR 12.0 billion against cash collateral. Another key feature, which has helped to support the liquidity of the euro area repo market, is the dominant share, two-third, of repo market trading cleared via central clearing counterparties (CCP), despite the absence of any mandatory clearing on these instruments.
Krzysztof Rybiński: Outlook for Poland’s economic and financial situation Speech by Mr Krzysztof Rybiński, Deputy President of the National Bank of Poland, at the Annual General Meeting of the Association of Chartered Certified Accountants (ACCA), Warsaw, 18 May 2006. *  *  *  Ladies and Gentlemen, Thank you for your invitation to address the Annual General Meeting of the ACCA. Today I am going to speak about prospects of the Polish economy with a special emphasis on the financial situation. In short, I can say that economic prospects of the Polish economy are good. Let me justify this conclusion by presenting four dimensions of future prospects of the Polish economy: global outlook, financial markets, domestic outlook and public finances prospects. Global outlook According to recent IMF and European Commission forecasts 1 , 2 , the global economy, after recording a growth of above 5 percent in 2004, slowed to an estimated 4.6-4.8 percent in 2005 and is expected to grow at a similar or marginally higher rate this year. Forecasts for 2007 call for a global growth moderation by 0.2-0.3%. If the forecasts come true, the global conditions will remain favorable and conducive to robust growth of the Polish economy.

While some of this year’s shortfall can be explained by one-off factors—such as the sharp fall in prices for cellular phone service—its persistence suggests that more fundamental structural changes may also be playing a role. These include the increased ability of prospective buyers to compare prices across different sellers quickly and easily, the shift in retail sales to online channels of distribution from traditional brick-and-mortar stores, and the consequences of these changes on brand loyalty and business pricing power. Over the coming months, I hope that we will be better able to differentiate between these competing explanations. If it turns out that structural changes have played a significant role, I would generally view this as a positive, rather than negative, development. It would imply that the U.S. economy could operate at a higher level of labor resource utilization without generating a troublesome large rise in inflation. More people could be put to work on a sustainable basis, enabling them to gain opportunities not just to earn greater income, but also to develop their skills and grow their human capital. Slightly above-trend growth is gradually tightening the U.S. labor market, which should support a rise in wage growth over time. When combined with a firmer import price trend—partly reflecting recent depreciation of the dollar—and the fading of effects from a number of temporary, idiosyncratic factors, I expect inflation will rise and stabilize around the FOMC’s 2 percent objective over the medium term.
On the other hand, the U.S. is less dependent on oil imports than the European Union, let alone Switzerland. Structural characteristics of an economy can also affect the economic impact of an oil price shock. Rigid labor markets, for instance, can lead to asymmetric effects on output. The output loss in the event of a rise in oil prices can exceed the output gain in the event of a corresponding decline in oil prices. It is generally assumed that the overall impact of an oil shock is somewhat less pronounced in the U.S. than in Europe. Finally, exchange rates can play a role. As a result of the substantial decline  3  See eg M A Adelman (1995): “The Genie out of a Bottle: World Oil since 1970”, MIT Press, Cambridge. BIS Review 69/2004  3  in the U.S. dollar against most non-Asian currencies, the recent increase in the price of oil in local currency has been less pronounced in Europe. For a central bank concerned with maintaining price stability as the bedrock condition for sustained economic development, the crucial question is how a level shift in the equilibrium price range of oil would impact longer-term inflation rates. Oil prices have a direct impact on inflation because the price of crude oil immediately impacts gasoline and heating oil prices. The inflation effect depends on the weight of oil based products in the CPI. In Switzerland, heating oil makes up 1.2% of the CPI. Total oil based products represent 3.8% of the CPI.

(S pread )  31.07.2004  31.05.2004  31.03.2004  31.01.2004  30.11.2003  30.09.2003  31.07.2003  31.05.2003  31.03.2003  31.01.2003  30.11.2002  30.09.2002  31.07.2002  31.05.2002  31.03.2002  31.01.2002  30.11.2001  30.09.2001  -3.00  31.07.2001  -2.00  Figure 9 Cross-correlations between oil price and Swiss CPI  BIS Review 69/2004  9