samchain/econo-pairs-v1 huggingface dataset:
Már Guðmundsson: Recent economic and financial developments in Iceland Speech by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, at the 52nd Annual General Meeting of the Central Bank of Iceland, Reykjavík 21 March 2013. *  *  *  Madame Prime Minister; Ministers; Madame Chairman; Directors and Ambassadors; Ladies and Gentlemen: As we convene for the 52nd Annual General Meeting of the Central Bank of Iceland, the domestic economic recovery that began in mid-2010 continues, although it has slowed down in recent months. At least to a degree, the slowdown is due to developments internationally. The margin of spare capacity in the economy continues to narrow. Inflation has proven more persistent than previously hoped, however. Early on, wage increases far in excess of productivity growth played a leading role in raising inflation well above the inflation target, but since last autumn the weakening of the króna, triggered by deteriorating terms of trade and a heavy foreign debt service burden, has played a greater part. Monetary policy responded to these developments with interest rate increases beginning in August 2011. The Bank’s interest rates have been unchanged since November, however, and intervention in the foreign exchange market has supported the exchange rate in the recent term, thereby supporting the monetary policy goal of bringing inflation back to target. Global output growth lost pace in 2012, but to differing degrees in various regions. There was a contraction in the euro area and marginal growth in the UK and elsewhere in Europe.

But the educational level of the consumer and above all his or her age, does have a substantial effect on the result. A 60-year old consumer will only choose a card over cash when making a purchase of, on average, SEK 179, while a 20-year old consumer would choose to pay by card for a transaction as low as SEK 60. It would appear that young people’s choice is fairly close to a cost-efficient choice from society’s point of view. The study is based on data from 2002, but there is nothing to indicate that consumers’ methods of payment have changed radically since then, although cards have continued to grow in importance. Use of cash is still at a high level in Sweden. The cost of cash management has probably risen more than the cost of card management, calculated per transaction. The costs for increasing security for cash-in-transit and ATMs have been substantial. There are many indications that the gap in socioeconomic costs between cards and cash has widened further and that the cut-off point will therefore occur at an amount lower than SEK 70. In this case, society would benefit even more from a reduction in the use of cash. Make the costs visible An important basic insight is that the costs of different types of payment exist, even if they are not visible. They affect the consumers in that goods and services become more expensive. If these choose less efficient instruments of payment to a greater extent, then the price increases will be greater.
It is the cost of long-term (seven, and ten-year) OFZs that banks price in their interest rates on long-term loans — investment loans and mortgage loans. Those are the types of loans that shore up growth, and in the case of mortgage lending, they are of great social importance, too. I also have to say that the opposite is true: rising inflation makes both short and long-term loans more expensive, while people become poorer as inflation erodes their incomes and savings. Economic history provides numerous examples when a late withdrawal from anti-crisis measures or prolonged accommodative monetary policy propelled a strong rise in inflation, higher yields of government bonds and higher interest rates on loans. It did not matter whether the central bank maintained a low policy rate: high inflation drove loan rates up. That occurred because the central bank rate was unreasonably low, and excessively stimulating. In those cases, central banks are often forced to raise their interest rates and switch to monetary tightening, and they have to do that in a more drastic manner, and for a longer period. Such a course of action is dictated by inflation, inflation expectations, and early signs of bubbles signalling risks to financial stability. Ultimately, inflation rates become unacceptable to either society or the economy, and credit is unaffordable. There are such examples today. Statistical data for some developing countries already suggest double-digit growth in inflation, with no signs of a slowdown in store (we will provide the data later).

Elvira Nabiullina: Current problems in the post-pandemic economic recovery Speech by Ms Elvira Nabiullina, Governor of the Bank of Russia, at the plenary session of the Federation Council meeting, 22 September 2021. * * * Good afternoon, Ms Speaker and colleagues. Thank you very much for inviting me to speak today, on the first day of the autumn session. In my speech, I would like to focus on current problems in the post-pandemic economic recovery. Undoubtedly, we are pleased about its rapid pace. Yet, the economic rebound is bringing some side effects that we must counter to ensure the stability of our economy, the financial system, and ultimately, the well-being of our people. The economy has now returned to the growth path it would have been on but for the pandemic. Certainly, central to the successful delivery of anti-pandemic measures have been the Government’s budget support measures alongside the prompt efforts of lawmakers to set up a legal framework for anti-crisis response measures. In turn, we at the Bank of Russia have granted regulatory relaxations to banks to support consumers and businesses, and to restructure and issue new loans in this challenging period. Our monetary policy has been accommodative. It was only after we made sure that the economic recovery was becoming sustainable that we started to raise the key rate. Certainly, I will explain why we are doing this as I know that there are many questions on this subject.
I trust that by sharing with you my views on our monetary policy normalisation path I have reassured you about our commitment to stopping high inflation from becoming entrenched. The more confident our fellow euro area citizens are that inflation will return to 2% in a timely manner, the smoother the adjustment process will be. Thank you. 16  Fo r instance, Banco de España staff have co nducted a mo del-based exercise to assess the impact o n euro area inflatio n of a non-targeted, permanent public expenditure sho ck of 1% of GDP. The results sho w that fo r each 1% of GDP expenditure, inflatio n increases by 0.2 pp three years later. This relatio nship might be stro nger depending o n the co mpo sition o f expenditure and against a backdro p o f supply-side co nstraints. 9

In May, this realisation led to RePowerEU, a plan that set two fundamental goals: to reduce, by the end of 2022, dependence on Russian energy to one-third of its pre-war level (as a prior step towards becoming fully independent by 2030) and to raise gas storage levels to 80% of total capacity by 1 October. In addition, in July the European Commission presented a plan to reduce Europe's gas consumption by 15% next winter. The degree of compliance with the two plans is relatively high. First, Europe has partially replaced gas with other sources of energy. Second, it has increased the geographical diversification of its gas imports, with more gas coming from Qatar, the United States and Norway. It should be borne in mind that there are limitations on the replacement of gas supply sources, since a significant part of the new imports must come by sea in the form of liquefied gas, while the process of increasing current regasification capacity takes time. In addition, this supply channel faces gas market integration problems, since the main  7  Wage settlements in the euro area – excluding the most volatile elements, such as special payments – have accelerated to 2.6% (a figure similar to that in the collective agreements registered in Spain to August, with wage settlements in the newly signed collective agreements of 2.9%). A further rise is expected in 2023, although the increases currently projected would, in principle, be moderate once trend productivity growth is taken into account.
Second, a greater capital requirement also increases the stakes for shareholders as it decreases the degree of leverage of the financial institute. This somewhat alleviates (although it does not fully resolve) the asymmetry problem facing limited liability shareholders and thus improves their incentives to undertake risk monitoring. Third, to the extent that equity capital is more expensive than debt, a capital surcharge works like a tax. It lets the firm decide on its optimal size but in so doing forces it to integrate the fact that a larger size imposes an extra cost to society and is thus only warranted if the additional benefit for the firm justifies the additional social cost. In other words: be big if you are convinced of the benefits of size but cover the social cost of your decision!11 Imposing organisational measures The level of the capital surcharge for systemically relevant institutions can, in the spirit of the Pigovian approach, be decreased if the size of the TBTF externality is further reduced by other means. This provides the rationale for imposing organisational measures with the goal of making partial bankruptcy possible.12 The aim of organisational measures is to encourage banks to isolate the divisions that assume essential systemic functions from those that do not, so that the functioning ability of the former can be maintained in a case of nearbankruptcy, while the latter can be wound down.

If we can succeed in implementing the reforms that are still outstanding, there is a chance that economic growth can be propelled to a level beyond the current economic upswing. BIS Review 100/2006  1
And what are the key challenges the SNB faces when implementing its monetary policy? Let us start by discussing why a well-functioning money market is so important. A wellfunctioning money market is essential for the transmission of monetary policy. Like most central banks, the SNB steers interest rates on the money market. To this end, it sets the SNB policy rate and uses its monetary policy instruments to keep secured short-term Swiss franc money market rates close to the policy rate. It would not be possible to steer money market rates in this way without a well-functioning money market. Since June 2019, the SNB has communicated its interest rate decision via the SNB policy rate. The SNB policy rate signals the level of interest rates the SNB seeks to maintain on the secured money market. When assessing the prevailing conditions in the money market, the SNB nowadays focuses on SARON. In the past, the SNB used to set a target range for the three-month Libor in its monetary policy assessment, and it then sought to keep this interest rate in the middle of the target range through money market operations, such as repo  Page 3/13  transactions. In Chart 1, the old system with a target range for the three-month Swiss franc Libor is shown on the left, and the new system with the SNB policy rate is shown on the right.

And, neither bankers nor traders have a monopoly on this capacity -- corporate treasurers and institutional investors can pull up most of the same screens we can. At one time, a presence in a local market and access to early newspapers could provide a trading advantage for a large market maker. Today, news from that market is available electronically worldwide with almost no lag. Information is cheaper and easier to come by than ever before. The result? A global market that reacts quickly and efficiently to new data, and participants who have more time to analyze information because they need to spend less time gathering it. One consequence of this improved transparency in information technology is that information gets reflected in asset prices more quickly and more smoothly than ever before. A closely related development that has also contributed to increased transparency in the foreign exchange market has been the rapid evolution of the price discovery process in the past several years. Electronic brokerage and electronic interbank dealing systems have evolved that have smoothed the dissemination of current pricing and improved market liquidity. Whereas truly competitive pricing was once the province of only the largest market makers, smaller interbank dealers -- and even some foreign exchange end-users -- now also have access to narrow bid-ask spreads. The result so far has been a deeper market and, again, a more level playing field for all market participants, with pricing no longer dominated by a few large players.
When expectations meet the future Speech given by Sir Jon Cunliffe, Deputy Governor for Financial Stability, Member of the Monetary Policy Committee, Member of the Financial Policy Committee and Member of the Prudential Regulation Committee  London School of Economics Wednesday 6 March 2019  I am grateful to Hugh Burns, Andrew Gimber and Katie Low for their help in preparing these remarks. 1  All speeches are available online at www.bankofengland.co.uk/speeches  The subject of this symposium is “The Next Great Crisis” by which I think we mean financial crisis. One of the defining characteristics of humans is our ability to imagine the future, as I shall discuss later. But though we can imagine the future, we cannot know it. And I am a cautious central banker. So I will not today give you my prediction for the origin, shape and extent of the next great crisis. I am however prepared to make one prediction with confidence. Whatever the trigger and the financial services and instruments most affected, the next crisis will have, somewhere at its centre, losses from an overextension of credit and an adjustment in asset prices. And, for me, as Deputy Governor at the Bank of England responsible for Financial Stability, an equally if not more important question is not what will the next great financial crisis look like but whether the next and subsequent financial crises will actually be ‘great’.

Miguel Fernández Ordóñez: Turbulence in the world markets – a Spanish view (five lessons and some homework) Address by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, at the “Círculo Financiero”, Barcelona, 14 May 2008. *  *  *  Let me begin by thanking you for the invitation to deliver this speech. I shall not be going into details today on either the sequence of events that have triggered the turbulence in international financial markets, or on the various suggestions for reform that may prevent a similar situation from arising in the future. We currently have several reports by various institutions addressing these matters in depth, including, for example, the most thoroughgoing report by the Financial Stability Forum. The scope of my speech this evening will be more modest: to examine the Spanish banking system in the context of this turbulence. The central idea I wish to convey is as follows. Spanish banks and savings banks have not contributed to any extent either to the generation or to the subsequent propagation of the turbulence, which in principle puts them in a sound position to withstand it. However, and as recent events have clearly reminded us, we live in an increasingly global world. Accordingly, the Spanish financial system cannot remain immune to the consequences of the current problems, which affect not only those who originated them but all of us.
Winters, B (2012) “Review of the Bank of England’s Framework for Providing Liquidity to the Banking System”, http://www.bankofengland.co.uk/publications/Documents/news/2012/cr2 winters.pdf. Wormell, J (1985) “The Gilt-Edged Market”, George Allen & Unwin Publishers. 10  BIS central bankers’ speeches

Spiegel online on 26th September 2007 described a research led by the Nobel-price winning chemist Paul Crutzen which had found that biofuels emit even 70 percent more greenhouse gases than fossil fuels. In effect, global warming may accelerate and lead to further increase in frequency of disasters such as floods, droughts, and unexpected weather changes that may have negative  1  Views presented today are my own and do not necessarily represent the official position of the National Bank of Poland and the Polish Financial Supervision Authority. 2  Rybinski K. (2007) “The Role of the EURO for the Future of Poland”, speech by Krzysztof Rybinski, Deputy Governor of the National Bank of Poland, 15 June 2007, http://www.nbp.pl/publikacje/wyklady/rybinskiadesti.pdf  BIS Review 138/2007  1  effects on crops. Secondly, food prices will be lifted up by an increasing demand for agriculture products in the emerging markets, especially in Asia, as the catching-up process progresses. It is worth keeping in mind that the share of food in the CPI basket is some 10 pp. higher in Poland than in the eurozone, so agflation, if it materializes, will lead to inflation divergence. 2. One cannot exclude a possibility that other commodities prices may continue to rise as well. Demand for commodities has already substantially risen in recent years. The “problem” lies again in the emerging markets. Fast growing economies create still growing demand for all sorts of commodities, especially metals and fuels (for example: oil consumption in China has doubled within last 10 years).
In this case, low implied volatilities on interest rates and exchange rates can support cross-border carry trades because the yield pick up looks attractive when you can hedge the worst risks quite cheaply [Chart 11]. The continued smooth financing of global imbalances through these carry-trades in turn leads to low volatility. But this can of course work in reverse. Foreign exchange volatility has jumped up since the US Thanksgiving Day holiday. If this volatility were to persist the perceived risks in the carry trade would increase. The common characteristic of these examples is that low implied volatilities reduce the apparent riskiness of portfolios and can encourage investors to take on more risk. And if implied volatilities are not a good measure of future volatility, they will end up bearing more risk than they expected. Avoiding this pitfall requires diligent risk assessment by investors and other counterparties. That is what is needed for market discipline to do its work. It requires both adequate disclosure of risk-relevant information and its effective use in investment decisions. In the case of the hedge fund sector, for example, it seems likely that greater institutional investor interest will continue to raise the bar on disclosure requirements, particularly for those generating returns using complex products where traditional measures like value-at-risk (VaR) may fail to capture fully the underlying risks. Conclusions To conclude, our overall assessment remains benign. The financial sector is strongly capitalised and well placed to handle even large shocks like Amaranth.

The incident may also raise some questions about how effectively market forces are acting to restrain those taking outsized risk positions, something that I will return to in a moment. Taken together, these developments provide a strong baseline for financial stability. But the risks that we pointed to in July are still there. In particular, we pointed to the risk that financial firms concerned about losing market share in rapidly expanding markets might pay less attention than they should to their resilience to unexpected shocks. [Chart 1] gives our assessment of developments since July. It shows that a number of the vulnerabilities have edged up a little as leveraged buy-out (LBO) activity and commercial property lending have grown and as the number of personal insolvencies has increased. On the other hand, the slowdown in the US economy and the beginning of a narrowing in its trade balance may have reduced the risks on that side, although we didn’t judge this material enough to change our overall assessment. BIS Review 124/2006  1  We know how easy and how fruitless it can be to draw up long lists of things that could go wrong without paying attention to their likelihood. So we try to take a balanced view that recognises not just what could go wrong but also recognises changes that we think have a positive impact on financial stability.
In fact, what the economy needed was a greater monetary boost that would help offset the negative effects of the end of the commodity super-cycle and the weakness the economy had shown in recent years. In this sense, although the recent appreciation of the peso is an important development and will undoubtedly affect the evolution of inflation in the short term, as reflected in the projections that I have just shown, its implications for monetary policy are not evident as long as its direct or indirect effects do not imply that the convergence of inflation to the target in the policy horizon is compromised. 6  About our domestic economy, the baseline scenario assumes that the factors that have reduced activity and inflation in recent months are transient. However, their persistence may be different than anticipated. On activity, a fraction of the lower growth responded to more persistent investment-related factors. This may be accentuated, for example, if confidence indicators regress. In any case, it cannot be ruled out that the economy may return to higher growth rates faster than assumed in the baseline scenario. This, considering that the labor market has not deteriorated any further, the cost of credit is low and expectations have improved somewhat, which could lead to more dynamic consumption. Inflation has fallen beyond forecasts and is now below 2%. Expectations at shorter terms are down from the cutoff date for the last Report, but at longer terms they show no major changes and remain anchored to the target.

For example, the fact that the rate of growth of labor compensation costs remains so subdued is consistent with this conclusion. With respect to prices, inflation has been running somewhat below the Federal Reserve’s objective of a 2 percent annualized rate for the personal consumption expenditures (PCE) deflator. The latest Congressional Budget Office forecast has the four-quarter percent change of the core PCE deflator moving up from 1½ percent in the second quarter of 2014 to 1.9 percent by the fourth quarter of 2015. As with growth, I find this forecast to be quite reasonable, but would argue that the risks are on the side that inflation moves upwards more slowly than this. First, the appreciation of the dollar and weakening of foreign growth prospects that I mentioned earlier both act to dampen inflation pressures. Second, energy production in the U.S. is rising much faster than I would have guessed just a few years ago, helping to reduce energy prices which in turn reduces a wide range of production and distribution costs. Lastly, I would note that research suggests that inflation expectations play a very important role in the inflation process. Those expectations remain well anchored at the present time, despite concerns by some that the amount of slack in the economy has declined substantially. I am quite confident that those expectations will remain well anchored in the future, limiting the increase in inflation set in motion by faster growth and further reductions in slack. So what does this imply for monetary policy?