samchain/econo-pairs-v1 huggingface dataset:
Cash in the form of banknotes and coins does not accrue any interest for the holders. The general public’s holdings of banknotes and coins are entered into the Riksbank’s balance sheet as an interest-free liability. The Riksbank invests a corresponding amount, with a deduction for the cost of managing banknotes and coins, in yield-bearing financial assets. This equivalent amount is in practice part of the foreign currency reserve. The return the Riksbank receives on these financial assets comprises what is known as seigniorage income. In 2008 seigniorage income amounted to around SEK 5 billion, which corresponds to a return of 4.6 per cent. 12  BIS Review 160/2009  Figure 13 Banknotes and coins – monetary base SEK billion 450  450 Riksbank Certificates Fine-tuning Banknotes and coins  400  400  350  350  300  300  250  250  200  200  150  150  100  100  50  50  0  0 Jan-08  Apr-08  Jul-08  Oct-08  Jan-09  Apr-09  Jul-09  Oct-09  Source: The Riksbank. Another concept that has been discussed to some extent in connection with the financial crisis is what is usually known as the monetary base. This consists of banknotes and coins in circulation plus the banks’ deposits with the Riksbank through Riksbank Certificates, finetuning and standing facilities. During the financial crisis the banks’ deposits with the Riksbank increased substantially, as mentioned earlier, when the Riksbank increased its lending to the banks.

20/11/2020  COVID-19 and the liquidity crisis of non-banks: lessons for the future  SPEECH  COVID-19 and the liquidity crisis of non-banks: lessons for the future         Speech by Isabel Schnabel, Member of the Executive Board of the ECB, Financial Stability Conference on “Stress, Contagion, and Transmission” organised by the Federal Reserve Bank of Cleveland and the Office of Financial Research Frankfurt am Main, 19 November 2020 The reforms that followed the global financial crisis of 2008 have made our financial system safer and more resilient. Tighter regulation and higher capital ratios have been key factors enabling banks to act as shock absorbers rather than shock amplifiers during the coronavirus (COVID-19) pandemic. At the same time, the crisis has been a stark reminder that there are still considerable vulnerabilities in the financial sector. In particular, there has been a divergence between the comparatively lean regulation of the non-bank financial sector and its increasing role in financial intermediation across the globe. This divergence has measurably augmented the risks of perilous macro-financial feedback loops, which may also affect the conduct of monetary policy. In my remarks today, I will discuss how prevailing structural fault lines caused a liquidity crisis in the nonbank financial sector in the spring, which amplified market stress, including through forced asset sales, and how monetary policy had to respond to stabilise markets.
In judging how far inflation is likely to fall back next year, we have to gauge the extent to which high inflation in the short term will enter the expectations of those setting prices and pay. If it does so, then without some margin of spare capacity, inflation will have some tendency to persist above the target. Our inflation target is symmetric. We are not aiming for inflation below 2%, but at 2%. So even though some slowdown in the growth rate of economic activity is likely to be necessary to ensure that inflation returns to the target, we cannot allow the economy to slow too sharply, lest a margin of spare capacity is produced that pulls inflation down below the target next year. We face a difficult balancing act. Why should we not focus on growth for a while and forget about inflation? The answer is that once higher inflation becomes entrenched, it may be costly to dislodge. Past UK recessions were associated not with slowdowns in the world economy, but with attempts to squeeze inflation out of the UK economy. The best thing that we can do to promote economic stability is to avoid inflation, and inflation expectations, from becoming dislodged from the target in the first place. The most important function of an independent central bank is its role in monetary policy. Price stability is a necessary foundation of economic stability more generally.

But serious thinking and a willingness to contemplate radical change will be necessary. BIS Review 36/2008  3
If we are establishing a central decision-making body anyway, why act through 25 different authorities? Both the first and the second alternatives are half-way compromises trying to please different interests. My own view is that the third alternative, although radical, is the logical solution. There are two main arguments against the idea of a European Financial Supervisor – one relevant and one not very relevant. The not very relevant argument is that the supervisor needs proximity to have knowledge about the markets where the institution operates. First, this is already a problem with the home-host model. Second, this is an organisational problem that can be solved. An EU supervisor would certainly employ staff from all EU countries and have local offices in the national financial centres. For instance, for a regional cross-border banking group, I imagine the supervisory team to be based in the relevant region, perhaps in the same premises as the national FSA, and to consist of staff from that region. The relevant argument against an EU supervisor is that supervisory power ultimately needs to be backed by financial muscle. In the present set-up, the financial muscle derives from the national central bank’s ability to act as a lender of last resort and the government’s ability to raise taxes. The EU lacks such power. However, this problem is hardly unsolvable. For instance, one could think of the EU building up a deposit insurance fund for cross-border banks supervised by the EU supervisor, which would be able to handle all but the largest banking failures.

In other words, the likelihood that the central bank will have to provide liquidity support to a financial institution is partly determined by the quality of supervision. At the same time, the central bank may very well need the supervisor’s analytical or informational support to be able to decide on whether or not and how to intervene. Finally, in crisis resolution, even if the Ministry of Finance takes the lead, it is likely to rely extensively on the supervisor and the central bank for advice and execution. If we agree that there is a link between the soundness of institutions and financial stability, then supervisors must be interested in crisis management and resolution and central banks must be interested in certain aspects of supervision. In the last decade, at least in Sweden, the macro and micro perspective have grown gradually closer. Indeed, the Swedish FSA now has an explicit interest in the stability of the system, while the Riksbank has taken a greater interest in the stability of single institutions, if they are judged as systemically relevant. We have regular contacts to share information and assessments and coordinate policy. If before, the relationship between the two authorities might have been described as polite but uninterested, it is now a mix of curiosity, some competition and frequent flirting. BIS Review 35/2005  1  The times they are a-changin’ This could have been the happy end of our story but recently there have appeared challenges to this set-up.
All this should lead to a more harmonised regulation and supervision across countries, and as a result also foster financial integration. 2  BIS Review 47/2010  For central bankers, the part of the reform which directly concerns them is the establishment of the ESRB, a new independent body that will for the first time carry out a comprehensive macro-prudential oversight of the financial system of the EU. The ESRB will also issue risk warnings, and, where appropriate, recommendations, and follow up their implementation. This body will bring together the central bankers, the heads of the three supervisory authorities, the Commission together with the supervisors of the 27 EU Member States to regularly discuss and assess the financial stability conditions in the EU. In that respect, the ESRB shows some keen similarities with the Financial Stability Council in the proposed financial reform in the United States. The ESRB is expected to support financial integration through its contribution to financial stability in the EU. Indeed, if market participants are confident that the authorities take properly into account the interdependencies between countries and the various components of the financial system, they are likely to fully exploit the possibilities offered by cross-border activities in the EU.

First is Mainland authorities’ efforts to connect the interbank and exchange bond markets, which will allow participants in each market to access securities in the other market through an infrastructure connection without having to open separate accounts. This should ultimately be beneficial to the growth of both the CIBM and exchange bond markets, thus creating a bigger pie. 15. Foreign investors who access the interbank market through Bond Connect or CIBM Direct will be able to trade in the exchange market, which is the platform where most non-financial corporate bonds are lodged. The construction of the system linkage between the onshore infrastructure institutions is under way. Upon completion, the HKMA’s Central Moneymarkets Unit will explore with the Mainland side on the system enhancements required for Bond Connect investors to participate in the exchange bond market. 16. This development moves closer to having a single access point to the onshore bond market and will further open up access to the fast-growing credit bond market which remains relatively untapped by international investors. This presents an opportunity for investors to look further along the credit curve for diversification and yield. Relatedly, the entry of foreign firms into the onshore credit rating business is expected to facilitate this process, speed up the convergence of local and global ratings standards, and enhance foreign investors’ analysis of corporate credit. 17. Secondly, Mainland and Hong Kong stock exchanges have reached an agreement to include eligible ETFs in the Stock Connect scheme and technical preparations are under way.
Gazi Erçel: Globalization and international financial environment  Remarks by Mr Gazi Erçel, Governor of The Central Bank of the Republic of Turkey, at the General Meeting of the 17th Asian Banking Association which was held in Istanbul on 22 September 2000. *  *  *  I am honored to participate in this meaningful organization and I would like to thank you for the opportunity to address this distinguished audience today. I would like to begin with a quick review of the recent developments in the international financial environment, which I believe will give a clear idea why the issue of globalization is very crucial, interesting as well as challenging. Beginning with an evaluation of the recent financial crises, I will then concentrate on the growing importance of globalization process and challenges brought by globalization. I. Developments in the international financial environment  The 1980s and 1990s witnessed significant changes in the international financial markets. With the advent of globalization and rapid integration of financial markets, the world we live in is getting smaller in every aspect of life. Nowadays, when international banking systems are experiencing significant changes, banking is being discussed at a global level. Therefore, from the global standpoint, what seems to be important for banking systems is not the size, but the level of compliance with the internationally accepted rules and standards, and their functionality. In today’s financial environment, dominated by a dynamic, aggressive financial service industry, banks as major players operate with greater freedom.

They will become genuine stations of information gathering about the economic and financial activity of the region, being preceded by further analyses and studies. This research work will serve not only to a more explicit monetary programming but also to the modernization of transmission elements of this policy from the higher authority to the lower authority and vice versa. I estimate that this initiative of the Bank of Albania to monitor the economic activity not only in the metropolis but also in other regions of the country would be of particular interest for all the interested groups. Further, I would like to add some other comments on the latest developments of the banking system, which I deem have created good premises for a real expansion of this business, an expansion that will positively impact on the performance of business activities. After completion of the Real Time Gross Settlement (RTGS) system, the Bank of Albania inaugurated some times ago the initiation of a very important project on the Automated Electronic Clearing House (AECH). The operation of this new system will considerably increase the payment speed for the customers, knowing that the lack of this element has maintained businesses far from banks. I take this opportunity to make businesses aware of the advantages of the operation of this system, as both systems together will help reach the international standards of ATM and AIPS (automatic and electronic payment equipments), per population number.
We welcome input on this question in response to the Discussion Paper, but will need to base our judgments on a combination of robust, broad-based scientific evidence and specific UK government policy. 25  https://www.gov.uk/government/consultations/early-phase-out-of-unabated-coal-generation-in-great-britain 16  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  16  Chart 11: Transition consistent production pathways for fossil fuels  Source: SEI, IISD, ODI, E3G, and UNEP. (2020). The Production Gap Report: 2020 Special Report. This discussion leads naturally to our final tool: escalation. In calibrating our framework, we face a trade-off. On the one hand, we want to set challenging incentives to support transition. But jumping straight to the end state today, when data remain partial and firms are still developing credible emissions-reduction plans, is neither feasible nor productive. This is not at all an argument for despair or timidity. Issuers should not be given excessive time to adjust. And emissions data are improving steadily (Chart 12). Chart 12: Evolution of emissions data for CBPS eligible firms  Source: Certain information ©2020 MSCI ESG Research LLC. Reproduced by permission  17  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  17  But it does suggest adopting a progressive approach, in which the debt of firms that fail to develop and execute credible plans moves down the rungs of a ‘ladder’, flipping first to a negative tilt, then – if poor performance continues – to removal from eligibility, and ultimately active divestment (Chart 13).

pdf 24  15  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  15  climate disclosures for all UK companies (Chart 10). We will explore whether we can adjust CBPS eligibility requirements to incentivise timely compliance with these requirements. The second potential change relates to activities judged to be fundamentally incompatible with reaching net zero by 2050. Thermal coal is the most commonly-cited example of such an activity in the UK. Coal produces more than twice the amount of CO2 per unit of electricity as natural gas, and over a third more than oil. As such, the UN estimates that global coal production needs to fall very substantially, by some 11% every year between 2020 and 2030 to hit Paris temperature targets (Chart 11). In the UK, coal usage in power stations has already declined sharply – accounting for nearly half of the reduction in UK-wide emissions since 1990 shown in Chart 3 – and the Government has announced that it intends to eliminate its effective use altogether from October 2024.25  The new CBPS eligibility requirements announced this autumn will support and reinforce that timeline, excluding any assets that fail to meet tough restrictions. Judging whether any other fossil fuel related activities are also fundamentally incompatible with reaching net zero by 2050, and hence should receive similar treatment, is a complex and technical matter, in which the Bank has no direct expertise.
As I emphasised earlier, an ex ante evaluation can on the other hand be performed in real time as a part of the ongoing public debate on monetary policy. Was monetary policy credible? The credibility of monetary policy is always an important factor. The credibility of an inflation targeting regime is usually measured by to what extent inflation expectations for different time horizons correspond to the inflation target. The greater the degree of correspondence, the higher the degree of credibility. This provides a direct indication of the level of confidence in the ability of the central bank to meet the inflation target. Figure 10 shows how inflation expectations among money market agents developed in 2008 and early 2009. It is evident that expectations for both one and two years ahead have been revised significantly downwards recently, which is hardly surprising given the development of the economy. In the longer term, however, the expectations are well anchored around the target. How well inflation expectations are anchored around the target also has a direct impact on how well the central bank succeeds in meeting the target and on the possibilities the central bank has to also stabilise the real economy. This is because inflation expectations directly affect price and wage setting in the economy. Stable inflation expectations eliminate a potential source of shocks and make it easier for the central bank to stabilise both inflation and the real economy.

The point in Figure 6 that corresponds to February 2008 is not far from origin, while the point that corresponds to February 2009 is a long way from origin and represents substantial sum of squares for the inflation-gap and output-gap forecasts. Assessing whether monetary policy has been efficient thus entails attempting to determine whether monetary policy has been on the modified Taylor curve or not. The analysis is therefore ex ante, which means that the starting point is the central bank's forecasts for inflation and resource utilisation rather than the actual outcomes. In practice it is of course difficult to perform a more precise analysis, it becomes rather a question of determining to what extent monetary policy has been clearly inefficient in the sense that it is easy to find another repo rate path that would stabilise inflation more without stabilising resource utilisation less, or that would even stabilise both more. A factor that can make the analysis even more complicated is if the central bank, apart from inflation and a measure of resource utilisation, also includes other targets or limitations in its monetary policy deliberations. On such conceivable factor is so-called interest-rate smoothing, in other words that the central bank also chooses to even out the changes in the policy rate and ensure that they are made in relatively small and regular steps, for example by 0.25 percentage points at a time. With such a restriction, monetary policy will be located at a point above and to the right of the modified Taylor curve.
The policy decisions made by the FOMC in August and November were intended to influence financial conditions in a manner that would support the economic recovery and return employment and inflation, over time, to levels consistent with the FOMC’s objectives. One way that this might occur is through a portfolio balance channel. 12 Under this view, removing duration risk from the market would tend to keep longer-term real interest rates lower than they otherwise would be and would encourage investors to move into other types of assets, thereby making broader financial conditions more accommodative. These intended effects were apparent in financial markets from mid-August to early November, when investors increasingly anticipated the Federal Reserve’s decision to expand its balance sheet. Over that period, longer-term real interest rates declined, breakeven inflation rates moved up toward more normal levels, equity prices rose notably and risk spreads on many credit instruments narrowed. This configuration of asset price movements is the pattern that is typically associated with additional monetary policy easing. Since early November, one of the notable developments in financial markets has been the sharp increase in longer-term interest rates. At first glance, this change may seem at odds with the portfolio balance channel. However, it is important to understand the factors that led to the increase in interest rates in the current circumstances. The upward movement in longer-term interest rates in large part reflects the greater optimism among investors about the outlook for economic growth.

Continued good economic activity and an  BIS Review 17/2007  5  increase in employment will lead to inflation rising in the coming years. But we are nevertheless assuming that the inflation upturn will be modest. This is due to continued favourable supply conditions in the economy. Finally, I have pointed out that our forecast, as always, is uncertain. This applies equally to our interest rate forecast. Thank you! A comparison of forecast errors CPI 2006 The Riksbank Svenska Handelsbanken SEB Economist Intelligence Unit NIER SBAB Swedbank M organ Stanley M errill Lynch Nordea Hagströmer & Qviberg Öhman JP M organ UBS ING Financial M arkets Confederation of Swedish Enterprise Skandiabanken  0.0  0.1  0.2  0.3  0.4  0.5  0.6  0.7  Note.