samchain/econo-pairs-v1 huggingface dataset:
In the same period, inflation has at times relatively declined, but it was impossible to maintain a permanent recovery that could be identified as price stability. During the period between the first half of the 1970s and the early 1980s, studies and applications to fight inflation and to maintain price stability in developed economies intensified, whereas inflation accelerated due to the financing of public deficit by the Central Bank. In the second half of 1980s, the inertia arising the Central Bank meeting public deficits brought about abandoning of discipline in public expenditure changes in production-consumption behavior together with inflation and deterioration in the social structure. In the early 90s, apart from relatively short-term periods of stability, lax fiscal policies continued to be implemented along with monetary policies aimed at preventing a possible crisis. Price stability was not a priority, moreover, inflation entered a selffulfilling cycle. It is a fact that during this 30-year period, price stability was not the main objective and the necessary structural arrangements for maintaining economic stability, including price stability and sustainable growth, were not taken into consideration. This period of long-term chronic inflation brought with it a lot of negativity. As it is known, price stability is the sine qua non for maintaining economic and social stability. The extent of the damage to the economy as well as political and social structure of a country caused by failing to achieve price stability is clearly in the in the state of the country during this period and in the experiences of other countries.

Hamad Al-Sayari: Financing a changing world Speech by His Excellency Hamad Al-Sayari, Governor of the Saudi Arabian Monetary Agency, at the Euromoney Saudi Arabia Conference 2007: Financing a Changing World, Riyadh, 8-9 May 2007. *  *  *  I am pleased to be here today at this international gathering of experts who share a common interest in the economic development of Saudi Arabia. The theme of this Conference is "Financing a Changing World" and I intend to share with you my views on the role that the Saudi Banks and the Capital Market are playing in this regard. This gives me an opportunity to recap the important contribution of our banks and our growing capital market in channeling the financial flows to and from the Kingdom. I will also outline the future direction and challenges in this regard. In recent years, international fund flows have been affected by different phenomenon, including rising imbalances in trade balances originating from the export dominated economies in Asia, the pace of economic growth in developed economies in Europe and North America, and the volatile energy and commodity prices affecting all countries. Addressing the impact of these global phenomenon are causing significant challenges to the economies of all countries. For the Gulf region including Saudi Arabia, a major challenge is to ensure that the increased financial flows into the region are channeled efficiently to the most productive sectors of the economy and to profitable enterprises and projects.
In addition, the uncertainty engendered by the financial crisis had led to a strong appreciation of the Swiss franc against the euro. In view of the economic situation prevailing in Switzerland at that time, there was the risk of a pronounced deflationary trend, in particular if the Swiss franc were to appreciate further. This risk necessitated a further easing of our monetary policy. The substantial monetary policy easing therefore continued, with a further 25 basis point reduction in the Libor target range in March 2009. This left the new range at 0.0–0.75%, where it has since remained. The SNB aims to keep the Libor in the lower end of the range, i.e. at around 0.25%; the one-week repo rate has been at practically zero since the end of 2008. The room for manoeuvre using the traditional interest rate instrument was thus effectively exhausted in March 2009. To relax monetary conditions further, the SNB significantly increased liquidity. It did so via a number of unconventional monetary policy instruments. It concluded longer-term repos and purchased bonds issued by private sector borrowers. It also bought foreign exchange on the foreign currency market and acted to prevent the Swiss franc from appreciating further against the euro up to the end of the year. Against the background of the economic recovery, following its monetary policy assessment in December the SNB is acting only to decisively counter an excessive appreciation of the Swiss franc against the euro.

We need to take these international regulatory developments into  2  BIS Review 59/2010  consideration to ensure the global competitiveness of our financial centre. Yet, as the past two and a half years have shown all too clearly, in the event of a crisis each country must take responsibility for its own banks. The formulation and implementation of measures at the national level must take into account the specificities of the country concerned. Here in Switzerland, the “too big to fail” issue is particularly pronounced, hence the need for a “Swiss Finish”. Reform of financial sector regulation and oversight is, without a doubt, a tough challenge. But the SNB is also faced with equally tough challenges in the area of monetary policy. III. Review of monetary policy in 2009  In 2009, the SNB’s monetary policy activities were focused entirely on combating the financial and economic crisis and the associated deflationary trends. Price stability, which is not compatible with either deflation or inflation, remained the core objective. As early as autumn 2008, the SNB had adopted an expansionary monetary policy stance as a result of the increasingly unfavourable economic outlook and the prospect that inflation would be low for the foreseeable future. Between October and December 2008, the SNB lowered the target range for the three-month Libor by a total of 225 basis points, to only 0.0–1.0%. The SNB also ensured a generous supply of liquidity to the money market. The economic situation continued to worsen into the spring of 2009.
For this reason, when making an assessment of the likely impact of asset purchases, the Committee did not factor in a material expansion of bank lending. Indeed, our asset purchases were designed to facilitate a disintermediation of corporate financing away from banks and toward capital markets. This disintermediation was supported in part by the portfolio rebalancing triggered by our gilt purchases. As investors’ demand for alternative assets such as corporate bonds and equities increased, the ability of businesses to raise finance in capital markets improved and the cost fell. This disintermediation was reinforced by the Bank’s operations to improve the functioning of corporate credit markets. The financial market dislocation in the immediate aftermath of the crisis hindered the functioning of the commercial paper and corporate bond markets and led to substantial increases in liquidity premia. In response, the Bank established facilities to make small regular purchases of corporate bonds and commercial paper, with the aim of aiding secondary market liquidity. The significance of these purchases of private sector debt should not be judged by their scale, which was tiny in comparison to gilt purchases. The purpose of these operations was not to purchase a specific quantity of assets, but rather to improve the functioning of those markets. In that respect, the knowledge that the Bank stands ready to purchase assets may be as beneficial as actual purchases. 5 The importance of expectations also played a central role in the design of our asset purchase programme.

Inflation is still being restrained by the fall in prices for imported consumer goods, increased competition in a number of markets and the current period of lower nominal pay increases. The trend in prices for consumer goods over the past two or three years is a result of favourable developments in the Norwegian and global economies. Low inflation is being accompanied by real income growth and a rise in production. It cannot be ruled out that small open economies are particularly vulnerable to fluctuations in international prices. Deviations from the inflation target in Norway are broadly in line with Sweden and New Zealand, but are larger than for example in the UK and Canada. Developments in recent years have also been influenced by the fairly large favourable disturbances to which the Norwegian economy has been exposed. Developments in Norway’s terms of trade provide an illustration of this here. As consumers, we enjoy the benefits of falling prices for many imported goods. As a nation, we benefit from a fall in prices for the goods we import in relation to prices for the goods we export. Norway’s terms of trade are improving. The impact of the rise in oil and gas prices is particularly strong – and the domestic economy is shielded to a certain extent through the oil fund mechanism – but there have also been terms-of-trade gains in the mainland economy. The situation in Norway differs from that of our Nordic neighbours.
I also encourage the private sector to learn more about the complexity and risks of various financial products to be able to use them effectively for their businesses. This will help businesses to reduce cost and increase competitiveness, as well as allow the financial sector to play a bigger supporting role for the real sector. For the financial sector, strengthening internal organization and promoting financial system efficiency will be the main factors that allow financial institutions to become more competitive. This will also increase the efficiency of business transactions as well as confidence in the financial system. Policy address Like all policymakers, the BOT faces not only the challenge of policy making but also that of communicating the policy choice to the general public. It is often the case that there is a gap between public expectation of near-term results and what the BOT aims to deliver: a firm foundation for the long-term, the results of which may not be seen for years to come. Upon assessing the changing global environment, risks and social dynamics together, the BOT  2  BIS central bankers’ speeches  remains resolute in our commitment to preserve Thailand’s economic resiliency and sustainable growth path. This can only be possible through a common vision among all stakeholders, for that would allow for policy integration and the creation of financial environment that would foster equitable progress and welfare.

Furthermore, from my point of view as a central banker in charge of ensuring price stability in the medium term, the main risk has changed radically in recent months: it is no longer that of "too low for too long" inflation but that of "too high for too long" inflation. Hence the need for the immediate normalisation of monetary policy that the ECB Governing Council decided upon and started to implement by reversing the exceptionally accommodative measures that were designed to address the risk of inflation being too low for too long. But the ECB's commitment is clear: the Governing Council will do whatever is necessary to reduce inflation and stabilise it at 2% over the medium term. The ongoing normalisation of monetary policy will follow a clearly defined sequencing. Last December, the ECB announced the gradual reduction of net purchases under the Pandemic Emergency Purchase Programme (PEPP). These net purchases were stopped last March. In March and April, it announced the reduction of monthly net purchases under the Asset Purchase Programme (APP). At the last Governing Council meeting, the ECB announced the end of net purchases as of 1 July 2022, and its intention to raise all key ECB interest rates by 25 basis points at its July monetary policy meeting. The ECB is also planning a further increase in key interest rates in September, the calibration of which will depend on the updated medium-term inflation outlook.
The program covered the 19 largest domestic bank holding companies—firms with assets of at least $ billion—accounting for two-thirds of the assets and one-half of the loans in the U.S. banking system at that time. Collectively, these firms spanned nearly every business area in the U.S. banking industry—including commercial and consumer lending, real estate lending, trading, derivatives, custody services and investment banking. The key point in our paper was that the SCAP was a program that used microprudential supervisory tools to achieve macroprudential objectives. I am sure that everyone here is familiar with these two terms, but let me provide a quick overview. Microprudential objectives focus on the health, performance, safety and soundness of individual firms. This was the perspective that 1/6  BIS central bankers' speeches  dominated supervision prior to the financial crisis. In contrast, macroprudential objectives focus on the stability and performance of the entire banking and financial system, emphasizing links among firms, how their activities can interact and the impact of the financial sector on the broader economy. This perspective has become more prominent since the global financial crisis. Macroprudential objectives can themselves be divided into two distinct groups. The first is what might be called structural objectives, which focus on the impact large, systemically important institutions have on the rest of the system when they fail or become distressed.

Depending on each firm’s business focus, geographic reach and customer base, any single scenario will result in variable degrees of stress, potentially undercutting structural macroprudential objectives. In the current stress testing regime, the bank-generated stress tests required as part of the CCAR go a long way to addressing concerns that stress tests based on a single supervisory scenario will not be tailored enough to expose capital vulnerabilities at all firms. In these exercises, banks are supposed to identify scenarios that are uniquely stressful to them. Evaluating these scenarios to ensure that they capture firm-specific risks is a key part of the CCAR qualitative review. This seems a very constructive way to think about consistency across firms, with the emphasis on each firm having robust risk identification and thorough consideration of the kinds of stress environments that would uniquely test its business model. Multiple, Independent Estimates and Diverse Perspectives Our 2009 paper described the benefits of the SCAP’s use of multiple, independent estimates of losses, revenue and expenses, as well as bringing diverse perspectives to bear on the design and implementation of the exercise. At that time, the technology of firm-wide stress testing was in its infancy, and the SCAP results were based on a combination of bank-generated estimates, 3/6  BIS central bankers' speeches  (somewhat primitive) supervisory models, and high-level “top down” estimates of possible stressed loan losses.
Such an action may be vindicated if there are risks to macroeconomic or financial stability or even if self-fulfilling runs on public debt may be a threat to market access, or lastly to avoid the deflationary consequences of a public debt event. However, one may be tempted to underestimate risks for inflation, especially since they only materialize with a lag, and such interventions could also increase moral hazard in terms of government incentives to keep their finances in order. These considerations explain why, when we set up the OMT, we required central bank interventions to be conditional on resolute fiscal policy adjustments, guaranteed collectively by euro area Member States. In addition to highlighting the main trade-offs between public debt sustainability and monetary policy, the great merit of Professor Gita Gopinath’s presentation is to use a formal model to support her rigorous analysis. In particular, she shows how the degree of commitment to low inflation may change the level of sustainable public debt. This analysis is most welcome, not only because public debts are very high, but also because in several parts of the world inflation appears stubbornly low in spite of extremely aggressive monetary policies. The second session examines changes in financial intermediation. Hyun Shin will focus today on the surge of bond-financing in the global economy over the last few years and the pros and cons associated with a broader shift from bank to market financing.

Admittedly, our objective as regulators remains relatively simple: it should be primarily to ensure that financial institutions, infrastructures and markets properly do their job of smoothly and efficiently channelling savings into productive investments. Yet our task is difficult as finance constantly evolves as a result of technological advances or as an answer to regulatory changes. This should prompt us to be both resolute and cautious in dealing with many questions such as whether there is an optimal mix of bank and market financing. The financial crisis has indeed revealed at least three major failures of our financial systems, be they bank or market oriented: excess leverage, excess complexity and excess opacity. Corrective actions have been implemented in these three areas. First, over the past few years, Basel III and various national or regional initiatives have led to a sizeable recapitalization of the banking system and especially SIFIs [systemically important financial institutions]. In the euro area, the Comprehensive Assessment of the balance sheets of 130 major banks shows how much progress has been made. Second, major reforms have been undertaken in order to facilitate the orderly resolution of large and complex financial institutions, thus providing better incentives ex ante to these large financial conglomerates. Such progress can be seen both in Europe, where the Banking Union is a major step forward, as well as abroad. Last, the scope of regulation has been extended to products and markets that remained too opaque in spite of their systemic relevance, such as some major classes of OTC derivatives.
Mario Draghi: One year of ECB banking supervision Speech by Mr Mario Draghi, President of the European Central Bank, at the ECB Forum on Banking Supervision, Frankfurt am Main, 4 November 2015. *  *  *  Ladies and gentlemen, Back in 2012, when it was decided to establish a single supervisory mechanism (SSM), many a critic claimed that either it was impossible, or that it would take forever. And yet here we are, marking the first anniversary of the SSM with this conference, reflecting no longer so much on the structure of supervision, but on its content. Now, the critics tell us that other necessary improvements to the institutional architecture of the euro area, and of the EU, are either impossible, or will not happen during our lifetime. You will forgive me for not being convinced. The establishment of the SSM was neither the start, nor the end of the suite of institutional reforms that we must undertake to restore in Europe the stability that is the premise for a return to prosperity. But it was a crucial step and in many ways it was the key to going further. Let me put the SSM’s significance in a broader perspective: In the early years of the euro, we lived under the illusion that we had established a fullfledged monetary union. There can, however, only be a single money if there is a single banking system.

Increasing the horizon of visibility is desirable generally, but it is true that an apparently never ending train of reform is not greatly conducive to reducing uncertainty. There is a simple solution to that: specify what we want to change, clarify the calendar to do it, and then just do it. This is exactly how the SSM was established. And that is perhaps the last area of significance of the SSM that I have not yet mentioned: it is the yardstick against which we can now judge other achievements. 2  BIS central bankers’ speeches
Financial market statistics show that lending to households via banks and credit institutions is increasing, but at a slower rate than before (Figure 8). Lending to companies is declining, but not by very much considering that we are in a recession. Figure 8. Households’ and non-financial companies’ total borrowing from credit institutions, annual percentage change 20  20 Households Companies  15  15  10  10  5  5  0  0  -5  -5  -10  -10 00  01  02  03  04  05  06  07  08  09  10  Sources: Statistics Sweden and the Riksbank  BIS Review 138/2009  9  If we look at the conditions in the financial markets from an interest rate perspective – in terms of price instead of volume – they have become less strained during 2009. This can be seen, for instance, if one looks at what are usually known as TED spreads – the difference between the interbank rate, where the banks lend to one another, and the government bond rate, both with a maturity of three months (Figure 9). The TED spread can be regarded as an indicator of confidence between the banks. One can say that this is a premium that reflects liquidity risk, credit risk and the demand for safer assets. The demand for government securities tends to increase during times of financial market turmoil. Figure 9.

Creating the right conditions for this is a difficult but important task. It involves the work on both financial stability and monetary policy. It involves extensive reforms and cooperation between central banks and other authorities around the world. We must tackle this task not only at a national level, but also from a global perspective. The work has already begun, and we are in a phase of the crisis where there are good prospects for achieving change. It is now that we have the chance to really create something that will last and will work better. We must not miss this opportunity! 12  BIS Review 138/2009