samchain/econo-pairs-v1 huggingface dataset:
The MPR was not changed during the second half of 2011. Our December Monetary Policy Report highlighted the wide range of existing risks, which originated mostly in the directions that the Eurozone situation could take. The possibility of a debt event occurring in a systemic sized economy or of a disruptive breakdown of the euro were among the worst risk scenarios envisaged although we also considered the possibility of the Eurozone authorities agreeing on a set of measures and reforms that would restore market confidence. Considering the deleveraging process that households and governments of developed countries would need to go through, these economies would continue to grow at low rates for a long time, regardless of the way that the Eurozone situation was settled. All in all, the international baseline scenario was more negative than previously considered, and would impact Chile’s growth and inflation rates. The working hypothesis of that Report was that there would be MPR cuts in the short term, coinciding with the results of several expectations surveys. The MPR was finally lowered at the monetary policy meeting of January 2012. Current dilemmas Tensions in financial markets stemming from the Eurozone crisis have recently eased. The European Central Bank’s (ECB) measures to supply long-term financing to banks, the political agreements to define an institutional framework aimed at maintaining fiscal discipline in the medium term, and the announcement of a new rescue package for Greece, have all contributed to this.

In time we hope this will help contain the rate credit union failures, which is currently disproportionately high amongst these smaller firms; and  ∙  simplify the regime by eliminating other capital requirements thresholds linked to non-asset metrics such as membership numbers and variety of business lines. The effect of these changes should be to reduce overall capital requirements for the credit union sector by roughly one quarter, and encourage the growth of successful credit unions by removing several cliff-edges present in our current regime. Conclusion We at the Bank have been clear that we have no appetite to weaken the level of resilience in the financial system. But this does not mean that we should stand still, particularly when we have opportunities to advance safety and soundness and competition at the same time. The changes we are proposing today are an example of what we can do when we bring a bit of fresh thinking, supported by our emerging army of regulatory robots, to the question of barriers to growth. 11  All speeches are available online at www.bankofengland.co.uk/news/speeches  11
•  Margin debt has been setting historic highs for several months running and, according to data released by the New York Stock Exchange on Monday, now stands at $ billion. 2  •  Junk-bond yields have declined below 5.5 percent, nearing record lows. 3  •  Covenant-lite lending is becoming more widespread. In my Federal Reserve District, 96 percent of which is the booming economy of Texas, bankers are reporting that money center banks are lending on terms that are increasingly imprudent. The former funds manager in me sees these as yellow lights. The central banker in me is reminded of the mandate to safeguard financial stability. As I said recently in a speech in Mexico, we must watch these developments carefully lest we become responsible for raising the ghost of irrational exuberance. It is clear to me that we have a liquidity pool that is more than sufficiently deep and wide enough nationwide to finance job-creating capital expansion and reduce labor market “slack.” But that will happen only if and when our fiscal authorities – the Congress and the president  1  Robert Shiller’s price-to-earnings ratio for the S&P 500 is based on average inflation-adjusted earnings from the previous 10 years, known as the cyclically adjusted PE ratio. 2  Data on market activity and margin debt can be found at www.nyxdata.com/nysedata/asp/factbook/ viewer_interactive.asp. 3  As measured by the Bank of America/Merrill Lynch high-yield corporate debt index covering credits rated BB+ and below.

At the same time, an increasing proportion of lending by the banks is to smaller enterprises and households, where the possibility of evaluating the credit risk in a traditional way is poorer than for large companies. Altogether therefore considerably higher demands are made on the banks’ risk management systems than previously. Major investments in knowledge on modern financial economy and IT-based risk systems are required for instance. This development is taking place at the same time as increased competition is tending to squeeze profits and information technology is changing the conditions for provision of payment services. When traditional bank activities shrink and change, the direction of activities has to be reviewed. The banks can for instance opt to take part in the provision of capital in the securities market and generate profits by charging fees for this activity. One strategy may be to offer businesses and private persons all financial services such as advice, insurance and payment services. In order to be competitive, larger banks are then often required, which is a driving force behind the increased frequency of bank mergers and mergers between banks and insurance companies taking place. Another alternative is of course to concentrate activities and become competitive within a particular niche. Small and medium-sized enterprises need for instance to have access to capital via banks which are able to obtain knowledge on the risks associated with lending to these. The possibility of turning to the securities market to have their need of capital satisfied should above all be confined to large businesses.
Throughout my whole first term of office I followed these principles, and today I would like again to state that my second term of office will be governed by the same principles. I have permitted no political interference in the activities of the Bank, which is a fundamental principle underlying the Law on the BNB and the Treaty on the accession of Bulgaria to the EU. I will not allow any political meddling in the work of the BNB in my next term of office. I highly appreciate the first words of the newly elected Speaker of the 41st National Assembly at our first meeting: „Mr. Iskrov, we are well aware of the Law on the BNB, of BNB’s key role for the financial stability in the country, and in spite of our disagreement with the early timing of your reelection, no one questions the independence of the central bank. This is a question of principle, on which there is no argument”. These were Ms. Tsacheva’s first words, and I am really grateful to her for them. BIS Review 104/2009  1  Independence should certainly not be an excuse for idleness or work not done. I would emphasise once again, just as I have so far worked with two Bulgarian Governments and all legitimate political parties and their representatives regardless of the political spectrum they belong to, so they too can count on BNB’s expert advice and support in the future.

Inflation expectations and the conduct of monetary policy, Speech at an event organised by the SAFE Policy center, 11 july 2019  6  Figure 3. Recent divergence between the evolution of household inflation expectations and market based-measures  Sources: ECB, European Commission  7
Mortgages were amortised to a greater extent a few decades ago, at the same time as inflation automatically reduced the real debt ratio. I believe that more amortisation may be needed, especially in the current situation with low and stable inflation. However, before the authorities impose amortisation requirements it may be worth reviewing other aspects of the provision of loans. One example may be how different amortisation alternatives are presented to the borrowers. Another may be to demand that the borrowers have the financial scope to amortise their loans at a certain rate. The important thing is to restore an amortisation culture so that the households’ margins are safeguarded and the economy is protected. The Riksbank focuses on these issues because we wish to safeguard the Swedish financial system. All our analysis and all our measures aim to reduce the risk of Sweden incurring major economic costs when the banking sector gets into trouble. As a complement, Sweden also needs to put a clear framework for macroprudential policy in place. The global financial crisis demonstrated the need to complement traditional financial supervision – micro supervision – which focuses on risks in individual institutions, with supervision that focuses on the risks in the financial system as a whole. In January, the Financial Crisis Commission presented an interim report which proposed how responsibility for macroprudential policy could be allocated in Sweden. We will therefore need to consider the Riksbank's stance on this issue.

So it is no surprise that a risk factor which adversely affects one institution would simultaneously hurt another. With fair value accounting, everyone has to mark their positions to the same volatile market. A number of institutional investors also abide not to hold any assets below a certain credit rating, hence a hard cut-off. So when borderline assets get downgrade, all these institutional players have to liquidate their positions, all at the same time. Meanwhile, as VaR methodologies and risk management tools employed by different banks become increasingly converge, the results of the analysis also tend to converge. The main point is that when a risk factor moves adversely, these similarly exposed institutions incur the same direction of losses, whence their largely identical response actions further distress the market, thereby completing the feedback circuit. The second propagation channel in the form of network linkages between institutions presupposes that there exists prior bilateral relationships between financial institutions. A good example is in the clearing, payment, and settlement activities where the bilateral link is simply the amount that must be cleared, paid, or settled. But with real-time gross settlement,  4  BIS Review 130/2009  the vulnerability in this area featured very little in this crisis. Instead, in this crisis, the direct interbank liquidity/funding lines proved to be the most critical network of bilateral relationships. When one bank becomes illiquid, this triggers cascading illiquidity to all other banks that are direct counterparties, or counterparties to the counterparties.
We have the collective power to transform reality through our actions, but this power cannot be released if we lack reliable information. It is generally said that information is power. It is hard to find a more illustrative example of the truth of this statement. Much remains to be done in this field, but we should congratulate ourselves on the fact that credit institutions, investors and customers are all exerting growing pressure in favour of increased transparency and information. Naturally, a key factor is that European regulations have also committed to achieving this goal. Noteworthy in this respect are various European standards, such as the European Green Bond Standard (GBS), whose public consultation concluded a month ago, and the longawaited taxonomy that was approved in June this year. Certain private initiatives are also well-known, such as the transparency standards produced by the Task Force on ClimateRelated Financial Disclosures (TCFD) at the request of the Financial Stability Board. These are ambitious standards which take time to prepare and which I often refer to in detail in my addresses. Today, however, I wish to take this opportunity to mention two farreaching and quite new initiatives which demonstrate that there is growing demand for information that will enable us to assess business reality from both a social and an environmental standpoint.

24.11.2020  Closing address. 1st Mapfre Sustainable Finances Observatory Forum Margarita Delgado Deputy Governor  *English translation of the original speech in Spanish  Good morning. I much appreciate this invitation to close this first Mapfre Sustainable Finances Observatory Forum. Allow me to congratulate Mapfre on this initiative and, naturally, Iberdrola and the Valladolid San Juan de Dios centre too for this well-deserved award. As many of you will know, I have now been Deputy Governor of the Banco de España for a little more than two years. A glance at my public agenda over this period will show that a significant number of my public interventions address what has come to be known as “green or sustainable finances”. Yet among the public addresses by my predecessors in the post, you will find none on this subject. Nor do I think you will find many speeches on sustainability on other central bank websites that are more than two years old. Along with my personal interest in the goals of combating climate change, I believe this shows two things: first, how novel this topic is for supervisors and central banks; and second, the great interest it arouses in public opinion. Looking through the newspapers we see every day countless initiatives for action and communication in the most diverse sectors relating to sustainability. Undoubtedly, the first edition of this forum and of these awards are one such initiative. They are a magnificent opportunity to acknowledge efforts made in the area of responsible investment.
Therefore, the materialization of upside risks would require further tightening of the monetary policy stance, while downward surprises in food and energy prices would be perceived as an opportunity to bring inflation back to the target in a shorter period. Figure 15: Inflation Alternative Scenarios  Forecasts,  Base  Scenario  Medium Term Target  Base Scenario  Pessimistic Scenario  Optimistic Scenario  and  12  10  Percent  8  6  4  2  12  2011-I  2010-IV  2010-III  2010-II  2010-I  2009-IV  2009-III  2009-II  2009-I  2008-IV  2008-III  2008-II  2008-I  2007-IV  0  BIS Review 62/2008  A protracted period of rising food and energy prices have led to significant breaches in inflation targets since the adoption of the inflation-targeting regime and consequently increased the stickiness in inflation expectations, as economic agents have become more backward looking. Under normal conditions, supply shocks are expected to alter relative prices rather than the underlying inflation trend. Nevertheless, the fact that several longlasting shocks appeared concurrently has increased the risks to price setting behavior. As a matter of fact, recent studies by the Central Bank reveal that economic agents have been increasingly grounding their expectations on past inflation figures. In this respect, recent developments in the pricing behavior and the underlying inflation trends are of particular concern. It may be necessary to pursue a tighter monetary policy should the price setting behavior deteriorate.

This involves imposing a levy on the incomes of the working population and transferring these funds to pensioners, either through redistribution in the present (pay-as-you-go system) or via a capital funding system which benefits future generations of senior citizens. Thus, demographic ageing means that the working population is obliged to shoulder ever greater levies. If, at the same time, the global creation of wealth progresses slowly, the responsibility of financing old age pensions is going to impose an increasing social burden. Thus, it is not only necessary to improve our economic efficiency, we also need to be careful not to impede these efforts through inappropriate measures. We must allow the invisible hand of competition to bring about the most efficient allocation of our resources possible in both the domestic and the foreign arenas. Consequently, we need to do more with the resources at our disposal. At the same time, we need to make sure we have access to better quality resources. This means taking a longer-term approach to our system of education. The conditions within which our economy operates also play an important role. Growth in investment activity not only allows us to create new jobs but also, and above all, to accelerate productivity advances – both of these factors encourage growth and help to achieve a better financial basis for our old age pension scheme. There are three reasons why the Swiss National Bank is concerned about demographic developments and growth.
Enforcement is carried out by third parties (law enforcement, social ostracism), by second parties (retaliation), or by the first party (self-imposed codes of conduct). Institutions affect economic performance by determining, together with technology employed, the transaction and transformation (production) costs that make up the total costs of production.” See North, Douglass (1997) in Drobak, J. N. (Ed. ): Prologue of Frontiers of the New Institutional Economics, p. 6. 2  Economists use a basic and powerful theoretical construct to demonstrate that, at the most fundamental level, production takes place through the use of labour, capital and raw materials as well as through technological progress. Lying behind it – and often having a profound effect on it – is how firms and the society in which the firms operate are organised. And organisation is about institutions in the broad sense – everything from society’s moral norms to how production is organised in each firm. 3  Hernando de Soto in The Mystery of Capital (2000) argues that a lack of proper land registration in poor countries makes it impossible for the poor to obtain credit. As a result, a large proportion of the population is in effect barred from establishing a business. 4  The Arab sociologist and diplomat Ibn Khaldûn analysed the relationship between institutions and economic progress. He published his major work The Muqaddimah in 1377. The book was published in Norwegian this year on the initiative of Nils Holme, the former director of the Norwegian Defence Research Establishment (FFI).

As Blanchard and co-authors have recently postulated, a revision to future potential growth prospects may cause firms to cut back on investment plans, causing muted growth expectations to become self-fulfilling.11 On the right-hand side of slide 5 you can see Blanchard and Co.’s analysis replicated for the euro area. And we see signs that such effects might have also been at play in the euro area: there is a positive correlation between potential growth revisions and investment error forecasts. This might suggest that investment, and therefore demand, is influenced by long-term animal spirits – changes in expectations concerning the steady-state path of the economy. But the logic may also run in reverse and create a vicious feedback loop: this would be the case if the pessimism-induced period of low demand ultimately affected long-run potential growth. I would call this an “anxiety trap” that could ultimately lead to the more subtle forms of hysteresis I mentioned earlier. The reason is that if the effect of low expectations and high uncertainty is to quell animal spirits, large demand shocks can have long-lasting effects: the increase in risk aversion slows down capital accumulation, thereby reducing productivity growth, while uncertainty encourages firms to enter into more flexible forms of employment that shed labour market risks onto workers.
Conversely, our financial institutions gained access to the single European market, a factor which encouraged additional inward foreign investment into the sector. At the same time, the last exchange controls were removed. The adoption of the euro last January was a further step in the integration process into the single market. Financial transactions across the euro area can now take place without incurring exchange rate risks. Furthermore, Maltese banks now have access to the Eurosystem facilities available to credit institutions within the euro area. These include a variety of instruments designed to provide short-term liquidity, as well as standing deposit and lending facilities. At the same time, euro adoption entailed a reduction in the minimum reserve requirements that Maltese banks had to comply with, resulting in the release of additional funds into the banking system. Euro adoption also led to improvements in the financial infrastructure supporting the Maltese economy. In November 2007, Malta formed part of the first group of countries that joined TARGET2, the payment system used by the Eurosystem for the settlement of large value  BIS Review 155/2008  1  interbank transfers in euro. Maltese banks can use TARGET2 to carry out transfers with other banks in Malta and throughout the euro area rapidly, safely and effectively. The Single Euro Payments Area (SEPA), launched in January this year, is a further step towards closer financial integration and aims at making retail payments across the euro area as easy as they currently are within national boundaries.

The return on asset which stood at 1.3 percent during the first quarter of 2007 fell to 0.7 percent for the first half of the year, reflecting provision in accordance with IAS39, the new accounting standards as you know, to strengthen the capital base. Meanwhile, qualitative improvements have resulted from much tighter board of director oversight and accountability, as required by the Bank of Thailand. On the non-bank side, non-bank credit card companies have been competing more strongly for market shares. To prevent default risks and NPL, and to safeguard against the overall  BIS Review 107/2007  1  financial stability, we have strengthened efforts to communicate to and raise awareness with the general public on this issue. Regulatory measures were also put in place to ensure that consumers were protected and well-informed, including the prescription of rules, procedures, and conditions for credit card business, including interests and service fee charges as well as debt collection. Turning to macroeconomic stability, latest data for August showed headline inflation at 1.1 percent and core inflation at 0.7 percent. On the exchange rate, while the baht movement has reflected largely external developments, there have also been internal drivers, which include large surplus in current and capital accounts. During the first 7 months of this year, the balance of payments recorded a surplus of 5.9 billion US dollar in total. Overall, international reserves rose to over 74 billion US dollar at end-August, close to 3.6 times of short-term external debt.
12  See, for example, Tokuoka, K., “Intergenerational Implications of Fiscal Consolidation in Japan”, IMF Working Papers, 12/197, 2012. BIS central bankers’ speeches  7

I should note that this is described in detail in the paper, "Measuring the Natural Rate of Interest After COVID-19," that was posted this morning on the New York Fed's r-star web page. First, we incorporated an additional persistent supply shock related to the effects of the pandemic that directly reduce the economy's potential. We measure this shock using the Oxford COVID-19 Government Response Stringency Index for each economy.12 This index aggregates measures of government containment and shutdown policies. Because the index is no longer being produced, we assume that in each case, it declines smoothly to zero over 2023-24. Second, we use a statistical procedure that accounts for outliers in the model's estimation. Specifically, from the second quarter of 2020 to the fourth quarter of 2022, we estimate a time-varying process for the variance of the shocks hitting the economy. This procedure places a lower weight on periods when there are very large outliers. Our results show that outliers are particularly large in 2020, as seen in Figure 2. By comparison, the estimated magnitude of outliers is relatively modest in 2021 and 2022. Starting in 2023, we assume that the distribution of shocks is no longer affected by the pandemic. Letting the Data Speak  Estimation of the modified model reveals three key findings. First, the modified estimation procedure yields results that are overall quite similar to those from the original model during the pre-pandemic period. Second, the current estimates of r-star are similar to those estimated directly before the pandemic.