samchain/econo-pairs-v1 huggingface dataset:
This is what I have been endeavouring to do in my speech today: I identified areas where concrete progress can be made rapidly. We should not let this historic opportunity slip: it is now or never. Thank you for your attention. 4/5  BIS central bankers' speeches  1 Discourse on the Method, René Descartes, 1637. 5/5  BIS central bankers' speeches

How we manage the fund in the best way possible and ensure that its assets benefit current and future generations alike is a question that is more relevant than ever. A part of the answer is to make the most of the fund’s defining characteristics – size, liquidity and long-term horizon – to create excess return. The experience of the past 20 years shows that this is possible. As a large, long-term investor, we manage the fund responsibly. This requires active ownership. We engage in dialogue with companies worldwide in order to improve their long-term earnings and weed out companies with business models that are not sustainable. Here we must also take active investment decisions. Such a large fund cannot be managed passively. Responsible investment requires active ownership. Active management and active ownership are closely related. This interaction has huge potential. Active management entails risk. To mitigate this risk, the Bank’s Executive Board and investment management organisation have established a set of investment strategies. These strategies complement one another and constitute a whole. Over time, they have yielded excess returns, well within the risk limits set in the Bank’s mandate. Finally, we depend on the people in the organisation to achieve our set objectives. Many of our asset managers have built up unique expertise by monitoring companies closely through many years’ work. Others contribute ideas and approaches to developing new methods and analyses. Still others help to make choices large and small every day to create excess returns.
However, in the end, the IMF decided to cooperate with  BIS Review 164/2009  1  Ecuador in its move towards dollarization of the economy, the latter becoming a success as economic performance in Ecuador has been fairly stable since dollarization was introduced. The Ecuadorian case proves that it is difficult to assess the merits and the costs of dollarization. In fact, a successfully executed dollarization is not enough to realize a stable economic environment: this process needs to be followed by sound economic and fiscal policies, otherwise the situation will go from bad to worse. In other words: dollarization is not a magic wand! 3. Effects of dollarization  The case of Ecuador illustrates well how hard it is to formulate general conditions for a successful dollarization. It is not only difficult to assess the pros and cons of dollarization, it is also necessary to analyze the country’s starting position, assess the political and social willingness to abandon the local currency, and to execute a sound economic policy after dollarization, in order to be able to conclude what the effects of dollarization were or are. In the last ten years there has been a steady discussion on the pros and cons of dollarization. Very distinguished economists like Stanley Fischer (who is currently governor of the Bank of Israel), Sebastian Edwards, Rudiger Dornbusch, Jeffrey Sachs and Paul Krugman all made valuable contributions, reaching however different conclusions on the merits of dollarization.

I will now briefly elaborate on the pros and cons of dollarization on a macro-economic level, thus not the operational implications. Whether an effect of dollarizing the economy is considered a positive or a negative, it could greatly differ between its advocates and its opponents. I will now briefly refer to some effects of dollarization: 1. Dollarization could lower transaction costs, especially when most payments to nonresidents are in US dollars. 2. Depending on the capital restrictions in place and the depth of the domestic banking sector, it could lead to reduced interest rates, thereby making it less costly to borrow. This could also be the case when acquiring an international loan, as there will be no exchange devaluation premiums on rates charged to local companies and the government. 3. Because of the elimination of exchange rate risk, dollarization could be beneficial to international trade and foreign investment. 4. The import of the monetary policy of the U.S., being the issuing country of the adopted currency, is unavoidable. This means that local policymakers are no longer in the position to use the exchange rate to absorb external shocks or to finance budget deficits by printing money. 5. Some of the tasks of the central bank, especially the function of lender of last resort, which is the credit line for local banks when experiencing financial stress, will disappear. This is typically linked to the ability of the central bank to print its country’s currency. 6.
Authorities with a mandate in this area must have well-defined roles and responsibilities, including a distinct set of instruments. Current overlaps between instruments should be eliminated, and more flexibility in the macroprudential policy framework should be maintained, so that authorities can implement those measures in a consistent and timely manner, which would require significant changes to Article 458 of the CRR. A more integrated financial market will support the emergence of new types of risk and also require extending the toolkit with new instruments. For the banking sector, this includes complementing the toolkit with borrower-based instruments (such as limits on loan-to-value, or loan-to-income ratios) as well as sectoral buffers and a time-varying leverage ratio add-on so that all aspects of systemic risks can be addressed in the banking union. Finally, the mandatory reciprocity framework needs to be expanded so as to ensure the effective mitigation of crossborder spillover effects and regulatory arbitrage across jurisdictions in the EU. 3/9  BIS central bankers' speeches  The significant progress we have made with our banking union needs to be recognised also from the international regulatory framework perspective. A case in point is the G-SIB 9 framework, which currently penalises cross-border transactions within the banking union by attaching a higher systemic risk score to banks with more transactions of that kind. This goes against the very rationale of the banking union, as it reduces the incentives for cross-border transactions and risk diversification, thus making banks more vulnerable to local shocks.

They are also all 2/9  BIS central bankers' speeches  necessary to ensure a proper balance between markets and regulations, and liability and control at European and national level. The SSM ensures that banks are subject to the same set of rules and supervised on the basis of common standards. This reduces the risks of spillovers from bank failures to sovereigns and provides a common framework conducive to further integration in the banking markets, a process which has been lagging. Since bank failures cannot always be avoided – and indeed this may not be desirable either, as it may undermine market discipline – we need a credible and well-functioning crisis management and resolution mechanism. This is ensured by the second pillar of the banking union. With the setting-up of the BRRD5, the Single Resolution Mechanism and the Single Resolution Fund (SRF), we have made a quantum leap in the institutional organisation of the EMU. However, the framework is still incomplete. Most notably, it requires a common public backstop to the SRF, which is essential to inspire full confidence in the resolution regime. In addition, it would be desirable to eliminate national divergences in the insolvency and liquidation of credit institutions, and in the implementation of the BRRD through national resolution laws. Allowing these divergences to persist ultimately implies that the geographical location of a failing bank may still influence the outcome of the resolution, which is inconsistent with the idea at the heart of a banking union.
It’s not sprinting as fast as you can for 100 meters until the finish line. If you told me today to run a full marathon tomorrow, I could not make it. But, if you gave me time to prepare and get fit, I would be in the run. Monetary policy Let me now devote the last few minutes of my talk to update you about our monetary policy. Throughout the last couple of years, the Monetary Policy Committee has maintained an accommodative policy stance to support the economy. Mindful of downside risks to growth, the Committee carefully adjusted the degree of policy accommodation to ensure sufficient support to domestic demand and to shore up confidence. Since May 2013, the policy rate was cut three times, as lower risks to domestic financial stability and subdued inflation opened room for monetary easing. Nonetheless, since the interest rate has been low for a prolonged period, we continue to be vigilant in monitoring any risks to financial stability. (Slide 6) Ladies and Gentlemen This year marks the 15th anniversary of Bank of Thailand’s adopting of the “flexible inflation targeting’ monetary policy framework. Thus far, this framework has served us well and resulted in a satisfactory record of price stability, which is a remarkable improvement from previous decades. (Slide 7) The headline inflation rates were on average 2.6% since 2000 under inflation-targeting, while they were more than 4% prior to that (15 years during 1985–1999).

Economic activity  1/4  BIS - Central bankers' speeches  According to Eurostat's preliminary flash estimate, the euro area economy grew by 0.1 per cent in the fourth quarter of 2022. While above the December Eurosystem staff projections, this outcome means that economic activity has slowed markedly since mid2022 and we expect it to stay weak in the near term. Subdued global activity and high geopolitical uncertainty, especially owing to Russia's unjustified war against Ukraine and its people, continue to act as headwinds to euro area growth. Together with high inflation and tighter financing conditions, these headwinds dampen spending and production, especially in the manufacturing sector. However, supply bottlenecks are gradually easing, the supply of gas has become more secure, firms are still working off large order backlogs and confidence is improving. Moreover, output in the services sector has been holding up, supported by continuing reopening effects and stronger demand for leisure activities. Rising wages and the recent decline in energy price inflation are also set to ease the loss of purchasing power that many people have experienced owing to high inflation. This, in turn, will support consumption. Overall, the economy has proved more resilient than expected and should recover over the coming quarters. The unemployment rate remained at its historical low of 6.6 per cent in December 2022. However, the rate at which jobs are being created may slow and unemployment could rise over the coming quarters.
Strong wage growth generates demands for greater efficiency in both private enterprises and government agencies. Strong wage growth may thereby increase the outflow of discouraged workers to various social security and pension schemes. All in all, we can expect an increase in the labour force of only 0.3-0.4 per cent in the years ahead. Wage increases in this year’s settlement were high. Wage settlements in internationally exposed sectors did not set the trend for wages. Wage increases in these sectors were around five per cent, while they were appreciably higher in a number of sheltered industries. This is a break with the pattern for the past few years. Many enterprises in the sheltered sector can, in principle, pass on higher wage costs to their customers. Monetary policy must reduce the possibility of passing on these costs in order to curb inflation. This is done partly by keeping growth in demand for goods and services under control. In addition, a strong krone may result in the importation of goods and services previously reserved for domestic producers. In rural areas and towns, where local government employment is an alternative to working in agriculture, the fisheries, local service production or small-scale industry, the public sector, with its nationwide agreements, is a wage trendsetter. Wage growth in the public sector may therefore be an important source of higher inflation. In the public sector, higher labour costs as a result of a costly income settlement can only to a limited extent be passed on to customers.

The assessment which guided today's monetary policy decision was that, overall, the prospect has strengthened for inflation to fall below 2% in the course of 2003 and to remain in line with price stability thereafter. Our decision should also help to improve the outlook for the euro area economy by providing a counterweight to some of the existing downside risks to economic growth, thereby supporting confidence. The most likely scenario is that economic growth will gradually recover in the course of 2003 towards rates more in line with potential. Falling inflation should support real disposable income and, together with a reduction in the gap between perceived and actual inflation rates, should underpin private consumption. Moreover, we expect an improvement in world demand. This, and the low level of interest rates, should benefit investment. Let me point out that, with today's decision, the key ECB interest rates have reached a very low level by historical standards. The Governing Council will continue to monitor closely all factors that may affect the prospects for inflation in the euro area. The outlook for the euro area economy will also very much depend on visible progress in other policy areas. Regarding fiscal policies in the euro area, I would like to reiterate that budgetary discipline strengthens the conditions for sustainable growth of GDP and employment. Therefore, sound fiscal positions, as enshrined in the Treaty and further developed in the Stability and Growth Pact, are in the interest of all the Member States.
The Eurosystem could also outsource parts of the settlement, such as recording or validation, to intermediaries.   Moreover, it is clear that some functions should remain under the sole  responsibility of intermediaries. In particular, I believe that the Eurosystem should not have the role of managing digital euro holdings: the Banque de France closed its last private customer accounts over 20 years ago, and does not intend to reopen any. Customer relationship management is best handled by financial intermediaries, as they have the experience in this field. They would also ensure compliance with the related regulatory requirements, including KYC and AML/CFT. Such a design would allow them to preserve the role of financial intermediaries in the retail payment system, and would ensure the high level of privacy required by the public.   Finally, regarding the possible risks of banks’ deposit conversions, we  must and will ensure that a digital euro remains a means of payment rather than a saving/investment asset. This could be achieved by capping the maximum amount of digital euro in circulation, at a low enough level. In a completely other field, regulated savings, ceilings for the Livret A have proven an efficient tool, without requiring the intervention of a Big Brother to check on them. Page 5 sur 7 II.

First, it results in the decline in the use of cash in transactions, which calls into question the availability of central bank money for the public. Increased reliance on digital payment solutions also shows how our European ecosystem has become critically dependant on non-European players (eg international card schemes and Bigtechs). Meanwhile, the emergence of crypto-assets and so-called stablecoins may compete against both commercial and central bank money, even though they do not offer the same guarantees in terms of credit risk and safety: the recent collapse of the Terra-Luna ecosystems or the sudden liquidity shortage of Celsius Network are necessary wake-up calls. I strongly welcome here, on the last days of a fruitful French Presidency of the EU, the successful trilogues on Transfer Fund Regulation (Travel Rule) and Markets in CryptoAssets (MiCA). 2. Even if the precise use cases are not yet definitively fixed, there are several material reasons to consider the issuance of a digital euro The main rationale for a digital euro is therefore to preserve the role of public money in a digital economy.
Again, this experience is not unique to the United States, indicating that it stems from factors common across countries, rather than issues unique to our economy. Indeed, most inflation-targeting advanced economies have struggled to achieve their inflation goals on a sustained basis over the past decade. This brings us to last week’s announcement and the issuance of a new consensus statement of our policy framework. It is a culmination of extensive outreach and conversations with communities and stakeholders across the country, careful and thorough analysis, and active 45 1/2  BIS central bankers' speeches  discussion and debate among Committee participants.4,5 We took important lessons from the experience of the past decade, reassessed the evidence, and looked at the challenges ahead of us. All this effort was worth it: this new statement means we are better positioned to achieve our goals. In fact, the process worked so well, we’ve committed to repeating it roughly every five years! The new framework statement directly and effectively addresses the problems caused by a low neutral rate and persistently low inflation. First, it stipulates that, following periods when inflation has been running persistently below 2 percent, a temporary overshooting of the longer-run inflation target will likely be desirable to keep inflation and inflation expectations centered on 2 percent. Second, it makes clear that we seek inflation that averages 2 percent over time, consistent with our longer-run target. Finally, the statement makes unequivocally clear that we seek maximum employment and will aim to eliminate shortfalls from this broad and inclusive goal.

It also means the macroprudential authority has no framework and tools for loosening regulatory policy to prevent the self-reinforcing deleveraging spirals that kick in in the downturn of the cycle. Second, it is difficult to know ex ante how strong the next credit cycle is going to be and so where to set underlying policy. The FPC faced some of these issues in the design of the UK’s “leverage ratio” capital framework which the Committee agreed last year. Our conclusion, informed by an assessment of the economic costs and benefits, was that provided we had the ability to vary leveragerelated capital requirements countercyclically, in the same way that we could vary the riskweighted capital requirements, we could set the minimum leverage requirement at a lower point. The second approach is to try to maintain the overall resilience of the system over the cycle. The underlying regulatory framework is of course intended to cope with a wide range of risks. It is intended to keep such risks firmly located in the tail of the distribution. But the distribution  BIS central bankers’ speeches  5  of risks changes through the cycle. One approach to time-varying macroprudential policy is to aim to ensure that tail risks do not increase with the credit cycle – ie that the resilience of the system is maintained over time and does not change with the distribution of risks. Stress testing of banks can play an important part in making an assessment of resilience through the cycle.
Due to the changed international environment, however, which we are unable to influence, we have no choice but to adjust to a leaner period, whether we like it or not. Monetary policy of the SNB With the end of the minimum exchange rate, the SNB has now returned to interest rate management. However, this does not mean that we have reverted to business as usual for monetary policy. In December last year, the SNB introduced an interest rate of –0.25%, to be charged on sight deposit account balances held by banks and other financial market participants at the SNB. On 15 January – concurrently with the discontinuation of the minimum exchange rate – we lowered this interest rate again, to –0.75%. This lowering of the interest rate makes it substantially more expensive to hold Swiss francs compared to  BIS central bankers’ speeches  3  other currencies. Over time it is intended to cushion the impact of the discontinuation of the minimum exchange rate and counter a tightening of monetary conditions. Discontinuing the minimum exchange rate does not mean that the SNB will stop paying attention to foreign exchange market developments. We will continue to take account of the exchange rate situation in formulating our monetary policy in future. Following the discontinuation of the minimum exchange rate, the Swiss franc initially appreciated sharply against all currencies. The appreciation diminished somewhat in the following weeks.

Thomas Jordan: The Swiss National Bank’s monetary policy after the discontinuation of the minimum exchange rate Speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the 107th Ordinary General Meeting of Shareholders of the Swiss National Bank, Berne, 24 April 2015. *  *  *  Mr President of the Bank Council Dear Shareholders Dear Guests, dear School Students Since 15 January, the Swiss National Bank (SNB) has once again been coming to terms with a whole new set of challenges. On that day, the Governing Board decided to discontinue the minimum exchange rate because the international environment for the SNB’s monetary policy had changed dramatically. The end of the minimum exchange rate of CHF 1.20 against the euro has far-reaching implications for our economy. It is therefore understandable that our decision triggered strong reactions. Yet had we continued to maintain the minimum exchange rate for a certain period, the consequences for our country would have been much more severe. In my talk today, I would like to explain to you in detail our reasons for discontinuing the minimum exchange rate. The SNB attaches great importance to clarifying its monetary policy decisions. This is, on the one hand, an important part of our statutory duty of accountability to parliament. On the other, it is a prime concern of ours that the general public and, in particular, you, our shareholders, should understand our monetary policy.