samchain/econo-pairs-v1 huggingface dataset:
But perhaps a better way to think of it is to recognise that, thanks to this ability to make credible commitments, Blue essentially gets to choose future as well as current policy. This is a pretty valuable addition to the set of monetary tools when the current interest rate can’t be cut (and if the economy responds sensitively to forward rates). Without it, as you can see, the simulated performance of the economy deteriorates significantly as the neutral real interest rate gets closer to the lower bound (i.e. as the red line approaches the origin). Unable to do much about them, the fully discretionary policymaker will spend quite a bit of time in these low-inflation, low-output traps. But because he effectively controls future as well as current policy, and can credibly “promise to be irresponsible” (i.e. to keep rates low even in the event of positive inflationary shocks in the future), the blue policymaker manages to avoid the worst effects of the lower bound for interest rates. Forward guidance in practice What about the real world? Is it blue or red? In practice, looking at what central banks have actually said about future policy, the boundary between the two is less clear in practice than in the theory. Even a fully discretionary policymaker – one who can’t credibly commit to future policy decisions – may react slightly  differently to incoming data around the lower bound.

It is therefore imperative that the risks arising from financial openness be better managed. Similar to legitimate concerns on trade openness, emerging economies also have legitimate concerns on the negative effects of financial globalisation. More needs to be done to have, to quote IMF’s Christine Lagarde, “safer capital flows”. Allow me to put forward two areas for deliberation. First is on financial safety nets. In this regard, I welcome efforts to strengthen regional and global financial safety nets. To this end, ASEAN+3 2/4  BIS central bankers' speeches  countries achieved a significant milestone under the Chiang Mai Initiative Multilateralisation when the fund size was doubled to USD240 billion in 2014. Moving forward, an important consideration is to bring the various bilateral swap arrangements and regional financial safety nets together with the IMF’s safety net into a coherent framework that will enhance their complementarities and thus, effectiveness in supporting emerging economies in dealing with short term capital flow volatility. Second is with respect to domestic policy space for emerging economies in dealing with capital flows. Clearly, capital flow volatility poses considerable challenges to emerging economies’ policymakers in safeguarding financial and macroeconomic stability. While the global community continues to debate and explore possible solutions to manage spillovers and spillbacks of policies in advanced economies, for emerging economies, there is a need not just to preserve existing tools available to us, but to constantly refresh our policy toolkit to deal with the multifaceted risks confronting our economies and to be flexible in implementing them. Pragmatism is key.
In 2015 the ESRB issued a recommendation which provides guidance for a systematic assessment of the cross-border effects of macroprudential policy, and a coordinated policy response in terms of voluntary reciprocity for macroprudential policy measures when needed. The recommendation provides the basis for implementing voluntary reciprocity in the EU and sets guidelines for the analysis, notifications and requests to be carried out. The reciprocity framework is still relatively new but it is a very important part of a macroprudential approach for the reasons just mentioned. I think the ESRB’s follow-up assessment of the recommendation in this area will provide important insights on how we might develop this framework further in the future. The EU needs a strong ESRB as we move ahead So what about the future role of the ESRB? The financial crisis brought with it new rules of the game for financial markets from a systemic risk perspective. We have a new regulatory landscape and framework for financial supervision, and the ESRB is a pillar in that framework. Not only is the ESRB central in identifying and warning against risks to the EU financial system, and recommending measures to mitigate such risk if needed. It has played a key role by providing a benchmark when the new macroprudential policy frameworks were implemented across the EU. The ESRB continues to be vital in developing that framework further, and with that I mean for both banks and for non-bank financial institutions.

In addition, we are concerned about a reference to the threshold allowing access to the Resolution Fund being introduced into the calibration of the internal MREL; this makes no sense when resolution is carried out at parent company level. As regards the measures still needed to finalise the Banking Union, completing the resolution framework is, in my opinion, the first priority, even more so than deposit insurance, the third pillar of the Banking Union. Mario Draghi was most insistent on this in his Florence speech of 11 May. i In most large jurisdictions – the United States, the United Kingdom and Japan – the intervention capabilities of resolution funds are not capped because they are backstopped by the fiscal authorities, without being a burden on public finances, since any public outlays are generally reimbursed by the private sector. During the last financial crisis, market and depositor confidence resulting from a credit line backstopped by the US Treasury enabled the Federal Deposit Insurance Corporation (FDIC) to resolve 500 banks without tapping into the resources of the safety net. ii Today, in the event of a severe crisis in the European Banking Union, the resources of the Single Resolution Fund (SRF) could be depleted. This is why a common backstop for the Single Resolution Fund is urgently needed. Let me emphasise that the aim of a common backstop is not to bail out banks or draw on government budgets.
We recognised that this was not without risks - risks in terms of the build-up of household debt and of an unsustainable rate of increase in house prices, if not an actual bubble - which, if persisted in for too long, or if carried too far, could lead to an uncomfortable retrenchment further ahead. In a virtual world where we could control these things precisely, we could no doubt readily agree that we would like to see stronger growth in other major industrial countries, a stronger euro, more business investment in the UK and more moderate growth of consumer spending and household debt. That would offer a more certain prospect of better balanced, and therefore more sustainable, growth. But we live in the real world! We expected the global economy to begin a sustained recovery in the latter part of last year which would allow us to return to better balanced growth in this country, and so we took the view essentially that for the time being at least unbalanced growth was better than no growth at all. In the event, our economy as a whole did just about keep moving forward through the winter, and the global economy - including manufacturing output - bottomed out around the turn of the year.

The Rt Hon Sir Edward George: The state of the UK economy - some impressions Speech by The Rt Hon Sir Edward George, Governor of the Bank of England, At the Northwest Development Agency/Bank of England Dinner, Manchester, 15 October 2002. *  *  *  The Bank has excellent contacts here in the North West - as indeed we have throughout the United Kingdom. We’ve been represented here - both in Manchester and Liverpool - for over 175 years; and I have no doubt that our present resident Agent, Tony Strachan - and his Deputies, Graeme Chaplin and Neil Ashbridge - are well known to many of you. They report regularly each month to the Monetary Policy Committee on the business climate - frequently attending our monthly briefing meetings to tell us face to face what it is you’re getting up to. You just can’t imagine the tales that they tell! It’s not that we don’t believe them - but we still feel the need to come and see for ourselves! The members of the MPC and other senior officials of the Bank are regular visitors up here. But this is the first occasion on which we have invaded you in such large numbers - with 10 of our non-executive Directors and all 9 members of the MPC plus over a dozen other officials - for a meeting of our Court - or Board - of Directors.
Ardian Fullani: Overview of Albania’s latest economic and financial developments Speech by Mr Ardian Fullani, Governor of the Bank of Albania, on the Monetary Policy Decision-Making of the Bank of Albania’s Supervisory Council, Tirana, 30 October 2013. *  *  *  Today, on 30 October 2013, the Supervisory Council of the Bank of Albania reviewed and approved the quarterly Monetary Policy Report. Based on the most recent monetary and economic developments in Albania, and following the discussions on their outlook, the Supervisory Council of the Bank of Albania decided to keep the key interest rate unchanged, at 3.5%. The Council notes that the inflationary pressures deriving from the real and financial sectors of the economy are weak and will continue to remain so. These circumstances require the stimulating monetary policy to persist in the period ahead. The monetary stimulus, transmitted through the low key interest rate and continuous injection of liquidity, provides the required conditions for meeting our medium-term inflation target. Let me now proceed with an overview of the economic developments and key issues discussed at today’s meeting. *** The Albanian economy was characterised by slow economic growth and weak inflationary pressures throughout 2013. Economic growth slowed down to 1.1% in the second quarter, while available information suggests weak economic activity will continue in the third quarter. The weak private demand offset the increasing positive impulses generated by the fiscal stimulus and foreign demand, in the first half of the year.

 Completion of important files, such as the prudential treatment of banks’ exposures to sovereign risk (the bank-sovereign link), EDIS (European Deposit Insurance Scheme), euro area reforms.  2020 budget – better use of resources.  Aligning the budgetary provisions of the NATO with those of the EU. Exemption of the rise in military expenditure, for NATO countries that are EU Member States, from the EDP (excessive deficit procedure) rule and from the MTO (medium-term objective).  Monetary policy normalisation and fiscal policy sustainability. 4
Euro area banks’ CET1 capital ratios remain at a solid level of about 14%, whereas profitability has stabilised on the back of the strengthening recovery. Some weak banks have been successfully resolved with the impact on the rest of the euro area banking sector being well contained. Notwithstanding these positive developments, important challenges remain, including the still subdued profitability, structural challenges in some parts of the euro area banking sector, such as the presence of excess capacity and cost inefficiencies, as well as – in a few countries – the persistently high stock of non-performing loans (NPLs). On aggregate, however, further progress has been made with respect to resolving NPLs, and a comprehensive action plan to deal with legacy asset quality issues was adopted by the Council of the European Union and is now being followed up by EU and national authorities. The ECB has published guidance to banks on NPLs and a draft addendum, currently subject to public consultation. With respect to financial stability, we observe that at the current stage the euro area’s position in the financial cycle is consistent with the ongoing economic recovery. There are no indications of widespread asset price misalignments and credit developments remain modest. Nevertheless, relatively buoyant real estate dynamics and high household debt levels in some countries warrant careful monitoring. We expect the national macroprudential authorities in the euro area to remain vigilant and ready to use the macroprudential policy instruments at their disposal to counteract the any emerging risks when necessary.

As affirmed by the Governing Council at its last monetary policy meeting on 7 September, we expect the key ECB interest rates to remain at present levels for an extended period of time, and well past the horizon of the net asset purchases. Our asset purchase programme (APP), at the current monthly pace of € billion, is intended to run until the end of December this year, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim. The net purchases are made alongside reinvestments of the principal payments from maturing securities purchased under the APP. Later this year we will decide on the calibration of our policy instruments beyond the end of 2017, taking into account the expected path of inflation and the financial conditions needed for a sustained return of inflation rates towards our objective. 1/3  BIS central bankers' speeches  The ECB’s monetary policy measures and the favourable effects they are having on borrowing conditions for firms and households, access to financing and credit flows across the euro area are supporting domestic demand and are also facilitating the deleveraging process. In order to reap the full benefits of our monetary policy measures, actions in other economic policy areas remain necessary to strengthen long-term growth and resilience in the euro area. Meanwhile, the condition and resilience of the euro area banking sector has continued to improve.
Expectations of a global recovery have boosted stock markets over the last year. The Norwegian stock market index, OBX, has increased more than US, German and Japanese stock market indexes. Oil prices and other commodity prices are also high. Normally, higher growth expectations are accompanied by higher interest rate expectations. This has not been the case lately. On the contrary, market expectations have fallen. The red line shows that in October last year, the market expected that the economic recovery would lead to higher interest rates. The green and yellow line shows the fall in expectations, and that the market now expects interest rates to remain low for a period ahead. The reason behind the change in expectations is the absence of inflationary pressures. In Norway, inflation is low. In February, annual core inflation fell to minus 0.1 per cent. It is particularly prices for imported consumer goods - the yellow line in the chart - that have fallen sharply. But prices for goods and services produced in Norway have also declined. Increased competition and productivity growth have probably contributed to low inflation. Higher productivity growth is a global trend and in particular in the US the phenomenon has been the subject of lively debate. The current economic recovery has in fact been labelled the “jobless recovery”, an indication that companies can increase production without new recruitment.

In historical terms, the real exchange rate has only remained so high for short periods. The Central Bank thus openly stated its view that the exchange rate was unsustainably high and must weaken. However, the timing and pace of the depreciation was unknown. BIS Review 60/2007  1  Following the privatisation programme that was completed in 2003, the Icelandic banks expanded very rapidly. Privatisation unleashed an enterprising spirit and the resolve and ambition to enter new territory. The banks sharply stepped up their activities outside Iceland by acquiring foreign financial companies and establishing branches. These radical changes are reflected in the growth of the three largest Icelandic banks’ total assets from the equivalent of 96% of GDP at the end of 2000 to roughly eightfold GDP at the end of 2006. A distinctive feature of Iceland’s financial sector is that no foreign banks operate directly in the country. However, the domestic banks have become less Icelandic, so to speak. The greater part of their operations are now in other countries. The bulk of their revenues and profits are generated abroad, in the other Nordic countries, the UK, Luxembourg and elsewhere in Europe. As a result, their revenue base is significantly broader and they are less exposed to cyclical fluctuations in the Icelandic economy than before. All the same, if the Icelandic economy were to weaken significantly, reports about it could affect the banks’ potential for securing foreign financing.
I am pleased that our current Agents, David Buffham and Will Dowson receive a warmer welcome from Chamber members and others as they travel around the region. Our agents are the eyes and ears of the Bank. They make sure that we take account not just of the economic statistics, which at best tell us what has just happened (and all too frequently fail to do that), but also know what businessmen and women are saying about their own outlook and plans. The Monetary Policy Committee receives a report from each region each month and I can assure you it always receives a lot of attention. All the members of the Committee also get out to meet businesses themselves and that is why I am here in the North East for two days. The main subject of my speech tonight is the wider economy, and in particular the tale of two cycles – the downswing of the financial cycle and the upswing in the commodity price cycle. The economic environment in context But first, it is important to recognise that the last ten years have been a period of remarkable stability for the UK’s economy. It has certainly been the most stable and successful period for the economy in my lifetime. 1 When the MPC was set up, Charlie Bean – then a leading academic, soon to be my fellow Deputy Governor – estimated that inflation would be away from the target by more than 1 percentage point in nearly 5 months of every year.

The huge increase in oil and food prices will itself have a dampening effect on consumers in those countries – as it will in the West. So we may well see the balance of supply and demand shift at some point. UK inflation outlook But the immediate prospect is for rising inflation. As the Governor explained in his open letter to the Chancellor, when the rise in energy prices passes through to consumers, CPI inflation is likely to rise sharply in the second half of the year, to above 4%. There is of course considerable uncertainty around this, and if energy and other import prices rise further, CPI inflation could well go even higher in the short term. That is bound to lead to a downward adjustment to real take-home pay. That cannot be avoided. Indeed, such an adjustment was seen in response to the rise in energy prices in 2004-06. Over that period, nominal wage  4  BIS Review 80/2008  growth was broadly stable, and there was a relatively smooth adjustment to real wages in response to the rise in energy prices. A key risk to the outlook is whether a similar, benign adjustment will occur in response to the latest price rises. With inflation having been above target for much of the past three years, and set to rise further in the near term, there is a risk that households and businesses may start to expect CPI inflation to be persistently above 2%.
So you may need to decide not just in what form you want to settle your bill, but in what currency. What exactly is the difference between currency and money? A currency defines a unit of account. In Switzerland and Liechtenstein the Swiss franc is the official or ‘state’ currency used to pay for goods and services. In the surrounding countries, the official currency of the euro area – the euro – is the unit of account. Multiple types of money co-exist within a given currency. These can be broken down into categories as shown in this illustration. Two principal types of money are in use today: cash (banknotes and coins) and book money. While banknotes and coins are issued by states, bank  Page 2/7  deposits, held on the accounts of commercial banks, are privately issued book money. The sight deposits of financial market participants, held at central banks, are another form of book money. This state book money functions as a liquidity reserve for commercial banks and as a means of payment for interbank transactions. In addition to cash and book money, another type of money has recently emerged: digital ‘token money’. Tokens are digital assets, which can be transferred from one party to another. As with a payment using a banknote, such a transaction does not require the involvement of a central third party. I shall devote the rest of my remarks to exploring this kind of digital token money in greater depth.

Page 7/7  Currencies, money and digital tokens  Thomas J. Jordan Chairman of the Governing Board Swiss National Bank 30th anniversary of the WWZ and VBÖ University of Basel, 5 September 2019  Types of money in Switzerland Currency Issuer  Type Cash  state  Banknotes and coins  state  private  private  Book money  Digital token money  Sight deposits held at the SNB for financial market participants  Swiss franc tokens for financial market participants  Sight deposits held at the SNB for all households and companies  Swiss franc tokens for all households and companies  Bank deposits  Stable coins (value stable against Swiss franc) Stable coins (minimal fluctuations in value against official currencies, e.g. Libra)  private  Crypto tokens (e.g. Bitcoin) Existing types of money 05.09.2019  Potential types of money  Currencies, money and digital tokens | Thomas J. Jordan | © Swiss National Bank