samchain/econo-pairs-v1 huggingface dataset:
(http://www.imf.org/external/pubs/ft/weo/2009/01/index.htm )  BIS central bankers’ speeches  Chart 3:  Chart 4:  Changes to US real GDP in crisis periods  Risk appetite(a)  1929 crash 1982 recession  cumulative % change since start of recession 40  Standard deviations from mean (b) 2.5  30  1.5  2008 financial crisis  2 1  20  0.5 10  0  0  -0.5  -30 1  2  3  4 5 6 7 years since crisis  8  9  10  Sources: Global Financial Data, Case-Shiller, Federal Reserve, US government bodies (Department of Commerce, Department of Labor, Council of Economic Advisers) and Bank calculations. -1.5  Credit Suisse  -20  0  -1  State Street  -10  -2 -2.5  04  05  06  07  Sources: Bloomberg, calculations. 08  Credit  09  10  Suisse  and  Bank  (a) Indices are adjusted so that positive numbers indicate increased risk-taking and negative numbers indicate reduced risk-taking. (b) 90-day moving average of standard deviations from mean. Mean and standard deviation calculated from 28 July 2004.

In response to this more competitive and challenging environment, banks could adopt various strategies such as greater income diversification, the containment of operating costs and increased investment in technology. From the regulatory standpoint, the main challenge will involve maintaining a level playing field for all financial system participants, so that similar activities posing similar are subject to a comparable level of regulation. As the supervisor of banks and guarantor of financial stability, the Banco de España also faces very important and specific challenges as a result of disintermediation. In this new environment, the relative importance of the main risks to financial stability will foreseeably change with an increase of those linked to market risk. As a result, the supervision and analysis of the financial risks arising outside the banking system and of the interconnections between banks and other financial system participants will become more important. These interrelations will not only take the form of cross-balance sheet or income statement positions; similarities between the portfolios of different types of participants may also mean that shocks initially affecting one institution or a group of institutions may ultimately have repercussions for all other financial market participants. In this respect, it should be borne in mind that the Banco de España is responsible for activating and deactivating certain macroprudential tools introduced under legislation to mitigate systemic risk in the financial sector. Most of these instruments are applied almost exclusively to banks.
The fact that the loans are falling due is of course included in our calculations when we assess how we will formulate our future monetary policy. Phasing out the loans is fairly undramatic. The measures will disappear, as I mentioned earlier; in principle this will occur automatically as the need for the measures disappears. The fixed-rate loans that currently have the longest maturities mature in the autumn 2010. At present we do not expect there will be a need to offer new fixed-rate loans at longer maturities beyond this horizon. But of course we are closely following developments in the financial markets, and are prepared to implement new such measures if necessary. The interest rate increases entail slightly more difficult considerations. For many central banks the question of timing is a difficult one. Withdrawing support measures and beginning to raise interest rates too early or too quickly may slow down the economic recovery in a sensitive phase. If the expansionary policy instead continues too long, there is a risk that inflation will be too high or that imbalances will build up, for instance, on the housing market or between different countries. Assets such as commercial property, but also residential property, have often played an important role in economic crises. There are links between house prices and the financial markets, not least through interest rates and lending. And low interest expenditure usually stimulates both credit growth and house prices, all else being equal. Considerations regarding the housing market...

Moreover, here in Essex County, there has yet to be any significant upturn in jobs, although neighboring Hudson County has seen a fairly strong rebound. 4  BIS central bankers’ speeches  That’s not to say that there aren’t any strong industry sectors here in New Jersey: job growth has been quite robust in health services, transportation and warehousing, construction and a number of business service industries. There has also been steady job creation in retail trade and leisure and hospitality, though these tend to be low-paying sectors. On the other hand, employment remains depressed in other industries such as finance, publishing, telecommunications and manufacturing. So why is New Jersey not keeping pace with New York in terms of job growth? Well, much of the strength in New York State has been driven by New York City; other parts of the state have seen similar, if not weaker, job growth than New Jersey. Of course, this raises the question: why has New York City’s economy been so much stronger? In fact, there is a body of research suggesting that the long-term drift of economic activity and jobs from cities to suburbs has subsided, and that there is a growing trend toward re-urbanization – a preference for both people and businesses to locate in cities, like New York. Yet there is also a strong tendency for persistent strength in an urban hub to gradually spill over into nearby areas.
Debt service has not risen by the same proportion, due to rising  BIS Review 41/2007  1  incomes and easier credit terms, and arrears are at a low. However, some borrowers have stretched their capacity to the limit and the most indebted group has seen its debt grow substantially as a proportion of income and assets in recent years. Conditions will not need to change much to cause them serious difficulties. The bulk of household debt is in the form of CPI-indexed mortgage loans, making low inflation critical. Household debt in foreign currency was very low, but has been increasing. High levels of foreign currency-denominated debt could prove questionable for households with no income in foreign currency. Since house prices are currently buoyant, they are likely to rise by less than general inflation or even fall in nominal terms. Household equity could shrink under such conditions. Business profitability appears to have been strong in 2006, in spite of a massive increase in financial expenses from exchange rate losses on foreign borrowing, higher interest expenses and a substantial increase in interest-bearing debt. Debt of listed companies grew as a ratio of equity and the same is probably true of other businesses. Higher debt levels leave them more vulnerable to a contraction in the economy. Equity prices have soared in Iceland in recent years. One explanation for the increase may be that Icelandic companies were undervalued by the markets, for example by international comparison, and another that bold investment ventures have driven up their value.

As a contributor, we will share with others the climate solutions that we have developed and may be of relevance to them. Let me highlight three key themes at the Singapore Pavilion: decarbonisation technologies transition finance carbon markets  First, innovating decarbonisation technologies. The transition to net-zero will require us to transform how we live and work. It will transform how we power our homes and offices, travel, grow our food, and construct our cities. As a densely populated metropolis in the tropics, Singapore is a living lab to develop, testbed, and commercialise green solutions for urban living. Let me highlight two areas. One, decarbonising land transport. 1/3  BIS - Central bankers' speeches  In many cities, land transport accounts for a substantial portion of carbon emissions; in Singapore, it is about 15%. The solution lies in electrifying transportation. This is why, from 2030, Singapore will allow only registrations of cleaner-energy cars – namely, electric, hybrid or hydrogen fuel cell cars. Infrastructure solutions for charging electric vehicles on a massive scale will need to be developed and Singapore can be a good test bed for such solutions. Two, decarbonising power generation. Globally, while the growth in renewable energy has been spectacular, fossil fuels continue to account for more than 80% of global primary energy consumption. This is why the production, deployment and research into low-carbon hydrogen, as well as carbon capture, utilisation and storage solutions are so critical and why Singapore has focused heavily in these areas.
‘No money, no inflation: The role of money in the economy,’ Bank of England Quarterly Bulletin, Summer, pp. 162-177. Masuch, K., S. Nicoletti-Altimari, M. Rostagno and H. Pill (2004). ‘The role of money in monetary policymaking,’ BIS papers no. 19, pp. 158-191. Poole, W. (1968). ‘Commercial bank reserve management In a stochastic model: Implications for monetary policy,’ Journal of Finance, Vol. 23, no. 5, pp. 769-791. Rotemberg, J.J. and M. Woodford (1997). “An optimisation-based econometric framework for the evaluation of monetary policy” in B. Bernanke and J.J. Rotemberg (eds. ), NBER Macroeconomics Annual 1997, MIT Press. Sargent, T.J. and N. Wallace (1973). ‘Rational expectations and the dynamics of hyperinflation,’ International Economic Review, Vol. 14, no. 2, pp. 328-50. Tobin, J. (1958). ‘Liquidity preference as behaviour towards risk,’ The Review of Economic Studies, Vol. 25, no. 2, pp. 65-86 Woodford, M (2003). Interest and prices: Foundations of a theory of monetary policy, Princeton University Press. Page 18  1. See King (2002). 2. See Friedman (1970), p. 24. 3. See Bernanke (2004). 4. See the discussion of this in Masuch, et al. (2004). 5. See Goodhart (1989). 6. See Poole (1968). 7. That would be in the spirit of the traditional monetarist arguments made by Friedman (1963) and Brunner and Meltzer (1988), as well as reflecting the portfolio models of Tobin (1958) that lie outside the monetarist tradition. 8. See the arguments made in IIMR (2022) and Jessop (2022). 9. See the discussion of these issues in Bernanke (2003). 10.

The impact of asset purchases and sales on the economy is state contingent, with the smooth functioning of financial markets being a key determinant of the likely impact. Back in its August 2021 Monetary Policy Report, the MPC judged ‘that the impact on monetary conditions of a reduction in the stock of purchased assets, when conducted in a gradual and predictable manner and when markets are functioning normally, is likely to be smaller than that of asset purchases on average over the past’. [17] The analytical results discussed today support these conclusions, and thereby the approach to unwinding the QE asset portfolio based upon them. That is not to deny that asset sales have the potential to tighten monetary and financial conditions – indeed, the monetarist framework would suggest that some tightening is likely. I would certainly expect them to do so. But as long as we undertake any gilt sales programme in a gradual, predictable and well-communicated manner in a reasonably benign market environment, we can still use Bank Rate as the marginal instrument to achieve the inflation target over the medium term, conditional on how QT has influenced asset prices and the wider economic situation. Concluding remarks The analysis I have presented explores whether monetary quantities play an additional role in the transmission of monetary policy to aggregate spending (and thus pricing) decisions, beyond that already captured by the impact of changes in the official policy interest rate.
These first set of parameters for core capital has been carefully calibrated after considering the conditions in the various economies, as well as the results of  BIS Review 121/2010  1  the bottom-up Quantitative Impact Studies and the top-down macroeconomic impact of the proposed changes. The phase-in arrangement for the new benchmarks strikes an important balance between strengthening the financial system and supporting economic recovery. Singapore supports the Basel Committee’s reforms, and the further work to be done. 9. Going forward, our key challenge is to ensure robust implementation of these new capital standards. In an interconnected global system, major problems in one part of the system will eventually affect us directly or indirectly, through various channels. All economies, whether advanced or emerging, and whether they had a direct banking crisis or not, have therefore a shared interest in strengthening the resilience of the global financial system. 10. However, as we phase-in these measures, we need to be vigilant that these do not have unintended consequences on credit availability and economic growth, or in reducing diversity in the financial system. 11. In striving towards a convergence in regulatory standards in order to preserve a level playing field across jurisdictions, we should be cognizant that the starting conditions and future challenges of countries differ. For many emerging economies, their priority lies not in re-capitalising banks or reducing leverage, but in continuing the reform of the banking system and in developing deeper capital markets to support future economic expansion.

Moreover, banks in emerging markets vary in size, sophistication and systemic significance – some are small and domestically focused, while others have sizeable regional footprints. Most emerging economies are also hosts to global banks, and rely on them to provide trade and project finance, and cross border remittances. Let me emphasise that these differences do not detract from the need to have higher regulatory standards. However, it does mean that in calibrating the details of the rules, we have to take into account these differences, so that financial intermediation is not adversely affected. The Macroprudential dimension 12. Let me now say a few words about macroprudential regulations. Macroprudential regulations relate to the use of prudential tools to promote the stability of the financial system as a whole, and not just that of individual institutions. It recognizes that there are two sources of systemic risks. One, at any point in time, interlinkages and common exposures across institutions can multiply aggregate risks. Two, over time, boom/bust cycles can be amplified and destabilize the entire system. In good times, low volatility and low risk premia induce excessive credit creation and rising asset prices in a process which then feeds on itself. When confidence turns, the credit excesses and asset bubbles unwind quickly, with prices overshooting as they head down, feeding a downward spiral. 13. While macroprudential regulation is not new, the financial crisis has triggered a renewed interest in it.
It has started to happen, particularly in the US, but there is a long way to go. As the IMF noted a fortnight ago, global banks accounting for 80% of the total assets of the largest institutions are still earning profits below their cost of capital. Prior to the crisis, global banks’ return on equity averaged 15%. In those years, global banks’ actual returns on the assets they held were pretty much flat in that period. Indeed, in the UK, banks in the years immediately before the crisis, return on assets actually fell. The high returns were not fuelled by a better return on the underlying assets banks were holding. In the UK, for example, banks’ assets grew from 20 times equity to more than 30 times equity. Put simply, banks maintained and increased shareholder returns by dangerously increasing leverage and thinning their capital cushions. Of course, shareholder returns collapsed when the crisis struck and risk across the system was re-priced. In the depths of the crisis, global banks’ earned negative returns for shareholders. UK banks’ return on equity plunged to –10%. Today, returns on underlying assets remain lower than they were before the crisis. In 2013, global banks’ average return on assets was 0.3%. For the largest UK banks, return on assets was just 0.01%. Return on equity in the UK, the shareholders’ return, was just 0.3%. Today’s low returns both on assets and on equity reflect a number of factors.

And that of course, is why, unlike monetary policy, it is so difficult to define financial stability with a numerical target. This motivation has been the starting point for the new international standards for bank capital and liquidity which have been set at levels calculated relative to the extreme levels of losses and liquidity stresses observed through the crisis. It is also the motivation behind the concurrent stress testing of the banking system that is becoming the norm in advanced economies. The current Bank of England stress test, which will report in December, subjects the banking system to a tail event – an improbable but plausible set of circumstances. The objective is to ensure not only that individual banks can weather such an event but also that when we aggregate the actions that individual banks take in such a stress, the system as a whole does not fail. The second impulse of the macroprudential policy maker is much closer to monetary policy. It is to act counter-cyclically against the upward spiral of exuberance which can easily set in to the financial system as rising asset values provide additional collateral for more and more lending and weaken lending standards. In the old days, central bankers simply called all of this “leaning against the wind”. Nowadays, when done to restrain risk in the financial sector, we call it “counter-cyclical macro-prudential policy”. But however called, we can expect such action by macro-prudential authorities to be a feature of the banking landscape for the future.
Later on, it is expected to gradually reduce to 20 billion US dollars by the end of 2022. I would like to emphasise once again that the fiscal rule mechanism smooths out the impact of a decrease in the current account balance on the domestic economic environment. However, it only pertains to oil price fluctuations. I would like to stress that we have slightly changed our approach to publishing forecast scenarios. The key rate decision relies on our baseline macroeconomic forecast and the analysis of uncertainties and risks for the baseline forecast. This is the reason why we will continue to publish the baseline scenario four times a year in our press releases and Monetary Policy Report following core meetings. We will release our supplementary scenarios – the high oil price scenario and the risk scenario that assumes that prices will plunge – in the same manner as the baseline scenario but once a year, in the Monetary Policy Guidelines. It is determined by the essence of these scenarios that remains almost unchanged across the meetings. The 2020–2022 Guidelines will be published on Monday. Winding up, I would like to comment on monetary policy prospects. 2/3  BIS central bankers' speeches  After the five years of the evolution from tight to moderately tight and then to neutral monetary policy, we have finally entered the key rate range we consider as a probable neutral interval.

Jean-Pierre Roth: Recent Swiss experience in monetary policy strategy Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at a seminar on monetary theory and policy, University of Fribourg, Fribourg, 28 November 2007. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  One continually recurring element in the history of the Swiss National Bank has been the application of a clear set of rules that we refer to nowadays as ′strategy′. The SNB′s monetary policy strategy consists of three elements: a definition of price stability, an inflation forecast and a fluctuation range assigned to a short-term interest rate. Experiences with this strategy since its introduction in the year 2000 – judged in terms of both price stability and cyclical developments in the economy – have demonstrated its value. Nevertheless, certain aspects of the strategy have been questioned by academics and by central bankers. These include inflation forecasting under the assumption of a fixed Libor, the choice of the reference interest rate, the role of monetary aggregates and exchange rates in the SNB′s models, and the decision not to publish the minutes of Governing Board meetings. However, these deliberately selected elements in fact serve to reinforce the legitimacy of the SNB′s strategy. BIS Review 139/2007  1
But one condition for macroprudential policy to work as intended is that there is a framework in place, with a clear division of responsibility and which clarifies how the various instruments should be used. One reason why monetary policy in Sweden has needed to give consideration to financial imbalances is because there has been no framework for macroprudential policy. While awaiting a permanent framework in Sweden, the Riksbank and Finansinspektionen started a joint council for cooperation on macroprudential policy at the beginning of 2012. But even if this council offers an important forum for analysis and discussion, it has no powers of decision-making and no tools of its own at its disposal. Two days ago, however, the Financial Crisis Committee produced a proposal for macroprudential policy in Sweden – which I will return to later on. Central banks should play an important role in macroprudential policy When drawing up a framework for macroprudential policy in Sweden, I think there are good reasons for giving the Riksbank a central role. One important reason is that the Riksbank has long been conducting extensive analysis of macroprudential policy issues. Ever since the Swedish bank crisis in the early 1990s, the Riksbank has gradually built up substantial knowledge and experience of analysing the risks that can threaten the stability of the financial system.

Essentially an Asian growth story:  8  BIS central bankers’ speeches  •  Rise of Asian middle class and growing affluence has generated demand for variety of financial services, including wealth management and insurance  •  Growth of Asian corporates has driven demand for offshore lending, foreign exchange trading, capital market activities, and risk management. 60. Some highlights in past year:  •  Assets under management (AUM) rose by 30% from $ trillion in 2013 to over $ trillion in 2014. •  Foreign exchange trading, measured by average daily turnover volume, increased by 40% from a year ago to reach $ billion in October 2014. •  Offshore non-life insurance, measured by gross written premiums, grew 8.8% yearon-year to $ billion in 2014. •  Corporate debt issuance grew 13% in 2014 as outstanding debt reached $ billion. Infrastructure financing space becoming more active. 61. Singapore already serves as important infra financing hub, with 60% of infra financing transactions in ASEAN led by project finance teams based in Singapore. •  MAS working closely with industry to develop toolkit for standardised public-private partnership contractual clauses. This will: o  o •  enhance bankability of infra projects; and facilitate subsequent capital market refinancing  Aim in coming years is to enhance infra financing ecosystem: o o  Work with MDBs to increase supply of bankable projects Facilitate greater institutional investor participation in infra assets. RMB market has taken off well. 62  Singapore currently second largest offshore RMB hub in world.