samchain/econo-pairs-v1 huggingface dataset:
In keeping with its primary objective, the Central Bank has also been very concerned about the inflationary impact of the regular use of Central Bank’s Reverse Repo window by some commercial banks which appear to use such window as a convenient instrument of regular funding. We wish to clearly discourage this practice in 2007 and therefore, with effect from 1st January 2007, the Reverse Repo facility of the Central Bank will not be made available on days when there is a liquidity surplus in the commercial banking system, according to our estimates. We would also closely monitor the Banks that seek this facility regularly to ascertain whether they are doing so because of any structural deficiencies that they are suffering from. 4  BIS Review 8/2007  We also noted that the financial sector grew with increased resilience, possibly benefiting from robust economic growth and a rather favourable external environment. Profitability, capital funds and asset quality of banks improved, leading to strengthening of capacity of the financial sector to absorb shocks. In the meantime, interest rates across markets rose in response to gradual tightening of monetary policy; turnover in the foreign exchange market recorded substantial increases; and market capitalisation and price indices in the equity market continued to improve.

At the same time, the Central Bank has also been conducting Open Market Operations aggressively, to manage the liquidity position in the market to be within the reserve money targets. Figure 3: Repo, Reverse Repo and Call Money Rates  Per Cent  15.00 13.00 11.00 9.00 7.00 02-Dec-06  21-Oct-06  11-Nov-06  30-Sep-06  09-Sep-06  29-Jul-06  19-Aug-06  08-Jul-06  17-Jun-06  27-May-06  15-Apr-06  06-May-06  25-Mar-06  04-Mar-06  21-Jan-06  11-Feb-06  31-Dec-05  5.00  Repo Rate Reverse Repo Rate Weighted Average Call Money rate (Tax Adjusted)  Responding to the tight monetary policy measures adopted thus far, market interest rates have increased, thereby discouraging excessive consumption and borrowing for such purposes. In turn, this has led to a deceleration in the high growth in the money supply. We believe that the tight monetary policy exercised by the Central Bank was instrumental in pulling back the growth in Reserve money from 20 per cent at end 2004 to 17 per cent by end August 2006. This decrease would have naturally led to a corresponding deceleration in broad money growth in the future, although in absolute terms, the growth in broad money remained uncomfortably high, around 19-20 per cent, during January to June 2006, a legacy of the high reserve money growth in the past.
The Banco de España publishes its regular projection exercises, the next update of which is due to be released in the middle of this month, drawing on the definition of different scenarios.1 These scenarios are based on different assumptions about, among other factors, the course of the pandemic, which continues to be subject to a very high level of uncertainty. In any event, the contraction in Spanish GDP for this year as a whole will be most substantial and unprecedented in recent history. The recovery initiated in recent months should lead to relatively high growth in activity, after the hibernation brought about See Macroeconomic projections for the Spanish economy (2020-2022): the Banco de España’s contribution to the Eurosystem’s June 2020 joint forecasting exercise. 1  1  by the lockdown; however some quarters of robust growth are still needed to regain the pre-pandemic level of GDP. It is clear that the sharp macroeconomic downturn triggered by the pandemic has substantially increased the risks to global financial stability. The forceful economic policy response — from monetary, fiscal and supervisory authorities — and the effect of the farreaching international financial reform implemented in the last decade are helping to mitigate and manage these risks. Indeed, so far the financial system has acted as a mitigating, rather than an amplifying, factor of the impact of this crisis. However, we should not be lulled into complacency, as the scale of the shock is very large and its duration is uncertain.

It starts with data, unconstrained by axioms and hypotheses, and then uses this to inform choices about models of behaviour. Data, in other words, precedes theory. Indeed, some data scientists have suggested such an approach could signal the “End of Theory”. 8  So where some economists have tended to see the pitfalls in Big Data, data scientists have seen promise. Where some economists have tended to see the ecological threat it poses, data scientists have seen the economic potential. I am caricaturing a little, but only a little. So who is right? And does the era of Big Data signal an oil-rush or an oil-spill? The truth, as often, probably lies somewhere in between. Both deductive and inductive approaches can offer insights into understanding the world. They are better seen as methodological complements than as substitutes. Put differently, using one approach in isolation increases the risk of making faulty inferences, and potentially serious mistakes, in understanding and policy. Let me give a couple of examples to illustrate. During the global financial crisis, it is now fairly well accepted that the workhorse Dynamic Stochastic General 9  Equilibrium (DSGE) model of the macro-economy fell at the first fence. It was unable to account for business cycle dynamics, during or after the crisis. While theoretically pure, it proved empirically fragile. That empirical fragility arose, I would suggest, from a methodological over-reliance on deductive methods. Or, put differently, from too little focus being placed on real-world data from the past, including on crises.
Strong domestic demand and diminishing excess capacity will surely lead to price pressure as producers compete for scarce resources. And as the recovery goes from strength to strength and inflationary pressure rises, so must the monetary policy stance regain its poise – poised at a neutral rate that is neither too accommodating nor too tight. After all, monetary stimulus can only do so much and excessive stimulus can lead to financial imbalances. Let me share my view on the surge in oil and commodity prices and, in particular, how we should respond to this challenge. The brief answer is that monetary policy stance continues to be one of regaining poise with increased vigilance over inflation. The long  2  BIS central bankers’ speeches  answer is a bit more complex. The first-round supply-side shock of a rise in oil price should be allowed to pass through into domestic prices. Central banks should take care not to overreact to such price changes as they only reflect the welcome process of market re-balancing demand and supply. However, there is a possibility that a supply shock, especially if it is long-lived, may result in second-round inflation. By second-round inflation, I mean a persistent and general rise in prices. Second-round inflation may materialize if inflation expectations become unanchored and result in a change in price setting behavior fueled by strong domestic demand such that prices rise across the board – something that every central bank must pre-empt by anchoring expectations to short-circuit the vicious cost-price spiral.

The difference in outcome between the two repo rate paths is partially due to the different development of the exchange rate, but it is, of course, also largely due to the divergence of the interest rates influencing investments and saving. 14  In the figure, foreign policy rates are obtained from adjusted implied forward rates at the date of the Monetary Policy Report. 10  BIS central bankers’ speeches  The exchange rate effects of choosing another repo rate path are naturally uncertain. However, the fact that the exchange rate in general is associated with great uncertainty does not mean that it can be disregarded when decisions are taken on the repo rate path. And, in my opinion, neither does the fact that market interest rates do not fully incorporate the repo rate path – possibly because they are influenced by foreign interest rates to a large degree – form a strong argument for disregarding the potential exchange rate effects of increased interest rate differentials. As a matter of principle, I consider that monetary policy should be a matter of choosing the repo rate path that gives the forecast for inflation and resource utilisation with the best target fulfilment when fully incorporated into expectations. Another principle is that high uncertainty is not an argument for refraining from using the best forecast as a basis for decisions.
And the unemployment rate continues to come down, and now stands at 5.2 percent. But I cannot stress enough that we still have a long way to go to get back to our maximum employment goal. For example, there are still over five million fewer jobs today than before the pandemic, and the unemployment rate is still far above the levels reached early last year. A more nuanced picture appears when you look more closely at the employment story. In typical recessions, the challenge is that there are not enough jobs available for the number of people seeking work. In today’s job market, demand for labor is very high—we hear that from employers who are finding it hard to fill all their openings—and a lot of people are getting hired. At the same time, people are leaving their jobs in large numbers, either to look for new work or exit the labor force altogether. This cycle of hires and quits reflects the extraordinary nature of the pandemic, as workers and employers adapt to rapidly changing circumstances. These vacancies won’t be filled instantly—it takes time for employers to find the right workers. But as demand for workers and progress on hiring remains strong, I am confident that we will continue to see meaningful job gains and continued progress toward maximum employment. The last aspect of the outlook that I’ll speak about is inflation.

Denis Beau: The challenges of the digital euro Speech by Mr Denis Beau, First Deputy Governor of the Bank of France, at the conference "The new challenges of financial regulation”, organised by Labex Réfi, Paris, 19 November 2021. * * * Over the past two years, most central banks around the world have been giving increasing thought to the idea of creating a digital form of their currency, a central bank digital currency (CBDC), to maintain the stabilising role of central bank money in a rapidly changing payments landscape: according to the BIS, about nine out of ten central banks have reported that they have launched studies.To date, only two retail CBDCs have been introduced (in Caribbean archipelagos: the Sand Dollar in the Bahamas and DCash for the Organisation of Eastern Caribbean States), but over twenty pilot projects are underway around the world. This observation naturally raises questions about the timing, form and role of central bank money in tomorrow’s payments landscape and about the role of banks and commercial bank money in a world of stablecoins and central bank digital currencies.
While price stability is being challenged by the recent run-up in gasoline prices – which has yet to be reflected in the personal consumption expenditure and consumer price indexes but may well make for worrisome headlines when February data are released – the underlying trend has been converging toward the 2 percent long-term goal formally adopted by the Federal Open Market Committee (FOMC) at its last meeting.1 As to the outlook envisioned by the entire FOMC, you might wish to consult the forecasts of all 17 members, which include those of yours truly, that were made public after the January meeting – though I think a puckish footnote appended to the internal document laying out a component of the December 1966 FOMC forecast might still apply: “Not to be used externally, but also harmful if swallowed.”2 Speaking of harmful if swallowed, I might add that I am personally perplexed by the continued preoccupation, bordering upon fetish, that Wall Street exhibits regarding the potential for further monetary accommodation – the so-called QE3, or third round of quantitative easing. The Federal Reserve has over $ trillion of U.S. Treasury securities and almost $ billion in mortgage-backed securities on its balance sheet. When we purchased those securities, we injected money into the system. Most of that money and more has accumulated on the sidelines: More than $ trillion in excess reserves sit on deposit at the 12 Federal Reserve banks, including the Dallas Fed, for which we pay private banks a measly 25 basis points in interest.

I believe lawyers call this a purposive approach to interpreting legislation and regulations – in other words interpreting meaning in the context of regulations rather than a literal interpretation. This is necessary because history shows us that the financial services industry can be addicted to arbitraging regulations – exploiting the rules to suit short term purposes rather than longerterm stability. I want to finish by saying something about a further important feature of financial stability. For me, the most unacceptable aspect of the financial crisis is that large banks have required the support of so much public money. This is often called the Too-Big-To-Fail problem, or better the “Too-Important-To-Fail-therefore-public-money-has-to-be-used” problem. Why are large banks in this position? The root of this issue is common to the key features of banks, namely their dependence on the confidence of depositors, the role of banks providing each of us with the facility to manage our money – our savings, and in our everyday lives in terms of payments – and the externality caused by the failure of one bank spreading a loss of confidence to other banks. The failure of any company should be dealt with, wherever possible, using the standard insolvency or bankruptcy laws of the country. These provide a well-established and predictable framework for dealing with company insolvency. But, the insolvency laws do not operate quickly – resolving a company can take time.
I would like to broaden my personal wishes to three collective wishes: for our country and its economy first; for its smooth financing second; and for financial stability and the soundness of your institutions lastly. 1) Today a confirmed recovery is underway, with growth of over 1% in France in 2015, and 1.5% in the euro area. In 2016, despite the uncertainties, all indicators point to higher growth. France must now transform this modest but real recovery into strong, lasting, job-creating growth. To do this, two conditions must be met in 2016: public reforms must be pursued, and corporate investment must be stepped up. As regards the reforms, France is currently being penalised by excessive debt levels in its public sector (differential of 25% of GDP vis-à-vis Germany, whereas both countries displayed the same level in 2010) and the deterioration in its trade balance and competitiveness. The fight for growth and against unemployment can only be won over time, with the great virtue of steadfastness. We must therefore keep up all efforts with regard to containing government expenditure and hold firm on that which is starting to work: the Responsibility and Solidarity Pact and the Tax Credit for encouraging Competitiveness and Jobs (CICE) should enable us to catch up, between 2014 and 2017, one-third of our competitiveness lag with Germany which built up over the first years of the euro (1999– 2007). Transforming the CICE into a permanent reduction in social contributions for corporations would be a very welcome development.

A crucial point is to avoid any tax distortions to the detriment of these products compared to liquid and risk-free investments. It remains all the more essential to fully inform investors about the risks involved when they invest their savings; two examples come to mind today, unit-linked contracts, and managers offering disintermediated financing. 3) My third and last collective wish for 2016 is that of financial stability and sound financial institutions. Since the financial crisis, the regulatory framework and the supervisory and oversight architecture have been considerably strengthened. This was necessary, I believe no one here doubts it. In the banking sector, this involved implementing Basel III / CRD4-CRR, finalising the TLAC, the new anti-shock weapon, and setting up the European banking union, which now includes two effective mechanisms: the single supervisory mechanism, and -since 1 January- the single resolution mechanism. Today, French banks are sounder: their core Tier 1 solvency ratio stood on average at 12% in September 2015, against 6% at end-2007. And contrary to the fears that have often been expressed, including by some of you, the current situation shows that these rules have not impacted lending and growth, in particular thanks to the positive effects of monetary policy. In 2016, the projects still underway should be completed. In particular in order to improve the comparability of internal models – and thus improve their credibility –, not to substantially increase overall capital requirements. To finalise and stabilise Basel III, not to open a new Basel IV.
As we enter into a gradual stabilisation and recovery period, policymakers are now faced with the challenge to find an enduring solution to ensure the stability of financial systems. Islamic finance has a role in shaping the future of the global financial system and reinforcing ethical and moral values that are inherent in Islamic finance principles and fundamental towards promoting the stability of the global financial system. Ongoing efforts to further strengthen the resilience of Islamic financial industry would enhance the prospects for global growth and the potential of Islamic finance to contribute towards global financial stability. 4  BIS Review 129/2010

the postcrisis response of regulation coincided with the greater use of quantitative easing. But it is nonetheless helpful to separate them analytically. A decade ago there would have been reason to think that the monetary policy need for increased central bank balance sheets would be shorter term, while the financial stability See “The central bank balance sheet as a policy tool: past, present and future”, by Andrew Bailey, Jonathan Bridges, Richard Harrison, Josh Jones and Aakash Mankodi. Available here. 1  2  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  2  demand would be permanent. That distinction still stands, but the structural drivers of low equilibrium interest rates suggest the use of central bank balance sheets for monetary policy will be more long-lived than had been anticipated. Expansion of central bank balance sheets in response to Covid  Turning to the more recent period, the financial stability and monetary policy drivers of central bank balance sheet expansion were again deeply intertwined. Central banks faced an incipient financial stability shock together with a need for monetary policy to respond to an unprecedented – in scale and speed – economic downturn. But the financial stability emergency differed from previous such events. The problem originated not primarily in the banking system, but in the non-bank sector – among funds, traders and corporates themselves. Central banks activated their traditional tools to inject liquidity into the banks via repo operations, and these played an important part in stabilising conditions.
And so, in May 2000, the Finance Ministers of ASEAN+3 gathered in the idyllic city of Chiang Mai in the highlands of northern Thailand, to discuss the establishment of a network of bilateral swap agreements. Thus was born the Chiang Mai Initiative. By October 2003, thirteen bilateral swap agreements had been successfully concluded, with a combined total size of roughly $ billion. 5. In May 2007, ASEAN+3 Finance Ministers agreed to transform these bilateral agreements into a multilateral agreement that would also provide a platform for mutual surveillance and dialogue. The Chiang Mai Initiative Multilateralisation, or CMIM, thus came into being in March 2010, with a war chest of $ billion. The CMIM operates as a common US dollar liquidity pool. A member state facing balance-of-payments or external liquidity problems can swap its local currency for US dollars from this pool. The size of the swap can be up to a fixed multiple of its contribution. 6. Today marks another important milestone in that journey – the opening of the ASEAN+3 Macroeconomic Research Office, or AMRO. AMRO is not just any research outfit. It is a critical component of the emerging regional architecture, based on mutual co-operation, surveillance and solidarity. Singapore is delighted and honoured to host AMRO. 7. But before I say more about AMRO, I want to touch briefly on the role of regional safety nets, and how they complement global safety nets. BIS central bankers’ speeches  1  Why regional financial safety nets matter 8.

Caleb M Fundanga: Developments in the Zambian banking sector Opening remarks by Mr Caleb M Fundanga, Governor of the Bank of Zambia, at the official opening of the Stanbic Bank Zambia Limited, Mulungushi branch, Lusaka, 24 November 2009. *  *  *  •  Members of the Board of Directors, Stanbic Bank Zambia Limited  •  Stanbic Bank Zambia, Managing Director, Mr. Joseph Chikolwa  •  Management and staff of Stanbic Bank Zambia  •  Distinguished Invited Guests  •  Members of the Press  •  Ladies and Gentlemen  Allow me to begin by thanking the Stanbic Bank Zambia Limited Managing Director Mr Joseph Chikolwa for inviting me to this occasion which marks the official opening of the Stanbic Bank Zambia Limited Mulungushi Branch. As the regulatory authority for the banking sector, the Bank of Zambia is pleased to be associated with achievements of institutions that we regulate, particularly where these developments lead to increased access to banking services as well as convenience for the Zambian public. It is also encouraging to see banks expanding their services to areas outside the central business district in order to bring their products and services to their customers’ door step. This is no doubt a strategic move that confirms that there are enormous opportunities here, which the bank can benefit from despite the stiff competition.