samchain/econo-pairs-v1 huggingface dataset:
As a result, as soon as house prices began to fall in the United States and monetary policies became less expansionary in the face of the inflationary risks arising from commodity price rises, the credit expansion cycle was broken. That caused significant rises in default rates, which affected the securities that had been distributed on the market among large numbers of investors, and the crisis whose main events I have mentioned was triggered. Having described the complex and extremely difficult international context, I now propose to offer some considerations regarding the situation of the Spanish banking system, by  4  BIS Review 133/2008  answering two questions. What has happened in Spain during these fifteen months of financial crisis? And what is going to happen in the near future? What has happened in Spain? The answer as to what has happened in Spain during the crisis is, as we all know, that nothing has happened remotely comparable to the succession of bank bankruptcies and bailouts seen in the United States and practically throughout Europe. And this despite the fact that, at the beginning of the crisis, many international analysts identified the Spanish banking system as that which would suffer the greatest problems on account of its need for external financing, its dependence on wholesale markets and the degree of its exposure to the property market.

An efficient securities clearing and settlement infrastructure is of fundamental importance to the integration and smooth functioning of financial markets. To this end, the Eurosystem supports the Commission’s intention to put forward a proposal for a directive on securities clearing and settlement. On the question of new regulatory initiatives, we share the view that asset management and retail financial services are areas where regulatory intervention could be considered. In the area of financial supervision, the Eurosystem fully supports the Commission’s view that the current institutional set-up should be exploited to the maximum extent before any potential structural change is considered. In particular, the Eurosystem agrees that the main policy objective in the area of financial supervision is two-fold: first, to enhance the competitiveness of EU financial markets and institutions and to facilitate the development of cross-border finance both in terms of institutions and in terms of products and services – the so-called financial integration angle; and second, to ensure the effectiveness of standards for oversight and supervision in a more integrated financial system – the so-called financial stability angle. In this respect, we attach particular importance to the consistent implementation of financial services legislation and the pursuit of supervisory convergence, as well as to the effective cooperation between home and host authorities. We are of the view that it is important that home-host coordination be developed on a robust and consistent basis for the financial groups involved in a way that both ensures effective supervision and reduces compliance costs.
This means that it is not quite as easy to determine the position of the modified Taylor curve. It is still possible, however, to enter the position of various forecast alternatives on the graph and at least assess whether the forecast is extreme in any respect with regard to the deviation of inflation from the target and the deviation of resource utilisation from the normal level. As yet, it is in practice mainly a question of whether the choice of interest rate path was extreme in either direction in the sense that the central bank gave considerable or very little relative weight to the stability of the real economy. Another interesting aspect to investigate is whether the weight attached to the stability of the real economy actually has been constant over time. If it has not been constant then the central bank's loss function has not been consistent over time, or it is more complicated than the quadratic loss function that I have discussed here and that is regarded as normal and reasonable in the literature on monetary policy. Figures 4 and 6 can be studied more closely in the light of this discussion. In Figure 4 we can see that the main scenario for February 2008 leads to resource utilisation being stabilised rather well, but that the CPI forecast is a little high in relation to the target of 2 per cent.

In the case of such a lambda, the point of contact will be lower down to the left, for example at point C, where the Taylor curve is flatter. The inflation forecast will then be further from the target while the forecast for resource utilisation will be closer to a normal level. It is of course not so easy to determine what a reasonably large lambda should be for a central bank. Neither the Riksbank nor other central banks have yet announced whether they apply a specific lambda and if so what this lambda is. In those cases where the decisions are made by a committee made up of several members, as at the Riksbank, it is also possible that different members attach different degrees of importance to the stability of the real economy. A question that then arises is how these different views should be aggregated. Nor is it entirely certain that monetary policy decision-makers are even clearly aware of the importance they attach to stability compared with the stability of inflation. If the central bank's forecasts are only based on a known model, like the Riksbank's main model Ramses, it is possible to determine the position of the modified Taylor curve and which point the Riksbank's main scenario in each Monetary Policy report corresponds to. 8 In practice, the Riksbank's forecasts and those of other central banks are based on several different models and a great deal of judgement.
Instead, you have the opportunity to cast your energies beyond your own interests, beyond the immediate term and beyond your own boundaries. Be open to working together with people from different backgrounds, and persevere through the new challenges and above all, hold fast to the values that are good and important, in particular to that of basic honesty and integrity. Always remember that these will form the foundations and basis of the trust that society will have in you. On this note, I wish you every success in your future endeavours. Thank you. 2  BIS Review 3/2006

As a result, credit risk perception by banks remains considerable; Second, in spite of a better reflection of the key interest rate cut in the last quarter of 2013, the credit price (including other related costs) is considered still relatively high. For that 2  BIS central bankers’ speeches  reason, banks need to cut the credit price down, having better control of their operational costs, especially foreign currency funding costs. Third, credit restructuring should be conceived as a broader process of deep restructuring of the activity of borrowing businesses. Each non-performing loan should be seen as a new opportunity. Our approach should extend to the micro level, according to the motto: door to door and case by case. From the bank’s perspective, this would mean that credit restructuring is not merely a rescheduling of credit instalments in agreement with the businesses, but an in-depth analysis to assess the possibilities of its future existence in the market and acknowledge on time the loss of a part or full credit value. Fourth, infrastructure and legal practice concerning collateral execution remains subject to adaptation to the new situation. Fifth, it may be necessary to allow longer time to see the effect of the measures taken until now, and other measures that should further address the above-listed problems. Despite the existing problems listed above, the Bank of Albania believes that the circumstances are better for banks to be more active in this year in tackling non-performing loans.
Vítor Constâncio: Completing and repairing EMU Speech by Mr Vítor Constâncio, Vice-President of the European Central Bank, at the Hyman P Minsky Conference, organised by the Levy Economics Institute and ECLA of Bard with support from the Ford Foundation, The German Marshall Fund of the United States, and Deutsche Bank AG, Berlin, 26 November 2012. *  *  *  Ladies and gentlemen, It is a great pleasure to be here today to participate at this event organised by the Levy Institute. It is fair to say that, intellectually, the Levy Institute has had a “good crisis”. Building on the post-Keynesian analysis of Minsky’s Financial Instability Hypothesis and Wynne Godley´s theory of sectoral balances and stock-flow consistent models, the work of the Institute´s resident scholars predicted and explained many of the challenges we are facing today. This serves as a reminder of the importance for policy-makers to keep an open mind in continuously refining our economic thinking. It is today clear to us that conventional macroeconomic models were ill-equipped to capture the key role of financial markets. Our theoretical foundations proved to be misplaced when tested in reality. The way forward therefore has to involve taking the lessons from this empirical test: using the knowledge we have gained so far to better understand the necessary conditions for economic and monetary union to function. What this implies for the euro area will be the subject of my address today.

As a Thammasat Economics alumnus, it is an honor and a great pleasure to be ‘home’ addressing the distinguished guests and participants of this prominent conference. Thank you. BIS Review 62/2002  5
Similarly, involvement in the supervisory process gives us critical information in fulfilling our lender-of-last-resort responsibilities. Information sharing with other agencies is simply not as good as the intimate knowledge and understanding of markets and institutions that is gathered on a first-hand basis. Indeed, many institutions at the center of the crisis and arguably the most troubled – Bear Stearns, Lehman Brothers, Merrill Lynch, AIG and the government-sponsored enterprises – were not supervised by the Federal Reserve. Consequently, when those institutions came under stress, the Federal Reserve had poorer quality and far less timely information about the condition of these institutions than would have been the case if we had had the benefit of direct supervisory oversight. Let me now shift gears and turn to the two macroeconomic policy issues: fiscal sustainability and balanced global economic activity. The deep downturn in economic activity has led to a sharp deterioration in the fiscal condition of many countries – the United States is no exception. The problem is not so much that the economic downturn has caused large budget deficits to open up – this always happens when a decline in economic activity leads to a sharp drop in revenue and increased spending on the safety net – but instead is more due to the fact that these deficits generally have a very large structural component.

Some instances of misconduct that have been uncovered have also resulted in fines, legal proceedings and convictions. [4] Control and monitoring requirements in relation to Libor submissions have been tightened, and a number of banks have become sceptical of taking on the legal risk involved in being a panel bank. The UK Financial Conduct Authority has finalised an agreement with the Libor panel banks whereby the banks have committed to remain as submitters until the end of 2021 (Bailey (2017)). After this time, the authorities can no longer guarantee that quotes will be submitted for Libor. Prospects that Libor may be discontinued in a few years’ time have amplified the need to establish alternatives to today’s reference rates. Some countries have already published recommendations for alternative reference rates. All the proposals are based on the shortest rates, ie overnight rates, as the new reference rates are required to be based on actual, observed transactions. The transition to new reference rates in other countries also has an impact on the use of reference rates in Norway. The removal of foreign ibor rates would change the markets on which the Norwegian banking sector currently relies. Norges Bank has, in consultation with Finance Norway, taken the initiative to establish a working group with a mandate to consider alternative reference rates for the Norwegian market. The working group comprises Norwegian banks and branches of foreign banks with a good understanding of the Norwegian money market. Finance Norway and Norges Bank have observer status, while Norges Bank also provides secretariat support.
32000 4800 1255 3892 2220 3262 1648 1485 25465 6188 9445 16494 15220 52805 333 100  34,630 1,270 18,340 19,510 13,440 18,000 22,010 25,880 2,410 19,300 25,580 23,420 2,650  Log data Staff/pop staff 38 38 55 67 76 83 93 96 98 161 165 202 263 357  8.48 7.13 8.27 7.71 8.09 7.41 7.30 10.15 8.73 9.15 9.71 9.63 10.87  popln staff/pop  18.64 16.94 17.88 17.19 17.48 16.69 16.55 19.38 17.47 17.86 18.22 17.87 18.81  -10.17 -9.80 -9.62 -9.48 -9.39 -9.29 -9.25 -9.23 -8.74 -8.71 -8.51 -8.24 -7.94  gdp  #NUM! #NUM! 1.31 1.11 #NUM! 1.65 1.69 1.07 #NUM! 2.93 2.29 2.58 #NUM!

For example, in recent years, the UK’s central counterparty for derivatives, London Clearing House (LCH) Limited merged with Clearnet SA, while the Euroclear Group acquired CREST, the securities settlement system for the UK and Ireland. The Euroclear Group currently provides domestic securities settlement services in 5 European countries as well as international settlement services. Such tie-ups are of course an international extension of the microeconomics of infrastructure provision outlined above, exploiting economies of scale and network externalities. But, at the same time, they introduce common business risks and cross-border dependence on core systems, thus providing another channel for problems to spill across borders. Such cross-border linkages consequently add a layer of complexity to supervisory arrangements, making international coordination among the public authorities essential. Linkages arising at the user level are again important here. As banks operate in multiple markets, there is increasing scope for shocks to propagate across borders. That may arise from the increased centralisation of banks’ liquidity risk management. To the extent that banks use the foreign exchange markets to recycle surplus liquidity in one system to meet a shortfall in another, or else take advantage of settlement links between securities settlement systems to transfer collateral across borders, liquidity risk may be reduced. But, to the extent that banks respond to the availability of mechanisms for reallocating liquidity between systems by reducing their aggregate holdings, a bank may be more vulnerable to simultaneous liquidity demands across markets or to operational disruption to such mechanisms.
Dealers de-risked their balance sheets rapidly as the crisis hit, and this reminds us that their capacity and willingness to stand in the way of major market moves (akin to catching a falling knife) was always constrained. 6 And all of this happened before any new regulations were put in place. Last on this point, it is worth recalling the background to the large increase in inventories from around 2002/04. Here, regulation does appear to have played a role, and not a good one. The first amendment to the Basel I capital standard came in the mid 1990s in the form of the so-called Market Risk Amendment. It enabled a substantial reduction in the capital held against trading book assets such as inventories, to a level that could be less than 1% of those assets. To illustrate this point, here is a quote from the FSA’s report into the failure of RBS. “The capital regime was more deficient, moreover, in respect of the trading books of the banks ….. the acquisition of ABN AMRO meant that RBS’s trading book assets almost doubled between end 2006 and end 2007. The low risk weights assigned to trading assets suggested that only £ billion of core tier 1 capital was held to cover potential trading losses which might result from assets carried at around £ billion on the firm’s balance sheet. In fact, in 2008 losses of £ billion arose in the credit trading area along (a subset of total trading book assets).

The imbalances manifested themselves in huge trade surpluses and an accumulation of foreign exchange reserves in the countries which relied on export-oriented growth – including those in the Asian region. They were reflected in the dollar revenue which was subsequently reinvested in US financial markets – which in turn helped to finance the US saving deficit, permitting these imbalances to remain uncorrected for a prolonged period of time. And as a result, asset price bubbles were also allowed to persist for a prolonged period as well. BIS Review 33/2009  1  All was well as long as everyone continued to grow. However, as emerging markets opened up, global demand, and particularly demand from growing economies like China and India, drove up the prices of oil and other global commodities. Many economists began to predict a structural shift in global demand and changing dynamics of global inflation which would effect domestic prices and make inflation higher and more persistent. 3. Coping with the global financial crisis  At the same time, problems were brewing on the financial side in the advanced economies. I will not lay out the causes of the financial crisis here, as that has been discussed widely elsewhere. In a nutshell, the slowdown in the US housing market, coupled with a mix of troubled banking practices, regulatory blind spots, and absolute faith in the market mechanism, among other things, led to a financial crisis in advanced economies.
In other words, monetary policy is always implemented under conditions of uncertainty – to varying degrees, of course. This is why we consider a large number of economic indicators and use several models. Furthermore, we do not put a single economist in front of a computer and assign that person the task of determining the monetary stance; instead, we have a committee that exchanges opinions and assesses the current situation and outlook at the time in question. The observations I have just made are general in nature and apply to large and small countries alike. But we know that monetary policy in small, open economies is accompanied by particular challenges – challenges that we must take into consideration when developing a monetary policy framework for Iceland. In this context, it should be noted, first of all, that smaller economies generally have a tendency to be more volatile than larger ones, owing both to less economic diversity and the greater relative weight of individual shocks. Second, the relative weight of the tradable sector is often greater than in larger economies. Because of this, economic developments are more dependent on the exchange rate, and pass-through from the exchange rate to inflation is generally stronger. Third, financial markets are shallower than in larger economies, other things being equal, and this contributes to greater volatility of financial prices. Fourth, in an environment of unrestricted capital flows and increasing international financial integration, the possibility for small economies to affect their own financial conditions through monetary policy diminishes.

Ida Wolden Bache: The policy rate has been raised to bring down inflation Introductory statement by Ms Ida Wolden Bache, Governor of Norges Bank (Central Bank of Norway), at the press conference following Norway's announcement of the policy rate, Oslo, 4 May 2023. ***  Accompanying charts to the speech Chart 1: Policy rate raised by 0.25 percentage point Norges Bank's Monetary Policy and Financial Stability Committee decided to raise the policy rate by 0.25 percentage point to 3.25 percent. Norges Bank's task is to keep inflation low and stable. The operational target is inflation of close to 2 percent over time. We are also mandated to help keep employment as high as possible and to promote economic stability. Chart 2: Inflation is too high Inflation is now markedly above the target. In March, consumer prices were 6.5 percent higher than one year earlier. High energy prices are a key driver of inflation, but other goods and services prices have also risen rapidly. Price stability is crucial for maintaining a well-functioning economy. The policy rate is being set with the aim of bringing inflation back to the target of 2 percent. At the same time, we want to avoid a slowdown in economic growth beyond what is necessary to tackle inflation. We have not yet seen the full effects of our past rate hikes. Our March forecasts indicated a policy rate increase to around 3.5 percent this summer.
The institutions that take part in the Riksbank's payment system can then pay by moving money, on behalf of themselves or their clients, between the participants’ accounts. When central bank money is used in a transaction, an asset with counterparty risk is converted into a safe and liquid claim on the central bank. Central bank money is safer than other money, as a central bank can always meet its obligations in domestic currency. It is important for financial institutions to be able to pay in central bank money, as they would otherwise be burdened with counterparty exposures when paying.2 Central bank money and the possibility to make safe payments are thus closely linked. The Riksbank needs to adapt its payment system so that the infrastructure remains safe and cost-efficient as technology develops and the payment market is changing. A growing trend both in Sweden and abroad is that households and companies expect to make payments at any time they like. The payment system we offer today therefore needs to be supplemented with a new system that is open 24 hours a day and adapted to the instant settlement of large volumes of payments. My assessment is that the best way for the Riksbank to attain this target is to make the Swedish krona available on the same technical platform as the European Central Bank (ECB) and the Eurosystem use.3 By taking advantage of the economies of scale that arise here, the right conditions are created for cutting transaction costs for Swedish households and companies.

It is important to note that the mechanism is driven by the relative wealth levels of different cohorts within the population. It is true that, on average, retirees have low savings rates, as they run down their wealth to finance their retirement. However, the data show that in practice this effect is typically not very strong, so that the average household appears to broadly maintain their wealth during retirement. This tempers the extent to which the retirement of the baby-boom generation reverses the impact of ageing on the real interest rate. [13] These results imply that the effect of population ageing on Global R* has been large, and is expected to persist. While the paths of the underlying drivers are estimated only until 2015, the model-based simulation implies that the equilibrium real interest rate will continue to adjust until the population structure and stock of global capital reach an eventual ‘steady state’. Indeed, the simulation implies that the effects of past structural trends would continue to reduce Global R*, perhaps by another 1 percentage point, over the very long run. [14] So, importantly, what this model, and the data behind it, are telling us is that we should not expect that ageing, and the retirement of baby boomers, will lead to significant upward pressure on Global R* over coming years or decades. The substantial contribution of population ageing to the decline in Global R* in the past stems from the steady increase in longevity, and this mechanism leads to permanently lower Global R*.