samchain/econo-pairs-v1 huggingface dataset:
This is mirrored by the fruitful cooperation between the statistical departments of national central banks (NCBs) and national statistical institutes (NSIs), both at the national and at the European level, for instance in the Committee on Monetary, Financial and Balance of Payments Statistics (CMFB). For this reason, I am particularly pleased that Commissioner Almunia has kindly accepted our invitation to give the keynote speech at this conference and that the programme includes a session organised jointly by Eurostat and the ECB’s Directorate-General Statistics and chaired by Mr Carré, the Director-General of Eurostat. I would like briefly to consider three issues: 1.  recent enhancements to euro area statistics from the ECB’s perspective as a policymaker;  2.  the importance of the appropriate communication of statistics; and  3.  the strategy for the further development of euro area statistics. Recent enhancements to euro area statistics from the ECB’s perspective as a policy maker First of all, I would like to reiterate that reliable and timely euro area economic, monetary and financial statistics are of paramount importance for the ECB’s decision-making. This applies not only to the single monetary policy, but also to the other ESCB tasks, including those in the areas of financial stability and payment systems. Statistics are themselves one of the main deliverables of the ECB, providing market participants, analysts, academics, the media and the general public with the aggregate financial data they need.

Ravi Menon: Financial cooperation between China and Singapore Congratulatory remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the inauguration of ICBC Singapore RMB Clearing Bank, Singapore, 2 April 2013. *  *  *  Mr Jiang Jianqing, ICBC Chairman, Mr Dai Bing, distinguished guests, ladies and gentlemen, good morning. 1. I am happy to join you at this morning’s ceremony inaugurating the Industrial & Commercial Bank of China as the Renminbi clearing bank in Singapore. 2. Today’s event marks a key milestone in the financial cooperation between China and Singapore. It is the fruit of a strong and substantive collaboration between the Monetary Authority of Singapore and the People’s Bank of China. •  MAS extended Qualifying Full Bank (QFB) privileges to ICBC and Bank of China in October 2012 as part of the China-Singapore Free Trade Agreement. •  PBC then named ICBC Singapore as the RMB clearing bank in Singapore. •  Last month, MAS and PBC doubled the size of their bilateral currency swap facility from RMB150 billion to RMB300 billion. The scope of the swap facility was expanded to allow MAS to provide RMB liquidity to banks in Singapore. 3. Singapore is the first regional financial centre outside Greater China to have a RMB clearing bank. Offshore RMB activities in Singapore will be underpinned by the strong and growing trade flows between the region and China. •  Singapore’s bilateral trade with China exceeds $ billion.
The first half of 2012 saw a stepping up of so-called “redenomination” risk, which was a euphemism for the doubts over certain countries, Spain among them, remaining in the euro area and, indeed, over the survival of the single currency. In March, a second bail-out was approved for Greece and, in May, with the inconclusive Greek elections, rumours were again unleashed about the country exiting the Monetary Union. In parallel, there was a fresh bout of tension centred on Spain and on Italy, where two-year risk premia relative to the German Bund climbed to over 700 and 500 basis points, respectively. Fears intensified in Spain over the impact of the double-dip recession on the position of credit institutions and on the feedback loop between sovereign and banking risk. Funding conditions on the wholesale markets once again tightened and net fund outflows to the external sector stepped up, totalling € billion in cumulative 12-month terms, 29% of GDP. In mid-2012, Spain was facing what was practically a collapse in external funding, which it was able to offset with a substantial increase in Eurosystem funding, which came to account for € billion in August 2012, 34% of the liquidity injected by the Eurosystem into banks across the whole euro area.

Options in the restructuring process Allow me now to turn to two questions: the options other than the strategy that was adopted; and why the reform and restructuring process under way since 2009 had to be reinforced, through the 2012 Memorandum of Understanding. As regards the options, I believe the debate mainly focuses on the early years of the crisis, between 2009 and 2011. The two scenarios usually mentioned are, first, not having bailed out non-solvent banks, facilitating their winding up; and second, as opposed to the gradual strategy launched, to have acted more aggressively from the outset, with an injection of public funds in the form of capital and the segregation of impaired assets into purpose-built companies, such as that which was finally created, namely Sareb. With respect to the first scenario, and irrespective of political considerations, letting ailing banks go bankrupt was not a reasonable option in economic terms. The winding up of banks would have meant the paralysis of banking services and losses for depositors in the institutions concerned of that portion not covered by the DGS (a portion that could be very high), accentuating the risk of contagion to other institutions. This type of strategy would have had a devastating impact on confidence and the stability of the financial system, on the real economy and on employment, and it would very likely have meant a higher cost for taxpayers insofar as the DGS would almost certainly not have been able to meet the coverage of deposits without further public aid.
There are also continued financial challenges for families here as indicated by the New York Fed’s measures of credit conditions. As of the end of 2013, average debt per person was about $ in Brooklyn – little changed over several years. At the same time, the Borough’s delinquency rate on that debt is now 11.6 percent, much higher than the state average and more than double the national average. What’s more, the mortgage crisis continues to take a toll on local homeowners. As of the end of 2013, more than 11 percent of mortgage debt in Brooklyn was 90-plus days delinquent, again significantly higher than the New York State and national delinquency rate. I also want to make a few comments about the impact of Superstorm Sandy. While areas of the New York City metropolitan region were hard hit by the storm, the devastation was particularly severe along the waterfronts of Brooklyn – and in particular in southern Brooklyn and neighborhoods like Red Hook. We saw and heard about the devastation of the storm from many of those affected, including a number of our own employees as well as other residents we met at a series of assistance clinics we organized in response to the storm. Those already living close to the edge financially were particularly vulnerable as were the City’s public housing residents. Still, Brooklyn’s economy showed resilience: while employment did drop in November 2012, it bounced back strongly the next month and accelerated during the spring of 2013, reaching new highs.

At the Federal Reserve, we try to meet with a diverse array of people in order to get a comprehensive picture of economic conditions in the regions we serve and a fuller understanding of the major issues. Earlier today, I met with developers and local community leaders to learn about the redevelopment of the Atlantic Yards, was welcomed to a roundtable breakfast meeting with members of the Brooklyn Chamber of Commerce and then traveled to Brownsville to learn about the challenges faced by that community. Following this visit to Brooklyn College, I’m headed to Bush Terminal in Sunset Park to meet with city officials and learn about an important redevelopment project and then I’ll end the day at Etsy – a successful innovative start-up and a major private-sector employer here in Brooklyn. These trips are only one of the many ways in which we seek to engage with the people and businesses in our region. We also reach out to our local communities through web resources, workshops and conferences. To assess the performance of the regional economy, we monitor economic activity on a monthly basis, we tap into the insights of the members of our Small Business and Agriculture Advisory Council and Upstate Advisory Board, and we have constructed a consumer credit panel that allows us to better understand the financial condition of homeowners and students at the local level.
That selling pressure overwhelmed the capacity (or willingness) of intermediaries to warehouse those instruments, leading to sharp and disorderly price declines in core assets relied upon, directly or  Page 5  indirectly, by households, firms and governments to support economic activity. And central banks’ traditional tools, working through banks, were unable to direct liquidity to the source of the shock (Figure 1). European energy markets in Spring 2022 saw similar dynamics too, when sharp price movements triggered by the invasion of Ukraine triggered large margin requirements on energy derivative positions that thinly-capitalised intermediaries struggled to meet, driving liquidation of positions that further amplified the initial shock to energy prices. Some may argue that Covid, Putin and the UK’s autumn 2022 fiscal announcements are truly exceptional shocks that would challenge any market structure, and are unlikely to be repeated. Maybe. But the underlying vulnerabilities are real and growing, and hoping for calmer times is not a strategy. LDI was just the latest warning of the need for action. 2) Public backstops vs. private self-insurance Given that the evolution of this new form of systemic liquidity risk is real and growing, there is an important debate to be had about how responsibility for insuring against the social consequences of that risk should be shared between private and public interests. It is a core function of public institutions to provide a backstop against genuine tail risks. The alternative – systemic collapse – would be hugely costly to the real economy.

As summarised in Table 1: The purpose of the intervention was grounded in the risk to UK financial stability from dysfunction in the gilt market. The Bank’s Financial Policy Committee (FPC) identified this risk and recommended that the Bank take action to safeguard against it; The operation was strictly time limited. The purchase window was open for 13 business days, the minimum period judged necessary (through contact with market participants) for pension and LDI funds to improve their resilience. This hard deadline, though criticised in some quarters at the time, proved critical in driving timely recapitalisation, and also gave policy makers and markets confidence that the time profile would be very different from QE. Similarly, the commitment to unwind the gilt holdings in a timely but orderly way gave confidence that there would be no lasting impact on the Bank’s stock of gilt holdings – the variable voted on by the MPC during QE. [16] Unwind was completed using an innovative demand-sensitive approach over a period of four working weeks – broadly the same time it took to run up the holdings. [17] The operation was targeted only at those assets involved in the LDI adjustment – long-dated conventional and (in the latter phases of the operation) index-linked gilts, whereas QE operations took place across the (conventional) curve; and  Page 10  The operations were subject to a system of backstop reserve pricing, aimed at ensuring we purchased only as many assets as required to resolve the financial stability issue and recatalyse the market.
The so-called Great Stability of the past decade has bestowed on the MPC the great gift of credibility – a golden halo which eluded monetary policy-makers in the UK for most of the twentieth century. What part has the MPC played in its own success? It’s difficult to say. But it is hard to believe that luck played no role. My own view is that the MPC has benefited from a virtuous circle. As we have kept inflation close to target, people have increasingly come to expect us to do so in the future, and to act on the assumption that inflation will stay low. These expectations have underpinned the wages they have bargained for, and the prices they have set. And that behaviour has helped us to keep inflation under control in the face of destabilising events. However, the unusual degree of stability, and the prestige it has conferred on central bankers, may also have bred some less helpful attitudes: such as complacency about the ease with which the economy can absorb shocks, and unrealistic expectations about what monetary policy can achieve. Just to be clear: monetary policy can pin down average inflation over the medium term. It can not deliver inflation at target at all times and in all circumstances, and certainly not in combination with rock-steady growth in output. Let me illustrate these points by looking more closely at one of the key challenges I mentioned earlier, the impact of higher energy prices over the past two years.

So between the mid-1990s and the financial crisis, the UK experienced a very powerful financial cycle – a long build-up of credit to the private sector followed by a sharp correction that has reversed some but not most of the preceding credit growth. There were of course other important elements such as lending overseas and between banks, and some would argue lending to governments. But I want today to focus on credit to the UK private sector, particularly household credit. I want to look at what lay behind the upswing of that cycle, the marked rise of credit to GDP since 1997. This is of more than academic interest. We are back to early 2000s levels of credit  1  See Schularick and Taylor (2012). BIS central bankers’ speeches  1  and debt in the economy. We are now emerging from the post crisis period of credit contraction; in the UK credit slowly began to grow again around 2012. It is now growing at almost the same rate as the economy. So now is a good time to ask: what lay behind the very rapid expansion of credit from the mid1990s to the crisis? Should we expect – or want – credit growth to return to its pre-crisis path, growing more than twice as fast as GDP? This is an important question for the Financial Policy Committee of the Bank of England as it assesses the risks to the stability of the UK financial system – where we are in the so-called “financial cycle”?
These developments reveal that our trading partners have seen their revenues increase, translating into an improved external demand outlook for Turkey. This is conducive to the increase in our exports. During the pandemic, countries have propped up their economies with direct public expenditures, other financial aid, and incentives. Some countries have used direct public expenditures more extensively depending on the fiscal room available, while others have introduced capital, credit and other liquidity incentives. Advanced economies announced public assistance programs amounting to more than 20% of their national income. For example, in the United States, the economy has been buoyed by government spending, at a rate of 25% of GDP, and forgone revenue. In some countries such as Italy and Germany, financial assistance has comprised capital, credit and other liquidity incentives as well as fiscal policy. Developing countries have supported their economies through various measures, albeit less vigorously than developed countries. In addition to following supportive monetary, fiscal and financial policies, Turkey is among the economies that have made great progress in vaccination and proved  3  more successful in containing the pandemic, which had positive implications for Turkey’s production, investment and employment. Here, I think we can have a better understanding of each country’s economic and public health policies if we review some basic macroeconomic variables. Compared with other developing economies, Turkey’s economy has room for improvement in terms of inflation, reserves and risk premium.

Distinguished guests, Stability to be established in the general price level in Turkey will foster macroeconomic stability and financial stability through the fall in country risk premium, acceleration in reverse currency substitution, accelerated accumulation of foreign exchange reserves and perpetual decline in financing costs. This will create a viable setting for investment, production and employment to continue growing in a healthy and sustainable way. I would like to thank you all for your participation.
I think there is a broad agreement on the fact that interest rate decisions are state-dependent rather than time-dependent and as a consequence, both the frequency and the amplitude of the policy changes are mainly driven by the underlying state of the economy. As far as the Eurosystem is concern, the more gradualist approach is nothing but the reflection that the economy of the euro area has been less affected by cyclical fluctuations than the US economy. Moreover, recent research carried out by the Eurosystem on inflation persistence tends to show that the degree of inflation persistence in the euro area is quite moderate while the degree of price stickiness is considerable and higher than in the United States. This finding may provide another justification for a gradualist monetary response to cost-push shocks as: first, the impact of an inflation shock will be small as agents anticipate a low persistence of this shock and therefore will reduce their expectations of future inflation; in turn, the negative response of the output gap will be limited implying a less persistent response of the real rate. 5. As a result, the Eurosystem monetary policy has won European citizens’ confidence in and acceptance of the new currency Finally, the euro has been readily accepted by economic agents and is now part of European consumers’ daily lives. Surveys confirm that the general public has confidence in the euro, as a solid currency, and in the Eurosystem as their Central Bank.

The quantitative definition of price stability has been clarified after five years of experience The definition adopted by the ECB’s Governing Council in October 1998 was confirmed and clarified in May 2003 following an in-depth review of its strategic framework by the Eurosystem. In the wake of this assessment exercise, the Governing Council specified that price stability was defined as an annual increase in the HICP close to, but below, 2% over the medium term. Several remarks should complement this definition: - by specifying that inflation should be close to 2%, the Governing Council intended first of all to confirm the symmetrical nature of its strategy by ruling out situations of deflation. This clarification also makes it possible to take account of any possible measurement bias in the price index, as well as inflation differentials within the euro area; - the quantitative definition of monetary stability brings the Eurosystem’s strategic framework close to that of central banks that rely on inflation targeting, especially if a broad definition of the latter is accepted, such as that expressed by the term “flexible inflation targeting”. The big difference is in the use made of forecasts derived from econometric models, which play a predominant role in “pure” inflation targeting strategies, whereas they are only one component in the decision-making process of the Governing Council of the Eurosystem; - especially in the early days, we were confronted with substantial criticism regarding our definition of price stability, considered by many observers as too ambitious.
So it is not surprising that equity investments have become more important for central banks in recent years. 1 How high should the equity share be? I will now talk in more detail about our investments in equity. So far I have explained why the SNB invests in equity. In the next few moments, I would like to explore two questions: first, how high should the equity share in our portfolio be, in rough terms? Second, how are investments carried out on the stock market? Slide 6 shows that, between 2005 and 2010, our equity share was around 10%. Furthermore, you will see that, since 2011, we have gradually increased the share so that it now amounts to 16% of foreign exchange reserves. When determining the equity share, the challenge is to optimise the risk/return relationship in the portfolio. As the saying goes among investors: if you want to eat well, buy shares, if you want to sleep well, buy bonds. The idea behind this old stock market saying is that, compared to most government bonds, equities have a higher potential return but are generally more risky. Nevertheless, we need to begin by taking account of the diversification effect of the equity investments. The interrelationships can be seen if we look at the stylised efficient frontier path shown in slide 7. We start with a portfolio consisting solely of government bonds (point A in the chart), and then start adding equities to the portfolio.

The chart is based on the same approach as in the previous slide. It is easy to see that periods of poor stock market performance correspond to an appreciation of the Swiss franc, and vice versa. When equities lose value, this generally occurs in an environment of increased uncertainty in the economy and on the financial markets. In such situations, demand for the Swiss franc is particularly strong due to its character as a safe haven. The value of our equity positions is then subjected to a double loss, first the price loss and second the appreciation of the Swiss franc against the foreign currencies in which the equities are denominated. So the diversification effect of our equity investments is diminished, to some extent, by this currency effect. We cannot safeguard ourselves by hedging an appreciation in the Swiss franc because this would be tantamount to selling foreign exchange reserves against Swiss francs, and an investment decision could thus have a monetary policy effect. This example shows how monetary policy considerations limit investment policy’s room for manoeuvre. A certain diversification effect can also exist between equities and gold. In times when uncertainty is high, the gold price often increases, while equity prices come under pressure. The opposite can occur when uncertainty decreases significantly. This was particularly evident last year, when the gold price underwent a significant correction after climbing for many years. Of course we cannot rely on this kind of diversification effect always holding. However, when it does, it is very welcome.