samchain/econo-pairs-v1 huggingface dataset:
This was more evident for securities firms and may reflect the opening of the Primary Dealer Credit Facility (PDCF) that allowed primary dealers to obtain liquidity from the Federal Reserve on a collateralized basis. Following the bankruptcy of Lehman Brothers in September 2008, these CDS prices increased dramatically. In response to the deterioration in the economy as well as to mounting loan losses, banks tightened their lending standards and credit spreads increased. This can be seen using data from the Federal Reserve’s Senior Loan Officer Opinion Survey (Chart 10). Values above zero represent tightening of standards, widening of spreads and weaker loan demand. All three were taking place as the economy entered the recession. A consequence was a sharp contraction of lending activity (Chart 11). To the extent that the decline in lending was not completely due to lower loan demand, then this credit contraction exacerbated the decline in real activity – creating what is called an adverse feedback loop between the financial and real sectors of the economy. The Federal Open Market Committee (FOMC) reacted aggressively in response to the recession and financial crisis. The FOMC quickly lowered its policy rate – called the federal funds rate – to essentially zero (Chart 12). The aggressive pace for lowering the fed funds rate reflected lessons learned from Japan’s earlier experience dealing with a housing market boom and bust. At the same time, the FOMC increased its provision of liquidity to the financial system.

16.11.2018  Remarks - First panel: “Central banks, macroeconomic stability and economic growth” Banco de España and European Institute of the Mediterranean with the support of the Central Bank of Tunisia Pablo Hernández de Cos Governor  In this first session of the conference we will focus on the role of central banks on both shores of the Mediterranean in contributing to the achievement of sustainable growth in the long term. Before giving the floor to our distinguished speakers, let me say a few words about the current global outlook and their implications for economic policymaking. At present, the global economy seems to be approaching its cyclical peak while the process of monetary policy normalization in the advanced economies continues, particularly in the United States. This process should normally precede the tightening of global financial conditions. At the same time, tensions in international trade remain, with the risk that disputes in this area will be solved with a greater use of protectionism to the detriment of a multilateral approach to the resolution of these conflicts; and, elsewhere, the markets of some emerging economies that had significant macroeconomic imbalances have undergone episodes of severe turbulence. We are therefore facing a phase of growth moderation with limited scope for economic policies. It would seem necessary to harness the current moment in which growth records are still satisfactory in order to generate margins that allow a certain countercyclical gearing of economic policies in the future.
Another problem encountered in 2000 was the lack of a front-loaded Supplemental Reserve Facility, which would support foreign exchange reserves when needed in the course of the program. The adverse developments in November 2000 and in February 2001 compelled the Central Bank to pursue policies aimed at stabilizing the financial markets. Priority was given to make the payments system function again by providing liquidity to the market, after having been switched to the floating exchange rate system. In this context, the Central Bank lowered its bid and offer rates in the interbank money market starting from 26 February 2001. Liquidity was given mostly to the state-owned banks, and to the banks that had been transferred to the Saving Deposits Insurance Fund through overnight quotations under open market operations. Besides overnight funding via open market operations, the  2  BIS Review 35/2001  Central Bank has also started providing the markets with liquidity through forward transactions since the mid-March. At the same time, the Central Bank withdrew the excess liquidity by way of repurchase and reverse repurchase transactions at the Istanbul Stock Exchange and by way of the CBRT interbank money market, when needed. The Central Bank has also provided banks with cash via foreign exchange deposits and limited foreign exchange interventions to help them fulfill their external obligations.

Few forecasters predicted the developments in the world economy that have affected the Swedish economy over the last year or so. In this speech I shall begin by explaining why the Riksbank makes forecasts and then go on to describe the forecasting process and how it is connected to the monetary policy decisions. One important question in this context is what stance decision-makers should take with regard to risks that are not captured by quantified forecasts. The best thing is to try to develop tools that can quantify the probability of a particular scenario, and to improve the analysis of what impact this scenario would have on the economy. But this is not always possible and I shall discuss my views on this problem. Forecasts are a central part of inflation-targeting monetary policy The primary argument for a central bank to make forecasts is that monetary policy has an impact with a time lag. The Riksbank conducts a policy of flexible inflation targeting. This means that, in addition to stabilising inflation around the target of 2 per cent, the Riksbank also aims to stabilise resource utilisation around a normal level. The Riksbank varies its steering interest rate, the repo rate, to attain the inflation target. However, the effects of monetary policy on the economy come with a fairly long time lag. This means that prior to each monetary policy decision it is necessary to analyse how different repo rate decisions can be expected to affect inflation and resource utilisation over the coming years.
And it introduces a cooperative approach to CCP supervision, involving all relevant supervisors and central banks in “supervisory colleges” to ensure that CCPs are properly overseen across Member States. The global regulatory push towards central clearing has contributed to making CCPs extremely important parts of the global financial system. In 2009, just 40% of all interest rate derivatives contracts were cleared through CCPs, but by 2017 this had increased to 83%1. New developments and current challenges The rising importance of CCPs means that their supervisory framework needs to be reformed. Most clearing is now done across borders and is strongly concentrated in a limited number of EU CCPs, which have become systemically important for the EU as a whole. Two of these CCPs are based in the United Kingdom. Currently, they clear around 95% of eurodenominated interest rate derivatives and around 30% of euro-denominated repos. Thus, a significant disturbance involving a major UK CCP could affect financial stability and market functioning across the EU. On top of this, most of the liquidity provided by central banks tends to be channelled through the repo market. The United Kingdom’s withdrawal from the EU means the supervisory framework for non-EU countries must be adapted. EU authorities must continue to be able to not only closely monitor UK CCPs but ensure they comply with EU regulations.

For example, the ECB was able to take the unconventional monetary policy measures it saw fit to address unprecedented economic developments – and thus to achieve its primary objective of maintaining price stability in the euro area. This flexibility and autonomy is a clear expression of the principle of central bank independence, and of the Eurosystem’s exclusive competence to define and implement monetary policy. The simplified amendment procedure does not give us carte blanche to rewrite the Treaties and the principles that underpin the ECB and the Eurosystem. Rather, it allows us to make targeted adjustments to our monetary policy toolkit. I have three things in mind here. First, Article 22 should not be changed to contain an inflexible and exhaustive list of measures the ECB can take. This would constrain monetary policy. The ECB needs broad discretion to take the necessary measures and address risks to monetary policy and the smooth operation of payment systems. Extreme market events are impossible to predict and central banks have the unique expertise and exclusive competence to assess and address the risks they pose to monetary policy. Second, Article 22 cannot subordinate ECB measures to the level of secondary Union law, for example by requiring them to be consistent with secondary legislation. This would create a 3/5  BIS central bankers' speeches  hierarchy of internal market legislation over monetary policy measures. This cannot happen. We cannot open a Pandora’s box and end up in a situation where monetary policy is no longer shielded against political influence.
8  BIS central bankers’ speeches  Table 1 Economic growth and current account (annual change, percentage) 2011  2012 (f) 2013 (f) MP Report MP Report MP Report MP Report Sep. 12 Dec. 12 Sep. 12 Dec. 12  GDP  6.0  4.75-5.25  5.5  4.0-5.0  4.25-5.25  Domestic demand Domestic demand (w/o inventory change) Gross fixed capital formation Total consumption Exports of goods and services Imports of goods and services  9.4 10.2 17.6 7.9 4.6 14.4  5.6 5.5 7.0 5.1 3.5 4.0  6.6 6.8 11.3 5.3 2.7 5.5  5.5 5.8 7.1 5.4 3.6 5.8  5.7 6.0 7.6 5.5 3.0 5.9  Current account (% of GDP)  -1.3  -3.2  -3.8  -4.4  -4.6  (f) Forecast. Source: Central Bank of Chile. Table 2 International baseline scenario assumptions 2011  Growth Trading partners World at PPP  2012 (f) 2013 (f) 2014 (f) MP MP MP MP MP MP Report Report Report Report Report Report Sep. 12 Dec. 12 Sep. 12 Dec. 12 Sep. 12 Dec. 12 (annual change, percentage) 4.2 3.5 3.3 3.8 3.5 4.3 4.0 3.8 3.1 3.0 3.6 3.3 4.1 3.8  United States Eurozone Japan China India Rest of Asia (excl. Japan, China & India) Latin America (excl.

Also, private consumption has increased in line with the significant increase in personal income. Still, we face significant risks, which I will look in more detail in a moment. Those coming from abroad have to do with the world economic situation I just described; domestically, they relate to the possibility of an exacerbation of output and expenditure. Beyond these risks, in the baseline scenario that today we believe to be the most likely, the Chilean economy will resume growth in line with the trend, while inflation will gradually return to levels that are consistent with the target. Let me now describe this scenario and the risks we have identified. Macroeconomic scenario The macroeconomic scenario facing the Chilean economy has not changed significantly in the past several months. As I just said, Chile’s output, and especially domestic demand, has grown above expectations. Some progress has been made abroad, but the risks derived from the Eurozone crisis are still present. In this context, headline inflation has fluctuated substantially in recent months, due to one-time events associated with supply shocks. Core inflation – discounting foodstuffs and energy – has declined slightly to near 2 percent y-o-y. The Board, continuing with what has been the tone throughout the year, held the monetary policy interest rate at 5 percent. Domestic situation As of November, y-o-y CPI inflation was 2.1 percent, after rising to almost 3 percent in October (figure 1). Y-o-y growth in nominal wages has remained roughly constant in the 6% to 7% range, although with differences across sectors.
That is a subject that is crucially important to the UK and to the EU, given our integration into the global economy. Financial globalisation – an integrated global capital market and cross-border financial services – mean that our economies can benefit from better matching of saving and investment, from greater choice and from risk sharing and diversification. But, of course, it also means that we import and export financial risk from across borders. We saw just over a decade ago the damage that can come from financial globalisation if we do not have appropriate governance at the international level. This question of governance, and of the import and export of financial risk, is a subject of crucial importance to me, and not just because I am still scarred by the great financial crisis. I am Deputy Governor for Financial Stability at the Bank of England. We are responsible for the largest and I think most complex international financial centre in the world. And I also want today to talk specifically, from the particular perspective of financial stability about how, in the light of the current governance of financial globalisation, we build the new arrangements for the governance of the financial sector connections between the EU and the UK. 2  All speeches are available online at www.bankofengland.co.uk/news/speeches  2  Governance of financial globalisation I have used the word “governance”. The word is of course closely related to the word “government”. But while related, they are not the same thing.

Many of them need to use instruments to manage or hedge their RMB exposures. All these RMB related financial services and products can only be developed by the markets and financial institutions because they are closest to their customers and understand their needs best. That is why it is so important for the HKMA to collaborate with our official sector counterparts in Australia to create this private-sector led Dialogue. The first Dialogue was held in Sydney in April last year, which was highly successful. I am very pleased that it is Hong Kong’s turn to host the second Dialogue and I am confident that it will be equally if not more successful. I note that today’s Dialogue has a very rich agenda and I look forward to hearing useful and practical ideas and suggestions on what the private sector can do on its own or in collaboration with the official sector to further develop the offshore RMB markets in Australia and Hong Kong. 8. Thank you very much. 2  BIS central bankers’ speeches
During periods of stress there may be large shifts in the demand for reserves and so the Bank’s market operations need to be designed to meet both our monetary policy and financial stability objectives without conflict. In normal times, Bank Rate is set within a reserves averaging framework, in which commercial banks choose their own targets for reserves balances held at the Bank but are then required to meet those targets on average over the monthly maintenance period and are remunerated at Bank Rate. The Bank of England supplies just enough cash to the system so that banks can collectively meet their targets, and a combination of the Operational Standing Facilities and the inter-bank market should guide short-term market interest rates towards Bank Rate. This framework relies on the Bank ensuring the amount of sterling cash in the system is in line with that demanded, given Bank Rate. The liquidity swap structure of the DWF does not involve an extra injection of cash and so helps to avoid any direct impact on the setting of Bank Rate. The Bank may, however, decide in exceptional circumstances, to lend cash instead. That might be required if, for example, the gilt repo market was not functioning properly, or the size of the required draw is sufficiently large that the Bank deemed it unlikely that the counterparty will be able to repo the gilts without causing undue volatility in the markets.

The risk premium in the interbank market has generally driven up the 3-month LIBOR which serves as the reference rate for the pricing of  15  Georgios Chortareas, David Stasavage, and Gabriel Sterne, 2002, “Does it pay to be transparent? International Evidence from Central Bank Forecasts”, Review of the Federal Reserve Bank of St. Louis, July/August, 99-117. 16  Frederic S. Mishkin, 2004, “Can Central Bank Transparency Go Too Far?”, NBER Working Paper No. 10829, p. 25. 17  In fact, the Bank of England would have preferred to act covertly, but the market abuses directive prevented this (http://www.guardian.co.uk/business/2007/sep/21/14). BIS Review 141/2007  5  credit. At the same time, interest rates on risk-free securities such as Government notes have declined. The result is a significant increase in the TED spread (the difference between an uncollateralized interbank loan and the risk free rate of the same maturity). With the 3-month LIBOR rising, central banks faced an important monetary policy decision. In countries where the official target rate is a central bank rate, for instance, the euro zone, the 3-month LIBOR became increasingly disconnected from the official target rate (typically a repo rate of two weeks or less). As you can see from Graph 1a, the ECB held its official target rate (the two-week repo rate) constant and therefore tolerated an increase in the 3month LIBOR.
Last but not least, rules and principles for economic policy were introduced in Norway, as in other countries, to prevent policy decisions based on shorter-term considerations and shifting preferences. The Norwegian economist Finn Kydland, who is from my home district of Rogaland, received the Nobel Prize in economics for his study showing that economic  4  BIS Review 109/2010  performance can be improved if policymakers can commit to a pre-established set of credible policy rules. 7 Four pillars were established in the 1990s and in 2001 to stabilise economic developments: •  the petroleum fund mechanism  •  the fiscal rule  •  a floating exchange rate  •  inflation targeting  This system was introduced in response to the sharp upturns and downturns in the economy over the first twenty years of the Norwegian oil age. As a result of the petroleum fund mechanism, a greater share of government petroleum revenues is invested abroad. This curbs the impact of oil price fluctuations on demand and output – as well as on inflation and the exchange rate. The rules for the investment of these oil revenues prevent individuals or groups from gaining strong control over Norway’s oil wealth. The fiscal rule for the central government budget states that petroleum revenue spending shall be limited to the return on the funds invested abroad. This provides for a gradual phasing-in of oil revenues and a rate of spending that can be sustained for several generations.

Thanks to groups like the Sexual Law Reform Society and Stonewall, and initiatives like Pride, there has been huge progress towards ending the unfair treatment of people on the basis of sexual orientation and creating a society in which everyone can be their true selves without fear or favour.7  6  See https://webarchive.nationalarchives.gov.uk/20091005104048/ http://www.number10.gov.uk/Page20571 7 The Bank of England aims to be an LGBT+ inclusive employer, taking part in the London Pride parade every year and flying the pride flag atop its Threadneedle Street building. The Bank has a thriving LGBT+ & Allies Network which was launched in 2006 and now has around 350 members and allies. In 2018, the Bank supported the rollout of rainbow lanyards in the spirit of creating a visibly inclusive and supportive environment – these are now worn by more than 1,000 colleagues. We complete the Stonewall benchmarking exercise each year and were pleased to have increased our ranking by over 100 places in 2018. 5  All speeches are available online at www.bankofengland.co.uk/news/speeches  5  The Bank of England is committed to ensuring our banknotes are as inclusive as possible. That means celebrating the breadth of human achievement in this great country from science to the arts to statecraft to literature. And it means featuring a range of individuals who reflect the vibrant diversity of UK society. The design of the note Let me conclude by unveiling the image for the new Turing £ note. The design recognises the breadth and variety of Turing’s contributions to science.
The conclusion was that our annual stress tests comprised stresses of a scale and nature that encompassed even the worst case disorderly Brexit scenario and that the core banking system would be resilient to such an outcome, were it to occur. We have also assessed other parts of the financial system in the same vein. And of course over recent months, as we approached ‘crunch’ Brexit dates and events, we have developed and have been ready to implement contingency plans to respond to financial sector stress. I would make three observations about this work that has occupied an increasing amount of the Bank’s resources over the last year and a half. First, we have sought to address risks to financial stability. Financial stability is a high hurdle. It does not mean market or economic stability or absence of any disruption or absence of losses. 1  The March FPC statement noted that, while most risks to UK financial stability that could arise from a disruptive Brexit have been mitigated, in the absence of further actions some potential risks to financial stability remain. These risks were: the ability of UK and global banks to provide wholesale banking to EU clients; the operational risks involved with migrating businesses, assets, and contracts in a short period of time; and the ability of UK-EU counterparts to use uncleared derivatives to manage risks.

For a small, open economy like Switzerland, in particular, the effectiveness of monetary policy measures can be largely dependent upon acceptance by the international environment. An important example for our country is the minimum exchange rate – an exceptional measure taken in an extreme situation. With this measure, the Swiss National Bank is countering distortions in the foreign exchange market which can be traced back to international events. The minimum exchange rate is accepted internationally because markets, international organisations and foreign central banks have understood the objective and motivation behind it, which they see as justified. BIS central bankers’ speeches  1