samchain/econo-pairs-v1 huggingface dataset:
BIS central bankers’ speeches  7  Conclusion In my remarks today, I have provided my current thinking about the U.S. growth and the inflation outlook, and the implications for monetary policy. To sum up, the U.S. economic outlook looks brighter, with growth likely to be somewhat above the trend of the past five years. The risks to growth appear generally balanced, without unusually high risks that growth will either be much stronger or weaker than my forecast. On inflation, I remain confident, despite the recent softening, that inflation will begin to move up towards our 2 percent objective next year. This move will not likely happen immediately, however, given the recent weakness in energy prices and the fact that non-energy import price trends are also likely to soften a bit over the near-term. With respect to monetary policy, I believe that market expectations as captured by the most recent New York Fed’s surveys of primary dealers and market participants are reasonable – with lift-off expected to take place sometime around the middle of next year. But, life is uncertain and my judgment of the appropriate timing could change in response to incoming data and other factors that change the economic outlook. When we do begin to tighten monetary policy, the pace of tightening will depend not only on the outlook but also on how financial market conditions respond as we begin to remove monetary policy accommodation. Financial market conditions are an important transmission mechanism of monetary policy.

The analyses in Inflation Report 2/05 are based on a baseline scenario where the key rate shadows forward interest rates up to 2007, and then rises somewhat more rapidly. The krone exchange rate is assumed to shadow the forward exchange rate, which remains broadly unchanged over the next three years. Private consumption accounts for just under 60 per cent of total demand in mainland Norway, and is an important channel through which monetary policy operates. Low real interest rates, solid growth in real disposable income and a continued sharp rise in house prices will result in high growth in private consumption again this year. Higher employment and somewhat higher wage growth will continue to contribute to growth in household demand in the period ahead. Household debt, however, has risen sharply. A gradual normalisation of interest rates will reduce growth in household disposable income. This suggests lower growth in consumption. We assume that households will choose to spread consumption over time, so that the saving ratio will continue to fall even if interest rates rise. Housing investment rose sharply last year. It appears that growth in residential construction will remain high this year, although the rate of growth is expected to slow somewhat through the year. Low interest rates may have contributed to moving forward some housing projects. A gradual normalisation of interest rates implies more moderate growth in housing investment. Developments in underlying demand for housing may also imply that residential construction will stabilise and gradually decline somewhat.
Fernando Restoy: Challenges for the Spanish banking sector Closing address by Mr Fernando Restoy, Deputy Governor of the Bank of Spain, at the XXI Meeting of the Financial Sector, organised by ABC, Deloitte and Sociedad de Tasación, Madrid, 1 April 2014. *  *  *  Good morning. Thank you, Paco, for your kind words. It’s a great pleasure for me to be with you this year for the closure of the 21st edition of the Financial Sector Meeting organised by ABC, Deloitte and Sociedad de Tasación, in which the Banco de España has traditionally taken part. The conference has had a very full day, in which the country’s main financial institutions have had their say. Allow me to bring some thoughts to the discussion on the main challenges for the banking sector ahead of the changes in the regulatory and supervisory framework and, most particularly, ahead of the banking union. 1. Introduction  Looking back, I believe such significant structural transformations as those currently sweeping the banking industry are almost unprecedented. At present, the banking sector must face a host of highly relevant changes on various fronts.

As indicated on several occasions, the overall aim of the comprehensive assessment of banks is two-pronged: on one hand, the exercise seeks to offer a high degree of transparency concerning the situation of banks whose supervision will be conducted by the single supervisory mechanism as from November; on the other, it intends to promote the recapitalisation of those viable institutions that show insufficient levels of solvency. Both  2  BIS central bankers’ speeches  avenues will help reinforce the credibility of European banks ahead of the transfer of the supervisory function to the new authority. I should emphasise that it would be mistaken to quantify the value of the stress test in terms of the capital requirements it brings to light; and even more mistaken to measure its success on the basis of the proximity of the final result to the relatively sizeable estimates in the analyses published so far which, often, have been lacking in information and rigour. Experience shows that, beyond the size of the capital shortfall identified, these analyses are only credible if they manage to provide rigorous and consistent information on banks’ real situation and their ability to withstand adverse scenarios. Accordingly, the strategy to pursue can be none other than to ensure the methodological soundness and consistency of the exercise, and to provide the market with sufficiently accurate information on the results obtained and the process followed. In this respect, what should reasonably be expected from the comprehensive assessment under way?
CPI and Growth Index: 1970=100 Growth 1997-1998 OECD forecast Germany Netherl ands  210 190  210 190 170  170  Austria 150  150  Sweden  130  130  110  110  90  90 70 72  74 76 78 80 82 84 86 88  650  90 92 94 96 98  Sweden  550  550 450 350  450  Netherl ands Austria  350 250  250 150  650  Germany  150 50  50 70 72 74 76 78 80 82 84 86 88 90 92 94 96  Sources: Statisti cs Sweden and OECD The problems are amplified by a regime of taxes and subsidies that are wholly or partly indexed. Groups that have full indexing are favoured at the expense of others who do not receive subsidies or do not get full compensation. Also the economic costs may rise when the BIS Review 14/1998  -3-  behaviour of businesses and households is negatively affected by taxes and subsidies in combination with a high rate of inflation. Many good examples of this can be found in the Sweden of the 1970s and 1980s. The American economist Martin Feldstein has estimated that if inflation increases from 0 to 2 per cent, then the economic costs in the United States will amount to the equivalent of 1 per cent of GDP, principally as a consequence of the disruption caused by the interaction between the tax regime and inflation.

In Malaysia, the efforts to enhance the international dimension of our Islamic financial system have been intensified in the more recent period to facilitate greater international trade and cross-border investment flows. The new initiatives that have been announced allow the establishment of new International Islamic financial institutions that will be permitted to offer the full range of Islamic financial services to residents and non-residents in international currencies. These initiatives also aim to serve as a catalyst for the development of the domestic financial markets as well as the development of talent and knowledge in Islamic finance. Collaboration with other emerging regional centres in Islamic finance will be an important part of this process that will contribute towards greater international financial integration. The establishment of the Islamic Financial Services Board in 2002 represents a major structural enhancement in building the international financial architecture for Islamic finance. The achievements thus far by the Islamic Financial Services Board in developing the prudential standards that can be universally applied have been very encouraging. The efforts represent a testimony of the collective capacity for greater international collaboration which has contributed towards strengthening the fabric of Islamic finance. While the legal framework and rules are constantly being reviewed to ensure that they remain relevant for the new areas of financial activity, it should not only be undertaken for the domestic Islamic financial system but also in the context of the international financial system.
My assessment was that there was a greater risk that the international slowdown would be deeper and more prolonged than the majority of the Board believed. The signals regarding developments in the US economy were mixed and the assessment hung in the balance between a rapid recovery and a more long-drawn out sequence of events. In my opinion, there was every reason to wait for clearer indications before changing the interest rate. Others were more concerned that the weaker exchange rate would have an impact on inflation. The role of the krona for an inflation target policy As the krona has long come under focus, I would like to briefly remind you of the role the exchange rate plays in monetary policy. We have an inflation target, and the development of the krona has an effect on inflation, partly through import prices, partly through influencing demand for Swedish goods and services. For instance, if the krona has a low value, demand and resource utilisation in the export industry increase. When we want to influence inflation, we do so primarily via the repo rate. Occasionally, but in my view very rarely, we can also try to influence the exchange rate and thereby the inflation rate, through currency interventions. It is important to remember that we can never have a target for the value of the krona while monetary policy is directed at an inflation target. The monetary policy decisions are based on forward-looking assessments of the inflation rate.

With the world economy now beginning to catch a cold from the slowdown in the US economy, the quality and competitiveness of our exports means that our companies are better equipped than others to hold their own in the global marketplace. Foreign trade not only represents Switzerland's growth driver, but it is also our friend when economic times are hard. BIS Review 45/2008  1
It was these two “i”s that were responsible for taking us from yesteryear’s hunter-gatherer clans to today’s super-cities.17 Let me start with the first “i” – ideas. These have their source in another, by now familiar, i – imagination. Great leaps forward societally have always had innovation, ideas and imagination at their hub. While fire provided the spark for early homo sapiens, this was only the first in a sequence of technological fireworks. In the mid-18th century, the Industrial Revolution was sparked by the firing of three ideas – James Watt’s steam engine, Richard Arkwright’s water frame and James Hargreaves’ spinning jenny. These inventions occurred at almost exactly the same time (within a handful of years) and in almost exactly the same place (within a few hundred miles of latitudes North of Stockport). This was remarkable, if not coincidental. The second Industrial Revolution of the mid-19th century was sparked by a different set of innovations. This time it was sanitation, electrification and internal combustion that lit the fuse on the mass-industrialisation of countries and continents. The third Industrial Revolution of the mid-20th century brought a further wave of innovation, with digitisation, computing and the internet generating a transformation of business and society. Each of these inventions involved a creative leap of imagination. As adoption spread, each became in time a GPT, applicable across sectors, industries and geographies. Like fire, these GPTs then transformed industries, jobs and lifestyles in ways inconceivable to their creators.

I want to stress two of them. The Single Resolution Mechanism, the second pillar of the Banking Union, has just successfully passed its first real test this summer with the orderly resolution of Banco Popular. However, there is still room for improvement in the coordination between the numerous institutions and authorities involved in these procedures. It means that every participant must know and very clearly understand its role in the process to ensure an efficient resolution. Second, Europe still suffers from overcapacity and cross-border consolidation is needed. In the United States, the top five banks have a market share of more than 40% while this figure is barely 20% in Europe. Given the new regulatory and supervisory framework I described earlier, we believe that the Banking Union should be considered – according to the criteria set up by the BCSB – as a single geographic area. Furthermore, we are reaching the point in Europe where facilitating healthy and well-designed cross-border mergers could actually improve financial stability. It would make banks better able to diversify their risks, achieve economies of scale and become more efficient. And as we have strengthened the single supervision and resolution of significant institutions, we should not fear the “too-big-to-fail” issue. Cross border consolidation would foster a more efficient allocation of savings towards productive investments in Europe and it would place European banks in a better position in terms of international competition.
| Andréa M. Maechler and Thomas Moser | © Swiss National Bank  Reserve absorption also reduces stock of reserves above threshold  Banks with reserves exceeding their thresholds Threshold Reserves lent to other banks  Reserves up to threshold  Remunerated at policy rate (0.5%)  Reserves absorbed via term repos & SNB Bills (≈ 0.5%)  Banks with reserves falling short of their thresholds Threshold  Interbank trade  Reserves borrowed Remunerated at policy rate (0.5%) from other banks Reserves  8  17.11.2022 Return to positive interest rates: Why reserve tiering? | Andréa M. Maechler and Thomas Moser | © Swiss National Bank  Reserve tiering creates an interest rate corridor for SARON Supply of reserves before OMOs  %  Upper remuneration rate = SNB policy rate (0.5%)  Demand for reserves  SARON (≈ 0%)  Lower remuneration rate (0%) Reserves  9  17.11.2022 Return to positive interest rates: Why reserve tiering? | Andréa M. Maechler and Thomas Moser | © Swiss National Bank  Reserve absorption via OMOs steers SARON close to policy rate  %  Supply of reserves after OMOs  Supply of reserves before OMOs  Upper remuneration rate = SNB policy rate (0.5%) SNB term repos and SNB Bills (‘soft floor’) SNB overnight repos (‘hard floor’)  SARON (≈ 0.45%)  Effect of OMOs  SARON (≈ 0%)  Lower remuneration rate (0%) Reserves  10  17.11.2022 Return to positive interest rates: Why reserve tiering?

June and the first half of July showed the first signs of weakening inflationary pressure, this is still not enough to speak of a steady decline in the inflation rate. In July, households’ inflation expectations continued to rise. In these conditions, even one-off factors might have a longerlasting impact due to their secondary effects. To prevent this, it is essential to create conditions that would encourage the propensity to save. For this, we need higher interest rates. We should not tolerate high inflation expectations in order to prevent their anchoring at this high level and avoid a more significant increase in the key rate that would be needed further on in this case. The second topic is the economy. According to our estimates, economic growth sped 1/3  BIS central bankers' speeches  up considerably in the second quarter. High-frequency indicators show that Russia’s economy has bounced back to its pre-crisis levels. Output in two-thirds of the major industrial sectors already exceeds pre-crisis levels, and this upward trend continues. Oil production has not restored yet. Output has also not recovered in international air transportation and hotel and restaurant business. However, this was due to remaining anti-pandemic restrictions, rather than insufficient demand. Moreover, the pandemic drastically affected the structure of demand and supply. In my previous statement, I mentioned the changes caused by the transfer of a significant portion of employees to work from home, as well as the elevated level of inventories now formed by companies.
In this connection, it should be kept in mind that all macroeconomic adjustments are different. That seen in Spain in 1992 and 1993 stemmed from an accumulation of substantial losses in competitiveness, which could be recovered fairly rapidly through the devaluation of the peseta. But the devaluation also led to a steep rise in the import bill which reduced Spain’s real income and made it necessary to impose tighter financial conditions in the form of high interest rates, making the adjustment of national demand particularly pronounced. In the current circumstances, membership of the euro area prevents a sharp currency depreciation from reducing household purchasing power and, at the same time, limits the possible financial shocks that domestic borrowers might suffer. However, belonging to the euro area also makes it impossible to rapidly restore nominal competitiveness to a more advantageous level for national production. For this reason, it is much more important than in the past for Spain to set in train immediately all the mechanisms that allow it to curtail cost rises and to increase productivity gains, so as to make production competitive and to reduce the negative effects on employment. Hence the external sector could provide a substantial offsetting influence in the adjustment phase and a larger boost to the subsequent recovery. This moderate cost behaviour demands a responsible response from firms and trade unions to the current labour market situation.

To increase our exports, domestic costs have to remain on a moderate path and the strategies for opening up the economy and fostering trade have to be developed. There are government initiatives to promote economic and trade relations with new areas (such as the Integral Market Development Plans), which are delivering good results and in which firms should not hesitate to take part. Finally, firms should continue to pursue innovation and quality as a means of enhancing competitiveness, a strategy which calls for specialised, well-trained workers. In this respect, education should pay greater heed to the practical needs of the productive sector by involving the business world more closely in the design and definition of vocational-training and university course contents. Here it is fitting to point out that some areas of education in  BIS Review 117/2008  5  Spain continue to produce disheartening results: in particular, the percentage of young people completing secondary school studies continues to be among the lowest in Europe. Hence government policies aimed at remedying this underperformance (in which the regions play a central role) should be prioritised. Firms, along with trade unions, also face the challenge of containing the effect of the adjustment on employment. Given the repercussions that unemployment has for spending and, above all, for household confidence and the general climate of uncertainty, this variable is crucial, since a smaller impact on employment would reduce the fall in demand and lower the probability of being caught in a vicious circle.
The interest rate path on which the inflation forecast was based reflected the fact that the market expected the repo rate to be raised by 25 points in connection with the monetary policy meeting on 22 February and then to be gradually increased during the remainder of the forecast period. We chose to raise the repo rate in February in accordance with expectations despite inflation being expected to be clearly below target for a large part of the forecast period. The inflation forecast could have justified waiting a couple of months before raising the repo rate. However, our assessment was that there were other circumstances that argued in favour of the repo rate being raised in February. At the same time, we considered that the repo rate could perhaps subsequently be increased at a somewhat slower rate than that indicated in the implied forward rates. Our motivation was that the very expansionary monetary policy in recent years in combination with the weakening of the krona had entailed a substantial stimulation of the real economy and also contributed to household indebtedness and a faster increase in house prices than could be deemed sustainable in the long term. In a situation where demand was already growing quickly and growth was robust, the risks of future sharp fluctuations in the real economy would be greater if one attempted to push up inflation quickly through very expansionary monetary policy.

8  All speeches are available online at www.bankofengland.co.uk/speeches  8  Chart 5: Investment grade, non-financial bond  Chart 6: Sterling investment grade non-financial  spreads  bond spreads, split by eligible and ineligible securities  Sources: Bank of America Merrill Lynch, Bloomberg and Bank calculations Sources: Bank of America Merrill Lynch, Bloomberg and Bank calculations Chart 7: Sterling investment grade corporate bond  Chart 8: Investment grade bond issuance by UK  issuance  private, non-financial corporates (PNFCs)  Sources: Dealogic and Bank calculations  Sources: Dealogic and Bank calculations  9  All speeches are available online at www.bankofengland.co.uk/speeches  9  Chart 9: CBPS portfolio relative to sector key  (a) As at 5 January 2017 (b) As at CoB 4 January 2017 Source: Bank calculations  10  All speeches are available online at www.bankofengland.co.uk/speeches  10