samchain/econo-pairs-v1 huggingface dataset:
Inflation expectations were therefore kept under control and this limited both inflation itself – people were willing to hold the new banknotes, forestalling the unwelcome dynamics of very rapid inflations – and the cost of government debt. The yield on new long-term debt rose to 6% immediately after suspension. But it subsequently fell back and averaged less than 5% through the rest of the conflict. Even in its temporary absence the monetary regime mattered22. Chart 12a: The CPI rose and fell with government spending during the Napoleonic wars  Chart 12b: Scale of government spending, rise and subsequent decline of CPI all larger in WW1  Real central government expenditure less interest payments, per cent of initial real GDP. Sources: Thomas and Dimsdale (2017), Mitchell (1988), Feinstein (1998) and Bank calculations. Real government consumption, per cent of initial real GDP. Sources: Thomas and Dimsdale (2017), Mitchell (1988), Feinstein (1991), Sefton and Weale (1995), O'Donoghue et al (2004), ONS and Bank calculations. The First World War – at the outbreak of which the UK again suspended the gold standard – was, by comparison with the Napoleonic conflicts, a far more costly exercise. Between 1914 and 1918 the ratio of government spending to GDP, excluding interest payments, was an astonishing 36% points higher – most of 21  There was certainly no shortage of criticism.

This does not mean that asset prices or debt have been given independent roles as target variables of monetary policy. The decisive factor has been the consideration of economic stability over time. A monetary policy that “leans against the wind” can entail costs in the form of lower demand and inflation in the short run. In the practical conduct of monetary policy, these costs must be weighed against the benefits. The main responsibility for counteracting financial imbalances cannot lie with monetary policy. If monetary policy seeks to pursue goals beyond its reach, the credibility of monetary policy will gradually weaken. Regulation and oversight of financial institutions must therefore continue to be the first line of defence against shocks to the financial system. In the proposal on a new central bank act, Norges Bank is given a clear responsibility for promoting financial stability. Norges Bank interprets the proposal to mean that the responsibility the Bank already has for promoting financial stability in a broad sense will be formalised. The Bank’s responsibility and work in this field have evolved over time, but the work on financial 5/8  BIS central bankers' speeches  stability has gained importance particularly after the financial crisis, as it has for other central banks. As noted in the Commission’s report, Norges Bank cannot alone ensure the “stability of the financial system”.
But I don’t think that one can realistically argue that we should consciously put the economy as a whole at risk of excess demand pressure and accelerating inflation in order to try to bring about a weakening of sterling against the euro. Yet that in substance is what the witnesses for the prosecution would be asking us to do. Now, even if you accept my case that macroeconomic stability, in the terms in which I’ve described it, is the right objective, there is nevertheless a more technical - but still serious - charge to answer. Some of those who agree in principle nevertheless argue that we are simply exaggerating the macroeconomic risks. The charge in this case is that we don’t in fact need interest rates at their present level, certainly not at any higher level, to maintain macroeconomic stability. That would be a technical judgement on which even the best informed experts might legitimately disagree: in fact as you may have noticed even the members of the Monetary Policy Committee themselves disagree, more often than not, at the margin. Now is not the moment for me to launch into that technical debate - just a day before our monthly policymaking meeting. In fact, strictly speaking according to our MPC “purdah” rules I ought not to be here at all. But you can find a detailed description of the technical debate, in the minutes of our policy meetings and in the Quarterly Inflation Report, either in our printed publications or on the Bank’s website.

In the run-up to my second visit, in June 1998 in Birmingham, we had again put up interest rates in successive steps, by 1¾% - with no one else to blame. But once more, following the conference - and again I imply no direct cause and effect - our next move, in October 1998, was to begin cutting rates. And here I am, my third attempt, only to find we’ve done it yet again - in the run-up to this conference we have once more raised interest rates in successive steps - by 1%. I make no prediction as to what might happen following this conference - one way or the other! Despite this unfortunate timing I’m very happy to be with you again this morning. My earlier experiences mean that I’m quite used to entering this particular lion’s den - even on this occasion Roger Lyons’ den! Good morning, Roger. I well understand that some of you - perhaps many of you - would like interest rates to be lower, in the hope particularly that this would also lower sterling’s exchange rate especially against the euro. And to be perfectly honest, if I were a farmer, or a steel maker, a motor manufacturer or even a hotel operator, indeed anyone competing primarily with Continental European producers right now, from my own, microeconomic, standpoint, I’d find that tempting too.
Within the framework of its supervisory and oversight functions over the insurance sector, SAMA considered many files of insurance companies. By the end of 2013, SAMA licensed 35 insurance and reinsurance companies. Besides, SAMA approved 194 offices to provide insurance related services. SAMA issued a number of regulations and rules to regulate the activities of the financing sector in the Kingdom, improve its services, promote governance and transparency, protect the rights of its beneficiaries and create a competitive environment to contribute to provision of better financing services to meet the needs of the market and beneficiaries at competitive prices. Up to the end of July 2014, SAMA licensed 12 banks and 4 companies to conduct the activity of real estate finance and financial leasing, and 4 companies to carry out other  BIS central bankers’ speeches  1  financing activities. SAMA also granted initial approvals on 11 applications for licensing pending the completion of the legal requirements of the Ministry of Commerce and Industry. At the international level, the Kingdom holds a prominent position. It is an active member of the G20 since its establishment and of several international financial organizations. SAMA represents the Kingdom in a number of international forums and institutions, such as the Bank for International Settlements, the Financial Stability Board, Basel Committee, the International Association of Insurance Supervisors, the Islamic Financial Services Board and the Gulf Monetary Council. Currently, SAMA is participating in more than 25 committees, working groups and sub-committees in international commissions and organizations.

SAMA effectively contributes to the efforts exerted in international regulatory reforms, enabling SAMA to cope with the latest developments and international standards in supervision and control. On this occasion, I pray to Almighty Allah to preserve the security and stability of our country and may the Kingdom’s continue its development march under the wise leadership of the Custodian of the Two Holy Mosques, Crown Prince and Deputy Crown Prince. 2  BIS central bankers’ speeches
Mervyn King: Monetary policy developments Speech by Mr Mervyn King, Governor of the Bank of England, at the Great Hall, Winchester, 10 October 2006. *  *  *  My Lord-Lieutenant, Ladies and Gentlemen Thirty years ago, inflation reached 27% – the highest that any G-7 country has experienced in the past fifty years. A few months later, Southampton won the FA Cup for the first, and only, time. You will be pleased to know that I see no causal relationship. Later in 1976, Jim Callaghan, as Prime Minister, delivered a famous speech to the Labour Party Conference in which he said “We used to think that you could spend your way out of recession … I tell you in all candour that option no longer exists, and in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step”. One of the economists who developed that insight – an American, Professor Edmund Phelps – was yesterday awarded the Nobel Prize. Low and stable inflation – 2.5% at present – is now the cornerstone of our economic policy. In that 1976 Cup Final every one of the players came from the British Isles. Today, it is hard to find British players among the top Premiership teams – globalisation is everywhere.

The recent fall in oil prices will ease the pressure on firms’ input costs allowing them to restore profit margins without an increase in output prices. Nevertheless, according to surveys, businesses are more likely to raise prices than during the NICE decade. And in their own survey, the Bank’s Agents found that half of those (largely manufacturing) firms which had experienced some erosion of margins were now intending to raise prices. 2  2  Not so bad: not of the same order but also desirable. Speech at the Eden Project, Cornwall, October 2004. BIS Review 94/2006  A change in oil prices does not in itself tell us where overall inflation is headed in the medium term. For that, we need to look at the balance between money spending and potential supply. The growth of total money spending in the economy has picked up in recent quarters – nominal domestic demand rose by 6% in the year to Q2. And the growth rate of broad money and credit in the economy is now higher than at any point since 1990. There is, however, great uncertainty about potential supply. The possibility of continuing migration from the new member countries of the European Union and elsewhere is likely to increase the potential labour force available to UK employers. And it appears that more people of pensionable age are choosing to continue to work.
Germany met its tolerance threshold after World War I. The Treaty of Versailles obliged Germany to pay war reparations to the allies after the war. The total sum of reparations was estimated at twice Germany’s national income at the time. The annual payments, which were linked to export revenues, came to 5–6 per cent of Germany’s national product. The economist John Maynard Keynes argued that it was impossible for the country to make these payments and that the reparations demanded would have fatal consequences, not only for Germany, but for all of Europe. “I believe that the campaign for securing out of Germany the general costs of the war was one of the most serious acts of political unwisdom for which our statesmen have ever been responsible.” 11 The countries that have defaulted on debt in the past two decades have systematically experienced problems when debt has reached around 50 per cent of GDP. Today, average sovereign debt for advanced economies is around 80 per cent of GDP. Japan’s gross public debt – one of the world’s wealthiest nations – is almost 220 per cent of GDP, but given its considerable assets net debt is about 110 per cent of GDP. 12 Sustainability of government debt is to a large extent determined by a country’s governance system, tax system and growth capacity. Developed democracies with sound public financial management and solid institutions have a considerable capacity to collect taxes to service debt.

The building industry and the financial sector expanded more than other segments of the economy. Many governments allowed their expenditure to rise in pace with higher tax revenues. Like the banks, many governments also moved some expenditure off the balance sheet, through public private partnership (PPP) agreements, for example. The bubble was allowed to expand. Households borrowed too much, house prices were too high, banks and the building industry were too big and government expenditure and debt grew too rapidly. The imbalances gradually surfaced. The problems arose initially in the US housing market and spread in earnest when money and capital markets abruptly dried up in September 2008. Once the crisis had become a reality, the authorities responded rapidly. To begin with, they provided support where the financial markets had failed, by providing guarantees, offering liquidity and funding and purchasing securities. Central bank key rates were aggressively cut. The crisis in the 1930s had shown that the cost of failing to implement such measures was very high. (See Chart: Sovereign debt to GDP in the G7.) The rescue packages moved private debt onto government and central bank balance sheets. In addition, tax revenues declined and social security expenditure increased. In the next phase, governments had to counteract falling corporate and household demand for goods and services by increasing public consumption and investment. Many countries entered the crisis with deficits and a relatively high level of debt.
However, we assessed that this was largely due to temporary factors and that growth would in future be good, see Figure 1. There are several factors that point to a favourable development in the global economy going forward. One factor is the oil price, which has fallen substantially over the past year. This can be expected to have a positive effect on growth in the countries that do not produce oil. For instance, it provides scope for increased consumption in these countries, which could favour global growth. Another factor is that the relatively large fiscal policy restraint in the large developed economies in recent years appears to be over. During 2015 and 2016, the restraints will be  BIS central bankers’ speeches  1  relatively small. Fiscal policy will not therefore have the same restrictive effect on GDP growth in the years ahead as before. A further factor that affects developments in the global economy is the expansionary monetary policy around the world. The policy gives continued support to credit granting and helps to push up inflation expectations, which benefits both consumption and investment. This is particularly true of the euro area, where inflation expectations have now started to rise and lending has begun to show a more positive trend. Many countries also have an unmet need to invest, following the financial crisis, and this can be met as the credit supply improves.

Philipp Hildebrand: The Swiss National Bank and the financial crisis Summary of a speech by Mr Philipp Hildebrand, Chairman of the Governing Board of the Swiss National Bank, at the Club of Rome Forum, Zurich, 20 January 2011. The complete speech can be found in German on the Swiss National Bank’s website. *  *  *  Since August 2007, central banks have been continually at work, fighting the crisis. They have had to stabilise the financial system and limit the extent of the economic downturn. In many countries, the repercussions of the financial crisis are reflected in both government finances and central bank balance sheets. In Switzerland, these repercussions – i.e. the costs of the financial crisis – have had relatively little impact on the budgets of either the Confederation or the cantons. The costs are mainly to be found in the SNB’s balance sheet, at the moment largely in the form of risks. The SNB balance sheet has significantly lengthened, particularly as a result of foreign currency purchases. Inevitably, the large holdings of currency investments means greater risk. As the SNB announced on 14 January 2011, it is expecting a substantial loss for the year 2010. This is mainly attributable to exchange rate losses on foreign currency investments. In view of these losses, it is very tempting to argue that the SNB should not have purchased any foreign exchange. However, the purpose of the SNB is not to make a profit.
Expenditure on welfare, including on health, is already absorbing close to one-fifth of the economy’s annual income, or about Lm300 million, and almost two-fifths of government revenue. Retirement pensions alone account for more than one-fourth of this, and are the cost item which is likely to register the strongest growth in the years ahead. Over the next twenty-five years it is expected that the number of workers supporting one pensioner will drop from the present 4 to just over 2, partly reflecting the fact that the proportion of pensionable age persons in the population will rise from 16.7% today to over 28%. An ageing society will also further aggravate existing national saving and investment trends. The impact on private consumption and savings patterns is a result of the ‘life cycle hypothesis’, which holds that a rise in the proportion of the elderly in the population tends to be accompanied by a decline in national savings. Indeed, the effect of population ageing on public finances is nothing but a reflection of a wider economic problem involving a reduced productive capacity. Reforms to pre-empt this impact must, therefore, be implemented without delay. Here again, Malta need not re-invent the wheel. The World Bank model involving funded pension schemes is being applied successfully in many countries. Equally interesting is the Open Method of Co-ordination of Pension Reform operated by the European Commission with the aim of promoting sustainability of pension systems across the EU without imposing uniformity.

Andrew G Haldane: Financial arms races Speech by Mr Andrew G Haldane, Executive Director, Financial Stability, Bank of England, at the Institute for New Economic Thinking, Berlin, 14 April 2012. All speeches are available online at www.bankofengland.co.uk/publications/speeches  *  *  *  Elephant seals have got too big for their beaches. A large specimen might weigh over 8000 lbs (3700 kg).1 Their size has a simple evolutionary explanation. Large males fight for the right to mate with a whole beach full of females. For elephant seals it is, quite literally, winner-takes-all. And the key to winning is simple – size. No-one is going to argue with a male swinging around his proboscis on the beach. In that way, size has become the dominant gene in the evolutionary trajectory of the elephant seal. But size is not costless for the elephant seal. It makes them easy prey on land. At times in the past, this has threatened their very existence. In the 18th century, their main land predator – man – hunted elephant seals for their blubber and fur. In the 19th century, their numbers fell rapidly to below 100 and for a time they were believed to be extinct.2 Just in time, governments intervened to place restrictions on hunting, nationally and internationally. Today, elephant seal numbers have swelled to above 800,000. The hand of government has protected them from man – and from themselves.
For these first six channels, one can argue that it is the expected stock of security holdings to be purchased by a central bank that chiefly determines the amount of accommodation—that is, the impact the central bank’s purchases are expected to have on the size and duration of assets available to the public. Alternatively, for the market function channel, the “flow” effects are most important, in that the transactions associated with a central bank’s asset purchases can also affect an asset price by altering market liquidity and functioning, although such effects may dissipate quickly. This channel could achieve monetary accommodation through the purchase of any security type in which market functioning has become stressed. One example is the European Central Bank’s Securities Markets Programme, which was designed “to address the malfunctioning of securities markets".10 The purchase of non-sovereign assets can be helpful by providing additional channels for 2 / 10  BIS central bankers' speeches  monetary accommodation to be realized. Further, having additional markets to operate in can help central banks overcome functional limitations that could exist if they were restricted to LSAPs in only one market. For example, the stock of assets held by the private sector in a given market might be too small to meet the monetary policy goal. Or, the purchase of a large amount of the existing stock of a given market might result in impaired market functioning, which, in the extreme, could impair the effectiveness of the LSAP and other monetary policy tools.

22 In addition to making asset purchases, these central banks also developed programs targeting bank lending  channels, given that their capital markets are smaller relative to the banking system compared to the United States. 23 For example, 5-year Fannie Mae debt securities, which had traded, on average, 42 basis points above similar-  maturity Treasury securities in 2007, traded as high as 159 basis points above Treasury securities in November 2008. Similarly, current coupon agency MBS spreads averaged 137 basis points above similar-maturity Treasury securities in 2007; that spread was as high as 288 basis points in November 2008. Both of these spread levels in November 2008 were at or near the highest spread levels in many decades of available data. 24 On November 25, 2008, the FOMC announced purchases of $ billion in agency debt and $ billion in  agency MBS. On March 18, 2009, this program was modified to include a total of $ billion in agency debt and $ billion in agency MBS, as well as $ billion in longer-term Treasury securities. 25 Federal Reserve Board of Governors press release, November 25, 2008. 26 See Hancock and Passmore (2011) 27 See Gagnon, Raskin, Remache and Sack (2010). 28 Note that at that time the Federal Reserve was already in the middle of the maturity extension program (MEP)  which was selling shorter-maturity Treasury securities and purchasing longer-maturity Treasury securities. When the MEP expired in December, purchases of $ billion per month in Treasury securities were added to the LSAP.