samchain/econo-pairs-v1 huggingface dataset:
Given that in the long run the nominal interest rate is the real equilibrium interest rate plus expected inflation, a fall in the latter implies lower average nominal rates, causing them to collide with their lower bound more often. This entails less headroom to provide stimulus in recessions with low inflation, further lowering inflation expectations, and so it continues. In this setting of historically low natural rates, a loss of interest rate policy scope and deanchoring risk for inflation expectations, the main central banks have deemed it necessary to rethink their monetary policy strategy, i.e. how they structure their monetary policy targets and how they pursue them with the tools available. To date, within their strategic frameworks most central banks have followed variants of what is known as inflation targeting, whereby they target inflation running close to a precise numerical value — e.g. 2% — over the medium term. 5  See, for example, Brunnermeier and Koby (2018) for a discussion of the effect of interest rates on bank profitability and their ability to lend. 6 Arce et al. (2018) estimate that these negative rates do not necessarily tighten the credit supply of European — or, in particular, Spanish — banks. 8  Yet alternative monetary policy strategies exist whereby a central bank attempts to make up for past deviations of inflation from its target. These are the so-called make-up strategies.7 One of them is known as price-level targeting. In this case, the central bank announces a target price-level growth rate, e.g. 2%.

The results of this work are included in a report that not only sets out our preliminary conclusions but also outlines a future roadmap. That is to say, the Eurosystem’s exercise is but the first of many steps and thought processes that lie ahead before we come to a firm decision in this connection. If I had to briefly summarise the main contribution of our report to the current debate, it would be this: we have striven to identify the scenarios which, should they materialise, might warrant the launch of the digital euro as one of the possible measures to be considered in response to the challenges these scenarios would pose. In other words, we have attempted to clarify when a digital euro might prove a good ally that would allow us to continue fulfilling the Eurosystem’s mandate and objectives. Allow me to illustrate this matter with a highly topical example. As I said earlier, the pandemic has prompted greater digitalisation and, as a result, the use of cash as a means of payment has changed notably. Indeed, on our figures, the volume of cash withdrawals from Spanish ATMs during the second quarter of this year has been 52% down on the figure recorded in the same period a year earlier.10 Were this one-off phenomenon to become a permanent change in society’s preferences, we could cease to count on the public alternative that cash offers to private means of payment.
Durmuş Yilmaz: Recent economic and financial developments in Turkey Opening speech by Mr Durmuş Yilmaz, Governor of the Central Bank of the Republic of Turkey, at the 79th Ordinary Meeting of the General Assembly, Ankara, 12 April 2011. *  *  *  Introduction 1. Esteemed Shareholders, Distinguished Guests and Members of the Press, Welcome to the 79th Ordinary Meeting of the General Assembly of the Central Bank of the Republic of Turkey. 2. I would like to start my speech with a brief evaluation of the international economic developments in the aftermath of the global economic crisis. Later on, I will summarize the key macroeconomic developments that took place in Turkey in 2010. Finally, I will share my evaluations pertaining to the recent monetary policy implementations of our Bank and their effects. Global economic developments Distinguished Guests, 3. In 2010, the growth discrepancy between advanced and emerging economies became more pronounced while the global economy continued to recover. In the post-crisis period, economic growth in emerging economies has been robust, and mainly driven by domestic demand. As a matter of fact, most of these economies have already surpassed their pre-crisis production levels. Amid the fast recovery, output gaps in these economies have tended to close, and employment conditions have significantly improved. 4. Meanwhile, advanced economies, the epicenter of the crisis, have continued to exhibit a slow and gradual recovery. Downside risks regarding the pace of recovery in these economies have yet to completely disappear, albeit having gradually waned.

Following the deepening of the global financial crisis, we focused on policies to contain the adverse effects of the crisis on economic activity and financial stability, while also overseeing price stability. Accordingly, our Bank slashed policy rates and kept them at low levels for quite some time in addition to deploying supportive liquidity measures. 38. In view of the normalization in money and credit markets amid waning effects of the global crisis on financial markets, we announced our exit strategy on April 14, 2010, which encompasses the withdrawal of crisis measures and the normalization process of the monetary policy. Unlike other emerging economies, Turkey entered the global crisis with a strong and well-regulated banking system as well as a flexible and efficient liquidity management tailored to previous crisis experience. Hence, our balance sheet deteriorated only slightly due to anti-crisis measures and we were not forced to adopt radical measures during the crisis. Thus, our exit strategy was simple compared to those of many other central banks. 39. As part of the exit strategy and also considering the favorable developments in credit markets and the recovery in economic activity, the CBRT started to withdraw the temporary liquidity measures introduced during the crisis. Hence, the excess liquidity provided to the market was gradually drained in tandem with the normalization process. Moreover, as the first step of the technical rate adjustment process, the 1-week repo rate was adopted as the key policy rate in May. 40.
Since the Federal Reserve leaders’ very first meeting in 1914, in addition to the weighty task of standing up from scratch a fully functioning central bank, they had to prepare for any eventuality concerning the impact of the Great War on the U.S. and the Federal Reserve’s responsibilities.3Against this backdrop, Fed leaders foresaw that it would be useful to establish close banking relationships with foreign central banks to facilitate transactions arising from wartime needs and conditions, including payments for warrelated U.S. exports, financing of wartime government debt, and gold transfers. It was left to Governor Benjamin Strong of the New York Fed to journey to Europe in the spring of 1916 to personally negotiate the early account agreements, allowing him to forge close personal 1/8  BIS central bankers' speeches  relationships with European central bankers, most famously with the Bank of England’s Montagu Norman, or as Strong would come to call him: “my dear Monty.” 4 While these initial discussions in 1916 did not lead immediately to agreements, partly owing to U.S. observance of neutrality, the groundwork had been laid such that by the time the U.S. entered the War in April 1917 the arrangement with the Bank of England could be executed rapidly. The historical records show that the establishment of this first account agreement with the Bank of England involved a minor diplomatic faux pas, known as the British Treasury bills episode.

Euroclear Bank, with over 300,000 securities in 2011 and holds clients’ assets valued at EUR 10.8 trillion, provides a huge reservoir to support cross-border cross-currency collateralised lending. Its large investor base will also provide a powerful platform for global investors to access the markets in Hong Kong and Malaysia. I would like to take this opportunity to thank Bank Negara Malaysia and Euroclear for sharing our vision and working with us to bring it to fruition. The platform will offer a wide range of services to global and domestic investors. These services include a global securities database containing information of international and domestic securities, provision of a single point of entry to allow investors to buy and hold international and domestic bonds through their accounts of the local system, cross-border issuance and settlement of bonds in foreign currencies on a delivery-versus-payment basis, provision of an effective and efficient channel for cross-border cross-currency collateralised lending and borrowing between financial institutions, and automation and standardisation of the corporate action processing such as interest payments and redemption, distribution of corporate action notices, and exercise of custody instructions. My colleague Esmond will explain these arrangements in greater details shortly. Finally, I would like to stress that the Pilot Platform to be launched is meant to be inclusive, not exclusive, and we welcome the participation of more parties. The benefits in promoting bond market development and financial stability can only increase with more bond investment and settlement systems in the region joining as partners.
Does it have a sustainable business? Are the people running it competent, open and honest? With that in mind, the types of activity undertaken by supervisors became well-established, particularly as supervisory approaches evolved, and indeed began to conform, in the latter half of the twentieth century. This evolution has laid the groundwork for the supervision that we undertake at the PRA today, with some obvious exceptions such as cyber risk which calls for innovation in our approach. It would be hubristic to condemn and discard all the regimes of the past, or to insist that our approach is, for the first time in supervisory history, perfect. But I am confident that we have distilled the best (often basic) elements of supervisory practice from our mixed heritage – forward-looking, judgment-based, focused on the key risks – and combined these with a healthy dose of common sense to deliver the PRA’s approach. So what conclusions should we draw from the evolution of supervision over the past 100 years? Will a supervisor in 2117 look back and say the PRA had the best way of doing things? I doubt it – supervisors of the future will surely identify ways to improve on various elements of our current supervisory model. Our approach here at the PRA is a good one but we would be wise to have some humility about it.

The collapse of Banco Ambrosiano in 1982 and the difficulties at Johnson Matthey Bankers in 1984 brought the risks inherent in the system into sharp relief once more, and there was a renewed push to establish consolidated supervision across 26  borders . Through its participation in international fora, the Bank sought “to promote close supervisory co-operation, to influence supervisory developments and to enhance the effectiveness of its own supervisory effort through obtaining clearer pictures of the nature of the business operations engaged in by the institutions it supervises 27  and of the methods and operations of its international counterparts” . The idea of a level playing field began to emerge in the international setting as well as the importance of supervisory convergence in an increasingly globalised sector; this, alongside crises, motivated the evolution of regulation and supervision to a large extent during the latter decades of the twentieth century. In addition, the increasing size (including in the present day) of the financial sector and its contribution to UK GDP underscored the importance of maintaining stability in the financial system, and a more active type of supervision began to emerge.
This sector, which directly contributes to a significant 5.3% of gross value added and provides for the livelihood of over 11,600 employees, is in good health. This is attested by the positive assessments from major rating agencies and the IMF as recently as last year. These conclusions are also corroborated by the results of the CBM’s stress tests which regularly feature in our publications. So let us all rise to the occasion, and work towards preserving the sustainability and reputation of our sector. *** Inequalities are of two broad types: legacy inequalities and inequalities that are consequences of present social and economic developments. Gender inequalities have roots deep in the past. Today’s faster economic growth, however, does bring with its own risk of social shocks. The risk of higher inequality is a case in point. As already announced in my previous IFS address, the Bank has begun to develop a social research capability that focuses on studying inequalities of both types. This is a new experience for the Central Bank of Malta and we are striving, within the limits of available resources, to produce high quality empirically based results by the first quarter of next year. We are, however, striving to go beyond producing knowledge. In our efforts to promote inclusiveness and diversity in the Bank itself, we have made modest but significant steps forward.

Favourable labour market conditions, as reflected in a further decrease in unemployment since late 2018, and a dynamic, albeit gradually normalising housing market, should continue to support household income and private consumption. Moreover, growth in government consumption will remain elevated, as Government is expected to use some of its fiscal space, while investment is expected to maintain a high share in GDP, reflecting the substantial upgrade to Malta’s infrastructure. Nevertheless, growth is set to moderate compared with 2018, reflecting two main factors. Firstly, given the less favourable external environment, we foresee lower contributions from exports. Secondly, it is to be expected that an economy that has been growing very fast to gradually return to rates that are more in line with its long-term growth. The balance of risks is tilted to the downside. This mainly reflects the risk that economic conditions abroad deteriorate further, in which case the recent slowdown in some of our closest trading partners could develop into a more severe downturn, limiting the expansion in our exports. These risks are seen as more elevated than the upside risks associated with domestic factors. For example, the labour market’s resilience and strong liquidity position of households could be reflected in higher than expected private consumption. Government expenditure could also surprise on the upside. Indeed, Malta is one of few countries in the euro area which has the fiscal space necessary to mitigate the effects of weaker foreign demand. Ideally Government should utilise this space to enhance the economy’s capital stock and potential growth.
José De Gregorio: The Great Moderation and the risk of inflation – a view from developing countries Keynote speech by Mr José De Gregorio, Governor of the Central Bank of Chile, at the 10th Geneva Conference on the World Economy “Low inflation? Testing times for Central Banks", organized by the ICMB (International Center for Monetary and Banking Studies), Geneva, 6 May 2008. I am very grateful to Christopher Neilson and Andrea Tokman for their great contributions and suggestions. *  *  *  It is an honor to be a keynote speaker at this important gathering. Personally, this is a special meeting as I contributed, together with Barry Eichengreen, Takatoshi Ito, and Charles Wyplosz, to the writing of the first report for this series of conferences back in 1999. It was lots of fun and an intellectual pleasure to work with such a great team of colleagues, and in such an important issue. In that first Geneva Report we wrote about the need to reform the IMF giving it independence, such as what we praise for central banks, and accountability, an essential element to make independence effective. In the future I would like to develop further on those issues; however, today I will focus on an even more pressing debate in the recent macro juncture: monetary policy, stability and the current risks of an outburst of inflation around the world, which is precisely the subject of this conference.

That is, monetary policy must worry about, and act upon, unstable dynamics that can lead to increases in inflation that may later be too costly to contain. These are the undesired second-round effects that may require strong monetary policy actions. In a flexible inflation targeting regime, once there are deviations from the target, monetary policy is implemented on the basis of bringing back inflation projection towards the targeted level within a given time horizon. In Chile, this would mean bringing down projected inflation to 3% in the two year horizon. This length of the horizon takes into account the lags in the effects of monetary policy, as well as the fact that bringing back inflation to target has an output cost. It also allows for transitory shocks to undo their effects without shifting the path of monetary policy. Therefore, in the current context of sharp inflationary pressures, monetary policy must avoid undesired second-round effects, which are those that generate an adjustment longer than the one envisioned in the policy horizon. In order to monitor these potentially undesired second-round effects, we scrutinize price dynamics that appear to be out of the normal. For example, we follow the evolution of wages compared to an estimated evolution of wages based on the historical patterns of indexation. If wages are growing faster than these estimates, we could be facing worrisome wage dynamics that may require a policy reaction.
9 [19]  An Economic Commentary published by the Riksbank in 2018 contains a study of a number of measure of underlying inflation. 18 One of the better measures according to the above criteria is based on so-called principal component analysis, CPIFPC. This method aims to capture common trends among the various price indices for the sub-groups that together comprise the CPIF. As a final step, the component is standardised so that it has the same mean value as the CPIF. This means that the first criterion is met by definition. The other criteria are well met in relation to other measures, possibly with the exception of the final criterion, of being easy to understand. Figure 5 shows how CPIFPC has developed since 1995. It is clear that the underlying measures shows less white noise than the original CPIF series, but it is not entirely without white noise. At the same time, it is easy to detect the more long-term trends. Figure 5. Underlying measure calculated using principal component analysis and CPIF inflation Annual percentage change. 3.0 2.5 2.0 1.5 1.0 0.5 0.0  -0.5  11  12  13  14  15  16  17  18  19  CPIFPC CPIF  Sources: Statistics Sweden and the Riksbank  18 See J. Johansson, M. Löf, O. Sigrist and O. Tysklind (2018). 10 [19]  Which consumer prices should be excluded? The CPIFPC is a measure of underlying inflation calculated using the statistical method.

Ravi Menon: What does it take to get to net zero Keynote speech by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Economic Society of Singapore Annual Dinner 2022, Singapore, 17 August 2022. * * * ESM Goh, Dr Euston Quah, distinguished guests, ladies and gentlemen. It is both an honour and pleasure to speak to you. There are many pressing issues I could talk about today. The world is just emerging from the most devastating pandemic in over a century, with far-reaching changes whose effects will be felt for years to come. A major war has broken out between the two largest countries in Europe, heightening geopolitical risks and setting off a food and energy crisis across the world. The global economy is facing the sharpest surge in inflation and fastest pace of monetary policy tightening in 40 years, with highly uncertain consequences. Instead, I want to talk about what I think is the mother of all challenges facing the world today, and for the next few decades – climate change. Long after our conjunctural challenges of war, disease, and inflation are behind us, the climate crisis will still be with us, only more intense, more urgent, more disruptive. CLIMATE CHANGE Climate change is already happening. Over the last three decades, the number of registered severe weather events has tripled. Over the last two decades, the rate of increase in sea levels has doubled.
Moreover, rescue operations for banks, especially in Ireland, strongly contributed to a deterioration of public finances, while bank guarantees increased the contingent liabilities of euro area governments. [Slide 2] The mathematics of all these developments is very simple. By mid-2010 a number of euro area countries, even some that did not see such an accumulation of imbalances, began to be affected by an unprecedented sovereign debt crisis; financial markets were starting to perceive debt levels as unsustainable. From this point on, governments under close scrutiny by those markets had to take action to regain their confidence. They were not left to their own devices. A fully-fledged EU and IMF financing package – known formally as the Economic Adjustment Programmes – came to the aid of Greece, Ireland and Portugal between 2010 and 2012. These programmes involved far-reaching economic and financial policy adjustments, including in the area of structural reforms. Spain, meanwhile, launched a financial sector adjustment programme supported by its European partners. Moreover, a permanent solidarity framework – the European Stability Mechanism – is now in place. It can provide financial assistance to Member States in difficulty, thereby reducing threats to financial stability in the euro area. And from an early stage onwards, the Eurosystem provided very substantial liquidity support to the banking sector, which had been severely affected by the seizing-up of the interbank market. The ECB’s non-standard measures played a critical role in preventing a deflationary scenario, especially as the sovereign debt crisis escalated from mid-2010 onwards.

[Slide 1] A property worth 100 in 1998 would have sold at 280 in 2007 in Spain and Ireland and at 230 in Greece. Between 1998 and 2007 bank lending for house purchases increased by more than 400% in Spain, 500% in Ireland and 800% in Greece. The credit boom led to a sharp increase in private sector indebtedness. But such imbalances have not only been a private sector story. Between 1998 and 2007 the compensation of employees in the public sector (that is the number of employees times their per capita wages) increased cumulatively by close to 180% in Ireland (i.e. five times the euro area average) and by close to 110% in Greece (i.e. three times the euro area average). Public spending growth has systematically exceeded nominal GDP growth also in Portugal (about double the average for the area). Fiscal discipline had been clearly insufficient. Even when the headline fiscal deficit was suggesting a healthy situation until around 2008, that was misleading as GDP was above potential and strong tax revenues resulting from housing booms were not sustainable. During the 2008–09 crisis, the sharp drop in domestic demand caused a significant fall in revenues, which in some previously booming countries were based on very cyclically sensitive taxes, such as corporate taxes, stamp duties and capital gains taxes. At the same time, government spending was increased by crisis-related measures.