samchain/econo-pairs-v1 huggingface dataset:
Like the provisions, this forms part of the SNB’s equity capital. In the short term it helps to absorb any losses, while in the longer term it is transferred to the Confederation and the cantons as a distribution of profits. If it were not for the distribution reserve, the SNB’s resilience could only be guaranteed to a limited degree. There are two reasons for this: for one thing, a need for measures to safeguard the system could arise unexpectedly, greatly increasing the risks faced by the SNB suddenly; and for another, these risks are significantly higher because of the permanently expanded balance sheet. The SNB has therefore decided to additionally strengthen its equity capital, and thus its balance sheet. The SNB’s ability in the long term to respond to a crisis must not be dependent on the distribution reserve. This is only possible if the SNB increases its provisions from their current level. In the past, it increased its provisions each year at a rate equal to average nominal GDP growth for the previous five years. The SNB now intends to double this allocation in financial years 2009–2013: instead of approximately CHF 1.5 billion, some CHF 3.0 billion will now be allocated to provisions in 2009. Strengthening provisions will reduce the potential for future profit distributions to the Confederation and the cantons. On a current view, however, the annual profit distribution of CHF 2.5 billion can be expected to be maintained until 2017, when the current agreement on profit distribution lapses.

Just let me give you an example: security is not something that people can actually address only at national level. Unfortunately, we have seen this very frequently through various terrorist actions. Everything in economics now is basically global. So it’s even beyond being only European. It’s actually all over the place. The more we integrate, the better we’ll be placed to address economic issues of this nature. Think about defence. Does it make sense today saying that countries are able to defend themselves against global challenges? Well, less and less. Think about another challenge: migration. Migration is not a problem of one country. It’s a problem, a challenge and an opportunity for a group of countries. In this case, the European and eurozone countries are certainly called to respond to this challenge. All this means that having a European perspective has become essential to understand today’s problems and the possible solutions. The key 1/2  BIS central bankers' speeches  question that you will be asked more and more in the future is “What can we achieve together?” We count on you to embark on this long journey: we invite you to be our ambassadors, to continue the conversation on Europe in your schools and cities, with your relatives and friends. You will have an important role to play in tomorrow’s Europe, but that role, that responsibility, starts today. You give us not only hope for a better future, but you also inspire us to continue our work.
The relevant monetary policy trade-off at this juncture, then, is not the traditional one between inflation and growth but between inflation and growth on the one hand, and financial stability on the other. How, then, should central banks respond to this new trade-off? I see three main avenues. First, central banks need to expand their set of policy tools. Measures to limit excessive risk-taking in the boom and limit losses in the bust, such as counter-cyclical capital requirements, leverage limits, and stable funding ratios are the most obvious additions. These fall under the heading of macroprudental tools. For emerging markets where the brunt of the impact from excess global liquidity 6  has been felt in exchange rates, capital flow management measures would help to alleviate these pressures. Moreover, central bank operational frameworks – such as collateral rules that dictate which types of securities can be pledged for central bank liquidity, the types of assets central banks choose to hold, or the structure of liabilities that they choose to issue – offer ways to influence certain segments of financial markets directly. The challenge going forward is to operationalize these micro and more targeted policy tools in a systematic way. Here it is important to stress that any one set of instruments working alone is unlikely to be sufficient. Interest rate policy, macroprudential levers, and capital flow management measures all interact and their application should be viewed as a whole rather than in isolation.

Navigating the Great Transition: An Emerging Market Perspective Speech by Dr. Veerathai Santiprabhob Governor of the Bank of Thailand School of International and Public Affairs, Columbia University October 5, 2016  Ladies and Gentlemen, It is a pleasure for me to be here in New York and to have a chance to participate in the policy discussion at SIPA. Given the increasingly complex policy challenges facing the global community, the contribution that SIPA makes in educating future leaders to serve the global public interest is critical. I would like to thank Professor Ito for inviting me. He was one of my early mentors at graduate school and I have benefitted from his many insights ever since. This coming weekend I will be attending the Annual Meetings of the IMF and the World Bank. As you know, this is one of the biggest global forums for addressing issues related to the global economy and world financial market. The discussions will be especially pertinent this year given the complex and highly unpredictable state of the world that we face. Former premier Wen Jiabao once described China’s growth performance as “unstable, unbalanced, uncoordinated, and unsustainable”. This seems like an apt description of the global economy at this juncture. Unstable because the proliferation of popular discontent fueled by rising income inequality amidst ongoing international conflicts have greatly elevated geopolitical uncertainty. Unbalanced because with anemic recovery of advanced economies, much of the growth in 1  the global economy continues to be driven by emerging markets.
The house price inflation series begins in 1954. The FSTE-All Share Index series begins in Jan 1693. The 2.5% coupon consol yield series begins in July 1700. All data are for the UK. 14  BIS Review 18/2009

AI uses the law of large numbers to solve problems and learn, sifting multiple permutations for a solution. All AI problems are, in effect, big data problems involving long strings of ones and zeros; they are digital. The brain, by contrast, is more analogue in its configuration, processing and problem-solving. Solutions are often condensed down to a small number of learned behaviours or heuristics. These differences become clear with a task such as learning a language. This is one where huge strides have been made by machines over the past decade (Pratt (2015)). That rapidlearning has not come from computers feasting on the classics like a college student. Rather, it has arisen from them devouring the whole library in one digital mouthful, then seeking matching patterns in the text and syntax. Language, paradoxically, has become a numbers not a words game. These different approaches to problem-solving are important when defining where humans may have the edge. This appears to be in tasks requiring high-level reasoning – large logical  BIS central bankers’ speeches  9  leaps of imagination rather than repeated small experimental steps. It is in tasks where the focus is on cognition and creativity, rather than production and perception. And it is activities where EQ trumps IQ1, where social capital is scored as or more highly than financial capital. To bring that down to planet earth, no-one anytime soon is I think going to choose a robot to cut their hair – I told you the hairdressers were safe.
Moreover, several challenges such as the advent of ASEAN Economic Community (AEC) in 2015, the implementation of the Basel III accord and the rocky recovery of the western hemisphere, remained ahead of us. In this regard, I view that priority should continue to be on strengthening the role of domestic and regional institutional investors. This group of market participants are important players on both the issuer and investor side. Collective investment or asset management companies can be an important vehicle to channel cross border savings for cross border investment. We know all too well that very few non financial single name issuer can succeed in a foreign market if they are not well known household names. But institutional investors such as insurance, pension funds and asset management firms are likely to be able to better intermediate cross border savings and investment. These institutional investors would be able to provide a two way flow and with a better knowledge of regional conditions and a natural home bias, would also be a stabilizing factor during severe market stress. A stronger and broader regional institutional investor will also provide opportunities for diversification as well as alternative saving vehicle that would serve the changing demographic trends. Throughout Asia, we are seeing increasing demand for more sophisticated wealth management services. As regulators we also need to continue to collectively enhance our infrastructure and further harmonize regulatory regimes to support greater cross border activities. Standardized market conventions help promote cross border issuance in our respective markets.

As far as the effectiveness of the policy goes, the impact depends on what those who have sold the gilts do with the money we give them in return, and how banks, businesses and households respond to the resulting movements in asset prices and money holdings. It is quite possible that the impact of a given quantum of purchases will be different at different times and be sensitive to the prevailing economic conditions. But that is also the case with changes in Bank Rate, where the effects can be equally uncertain. BIS central bankers’ speeches  3  Tracking the impact of the new round of purchases is also harder than before. Market participants have increasingly come to anticipate our actions, so that asset prices tend to move ahead of our decisions. That makes it difficult to isolate the impact on asset prices of policy changes from the myriad of other things driving them. The fact that UK government bond yields have fallen about a quarter percentage point more than those in Germany and the United States since the late summer is, however, at least consistent with the effect we expected. In any case, so far we have seen little to suggest that the effect on nominal demand will be markedly at odds with that of our first round of purchases. But it is still rather early to draw firm conclusions one way or the other.
The recommendation exceptionally has adopted a “one-size-fits-all” approach owing to the current economic uncertainty banks are experiencing, leaving them quite simply unable to forecast their medium-term capital needs accurately. We will review this recommendation in December, and unless we conclude that the banks’ capital projections remain clouded by exceptionally high uncertainty, we should revert to our usual supervisory practice of assessing the planned distribution of dividends on a bank-by-bank basis, taking into account the safety and resilience of the banking system as well as the preservation of its intermediation function at a time of deteriorating asset quality and increased capital consumption. Another new development concerns the leverage ratio. On the basis of the amendments to the Capital Requirements Regulation, ECB Banking Supervision has allowed significant credit institutions to exclude central bank exposures from the calculation of their leverage ratios until July 2021. ECB Banking Supervision has cooperated with and sought the views of the ECB’s central bank function in order to tailor the scope of this temporary exemption so that it covers only those claims on the central bank that are related to the implementation of monetary policy. The measures in relation to dividends and the leverage ratio, as well as the other measures providing temporary capital, liquidity and operational relief to banks, are exceptional measures which are justified as long as the impact of the COVID-19 crisis continues to be felt. We may also decide to discontinue some of these measures, as we did for some of the operational relief measures in July.

As with our monetary policy tools, we are closely monitoring the situation and we will review our approach on a regular basis. Independent of the ECB’s actions, banks need to perform proper risk management, acknowledge the recognition of impairments, and book an appropriate level of provisions. I would now like to turn briefly to the subject of central bank digital currencies (CBDCs) and how the pandemic has had an impact on them. The arguments in favour of CBDCs have intensified during the pandemic; one of them is reaffirming the role of central banks as the sole issuers of money. Although these arguments are legitimate, they do not necessarily tip the scales in favour of immediate action in favour of CBDC issuance. This is due to the many legal, operational and policy issues around CBDCs which remain unresolved, standing in the way of a transition from traditional cash to CBDCs. I have touched on those issues in some of my previous speeches. Suffice to say that the issues in question will continue to provide food for thought for the ECB, euro area NCBs and central banks throughout the world as they further explore the costs and benefits of CBDCs. Conclusion Let me conclude. In the blink of an eye, the coronavirus pandemic and the response to it placed the global economy in an induced coma. The ECB has acted forcefully and well within its mandate. Our crisis response shows that our legal framework is flexible, but only up to a certain point.
The History of Inflation Targeting Before I look forward, it’s worth looking back and highlighting that it’s now 30 years since the inception of inflation targeting. In 1989, the central bank of the small country of New Zealand announced that the main objective of its monetary policy was to target the inflation rate.1 In the subsequent decades, most central banks in major economies coalesced around this approach of aiming for a low, publicly announced inflation rate. For the past three decades, this approach has been remarkably successful at keeping inflation low and stable.2 The inflation targets have acted as a nominal anchor for inflation expectations, which play a big role in determining actual inflation. For anyone who was trying to get a mortgage at a double-digit interest rate or seeing prices go up and up back in the days of high inflation, it’s almost unthinkable that in 2020 central banks are pondering the opposite challenge: how to prevent inflation from being too low. But it’s the reality most policymakers face, and the one our monetary policy frameworks will need to grapple with long into the future. The Future of Inflation So, how did we arrive where we are today? Why is low inflation the current challenge, and why will that likely persist? 1/4  BIS central bankers' speeches  To answer these questions, we need to look at r-star, or the longer-run neutral rate of interest.

In this setting, the reform of the pension system currently under discussion is especially important. Indeed, it goes beyond the major goal of ensuring the long-term sustainability of our pensions system in the face of the challenge of population ageing. This reform may also have significant and beneficial short-term effects on the credibility of the authorities’ commitment to budgetary discipline and the ability to see through far-reaching structural reforms and favourably influence the risk premia on public debt. The promptness and ambitiousness of the reform are essential. A suitable combination of changes in certain parameters of the system, raising the legal retirement age, the minimum number of years necessary to qualify for a pension and the period over which the pension is calculated would help ease substantially the pressure on future public spending on pensions and resolve one of the Spanish economy’s major outstanding problems. Fiscal consolidation is an essential condition for ensuring future economic growth. The effort will no doubt be rewarded because it will place the Spanish economy in a sounder position to anchor the recovery. Its long-term effects will in any event prove more forceful if accompanied by structural reforms that raise the economy’s growth potential. The elements interconnecting both policies are on an enormous scale: potential growth influences the sustainability of public finances, while an appropriate distribution of adjustment efforts across the various spending and revenue items is conducive to activity and has expansionary effects on output and employment.
The constant need to invest in key payment infrastructures in this country is in line with technological advancements and the changing needs of consumers and businesses. In this regard, MyClear should be responsible to facilitate the pooling of resources and adoption of new technology to expand the network reach and resilience of its payment infrastructures. Financial institutions on the other hand, should leverage on the common platform to compete by providing innovative and value-adding products to their customers. Such synergistic collaboration will prevent unnecessary duplication and wastage  BIS central bankers’ speeches  3  of resources in the payment landscape. It shall reduce the cost of transactions over the long run. Modernising payment and settlement infrastructure MyClear is embarking on a multi-year programme to modernise Malaysia’s payment infrastructure. In the area of retail payments, a new real-time Retail Payments Platform will be developed to serve both as a catalyst and enabler for innovative payments in Malaysia. As for large value payments, the Real-Time Gross Settlement System or RENTAS is currently being enhanced to adopt a multi-currency system that leverages on the SWIFT messaging standard. The enhanced RENTAS would cater for multiple messaging formats including the internationally-recognised ISO 20022 which supports the transmission of richer remittance data and facilitates interconnectedness with other economies within the region. Enhancing capital market infrastructures With respect to the capital market, Malaysia’s debt securities market is the largest in Southeast Asia.

This represented a deconstruction of the old model of central banking.5 In my view, while there were enormous innovations of enduring value during this period, the reductionist vision of a central bank’s role that was adopted around the world was fatally flawed. 2  Other banks were restricted to partnerships of up to 6 members. 3  During the 1866 and 1878 crises the Bank lent freely to the system but allowed the insolvent Overend Gurney and City of Glasgow Bank to fail. And in 1890 it used a “lifeboat” approach to rescue Barings which was perceived to be solvent. Note however that there is no definitive evidence that an explicit set of Lender of Last Report (LOLR) principles was accepted by the top of the Bank and its directors. The emergence of the Bank’s LOLR role in this period is discussed in Collins (1988), Capie (2002) and Dornbusch and Frenkel (1984). 4  In the late 19th Century the banking system was relatively unregulated (and partly self-regulated) – the Bank did not have an explicit supervisory infrastructure or system of prudential control until 1979. Nevertheless the scope of the Bank’s responsibilities was arguably as broad then as it is now, albeit that the mix was different. 5  See Padoa-Schioppa (2011). 2  BIS central bankers’ speeches  In particular, it failed to recognise that financial stability is as important an objective of macroeconomic policy as price stability, and it downplayed the interrelationships between the two.
The Baltic states and Sweden are naturally closes to our interests, so I will focus primarily on these countries. And as all financial crises are in various ways linked to the banks' loans on the property markets, I also see this seminar as an excellent opportunity to discuss these markets too. We have heard and seen little more than negative news over the last 12 months and most forecasters, including the Riksbank, have underestimated the strength of the international economic downturn. Now, however, we are beginning to see increasingly distinct signs of a stabilisation of the global economy, above all on the financial markets. I therefore intend to conclude my speech by saying a few words about this. The economic integration of the Baltic region is increasing The Baltic region consists of eight countries. They are all members of the European Union (EU) and the region has a total population of almost 72 million. 1 This is more than 15 per cent of the total population of the EU member states. 2 Throughout the course of history, the countries in the region have had close links with each other, not least because of common economic interests. The Hanseatic League is a thing of the past, but the ties between the countries have not weakened, quite the reverse. The economic links are now stronger than ever and a large part of the countries' trade takes place within the region. However, the integration does not relate to trade alone.

Incomes have also developed positively – at least for those who still have jobs. Another important explanation of why house prices have not fallen more is that the real interest rates faced by the households are at historically low levels. The construction of new housing has also been at a low level since the crisis of the 1990s. This is despite the fact that in most of the large urban areas it pays to build new house in comparison to what it costs to buy an existing house. 9 At the moment, when the crisis appears to have bottomed out and optimism has begun to grow, housing prices are beginning to increase again, especially in the major cities. The Riksbank will closely monitor developments in the period ahead with regard to both the housing market and the market for commercial properties. The Swedish banks can cope with large losses in the Baltic states In the deep recession that we are now experiencing, it is not possible to dismiss the fact that the Swedish banks are facing significant loan losses. During the first six months of this year, these losses amounted to SEK 30 billion, which translated into annual figures is equivalent to 0.84 per cent of total lending. A large part of these losses, 44 per cent, stem from the Swedish banks' operations in the Baltic states.