samchain/econo-pairs-v1 huggingface dataset:
Last Thursday’s agreement represents an important element of a satisfactory resolution to the euro area crisis, but there are still many details to be worked out. Moreover, the announcement by the Greek government that it plans to hold a referendum on its package has injected additional uncertainty. And, even if the 27 October agreement is eventually implemented, the peripheral economies of the euro area will still be faced with substantial adjustment challenges, including the need to rebalance their economies and improve their competitiveness. So the strains in the euro area seem likely to continue for some while yet. The second factor behind the unexpected slowing in growth is the substantial rise in energy and other commodity prices during the latter part of 2010 and first part of this year, associated with strong growth in the emerging economies as well as interruptions to the supply of oil as a result of geopolitical developments in the Middle East and North Africa. UK inflation over the past year has consequently been around 1½ percentage points higher than the central view in our November 2010 Inflation Report, with the twelve-month rate reaching 5.2% in September. That has added to the squeeze on real household incomes already taking place as a result of earlier increases in energy and other import prices, together with the increase in the standard rate of VAT to 20 per cent.

This can be done in a variety of ways: reverse repo transactions with dealers and other counterparties, securities sales from the Fed’s portfolio or bill issuance by the Treasury, with the funds deposited at the Federal Reserve. Although our ability to pay interest on excess reserves is sufficient to retain control of monetary policy, it is not bad policy to have both a “belt and suspenders” in place. As a result, we are working out ways to drain reserves to provide reassurance that we will not – under any circumstance – lose control of monetary policy. A related concern is the question of whether the Federal Reserve will be able to act quickly enough once it determines that it is time to raise rates. This concern reflects the view that the excess reserves sitting on banks’ balance sheets are essentially “dry tinder” that could quickly fuel excessive credit creation and put the Fed behind the curve in tightening monetary policy. In terms of imagery, this concern seems compelling – the banks sitting on piles of money that could be used to extend credit on a moment’s notice. However, this reasoning ignores a very important point. Based on how monetary policy has been conducted for several decades, banks have always had the ability to expand credit whenever they like. They don’t need a pile of “dry tinder” in the form of excess reserves to do so.
Likewise, markets may not capture external concerns: they may focus on the immediate needs of direct participants rather than those of depositors, customers, or the public. That is why transparency is one “pillar” of Basel II’s three-pillar approach. The pillars we selected are meant to complement and to supplement each other. The first pillar - which specifies the minimum capital requirements - constitutes a very direct approach to supervision. By applying a uniform set of rules to banks, the first pillar adds transparency to the regulatory process and makes it easier to compare banks to gain a sense of their relative degrees of solvency. On the other hand, uniform rules have certain drawbacks. They tend to be inflexible and therefore might preclude or ignore innovation. Applying uniform rules may also fail to account for a bank’s unusual businesses or risk profile. The second pillar, supervisory review, addresses some of those drawbacks. It introduces judgement into the policy mix. Banks and supervisors will exercise discretion in determining capital needs relevant to their particular businesses and risk profiles. That degree of discretion makes the supervisory framework more flexible and better able to adapt to change and innovation. In a way, we might think of the second pillar as being analogous to the “principles-based” policy approach that some have advocated in accounting and financial reporting. Yet relying on a system that would permit discretion without boundaries would have its shortcomings as well.

There has been steady expansion all along, but especially since EU membership. 31 new licences for financial services operators were issued during 2004, 93 in 2005 and a further 61 up to June of this year. Membership of the EU is contributing to this growth also as a result of the adoption of the single passport regulations and the right to provide cross-border services. There are 99 institutions with passporting rights in Malta today, and two Maltese credit institutions have passporting rights in the EU. The banking sector is composed of 18 banks, of which 6 are domestic and 12 foreign controlled. The combined balance sheet of the domestic banks has grown by an average annual rate of 7% in the past two-an-a-half years and their assets to GDP ratio, at 280%, is comparable to the average for the euro area. For the entire banking system, this ratio is closer to 750%. In the area of investment services, there are currently 21 professional investment funds targeting institutional investors and high net worth customers, and 66 sub-funds, with a total net asset value of Lm1.22 billion. The number of local collective investment schemes (CISs) stands at 14, with 52 sub-funds, and shareholders’ funds total over Lm0.5 billion. The insurance sector has also been growing rapidly of late, with four new licences being issued during the first half of 2006. To date, there are 33 insurance principals registered in Malta, 16 of them are foreign companies offering their services through insurance agents.
We have moved on a great deal since then in the EU and in our understanding of the benefit of open capital markets and how to manage the risk. We have learned some very painful lessons. But I think we continue to see that balance in the EU’s recent major reform of the regulatory framework that underpins the single market in financial services. I will give three examples. First, CRD4, the EU’s prudential capital standard for banks, includes a number of important areas in which member states’ prudential authorities can act to increase the capital of the banks for which they are responsible to deal with specific risks they face at the national level. The negotiations around this were not easy. But it was particularly important for the Bank of England which, through the Financial Policy Committee, is the UK’s macroprudential authority to have this flexibility to raise capital above the levels in the EU rules to address risks to UK financial stability. I would highlight two other points from CRD4. First, the legislation also provides that when national authorities take action of this sort within their jurisdiction, it is reciprocated, with regard to that jurisdiction, by the authorities of other member states. Second, there are proportionate protections in the legislation to ensure these flexibilities are used truly for prudential purposes and not abused by member states.

It would be a mistake, however, to think that we can hope to provide all the knowledge and information needed, at exactly the right times, for individuals to successfully navigate the digital financial landscape. Rather, our job as a financial education community is to help people become comfortable with the language and ways of digital financial services - much like learning how to get around and get things done in a new city. Then individuals will be far better able to adapt to the continual changes brought about by new technologies and empowered to know what to look for, where to look, and how to make sense and use what they find to their best advantage. This is not achieved in one month or over the few days that our teams will be spending in each location on the roadshow. It requires sustained efforts on our collective part to help your customers, the schools and organisations that you work with, and the public at large, build greater confidence in using financial services effectively. 17. Financial education is absolutely central to the goal of making sure that finance works for the people. Today, more than at any time before, our society needs the right  3/4  BIS - Central bankers' speeches  knowledge and skills to manage their finances. Saving for retirement, borrowing responsibly, investing wisely, and protecting against financial harm will build resilient households. Resilient households, in turn, will promote financial stability and healthy economies.
Chile’s institutionality assigns the Central Bank two main functions: to safeguard the stability of prices and the stability of the payment system, understood as financial stability. The first of these objectives has been specified under the regime of flexible inflation targeting, and has governed us for over 15 years, setting the target that annual expected CPI inflation must stand at 3% in a two-year horizon. This regime also considers a floating exchange rate, where the Bank reserves the possibility of intervening in the market, a power it has exercised barely four times since this policy came into effect in 1999. This should clarify what lies beyond the objectives of our Monetary Policy: on the one hand, under the foreign exchange policy I have just described, we do not have a target for the exchange rate. We allow it to settle freely in the market responding to local interest rates and its other macroeconomic determinants. This is relevant because, as the empirical evidence shows, in small, open economies the exchange rate is an important shock absorbing mechanism. Second, our target is not short-term inflation, but longer-term inflation. Thus, to the extent that inflation fluctuations are perceived as transient, they should not have much impact on our policy decisions. A good example of this is the steep increase in inflation we had between 2014 and 2016. This process originated largely in a shock to the exchange rate that had transitory effects on inflation.

Stefan Ingves: The Riksbank and monetary policy Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, at the School of Business, Economics and Law, Göteborg University, Göteborg, 23 May 2006. *  *  *  Let me begin by thanking you for the invitation. It is always a pleasure to have the opportunity to come and talk about monetary policy and our work at the Riksbank - but I shall refrain from commenting on whether it is always a pleasure for the listeners. I hope that you will in any case get a picture of our view of the economy and inflation prospects and of our method of how we conduct monetary policy. I shall begin with a rough outline of what I intend to discuss in my speech and the main conclusions: First, I shall describe my view of the current monetary policy situation. A brief summary of my conclusions is: •  The upswing in the international economy appears to have been slightly stronger than we envisaged in the February Inflation Report. •  With regard to Sweden, the statistics received since the Inflation Report was published indicate that the economy has developed approximately in line with our assessment, although inflation temporarily rose more rapidly than anticipated as a result of developments in energy prices. •  Our earlier monetary policy considerations from February and April still apply to a large extent. Monetary policy will need to be less expansionary in future.
For details, see Global Supply Chain Pressure Index (2) WTI-Brent average. (3) S&P GSCI Industrial Metals. (4) One-month futures prices. Sources: Bloomberg, and GSCPI of the NY Federal Reserve. 14  Figure 10 Financial conditions a) Currencies (*) (index, 1.Jun.22=100) U.S. Eurozone Chile Latin America  130  b) Interest rate on 10-year nominal d) Premios por riesgo país (CDS a 5 años) bonds (*) (difference with respect to 1.Jun.22, (difference with respect to 1.Jun.22, basis points) basis points) U.S. Brazil Peru Eurozone Mexico Colombia Chile Chile 130 Latin America 120  110  90 120  90  60  70  110  30  50  0  100  30  -30  90 Jun.22  Aug.22  10  -60 Jun.22  Aug.22  -10 Jun.22  Aug.22  (*) For Latin America, simple averages of exchange rates of Brazil, Mexico, Colombia, and Peru are used. Sources: Central Bank of Chile and Bloomberg. Figure 11 CPI and core CPI inflation forecast (w/o volatiles) (*) (annual change, percent)  CPI  14  Core CPI  12 10 8 6 4 2 0 19  20  21  22  23  24  (*) As from 2022Q3, forecasts are shown (dashed lines). Sources: Central Bank of Chile and National Statistics Institute (INE).

First, domestic demand, supported by the large and fast-growing middle income and young population in the region, will increasingly have a greater role in driving economic growth in Asia. This would contribute towards a greater balance between domestic and external sources of growth. Second, the diversification of external markets will accelerate, towards greater economic inter-linkages with emerging economies in other parts of the world. Part of this trend includes the creation of the ASEAN Economic Community by 2015 in which ASEAN will transform into a single market with free movement of goods and services. This will include the lifting of restrictions to the flow of capital in the region. And third, is the greater financial integration within Asia that will result in an increased part of the savings in Asia being reinvested in Asia. The new spending patterns as incomes rise in the region will drive the modernisation of the retail sector across the region. Financial services to the household sector will become increasingly important in this new environment. Reforms to pensions and retirement benefit systems will be key to providing a more comprehensive social safety net, thus reducing the need for high precautionary savings and encouraging consumption. In addition, the large trade sector in Asia and large capital investments required to move towards higher valueadded activity will also provide an expanding market for financial services. The more regionally integrated financial system will allow firms and investors increased options in the regional financial markets for financing and investment.
I will approach the question from the point of view of central banks and ask: what influenced their ability to raise market awareness with respect to building vulnerabilities within the financial system? And can we rely on the ESRB to repair this problem in the future? The information at the disposal of central banks and other bodies with financial stability competencies enabled them to point to growing risks and vulnerabilities, but it did not allow a deeper understanding of the interconnections in the financial system and of the potential magnitude of the detected risks. As a result, the discussion of the risks in their public communications or publications tended to be mostly of a qualitative nature, and generally did not involve a clear risk prioritisation exercise, and therefore had a potentially smaller impact on market behaviour. Another important element was that risk assessments were generally not made with the specific aim of suggesting appropriate remedial policy actions in terms of prudential policies or regulation. Recommendations, mostly formulated in broad terms, tended to target market participants’ behaviour (e.g. proposing mitigating actions), but they were more muted regarding policy measures that could be taken in the prudential and regulatory area. One reason for this is, again, the information base. The formulation of concrete policy recommendations (e.g. with respect to capital buffers or funding-related issues) would need to be backed by rigorous quantitative assessments, for which publicly available information is generally not sufficient.

In The Pursuit of Love and Love in a Cold Climate she describes the marriage of Linda, the heroine, to the son of the Governor of the Bank of England. The marriage between Linda and the incredibly boring Tony is doomed from the outset. As Lady Montdore explained, “Bankers don’t seem to be much to look at - so extraordinarily unsuitable having to know them at all, poor things, let alone marry them”. I don’t suppose Lady Montdore would have come to this lecture, but if she had I would point out to her that life is full of surprises. Risk, luck, fate, uncertainty, probability theory - we all have names for the game of chance. Most decisions in life involve risk. Sometimes we embrace it, as when we enjoy a bet on the Grand National, and sometimes we avoid it, as when we insure our houses against fire. The playing of the hand we are dealt may be a pleasure in bridge but a burden in life. We accept that Lady Luck has her part to play in our personal lives. But in our collective life - public policy - the role of probabilities rarely takes centre stage. An informed discussion of public policy issues, however, requires an analysis of the risks and uncertainties involved. Whether in policies for health or transport, matters monetary or meteorological, in times of war and peace, decisions should reflect a balance of risks.
5  In this regard, given that more analysis is needed before we have better answers for the implications of climate change on the economy and on monetary policy, our first objective should be to step up our efforts, as both the Banco de España and the Eurosystem are doing, to develop the tools and models needed for such an analysis. In addition, fully incorporating climate risks into our internal risk management may well collaborate to expand our ability to deliver on our price stability mandate. Climate change will indeed affect the risks of the assets held on our balance sheets. Monetary policy implementation exposes us to such risks directly through holdings of assets and indirectly through collateral pledged by counterparties. Therefore, and very much related to my previous comments on the implications of climate change for the financial sector, we should take due consideration to the appropriate assessment of climate risks in the overall risk management of our stock of assets and also on the specific criteria for new purchases in asset purchase programs. For example, one step would be to introduce climate-related disclosure requirements in order for an issue or issuer to be eligible for purchases. Another one would be to expand the use of ratings that adequately include in their methodologies the impact of climate risks in the financial profile of issuers or specific issues.

Phase 2a: The acute phase of the coronavirus crisis – broader purchases of securities for continued market functioning On 11 March 2020, the World Health Organisation (WHO) announced that Covid19 would be considered a pandemic. Many were, of course, concerned about health risks, but many were also concerned about how the economy would be affected. International economic prospects weakened rapidly. Many economies closed down almost completely and service sectors in particular were hit hard. It was very uncertain how long the pandemic would last and how households and companies would get through it. In this situation, both central banks and other authorities reacted quickly, and comprehensive support packages were presented. The aim was often to facilitate the overwintering of companies so that their operations could be restarted once the economies had reopened. The Riksbank saw a risk that the great uncertainty would mean that households and companies would encounter ever higher interest rates on their loans and that this would impair their ability to cope with the pandemic. In March and early April 2020, this risk was reflected in, among other things, the fact that interest rates on mortgage and corporate bonds began to rise rapidly and that the markets for these bonds were functioning poorly. The risk was therefore that concern over weak economic developments with more and more payment defaults would be self-fulfilling through a vicious circle, where rising risk premiums lead to ever-increasing problems and even higher interest rates.
Our leadership must lead to an outcome which makes practical sense, measures up to international best practices, and must be market-oriented. On this front, we have been actively involved in the consultation process for the New Basel Capital Accord, which will provide a more comprehensive and sensitive approach to addressing risks through the use of minimum capital requirements, supervisory reviews and market discipline. The second agenda of the banking sector reform is enhancing our risk management capacity. Toward this end, our Supervision Group has moved from regulation and transaction-testing toward risk-based supervision. We realize that good rules alone do not automatically translate into honorable practices. Therefore, we consider an upright supervisory role as a sine qua non to ensure honest banking practices. The new supervisory practices can be considered a milestone in this area. Our aim is to nudge Thai banks to change their business practices. Currently, they are working harder than ever to satisfy some of the new rules, notably those that link risk-based classification of debts to provisioning for loan losses. BIS Review 16/2002  3  We are in effect encouraging banks to eschew the old norm of collateral lending and adopt new practices of examining cash-flow projections and other indicators. This reform was implemented hand in hand with the corporate sector reform under the purview of the SEC. This practice will only lead to a more efficient allocation of financial resources.

The latest released January economic figures point to more strength in the fourth quarter of 2001 than we had anticipated, given the event on September 11. And, with the current more supportive fiscal and monetary policy stance as well as the expectation of a rebound in the US, the overall environment this year is more conducive to growth than last year. From this vantage point, we are of the view that the economy could grow by 2-3 per cent this year while inflationary pressure would be virtually absent. A continuing expansion in domestic demand and a rebound in exports in the latter half of the year would be the key drivers of this year’s growth. The outlook for inflation remains tame, with core inflation expected to hover around 1-1.5 per cent, well within the target corridor of 0-3.5 per cent. Last year, notwithstanding the slowdown in the global markets, the Thai economy exhibited a noted degree of resiliency. While the world economy was in a slump, Thailand’s exports did not fall to the extent observed in many countries in the region. And, even as export fell by about 7 per cent, output growth remained positive in every quarter. In terms of macroeconomic stability, we saw an improvement both on the domestic and external fronts. In fact, Thailand external position strengthened significantly over 2001. The current account registered a large surplus and external debt continued to fall sharply in 2001. Our reserve position remains strong.