samchain/econo-pairs-v1 huggingface dataset:
This could dent the capital and liquidity positions of banks and other financial intermediaries, thereby weakening their ability to channel funds to the real economy. If the financial system is weakened, the transmission of monetary policy is impaired, meaning that changes to the monetary policy stance will not be properly transmitted to the real economy. The third channel is via climate-related financial risks on the Eurosystem balance sheet. Rules regarding asset purchase programmes and the collateral framework will be revised to encourage counterparties to steer away from fossil fuels, speeding up the transition to net zero. The Eurosystem, which consists of the ECB and all the national central banks of the euro area – including the Central Bank of Malta - has taken steps towards integrating climate change considerations into its policies and operations. In fact climate features prominently in the review of the ECB’s monetary policy strategy that was finalised in July 2021. The ECB laid out three core objectives: (i)  managing and mitigating the financial risks associated with climate change and assessing its economic impact,  (ii)  promoting sustainable finance to support an orderly transition to a lowcarbon economy, and  (iii) sharing our expertise to foster wider changes in behaviour. Let me elaborate. 4  The Eurosystem will adjust its corporate bond holdings towards issuers with better climate performance. Better climate performance will be measured with reference to lower greenhouse gas emissions, more ambitious carbon reduction targets and better climate-related disclosures.

But it’s true that, economically speaking, Italy is a in a difficult juncture. It is the only euro area country that is experiencing a technical recession. And it has not seen an improvement in the labour market, which is another thing that sets it apart from other euro area economies. In the longer term, Italy’s problem is well known: it is productivity growth. I don’t believe that any of this has to do with the euro, otherwise it would be a general problem across the euro area. The response is to focus on the country’s strengths, such as its small and medium-sized enterprises. And to use the Single Market to leverage their strength and help them export to global markets. Isolation and protectionism don’t work. Europe is an asset for our economies. 1/2  BIS central bankers' speeches  It seems to be difficult at the moment to undertake the much discussed reforms to complete the banking union and the capital markets union. Do you share this impression? Yes, I do, and it’s a concern for the ECB. We firmly believe that Europe is part of the solution in dealing with the problems faced by European citizens. Many citizens in many countries are angry because economic results are not what they should be, because it has taken too long to recover from the financial crisis, because unemployment especially among the youth – is still high and because globalisation has not lived up to its promises, instead increasing inequality and marginalising parts of society.
Losses from the tear-up of positions would still be expected to be allocated in the order contractually agreed in the rulebook without discrimination between counterparties. But the discretions exercised by the resolution authority, such as the scope and price of the partial tear-up or the speed of replenishment of the depleted default fund would be taken with objectives to protect financial stability and subject to public law safeguards. In taking these actions the resolution authority would have the advantage of being able to coordinate and exchange information with other domestic and foreign authorities and with the wider market in a way that the CCP would not. This ability to coordinate could be crucial to the orderly management of a systemic event particularly if defaults were impacting multiple CCPs. An important aspect of stabilising the CCP and the wider market would be to maintain sufficient certainty around the losses that could be incurred in the resolution. A CCP’s rulebook provides its members with assurance ex ante about the point at which and the extent to which they will be exposed in the event of a clearing member default. It protects them from discrimination in the allocation of losses. Resolution authorities should similarly respect the CCP rulebook in the allocations of loss. If, in extreme circumstances, it proves necessary for the resolution authority to deviate from the rulebook, CCP members should be compensated for losses borne in excess of what would have been incurred had the rulebook been followed.

In addition, central banks may choose to participate in distorted financial markets where there may be threats to financial stability, as is sometimes done with reserve accumulation and exchange rate intervention in EMEs, or as has been the case of some interventions in debt and other asset markets in advanced economies. However, interventions beyond currency markets must be truly exceptional and only on the grounds of preserving financial stability or complementing monetary policy. Another way to control the vulnerability of the system to the reversals of asset prices is to limit the amount of debt that finances the purchase of those assets with higher prices or increase capital buffers for such debt. In terms of macro prudential policies there are a series of options for this. Higher capital requirements for intermediaries participating in the business of making leveraged purchases of financial assets are one option. In the same vein, reducing loan to value (LTV) ratios in mortgage loans, increasing provisions for housing loans or increasing capital requirements on mortgage lending are all viable options if the distortion is in the housing market. Several countries in Asia have been actively using LTV caps over the last couple of years to reduce the risks from housing price booms. Which of these tools should be used will depend, however, on the institutional setting of each country, the functioning of the financial system and the asset price that is distorted.
They include the fact that the probability of the zero lower bound constraint binding is likely to be materially  17  All speeches are available online at www.bankofengland.co.uk/speeches  17  higher than it has been historically. Recent simulation studies have suggested this probability may be as high as around one-third, if r* remains around current levels (for example, Kiley and Roberts (2017)). Implications for Future Research  The link between the competitive structure of product markets, the macro-economy and the setting of monetary policy is a relatively under-researched area. This paper has only scratched the surface of this important topic. But trends in concentration and market power have clear potential to impact on the macroeconomy and monetary policy, justifying ongoing research on the topic. To that end, we conclude with a few reflections on potentially fruitful future research avenues. First, the framework used here to understand the macro-economic implications of increased market power assumes a particular competitive structure – monopolistic competition. This has limitations, assuming as it does that no one firm is sufficiently large to have a significant bearing on others’ behaviour. In practice, strategic interactions between firms are likely to be important in many markets, especially network markets (for example, Bramoullé, Kranton and D’Amours (2014)), with potentially important implications for pricing and the Phillips curve. Second, the framework developed here also sidesteps questions about the competitive structure of the market for inputs, especially labour inputs.

14  All speeches are available online at www.bankofengland.co.uk/speeches  14  these would tend, therefore, to reduce the interest elasticity of investment demand, 𝜎. Whether these effects are significant at the macro-economic level is, however, far from clear. Market Power and Monetary Policy  Taking this evidence together, we now summarise the various channels we have discussed through which monetary policy might prospectively be influenced by a rise in market power and mark-ups. First, if shocks to firms’ mark-ups have increased over recent decades, this would tend to shift outwards both output and especially inflation variability. Because these shocks are trade-off inducing, monetary policy is constrained in its capacity to cushion them. In consequence, the path of interest rates (both its level and variability) is affected only modestly by a rise in the incidence of mark-up shocks. Second, a rise in market power also has the potential to alter the slope of the Phillips curve, as discussed above. This, too, may affect the setting of monetary policy. To see that, consider the period loss function for monetary policymakers in the textbook model. This can be derived from the utility function of the representative household (Galí (2008)). It takes the form: 𝐿𝑡 = 𝜋𝑡2 + 𝜆𝑥𝑡2  (10)  where the weight on the output gap is:  𝜆=  𝜅 𝜖  (11)  Under optimal discretionary monetary policy, the policymaker minimises this loss function each period, subject to the Phillips curve, taking expectations as given.
If, on the other hand, it thinks there’s going to be an imminent resolution (high q, low E[T]), there is every incentive to wait until that actually happens. In the meantime only extremely high-return projects would get the go-ahead. One general implication of this is that empirical estimates of the impact of uncertainty on investment, which generally assume that the effect is purely contemporaneous – investment today is a function solely of uncertainty today – are (strictly speaking) an over-simplification. At least in principle it will also depend on how long businesses expect any uncertainty to endure: the shorter the expected duration the greater the predicted impact. I doubt this would ever be straightforward to test empirically. As hard as it is to measure uncertainty very precisely it’s obviously harder to gauge accurately how long people expect that uncertainty to last. But the distinction may nonetheless matter on occasion. One such occasion is when there is thought to be a particular date at which important information is likely to be revealed. If so, then [3] suggests that the effect of uncertainty on investment should intensify the closer  8  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  8  one gets to that point. As the remaining time shortens the perceived cost of waiting for news falls with it.

Indeed, in mitigating inflationary pressures, an exchange rate appreciation restrains the MPR adjustments that could result from only the closing of the output gap. One working assumption we use in our projections is that the real exchange rate will change little into the long term. Any movements away from its trend are possible in a floating regime. Its potential financial effects on aggregate output and inflation will be definitely considered by the Board as an input for its future decisions. As we have demonstrated in the past, our monetary policy is highly flexible. It has contributed enormously to the good standing the Chilean economy enjoys today, in an environment of stable prices and restored employment and output. Now I will review the main features of the macroeconomic conditions we believe are the most likely for the next two years and its implications for inflation and monetary policy. Macroeconomic scenario The first closing of second-quarter National Accounts showed GDP growth at 6.5% y-o-y. In terms of velocity, the second quarter ended with an annualized quarterly variation of around 20% (figure 3). Domestic demand also grew above forecasts, driven by increased private consumption and a strong rebound of investment. Such dynamism has responded to not only temporary factors but also to more persistent ones. Among the temporary factors, what stands out is the immediate repair of the damages caused by the catastrophe of 27-F and the reversal of the dramatic contraction of domestic demand during 2009, associated to the then high levels of uncertainty.
Barbro Wickman-Parak: Inflation targeting and the financial crisis Speech by Ms Barbro Wickman-Parak, Deputy Governor of the Sveriges Riksbank, at LO (the Swedish Trade Union Confederation), Stockholm, 9 January 2009. *  *  *  It is usual at the beginning of a new year to look back over the past year. If we look back at economic developments during 2008, it would be an understatement to say that it was an eventful year. First we had soaring oil and other commodity prices, combined with rising cost pressures and ever declining economic activity abroad. At this point concern was expressed in the international debate that the economies could suffer stagflation, that is, a combination of rising inflation and an economic downturn. The anxiety about stagflation soon faded. When the crisis in the financial markets suddenly intensified in the wake of the Lehman Brothers bankruptcy and economic activity deteriorated substantially in most parts of the world, a new theme for the debate arose; deflation. It is no surprise that situations like the present one cause people to wonder whether the monetary policy system is really strong enough to withstand these conditions, too. Let me first say that it is important to discuss this; new experiences and knowledge change the conditions for monetary policy. These things are not carved in stone!

Note that this takes into account only first mortgages held by the banks. If loans with second mortgages were included, the number of cases would undoubtedly be larger. Residential property prices fell on average by 7% in the first quarter of this year. So the negative equity problem will have got worse, as the latest figures to be published shortly will show. This poses some threat to the profitability of banks. So far, however, even mortgage loans in negative equity have continued to perform reasonably well, although the delinquency ratio of around 2.5% is worse than for those with positive equity. The impact of SARS Even before SARS arose as an issue, 2003 was expected to be another challenging year for the banks. But the prospect of lower charge-offs for credit cards encouraged a number of banks to forecast that they would achieve higher profits. Performance in the first quarter seemed to bear this out. As usual, some banks did better than others, but aggregate profits in the first quarter did show an improvement over the same period of last year. The SARS outbreak is now affecting the business of the banks in various ways and the banks are having to react to this. The first priority has been to maintain business continuity and to protect the health of bank staff and customers. Banks have therefore activated, and where necessary reviewed and updated, their business continuity plans, demonstrating in the process that these are not just paper exercises.
In Turkey, the ratio of direct foreign capital stocks to the GDP had not changed since 1990 and still stood at 9 percent as of end-2003, while this ratio rose as high as 50 percent for the Czech Republic and Hungary and 30 percent for Argentina and Brazil during the same period. Graph 13: FDCI/GDP: Turkey and Other Emerging Markets (2003) 236.5  100 90 80 70 (%)  60 50 40 30 20 10 Hong Kong  Hungary  Czech Rep.  China  Argentina  Mexico  Brazil  Poland  Russia  Turkey  India  0  Source: UNCTAD, WIR 2004. When the conditions for foreign direct investment are analyzed from the perspective of international investors, two factors come to the forefront as prerequisites: The first one is related an investment environment with a healthy functioning legal system with legal security. The latter includes the attainment of sustainable macroeconomic balances and administrative stability in basic policies on international investments achieved irrespectively of changing governments. In other words, what is essential is the stability of the policies that are being implemented. Turkey’s experiences show that partial improvements that are achieved without meeting these two prerequisites will not help to attract direct foreign investments to the country. Furthermore, other problems that should be noted include the unpredictability of legal arrangements, the amount of time wasted on administrative regulations, as well as the lack of transparency and consistency.

The analysis of a total of 52 balance of payments crises experienced in the 1980-2001 period in 19 countries including Turkey show that 51 of these crises erupted under managed floating exchange rate regimes.1 Thus, in almost all countries facing a balance of payments crisis it can be seen that pegged or foreseeable exchange rate regimes were being implemented. In addition, there were problems related to financial stability or the implementation of tight fiscal and incomes policies that were supposed to support the exchange rate regimes in these countries. A second issue I would like to touch upon is that the open positions of the banking sector are so low that they are even comparable to those of the past. Within this framework, the amount of open positions of the banking sector is closely monitored and necessary warnings are given. Meanwhile, the real sector should also be cautious about open positions. Another important issue that needs to be kept in mind in relation to the current account deficit is that the Central Bank does not try to artificially keep the New Turkish Lira overvalued. US dollar 21.7 billion worth of foreign exchange purchase since 2002 is an indicator of this. Besides, short-term capital is not encouraged, and market players are continually reminded that the exchange rate risk lies in the market.
As discussed over the past two days, many economies in Asia have been working on this, as this reform is important not only to derivative markets, but also to bank lending. The HKMA has actively engaged our banks to identify their exposures to the benchmark rates of relevance (i.e., LIBOR and HIBOR) and to prepare for various scenarios that could play out during this process. At the same time, the Treasury Markets Association in Hong Kong has proposed HONIA as an alternative risk free overnight reference rate to HIBOR and is consulting industry stakeholders. I should take this opportunity to mention that ISDA’s leadership on two important implementation issues – namely, how to adjust new overnight reference rates for longer tenors and how to ensure credit risk premiums are reflected – helped pave the way for constructive discussions in Hong Kong. So overall, progress is being made. Managing the Risks in Financial Market Development Whether it’s facilitating fintech innovations or deepening derivatives markets, it’s critical that a robust and adaptive regulatory framework and effective international coordination are in place to mitigate potential financial stability risks. The types of regulatory framework would depend on the stage of development in the market itself. For markets that are going through innovation, particularly those that are adopting new technologies, regulations should focus on “nurturing” rather than “restraining”.

To me, the market’s opinion is clear: derivative markets in Asia need to be further developed. Let me share some recent experiences in Hong Kong in this regard. By daily average trading volume, our interest rate and FX derivative markets have almost doubled since 2013, and are now first and second, respectively, in terms of regional market share. Notwithstanding this growth, Hong Kong still only accounts for a small global market share, and the products we cover – both in terms of contract type and underlying currency – has a lot of room to expand. We have therefore taken a proactive approach by encouraging international banks to establish derivative hubs serving Asian risks in Hong Kong as long as they meet capital adequacy requirements and our risk management standards. Establishment of these hubs can help banks take advantage of Hong Kong’s double tax agreements with all key economies in the region; more importantly, our city’s growing status as a nexus between Mainland China and the rest of the world means that Hong Kong will play an increasing role in providing risk management solutions for international investors going into China and, increasingly, Chinese investors going global, just like how we successfully facilitate those investments through our Connect schemes. Our commitment to further developing the derivatives market is strong and we stand ready to work with various partners on this. One key current issue is benchmark reform.
Ardian Fullani: Bank of Albania’s work progress, 2012 results, and challenges for the future Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the Parliamentary Commission on Economy and Finance, Tirana, 9 April 2013. *  *  *  Honourable Chairman, Honourable Deputies, Ladies and Gentlemen, I would like to start by expressing my great appreciation for this opportunity to present to you, on behalf of the Bank of Albania, the central bank’s work progress and results over the past year. Also, this meeting will let us share our opinions about recent economic and monetary developments, and touch upon the challenges, which, in Bank of Albania’s opinion, deserve attention in the future. Right from the start, I would like to emphasize that the Bank of Albania succeeded in fulfilling its legal responsibilities in 2012. Consumer prices remained stable, as depicted by the 2% average inflation rate during the year. The financial system soundness also improved at both macro and micro levels. The major objectives of the Bank of Albania were achieved, despite adverse internal and external environment, and shocks posed to Albanian economy over this period. Their achievement reflected, to a great extent, the Bank of Albania’s cautious monetary policy, regulatory measures and our policy of banking supervision. They were favoured by ongoing improvement of the financial payment infrastructure, prudential and efficient liquidity management operations, and transparent communication with the public.

Mugur Isărescu: Opening speech – conference “Investment and Investment Finance in Romania” Opening speech by Mr Mugur Isărescu, Governor of the National Bank of Romania, at the conference “Investment and Investment Finance in Romania”, organized by the National Bank of Romania and the European Investment Bank, Bucharest, 13 February 2020. * * * Vice President McDowell, State Secretary Gyorgy Attila, Distinguished audience, Ladies and gentlemen, It is a pleasure for me and the Board of Directors to welcome you at the National Bank of Romania, to the conference dedicated to Investment and Investment Finance in Romania. This conference has been organized by the European Investment Bank in partnership with the National Bank of Romania. In fact, this partnership has had a long standing as a pillar for progress and investment in Romania. Please allow me to express a heart-felt welcome and to extend my warmest thanks to Mr. Andrew McDowell, Vice-President of the European Investment Bank and to Ms. Debora Revoltella, Chief Economist of the European Investment Bank, for their continuous support and deep commitment to develop investments in Romania, and, moreover, for being trusted partners and friends. I am glad that we have decided to co-organize this conference here in Romania, at the central bank, as this year we honour two landmarks with historic importance. One is the National Bank of Romania’s 140th anniversary and the other is the 20 years’ celebration of the day (February 15th 2000) when the EU formally started the accession negotiations with Romania.