samchain/econo-pairs-v1 huggingface dataset:
This was intended to prevent the Bank’s holdings becoming unduly concentrated in any particular segment of the market and had the  2  For a summary of the evidence, including references to related studies, see Michael Joyce, Matthew Tong and Robert Woods (2011), “The United Kingdom’s Quantitative Easing Policy: Design, Operation and Impact” Bank of England Quarterly Bulletin, 51(3), 200–212. 3  Specifically, investment-grade yields fell by around 70 basis points, while sub-investment grade yields fell by around 150 basis points. 2  BIS central bankers’ speeches  consequence of shifting them more towards shorter durations. The subsequent response of yields at different maturities was broadly in line with what would have been expected on the basis of our first round of purchases (see Chart 3). The approach is also less suited to analysing the impact on the prices of assets which are less immediate substitutes, such as equities. These are likely to take longer to adjust, as it probably takes a while for portfolio managers to decide how they want to rebalance their portfolios. But, as Chart 2 shows, equity prices rose substantially once QE was actually under way – by around 50% during QE1 and around 10% during QE2. In both cases, the switch from decline to growth coincides with the commencement of asset purchases. It seems unlikely that all of the recovery in equity prices during these periods was down to our QE.

This is, by the way, of the same order as some calculations of the impact of QE produced by the Pension Corporation late last year.7 There are a couple of conclusions I want to draw from this. The first is that while the change in the deficit is certainly not trivial for a substantially underfunded scheme, the impact of QE is nevertheless small compared to the movement in the deficit associated with other factors, such as the collapse in equity prices as a result of the financial crisis and the  6  This is broadly consistent with the NAPF Annual Survey for 2011, which suggests an average mix of 40% fixed income, 40% equities and 20% other assets, the prices of which I have assumed evolve in line with equities. The bonds are assumed to move in line with 15 year gilts, while the equities are assumed to move in line with the UK FTSE All-share index. 7  See Pension Corporation (2011), “QE’s impact on pension fund liabilities”, December. 4  BIS central bankers’ speeches  recession. In particular, it would be an error to attribute the deterioration in pension deficits since the start of the crisis solely to the impact of QE. The second observation is that QE does not inherently raise pension deficits. It all depends on the initial position of the fund, with the movements in liabilities and assets likely to be broadly comparable when a scheme is fully funded.
The oil price was approxi mately NOK 500 per barrel at the beginning of 2008 Q4 and has varied bet ween NOK 260 and NOK 350 per barrel in 2009 3) Negative return in NOK. Negative return measured in international currency in brackets 4) Fall in housing wealth fro m August 2007 to 2008 Q4 (no minal ter ms) Sources: Ministry of Finance, Ministry of Trade and Industry, Folketrygdfondet and Norges Bank 5  6  BIS Review 53/2009  Return 1998 - 2008 Benchmark portfolio and actual portfolio. Indexed, 31 Dec1997=100 200 Benchmark portfolio Actual portfolio  175  150  125  100 98  99  00  01  02  03  04  05  06  07  08  09 6  Return on equities1998 - 2008 Benchmark portfolio and actual portfolio. Indexed, 31 Dec1997=100 Benchmark portfolio  200  Actual portfolio  175 150 125 100 75 98  99  00  01  02  03  04  05  06  07  08  09 7  BIS Review 53/2009  7  Return on fixed income instruments 1998 - 2008 Benchmark portfolio and actual portfolio. Indexed, 31 Dec1997=100 Benchmark portfolio  200  Actual portfolio  175 150 125 100 75 98  99  00  01  02  03  04  05  06  07  08  09 8  Credit ratings, fixed income portfolio1) Government Pension Fund - Global.

This is the very foundation of the investment strategy with its high allocation to equities. Our ability to adhere to this strategy in a critical phase – even if this should last some time – is crucial if the fund is to deliver the returns we expect in the longer term. In 2008 Norges Bank’s management results were weak in both absolute and relative terms. Relative returns in 2008 were significantly worse than might have been expected based on the investment strategy chosen. In the management of the fixed income portfolio, the crisis in the financial system revealed that risk exposure in the various mandates was not sufficiently independent. The Executive Board has reinforced its oversight of the Bank’s investment management. It has issued a new mandate to NBIM that delegates investment management responsibility and introduces additional limits in the risk profile for investment management. As with the fund’s long-term investment strategy, the results of our operational management of the fund need to be measured over time. I am confident that the operation we have built up will deliver good results in the long term. Thank you for your attention!
Combining the three core businesses of retail banking, specialised financial services and corporate and investment banking helps to open up opportunities for cross-selling, and reduces banks’ sensitivity to the interest rate cycle by giving them access to more diverse sources of financing. Even in retail banking, profitability has been better preserved thanks to the increase in fees on activities that are not linked to interest rates: payment services, asset management and insurance investments. For the six largest French banks, net interest margin thus accounts for 44% of net income compared with 57% for their euro area peers. The challenge of bank profitability also raises another imperative: cross-border consolidation, which would allow genuine pan-European banking groups to carry out their activities more efficiently and better withstand the international competition. Compared with the US market, the European banking sector remains fragmented: the 5 main European banks have a market share of just 20% compared with more than 40% for their US peers. Meeting this target is in part the responsibility of public authorities: concrete progress finally needs to be made on the Capital Markets Union, and the Banking Union needs to be completed in a true single banking market. It is particularly important to prevent geographical ring-fencing practices, which stop groups from managing liquidity and capital on a consolidated basis. These policies could prove dangerous in the event of a crisis as they would make it harder for entities within cross-border groups to support each other.

In my view, that now points to a gradual withdrawal of some of the stimulus we provided to the economy in more difficult circumstances last year – not so much as to undermine the recovery, but to keep it on a low inflation path, consistent with the Committee’s remit. 7  10  See Sentance (2009a) and Sentance (2009b) for a more detailed discussion. BIS Review 99/2010  References Eurostat (2010) “Regional GDP per inhabitant in 2007”, Press Release 25/2010 – 18 February 2010 Lee, N. (2010) “No city left behind”, published by the Work Foundation, July 2010 Sentance, A. (2009a) “Monetary policy in turbulent times” Speech at the Agricultural Engineers Association Annual Conference, Institution of Civil Engineers in London on 21 April 2009 Sentance, A. (2009b) “Energy and environmental challenges in the new global economy” Speech at the British Institute of Energy Economics Sustainable Energy Seminar, London on 21 September 2009  BIS Review 99/2010  11
Christine M Cumming: Reform in a time of rapid change Remarks by Ms Christine M Cumming, First Vice President of the Federal Reserve Bank of New York, at the Standard and Poor’s Ratings Services Global Bank Conference, New York City, 27 March 2014. *  *  *  It is a pleasure to speak at this program on global banks. Since your agenda covers many dimensions of transformation and adaptation of global financial institutions, I thought I’d frame my remarks around the theme of reform in a time of rapid change. Change involves both long-wave and short-wave components. Reform can be driven by both the public and the private sectors. My thesis is that the most effective reform involves both the public and private sectors and takes account of both the proximate needs for reform and the long-term trends that drive long-term transformation. The views I will express are my own and not necessarily those of the Federal Reserve Bank of New York or the Federal Reserve System. Let me highlight two kinds of change. So much of the immediate regulatory agenda has been framed around addressing the failings in the run-up to the global financial crisis – the failings as we understand them today. The resulting lessons learned often focus on developments between 2003 and 2007: poor underwriting in the U.S. residential mortgage market, the rapid expansion of leverage in the household and the financial sectors, and the packaging and repackaging of risks from mortgages into increasingly complicated securities.

The rate of inflation has been posting very moderate figures since autumn last year as a result of the removal from the index of the base effects linked to fiscal consolidation; certain temporary factors, such as those relating to energy price developments; and other more durable factors, relating to the economy’s excess capacity, the reduction in unit labour costs and the relative sluggishness of spending. For the remainder of the year the inflation rate is expected to hold at low levels, below the euro area average, thereby permitting further headway in gains in competitiveness with which to entrench a stronger recovery. Low inflation is conducive to gains in income purchasing power, although the counterpoint to this is the greater difficulty this adds to further progress in household and corporate deleveraging. In the more immediate future, the advances made by the Spanish economy augur a firming of the gradual path of recovery, underpinned by greater confidence, a progressive easing in financial tensions and a gradual improvement in the labour market. A crucial role will have to be played here by the re-balancing processes under way in the Spanish economy, especially the redressing of the private sector’s financial position and fiscal consolidation. The successful culmination of these processes is pivotal for rooting the recovery in domestic and external confidence and for ensuring the external funding flows that are vital for making sustained medium-term growth possible.
Even if we compare the price increase in the year of the final changeover to the euro, i.e. in 2002, to the inflation rate in earlier years, we can see that the price rise in the euro zone did not accelerate. The rate of inflation in neighbouring Finland was even lower than in 2000 or 2001. Meanwhile in Denmark, which had postponed the changeover to the euro, growth in prices accelerated and was even faster than in Finland, which had adopted the euro. •  Unsubstantiated price rises under false pretences in the conditions of market economy are above all prevented by competition between companies, both in Estonia and in the ‘old’ Europe. In the ‘old’ Europe, also consumer protection agencies have been of help, which will hopefully be the case also in Estonia. •  Administrative rises in excise duties related to the accession to the European Union and increase in the prices of a few other individual goods (such as sugar) cannot and must not be associated with the adoption of the euro as a single currency. These two factors are not related, except for the fact that in order to adopt the euro a country has to be a member of the European Union first. •  The following six months will indeed bring about several one-off price rises related to the accession to the European Union - all in all, according to our current analysis, these should escalate Estonian consumer prices 1-1.4%.

The changeover to the euro does not call for extensive reforms in Estonia, rather, it is a more exhaustive utilisation of the opportunities Europe has to offer. •  The changeover to the euro cannot and must not be a seasonal election issue but an area where we proceed from Estonia's interests - hence, common sense, analysis of the economic situation, and knowledge of the theoretical foundations of the EMU. 2  BIS Review 26/2004  •  The European Central Bank has indicated that due to the differences in the economies of the new member states, a single approach suitable for everyone for joining the exchange-rate mechanism, ERM II, and adopting the euro cannot be suggested. Besides, a common approach was not possible for the present member states either. An approach that takes into account Estonia's particulars means that accession is going to be based on the present currency board arrangement and that our application to join ERM II will be submitted as soon as possible. Prior to adopting the euro a country has to be a successful member of ERM II for at least two years. Also Estonia's technical readiness for changing over to the euro should be achieved by mid-2006. If such a scenario materialises, we will be among the first new EU members to adopt the euro.
At the same time it is important to set the interest rates in a way that avoids directly subsidising the bank system. In addition to the Riksbank’s measures the Swedish banks have received other forms of support during the financial crisis. They have also been able to borrow from other central banks. As part of the government’s stability package, with effect from December 2008 financial institutions can apply to have their borrowing guaranteed by the government through the Swedish National Debt Office. At present nine financial institutions have received loans amounting to just over SEK 300 billion with such guarantees. All in all, the bank lending supported by the Riksbank and by the Swedish National Debt Office amounted at most to almost SEK 800 billion in July this year (Figure 10). BIS Review 160/2009  9  Figure 10 The Riksbank’s lending and government-guaranteed borrowing SEK billion 900 800  900 Emissions guaranteed by the Swedish National Debt Office The Riksbank's lending  800  700  700  600  600  500  500  400  400  300  300  200  200  100  100  0 Jul-08  0 Oct-08  Jan-09  Apr-09  Jul-09  Oct-09  Sources: The Swedish National Debt Office and the Riksbank. To summarise, the measures to safeguard financial stability during the financial crisis were mainly aimed at quickly providing the banks with wide scale funding in SEK and USD.

And when Bank Rate eventually starts to return to a more normal level, as one day it will, the Bank would then have no income, in the form of coupon payments on gilts, to cover the payments of interest on reserves at the Bank of England that we had created. The Bank would become insolvent unless it created even more money to finance those interest payments, and that would lead ultimately to uncontrolled inflation. That is a road down which the Bank will not go, and does not need to go. I suspect that the advocates of “helicopter money” and related ideas are really talking about a relaxation of fiscal policy. It would be better to be open about that. Enough of what the Bank of England should not be doing. So what should we be doing? Since the Monetary Policy Committee last published an assessment of the economic outlook, other central banks have been active. The European Central Bank announced its plans for Outright Monetary Transactions, the Bank of Japan expanded the scale of its asset purchases, and the Federal Reserve committed to continue with its asset purchases until the outlook for the labour market improves substantially. Our current programme of asset purchases will be complete by next month. What happens after that will depend upon the outlook, beginning with an appraisal of where we are today. Judging the present state of the UK economy is far from easy.
But what is different is that the current risks to inflation are unusually large. My central view is that these risks should gradually lessen as the temporary effects pushing up on inflation wane and the economic recovery continues. But it is possible that some of the risks will crystallise and policy will need to react. It is quite likely that in hindsight, once we see how the economy evolved and which risks materialised, that the current stance of policy will be criticised for having been too tight or too  BIS Review 122/2010  7  loose. But we cannot set policy with hindsight. All we can do is set policy in such a way that balances the opposing risks to inflation and be ready to change policy decisively in either direction as this balance of risks alters. I do not know when policy will next change or in what direction. But I can assure you that when making this decision, the objectives of policy will be clear and unchanging: inflation, inflation, inflation. References Benito, A, Neiss, K, Price, S and Rachel, Ł (2010), “The impact of the financial crisis on supply”, Bank of England Quarterly Bulletin, Vol. 50, No. 2, pages 104–114. Bils, M (1989), “Pricing in a customer market”, The Quarterly Journal of Economics, Vol. 104 (4), pages 699–718. Campa, J and Goldberg, L (2006), “Distribution margins, imported inputs, and the sensitivity of the CPI to exchange rates”, NBER Working Paper No. 12121. Chamberlin, E (1933), “The theory of monopolistic competition”, Cambridge, Mass.

I understand that the EU Code on remuneration would already be consistent with this. What I am describing is not a scary prospect. It should, in fact, be liberating to establish a financial system based more firmly on the principles of the market. But it is a prospective world in which our capital markets will be at least as important as they were over recent decades. That underlines the necessity of the work on, for example, standards for central counterparties, on shadow banking, and on transparent and resiliently liquid markets. This is a world in which securities regulators will play a vital role in underpinning stability. In the UK, the new Financial Conduct Authority under Martin Wheatley will be a member of the new macroprudential body, the Financial Policy Committee, for just that reason. Thank you again to AFME for providing a forum through its book for this public policy debate to continue. 2  BIS central bankers’ speeches
The U.S. experience during the Great Depression – in particular, in 1937 – is a classic example for monetary historians: In response to the positive growth and reinflation that occurred after the devaluation and suspension of gold convertibility, the Fed raised reserve requirements, the Treasury sterilized gold inflows and there was a fiscal contraction. Subsequently, the economy dropped back into recession and deflation. During this time, interest rates remained very low. The discount rate was lower after 1937 than before, and Treasury bill rates were less than 1 percent. By many economic accounts, it took the big fiscal expansion associated with World War II to exit the Great Depression. Japan over the past 20 years We can also learn from the Japanese experience over the past 20 years. After attempting to expand production and avoid deflationary prospects in the late 1990s, monetary policy reversed course prematurely in the early 2000s as the inflation rate inched above zero; deflationary pressures soon reemerged and policy rates returned to zero by 2001.This experience was repeated again later in the decade. Indeed, it has only been over the past year – following nearly 20 years of stagnation – that we see the recent goal-oriented monetary expansion making significant headway in extracting Japan from below-target inflation. Recent European experience The recent European experience in 2011 is yet another example of premature tightening.

Financial turbulence puts a strain on the real economy and is a threat to price stability. Moreover, we are dependent on well-functioning banks and financial market infrastructures for the implementation of monetary policy operations. Second, we have an important role to play in times of financial instability, namely that of lender of last resort. As such, we provide liquidity to financial institutions in financial distress. This emergency action 1 2  Sources: Blick (6 July 2021), Finanz und Wirtschaft (21 July 2021), translated from the German. With a focus on Switzerland, cf. Birchler U.W., The National Bank’s closer focus on the stability of the system, in: The Swiss National Bank 1907–2007. Page 2/12  often comes with high risks for us and for the economy as a whole. These two points illustrate that it is in our interest to identify risks to financial stability as early as possible and to contain them through preventive measures. The SNB’s mandate regarding financial stability was explicitly defined in the comprehensive revision of the National Bank Act (NBA) in 2003. In accordance with art. 5 NBA, the SNB is obliged to ensure price stability and, as part of this mandate, also to make a contribution to the stability of the financial system. By choosing the word ‘contribution’, legislators expressed the fact that financial stability is subordinated to the goals of monetary policy and that it is promoted not only by the SNB, but also by other authorities.