samchain/econo-pairs-v1 huggingface dataset:
BIS central bankers’ speeches  1  from the depositing of money in their shops; and the Bank of England in the same manner, from the liberty it has to issue its notes in all payments 4.” Today, given my current role overseeing the Bank of England’s market functions, as well as my previous experience at the IMF dealing with the crisis in the Eurozone and in the wake of the Arab Spring, I would like to offer some thoughts on how lessons from reform to the domestic financial safety net for banks could be applied to sovereigns, to the IMF as international lender of last resort and to the global financial safety net more broadly. I will argue that we need a stronger and more resilient global financial safety net to reduce the systemic implications of sovereign crises and allow nations to cope with shocks in order to reap the economic rewards of an integrated system of trade and finance. I will also argue that the effectiveness of that safety net would be enhanced by implementing policies that strengthen surveillance and the stress testing of countries balance sheets, and better mechanisms for resolving sovereign debt crises when they occur. These are of course my personal thoughts rather than an official UK position, but I offer them in the spirit of encouraging debate. 2.

But I do think there are some lessons that can be learned from the overhaul of central bank liquidity facilities that could be applied to the provision of liquidity insurance to sovereigns. What would the equivalent enablers be for sovereigns? (i)  Better surveillance, particularly of the vulnerabilities to sudden stops;  (ii)  Stress testing countries’ balance sheets through better debt sustainability assessments; and  (iii)  Better mechanisms for reducing disorderly spillovers. Surveillance The Bank of England’s Sterling Monetary Framework 11 is available to banks and building societies on a presumptive basis – banks with a genuine short-term liquidity can rely on it when a shock hits. A key part of that access is the agreement of supervisors that firms meet micro prudential standards. By contrast, there is no system of pre-qualification for the IMF’s precautionary liquidity facilities, at the margin discouraging sovereigns from relying on the IMF  9  Although I note the governance implications of capital market borrowing need further thought. 10  See Winters (2012). 11  Further information on the Bank of England’s Sterling Monetary Framework can be found here: http://www.bankofengland.co.uk/markets/pages/money/default.aspx. BIS central bankers’ speeches  5  as a form of insurance. One potential means of giving countries greater incentives to rely less on self-insurance could be to offer pre-qualification on the basis of strong economic fundamentals and policy track records as part of the Article IV process of surveillance, on a confidential basis.
In contrast to most European countries, Norway also has room for manoeuvre on the fiscal front, if necessary. But – as in the rest of Europe – the authorities cannot solve the deeper challenge, namely the need to establish new private sector activity. This is a task for the business sector. What the authorities can do is to establish framework conditions that promote innovation and growth. Hayek and Keynes In my introduction, I posed the question: can crises be curbed? quickly followed by: can misjudged attempts to curb a crisis sow the seeds of an even deeper crisis? Keynes and Hayek did not come to agreement on how a crisis should be managed. Their debate is still relevant today. Keynes advocated the use of public spending to curb crises. 6  See Financial Stability Board (FSB) (2011), “Key Attributes of Effective Resolution Regimes for Financial Institutions” and FSB (2015) “Principles on Loss-absorbing and Recapitalisation Capacity of G-SIBs in Resolution”. 7  The first pillar of the European Banking Union, the Single Supervisory Mechanism (SSM), with the ECB as supervisory authority for the 130 largest banks in the euro area, started in November 2014. The second pillar of the European Banking Union, the Single Resolution Mechanism (SRM), became operational in January 2015 and the joint crisis resolution authority, the Single Resolution Board, started its work. 6  BIS central bankers’ speeches  Hayek warned against such a policy: the misjudged application of government measures could easily lead to deeper crises and credit bubbles. Both were right.

The fall in oil prices in 2014 led to a further reduction in the key policy rate in Norway. Chart: Gradual normalisation of monetary policy Last week, Norges Bank raised the key policy rate for the first time in seven years. If the economy evolves as currently envisaged, last week’s decision will be the beginning of a gradual normalisation of the interest rate level. This is good news. It means that the Norwegian economy is performing well. The effects of the fall in oil prices in 2014 have unwound. The economy has shown solid growth in recent years and the labour market has been improving. The upturn in trading partners’ economies, higher oil prices and low interest rates have lifted growth in Norway. The outlook for the Norwegian economy implies that the key policy rate will be raised in the years ahead. Capacity utilisation is close to a normal level. Underlying inflation is close to the 2% inflation target. The key policy rate is being raised to prevent pressures in the economy from intensifying and triggering a surge in prices and wages. Raising the rate also reduces the risk of a renewed rapid rise in property prices and debt. High price and wage inflation and a further buildup of financial imbalances would increase the risk of a sharp economic downturn further out. There are a number of factors to suggest that the key policy rate should be raised at a gradual and cautious pace. An environment of low global interest rates limits the room for manoeuvre.
There is still demand for related financial products from certain types of investors. Since the fundamental business idea behind the model is still valid, hopefully a more sustainable version of it will evolve. 6  See Rajan, R. (2005), “Has financial development made the world riskier?”, NBER WP 11728 and Sufi A. and A. Mian (2008) “The Consequences of Mortgage Credit Expansion: Evidence from the 2007 Mortgage Default Crisis”, paper presented at the May 2008 Federal Reserve Bank of Chicago Banking Structure Conference. BIS Review 68/2008  3  3. Vulnerabilities of securitisation during the turmoil  After an extended period of ample liquidity and generally low credit spreads in many economies and markets, sharp losses in the value of US subprime mortgages and an associated evaporation of investor appetite triggered broad distress in structured finance markets during the summer of 2007. Losses were magnified by illiquid markets for many types of structured instruments, leading to sharp decreases in secondary market prices. When the first downgrades of ABS backed by pools of sub-prime mortgages in the US took place, the ABS market – which is not very deep even in normal times – dried-up nearly entirely. Even though the problem arose in the sub-prime market, spreads on ABSs backed by corporate bonds, bank loans, credit cards and auto loans increased substantially as well, clearly indicating a contagion effect. Thus, from end-July the market turbulence depressed securitisation activity in general.

We have said that the prerequisites for capital account liberalisation are macroeconomic stability, sufficient foreign exchange reserves, and a financial system that can stand on its feet without capital controls. The first of these conditions has been met, and the next will be met upon successful conclusion of the third IMF review. The prospect of meeting the third condition in the next few months has improved in view of strong interim earnings reports from two of Iceland’s large commercial banks and the recent Supreme Court judgment concerning the interest rate to be used for loans with nonbinding (illegal) exchange rate linkage clauses. But it would be a misunderstanding to assume that the timeframe can be measured in terms of weeks rather than months. We must receive the next tranche of the IMF loan after the third review, and we probably cannot pronounce the banks sound with respect to capital account liberalisation until late November. Furthermore, it is appropriate to bear in mind, as the recent unrest in the bond market shows, that there are short-term risks related to the removal of the controls; thus it is important that each step be well prepared. But if nothing unexpected arises, the time is coming closer, and preparation is underway within the Central Bank. BIS Review 130/2010  3  Of course, we won’t make much progress in lifting the controls or gaining access to foreign credit markets if the Icelandic Government is considered unlikely to be able to fulfil its foreign loan obligations.
First, regulators around the world have issued regulations or guidance on the management of outsourcing risks pertaining to cloud services. The Monetary Authority of Singapore and the UK Financial Conduct Authority were among the first regulators to do so, as early as 2013. Second, the jurisdictions where these CSPs operate from have begun to exercise regulatory oversight over them. In the US, the Cloud Services Utility Agency, or CSUA, was formed in 2024 with the mandate of regulating CSPs, working closely with the US Federal Reserve System. I am pleased that the Federal Reserve Bank of San Francisco has been designated as the lead regulatory co-ordinator with the CSUA, as two of the four globally dominant CSPs are based in California. Dealing with artificial intelligence The use of AI has swept across the financial services sector in recent years. Banks are benefitting from AI through better customer insights, increased productivity, and cost savings. AI applications range from customised financial services to enhanced risk management and regulatory compliance. But the growing application of AI has also introduced new risks and challenges for regulators. Foremost are concerns about market disruption and financial instability caused by runaway AI trading algorithms. The global flash crash of August 2022 demonstrated the contagion risks that multiple AI trading programmes “learning” from one another can precipitate.

Technology has helped us reduce some risks and better manage others, but it has also introduced new risks and vulnerabilities. The regulator’s job is never done. And while we have gotten better at managing traditional risks such as credit and market risk, 8/9  BIS central bankers' speeches  cyber risk has now moved to the front of the regulatory agenda. But while the landscape has evolved and the nature of threats to financial stability has changed, the core principles of sound regulation remain evergreen. The goal is to keep the financial system stable and maintain public confidence and trust in the financial sector. And to do this in a way that allows the financial sector to innovate and grow, and serve the needs of the economy and society. That means taking a proportionate approach to risk, so that we can achieve resilience with efficiency, stability with growth, safety with innovation. Thank you. Everything said here about the future is pure imagination; it is neither a forecast nor a recommendation, by me or the Monetary Authority of Singapore. My intention is merely to paint a plausible scenario for the future of financial regulation, as food for thought for this Symposium. In all likelihood, the Symposium of 2028 will find my account lacking in imagination or realism or both. The truth will be stranger than fiction. 9/9  BIS central bankers' speeches
The comparison of the public debt levels with the Maastricht Criterion as a benchmark reveals shift towards less vulnerable zone in most of the countries. In 2015, when the average government debt level reached its peak, it was below the accepted benchmark by close to 8 p.p. of GDP, while in 2019, the distance was widened to 14 p.p. and by 2024, it is expected to reach around 20 p.p. (according to the WEO, October 2019 forecast). This clearly indicates that in the last couple of years, despite the low interest rate environment, fiscal space in CESEE region was rebuilt thus reducing public sector exposure to sudden shifts in the sentiment at the global financial markets or reversal in the interest rate cycle. Still it has to be noted that the public debt level is still above the pre-crisis pone, and few of the countries, despite the adjustment, did not succeed in bringing the debt level below 60% of GDP (Albania, Croatia, Hungary, Montenegro, and Slovenia). Even more, in Montenegro the debt level has still been increasing, reaching above 80% of GDP in 2019, raising concerns related to sustainability issues. Private leverage in the region has been rising since early 2000s, albeit mostly from lower levels compared to advanced economies. After reaching the peak at the onset of the global crisis, gradual deleveraging occurred, but debt level remained elevated in comparison to the pre-crisis in many countries.

In part due to the Fed’s actions, the U.S. economy gradually recovered, and as a result the FOMC has been slowly but surely moving monetary policy “back to normal.” This process can be thought of in three stages. Stage 1: Lift-off The first stage in policy normalization focused on the lift-off of the federal funds rate target from near zero, which occurred in December 2015. But, well before that happened, the FOMC went to great effort to communicate its thinking to the public to better prepare it for the upcoming change in policy. 2 Importantly, we also made extensive preparations to ensure that we were ready and able to raise rates as needed, in the context of a very large Fed balance sheet and bank reserves. And, consistent with the Fed’s aim to be as transparent as possible, we published our plans on how we would use interest rates paid on bank reserves and overnight reverse repurchase agreements to keep the federal funds rate within the FOMC’s target range.3 At the time—in light of the shallow recovery and low inflation—the FOMC was very focused on balancing the risk of a premature removal of accommodation against concerns that excesses could eventually develop in the economy. In the end, lift-off went without a hitch. The approach developed back then has served us extremely well in controlling the federal funds rate, and has proven to be flexible as market conditions have evolved. I will come back to this point later.
Applying this regulation, the VAT accrued in 2017 and collected in 2018 was recorded in 2017 and, in a similar manner, the increases in revenue included in the Draft Budget due to the effect of the SII would not affect the general government deficit in National Accounts terms. Second, although there is always some uncertainty regarding the response of government revenues to tax bases (elasticity of taxation), the Draft Budget projections seem to be based on higher elasticities than have been recorded on average in the past. This consideration is based on the Banco de España’s estimation of a set of standard models for the main items of government revenue (personal income tax, VAT, corporate income tax, social contributions and excise duties). These items are made to depend on the growth in the macroeconomic bases of the Draft Budget for 2019, with an impact proportional to the tax elasticities estimated by the European Commission and the Organisation for Economic Co-operation and Development (OECD), to which should be added the effect of the measures I have already described, taking the impact on the Draft Budget estimated ex ante. According to these calculations, the aggregate collection of shared taxes and social contributions would increase by 5.6% in 2019, as compared with the increase projected in the Draft Budget of 6.9%, correcting for the effect of the SII in both cases (see left-hand panel of Chart 9). The main source of this discrepancy is the difference in the projected social contributions (see right-hand panel of Chart 9).

This tentative estimate suggests that achievement of the official deficit target of 1.3% in 2019 is subject to far-from-negligible risks. A smaller revenue impact of the new taxes than officially estimated, a delay in the entry into force of the tax measures included in the Draft Budget or potential materialisation of the downside risks to the economic growth outlook that I have already discussed would raise the projected deficit. On the other hand, a more dynamic response by tax revenues to macroeconomic conditions than historically estimated or a containment of discretionary spending would have the opposite effect. In any event, the Banco de España will publish a complete estimate at the end of March, including an update of the macroeconomic projections with all the information that has become available since the last projection exercise was conducted in December. As regards the fiscal policy stance in 2019, derived from these preliminary estimates and measured by the change in the general government structural balance, it would be roughly neutral. The level of the structural deficit would stand at around 2.5% of GDP, according to the Banco de España’s estimates, similar to its value over the last five years and higher than in 2013-14, which implies that practically the entire reduction observed in the government deficit since 2013 has been due to the effect of the business cycle (see Chart 10).
Economic developments were marked by high and variable inflation. Inflation rose gradually and it took a long time before it fell. The absence of a nominal anchor was one of the main reasons behind the pronounced swings in the Norwegian economy. With a policy of low interest rates and devaluations, inflation took root. Nominal interest rates were kept at a low level even though inflation and the value of tax-deductible interest expenses rose. Frequent devaluations from 1976 were unable in the long term to prevent a decline in the manufacturing sector. On the contrary, they proved to be self-reinforcing. The wide fluctuations culminated in a credit boom in the mid-1980s. A pronounced downturn and high unemployment followed at the end of the 1980s. I would like to highlight three factors that have taken on particular importance for economic policy in general, and monetary policy in particular. – First, economic agents look to the future when they make decisions about consumption and investments, wages and prices, and take account of not only current economic policy, but also their  4  Bjerve, Petter Jakob (1981): “Kva hendte i Norge i 1970-åra - konjunkturpolitisk?” (What happened in Norway in the 1970s in terms of counter-cyclical policy? ), Sosialøkonomen No. 5, 1981. 5  Official Norwegian Report (NOU) 1973:36 Om prisproblemene (price problems). 2  BIS Review 36/2004  expecations of future economic policy.

What considerations need to be made regarding Treasury market clearance practices given the growth in activity by participants who are not central counterparty members? Will the evolving settlement marketplace introduce new challenges to Treasury market participants? How must practices and culture evolve as market structure does? And, how will the interplay of all of these issues affect the future of the Treasury market? Today’s conference provides an excellent opportunity to discuss these issues. Thank you for coming. I look forward to today’s dialogue and the ongoing engagement between the Joint Member Agencies and the public as we all strive to ensure the continued sound functioning of this essential marketplace. 1 Joint Staff Report: The U.S. Treasury Market on October 15, 2014, U.S. Department of the Treasury, Board of  Governors of the Federal Reserve System, Federal Reserve Bank of New York, U.S. Securities and Exchange Commission, U.S. Commodity Futures Trading Commission, July 13, 2015. 2 Ellen Correia Golay, Frank Keane and Nathaniel Wuerffel assisted in preparing these remarks. 3 The Joint Member Agencies are the U.S. Department of the Treasury, the Board of Governors of the Federal  Reserve System, the Federal Reserve Bank of New York, the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission. 4 Best Practices for Treasury, Agency Debt, and Agency Mortgage-Backed Securities Markets , Treasury  Markets Practices Group, Revised February 2016. 5 Banking Conduct and Culture, Group of 30, July 2015.
Most importantly, this Act also addresses financial stability issues that have surfaced in this current international financial crisis. It is my great pleasure to welcome you to the 2009 Tun Ismail Ali Public Lecture. This Public Lecture is now organised in conjunction with the Tun Ismail Ali Chair in Monetary and Financial Economics at the University of Malaya that was established by Bank Negara Malaysia in August of 2000 in honour of the late Tun Ismail Mohamed Ali. It is our hope that this Chair will contribute towards the advancement of knowledge in the area of monetary and financial economics. This Public Lecture takes place at a time of a financial crisis that is continues to unfold in the advanced economies and that now is having unprecedented consequences on the global economy. For some parts of the world, such as Asia , the financial sector has largely not been affected, but the impact has been on the real sector, following the massive contraction in world trade. While this crisis started in early 2007, Malaysia has seen the full impact of this crisis on our economy in the first half of this year. Today, we are very privileged to have with us Professor Dr. Takatoshi Ito, professor at the University of Tokyo and this year's holder of the Tun Ismail Ali Chair, to speak to us on the "Comparison of the Financial Crises: Japan and Asia in 1997-1998 vs. US 2008-2009".

2  Estimation of an error-correction model in which the projection of the NFC lending rate depends on the lagged OIS3M and OIS2Y 3 April 2023 euro area bank lending survey (europa.eu), released on May 2, 2023  Page 7 sur 14  By the way, the growth of loans in France remains significantly higher than in the euro area average. Overall, evidence shows a quick and smooth pass-through of ECB decisions to broad financing conditions. But this is only the first part of the transmission to tame inflation. II. Transmission to the real economy and the decline in inflation In the textbook theory, tighter financial conditions moderate aggregate demand. Monetary policy also affect inflation through the exchange rate channel, but this is beyond the scope of my speech today. According to recent ECB work based on a set of models that complement each other,4 our policy tightening is estimated to lower inflation by around 2  4  Darracq-Paries, Motto, Montes-Galdón, Ristiniemi, Saint Guilhem and Zimic, A model-based assessment of the macroeconomic impact of the ECB’s monetary policy tightening since December 2021, ECB Economic Bulletin, issue 3/2023. Page 8 sur 14 percentage points as a mean over the period 2023-2025. But these estimates call for two caveats: - they vary substantially across models, and are lower in semi-structural models, which unlike structural or DSGE models, incorporate more inertia in consumption and less influence of forward-looking inflation expectations.