samchain/econo-pairs-v1 huggingface dataset:
These longer interest rates have an impact on the economy through capital costs, the stock market, the exchange rate, and other asset prices (Blinder 1998, D’Amico, English, López-Salido, and Nelson 2011, Woodford 2005). It would therefore seem that publishing a policy-rate path would be the most direct way to affect interest-rate expectations, especially since central banks should have better information about their own intentions than anyone else. Publication of the central bank’s assessment of the future path for the policy rate is thus a separate tool in the monetary policymaker’s toolbox. This tool can be particularly useful 6  BIS central bankers’ speeches  when the policy rate has reached the effective zero lower bound, and there is a need for even more expansionary policy. Given this, it may seem a mystery why still so few central banks choose to publish a policy-rate path, when an increasing number of central banks are publishing forecasts of inflation and the real economy. I welcome very much that “[t]he FOMC continues to explore ways to further increase transparency about its forecasts and policy plans” (Bernanke 2011a). Global interest rates and emerging-market capital inflows Emerging-market economies have been subject to increased inflows of foreign capital over the last few years, and some emerging-market policymakers have expressed concerns about the related risks of bubbles and other negative effects.

The primary question today is not so much how much further we need to go with interest rate hikes, but how large is the pass-through of what is already in the pipe. Overall, evidence shows a quick and smooth pass-through of ECB decisions to broad financing conditions, which is the first step of monetary policy transmission. The growth rate of bank loans to households and firms has slowed due to a combination of higher borrowing rates, lower demand, and - for firms - tighter credit standards. Volumes of loans are decelerating, even though growth in outstanding amounts remains positive [+3.3% in the euro area for mortgages to households and +5.2% for loans to businesses]. By the way, the growth of loans in France remains significantly higher than in the euro area average. The second step of monetary policy transmission goes from the overall financing conditions to the economy and to inflation. In the textbook theory, tighter financial conditions moderate aggregate demand, and then decrease inflation with some lags. The estimated transmission lags of monetary policy in the literature vary from one year1 to more than two years2. At the current juncture several factors may bring us closer to the upper range: The current tightening cycle started from exceptionally low levels of real interest rates. It is only from the end of 2022 that we achieved positive real rates at all maturities – but we are now clearly in restrictive territory. the proportion of fixed-rate long-term loans is particularly high by historical standards.
That will be an important part of the reforms of microsupervision in the UK, as we prepare for the Prudential Regulatory Authority. Enhanced resolution regimes are aimed at putting asset managers at risk through their holdings of credit instruments, just as they accept risk as equity investors. That will affect the oxygen that bankers breathe. But we could underpin the positive incentive effects by paying part of the deferred element of the remuneration of bankers in risky debt securities as well as in equity; equity gives them upside as well as downside, whereas a fair chunk of their wealth being a debt claim on their bank would give them a powerful interest in its medium-term soundness. My guess is that senior bank management team would not object to that. But none of what I have said makes a case for placing all of our eggs in the resolution basket. Switching metaphors, we need belt and braces. Which is why the G20 agreed that the so-called Global Systemically Important Financial Institutions (G-SIFIs) should carry greater loss absorbing capacity (or GLAC) than implied by Basel III. First best would be equity. Indeed, Adair has argued this evening that ideally Basel 3 would have set a higher equity requirement. But that did not happen. In practice, we are going to have to be open-minded, but also principled, about quasi-equity instruments contributing to GLAC for SIFIs (sorry about the acronyms!).

At the same time, I believe that the Federal Reserve System’s monetary policy responsibilities are allocated appropriately by the Federal Open Market Committee, with New York playing an important role to ensure that monetary policy is executed effectively even during periods of duress. Of course, the Federal Reserve System and the New York Fed are not perfect institutions. That is why we always must strive, in an open and transparent manner, to improve what we do and how we do it, for the benefit of the American people. Thank you for your kind attention. I would now be happy to take some questions. BIS central bankers’ speeches  5
Emilija Nacevska: Strengthening the capacities of the system for fight against counterfeiting of the euro Speech by Ms Emilija Nacevska, Vice Governor of the National Bank of the Republic of Macedonia, at the opening conference of the Twinning Light Project "Strengthening the capacities of the system for fight against counterfeiting of the euro", Skopje, 15 January 2019. * * * Dear Minister Oliver Spasovski, Your Excellencies Samuel Zbogar and Thomas Gerberich, dear Project Leaders Biljana Celeska Anevska and Peter Spicka, dear Mr Damir Bichanic, distinguished representatives of the Delegation of the European Union in the country and representatives of the Ministry of Interior, distinguished colleagues, dear guests, It is my honor and pleasure to greet you on the behalf of the National Bank and to welcome you to today’s event held in our institution, marking together the beginning of this very important Twinning Light Project aimed at strengthening the capacities of the institutions involved in the system for fight against counterfeiting of euro. At the very beginning of my speech, I would like to express the gratitude of the National Bank to the European Union, because it has recognized the determination of our key institutions responsible for fighting money counterfeit to put their maximum in establishing a strong and efficient system for protection of the national, as well as the financial interests of the Union.

And do the authorities themselves have arrangements in place to produce comprehensive assessments of the operations and the risks of these groups? Under the prevailing regulatory structures I am afraid that the answers to both of these questions are likely to be no. Policy actions are needed As I have tried to illustrate so far, financial integration gives rise to several challenges related to the supervision of cross-border banks. Most importantly, I have argued that the present  BIS Review 83/2007  3  supervisory arrangements are not designed to prevent the cross-border externalities that financial crises may result in. This, of course, is a growing problem in an integrated world. Furthermore, I have argued that there are deficiencies in how the supervision of internationally active banks works in practice, which can partly be explained by limitations in legislation and partly by supervisors not being sufficiently coordinated. In my opinion all this gives us good reasons to reflect on how to take actions for revising the present regulatory frameworks. We need to find ways for countries to cooperate closely and establish mechanisms for coordination and conflict resolution. Motives for a coordinated financial supervision Most of what I have said so far is probably pretty uncontroversial both in terms of the analysis of the challenges of integration and of the need for action. However, it may be more difficult to reach agreement on how to move forward. A number of alternative solutions have been brought into the debate.
When the couple reaches the age of 70, they are entitled to a non-means tested Old Age Allowance of $ $ x 2) provided by the Government. So this couple will be receiving up to $ (or $ per month or around $ (or $ per year, and have the benefit of being able to stay in their own property, for life. Compared with the median income of two-person households in Hong Kong of $ (or $ per month,1 this guaranteed monthly payout of $ would really help support a decent retirement life and protect the retirees from highly volatile market risks and from increasingly high longevity risk. Conclusion 9. I would like to conclude by making the following observations: The Reverse Mortgage Programme and the Life Annuity Scheme, when combined, will create an economic outcome similar to a life pension. This self-made pension is (a) a market based solution to provide steady cash flows for life by liquefying the fixed and financial assets accumulated by the retirees during their working life. The schemes are commercially and financially viable and will therefore not involve Government subsidies; 3/4  BIS central bankers' speeches  The launch of the Life Annuity Scheme has helped promote the annuity market in Hong Kong, which has up till now been rather underdeveloped. In 2016, the annuity business only accounted for less than 2% of all long-term insurance business of (b) private insurers in Hong Kong.

The model that we are pursuing in Hong Kong is not only highly innovative, it also serves as a pilot that, if proved to be successful, would provide a good model for many countries in the world as an additional retirement support option that is financially viable and thus sustainable over the long run. 11. Thank you very much. 1 Figure for the first quarter of 2018. Source: Quarterly Report on General Household Survey (Q1 2018), Census  and Statistics Department. 4/4  BIS central bankers' speeches
This has been recognised in the view of most central banks in advanced economies who have made it clear that when policy rates go up they are likely to do so slowly and to levels materially below those we saw before the crisis. Second, while I believe central banks do have the tools to offset shocks to the real economy and to fulfil their mandates, these tools become increasingly more complex in their effects in a world in which the natural rate is low. I would briefly mention two aspects of this. Monetary policy at very low levels of the natural rate can have implications for the financial sector – both in the way the sector is able to transmit monetary policy and in broader impacts on the price of financial assets. 8  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  8  These effects can be managed. In August, the MPC specifically addressed the implications of its recent policy package on banks’ interest margins; it took action to prevent these jeopardising the transmission of its policy stimulus. And, to the extent that monetary policy at these levels has an undesirable impact on financial assets and indebtedness, the development of macroprudential policy is intended to address these directly and more generally to make the financial system more resilient to shocks. On a different note, one cannot ignore that monetary policy has a distributional impact. All sectors of the economy and all parts of society benefit from price stability and lower volatility in economic growth.

In 1950, the total output value was just over SEK 500 billion, measured at current prices, and in 2003 it was around SEK 2,300 billion. However, one can also see that this has not been an even development. GDP growth has been more rapid during certain periods than others and during some episodes, such as the 1990s crisis, the level of output even fell. But seen over a longer period, the increase in GDP has been relatively stable. On average, output rose by 2.7 per cent during these years. The orange line in the figure shows how a measure of trend, or potential, output has developed over the same period. Potential output in principle reflects the capacity limits put on production of goods and services at a given point in time. One type of limit is the access to resources for production factors of production - in the economy. This normally covers two main factors: labour force and physical capital, i.e. factories, machinery, etc. Another limitation is how productive these factors of production are, that is to say, how much that can be produced in, for example, one hour of work or use of the machinery. It is important to emphasise that potential output is not an estimate of a ceiling for production. It is therefore not a measure of the level of output that would apply if the entire labour force were employed and all physical capital was used to the maximum.
But in any case, trust will not be rebuilt if we start by unravelling the existing rules. Second, we have seen during the crisis that, without monetary policy instruments at the national level, fiscal policies can become overwhelmed if country-specific shocks are very large and not well catered for by the shock-absorbing capacity of the economy and the financial sector. Action can and should be taken to reduce the probability and size of such large shocks. The banking union, with its Single Supervisory Mechanism, Single Resolution Mechanism and the new bail-in rules, goes a long way in this direction, provided that all these elements are implemented in a resolute and consistent way. But we cannot responsibly assume that the euro area will from now on be immune to crises. The Five Presidents’ Report therefore calls for the creation of a shock-absorption capacity at the euro area level to complement the automatic stabilisers of Member States. And last but not least, there is ample scope for euro area countries to better absorb shocks internally, by having suitably resilient economies. Additionally, we need to improve and strengthen labour mobility and risk-sharing via financial markets. This is another reason why completing the banking union, and why complementing it with a capital markets union with substantial cross-border equity links, is so important. And this also reminds us of the importance of preserving labour mobility from the temptation of raising new fences.

Benoît Cœuré: A budgetary capacity for the euro area Introductory remarks by Mr Benoît Cœuré, Member of the Executive Board of the European Central Bank, at a public hearing at the European Parliament, Brussels, 2 March 2016. *  *  *  Madam Chair, Mr Chair, Honourable Members of the European Parliament, Ladies and gentlemen, I am grateful to the two rapporteurs and to the two committee chairs for holding this hearing today to advance the public debate on a fiscal capacity for the euro area. We are all well aware that political attention is largely focused elsewhere, but we should not lose sight of the objective of completing Economic and Monetary Union (EMU), securing its capacity to absorb economic shocks and creating confidence today in its future economic performance. As I have said elsewhere, if downside risks to the recovery were to materialise, this would not make it easier to respond to the refugee crisis or to counter terrorism. 1 A quick glance at fiscal policies today should further convince us of the importance of this discussion: •  The recovery in the euro area is proceeding at a sedate pace; it is mainly supported by our monetary policy measures and by the low price of energy. At the same time, the global economy is overshadowed by renewed uncertainty and broader geopolitical risks. •  Public finances in many euro area countries are still in a fragile condition.
BIS Review 138/2008  05  06  07  08  09  10  11  12  Sources: Intercontinental Exchange and the Riksbank  15  Falling commodity prices USD, index (2000 = 100)  350  350 Food M etals Other agricultural products Total  300  300  250  250  200  200  150  150  100  100 04  05  06  07  08  Source: The Economist  Weaker krona Trade-weighted exchange rate (TCW), index, 18 November 1992 = 100  138  138 TCW-index  136  136 TCW-forecast M PR 2008:3 TCW-forecast M PR 2008:3  134 132  134 132  130  130  128  128  126  126  124  124  122  122  120  120 04  05  06  07  08  09  10  Note. Broken lines refer to the Riksbank’s forecasts (quarterly data). 16  11  12  Source: The Riksbank  BIS Review 138/2008  Lower growth in the world and in Sweden Annual percentage change, calendar-adjusted data 6  6  Sweden World  5  5  4  4  3  3  2  2  1  1  0  0  -1  -1  -2  -2 -3  -3 1980  1985  1990  1995  2000  2005  2010  Note.

The establishment of ACE will support and indeed, further propel efforts to raise the calibre and dynamism of talent across all levels in the industry. ACE will provide a range of facilities for professional development and skills development including learning and training for all the different levels of financial specialisation. The institutions that are to be housed within ACE have all embarked on measures to deliver programmes and qualifications that are benchmarked against leading education and training standards. The high quality talent that ACE will develop will contribute to the vibrancy and progress of the Malaysian financial industry. BIS central bankers’ speeches  1  ACE is an initiative spearheaded by the financial services industry and it will house 10 institutions, involved in education, training and standard setting. With its strategic location in Kuala Lumpur, ACE has close proximity to the headquarters of financial institutions. Its integrated facilities will foster and facilitate collaboration amongst banking, insurance, capital market and Islamic finance industries to share intellectual capital, expert resources as well as benefit from economies of scale by the sharing of common infrastructure and facilities. Today’s ground breaking ceremony marks the official start of the construction for the ACE project. Let me take this opportunity to congratulate those involved in the Project to bring it to this stage of development.
My central scenario for the short term is a scenario where after a couple of months inflation will recede in the euro area and come back “below but close to 2%” in accordance with our definition of price stability. It is not unusual to witness commodity and consumer prices acceleration in the initial phase of an economic slowdown, as there is some inertia in employment and commodity prices dynamics with respect to activity. This has happened previously at the end of the 1990s, with a subsequent moderation in inflation. In the short run, recent inflationary shocks are likely to maintain inflation at a high level for most of 2008 as we may expect a significant degree of persistence in energy, industrial commodity or some food price increases (such as meat). In the euro area, HICP inflation has reached 3.3% in February. It might remain well above 2% in the coming months but ebbs later this year according to ECB staff forecasts. These projections rely on a scenario of global economic slowdown and moderation in commodity prices, which would contain pressures on capacity utilisation in the labour and product markets. They are all the more credible than we do not see at this juncture a major diffusion of price increases: less than 30% of the consumption basket (energy and food) are responsible for more than 60% of the overall increase. There are nevertheless some upside risks to these projections. First, further shocks on food and commodity prices cannot be ruled out.

However, in the medium run, the challenge of climate change may lead to a significant improvement in technological progress, which will lead a minima to reduce energy consumption and carbon dioxide emissions for a given level of output but could also stimulate productivity growth. This inflationary impact highlighted before would then be offset both by downward pressures on energy prices and by productivity acceleration. *  * *  As we can see from this rapid review of risks factors to inflation in the short to the long run, there is a clear upward bias to risks regarding inflation, which has to be taken into account by economic policy. BIS Review 32/2008  3  It is thus all the more necessary to insure a proper degree of competition on product markets and a well-functioning price system, inducing changes in consumption or production patterns according to the relative scarcity of products. There are large margins of improvement with respect to product market competition both in emerging and advanced countries. In the euro area, the fulfilment of the Lisbon agenda objectives could have a significant offsetting impact. Higher employment rates and acceleration in productivity would lead to both less inflation and higher growth. The low current employment rates of the younger and older workers provide a wide acceleration margin for European growth. The potential catching-up of information technology use in the Euro area would lead to a substantial increase in productivity growth. Both evolutions would significantly reduce the inflation content of growth and help contain inflationary pressures.
Every one of them suggests that, while low interest rates might be the natural consequence of price stability, they may ultimately compromise financial stability. The first hypothesis, is that hedge-fund and wealth managers, who tend to be paid according to the nominal returns on their investments, might be prone to taking additional, possibly excessive, risks when interest rates are low and, as a result, they might receive lower levels of compensation.11 To the best of my knowledge, empirical studies which support or dismiss this claim have been yet to be carried out. The second hypothesis12 is that low interest rates increase the value of the collateral backing up loans. Banks thus have less incentive to monitor their clients’ loans.13 This view is empirically better documented, but the supporting evidence is ambiguous.14  8  Bean (2006). 9  Borio and Zhu (2008). 10  See, for example, Altunbas, Gambacorta and Marqués-Ibáñez (2010). 11  Rajan (2005)  12  Dell’Ariccia, Laeven and Marquez (2010)  13  Note that this theory closely resembles Ben Bernanke and Mark Gertler’s “financial accelerator” model. However, in this model the increase in collateral value prompts investors to borrow more whereas in the model of the “risk-taking channel”, increased collateral value induces banks to monitor their existing loans less. BIS central bankers’ speeches  3  Finally, the third hypothesis is that banks with access to cheaper external funding increase their leverage to achieve higher returns on equity.

Only then, will our financial system become less prone to risk and will the extent of future crises clearly decrease. In order to achieve this goal, several measures have been decided on in Switzerland. First, new capital adequacy requirements were enacted in 2008. Big banks will have to double their risk-weighted capital. In addition, they will have to hold a minimum amount of equity capital, irrespective of the risk models they use internally. This is because the crisis has shown that internal risk models massively underestimated the risks taken. Second, new liquidity regulations will be adopted. In the future, big banks will have to hold a sufficient amount of high-quality liquid funds to be able to cover unexpected liquidity losses for a period of at least 30 days. The reason for this is that, in the financial crisis, even solvent banks had liquidity problems. Finally, measures to solve the “too big to fail” issue must be put into practice. No bank should be so systemically important that governments feel forced to rescue it from impending failure, fearing the economic costs such a failure would cause. Possible solutions to the “too big to fail” issue are the creation of incentives to encourage banks to reduce their size or change their organisational structure. BIS Review 36/2010  1