samchain/econo-pairs-v1 huggingface dataset:
And the sheer scale of the balance sheet interventions necessary in recent months pose important longer term questions. About the extent to which the non-bank financial system may still be capable of amplifying instability – for example through sudden non-bank deleveraging, runs on money market funds, or rigidities in dealer intermediation. And about the appropriate balance of responsibilities between the public and private sector for dealing with such vulnerabilities. 2  All speeches are available online at www.bankofengland.co.uk/news/speeches  2  I cannot give comprehensive answers to these questions today. But, in what follows, I have tried to provide some raw material for that exercise, illustrated using seven of the most vivid ‘moments’ from my own experience of the past few weeks. Moment 1: the first rumbles of thunder In the first week of March – the week before that fateful Friday 13th – we at the Bank had decided to move all of our market operations to full split site working, to reduce the risk of Covid-19 transmission. On Friday 6 March, as I was walking across the trading floor saying goodbye, my attention was drawn to a group of our foreign exchange reserves managers staring intently at their screens and talking animatedly. A big adjustment in financial markets had already been underway for some time, as expectations of slower demand caused by the global spread of the virus pulled down on equity and oil prices, and investors moved into safer assets, reducing yields (Chart 1). Market functioning had however mostly held up well.

Seven Moments in Spring: Covid-19, financial markets and the Bank of England’s balance sheet operations Speech given by Andrew Hauser, Executive Director, Markets  Bloomberg, London 4 June 2020  I am grateful to Gregory Kidd for his help in writing this speech, and to Andrew Bailey, James Benford, Christine Boykiw, Ben Broadbent, Nicholas Butt, Rohan Churm, Victoria Cleland, Amber Evans, Michael Foster, Richard Gordon, Sarah Hall, Andrew Harley, Ronan Hodge, Al Hughes, Lance Jones, Adam Newell, Will Parry, Rhys Phillips, Jo Place, Eugenia Planas, Dave Ramsden and Tim Taylor for their advice, comments and guidance. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches  Introduction  I have always had a funny feeling about Friday the 13th – and 13 March 2020, Mark Carney’s last day in the office as Governor of the Bank of England, was no exception. Two days earlier, on Wednesday 11 March, the Bank and HM Treasury had launched an unprecedentedly comprehensive package of measures to respond to the rapidly growing economic consequences of the spread of Covid-19. Hailed globally as a shining example of how monetary, fiscal and regulatory policies could work together to reinforce one another, the combination of interest rate cuts, government spending, cheap funding and capital easing measures seemed sure to stabilise markets and restore some muchneeded confidence to households and businesses. So it cannot have been hugely welcome when, on Friday morning, with the removal vans waiting outside, I suggested the Bank’s Governors needed to meet again before the weekend.
The measures implemented by central banks and governments have had a stabilising effect on financial markets. Credit and money market premiums have decreased and activity has picked up. Daily fluctuations have become less pronounced. With the improvement in financial markets over the past six months and the increase in the credit supply, global trade is now picking up slightly, albeit only gradually and from a low level. Manufacturing output has recently risen in the US, Japan and many emerging economies, while it continues to fall – albeit at a slower pace – in many euro area countries. Manufacturing output in Japan and the US is still at a very low level. Despite the pickup in growth, capacity utilisation in advanced economies will remain very low for the next two-three years. 2  BIS Review 139/2009  Uncertainty in equity markets has eased and risk premiums are lower, reflected in a rise in leading US stock indices of more than 50 per cent since equity markets bottomed out at the beginning of March 2009. Oslo Børs has risen by about 70 per cent since the beginning of March. The price of oil has risen somewhat since the June Report, and has doubled since the trough in December 2008. Metals prices have also risen. The increase in oil prices reflects low growth in oil production, more positive expectations as to the world economy and a weaker US dollar.

Machinery and equipment posted negative y-o-y growth in the third and fourth quarters of 2013, while construction and other works decelerated significantly during the same period (figure 6). BIS central bankers’ speeches  3  This correction to investment growth owes to various factors. For one, there is the aforementioned investment cycle of mining and related sectors, plus the postponement of some investment plans. Although this was an expected development, its magnitude was unclear. Another factor is the low basis for comparison of the same months of 2012, which were swollen by unusual imports of transportation material, which affects the y-o-y variation of capital goods imports. There is also the downturn of expectations reflected in business confidence surveys and our business perception report Informe de Percepciones de Negocios. Lastly, there is the drop of public investment in real terms during the last quarter of the year, and the depreciation of the real exchange rate, which raises the costs of foreign capital goods. Accordingly, private growth forecasts for this year have been revised downward. Our March Economic Expectations Survey lowered GDP growth in 2014 from 4.1 percent in November to 3.7 percent in March. Thus, the baseline scenario of this Report has lowered the GDP growth estimate for 2014. The Board estimates that this year our economy will grow between 3 and 4 percent (3.75 to 4.75 percent in December), that is, less than last year and below trend.
Attempting to achieve this is important to ensure the inflation target continues to function as a benchmark for expectations in the economy, as it has done for twenty years now. However, this does not mean that the inflation targeting framework will be exactly the same as it is today forever. We are learning from previous experiences, and the global economy is constantly changing. We therefore welcome a discussion of ideas about the content and direction of the monetary policy. Naturally, we at the Riksbank listen to the arguments and analyses presented to us, and we try to contribute to this discussion with our own analysis. 16 I hope that my speech today has conveyed that I am not convinced by the arguments recently put forward which say that the Riksbank should abandon or lower the inflation target, or show even greater patience with low inflation. 16  10  The Riksdag is also contributing to this process by carrying out both its own and external assessments of the monetary policy. An external assessment is currently being conducted under the management of Marvin Goodfriend and Mervyn King (The Riksdag, 2014). Their conclusions will be presented at the beginning of next year. BIS central bankers’ speeches  References Andersson, Rune (2015), Det är därför minusräntan är så farligt. [Why the negative rate is so dangerous.] (In Swedish), Debate article, Dagens Industri, 12 August. Armelius, Hanna, Paolo Bonomolo, Magnus Lindskog, Julia Rådahl, Ingvar Strid and Karl Walentin, (2014), “Lower neutral interest in Sweden”, Economic Commentaries, no.

Jean-Pierre Roth: Monetary policy and credit markets Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the University of St Gallen, St Gallen, 22 January 2004. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The economic slump of the past two years has affected the credit markets. Corporate loans declined, and on the capital market redemptions of shares and bonds of private borrowers exceeded new issues. In this speech, a few general points concerning credit financing and monetary policy will be discussed. The financing opportunities and, concomitantly, a borrower’s expenditure behaviour depend on the value of capital assets eligible as collateral or, more generally, on the borrower’s balance sheet structure. Due to the major significance of real estate as security, the situation on the real estate market in turn has a considerable bearing on credit conditions. The Swiss National Bank thus keeps a careful eye on price development in the real estate market. Monetary policy influences the prices of investments and thus impacts on the economy via the borrowers’ balance sheets. This is not the only channel - and certainly not the most important one through which monetary policy exerts an influence; it may, however, be relevant under certain circumstances. Since corporate balance sheets differ considerably from one enterprise to another, monetary policy has distributive effects.
Øystein Olsen: Macroprudential regulation and monetary policy Speech by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), at the Centre for Monetary Economics (CME)/BI Norwegian Business School, Oslo, 7 October 2013. Please note that the text below may differ slightly from the actual presentation. *  *  *  Accompanying charts can be found at the end of the speech. Original presentation is on Norges Bank (Central Bank of Norway) website. Charts in pdf  International economic developments in recent years have presented a challenge to the economic policy framework. An important lesson from the financial crisis is that regulation of the financial system must be improved and that the macroprudential perspective in particular needs to be strengthened. Development of macroprudential regulatory frameworks is therefore underway in a number of countries, including Norway. Experience shows, however, that financial crises are very difficult to predict and prevent. The aim of macroprudential regulation is to reduce the probability of a crisis and counteract harmful effects in the financial system when a crisis occurs. A related issue is how monetary policy should respond to financial imbalances, and more specifically, what the implications of the new macroprudential policy tools will be for monetary policy. How monetary policy is conducted and communicated is also evolving, both abroad and in Norway. Norges Bank has decided to launch a major research project with a view to further developing the framework for flexible inflation targeting. I will return to this topic towards the end of this address.

Regionally, the establishment of the Chiang Mai Initiative Multilateralisation (CMIM) further enhances the regional capacity to cope with capital flows and safeguard financial stability of the region. The HKMA fully supports this important regional initiative, and indeed we have played an active role in its development and participated directly in the arrangement. 10. The third area is enhancing the capacity of regional capital markets to absorb capital inflows and channel them to productive uses. In this regard, the HKMA took the lead in developing the Asian Bond Funds (ABF) under the aegis of the Executives’ Meeting of East Asia Pacific Central Banks (EMEAP). The ABF, as a pioneer product, aimed to provide a convenient low-cost local-currency instrument for investment, and at the same time help identify and remove the impediments to bond market development. In parallel, with the strong support from the ADB, ASEAN+3 members have undertaken a range of projects under the Asian Bond Markets Initiative to promote the development of the local currency bond markets. Notwithstanding these regional efforts, we still have a long way to go in developing a regional bond market that is broad and deep enough to channel the region’s abundant savings to meet its huge investment needs. Continued national and regional efforts in this regard are much needed. 1  Emerging Asia includes China, Hong Kong, India, Indonesia, Korea, Malaysia, the Philippines, Singapore and Thailand. 2  BIS central bankers’ speeches  11.
100, pp. 1169-1189. Rotemberg, J (1982), ‘Sticky Prices in the United States’, Journal of Political Economy, Vol. 90, No. 6, pp. 1187-1211. Schnabel, C (2013), ‘Union membership and density: Some (not so) stylized facts and challenges’, European Journal of Industrial Relations, Vol. 19, pp. 255-272. Smets, F and Wouters, R (2007), ‘Shocks and Frictions in US Business Cycles: A Bayesian DSGE Approach’, American Economic Review, Vol. 97, No. 3, pp. 586-606. Svensson, L (1997), ‘Inflation Forecast Targeting: Implementing and monitoring inflation targets’, European Economic Review, Vol. 41, No. 6, pp. 1111-1146. Taylor, J (1979), ‘Estimation and Control of a Macroeconomic Model with Rational Expectations’, Econometrica, Vol. 49, No. 5, pp. 1267-1286. Taylor, J (1993), ‘Discretion versus policy rules in practice’, Carnegie-Rochester Conference Series on Public Policy, Vol. 39, pp. 195-214. Taylor, M (2017), ‘Good work: the Taylor review of modern working practices’, Department for Business, Energy & Industrial Strategy. Tirole, J (1988), The Theory of Industrial Organization, MIT Press. Traina, J (2018), ‘Is Aggregate Market Power Increasing? Production Trends Using Financial Statements’, Stigler Centre New Working Paper Series, No. 17. Van Reenen, J (2018), ‘Increasing Differences between Firms: Market Power and the Macro-Economy’, Federal Reserve Bank of Kansas City Economic Policy Symposium, Jackson Hole. Woodford, M (2003), Interest and Prices: Foundations of a Theory of Monetary Policy, Princeton University Press. Yellen, J (2014), ‘Labor Market Dynamics and Monetary Policy’, speech at the Federal Reserve Bank of Kansas City Economic Symposium, Jackson Hole, Wyoming.

So we would not expect the relationships embedded in those models necessarily to be invariant to a rise in market power and mark-ups. Nor do these models typically take into account any of the potentially macro-economic side-effects of a shift in market power – for example, on productivity. Market Power and the Macro-Economy – A Theoretical Approach  To explore those questions, we draw on the textbook New Keynesian model of the macro-economy, the type of which is often used to justify and assess the effects of flexible inflation targeting (Clarida et al (1999), Woodford (2003)). Specifically, we use the well-known textbook New Keynesian model in Galí (2008) to consider how changes in market power might affect the setting of monetary policy. We analyse the case where higher mark-ups are effectively the result of reduced competitive pressures, rather than the rise of highly productive ‘superstar’ firms. The model takes the following generic form: 𝜋𝑡 = 𝛽𝐸𝑡 𝜋𝑡+1 + 𝜅𝑥𝑡 + 𝑢𝑡  (1)  𝑥𝑡 = 𝐸𝑡 𝑥𝑡+1 − 𝜎(𝑖𝑡 − 𝐸𝑡 𝜋𝑡+1 − 𝑟𝑡∗ )  (2)  where 𝜋 is inflation, 𝑥 is the output gap, 𝑖 is the policy rate, while 𝑢 is a cost-push shock. The first equation is a New Keynesian Phillips curve, the second a forward-looking IS curve. This twoequation system contains three key structural parameters: the slope of the Phillips curve, 𝜅; the interest elasticity of demand, 𝜎; and the long-run neutral rate of interest, 𝑟 ∗ .
The efficient-market hypothesis presupposes that investors are rational and base share valuations on fundamental factors. If their market behaviour is not rational, it is assumed to be random, which means that individual actions have no impact on financial prices. If irrational players nevertheless act in a similar way, any influence on financial prices is eliminated by other, more professional agents via 3 arbitrage, which is assumed to be quick and effective. The irrational players accordingly suffer losses and therefore ultimately leave the market. In this way, the competition between rational and irrational investors, together with the existence of arbitrage, results in financial markets remaining efficient. 4  In the past two decades, however, the notion of financial market efficiency has been challenged, which will hardly surprise those with practical experience. This is mainly because the possibility of arbitrage has proved to be much more limited than assumed earlier. Studies in recent years have demonstrated the occurrence of periods when prices deviate appreciably from more fundamental levels. A new line in financial science, Behavioural Finance, has emerged, aimed at explaining why price deviations occur and developing tools for predicting them. Academics in this field have turned to 5 experimental psychology and other disciplines to explain the mind-set of financial market players. In a notable paper by a Princeton professor, Robert Shiller, it had already been shown in the early 1980s that share prices are considerably more volatile than would be expected if they were 6 determined by the current value of expected future dividends.

This is the fourth edition of this Conference organised by the European Institute of the Mediterranean, with the support of the Banco de España, to discuss economic and financial matters in the Mediterranean region. The three previous editions were in Barcelona, in 2014 and 2017, and in Rabat in 2015, on that occasion with the support and hospitality of Bank Al-Maghrib. This conference is therefore beginning to take root as a successful meeting point between different actors with interests in the economic and financial developments in these countries. The exchange of ideas among a wide and diverse range of participants – including central bankers, public officials, academics, and representatives from the private sector and international organisations– in a friendly environment proved enormously fruitful in previous editions, as, I am sure, will be also the case this time. Let me also add that forums like this are particularly relevant for central banks, which in recent years have had to face deep-seated transformations in economic and financial relations globally. This new environment forces us to re-think the design and implementation of economic policies in order to better contribute to the progress of our society. I would also like to inform you that the Banco de España is preparing a seminar on central bank communication, the first of which is aimed at Mediterranean and Latin American countries, to be held in the spring of 2019.
Nevertheless, the strong demand in the ecosystem to provide innovative solutions convinced us of the interest of an experimental approach in this field. The way we experiment with CBDCs for wholesale transactions perfectly illustrates our choice to move from conceptual and academic considerations, to experiments in the field, hand in hand with market players, using a pragmatic, trial and error way of working. The goal is to determine i) how digital central bank money may improve the efficiency and fluidity of payment and settlement systems, ii) what are the most promising technologies and iii) whether it makes sense to make central bank money available to beneficiaries that do not have access to it yet. In May this year, we conducted a first successful and very promising experiment with Société Générale Forge, that enabled us to test the three steps of a digital transaction: the tokenisation of a security, the digital representation of central bank money on a private blockchain, and the settlement of a transaction on the security on the private blockchain. This led us to interface successfully a public with a private blockchain. Upcoming CBDC experiments – there will be eight of them – will help us to investigate not only the potential of technology but also to question the players in the ecosystem on what tomorrow’s landscape could look like, on subjects as fundamental as the methods of exchanging financial instruments for CBDCs, the improvement of the conditions for executing cross-border payments or new ways of making CBDCs available to financial sector players.

In turn, these experiments will lead us to assess whether the regulatory framework currently in force needs to be adapted since we are carrying out these experiments within the current legal framework. Besides, this autumn, the Eurosystem has adopted a similar hands-on approach for its experiments on a digital euro for the general public, in which we are participating, alongside with the ECB and other Eurosystem central banks. The experiments underway directly relate to the need for the Eurosystem, should circumstances so require, to be ready to issue a CBDC in order to ensure that central bank money is accessible to the general public and to preserve their freedom of choice of means of payment and their confidence in our currency. 4/5  BIS central bankers' speeches  *** To conclude, let me say that a thriving, creative and efficient innovation ecosystem is a key element in the transformation of the financial system towards greater efficiency and stability. This is why at the Banque de France and the ACPR, we feel it is important to support it and contribute to it. 5/5  BIS central bankers' speeches
Muhammad bin Ibrahim: Role of the Islamic financial system in supporting green technology Keynote address by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia, at The Green Financing: Discover Green Technology Industry in Malaysia “Role of the Islamic financial system in supporting green technology”, Kuala Lumpur, 8 October 2013. *  *  *  The recent haze that caused unhealthy air quality is the direct result of acute deforestation and irresponsible practices, a grim reminder of the unfolding environmental catastrophes confronting us and our future generation. Globally, extreme climate change, resource depletion and environment degradation have increasingly become looming threats to livelihoods. Greenhouse gas emissions are on the rise and atmospheric carbon dioxide concentrations are at its highest in three million years. It is reported that the global average temperature has risen by 0.74oC over the past century and is forecasted to rise by 1.8oC to 4oC by year 2100. Severe deforestation issues across the continents and over dependence on non-renewable energy resources pose further challenges to the finite carrying capacity of the earth. Sustainable development has become an imperative. It is a global imperative given the interconnected world we live in. It affects everyone. No one is isolated. A united action is therefore required to solve these major ecological problems before solutions become impossible. I am pleased to be here today to speak at The Green Financing: Discover Green Technology Industry in Malaysia (GF 2013).

It is important that these matters are discussed, particularly as one cannot expect the economy to transform itself automatically. We have made good progress in recent years by establishing macroeconomic stability, with sound government finances and stable prices. Efficient wage formation and a financial system that functions properly are other important pieces. The fact that I have concentrated on these two factors this evening should obviously not be taken to imply that they are all that is needed to complete the puzzle. BIS Review 129/1999  4