samchain/econo-pairs-v1 huggingface dataset:
Yet there are many commentators who still refer only to the central path. It would be extremely dangerous to start publishing fan charts for future interest rates unless we were confident that all commentators would understand the probabilistic nature of such statements. When the Riksbank first published a fan chart for its future policy rate in February this year, an article written by one of the most sophisticated investment banks totally ignored the probabilistic nature of the exercise. Against that background, would we be able to convince the media’s huge audiences for personal finance advice that they should not base their decisions on our central projections for interest rates because they will almost certainly not come to pass? Overall, then, I do not think that a compelling case has yet been made for the MPC to publish a forecast of the path for Bank Rate. But we must certainly provide the information necessary for financial market participants to form their own view as to the likely path of interest rates, and we must always be trying to improve the quality of that information. We shall also keep in close touch with our colleagues in central banks that do publish forecasts of policy rates to see what we can learn from their experience. If we feel that there are net benefits from following their example, then we will do so. 16  See Goldman Sachs (2006). 17  There are many ways of aggregating individual votes on paths of interest rates, but none is particularly attractive.

With inflation expectations well-anchored to the target, companies have restricted the pass-through of changes in costs to prices. The necessary adjustment of real take-home pay has taken place more through fluctuations in money wages than prices. In short, the behaviour of the UK economy has improved over the past decade, both in terms of its performance and its stability, and that improvement has been more marked in the United Kingdom than in the rest of the G-7. Although structural reforms to the economy over several decades have made the economy better able to respond to economic shocks, the new monetary framework has also played a key role. Inflation expectations have been successfully anchored to the target. And that has meant that cost changes have affected wages and profits rather than prices. As a result, inflation and output growth have been remarkably stable. 2. The change in monetary policy decision making  It appears then that the success of the framework in anchoring inflation expectations has played a key role in the economic stability of the past decade. What was it about the framework that accounted for that? 4  BIS Review 43/2007  Since its inception, the MPC has met 120 times.7 At those meetings it raised Bank Rate 17 times, lowered it on 17 occasions, and left it unchanged 86 times.8 Bank Rate has varied between 3.5% and 7.5%. The MPC has changed interest rates at just over a quarter (28% in fact) of its monthly meetings.
The level of the buffer must therefore be considered in the light of other capital requirements. Norway could be among the first countries to apply the countercyclical buffer. Growth in credit and in house prices in Norway has been high for a long period, and credit has reached a historical level relative to GDP. In view of this situation, banks must make extra allowance for the risk of an economic setback. Banks have taken due note of the requirements and are in the process of adjusting to them. Discussions with market participants suggest that an expected countercyclical buffer has been included in banks’ long-term adjustments. 3  Basel Committee on Banking Supervision, “An assessment of the long-term economic impact of stronger capital and liquidity requirements”, August 2010. http://www.bis.org/publ/bcbs173.pdf. For an updated collection of references to studies of the costs and benefits of macroprudential regulation, see Annex 1 in IMF Working Paper WP/13/167, by Arregui et al. “Evaluating the Net Benefits of Macroprudential Policy: A cookbook”, July 2013. http://www.imf.org/external/pubs/cat/longres.aspx?sk=40790.0. 4  For further detail and references, see Norges Bank Papers 1/2013. 4  BIS central bankers’ speeches  Capital requirements and monetary policy The countercyclical capital buffer and the key policy rate are two instruments serving different objectives. The objective of the countercyclical capital buffer is to increase banks’ resilience to losses in a downturn. The primary objective of monetary policy is low and stable inflation.

Under CRD IV, national authorities shall take account of other variables in addition to the credit-to-GDP ratio.2 The four key indicators are also in line with the new Norwegian regulation, which states that the basis for the buffer decision from Norges Bank “shall contain an overview of the credit-to-GDP ratio and the extent to which it deviates from the long-term  1  The trend is estimated using a one-sided Hodrick-Prescott filter (lambda = 400000) extended by a forecast. The mean is for the entire period in the chart. 2  Articles 135(1)(c) and 136(3)(c) of Directive 2013/36/EU (CRD IV). BIS central bankers’ speeches  3  trend, as well as other indicators, and Norges Bank’s assessment of systemic risk that is building up or has built up over time”. Under the regulation, Norges Bank shall take account of guidance from the European Systemic Risk Board (ESRB). The ESRB is currently working to formulate guidelines for setting the buffer rate. Norges Bank and Finanstilsynet are actively participating in this effort. Once the guidelines are in place, recommendations from the ESRB on methodologies and benchmarks for setting the buffer rate will be included in the basis for the buffer decision. In line with the recommendations from the Basel Committee on Banking Supervision and the regulatory framework, there should not be a mechanical relationship between developments in the indicators and Norges Bank’s advice on the buffer as relationships in the economy are too complex. The advice will always be based on qualified judgement.
The conditional inflation forecast is based on the assumption that the three-month Libor will remain at –0.75% over the entire forecast horizon. Despite depreciating somewhat in recent months, the Swiss franc is still significantly overvalued. Furthermore, inflation prospects have largely remained the same. We have therefore decided to maintain our expansionary monetary policy. The target range for the three-month Libor is unchanged at between –1.25% and –0.25%, and interest on sight deposits at the SNB remains at –0.75%. The interest rate differential with other currencies, even following the European Central Bank’s (ECB) mild interest rate cut, is thus still markedly higher than at the beginning of the year. The negative interest rate makes the Swiss franc less attractive, and continues to help weaken the currency. The SNB also remains active in the foreign exchange market in order to influence the exchange rate situation, as necessary. The negative interest rate and our willingness to intervene in the foreign exchange market are intended to ease pressure on the Swiss franc. Our monetary policy thus helps to stabilise price developments and support economic activity. Global economic outlook As our inflation forecast is heavily influenced by economic developments abroad, let me now present our assessment of the global economy. Global economic growth was weaker than expected in the third quarter of 2015. This was mainly due to subdued manufacturing activity around the globe and sluggish world trade.

Durmuş Yılmaz: Evaluation of global financial developments and structrual reforms Speech by Mr Durmuş Yılmaz, Governor of the Central Bank of the Republic of Turkey, at the 19th Annual World Business Congress, Konya, Central Anatolia, 21 July 2010. *  *  *  Honorable Rector, Esteemed Academicians, Distinguished Guests, We are gathered here today for the 19th Annual World Business Congress of the International Management Development Association (IMDA), where the lessons learned from past experiences in the global business world, current issues and future tendencies will be discussed. I would like to congratulate everyone, notably Prof. Dr. Mehmet Babaoğlu, Rector of Karatay University, and distinguished members of the University for their Contributions to organizing this esteemed Congress, which is held in a different country each year. I would like to start my speech with a brief evaluation of global financial developments. Then I will address structural reforms, which we deem essential for raising Turkey’s potential growth rate, when considering the Turkish economy on a macro scale and from in a longterm perspective. 1. Global developments:  As is known, problems, which emerged in the global financial markets about two years ago and spread across the corporate sector over time, affected the Turkish economy as well as other economies. We see that the impact of global turmoil on economies mainly emerged through three channels: (1) Foreign Trade, (2) Capital Flows and (3) Expectations. The Turkish economy has been affected by global turmoil through all these three channels due to its structural features.
In recent years, capacity utilisation has declined from a high level and is now on a par with the level prevailing in the years 1995-1997, before the rise in costs accelerated. Consumer price inflation in 2003 and the background for the deviation from the target In the years 1998-2002, the Norwegian economy was characterised by substantial labour shortages and a considerably higher rise in labour costs than among trading partners. Last year was the fifth consecutive year of very high annual growth. Wage growth was substantially higher than the level that over time is consistent with the inflation target and with normal productivity growth. Pay increases varied widely across the different groups. In Norges Bank’s view, there was therefore a substantial risk of new wage-wage spirals. Further rounds of such strong wage increases might have led to a decline in output and employment. Monetary policy was therefore tightened through an interest rate increase last summer while the krone remained strong. At the one-year horizon, the strong krone would push down inflation to below 2½ per cent, but subsequently the effects of strong wage growth would dominate. Last year, Norges Bank’s Executive Board struck a balance between the consideration of stable inflation developments in the short term and the consideration of stabilising developments in output and employment. Inflation was thus expected and intended to be low in 2003. In the October 2002 Inflation Report, inflation was projected to fall to 1¾ per cent in summer 2003.

Svein Gjedrem: The conduct of monetary policy Introductory statement by Mr Svein Gjedrem, Governor of Norges Bank (Central Bank of Norway), at a hearing before the Standing Committee on Finance and Economic Affairs of the Storting (Norwegian parliament), Oslo, 1 December 2003. Please note that the text below may differ slightly from the actual presentation. The statement is partly based on the assessments presented in “Report on monetary policy in 2003 - the first eight months” and Norges Bank’s Inflation Report 3/2003. The Charts in pdf can be found on the Norges Bank’s website. *  *  *  I would like to thank the Storting for inviting Norges Bank to appear for the first time before this Committee to report and answer questions on monetary policy in connection with the Storting’s deliberations on the Government’s credit report. The mandate The operational target of monetary policy as defined by the Government is inflation of close to 2½ per cent over time. The target is symmetrical - it is equally important to avoid an inflation rate that is too low, as it is to avoid an inflation rate that is too high. The inflation target provides an anchor for economic agents’ expectations concerning future inflation. It provides an important basis for choices concerning saving, investment, budgets and wages. Households, businesses, public entities, employees and employers can base decisions on the assumption that inflation in Norway will be 2½ per cent over time. We have a very open economy with free capital movements.
A lot has changed in terms of the regulatory environment and the range of financial services demanded and offered as well as the organizational structure and management practices of financial institutions. BIS central bankers’ speeches  1  Thirty years ago commercial banks were primarily and basically anchored in intermediation – garnering deposits and making loans. Gradually product innovations, new distribution channels, advances in technology, deregulation on the one hand and tightening of regulations on the other hand and emerging new competitors have dramatically changed the way banks now do business. Banks have now not only grown larger but have become much more complex and now span across the globe. The advancements in information technology in particular have allowed banks to handle a phenomenal amount of data at alarming speed thus propelling the introduction of new products and services. Three decades ago, bank failure was not a frequently mentioned financial jargon unlike today where bank failure is discussed at almost every financial fora and where the collapse of one bank could trigger a domino effect across many countries simultaneously. The rapid demise of banks which were thought of being too big to fail given the unquestionable caliber of those at helm are now tumbling, and with every failure, regulators are forced to revisit regulations that were thought to provide adequate safeguards.

As emphasized by the Director of the State Statistical Office, Mr. Apostol Simovski, the Republic of Macedonia has long been integrated into the system of the so-called IMF’s Data Standards Initiatives. This system is extremely dynamic and started to develop since the mid-1990s, in response to the then international financial crisis, in order to promote transparency of both economic and financial data. I say dynamic, given that its construction blocks have been continuously changing and increasing. Its last, third construction block is the SDDS plus which reflects the weaknesses identified in the statistical data infrastructure that surfaced with the latest global economic and financial crisis from 2008. It is a fact that the genesis of the crisis was not located in the lack of data, but fact is also the identified need for an enriched data set for conducting more effective economic policies. This crisis has clearly shown how inadequate regulation and excessive risk-taking can lead to a collapse of the financial system. It has shown how the underestimation of the strength of the links of the financial system with the real sector, as well as the underestimation of cross-border exposures of economies and financial integration, could lead to inadequate assessment of macro-financial links and underestimation of risks. The SDDS plus is actually a response of the international financial community to these statistical gaps. This initiative means enrichment of statistics, in both scope and quality, in order to timely recognize and appropriately react to vulnerabilities that may arise in an economy.
What could also be helpful in this respect is the enhancement of the surveillance of financial systems of all countries in the framework of the Financial System Assessment Program (FSAP), as well as the publication of their conclusions. 3. The last area of reform that strikes me as particularly important is enhancing the legitimacy and resources of the financial institutions at the heart of the international financial architecture  For international cooperation to function, institutions must be efficient and accepted by all economic players. This means that they must have clear mandates, appropriate resources and governance that correctly reflects today’s multipolar and interdependent economic and financial world. BIS Review 101/2009  3  In this area, the G20 also agreed on robust measures aiming in particular to adapt the resources and functioning of the Bretton Woods institutions. For instance, while we have observed an increasing number of bilateral initiatives, such as swaps offered by major currency issuers, such as the Fed and Eurosystem, as well as, in a very different context, by China, these mechanisms cannot alone constitute a coherent insurance system. This is why the G20 decided to triple IMF resources to USD 750 billion, which is unprecedented. The intervention tools were also reformed. A multilateral instrument for the prevention and early management of crises was also created, the Flexible Credit Line (FCL); Mexico, Poland and Argentina have already signed up and this has without doubt reduced the risk of contagion. In addition, the Poverty Reduction and Growth Fund was established for the poorest countries.

I am rather doubtful myself, for several reasons. First, in the absence of single accounting standards, a comparison between banks belonging to different accounting universes will mean absolutely nothing. Second, that sort of ratio did exist in the United States and proved of no help, precisely in the country where the crisis emerged. Finally, in the present circumstances, it could add to the reluctance of banks to be active lenders in the interbank money market, therefore reducing market liquidity and still increasing the over-reliance of the banking sector on the central bank counterparty. That said, it is essential to enhance the counter-cyclical nature of capital requirements. For instance, implementing a forward-looking provisioning system and an additional capital requirement at the cycle peak would be effective measures to make capital requirements more contra-cyclical. In this regard and especially in the light of the profits announced by the major banking groups and the large payouts to traders, CEOs or shareholders in the form of dividends, I would like to stress that these profits should primarily be used to bolster capital ratios and allow banks to focus on their core task of financing the economy. All in all, I praise international standards in the field of prudential rules.
There is psychological research, in the field of cognition, demonstrating that people have an easier time understanding conditional statements if they’re less abstract and more rooted in real-world experience. In addition, I suspect there may be sometimes a degree of wishfulness involved. None of us likes uncertainty. Longstanding research has identified related, and deep-seated, cognitive biases. We are all prone to over-confidence in our own predictions and, after the event, to the belief that what has happened was entirely predictable (and, indeed, that we predicted it[19]). I think there may be something of the same underlying phenomenon at work in people’s desire to know the “plan” for interest rates. In a letter to the FT in 2018, my former colleague Martin Weale made a similar point: “The pressure on the Bank of England for clearer communication is a consequence of people wanting the future to be less uncertain than it is.”[20] Anyhow, whatever the true cause, I sometimes worry that there’s a potential cost to this (one that matters more than the odd “unreliable boyfriend” tag). If people come to rely too much on explicit steers from the central bank, forward interest rates and other asset prices may become insufficiently sensitive to economic events. And if in turn the central bank acquiesces to the desire for more definitive statements about the future path of interest rates, and feels the need to signal policy changes well in advance, this could compromise its ability to respond to surprises that occur in the meantime.

So even a relatively small effect of this sort can have a material impact on the credibility, and therefore the power, of the guidance (the dotted line in Chart 5). The solid blue line presumes that there’s some mechanism – some Odyssean mast to which you could tie yourself – ensuring that the cost of breaking the promise is always greater than the temptation to do so. Chart 5. Commitment policy loses much of its power if it isn’t fully credible  Results from a simulation of a small macroeconomic model under alternative assumptions about monetary policy and the average distance to the lower bound. Macroeconomic volatility is measured using a simple “loss function” that weights the variance of inflation and the output gap. The y-axis shows the square root of the loss function, scaled to 1 for the case of commitment policy with an average distance to the lower bound of 5pp. Sources: See Appendix for further details. In practice, it’s hard to see that there is one. The importance of maintaining reputation obviously helps. There’s a cost to breaking one’s word. But that mightn’t be enough, especially if your promise seeks to constrain not just your future self but your successor as well. That obstacle is all the greater if, as in the UK, policy decisions are made not by collective consensus but by democratic vote. Each member of the MPC member is individually accountable for his or her vote. It’s part of the UK’s constitution that “no parliament can bind its successor”[16].
And Governor Carstens’ predecessor, Guillermo Ortiz, is an advisory board member of the Dallas Fed’s Globalization and Monetary Policy Institute. The Federal Reserve Bank of Dallas and the Banco de México enjoy a unique and mutually beneficial relationship. As Guillermo and Agustín well know, there is also a personal dimension to the Dallas Fed’s relationship with the Banco de México. I grew up in Mexico City in the 1950s, attending elementary school not far from here. Spanish was my first language in school. To this day, I have many friends in El Norte who say I speak better Spanish than I do English, although that may be due to my Texas accent. Either way, I always proudly tell them, “¡No hablo español; hablo puro mexicano!” This evening, I will do my level best to speak to you in español mexicano rather than in inglés texano. Unprecedented U.S. monetary policy As you surely know, and as I am happy to report, the Federal Open Market Committee (the “FOMC”), charged with crafting U.S. monetary policy, is winding down its extraordinary “quantitative easing” phase. The Great Recession demanded extraordinary policy, and the FOMC responded. Led by Chairman Bernanke, the FOMC met the financial crisis head-on in September 2007 and by the end of 2008 had lowered the federal funds rate to zero from 5.25 percent. Once the full force of the financial crisis hit, after the failure of Lehman Brothers, the federal funds tool proved insufficient.

Richard W Fisher: ¡Ándale Pues! Having made the tough choices, Mexico stands to benefit from reforms and navigate Fed’s tapering with relative ease Remarks by Mr Richard W Fisher, President and Chief Executive Officer of the Federal Reserve Bank of Dallas, before the Association of Mexican banks, Mexico City, 5 March 2014. *  *  *  The views expressed by the author do not necessarily reflect official positions of the Federal Reserve System. Thank you, Luis [Robles], for that kind introduction. It is my great pleasure to be here tonight as the guest of the Association of Mexican Banks and reunited with my colleagues from Banco de México. I recently returned from Europe, where I met with leaders from the European Central Bank and the National Bank of Switzerland. I am very grateful to Governor Agustín Carstens for his hospitality. The Federal Reserve Bank of Dallas has enjoyed a long history of cooperation and consultation with the Banco de México. I like to call Banxico our sister bank. Agustín himself spent some time at the Dallas Fed when he was a young man, and we take pride in playing this small part in his accomplished career. For many years, the Dallas Fed’s El Paso Branch has held joint board meetings and informational exchanges with the Banco de México regional board of directors in Ciudad Juárez. Now our branches in Houston and San Antonio are holding similar joint meetings with their Banco de México counterparts.