samchain/econo-pairs-v1 huggingface dataset:
Our strength can be seen from the current account surplus, a strong reserves position, low level of external indebtedness and strong capital buffers in the banking system. We expect these strong conditions to persist. As many of you here can testify, our financial system is resilient and robust. On numerous occasions over the past decade, we have been able to manage market volatility in our stride. To a large extent, this was due to the continuous measures taken over the years to develop our financial markets. Our market now is balanced, deep and liquid to provide the structural support for orderly market conditions. Conclusion Let me conclude with the wisdom of the great philosopher Socrates. He viewed that any state should be led by wise, noble and exemplary ‘guardians'. These guardians will “...unite themselves in philosophy and spirit and swiftness and strength...and they ought to be wise and efficient." As bankers and guardians, let us aspire to exemplify these traits; to pursue professionalism, agility and wisdom. Thank you and congratulations again to all the graduates. A bright and exciting future awaits you. 4/4  BIS central bankers' speeches

Brainard, L. (2017), Rethinking monetary policy in a new normal, Presented at the Rethinking Macroeconomic Policy Peterson Institute conference, Washington, DC. Bridges, J., C. Jackson and D. McGregor (2017), Down in the slumps: the role of credit in five decades of recessions, Staff Working Paper No. 659, Bank of England. Broadbent, B. (2018), Monetary and macro-prudential policies: The case for a separation of powers, Speech at Reserve Bank of Australia, Sydney. Caballero, R., E. Farhi and P. Gourinchas (2017), The safe assets shortage Conundrum, Journal of Economic Perspectives, Vol. 31 (3), pp. 29-46. Carney, M. (2019a), Pull, push, pipes: sustainable capital flows for a new world order, Speech at the 2019 Institute of International Finance Spring Membership Meeting, Tokyo. Carney, M. (2019b), The global outlook, Speech. Clarida, R. (2019), The Federal Reserve's Review of its monetary policy strategy, tools, and communication practices, Speech at the "Fed Listens: Distributional Consequences of the Cycle and Monetary Policy" Conference. Dynan, K. and W. Edelberg (2013), The relationship between leverage and household spending behavior: Evidence from the 2007-2009 Survey of Consumer Finances, Federal Reserve Bank of St. Louis Review, 95(5), pp. 425-48. Eggertsson, G. B., N. R. Mehrotra, and J. A. Robbins (2017), A model of secular stagnation: Theory and quantitative evaluation, NBER Working Paper. Fagereng, A. and E. Halvorsen (2016), Debt and household consumption responses, Norges Bank, Staff Memo. Gagnon, E., B. K. Johannsen, and D. Lopez-Salido (2016), Understanding the new normal: The role of demographics, Finance and Economics Discussion Paper, Federal Reserve Board of Governors.
Anita Angelovska-Bezoska: Ministerial Dialogue on the Economic Reform Programmes of the Candidate Countries Speech by Ms Anita Angelovska-Bezoska, Governor of the National Bank of the Republic of Macedonia, at the Ministerial Dialogue on the Economic Reform Programmes of the Candidate Countries, Brussels, 25 May 2018. * * * Dear Ministers, Dear representatives of the European Commission, European Central Bank and Eurostat, It is my great pleasure to join you on the regular Ministerial Dialogue. At the beginning, let me express our gratitude to the ECB, European Commission and Eurostat for their assessment of our Economic Reform Programme that outlines the ongoing, as well as forthcoming mediumterm reform priorities aimed at more competitive, flexible and resilient economy. Herewith, we appreciate the positive assessment of the monetary policy as well as the recommendation to continue “to conduct monetary policy consistent with the exchange rate peg, using available scope within this framework in line with safeguarding price stability” which is completely in line with central bank views on monetary policy strategic framework. In light of today’s thematic discussion on fiscal sectors reforms, we would like to express our support for the Ministry of Finance’s reforms oriented towards strengthening Public Finance Management system that besides improving the effectiveness of the use of public resources, will also foster the ongoing fiscal consolidation process.

We believe that the numerous reforms enshrined in the medium-term PFM Reform Program, such as strengthening macro-economic forecasting infrastructure, strengthening commitment control, enhancing fiscal transparency and introducing fiscal rules will help prevent potential fiscal slippages and be conducive to further strengthening of fiscal discipline. Continuation of prudent fiscal policy leading to stabilization of the public debt will provide room for prolonged accommodative monetary policy, i.e. keeping the main policy rate at its historically lowest level for an extended period, thus providing further stimulus for economic recovery. This is even of crucial importance considering the implemented exchange rate targeting strategy in our case. Reestablishment of fiscal buffers may be needed in the context of the new forthcoming global cycle of lower liquidity and higher interest rates. In addition, budget forecasts underpinned by sound macro assumptions will be an important input in the medium-term macro-forecasting process of the central bank with positive effects over forecast quality thus further enhancing the quality of the monetary policy decision making. Allow me to take this opportunity to also point out that last year’s monetary policy objectives have been achieved, despite the political uncertainty present at that time. Monetary policy remained accommodative, amid moderate inflation of 1.5% in the first four months of 2018, strong external position and gradual stabilization of market expectation. In March 2018, the main policy rate was reduced to 3%, which is historically lowest level.
As we are aware, the world’s focus and attention has been to usher in an economic order that ensures high economic growth and an advanced level of development. In this endeavour, the widely discussed topics include liberalization, globalization, IT revolution, poverty alleviation, trade co-operation, political inclusion, regionalization, and many other buzz topics. Amongst these topics, “inequality and poverty” has maintained an important position, and it has therefore been discussed for years. Let us then ask ourselves the question: What do we really mean by inequality and poverty? Inequality means the lack of or fair treatment in the sharing of wealth or opportunities between different groups in society; and Poverty is the condition of being extremely poor. What do those who are stricken by poverty and inequality feel? Simply, they suffer the lack of material well being and lack of opportunities to succeed. Such feelings are often the root causes of political, economic and social upheaval, tension and revolution. Mr. Chairman, poverty and inequality are very closely linked. There is also ample empirical evidence to suggest that inequality and poverty seriously affect development. Inequality often leads to poverty while poverty hinders development and prosperity. Addressing inequality issues would undoubtedly have a positive impact on poverty alleviation. We would also probably unanimously agree that alleviating poverty is vital, considering its many economic, social, cultural and even more importantly, the human costs.

Your own Chairman, Prof. A D V de Indraratne, chairs such Committee and we have benefited immensely from the insights and advice rendered by such Committee. In a similar manner, I am certain that the research findings that will be presented by you at the conclusion of this very timely conference, together with the professional views expressed at the technical sessions would help policymakers immensely to reshape their policy focus appropriately. In conclusion, let me emphasize our deep commitment to your theme by referring to our own Mission at the Central Bank. The Vision of the Central Bank is that of being a credible and dynamic Central Bank contributing to the prosperity of Sri Lanka. As set out in our Strategic Plan, the term prosperity has a wider connotation: i.e., the enhancement of the quality of life of people through sustainable wealth creation and inclusion of all segments of the society in enjoying the benefits of development. The Central Bank expects to facilitate this process by ensuring price stability and financial system stability while providing prudential and pro-active policy recommendations, as the Advisor to the Government on Economic Affairs. We have, so far, taken a pro-active stance in the delivery of prosperity and we are encouraging the key stakeholders in our country also, to implement the necessary strategies towards such end. We see the Sri Lanka Economic Association as being a key partner in the delivery of prosperity in our country and we commend you for your commitment and dedication.
Several of these measures have had an impact on the Bank’s assets, either by reducing them (sale of foreign currency) or increasing them (purchase of bonds and loans to commercial banks). The adjustments on the asset side have counterparts on the liabilities side, either by active measures (repurchase of long-term bonds from the Central Bank), or by monetary sterilization or liquidity absorption, or finally, to respond to changes in the demand for cash. The net effect of these operations and portfolio revaluations has an impact on the Bank’s net worth. On aggregate, these operations have involved an 86% growth in the balance sheet in one year, the equivalent of almost 10 points of GDP. At the same time, there have been significant changes in the composition of the balance 6 For further detail on these measures, their operating margins and effective execution, visit https://www.bcentral.cl/web/banco-  central/medidas-excepcionales. 8  sheet (Figure 16). Now the Bank records on the assets side internal credit items (FCIC-LCL) and local securities. The latter yield more than international reserves, although with a somewhat higher credit risk compared to the sovereign securities that make up the former. On the liabilities side, the counterpart has implied an increase in short-term debt placements (PDBC) and the use of permanent facilities that drain the system’s excess liquidity. There has also been an increase in the monetary base, explained by an increased cash demand from the population.

The primary question today is not so much how much further we need to go with interest rate hikes, but how large is the pass-through of what is already in the pipe. Overall, evidence shows a quick and smooth pass-through of ECB decisions to broad financing conditions, which is the first step of monetary policy transmission. The growth rate of bank loans to households and firms has slowed due to a combination of higher borrowing rates, lower demand, and - for firms - tighter credit standards. Volumes of loans are decelerating, even though growth in outstanding amounts remains positive [+3.3% in the euro area for mortgages to households and +5.2% for loans to businesses]. By the way, the growth of loans in France remains significantly higher than in the euro area average. The second step of monetary policy transmission goes from the overall financing conditions to the economy and to inflation. In the textbook theory, tighter financial conditions moderate aggregate demand, and then decrease inflation with some lags. The estimated transmission lags of monetary policy in the literature vary from one year1 to more than two years2. At the current juncture several factors may bring us closer to the upper range: The current tightening cycle started from exceptionally low levels of real interest rates. It is only from the end of 2022 that we achieved positive real rates at all maturities – but we are now clearly in restrictive territory. the proportion of fixed-rate long-term loans is particularly high by historical standards.
If leveraged loans experienced loss rates in line with the financial crisis, the equity tranches of CLOs would lose all their principal. Before everyone takes fright at the ‘s’ word, some important context is needed. These securitisations are very different beasts to their ancestors of 2008. CLOs now have much less embedded leverage than they did before the crisis, with equity tranches around 25% thicker. And they are not held in ‘shadow banks’ like investment vehicles that turn out really to be a part of banks. They are held properly outside the banking system, on the balance sheets of non-banks like hedge funds and open-ended funds. Chart 17 shows our map of who holds the loans and in what form. 9  These are estimated five-year loss rates based on observed default rates during the global financial crisis on the S&P leveraged loan indices for the US and Europe and Moody’s data for all corporates. We assume a recovery rate in line with the average on first lien loans.

A recession is defined as two consecutive quarters of negative real GDP growth, with at least eight quarters between consecutive peaks or troughs. Corporate debt  A similar picture is apparent across companies. In a recession, companies with more debt tend to cut back on investment and employment by more than others. The evidence here is that companies with net debt more than about four times their cashflow cut investment twice as sharply as others (Chart 2). 4  All speeches are available online at www.bankofengland.co.uk/news/speeches  4  Financing from overseas  Public debt, in contrast, tends not to deepen recessions, at least in countries issuing the debt in their own currency and within the bounds of sustainability. However, whether debt is raised by governments, households or corporates, the source of it does matter. A reliance on inflows of foreign capital -– what Governor Carney has called the ‘kindness of strangers’ – can mean future recessions tend to be deeper. The evidence is that those strangers tend to be more flighty when the economic ground shakes, ceasing to fund new investments, raising the cost of finance in the economy and magnifying recessions. 5 Other things equal, countries running bigger current account deficits tend to have deeper recessions.
While the gold initiative’s third demand – that all of the SNB’s gold holdings should be stored in Switzerland – may be unproblematic in monetary policy terms, this too runs counter to the notion of security. Gold is stored in multiple locations for reasons of risk diversification, in other words to improve security. The lion’s share of the SNB’s gold reserves (approximately 70%) is already stored in Switzerland and an appropriate regional diversification serves to enhance the SNB’s market access. Concluding remarks Please allow me to make a few closing remarks. Managing Switzerland’s substantial foreign exchange reserves in the country’s best interest remains our key investment policy challenge. New markets are playing an important role here. I have discussed the growing significance of Asia and explained the process by which we plan to be able to invest a small fraction of our foreign exchange reserves in China in the near future. Thanks to our branch office in Singapore, we are optimally positioned to monitor developments and manage our investments in the Asia-Pacific region efficiently. Within the scope of its mandate, the SNB needs a certain amount of latitude in order to continue fulfilling its monetary and investment policy objectives, especially given that the Swiss monetary policy landscape is set to remain challenging in the foreseeable future. A BIS central bankers’ speeches  5  “yes” vote for the gold initiative would severely restrict our scope for action. It would therefore make it considerably more difficult for the SNB to conduct successful monetary policy operations in future.

To this end, it is prepared to purchase foreign exchange in unlimited quantities and to take further measures immediately if required. Once monetary policy requirements have been met, our foreign exchange investments are guided by three criteria: security, liquidity and return. In order to ensure that we meet the first two criteria – security and liquidity – we hold a substantial portion of our foreign exchange reserves in liquid government bonds, in the most important global currencies; almost threequarters of our foreign exchange reserves are currently invested in such instruments. When it comes to our third criterion – return – equities play an important role as they generally have a higher return potential than the government bonds of the major advanced economies. Currently, 16% of our foreign exchange reserves are invested in equities. BIS central bankers’ speeches  1  Given how substantial our foreign exchange reserves are, doing justice to all three of these criteria simultaneously is no simple matter. On the one hand, the considerable growth of our foreign exchange reserves has increased the concentration risk associated with conventional government bonds; on the other hand, there is the risk that we may overuse certain markets, thereby potentially triggering undesired price fluctuations. We therefore evaluate investment possibilities on a continual basis. As part of our search for diversification, Asia-Pacific markets in particular have become increasingly important for the SNB’s investment policy in recent years.
In the US, the federal government still persistently registers fiscal deficits (averaging 3.2% of GDP per annum since 1980s) only except for the second term of the Clinton presidency in 1997–2001. Incurring persistent fiscal deficit means that the governments have to continuously raise additional debt to finance their spending. Quantitative easing: Lessening of pain of excessive debts? 10. This ballooning government debt raises concerns about long-term fiscal sustainability. For now, the situation seems manageable as central banks in these economies are pursuing quantitative easing (QE) policies to artificially suppress government bond yields. The aggressive asset purchases by major central banks have now suppressed bond yields to extremely low levels, where shorter-term government bond yields in some European economies like Germany, Austria, Denmark and Switzerland have already turned negative. 2  BIS central bankers’ speeches  Negative government bond yield means that lenders are paying borrowers for the privilege of holding their debt, which is clearly not making any sense. I doubt how long such an unusual phenomenon could last, but in any case, I’m certain that such distortions will definitely come with unintended consequences. At least, one side-effect I can already observe is that QE penalises prudent savers and pensioners very badly. In Japan, for example, QE helps reduce the financing cost of public debt at the expense of eroding the purchasing power of JGB holders, with many of which being retirees and pension funds, by paying them negative real yield. Sovereign debt crisis: Mishaps that belong only to EMEs? 11.

Many Emerging Market Economies (EMEs) have had a wealth of experience in the mismanagement in their macroeconomic, fiscal and monetary policies, and all of them had paid a heavy price for their past mistakes. The fact that the latest series of crises erupted in the developed world does not mean EMEs are immune from the spillover effects. More fundamentally, the Emerging Market Economies, including Hong Kong where household debt to GDP ratio saw a record high, must learn from the latest mistakes of the developed world and take extra care in not getting into the mind-set or habit of spending beyond our means, whether at the household, corporate or government level. Hong Kong should in particular guard against the temptation of “collective irresponsibility” by pushing for or condoning public policies that entail spending that cannot be sustained in the medium to longer run, or else we would be mortgaging the future of our children and grandchildren. This again is easier said than done, and requires considerable wisdom of Hong Kong people and the courage and skills of our leaders to resist increasing pressure and temptations for unrestrained public spending. Hong Kong’s population is aging, and aging fast. At present, the elderly  BIS central bankers’ speeches  5  dependency ratio of Hong Kong is 5:1. This means that Hong Kong now has 5 persons within the age group of 15–64 supporting each person over the age of 65.
Given that ‘administered and regulated’ price increases will continue to push up on inflation over the next two years, the MPC is prepared to bring inflation back to the target over two years or a little longer. Rest assured, however, that we will bring inflation back to target – and at each point we will ensure that risks to price stability are contained. Our forward guidance builds in important safeguards of price stability. If there are any signs of underlying inflation pressures building such that it seems inflation 18–24 months ahead will be 2.5% or more, or if medium term inflation expectations are no longer sufficiently well anchored, then the guidance on interest rates no longer applies. These safeguards give ample flexibility to bring inflation back to target at the appropriate pace, while ensuring that risks to price stability are contained. Market reaction to forward guidance Much has been made of the upward movements in market interest rates since our announcement of forward guidance. Let me give you my perspective. There has been a generalised upward move in long-term yields in advanced economies, including the UK, over the past month. The main common driver is speculation that the US Federal Reserve will soon reduce the pace of its asset purchases. That has – not surprisingly – affected yields in other countries because safe, liquid sovereign bonds of the world’s largest economies are close substitutes for each other. In the UK, these movements have been reinforced by growing expectations of recovery.

Specifically, we announced that we do not intend to raise Bank Rate at least until the unemployment rate falls to 7%, provided there are no material threats to either price or financial stability.1 All nine MPC members agreed to set monetary policy in future according to this framework of forward guidance. That does not mean Bank Rate will automatically rise when unemployment falls to 7%. Nor is 7% a target for the unemployment rate – it should ultimately fall well below that level. Before the Great Recession, the UK’s unemployment rate stood at just over 5%. The 7% threshold is instead a staging post along the road to recovery. When unemployment reaches 7% the MPC will reassess the state of the economy and the appropriate stance of monetary policy. Our forward guidance provides you with certainty that interest rates will not rise too soon. Exactly how long they stay low will depend on the progress of the recovery and in particular how quickly unemployment comes down. What matters is that rates won’t go up until jobs and incomes are really growing. The knowledge that interest rates will stay low until the recovery is well established should give greater confidence to households to spend responsibly and businesses to invest wisely. It may seem that unemployment doesn’t have far to fall, from the current 7.8% to the 7% threshold. The MPC’s central view, though, is that this could take some time – for three reasons.