samchain/econo-pairs-v1 huggingface dataset:
The point is that paths derived from different interest rate assumptions make it possible to some degree to quantify and weigh up various monetary policy options against each other. So, to sum up it is easy to see that the monetary policy communication can be made easier in various ways if the forecast horizon is extended. The new methods that have been developed can also facilitate the creation of alternative scenarios to more clearly understand and communicate the considerations facing the Bank. Conducting monetary policy I should like to conclude by mentioning a third perspective. This does not concern methodology for forecasting, or how monetary policy is communicated, but how policy is actually conducted. From time to time the view is expressed in the general debate that monetary policy should be conducted in a more “pragmatic” manner, more like the Federal Reserve in the United States. It is not always easy to understand exactly what this entails, but one thought appears to be that the Riksbank has in some way bound itself too tightly to the framework that we and many other inflation-targeting countries abide by. Even though, when looking back over the past ten years of monetary policy, I cannot see any situation where we have been curbed by our analytical framework and thereby made some tangible error in our policy, I believe this issue is worth discussing.

The other point has to do with the fact that it becomes easier to produce consistent forecasts and scenarios. This is particularly important when preparing estimates and developing scenarios in a somewhat longer-term perspective than the usual two years, which can sometimes be valuable in order, for example, to show the effect on inflation of shocks that are judged to be temporary. The assumption of a constant repo rate becomes generally more unrealistic the longer the forecast horizon is extended. When the difference between the market’s view of the future repo rate and the assumption of an unchanged repo rate has been large, it has also been complicated to link assumptions about short-term interest rates to a reasonable picture of, for instance, future long-term rates, since long-term rates depend on expectations of how short-term rates will evolve. Up to now the Riksbank has chosen to highlight forecasts based on an unchanged repo rate; this has basically worked well, not least in terms of communication. Little by little, however, the Bank's monetary policy work has evolved to the extent that there are now sufficient analytical resources with which to deepen the discussion in this area. The approach used so far has also, as the Bank’s analysis has developed, felt like a bigger restriction in the internal work than before. The perceptions of how the Riksbank acts seem also to have become so well established that the communication risks of presenting forecasts with different interest rate scenarios appear smaller today than before.
They are now just about as low as in any major industrial country with the exception of Japan. At the same time our economy has now grown continuously quarter by quarter for over 8½ years at an average annual rate of 3%, which is well above most estimates – at least until recently – of a longer term trend rate of 2¼-2½%. And the number of people in work has recently been at an all-time high in the UK as a whole, and close to its high point in your own region; while the rate of unemployment, on a claimant count basis, is at a 25 year low in the UK as a whole and at its lowest for 20 years in Yorkshire and Humberside. The question now of course is – can we keep it up? The answer to that question depends on developments both at home and abroad, but let me comment first on the international situation which is currently the focus of a great deal of attention. As I explained in a speech last night in Edinburgh, the bounce back from the world economic slowdown in 1998/1999 was such that in the year just ended world economic activity grew at a rate of some 4½% which equals the fastest rate for 16 years – and compares with an average rate of some 3¼% over the last 10 or 20 years.

There is not a great deal that we can do – through monetary policy – directly to affect the supply-side of the economy, the underlying rate of growth that we can hope to sustain. Maintaining a stable monetary environment can certainly help, but that is essentially determined by the ingenuity and skills of our business managers and our workforce, by the whole range of Government policies and importantly too, Mr Chairman, by the imagination, energy and enthusiasm of organisations like your own Yorkshire Forward in developing and putting into effect your Regional Economic Strategy. Our job – as I say – is to keep overall demand in the economy growing broadly in line with supply-side capacity. BIS Review 2/2001  1  So how then are we doing? First on inflation. Since we came out of the last recession, in 1992, retail price inflation (on the Government’s target measure) has averaged 2.7%; it has in fact been marginally below the 2½% target for much of the past two years and was 2.0% in the latest 12 months to December. Short-term interest rates - which went up to 12% (and tentatively even to 15%) before we left the ERM in 1992 have been stable at 6% for the best part of a year. Helped by a decline in inflationary expectations, UK 10 year Government bond yields have fallen to around 4¾% which, apart from a brief period at the beginning of 1999, is the lowest they’ve been for nearly 40 years.
Jarle Bergo: Monetary policy and the cyclical situation Speech by Mr Jarle Bergo, Deputy Governor of Norges Bank (Central Bank of Norway), at a meeting with local authorities and the business community, Kapp, 23 November 2005. Please note that the text below may differ slightly from the actual presentation. The address is based on the assessments presented at Norges Bank’s press conference following the Executive Board’s monetary policy meeting on 2 November, Inflation Report 3/05 and on previous speeches. Charts in pdf-format can be found on the website of the Norges Bank. *  *  *  The economic situation The cyclical upturn in the Norwegian economy continues. Overall capacity utilisation in the economy has increased. After a period of very low consumer price inflation, there are prospects that inflation will again rise at a faster pace. Interest-rate setting since this spring has been oriented towards a gradual increase in the interest rate – in small, not too frequent steps – towards a more normal level. On the basis of the analysis in Inflation Report 3/05, this strategy still appears to provide a reasonable balance between the objectives of monetary policy. The reduction in Norges Bank’s key rate through 2003 and into 2004 resulted in low interest rates. At the beginning of the recovery, falling interest rates and expectations of low real interest rates ahead fuelled private consumption. A weaker krone exchange rate and the international recovery stimulated traditional merchandise exports.

On the other hand, raising the interest rate more rapidly would increase the risk of a stronger krone, which could prevent inflation from reaching the target of 2.5 per cent. The projections indicate that the interest rate will rise by about 1 percentage point in the course of the next year. This is consistent with expectations in the money and foreign exchange market. At the 2-3 year horizon, we expect a further, gradual rise in the interest rate. Norges Bank’s projected interest rate slightly further ahead is somewhat higher than forward rates in the financial market, but market rates in Norway and other countries may have been pushed down by extraordinary factors in the world economy. Norges Bank has assumed that money market rates among our trading partners will also increase gradually over the next three years. The interest rate path in Norway and abroad may be consistent with an approximately unchanged krone exchange rate. With interest rate developments as outlined above, CPI-ATE inflation is projected to increase gradually from about 1½ per cent today to close to 2 per cent at the beginning of 2007. There are prospects that inflation will increase further and reach the target of 2.5 per cent in the second half of 2008. With a gradual reduction in unemployment, Norges Bank expects wage growth to pick up after a period. At the same time, profit margins are expected to edge up in pace with rising demand and capacity utilisation.
As regards price developments, annual HICP inflation averaged 3.3% in 2008, which is much higher than in the previous two years and significantly above the ECB’s definition of price stability. However, headline inflation rates fluctuated sharply in the course of the year, peaking at 4.0% in June and July, mainly as a result of developments in international commodity prices. During the second half of 2008, annual inflation declined steadily and rapidly. In March 2009, it stood at 0.6%. By contrast, HICP inflation excluding energy and food posted a much smaller decline in 2008 and early 2009. Looking ahead, HICP inflation is likely to remain well below 2% in 2009 and may reach negative levels around mid-year. Such a phenomenon is expected to be temporary, driven mainly by base effects from past energy price developments, and would not constitute an episode of deflation, that is, a protracted  BIS Review 49/2009  1  period of decline in the price level that can adversely affect inflation expectations and aggregate demand. Looking at the policy-relevant medium-term horizon, HICP inflation is in 2010 expected to rise again but remain below 2%, reflecting mainly ongoing sluggish economic activity in the euro area and beyond. Monetary policy has been conducted in an extraordinary and rapidly changing economic and financial environment over the past year.

These include improvements in service delivery by the public sector, having a stable and sustainable tax system, maintaining stability in the exchange rate, preserving political stability, consistency in government policy, and continued investment in infrastructure development. Other areas highlighted include addressing high lending rates, increased efforts in the fight against corruption and reducing bureaucratic processes. Further, respondents were of the view that government needs to take appropriate measures to enhance private sector involvement in decision-making and streamlining licensing requirements. In closing, I wish to thank you all for attending this virtual meeting and hope that you will use the occasion to explore the survey findings and recommend appropriate measures to contribute to the enhancement of the business environment. It is now my singular honour and privilege to officially open the workshop and wish you all fruitful deliberations. I thank you for your kind attention. God bless you. 2/3  BIS central bankers' speeches  3/3  BIS central bankers' speeches
Attracting, retaining and nurturing talent of our brightest mind would form the basis for our country’s transition to being a high income growth economy. It is also the groundwork that we need to built and strengthen so that our financial services remain competitive and innovative. With the support from the industry players, FSTEP can serve as a bridge that connects the needs of the financial services industry with the talents produced by institutions of higher learning. But the industry must be forward looking in its approach. FSTEPS was designed and intended to develop the best graduates that we can recruit. Properly trained and exposed, they could form the pool of future leaders and senior management for the financial services industry. FSTEP was not envisaged to produce technicians and mechanics. Neither was FSTEP created to duplicate the training programs of financial institution. FSTEPS comprehensive one-year programme while emphasizing the important facets of technical knowledge also exposed trainees to personal development and on the job internship. FSTEP was intended to produce graduates that can be entrusted with positions of responsibility in the industry over the long term. This was the idea behind the formation of FSTEP and we need to bear this in mind when devising the syllabus and enhancement in the future. The Quality Assurance Committee was created based on the thinking that a dynamic and relevant programmes requires continuous and timely revision. The QAC that had developed the new syllabus incorporated valuable inputs from the industry.

Philipp Hildebrand: Financial stability Summary of a speech by Mr Philipp Hildebrand, Vice-Chairman of the Governing Board of the Swiss National Bank, at the Institut des Hautes Etudes Commerciales de Lausanne, Lausanne, 16 September 2008. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  During the period of financial market turbulence, central banks have gone far with their interventions to stabilize the financial system, taking into account the high costs that can be imposed by a banking crisis onto the real economy. Central banks by themselves, however, cannot guarantee financial stability in the long term. In particular, we cannot exclude that their interventions create incentives for banks to be less cautious in the future. The first line of defence therefore consists of banks having sound risk management practices and holding appropriate levels of capital and liquidity. The Financial Stability Forum has made a series of recommendations in this respect. Given the size of the big Swiss banks in relation to our national economy, we should be especially prudent. For this reason, the Swiss National Bank supports the project undertaken by the Swiss Federal Banking Commission (SFBC) to strengthen capital adequacy requirements and to revise the liquidity requirements for the big banks. As the SFBC has pointed out on several occasions, these measures have to be implemented gradually – to ensure that banks have sufficient time to adapt. These measures will contribute to the solidity and credibility of the Swiss financial centre.
The FOMC has carefully laid out a clear and transparent normalization strategy and is implementing that strategy, and I believe that the confidence engendered by this clarity and transparency has been of great importance in maintaining market stability, both in the United States and globally. Experience so far has shown that the Federal Reserve’s monetary policy implementation framework has continued to provide appropriate control over the federal funds rate, even as the FOMC has moved to reduce the size of the balance sheet gradually and predictably. This stability has supported the orderly functioning of the broader set of dollar money market rates that are important to financial conditions in the United States and around the world. Then, I will discuss the recent technical adjustment to the rate of interest paid on reserves (IOR). The Federal Reserve made the adjustment to provide greater comfort that the effective federal funds rate would remain within the target range set by the FOMC. 3 I will discuss how this adjustment has had exactly the intended effect on money market conditions, and how it has reinforced my certainty that the Federal Reserve is well positioned to maintain the public’s high 1  I would like to thank James Egelhof, Jacqueline Yen and Samuel Zief for their assistance in the preparation of these remarks, Vivek Manjunath for his assistance with data, and colleagues in the Federal Reserve System for numerous insightful comments and suggestions. 2 See Powell, “Monetary Policy Influences on Global Financial Conditions and International Capital Flows,” May 8, 2018.

15  Additionally, some segments in the non-bank financial sector exhibit high levels of vulnerability, similar in fact to those witnessed before the crisis. The search for yield may have also fostered an increase in leverage among relatively risky firms. For example, in recent years there has been a dramatic increase at the global level in the volume of lowerrated investment-grade corporate bonds and in the issuance of leverage loans, many of which are distributed in the form of CLOs. Macroprudential policies are well-equipped to deal with some of these risks. Indeed, the evidence suggests that these policies have been effective in curving financial stability risks. However, most of the existing tools in this area apply only to banks. In a world in which the share of non-banks is increasing, we need to develop new macroprudential tools that can be used to prevent the build-up of systemic risks outside the perimeter of the banking sector. Conclusions  Let me conclude. We seem to be in a new economic context characterised by older and declining populations, radical technological innovations (but not necessarily much higher productivity growth), high debt and low interest rates. All this entails substantial challenges both for macroeconomic policies and for the financial sector. Central banks will need to redefine not only their strategy but also the toolbox to be used when the constraints on their interest rate policy become binding.
According to some estimates, in the past ten years European investment banks have lost 10 percentage points of their market share to US banks.iii This can be attributed to the difficulties European banks face in achieving the critical mass needed to operate in a global market. And Brexit will do  Page 3 of 5  little to change this trend if the European market remains fragmented. Conversely, US investment banks have the benefit of a huge domestic market where margins are higher. Their size gives them a decisive advantage when it comes to achieving economies of scale and competing for large-scale financing transactions. Faced with these structural challenges, French banks’ CIB divisions have already begun to refocus on more profitable activities and implement major cost-cutting plans. However, there is still a lot to be done, notably when it comes to industrialising processes and flows; digitalisation is also changing trading activities. 2.2  Banks and regulators therefore have three focuses for action  The main prerequisite for improving profitability is for banks to put in place individual restructuring strategies. There are a number of levers they can use for this: technological innovation, cost control or the diversification of revenue sources [slide 5]. On this latter issue, I would like to underline the resilience of the French “universal” or diversified banking model.

My conviction is that the world today is better managed than in the past and, in that sense, is safer. What has increased, however, is the magnitude of a potential crisis. This is what I refer to as uncertainty. The big challenge for international business of today is to learn to live with uncertainty. And in this domain we still have a way to go. Nowadays, our difficulties in dealing with uncertainty permeate all our discussions about the responsibilities of different private and government agents. I perceive an understandable – but in my opinion misconceived – nostalgia for a world that used to appear safer, thanks to regulation. We hear demands for the construction of barriers to protect ourselves from the menacing world outside – demands for more regulations to ensure that financial providers cannot go bust, cannot cheat, cannot make wrong decisions; more trade barriers to ensure the survival of domestic producers; more restrictions to the movement of persons to protect our workers… The problem with this dreamworld cocoon is that it has never worked and will not work. And what is even worse, if it did work, if it were possible to barricade ourselves against all possible menaces, we would still not be better off. Globalisation is a great opportunity and it can make us all richer and safer. But we have to learn to live with risk. In fact, the main danger I see today is that because we live in a more stable world, in a safer world, we may become complacent.
One question that has been raised in the debate is whether it is too late to cut the rate now, given the economic recovery. This is not the decisive issue for us. Our method of working means that we base our decisions on inflation forecasts. These show that there is scope to cut the rate. In the short term, inflation is expected to be much lower than 2 per cent and to cautiously approach the target level only 1-2 years from now. It would therefore appear that there is plenty of time for an upward adjustment of the interest rate in the future if our forecasts indicate this is necessary. The situation would be different if there was reason to expect a rapid economic upturn now, which could threaten fulfilment of the inflation target in the shorter term. A cut in the interest rate can perhaps also be regarded as an insurance against weaker growth in demand; although we have assumed a clear improvement in economic activity, this is not guaranteed. Finally, I should like to comment on an element in the present discussions on monetary policy. Many debators have shown a tendency to argue as though it were possible to conduct a perfect, fine-tuning policy. I believe it is almost impossible. I think that it is always possible to claim with hindsight that a little bit more or a little bit less could have been achieved either earlier or later.

I recall that some economists wanted to interpret the high level of unemployment following the crisis years as an indication that the changeover of monetary policy regime had raised the economy's equilibrium unemployment level and caused a permanent deterioration in employment. However, once the crisis had been overcome and the new policy was established, the labour market situation soon improved. Unemployment is currently around 4-5 per cent, which can be compared with figures of above 8 per cent in the mid-1990s. However, we still have some way to go to return to what was considered full employment prior to the crisis years 1991-93. 2  BIS Review 9/2004  2. GDP growth in Sweden 1970-2002 7  7 Annual growth Average 1970-1989 Average 1995-2001  6 5  6 5  4  4  3  3  2  2  1  1  0  0  -1  -1  -2  -2  -3  -3  1970  1975  1980  1985  1990  1995  2000  Sources: Statistics Sweden and the  All of this has been achieved parallel with a low inflation rate and during the period as a whole inflation has been in line with the Riksbank's target. From 1993 to the present day, the increase in CPI inflation has averaged 1.9 per cent, while the measure of underlying inflation on which we usually choose to base our monetary policy decisions - UND1X - has risen by an average of 2.1 per cent.