samchain/econo-pairs-v1 huggingface dataset:
If the GPFG remains under the aegis of the Bank, Norges Bank acknowledges that there are arguments in favour of establishing a committee for monetary policy and financial stability. Such a committee would take over the board’s central banking matters, allowing the composition of the board to be more closely tailored to tasks specifically related to investment management. If this solution is chosen, the Executive Board is in favour of a model based on today’s governance structure for Norges Bank. Conclusion Norges Bank has been an important public institution, acting in the national interest, for over 200 years. Important core functions have been performed by the Bank from the very beginning. Norges Bank is responsible for safeguarding the value of money and promoting economic stability. At the same time, the Bank’s mandate and the society in which the Bank operates have changed over time. Some functions have been eliminated altogether over the years: there is no longer any need for the Bank to follow up the strict credit and exchange rate regulation of the past, and the manufacture of banknotes and coins has been outsourced. Other functions have been added, one of which is the management of the GPFG. Norges Bank is used to change. With 200 years of history behind us, the Bank has the professional capacity and experience to perform its tasks efficiently, even when the Bank’s functions and the external environment change.

In the literature, this is referred to as hysteresis. Research indicates that the costs of a downturn may be far higher than the immediate output loss. 4/8  BIS central bankers' speeches  With a sufficiently flexible inflation targeting regime, it is possible to prevent a long-term reduction in employment following a sharp fall in the level of activity. At the same time, this means accepting that inflation will temporarily overshoot the target while labour market conditions normalise. The benefit is somewhat higher average employment than under less flexible inflation targeting. But if the policy rate is kept lower than the level necessary to stabilise inflation for a considerable period of time, there is a risk that inflation will accelerate. A monetary policy objective of achieving the highest possible level of employment can therefore come into conflict with the primary objective of “monetary stability”. If that were to happen, the Bank will give precedence to its primary objective – low and stable inflation. Delivering low and stable inflation is the best contribution monetary policy can make to favourable and stable developments in the economy over time. Financial stability considerations Monetary policy can also contribute to high and stable output and employment by giving weight to preventing a build-up of financial imbalances. Experience shows that the likelihood of a severe economic downturn increases when financial imbalances have built up. Economic downturns caused by financial crises tend to be both deeper and longer than other downturns.
It is in the name of our mandate that we will very probably need to go even further: we are ready to maintain very low interest rates and very abundant liquidity for as long as necessary, and thereby to facilitate the financing of all economic agents, including the Member States. But it is with the strength of our independence and our mandate behind us that we are conducting this policy. II. Coping with Covid-19 – new instruments in the face of a diverse range of objectives Covid-19 – a tragedy in three acts The Covid crisis is playing out in three acts: an act I consisting of a general lockdown, followed by a slow and disparate exit, and finally a gradual resumption of activity. The intensity of the initial shock led to an unprecedented drop in activity, which for France we estimate at –27 % as at the end of April. During this first act, national fiscal policy responses were robust and coherent – and, in complete independence, I would like to underline the quality of these responses, particularly in France – even if at the outset these policies were not fully coordinated. Since then, European coordination has improved and took a major stride forward last Monday when France and Germany put forward their proposal for a common recovery fund.

François Villeroy de Galhau: Monetary policy in the face of the Covid crisis Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, to the Société d’économie politique, Paris, 25 May 2020. * * *  Ladies and gentlemen, I am very happy to join you today for this discussion, which although virtual, will be very real in terms of the strength of the ideas put forward. And I would like to extend my warm thanks to your Chairman Denis Ferrand for his kind invitation. The crisis we are living through is without precedent, in terms both of its brutality and its scale. In the face of this unparalleled storm and the uncertainty it is creating, central banks have responded and innovated, and they need to remain alert. These actions are sparking debate, and raising profound questions about monetary policy. In these troubled times, I think I should start with a reminder of the two anchors that moor our decision-making. I shall then turn to our current strategy, in order to clarify the order of priority for our objectives, and therefore for our tools. I. Two vital and permanent anchors: the mandate and independence In these turbulent times, the ECB is held fast by two crucial and permanent anchors: its price stability mandate and its independence.
Asset-backed securities with high credit ratings have proved not to be as sound, nor as liquid as they appeared. Some of those structured investment vehicles or conduits were extensively leveraged and strongly dependent on short-term funding. In the absence of liquidity, sponsoring banks had to fund off-balance-sheet vehicles from their own balance sheet. This led to de-leveraging and forced asset sales. 4. Higher default rates caused the first bankruptcies in the US and credit spreads started to rise. Risk aversion spread to all asset classes. Forced sales to cover margin requirements saw volatility rise sharply (VIX doubled from 15 to 30 %). The unwinding of riskier positions caused stock markets to fall (Stoxx50 -11 %) and carry trades were liquidated (EURJPY fell from 169 to 152, a 10 % appreciation). As markets fell, margin requirements rose further. The uncertainty about the pricing of some instruments added additional pressure. 5. As the credit crisis spread further short-term liquidity evaporated. Short-term funding in the interbank market became unavailable, causing casualties amongst banks and funds. In Europe, IKB and Landesbank Sachsen were rescued from insolvency. Northern Rock followed later. Funding in the primary market was impossible for banks. Trading in the secondary market stopped, with the exception of government issues. 6. The effective shut-down of the refinancing pipeline left banks to rely on shortterm funding from central banks. Neither primary issues nor short-term papers, such as ABS or ABCP, could be placed in the market.

The level of debt, in contrast, seems to matter much less as an indicator of a turn in the financial cycle, though it does seem to matter as an indicator of the extent of the correction and the consequent damage to the economy.24 We also have a wide range of other economic and financial indicators, such as asset prices and credit conditions. We can estimate how far these are above or below an equilibrium value to help us make an assessment of where we are in the financial cycle. And, of course, macroprudential policy makers need to apply their judgment. The Financial Policy Committee of the Bank of England uses all of these approaches to make its assessment of the level of risk or, to put it another way, where we are in the financial cycle. And we use that assessment to inform our stress test of the core banking system so that the test becomes more severe, with higher losses and greater stress, when we judge the risks in the financial system are getting higher. But we would, in my view, benefit greatly in this area from a better understanding of how the expectations of the future that inform financial sector risk-taking are formed, the ability to use that understanding in modelling the financial cycle and better real-time information on the evolution of expectations.
For some, the conjunction between the two should be an “or”, considering them mutually exclusive: innovation in the form of a central bank digital currency would be an alternative, indeed the only alternative, to the unchecked development of decentralised finance. For me, the conjunction is “and”: the two pillars clearly work together to create a framework that can foster sustainable innovation; this is why the EU should adopt the MiCA regulation on crypto assets in the first half of this year. But the worst conjunction would be “neither, nor”: revolutions always happen quickly, and we are at risk of neither innovating nor regulating in time. In that case we would have failed in our historical mission and jeopardised centuries of work building up confidence in our money. In conclusion, we are all trying to deal with high uncertainty. Even more than in “normal” times we have to keep our eyes wide open to the present realities, but at the same time not lose sight of the structural priorities beyond the current emergencies. As the French writer Antoine de Saint Exupéry puts it in The Little Prince: “As for the future, your task is not to foresee it, but to enable it” (“Pour ce qui est de l’avenir, il ne s’agit pas de le prévoir, mais de le rendre possible”). I thank you for your attention. 1 OECD forecast, December 2021 2 Estimations by SwissRe, 14 December 2021  3/3  BIS central bankers' speeches

In the case of investments in individual companies, extensive  BIS central bankers’ speeches  1  transparency can come into conflict with confidentiality requirements. In order to ensure confidential communication with the governing bodies of the companies in which we have a stake, both parties must be certain that the dialogue is indeed confidential. In 2012, we expanded our collaboration with Norwegian academia. NBIM participated by giving lectures on investment management at several universities and other academic institutions. Our programme, the Norwegian Finance Initiative, has helped support research in financial economics at different levels. This initiative contributes to enhancing the quality of research in financial economics among Norwegian academic institutions and to stimulating public debate on the management of the GPFG. This framework for cooperation is also used within Norges Bank, both in investment management and the development of strategy. Thank you for your attention. I now give the floor to the Chief Executive Officer of NBIM, Yngve Slyngstad. 2  BIS central bankers’ speeches  BIS central bankers’ speeches  3  4  BIS central bankers’ speeches
Loss of diversification benefits Another important drawback in this regard is the initiated process of deleverage of western banks, their more pronounced concentration on home markets and the general fragmentation of international banking model that could deplete the financial markets of EE’s, slow down the process of their regional integration and globalization and will eliminate the potential diversification benefits for their investors. Incentive for further development of shadow banking Extremely high capital and other requirements may drive banking activity into institutions or financial arrangements that are not regulated as strongly, often referred to as “shadow banks.” This is especially pronounced in EE’s where required credit growth rates to support continued rapid economic growth and social development are much higher compared to advanced economies (AE) 3. There is near universal agreement after the financial crisis that the shadow banking sector is potentially capable of creating massive problems and triggering a future crisis. Therefore, there is much discussion on how to control those institutions and  3  According to Financial Stability Board’s monitoring report on global shadow banking (“Global Shadow Banking Monitoring Report 2012”, page 4, paragraph 5): “After the crisis (2008–2011), the shadow banking system continued to grow although at a slower pace in seventeen jurisdictions (half of them being emerging markets and developing economies undergoing financial deepening) and contracted in the remaining eight jurisdictions”..  BIS central bankers’ speeches  5  types of transactions.

Banks would have to extend the maturity of funding sources (long-term securities or extend the maturity of loans) or convert long-term loans to short-term loans with negative implications for the effects for the growth. Extension of the maturity of the funding structure would also imply higher cost of financing. Within the emerging markets, the main concerns arise from the mismatch between the funding that is actually being stable in some of the EE’s and the funding that is defined as a stable one within the Basel III regulation. Some of the examples that we can run through are countries like Saudi Arabia and South Africa, where the deposits of the public sector entities and the wholesale funding are the most stable one, but are not treated as such within the new regulatory framework. The above can be considered as direct impact of transmission of the new liquidity framework to the EE’s, but the indirect impact should not be neglected at all. The new liquidity rules will probably change the assets structure in the balance sheets in some of the large banks in the AE’s. In a world of rapid financial integration, many of these banks have subsidiaries in the emerging world and if the liquidity is managed on consolidated level, this can imply possible liquidity shortages in the host country.
Although regulators and supervisors conspicuously failed to address these issues during the run-up to the crisis, prudential regulation and supervision should surely be the first line of defence, as they can be focussed directly on the source of the problem. Regulatory policies have a comparative advantage in combating excesses in financial markets. By contrast, inflation is, in the long run, a monetary phenomenon, so it is more naturally suited to the pursuit of price stability. Beefing up the regulatory regime so it is better suited to preventing the re-emergence of financial excesses is very much work in progress. There are sound arguments for forcing banks to build up more capital and reserves during the good times, which they can then draw down if things turn bad, so improving the general robustness of the system – so-called “macro-prudential regulation”. Under instruction from the G20, the Financial Stability Board, together with the Basel Committee on Banking Supervision, is therefore developing an appropriate set of cyclically-varying regulatory requirements on financial institutions 5 , together with a range of other changes to improve the stability of the global financial system. Of course, no regulatory regime will be perfect, and financial institutions have an incentive to try to circumvent requirements that they perceive as onerous. So there may be times when monetary policy will need to work alongside regulatory policy in order to restrain excessive credit and asset price growth, even though the achievement of the inflation target may not immediately appear threatened.

Fortunately, all political parties recognise the need to put in place a credible plan for the consolidation of the public finances over the medium term, even if their preferred routes to doing so differ. Finally, question marks remain about the durability of the recovery in the rest of the world and particularly in the UK’s main export markets. Some of the advanced economies face headwinds similar to those facing the United Kingdom. The fate of the euro area, the destination of more than half our exports, is particularly important. The recovery there all but stalled in the fourth quarter and business surveys point to only moderate growth in the first part of this year. Moreover, Greece and some other euro-area countries face significant fiscal challenges. The necessary fiscal consolidations are likely to depress overall euro-area demand unless offset by demand expansion elsewhere. But as I noted, there are also reasons to be cheerful. Two factors in particular should provide a boost to the demand for UK goods and services. First, there is a substantial policy stimulus still working through the economy. Bank Rate remains at a historical low of 0.5%, while the Bank has bought some £ billion of assets, mainly gilts, financed by the issuance of central bank reserves (think of these as Bank of England IOUs that are held by the commercial banks) – so-called “quantitative easing”.
This is attributable to various policies and practices adopted in the region following the lessons learned from the Asian financial crisis in 1997–98. On the local front, Malaysia has been largely successful in dealing with the challenges brought about by the global crisis. The economy has recovered beginning from the fourth quarter of 2009. Prompt government responses and initiatives, as well as the existence of strong macroeconomic fundamentals and a sound financial system are the principal factors. In the first quarter of 2010, most Asian economies registered robust growth, with Malaysia  BIS Review 76/2010  1  recording a 10.1% real GDP growth. Another recent measure of Malaysia’s resilience is its rating in the IMD World Competitiveness Yearbook 2010. Malaysia’s global competitiveness ranking improved significantly from 18th place in 2009 to 10th place in 2010, out of 58 economies. Malaysia has successfully issued a $ billion sovereign Sukuk (Islamic bonds) last Friday with large international demand even during a period of volatile financial markets. This further attests to Malaysia’s success as well as international acceptance of Malaysia’s standing as a major international Islamic financial centre. Although Malaysia fared relatively well during this crisis, we should not be complacent. We should leverage on the lessons learnt from this and the late 1990s crises to improve our resilience to any future shocks. There is at present obvious optimism among financial institutions following the improved economic outlook and market sentiment.

Philipp Hildebrand: Developments in the international financial markets and managing the Swiss National Bank’s assets Introductory remarks by Dr Philipp Hildebrand, Member of the Governing Board of the Swiss National Bank, at the end-of-year media news conference, Zurich, 16 December 2004. * 1. *  *  Developments in the international financial markets  Looking back at the year gone by, it becomes evident that two opposing price movements have dominated the markets: the strong depreciation of the US dollar on the one hand and the sharp rise in oil prices on the other hand. Developments in the bond and equity markets were, by comparison, rather restrained. In the past few weeks, the dollar has continued its downtrend that commenced three years ago, at which time the greenback was still worth over CHF 1.70. Given the structurally inflated US current account deficit, the sustained downward revision comes as no surprise. However, the fact that the revision to date has been relatively one-sided vis-à-vis the European currencies and the Canadian dollar is problematic. Major Asian currencies have either remained completely pegged to the dollar, such as the Chinese renminbi, or joined the dollar in its slide - at least to some extent - like the Japanese yen. This was only possible, however, at a price, namely huge dollar-buying efforts on the part of the central banks and governments in question. As a result of this asymmetric trend, European exporters are currently bearing the brunt of the additional competitive pressures stemming from the weaker dollar.
4  UNEP Emissions Gap Report 2019 International Energy Association (IEA) Global Energy Review 2020 IPCC Global Warming of 1.5°C Special Report 7 UNEP Emissions Gap Report 2019 5 6  3  All speeches are available online at www.bankofengland.co.uk/news/speeches  3  Let me be clear, change needs to happen in the real economy. Consumers, governments, corporates all need to act. But, if the real economy does not make that change and we head down a path of increasing climate instability or disorderly transition, the financial sector will bear that risk. It is, in my view, self-evident that the financial system cannot diversify its way out of this risk. As the pandemic has revealed, the interconnections between the real economy and the financial system run deep. And just like Covid-19, climate change is a far-reaching, system-wide risk that affects the whole economy, from which the financial system is not immune. For the same reason, while individual investors can divest, the financial system as a whole cannot. Indeed, seemingly rational individual actions that delay the transition make our collective future problems much bigger. Given the scale of change required, we will simply not be able to divest our way to net-zero. Rather if financial risk is to be reduced, then the underlying climate risks in the real economy must be managed. And fixing this collective action problem is a shared responsibility across financial institutions and regulators. We need to work together to solve it.

In total, 1300 tons were sold. The decision to reduce our gold holdings by half was taken for two reasons that were highlighted by experts as early as 1997: First the SNB arguably had more gold than it needed. Switzerland's official gold holdings per capita were five times higher than those of the next G10 country. Second, the SNB had - on a mark-to-market basis - excess capital reserves that were no longer required for monetary purposes. As a result, the decision was taken to sell 1300 tons of gold. In May 2000, as soon as the legal framework had been amended to allow market sales, the SNB started it gold sales operations. We adopted a very transparent strategy and tried, within the constraints of the Washington Agreement, to maximize the proceeds of the gold sales in Swiss francs. The average selling price of USD 350/oz was 17 dollars higher than the average London fixing of the selling period. Of course, with today's prices around 600 USD/oz, you might think that we revisit our sales program with mixed feelings. As a matter of fact, price forecasts, which are inevitably subject to great uncertainty, did not feature prominently in the SNB’s decision to sell gold. The timing of the gold sales was largely influenced by factors that the SNB did not fully control. Once we were allowed to sell, we started our program within the window of opportunity that had been negotiated with other central banks under the first Washington agreement.