samchain/econo-pairs-v1 huggingface dataset:
In these situations deflation need not be the bugbear to economic development that it is often made out to be. On the other hand, if we move forward a few years to the period during and after the First World War, we do see large shocks - falling GDP combined with very high inflation, followed by severe deflation at  BIS Review 37/2003  1  the beginning of the 1920s. This was when Sweden experienced its most severe economic crisis, rather than during the 1930s as was the case in the USA and Germany, for instance. If we move forward to the post-war period, this was a unique time of high and constant growth. During the period following the Second World War and up to the 1970s, standards of living rose at a record rate throughout the world. An interesting fact is that although growth in Sweden during this period was higher than it had been at any other time, it was nevertheless rather low in an international comparison. Many European countries, including our Scandinavian neighbours, grew at an even more rapid rate. However, from the 1970s the problems increased. Growth waned and inflation rose. We managed to temporarily stimulate growth by means of substantial devaluations, but there was no proper follow-up and the economy overheated, only to turn around entirely at the beginning of the 1990s, resulting in extensive problems for the financial sector. Since then we have had a decade or so with better growth and more balanced developments.

Price stability, as everyone realizes, may be defined in many ways, with somewhat different consequences for the execution of monetary policy. When the index for measuring inflation is chosen, a number of different considerations have to be taken into account. The index has to be reasonably broad and give a picture of price developments in the economy as a whole. It is an advantage if it is also well established and regularly published with a short time lag. In addition, it is desirable that the index is seldom revised. All these factors bear out the suitability of the consumer price index (CPI) . Thus, the Riksbank’s inflation target has been expressed in terms of a change in the official consumer price index. BIS Review 56/1997  -8-  Figure 5  CPI an d U n d e r lyin g In flatio n Pe r ce n tage 12-m o n th ch an ge 6 .0  6 .0  CP I  5 .0  5 .0  Un derl y i n g do m es tic in fl ati o n  4 .0 3 .0  4 .0 3 .0  2 .0  2 .0  1 .0  1 .0 0 .0  0 .0 92  93  94  95  96  97 -1 .0  -1 .0  Sources: S tatistics S weden and the R iksbank One problem with the CPI is that it is affected by temporary influences on inflation.
As a consequence, and given the potentially huge cost of a disorderly collapse of such a bank for financial stability and the economy, we cannot yet exclude the need for a public bail-out in a possible future crisis. 4  In this respect, both banks are now very well placed in an international peer comparison. At Credit Suisse, the ratio of loss-absorbing capital to risk-weighted assets has more than doubled, from 5.2% in the first quarter of 2012 to 10.8% in the second quarter of 2013, while at UBS it rose from 7.5% to 11.4% over the same period. 5  Risk weights increase from 75 to 100% for the loan tranche exceeding the 80% LTV ratio. 6  In particular, the revised guidelines require banks to apply tighter rules regarding mortgage lending, as follows. First, at least 10% of the value of the collateral must be provided in equity from sources other than borrowers’ pension assets. Second, the mortgage debt on residential properties has to be repaid such that it amounts to no more than two-thirds of the collateral value after 20 years. A 100% risk-weighting applies for new mortgage loans that do not meet these tighter minimum requirements. 7  As at Q2 2013. Pro memoria: during the crisis, UBS incurred losses of about 2%. BIS central bankers’ speeches  3  This state of affairs is still unsatisfactory, and has led to renewed debates on how to further regulate global banks.

Second, on the cyclical front, the sustained momentum in the Swiss mortgage and real estate market over several years has already led to imbalances that pose a risk to financial stability and, ultimately, the Swiss economy. So, what have we done to address systemic risk in Switzerland up to now? With respect to the structural dimension of systemic risk – the TBTF issue – Switzerland already adopted a package of measures back in 2011. This package aims at reducing both the likelihood of crisis at a systemically important bank and the costs to the economy in the event of such a crisis. The package consists of four complementary measures: (1) significantly more capital, and capital of better quality, (2) larger liquidity buffers, (3) rules imposing sufficient diversification to reduce counterparty risk, and (4) organisational measures. Let me briefly outline some key elements of this package. The new capital adequacy regulations for systemically important banks apply to the riskweighted capital ratio and the leverage ratio. Furthermore, they are designed to be progressive. Put simply, the bigger the bank, and the greater its systemic importance for the domestic financial system, the higher the requirement.
Indeed, in many countries, it is envisaged to make the central bank the “systemic supervisor” or, at least, a central pillar in the macro-supervisory architecture. 3. A key question, however, is how this new financial stability function would interact with monetary policy. In theory, things are simple. Central banks would have several tools available for different objectives. One set of tools (interest rates, international  2  BIS Review 147/2009  reserves) would, as now, be used to fulfil the price stability mandate. On the other hand, macro-prudential tools would support and foster financial stability. In such an ideal “Tinberghen” world, each instrument would be precisely assigned to a single objective. Things may be more complex in the real world because these instruments are not independent. For instance, changes in capital requirements will affect credit growth and the transmission channel of monetary policy. Conversely, as I said, levels of or movements in monetary policy rates may increase or decrease the level of risk inside the financial system, hence its vulnerability to shocks. Finally, there may be circumstances in which the objectives of price and financial stability may not be fully compatible. 4. When instruments overlap and the objectives possibly conflict with each other, the potential for confusion is real and significant. To avoid any damage to central banks' credibility and ability to fulfil their mandate, it is essential that a clear and transparent framework should be in place.

That’s where the crisis starts. It is important to note the asymmetry in these developments: imbalances are slow to build up but very fast to unwind. And the adjustment process can be disorderly and traumatic. What role does monetary policy play? In a very basic sense, monetary policy is about determining the level of short-term interest rates. And it is equally basic to state that the interest rate is the price of liquidity. Therefore, it may happen that, because inflation is contained, interest rates are kept at a low level, and liquidity is cheap and easily accessible for financial intermediaries. In turn, abundant liquidity may increase risk appetite, induce  BIS Review 147/2009  1  maturity transformation and lead to growth in leverage. This has been called the "risk-taking channel” of monetary policy. Ultimately, it creates a link between the level of interest rates and those of risk premia. And this, of course, means that movements in interest rates have, all other things being equal, a bigger (and possibly less predictable) impact on the financial system, credit aggregates and asset prices. A lot of work remains to be done to precisely quantify that channel and disentangle its effects from those of the more "traditional” credit channel. Nevertheless it is clear that, in the future, central banks will need to pay greater attention to the impact of their decisions on the level of risk in the financial system. Some analysts would go a step further.
Let me insist that the forex intervention has only transitory effects. It cannot permanently modify an economy’s competitive position. This can only be made with policies that affect the real side of the economy. Monetary or forex measures can only have a temporary influence. The impact of a sterilized exchange rate intervention occurs via the currency portfolio composition. Because external and internal financial assets are not perfect substitutes, changes in their relative supply have an initial effect on prices, which then fades over time. The IMF’s latest Regional Economic Outlook for the Western Hemisphere presents estimates showing that interventions reduce the rate of currency appreciation. Additionally, it indicates that the effects are milder in more financially open economies, and shows that rule-based or discretional interventions have similar effects. Ours is rule-based, in order not to lose control over our monetary policy. As proven by this evidence, the effects would not be so different if our intervention had been arbitrary. This comes as no surprise, since the effects depend on both the amount of the intervention and the composition of the currency portfolios. It has called the attention of many people that a measure similar to that of 2008 has caused a different behavior of the exchange rate. I don’t need to say that the combination of events has also been different, especially abroad. Back then the world economy was headed to a severe crisis and risk aversion was growing. This eroded asset value in emerging economies and strengthened the dollar.

It is actually on a flatter slope than it was in the 1990s and that of other emerging economies  4  BIS central bankers’ speeches  that have adopted measures to control capital inflows (figure 12). Still, it is important to be on the watch for excess flows that might incubate financial fragilities and exacerbate economic cycles, in which case it could be necessary to review financial regulations in place to avert any costly imbalances. Recent monetary policy decisions The scenario outlined in the latest Monetary Policy Report assumes that in the coming quarters the Chilean economy will grow in line with its potential. This will allow trend inflation, today in bounded levels, to converge and remain around the 3% target in the coming quarters. To achieve this objective, we have withdrawn some monetary stimulus, bringing the monetary policy interest rate (MPR) closer to the neutral range. Although this is the baseline scenario, the Report also indicated that inflation (and growth) risks were biased upward. For inflation, arguments were based on the combination of adverse supply shocks in energy and foodstuffs, the closing of output gaps and the strong dynamism of the domestic demand. Some of the aforesaid risks have eased. Private inflation expectations have moderated, consistently with MPR adjustments and the recent decline in oil prices and other commodities (figure 13). Anyway, commodity markets remain volatile, so it is premature to evaluate at what level international prices will settle.
Monetary policy based on an inflation target was a relatively new phenomenon at that time. There was also great uncertainty about how this would work in Sweden. For those of us who were around during the crisis years, it is particularly pleasing to see how well the Swedish economy has developed over the past ten years, compared with the previous two decades. Naturally, one cannot ascribe all success to the changeover in stabilization policy – the general economic developments have also been favourable. However, there is no doubt that the new regime with an inflation target for monetary policy has given a steadiness and stability to economic policy that was previously lacking. A stable fiscal policy has also been very important. A lot has happened to the monetary policy framework since the inflation target was introduced. This includes much of the learning process I mentioned in my introduction. As deputy governor during the years 1994 to 1998, I was involved in setting the course, so to speak, and when the work on building up competence and analysis tools for the bank’s main tasks - monetary policy and financial stability began. Other important tasks included improving communication and increasing transparency, both internally and externally. It was necessary to win confidence in monetary policy as quickly as possible and this required openness and clarity. Since I returned to the Bank at the beginning of last year, I have been able to note that the Riksbank’s work procedures have continued to develop and modify.

9  Giavazzi, F. and F.S. Mishkin (2006), “An evaluation of Swedish monetary policy 1995-2005”, Reports from the Riksdag 2006/07:RFR 1, Committee on Finance. 6  BIS Review 8/2007  I hope that I have been able to give you an insight into how our monetary policy strategy has developed and how it looks today. At the beginning of my talk, I said that the development of monetary policy was a learning process. In my opinion, it has to be so. We are working in a world that is constantly changing and always making new demands of us. It is only natural that we must always work on refining and improving our strategy and framework. Openness, clarity and efficient communication are important guiding principles in this process. It is also a strength to be able to learn from others’ experiences in the monetary policy field. Gatherings like this are excellent opportunities to do just that. Perhaps the Swedish experiences of monetary policy with an inflation target may in some way be useful to other countries planning to introduce an explicit inflation target? I hope so! Thank you. BIS Review8/2007  7
The trust deed and prospectus of the PAIF, which comply with laws and regulations of Hong Kong and Singapore and are in line with international standards, served as a model for the drafting of fund documents for the ABF2 Single-Market Funds. This has helped to promote the adoption of international best practices among EMEAP economies. 2  BIS Review 79/2005  ABF and financial stability 15. Let me turn to the other question that I have been asked specifically to address, and this is how the ABF initiative can contribute to financial stability in the region. I must confess that, even though the central banks in the region have been enthusiastic in the development of the project, the benefits of ABF to financial stability in the region have not been clearly articulated in our deliberations. I can assure you, however, that this is not a reflection of any lack of brains on the part of Asian central bankers or because the objectives have not been clearly defined, although there may be a lack of a clear road map. But it should be all right, as Deng Xiaoping pointed out, to cross the river by feeling the stones. The lack of a clear linkage between ABF or indeed debt market development generally and financial stability is more a reflection of the difficulty of defining what financial stability is. 16.

Joseph Yam: The Asian Bond Fund initiative Keynote remarks by Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the Global Bond Summit, Hong Kong, 14-16 November 2005. *  *  *  Introduction Ladies and gentlemen, I am very glad to have the opportunity to speak at this Global Bond Summit, all the more so because it is being held here in Hong Kong and because development of a deep and liquid bond market in Asia is a subject that is very close to my heart. 2. It has been suggested that I should talk specifically about the Asian Bond Fund (ABF) initiative. I am happy to do so not only because ABF is an important initiative for promoting the development of bond markets in the region but also because of the active involvement of the HKMA in the past three to four years in the project, including chairing the EMEAP Working Group that gave birth to it. But I cannot, of course, speak for the eleven central banks and monetary authorities comprising the EMEAP group, but only for the HKMA, and so my comments today are those of the HKMA. Asian finance 3. Let me begin at the more macro level and draw your attention to one aspect of Asian finance that has always struck me as odd, and this is how financial integration in Asia is lagging behind economic integration.
I will be talking about issues like the present state of the Russian economy and the impact this has on financial stability; key challenges facing the world today; the current situation in the banking sector; and finally I would like to go into more detail on some policy measures undertaken by the Bank of Russia for the express purpose of mitigating risks in the Russian financial system as a whole. 1) On key risks and the current state of the Russian economy First of all I would like to draw your attention to a number of improvements in the Russian economy that began to take place in 2016. GDP moved into growth from the third quarter of 2016, and we expect that the positive effects of this change will continue to be felt. According to our assessment, the GDP will see growth of 1-1.5% in 2017, and 1-2% in 2018–19. It is worth noting that in recent years indices of business activity have grown considerably and now sit at the highest levels of the last 9 years: in industry the PMI rose from 49.8 points in January 2016 to 52.4 points in March 2017; in the service sector – from 47.1 to 56.6 points over the same period. Economic recovery has contributed to the reduction of current credit risks in the banking and financial sectors as a whole. Inflation is falling even more quickly than expected. The annual rate of consumer price growth fell to 4.3% in March 2017, down from 12.9% in December 2015.

However, from the point of view of financial stability we cannot completely disregard the possibility of capital outflow from the OFZ market if external or internal shocks were to take place. The Bank of Russia conducted a survey of foreign investors regarding their investment strategy in Russian sovereign bonds. The results of the survey show that a significant portion of investors buying OFZ admit that these may be sold prior to maturity. Such risks need to be taken into account and their impact on the economy reduced through clear and predictable policy. This is important because the situation on global markets remains fragile and volatile while uncertainty persists in a number of factors. Such factors include what format a British exit from the European Union will take, at this point still unclear; the possible negative consequences that will result from changing economic and trade policies in the United States; and the aggravation of political risks in Europe. The heightened risk of negative developments in the Chinese economy, given the high degree of debt load in the economy and increase in the number of corporate defaults over the last year, may also prove to be an important factor. However, seeing as total capital inflow is considered to be small, risks to financial stability associated with the possible outflow of this capital remain quite low. The excessive optimism currently experienced in global financial markets may also be a cause for concern.
Having grown steadily before the pandemic, our exports accelerated and increased sharply after the pandemic, reaching USD 126 billion in the first half of 2022, up nearly 20% year-on-year. This marks a historical high for our exports in the first six months of any year. 3/5  BIS - Central bankers' speeches  We identify three main reasons for our record-breaking export performance despite the armed conflict between our major trading partners. First, we see that Türkiye has become a key trade hub thanks to its increased relative advantages in the reshaped global market after the pandemic. Second, we observe that our exporters have the capacity to adapt rapidly to changing conditions by covering diverse products and destinations thanks to their resilient and flexible structure. I would like to discuss this point with you in more detail. As you know, Turkey has a much stronger export structure compared to many similar, neighboring or regional economies. This is supported by the high share of manufacturing in exports and the diversity of the number of destinations and exported products. The destination and product diversity of our exports doubled in 2022 compared to 2006. Around 29% of the increase in our exports between 2015 and 2022 was generated by new markets. The flexible and dynamic structure of our exporters protects our economy against external shocks. Our companies' flexibility in introducing new products and finding new markets allows them to compensate for possible losses in adverse conditions, including the current armed conflict.

We, as the Central Bank, will continue to stand by you with our industry-friendly targeted policies aiming to create the financial conditions that will support continuity of supply as well as our current account surplus capacity. I will be pleased to answer your questions. 5/5  BIS - Central bankers' speeches
BIS central bankers’ speeches  3  Returns important for preservation of real value That brings me to the third criterion for our investment activity – return. I would like to stress that the SNB is not concerned with maximising return for its own sake. Rather, return is inextricably linked to the criterion of security. Our goal is to ensure that the purchasing power of the currency reserves at least is maintained over time. That, in turn, presupposes that the long-term return we earn on our investments is equal to or greater than the average rate of inflation. Bear in mind that we are aiming to preserve real value in Swiss francs, not in local investment currencies. This means that a certain amount of positive return in local currencies is needed, if only to balance out the currency losses incurred in periods when the Swiss franc is appreciating. To improve the long-term relationship between risk and return, government bonds in our portfolio are supplemented by the additional investment categories I have already mentioned. Generally, the potential returns on equities are greater than those on government bonds issued by the major advanced economies. They can therefore make a contribution to preserving the real value of the currency reserves. To be more precise, equities increase the probability of preserving the real value of the currency reserves. This applies, in particular, in view of the current low (or negative) real returns on government bonds in core markets.

As I have already mentioned, since the full revision of the NBA in 2004, additional bond categories such as corporate bonds and the bonds of foreign authorities, as well as equities, have been available. The diversification effect of equities versus government bonds can be seen in slide 4. For this chart we divided up the distribution of all daily returns on the US S&P 500 stock market index since 1999 into ten equally large groups or deciles. Then we ordered the deciles according to size of returns. The decile with the worst returns is on the left-hand side and that with the best returns is on the right. Subsequently, we assigned the associated US government bond returns to these deciles. As you see, there was a good diversification effect between equities and government bonds. This result is not hard to understand intuitively. During the cyclical upswing, when interest rates are increasing, prices of government bonds come under pressure, while equity prices benefit from the improvement in the economy and the better profit outlook for companies. Last year, this negative correlation was very clear and the diversification effect between equities and government bonds was particularly strong. However, these interrelationships apply for returns in local currency, while for us, what is critical is – ultimately – the return in Swiss francs. Here the situation looks somewhat different. This is because equity prices often correlate negatively with the external value of the Swiss franc. You can see this relationship in slide 5.