samchain/econo-pairs-v1 huggingface dataset:
After the “sprint” to monetary normalisation started in July 2022, we are now entering a new phase of monetary policy that is more comparable to a longdistance race: it will be longer – above all we must not claim victory too rapidly -, but more gradual and more pragmatic in the pace of the next interest rate hikes. It is clearly too early to tell beyond the 3% that we are expected to reach in March – which is well below the current rate of 4.75% in the United States, or 4% in the United Kingdom – at what "terminal" rate key rates will stabilise. But I believe it is possible to shed some light on the path that we should follow, in order to provide some degree of economic predictability. First, regarding the calendar, it seems to me desirable to reach this terminal rate by summer, i.e. by September at the latest. And our decisions will be guided by the economic data: our central criterion for deciding on monetary stabilisation should be the fairly certain turnaround in the underlying inflation trajectory. It is this underlying inflation that monetary policy can best treat, and which provides the best indication of the medium-term perspective of headline inflation. We have not yet reached that turnaround, that economic "threshold". I would also like to dispel a fear: the disinflation that we are about to carry out will not lead to a recession, given the resilience of economic activity and employment.

In fairness – and this is just as  Page 5 sur 5 important for me as it is for you - and over time, we must successfully achieve the three major transformations that are the key to our economic and social success: the energy and climate transformation; the digital transformation; and the transformation of work by increasing its collective quantity and its individual quality. To conclude, I will repeat this conviction: we have the capacity to succeed together. Rest assured that the Banque de France, together with its staff throughout the branch network, will be fully mobilised in this respect.
BIS Review 133/2010  9  In thinking about variations in the value of the assets held by a bank with a diversified portfolio of loans then variation in real aggregate income is arguably a much better guide than volatility in particular asset classes (eg property, equities). In some simple asset price models the real value of assets which are a claim on a stream of income is proportional to aggregate incomes (see, for example, Barro 2006). If we use that as a rough rule of thumb the Table suggests that occasions when generalised falls in real asset values might be 5% or more occur roughly once every 15 years. Falls in value in excess of 10% might be about once every 40 year events. Declines of 15% or more are once-every-80-year events. This suggests that banks would need far more capital than has been usual in recent years to be truly robust. Why bank capital might not be expensive? Of course if having quite substantially more capital generated much higher cost in intermediating funds through banks – and there are no close alternatives for bank financing – that extra robustness would come at a high price. But calculations undertaken by the Bank of England (2010), the BIS (2010) and academics (Kashyap 2009, and Admati et al 2010) suggest this is not the case. It is worth considering why.

The difficulty today is one that monetary policy must address – this is to balance the risks of removing the stimulus from the expansionary monetary policy too soon, starving a recovery while it is still immature, against the risk of allowing inflation and inflation expectations to become stuck at above the target level. Balancing those risks in the UK is not easy. That is the issue the Monetary Policy Committee at the Bank of England faces today and the one I now want to explore. The immediate monetary policy problem The financial crisis dealt a huge blow to the financial infrastructure in most of the developed world. In the UK, and here in Ireland, the financial system came close to total breakdown. It was not so much that virtually no-one thought this sort of thing would happen. It was worse than that; virtually no-one thought this sort of thing could happen. But it did happen. As a result the supply of credit to businesses and to households was – and continues to be – seriously affected. The confidence of businesses and households has been severely dented. Fiscal deficits have exploded; private sector investment has imploded. Whatever the aftermath of this event is – and we will not know that for many years – I very much doubt it will be a normal cyclical recovery after a downturn.
Unlike other countries which found that their major banks had collapsed practically from one day to the next, the problem of the Spanish banking system was confined to a part of the savings bank sector. And I stress “a part”, since some of our savings banks are perfectly sound when set against the commercial banks. However, during the upturn some savings banks had pursued a model centred on high credit growth with high exposure to the real estate development and construction sector. With the arrival of the crisis, the shortcomings of this model became clearly evident. In the new setting, with a rapid deterioration in asset quality, with margins diminishing and with business volume expectations much lower than in the past, it could be seen that it was essential to restructure balance sheets and reduce the sector’s capacity, which had expanded in prior years in parallel with the buoyancy of credit. Patently, too, these institutions were excessively fragmented, which increased their difficulties in raising finance on the wholesale funding markets. Finally, the crisis also brought to light the obstacles arising from the corporate structure of savings banks, which prevented them from raising high-quality capital on the markets and which, frequently, did not provide sufficiently for best-practice governance arrangements. Had capital been injected into the savings banks without making such aid conditional upon what is inevitably a longer, riskier and more complex process of restructuring these institutions, that would have been of no use in resolving our main problems.

4  BIS central bankers’ speeches  Given the importance of the matter, I cannot conclude without referring to our level of educational attainment and, specifically, to secondary education. Unfortunately, the measures that raise educational attainment pose a problem; unlike the reforms we have looked at today, the effects of potential improvements in education are very slow and this explains why the attention the subject requires is continuously put off. But this slowness in bearing fruit is precisely what justifies the need to undertake this task as soon as possible and, while waiting, we should reiterate that education is the most important problem facing our society and our economy in the medium term. Thank you very much. BIS central bankers’ speeches  5
Sweden is not alone in changing its approach to economic stabilisation policy. A similar change of course has taken place in country after country – in fact, this took place very late in Sweden – in which context the deregulation of the financial markets nationally and internationally played a crucial role. Sweden’s economic successes during this century are the result of an openness towards the surrounding world, a large foreign trade, and the growth of large multinational companies. It would not have been possible to adopt a completely different approach than liberalisation of foreign exchange legislation and the capital market without very large costs for Sweden. It can therefore be said that the alternative to the new approach to economic policy would not have been feasible. However, this also says that when the present economic order changes, then Sweden will follow the tide. No economic policy regime lasts forever. To date we can distinguish at least five distinct regimes/epochs this century. History has not come to an end. 6. Conclusion The principles I have outlined above are illustrated by the Riksbank’s policy this spring. At the special monetary policy meeting on 2 November, the repo rate was at 3.4 per cent. The Riksbank noted then that at that interest rate inflation would be less than the target of two per cent in one or two years’ time.

Jean-Claude Trichet: Interview in Bild Interview with Mr Jean-Claude Trichet, President of the European Central Bank, in Bild, Germany, conducted by Mr Oliver Santen and published on 15 January 2011. *  *  *  Mr Trichet, in one word, how would you describe the state of the euro today? If you allow me two words: credible and stable. Will the euro crisis get worse this year? Let me be very clear: this is not a crisis of the euro. Rather, what we have is a crisis related to the public finances of a number of euro area countries. All governments have to put their finances in order, and above all those governments and countries which have lived well beyond their means in the past. How are the euro area countries ever to reduce the debt, now totalling € trillion? This year, the budget deficit in the euro area will be half as high as that in the United States or Japan. Virtually all advanced economies face acute fiscal problems. This is something that is often forgotten. That being said, this is no time for any complacency. Let me repeat: the ECB expects the governments in the euro area to make enormous efforts to bring down their debt. Some countries have to get their debt under control again. Can you understand that many Germans are afraid of inflation? The Germans are right to be fiercely against inflation. Inflation hurts in particular the poorest. Price stability is a precondition for growth.
These two countries have much in common, yet some things (and not only the Danube!) still separate us. As I have already mentioned on previous occasions, to a certain extent, the speed of convergence was, in the case of Romania, fuelled by the flexibility of our exchange rate regime. By contrast, adopting a currency board more than two decades ago, during a crisis, Bulgaria shifted to a fixed exchange rate regime, out of which the only exit strategy is joining the euro area. What we need in order to move forward on the convergence path towards euro adoption is, first of all, to understand there is no substitute for a coherent economic policy mix, which should remain so even in election years. We need economic convergence, but the process should be a balanced one, so as to preserve macroeconomic equilibria and safeguard competitiveness. It is important that Europe remains united. Therefore, I want to pay homage to Baron Snoy, who has been instrumental in promoting Romania’s and Bulgaria’s further integration into the Economic and Monetary Union. I have known him since the first event we hosted in June 2011, and have always found in him not only a wise man, dedicated to the European Project, but also a friend of Romania, with a vast knowledge of our history and culture. He has also played an important role in bringing together Europhile experts that are trying to find solutions to the daunting issues facing Europe nowadays.

Moreover, we should be aware that convergence is a continuous process, which will last even after the accession to the Eurozone; this is a lesson we should learn from the failed experience of other countries which considered that joining the euro is the end of the line. Second, while the nominal convergence criteria are deeply rooted in the minds of policymakers, the Maastricht Treaty explicitly stipulates that “a high degree of sustainable convergence” is needed. Yet, this requirement seems to have been overlooked sometimes. In this context, I want 1/2  BIS central bankers' speeches  to highlight that there are four types of convergence that must be taken into account: nominal, real, institutional and structural. Nominal convergence is easily quantifiable, as the specific criteria are clearly defined in the Maastricht Treaty. But we also have to ensure the compatibility of our institutions with those in the euro area and this is the essence of institutional convergence, a process where the central bank and its independence are particularly important. While structural convergence focuses on adapting the structure of our economy to that of the euro area, real convergence, measured by GDP per capita (at PPS) as a percentage of euro area/EU average, is the best proxy for the development level of a nation. So, when talking about convergence towards euro area enlargement, it is important to keep in mind all these valences of convergence. Third, we are very interested in learning the experience of our Bulgarian colleagues, and I am looking forward to their presentations.
In the UK, for example, despite several months of zero or mildly negative inflation rates, there is no evidence of the development of a deflationary mindset among businesses and  3  Whether this was good luck or good policy is an open question but, for those of you who recall debates of Jackson Hole’s past, I’m minded to favour policy, particularly given post crisis performance. 4  Energy consumption per dollar of GDP is now 45% lower in the US and 30% lower in Europe than it was in 1980. 5  Similarly in the UK, energy and food contributed over two percentage points to headline figure in late 2008, and is dragging by a litter over ½ percentage point in the latest data. 2  BIS central bankers’ speeches  households. Spending is picking up rather than being delayed. Consumer confidence is at its highest level in over decade and retail sales have been growing at well above past average rates. Firms’ investment intensions are robust. And inflation expectations remain consistent with our 2% target. 6 Trade Trade creates more complex global inflation dynamics. The ICT revolution has made a great unbundling of production chains possible, and large wage differentials globally have made doing so profitable. 7 This generated vast new quantities of “supply chain trade” (Chart 5), increasingly concentrated in Asia where, by the late 1990s, supply-chain trade had overtaken that of Europe, the US and Canada.

Philipp Hildebrand: Lessons from the financial market turbulence Summary of a speech by Mr Philipp Hildebrand, Vice-Chairman of the Governing Board of the Swiss National Bank, at the Jefferies prize-giving ceremony, Zurich, 27 August 2008. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The current financial crisis is probably the most complex since the 1930s. The extent of international cooperation in overcoming it is greater than ever before. An important part in these activities is being played by the Financial Stability Forum (FSF), which was founded in 1998 and to which Switzerland has belonged since 2007. Six months after the start of the crisis, in April 2008, the FSF published a series of recommendations for enhancing the resilience of the international financial system. There are three main advantages to cooperating internationally in this way. First, it is easier to focus more clearly on identifying solutions. Second, it ensures that particular attention is paid to maintaining a level playing field when establishing regulatory measures. Third, it creates considerable pressure for any recommendations issued to be implemented in practice. The current crisis has shown that the Swiss banking system remains vulnerable to major shocks. As part of its statutory mandate to contribute to financial stability, the SNB has been monitoring developments since the start of the crisis very carefully. The lessons learned by the SNB from the crisis tie in with the recommendations of the FSF.
A March 2021 survey shows that central banks’ interest in big data and machine learning has increased markedly over the last few years. 8 The SNB is no exception. The COVID-19 pandemic brought the need to exploit non-standard data into sharp focus. In normal times, official economic indicators and surveys are sufficient to monitor economic developments. But such standard data are only available at lower frequency and with a certain time delay. With events unfolding rapidly during the first wave of the COVID19 crisis, the need for non-standard, real-time data that are available at higher frequency became more pressing than ever before. To monitor economic activity, daily mobility and daily card transaction data became particularly useful as concurrent economic indicators. During the first lockdown in spring  8  Sebastian Doerr, Leonardo Gambacorta and José María Serena Garralda (2021), ‘Big data and machine learning in central banking’, BIS Working Papers, No. 930, March 2021. Page 7/10  2020, card payments data showed the sharp drop in economic activity in real time. 9 While online payments in retail trade – represented by the red bars in Chart 7 – increased, stationary card payments fell by more than 20% in March and April compared to the previous year, as can be seen from the blue bars. Such data also allow a sectoral and regional breakdown. We could thus observe the pronounced payment shifts that took place from urban to suburban and rural areas, and across cantons.

Speech  Embargo 15 April 2021, 4.00 pm  COVID-19, financial markets and digital transformation Money Market Event  Andréa M. Maechler and Thomas Moser Member of the Governing Board / Alternate Member of the Governing Board ∗ Swiss National Bank Webcast, 15 April 2021 © Swiss National Bank, Zurich, 2021  ∗  The speakers would like to thank Dirk Faltin, Cyrille Planner and Nicolas Stoffels for their support in drafting this text. Their thanks also go to Benjamin Anderegg, Roman Baumann, William Boye, Lucas Fuhrer, Sébastien Kraenzlin, Christoph Meyer, Christian Myohl, Carolin Reiss, Peter Thüring and SNB Language Services. Page 1/10  Ladies and gentlemen – good afternoon. My colleague Thomas Moser and I welcome you to the SNB’s Money Market Event. A year ago, we had to cancel this event in Zurich at short notice because of the COVID-19 pandemic. Unfortunately, COVID-19 restrictions still prevent face-to-face gatherings, but we are delighted to be able to greet you this year in a virtual setup. The pandemic has affected us all, but the costs are unevenly distributed. The economic costs are being borne disproportionately by the services sector and society’s most vulnerable groups. The ability to work from home is highly correlated to income, so the risk of income loss or job loss has been much higher among lower-income groups. In many ways, the crisis is unprecedented. The economic shock has been global and massive, affecting both economic supply and demand simultaneously.
Norges Bank has no set target for the level of the exchange rate. Nevertheless, developments in the krone are of considerable importance to interest-rate setting because the exchange rate has an impact on inflation and output. An important channel for monetary policy is the foreign exchange market and the krone exchange rate. Although the krone fluctuates, the krone exchange rate is not particularly unstable compared with other countries’ currencies. The krone exchange rate is the price of our currency measured in a foreign currency. Developments in other countries are just as important for the krone as developments in the Norwegian economy. Capital flows freely and flows can change rapidly. This can spill over to exchange rates and interest rates as well as output and employment. There is a cost involved for businesses in hedging against fluctuations in the krone. A krone that is stable - but too strong - also entails social costs in the form of low activity. Similarly, a krone that is stable - but too weak - is a source of high inflation. From spring 1999 to December 2002, the interest rate in Norway was fairly stable at between 5.5 per cent and 7 per cent. In other countries, the interest rate fell in 2000 and 2001 when the ICT and equity bubbles burst. The interest rate differential between Norway and other countries widened due to cyclical divergence. The period of high capacity utilisation continued for a longer period in Norway, with strong wage and cost inflation.

4  BIS Review 16/2010  the inflation target and resource utilization around a normal level. In the event of conflicting objectives, it achieves a reasonable compromise between the stability of inflation and the stability of resource utilization. Different central banks express this in slightly different words. The Riksbank has often used the term “well-balanced” monetary policy. 3 The forecasts of inflation and the real economy are then conditional on the central bank’s view of the transmission mechanism, an estimate of the current state of the economy and a forecast of important exogenous variables. The central bank uses all relevant information that has an impact on the forecast of inflation and the real economy. In this framework, the central bank takes financial conditions such as credit growth, asset prices, imbalances, potential asset price bubbles and so on into account only to the extent that they have an impact on the forecast of inflation and resource utilization. Inflation and resource utilization are target variables, that is, variables that the central bank tries to stabilize. Financial conditions are not target variables. Instead, they are only indicators, as they provide information to the central bank about the state of the economy, the transmission mechanism and exogenous shocks. Financial conditions then affect policy rates only to the extent that they have an impact on the forecast of inflation and resource utilization. 4 Now, is there any reason to modify this view of monetary policy given the experience of the financial crisis so far?