samchain/econo-pairs-v1 huggingface dataset:
The Riksbank was thereby able to slow the economic downturn and simultaneously prevent a further appreciation of the krona and a decline in inflation expectations (cf. chart 10). Interest rates in the Czech Republic touched 0% at the end of 2012, and the Czech National Bank (CNB) announced its intention to intervene on the foreign exchange market if necessary. At the end of 2013, the CNB intervened to weaken the Czech koruna and ease monetary conditions (cf. chart 11). Thus, like the SNB, the CNB also decided to use the exchange rate as an instrument for easing monetary conditions. The Danish krone, explicitly pegged to the euro since the inception of the currency union, also suddenly found itself having to contend with upward pressure. This reflected concerns about the future of the euro, and market assumptions that Denmark could become a member of a Nordic euro should the euro area split. At the end of 2011, Danmarks Nationalbank reacted by cutting its reference rate to below that of the ECB, and continued to lower it in successive steps thereafter. At the same time, it intervened on the foreign exchange market. In mid-2012, when the ECB once again lowered its rates, Danmarks Nationalbank lowered its deposit rate into negative territory in order to keep pace with the ECB’s monetary policy easing (cf.

Demand slump following the onset of the financial crisis (2008–2011) The key event following the onset of the financial crisis was the collapse of the Lehman Brothers investment bank in September 2008. The subsequent weeks and months saw a sudden, substantial slump in demand for goods and services. Between 2008 and 2009, global imports and exports fell by some 25% in nominal terms, the sharpest decline since records began in 1948. The euro area, and the neighbouring countries examined here, slipped into recession (cf. chart 2). GDP in the euro area plunged by around 5% in 2008 and 2009, at the height of the crisis. The drop in the neighbouring countries ranged from 3.4% in Switzerland to 7.2% in Denmark, whose economy had experienced a phase of overheating in pre-crisis years. Inflation rates fell sharply due to lower demand and falling oil prices (cf. chart 3).1 Inflation in the euro area declined to −0.6% in the course of 2009. The lowest inflation recorded during this period was −1% in Switzerland. In the Czech Republic, too, inflation was negative for a short period in 2009. In Denmark and Sweden, it remained in positive territory. Central banks reacted to the global slump in demand with drastic interest rate cuts – the conventional monetary policy instrument (cf. chart 4).2 In addition, markets were provided with large amounts of liquidity. In the Czech Republic, Denmark and the euro area, there was still leeway for further steps even after these interest rate cuts.
The Swedish Government has published a public inquiry evaluating the effects of a Swedish membership of the Banking Union and the Riksbank has provided its views on the matter in a consultation response. 28 The financial trilemma is a simple means of illustrating one of the conflicts of interest that the Banking Union is trying resolve. 29 Free movement of capital can be combined with financial stability if the financial market policy is supranational, that is, if it covers the entire geographical area the capital can move in. One of the purposes of the Banking Union is thus to limit the national financial market policy  28 See Swedish Government Official Reports (2019) and Sveriges Riksbank (2020a). 29 For a detailed discussion of the financial trilemma and the Banking Union, see Farelius et al. (2020). For a discussion of further aspects of a Swedish participation in the Banking Union, see Sveriges Riksbank (2020a) and Ehrenpil and Hector (2017). 12 [35]  in favour of more supranational policy and in this way improve the possibilities for preserving the stability of the financial system. However, the trilemma does not provide an unambiguous answer as to what is a reasonable balance between the different objectives; it is instead a question of judgement. It is important to remember that the Swedish banking sector has extensive international operations, primarily within the EU and especially in the Nordic-Baltic region.

12.03.2019  Roundtable: “Sustainable Finance as the driving force of the ecological transition” Banco de España Margarita Delgado Deputy Governor  It is a pleasure for me to welcome you to the Banco de España for two reasons. First, because I believe the Bank should be a forum for discussing and bringing closer to society those financial matters that bear on and affect the well-being of all. The second reason has to do with the matter I shall broach today, which I consider to be particularly important and which is none other than the role finances can and should play in relation to combating climate change. As you all know, this is not a new objective. Indeed, at least since the 1992 Río de Janeiro United Nations summit, combating climate change has been a recurrent objective of international institutions. So, what has changed in the wake of the 2015 Paris agreement, and why has climate change also begun to be part of the financial authorities’ agenda? Mark Carney talked about the so-called “tragedy of the horizon”, in the sense that the horizons used in the evaluation of financial risks are shorter than those that should be applied to evaluate climate change. Yet these risks may be said to have moved onto our horizon; both the physical risks owing to the effects of climate change, and above all, the risks of transition towards a sustainable economy. The Paris agreement marked a turning point regarding the feeling of urgency in the fight against climate change.
Second, inflation rose temporarily as a result of rising global oil and commodity prices. Monetary policy should not react to these either – and it didn’t. On the other hand, it is the task of monetary policy to prevent such increases from turning into a persistent inflation episode through a reaction of wages and other domestic cost factors. It is the third type of inflation that is a home-grown product. In increasing measure, the current bout of inflation falls into this category, as can be seen in the wage increases of the past year. Monetary policy must take action to impede this type of inflation, particularly when inflation expectations are well above target, as they currently are. A key question in this regard is why this inflation episode has occurred in spite of unemployment figures and other measures suggesting a considerable slack in the economy. Of course, a number of explanations are possible: that there is a lack of confidence in the will and ability to apply policy tools as needed to attain the inflation target; that the tradable sector, which enjoys good operating conditions due to the low exchange rate, is a driver of wage developments; and that the exchange rate is temporarily low because of the repayment of foreign debt, which is to some extent forced and is occurring more rapidly than is desirable. It is interesting, too, to ponder whether the slack in the economy is actually smaller than current assessments indicate.

Már Guðmundsson: Iceland – recent economic developments, conditions and outlook Keynote address by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, at the 51st Annual General Meeting of the Central Bank of Iceland, Reykjavik, 29 March 2012. *  *  *  Prime Minister; Minister of Finance; Chairman; Directors and Ambassadors; Ladies and Gentlemen: As we convene for the 51st Annual General Meeting of the Central Bank of Iceland, the economic recovery that began late in 2010 is gaining momentum in spite of international headwinds, while inflation has been higher and more persistent than was considered likely last year. It is important, too, to note that inflation is driven much more strongly by domestic factors than it was around this time last year, with wages rising in excess of increases in productivity and the nominal exchange rate declining in the recent term. According to preliminary estimates, GDP grew by 3.1% in 2011. In international terms, this compares well, as output growth in the OECD averaged 2% last year. However, it should be borne in mind that the economic recovery began later in Iceland than in most OECD countries. Business investment and private consumption contributed equally to growth, about 2 percentage points each. The contribution from factors was negative, however. This growth was not borrowed, either: last year’s underlying current account surplus measured roughly 3% of GDP. In some respects, the composition of last year’s output growth lays a sound foundation for continued economic recovery.
Lars Heikensten: Swedish banks in an international perspective Speech by Mr Lars Heikensten, Governor of the Sveriges Riksbank, Royals Vinterträdgård, Grand Hôtel, Stockholm, 10 November 2005. Diagrams for this speech can be found on the Sveriges Riksbank’s website www.riksbank.com. *  *  *  Swedish banks' competitiveness I would like to begin by thanking the Bankers' Association for inviting me to participate in this panel discussion on Swedish banks' competitiveness. Before I set about giving my view on the matter, I think it is important to stress that there are several different perspectives on competitiveness and competition. So, the conclusion will vary depending on the angle from which you look at the issue. The composition of the panel reflects these different perspectives well, which should guarantee an interesting discussion. I would like to define a bank’s competitiveness as a measure of how efficient the bank is at providing a given quantity of financial services at a certain level of quality. For the Riksbank, the competitiveness of Swedish banks is important both from a stability point of view and an efficiency perspective. Competitive banks have greater resilience to different kinds of pressures regardless of whether they stem from increased competition or poorer economic performance. They also are more efficient and can provide more and better financial services at a low cost. How to measure competitiveness, though, is by no means self-evident.

Jean-Pierre Roth: Switzerland - small, but global Speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the Swiss-Argentine Chamber of Commerce, Buenos Aires, 16 November 2004. *  *  *  Argentina is a country that fascinates us Swiss. At one time it offered my fellow countrymen a new home when they could no longer see a future in Switzerland. Today, Argentina largely attracts business people and tourists. As you know, Switzerland is a tiny country in comparison with Argentina. Situated in the heart of Europe, it has more or less come to resemble one huge agglomeration. It is therefore not surprising that many Swiss view Argentina as a land of space and opportunity. But as to what Switzerland could mean to the Argentineans is only something I can guess at. Perhaps you still associate my country with chocolate and watches. On the other hand, maybe you recently visited Switzerland and discovered that a great deal has changed. The country has become more liberal-minded and has begun to question its traditional views - partly of its own accord and partly as a result of external pressures. I am delighted to be here this evening and to have this opportunity to give you a brief overview of the challenges facing Switzerland in an era of growing globalisation, under the heading “Switzerland: small, but global”. 1.
The policy decisions made by the FOMC in August and November were intended to influence financial conditions in a manner that would support the economic recovery and return employment and inflation, over time, to levels consistent with the FOMC’s objectives. One way that this might occur is through a portfolio balance channel. 12 Under this view, removing duration risk from the market would tend to keep longer-term real interest rates lower than they otherwise would be and would encourage investors to move into other types of assets, thereby making broader financial conditions more accommodative. These intended effects were apparent in financial markets from mid-August to early November, when investors increasingly anticipated the Federal Reserve’s decision to expand its balance sheet. Over that period, longer-term real interest rates declined, breakeven inflation rates moved up toward more normal levels, equity prices rose notably and risk spreads on many credit instruments narrowed. This configuration of asset price movements is the pattern that is typically associated with additional monetary policy easing. Since early November, one of the notable developments in financial markets has been the sharp increase in longer-term interest rates. At first glance, this change may seem at odds with the portfolio balance channel. However, it is important to understand the factors that led to the increase in interest rates in the current circumstances. The upward movement in longer-term interest rates in large part reflects the greater optimism among investors about the outlook for economic growth.

The first objective is to obtain the securities at competitive and appropriate prices for the Federal Reserve, as doing so will ultimately benefit the U.S. taxpayer. The second objective is to minimize any negative effects that the purchases might have on the functioning of financial markets. As I noted in a speech in October 2010, the liquidity and efficiency of the Treasury market provide tremendous benefits to our economy, and the Desk was intent on designing a purchase program that would not diminish those benefits in any meaningful way. 3 To achieve these objectives, the Desk relies on a system in which it purchases securities through reverse auctions with a set of established counterparties called the primary dealers. 4 The securities that are eligible for each operation and an indication of the total size of the operation are announced in advance. 5 Dealers then submit offers to sell those securities, either for their own accounts or on behalf of their customers, over a 45-minute period on the morning of the operation. Those offers are assessed by the Desk based on two criteria: their proximity to market prices at that time, and an internal methodology for comparing the relative value of the securities at the offered prices. 6 This process occurs over a proprietary trading system called Fedtrade under the oversight of Desk staff, and the results are typically finalized and published within a few minutes of the close of the operation.
A 5-year period is very short for the structural achievements made in a country with a 30-year inflationary past to repair the fragility in expectations in a permanent way. Therefore, in a period where financial fluctuations were observed in all developing countries, the shortterm market fluctuations originating from foreigners’ exits were perceived to be much more negative in Turkey, although there was not a permanent deterioration in macroeconomic fundamentals. As seen in the table in the slide, there have been eight fluctuations since the year 2001 when the floating exchange rate regime was put into practice, and exchange rates have even surpassed the top value that was recorded in the recent fluctuation. However, to the extent that the program was implemented decisively and policies were conducted without any interruption, there had always been a return to the main trend where the Turkish lira appreciated. It should be kept in mind that this process is also the process for the Turkish lira to gain credibility. As long as macroeconomic fundamentals are strengthened and structural reforms are achieved, this process is likely to continue. Table.

By contrast, the central bank essentially holds nothing but liquid assets – largely government securities (Chart 49). Shifting deposits away from commercial banks, and towards the central bank, would therefore make for a “narrower” banking system – a “narrow” bank being one whose assets are as liquid as its liabilities. In principle, it would also make for a safer one. Backed by liquid assets, rather than risky lending, deposits would become inherently more secure. They wouldn’t be vulnerable to “runs” and we would no longer need to insure them. 8  Nor is it a live issue for the Bank. As the Governor recently said to the House of Commons’ Treasury Committee, “May I…be absolutely clear: there are no plans to abolish cash at the Bank of England”. 9  The Bank of England’s balance sheet has obviously grown following QE. Those operations have been conducted via the Asset Purchase Facility (APF), which is not directly on the Bank’s balance sheet – strictly speaking, the blue bar in Chart 4 is not direct holdings of gilts but a loan from the Bank to the APF. But the APF itself holds only gilts and, even before QE, the vast majority of assets on the Bank’s balance sheet were government securities. BIS central bankers’ speeches  5  The case for narrow banks has a long and distinguished pedigree. The classical economists Adam Smith and David Ricardo favoured such a system.
Notwithstanding this 25bp increase, Bank Rate remains close to its lowest rate its 323 year history (Slide 2). 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  I wasn’t in that majority. That was not because I disagree with the overall framework for setting monetary policy in this exceptional period, but rather because I have a somewhat different assessment of the economy. By way of framing my own decision, let me give a few comparisons to how things might have turned out in the absence of Brexit, for which I will use the MPC’s May 2016 forecast as a proxy (Slide 3). GDP growth in the year to 2017 Q2 (the latest quarter for which we have a full set of both expenditure and labour market data and the latest data available at the time of the November MPC decision) was 0.8pp weaker than the MPC’s May 2016 forecast, within which business investment growth was a full 5.2pp lower. Despite the weakness in output, employment and hours have actually been stronger than expected, meaning productivity growth per hour was been 2.2pp weaker in the year to 2017Q2. Nominal wage growth was 1.5pp weaker than in the pre-Brexit forecast, which, coupled with the effects of the depreciation on inflation, meant real wage growth was 2.6pp weaker. So, how does this nexus of data fit into my assessment of the economy? Let me start with demand, which is arguably the most straightforward to explain.

** To conclude, let me quote one of the Founding Fathers of the United States, Benjamin Franklin: “we must, indeed, all hang together or, most assuredly, we shall all hang separately.” Hanging together is exactly what we should aim for within Europe – to build a more integrated Union – and outside Europe – to work on a renewed multilateralism. 1 Cf. Speech at the Paris School of Economics, 24 September 2019. 3/3  BIS central bankers' speeches
The present Committee contains only one member (the present Governor) who has been there from the outset, and some of the early members served short terms. Might the latter day tendency towards changing rates only after a forecast reflect a generally less activist approach to setting rates? Table 1 provides an unscientific guide to Committee members’ degree of activism: it is arranged with the most ‘activist members’ (identified as those voting proportionately most frequently for a rate change) at the top.9 If personal preferences played no role, we might expect to see a relationship between activism and ‘MPC vintage’ – if MPC members responded to the same shocks, or their behaviour was affected by some other common factor, there would be clusters. Keen MPC watchers will no doubt find some support for the view that personality matters. But, in general, the members who voted for the most rate changes are associated with the earlier years of the Committee, consistent with the idea that the MPC may have needed to respond more frequently during that period.10  9  We have excluded the first 7 months of the MPC’s existence to allow for the possibility that the first rate changes were reflecting necessary adjustments to reach what the MPC thought was the right level of interest rates. 10  There are, of course, also other possible explanations, e.g.

François Villeroy de Galhau: Between "shadow" banking and an angelic vision of the market – towards a balanced development of non-bank finance Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the presentation of the 22nd Financial Stability Review, Paris, 25 April 2018. * * * Ladies and Gentlemen, I am very pleased to welcome you this morning to this presentation of the 2018 Financial Stability Review (RSF), dedicated to non-ban k finance. Intended as a forum for dialogue and exchange, the FSR offers leading personalities from diverse backgrounds the chanceto have an open debate. I am delighted to see many of this year’s contributors here among us this morning, and I would like to extend my warm thanks to all the speakers: Klaas Knot, President of the Dutch Central Bank; Philip Lane, Governor of the Central Bank of Ireland; Robert Ophèle, President of the Autorité des marches financiers; Paul Hamill, Global Headof FICC at Citadel Securities; Yves Perrier, CEO of Amundi; and Richard Portes, Professor of Economics at the London Business School. The topic we have chosen to address is far from anodyne: [slide 2] according to the Financial Stability Board (FSB), non-bank financing totalled USD 160 trillion in 2016 [Monitoring Universe of Non-Bank Financial Intermediation, MUNFI], up 50% relative to 2008 and accounting for close to half of all financial assets held by financial institutions worldwide, compared with 40% in 2008.