samchain/econo-pairs-v1 huggingface dataset:
Asset purchases promote this mandate by putting downward pressure on longer-term interest rates, supporting mortgage markets, and helping to make broader financial conditions more accommodative. The current purchases reduce interest rates and ease financial conditions through the same transmission channels as previous purchase programs. As has been widely discussed in the academic literature, one of the most important channels is the portfolio balance effect.4 This theory relies on the premise that financial assets are imperfect substitutes in investors’ portfolios, and, as a result, a rise in the demand for a particular financial asset relative to its supply – reflecting the Federal Reserve’s asset purchases, for example – will increase its price and reduce its yield. After selling that asset to the Federal Reserve, investors may rebalance their portfolios by investing in other assets, raising the prices of those assets, lowering their yields, and easing overall financial conditions. The Federal Reserve’s asset purchases are designed to remove risk from the portfolios of private investors. For example, Treasury and agency MBS purchases remove duration risk, thereby lowering longer-term interest rates and reducing private-sector borrowing costs. Furthermore, agency MBS purchases also remove prepayment risk from the market, since homeowners have the option to prepay their mortgages at any time. Investors generally demand an extra return to bear this risk, which is incorporated into agency MBS yields and passed along to borrowers in the form of higher primary mortgage rates.

The Desk’s January Survey of Primary Dealers indicates that the median respondent expects the FOMC to purchase about $ trillion in securities over the course of 2013 and early 2014, roughly equally split between Treasuries and agency MBS. As a group interested in forecasting, you will appreciate that while individual survey respondents may provide a modal expectation for asset purchases – that is, the total amount that they think the FOMC is most likely to purchase – they also place probability on a variety of other outcomes. If a respondent is more uncertain about the economic outlook, the way the FOMC will respond to the outlook, or the Committee’s assessment of the efficacy and costs of purchases, he or she will place much higher odds on a wider range of outcomes for the size of the Federal Reserve’s portfolio. The Survey of Primary Dealers asks respondents about their individual forecast distribution about the size of the Federal Reserve’s portfolio in the future.5 These individual probability distributions can then be aggregated by simple averaging to form an estimate of the probability attached to different sizes of the Federal Reserve’s portfolio. The evolution of this probability distribution can be seen in Figure 1. As can be seen, the probability attached to a very small amount of purchases or a very large amount of purchases has come down over the last few months.
We have imperfect knowledge about the state of the economy, nor are we absolutely certain of how economic relationships function. Alan Greenspan, the former Chairman of the US Federal Reserve, described this in the following words: “Uncertainty is not just an important feature of the monetary policy landscape; it is the defining characteristic of that landscape” 7 Sometimes, the nature of the uncertainty allows one to draw inferences regarding the probabilities of different outcomes. It is possible, in other words, to judge the risks one is facing, at least to a certain degree. In that case, decisions can be made on the basis of a calculated risk, which is an approach underlying theories of equity investment, 8 for example. But the financial crisis reminded us that keeping the overall risk picture in view may be difficult. When Queen Elizabeth visited the London School of Economics in autumn 2008 she asked why no one had foreseen the crisis. The British Academy Forum replied to the Queen in a letter six months later. Included in the letter was the following:  4  The euro area operates under rules intended in principle to facilitate long-term policy choices. The Maastricht criteria require participating states to keep fiscal deficits and public debt within defined limits. Recent history has shown that this framework must be reinforced through sanctions. Decision-makers need an incentive to comply with the rules in practice.

The author-narrator has embarked on an expedition to a South Pacific island with six companions. On the island they experiment with different forms of social organisation. After the group tries despotism, anarchy, democracy, etc., Loe concludes that enlightened despotism has much to recommend it: “Of course it very much depends on who the ruler is and how enlightened he or she is, but at its best this is probably one of the more sensible forms of government.” 16 Martin, one of the other members of the expedition, also thinks that this system might work well. He stresses, however, that the form of despotism must be a truly enlightened one: “Not just moderately enlightened, but ultra-enlightened. The ruler needs to be highly educated, plus be well travelled and have lots and lots of varied interests (…) Just find an exceedingly likeable individual, someone you trust, someone who is warm-hearted and good-natured, and ask him or her to manage things as best they can.” 17 Most people would probably argue that despite certain benefits, enlightened despotism would not be very robust. As you may have noted, a number of assumptions underlie Martin’s conclusion, and these assumptions are not always satisfied. Delegating decisionmaking responsibility to a group may help to guard against situations where the individual’s weaknesses and vested interests come to dominate. It can also provide some insurance  attending the IMF meeting). The business card revealed the date and magnitude of the British devaluation. It was a busy night.
But one of the consequences of economic development can be gentrification, where richer people move in and they make housing less affordable for people who have been living here for a much longer period of time. So, all these type of issues that we talk about when we visit. And oftentimes I get some personal stories and anecdotes that are actually pretty valuable to me in terms of how I think about how the economy is operating and what we need to do as the Federal Reserve in terms of how we 1 / 15  BIS central bankers' speeches  set monetary policy. Dr. Olajide Oladipo: Thank you. The economy is coming out of a serious crisis that started in 2008. From your perspective, where do you see the greatest growth in the economy right now? President Dudley: Well, the good news is the economy is actually in a pretty good place right now. Not for everybody, but if you think about the unemployment rate today, it’s 4.7%, which is pretty close to what we think is full employment. You could probably push that unemployment rate even lower, but if you did, you’d probably start to have an inflation problem. So, that would not be something that you could sustain over the longer term. The Federal Reserve has two missions: maximum sustainable employment and price stability. And so we’re trying to find that balance. Right now we’re doing pretty well. We’re pretty close to both our objectives.

On the foreign exchange market, the Swiss franc came under increased upward pressure for a brief period after the Brexit vote. This pressure abated again, not least due to the Swiss National Bank’s willingness to intervene on the market. While the pound sterling continued to lose value over the summer months, other key currencies, including the Swiss franc, moved sideways within a narrow range (cf. chart 3). Heightened uncertainty in the run-up to the US presidential election was once again reflected in growing demand for safe-haven currencies on the foreign exchange market, leading to slightly higher Swiss franc exchange rates. Following the US election, the US dollar appreciated on a broad basis. The strengthening of the currency occurred against the backdrop of the rise in US interest rates mentioned earlier. The dollar gained approximately 3% in trade-weighted terms after the election. The recent developments in the US also had an impact on other currency areas. Currencies in emerging economies in particular came under pressure and, as a group, weakened by around 4% against the US dollar. On a trade-weighted basis, the Swiss franc has changed little from its end-June level. Nevertheless, Swiss franc exchange rates moved in different directions. While appreciating more sharply against the yen than against the euro and pound sterling, the Swiss franc weakened against the US dollar and currencies of commodity-exporting countries. Overall, the Swiss franc is still significantly overvalued. The market environment remains challenging and fraught with global economic and political risks.
Let me mention three: (i) the revision of the reporting framework for large exposures by the EBA (for microprudential supervision), (ii) the FSB’s common template (limited to a small number of globally systemic institutions) to improve data on global banking interlinkages and (iii) a UK exercise to collect interbank data on recovery and resolution plans (with very detailed instrument and maturity breakdowns). While these initiatives address primarily micro-prudential data needs for the time being, their use for macro-purposes could be envisaged, provided that data confidentiality is preserved and that requests are duly justified. For macro-prudential oversight, the importance of reducing gaps in the data on credit and funding exposures beyond jurisdictions and the sample of global players, appears particularly relevant. As the crisis has illustrated, the structure of bank liabilities and the way in which assets are funded are of utmost importance for understanding maturity mismatches and interlinkages. Related to funding, data gaps also arise from limited information on the degree of asset encumbrance stemming from secured funding, as well as from inadequate data on the levels and characteristics of innovative sources of funding used by banks. At present, these elements are essential for analysing fragilities in the funding models of banks established in the EU. Uncertainty about the level of banks’ asset encumbrance is also hampering market participants’ capacity to assess banks’ creditworthiness, thereby reducing the availability and increasing the costs of unsecured funding. Risks to financial stability can also stem from novel sources of funding such as exchange traded funds (ETFs) or liquidity swaps.

In fact, the demand for micro-prudential datasets for macro-prudential analysis also results from the fact that the form in which existing aggregated data can be disseminated is often of poor quality, is not sufficiently granular and is not suited for analytical purposes. Ahead of reaping the benefits from the various initiatives that are under way at the global, EU and euro area level to limit data gaps, there is a need for close cross institutional cooperation between supervisory authorities and macro-prudential bodies, at the national and supra-national level. This calls for more interaction and data-sharing between the ECB (also when acting on behalf of the ESRB) and the ESAs that have access to supervisory reporting data and can collect ad hoc data more easily upon request. Procedures for the secure transfer of information and appropriate legal provisions need to be in place to safeguard confidentiality. More broadly, it is important that the pace at which efforts are being made to address current information needs – at the macro- and micro-levels – does not slow down. At the same time, improvements in datasets already in use for macro-prudential analysis should continue to be given priority. This needs to be done in an innovative way, reusing existing information where possible, so as to minimise the reporting burden, whilst serving the increased demands of users.
The recent repeal of the Glass-Steagall Act in the US will allow the creation of “financial super-markets” or one-stop shops that offer banking, securities and insurance services, and further push this trend towards consolidation. Developments in banking In this brave new world, one fact remains unchanged: the need for countries to have sound, resilient banking systems, and strong banks. But countries cannot achieve this by closing their markets and excluding foreign competition, except at a very high price. Instead, they must use competition to strengthen and upgrade their institutions, so that they can hold their own in an increasingly open environment. This is why Singapore has embarked on a five-year bank liberalisation programme, granting foreign banks new licences and more access to the domestic market, lifting foreign ownership restrictions on local banks, and upgrading standards of disclosure and corporate governance of local banks. Corporate governance Strengthening corporate governance is key to upgrading standards of integrity, professionalism and service in banks in Asia. Relationships between shareholders, the board of directors, management, and other stakeholders must all be configured in a way that encourages sound and rigorous banking practices and strengthens corporate performance. To be an effective instrument of corporate governance, the board of directors must act independently, and participate actively in shaping the strategies of the bank. The board should deliberate and decide on issues in the best interests of the bank, its depositors and all its shareholders.

We developed a Sandy Information Center with the best information we could find for folks impacted by Sandy – including key deadline dates along with expert legal, finance and insurance guidance. Over 2,000 have benefited from our web resources. While we are not yet back to normal in neighborhoods like Midland Beach, Oakwood Beach, New Dorp Beach and Tottenville, the situation is improving and I expect that this recovery will continue over the coming year. We are going to continue to examine where we can provide assistance in supporting this effort. One effort, for example, is to provide assistance in collecting detailed data on the areas that were impacted by the storm. From talking to some local business people late last November, we know that many residents and businesses had to wait a long time for insurance claims and small business loans, as well as to get their heat and power restored. We also know that eight public schools were closed. Unfortunately, timely statistics pertaining specifically to Staten Island’s economy are scarce, thus making it hard to accurately gauge the impact from Sandy or the strength and breadth of the ensuing recovery. So we truly value input from all of you – people on the front lines of the local economy – to assist us in gauging recent trends and developments in Staten Island’s economy. National economic conditions Turning to the national outlook, the U.S. economy remains on the slow growth track that has persisted since the recession ended in mid-2009.
Inflation and Supply-Chain Challenges One of the foremost concerns surrounding the outlook is inflation, which rose considerably last year. There are two main contributors to the current high inflation: very strong demand, especially for goods, and supply bottlenecks. Both have been prevalent throughout the pandemic. The shutdown of factories—particularly those in Asia—and widespread lockdowns led to disruptions to logistics networks, elevated shipping costs, and prolonged delivery times. A new index created by New York Fed research staff shows that global supply-chain pressures shot up last year, reaching historically high levels.1 These challenges are not just top of mind for companies selling their goods or consumers waiting for their purchases to be delivered. Elevated prices have real life consequences for so many, particularly for people who are struggling to cover the rising costs of food, housing, and transportation. The circumstances we are facing today are unlike anything we’ve experienced in the past. 2/3  BIS central bankers' speeches  Typical historical episodes cannot be used as reference points for current conditions. As an example, the very large increases in prices that we see today are primarily for durable goods. This is a striking turnaround from the past 25 years when those prices had been trending lower. In contrast, even with the recent increases, prices on services and non-durable goods are now fairly close to their longer-run trends. And, even though the Omicron wave is posing new obstacles, some supply issues are starting to work themselves out as the economy adjusts to the changing circumstances.

John C Williams: Reading the recovery Remarks (via videoconference) by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Council on Foreign Relations, 14 January 2022. * * * As prepared for delivery Good morning, everyone, and Happy New Year. Thank you, Charles, for that introduction. And thanks to Richard Haass for the opportunity to speak with the members of the Council on Foreign Relations once again. For the past two years, I’ve begun my remarks by saying how much I wish we could meet together in person. This time, I really was hoping for a chance to rewrite the script. After seeing so much progress on vaccinations over the past year and a moderation in COVID-19 infections during the fall, just a short time ago many of us had expected that we’d soon be turning the page. The story of the pandemic is a complicated one. It is writing itself as we live it, and the storyline has been far from predictable. This is, first and foremost, a health crisis. The unusual and extraordinary nature of the situation means that circumstances are constantly evolving. For the economy, this has meant that what we’ve experienced is unlike any recession or recovery we’ve seen—or read about—in the past. While there have been significant improvements in the overall economy, setbacks persist in some areas, and new challenges have appeared.
Hence, we are likewise engaged in a degree of “soulsearching” on the nature of financial risk and how it might best be managed and how the management of that risk might best be regulated. And we certainly have “bought-in” to the global regulatory reform agenda spurred by the Global Financial Crisis. Clearly Asian banking systems and Asian markets do not operate in isolation from global markets and hence, we are all in this together! 4. With this in mind, I would like to take this opportunity to pose a couple of questions, the answers to which would have fundamental relevance to the nature and shape of the global financial system going forward – a. To what extent is the mainstream thinking, that financial or systemic risks can be assessed and forecast through the use of the financial models that have been developed in the last two decades, still valid? b. The financial markets have become very complex and, as we now know, have generated huge risks for the global financial system. Is the current international effort on regulatory reform adequate in addressing the risks arising from this complexity? and  c.  The Basle Committee on Banking Supervision is undertaking major reform in upgrading global standards on the quality and quantity of the capital, and introducing global standards on the liquidity that banks have to hold in order to improve their resilience to risks and shocks. Some countries have already implemented these standards but some advanced economies have not yet done so.

In theory, the safety and soundness of a bank should be a key factor for customers in choosing the bank with which they want to entrust their money. Again, in theory a bank with a large capital cushion should (all things being equal) have a competitive edge in gaining customer confidence as compared to other banks with a weaker capital position. This being the case, banks should have an incentive to maintain higher capital levels. However, incentives have become somewhat distorted in more modern times, thanks to formal safety nets extended by deposit protection schemes and informal safety nets characterised by implicit government guarantee arising from the “too big to fail” consideration. 13. In the run up to the Global Financial Crisis, it was common for the big banks to maximise their Return on Equity (RoE) by optimising the level of their capital base and by leveraging up their balance sheets. This resulted in a steady reduction in the levels of capital, and as a result in the loss absorbancy capability, of banks in relation to the size of the risks taken by them on and off balance sheet. Even now, there is still a view amongst some banks that the Basel Accord serves more to indicate “optimal” levels of capital or liquidity rather than the absolute bare minimum standard. Some banks, including a few here in Hong Kong, have argued that the late adoption of Basel III by some advanced economies creates or constitutes an uneven playing field, placing them in a competitively disadvantaged position.
It is, however, my firm opinion that confidence is being significantly undermined by at least two sources of uncertainty. One is domestic. It arises from the fiscal and regulatory authorities. Congress and the president must put together a program that will encourage growth in final demand as soon as possible by incentivizing private businesses to do what they do best to make growth in final demand possible: Expand investment, hire workers and go about the business of lifting the income and net worth of the American people. Yet, they must do so without running afoul of the need to reverse the downward spiral of the nation’s finances. To this end, I am encouraged that the president and the Congress are going at it hammer and tong, searching to find the right balance between goosing up the economy short term and reining in the longterm fiscal imbalances that are imperiling our nation’s future. The second source of uncertainty has largely emanated from the European debt crisis, which intensified in the spring of 2010. At that time, risk spreads jumped, and both securities prices and confidence retreated. This helped derail the momentum that the economy had built up in late 2009 and early 2010. The sovereign debt crisis has reintensified, as you are all aware, and risk premiums in bond and stock markets are rising once again. Another global factor that undermined the pace of recovery this year, of course, was the disruptive earthquake in Japan and the economic aftershock from this tragedy.

1 Speech by Andrea Enria, Chair of the Supervisory Board of the ECB, at the Banking Seminar organized by De  Nederlandsche Bank, Amsterdam, 11 March 2019 2 16 supervisory agencies and 2 international financial organization were interviewed for the purpose of this  survey. 3/3  BIS central bankers' speeches