samchain/econo-pairs-v1 huggingface dataset:
This is why we initiated the Network of central banks and  supervisors for Greening the Financial System (NGFS), during the One Planet Summit on December 2017. And, in 16 months, our club of the willing has increased almost fivefold, from 8 founding members to over 40 members and observers with its Chair Frank Elderson and the Banque de France as Secretariat. We are now represented on the five continents; NGFS members’ jurisdictions cover 44% of global GDP and 45% of greenhouse gas emissions. We collectively supervise two-thirds of systemic financial institutions, banks and insurers alike. What appears obvious to most of us today was not previously set in stone. With our global effort to ensure that the Paris Agreement produces results, the NGFS’ first “A call for action” report has the potential to lever the financial system and I hope that it will pave the way for a “paradigm shift” in the wider community of central bankers. In my remarks today, I will (i) take stock of central bankers and supervisors’ achievements towards tackling climate change, which are significant and (ii) discuss four important tasks that still lie ahead. I. Central banks and supervisors are promptly moving ahead regarding  the snapshot of risks In its first progress report, released in Bali in October 2018, the NGFS unanimously concluded that “climate-related risks are a source of financial risks. It is therefore within the mandates of Central Banks and Supervisors to ensure the financial system is resilient to these risks.” So what do we do? a.

Before I go any further, I need to give the standard Fed disclaimer that the views I express today are mine alone and do not necessarily reflect those of the FOMC or others in the Federal Reserve System. Our Dual Mandate Goals While our monetary policy approach has shifted, our fundamental goals have not. The Fed has two goals set by Congress: maximum employment and price stability. These “dual mandate” goals remain on an equal footing, and our commitment to delivering on both has not changed. In addition, our assessment that a 2 percent long-run inflation rate is most consistent with achieving both of our dual mandate goals is unaltered. What has evolved is how we think about best achieving them. Like all institutions, the Federal Reserve must be responsive to changing circumstances and adapt to new realities. Since 2012, we have learned a great deal about the behavior of the economy, employment, and inflation— both in the short and longer run—and these lessons have informed our approach to policy. There are three key takeaways worth highlighting: First and foremost is the secular decline in the neutral rate of interest, or r-star, which has brought neutral real interest rates to near zero in the United States. This decline in r-star in turn implies that the constraint on monetary policy from the lower bound on nominal interest rates has become a central aspect of the landscape with which policymakers must contend.
However, there would not be any explicit exchange rate target; instead, the objective would be to mitigate excess volatility due to temporary capital flows and to smooth out short-term fluctuations in the exchange rate. The institutional framework would be the same as it is now, based on an independent monetary policy committee that takes decisions on the application of the Bank’s policy instruments, releases statements explaining its decisions, and gives account of its policies to Parliament and the nation through other channels. This system is broadly in line with best practice abroad and has worked well. Under normal conditions, interest rates on Central Bank transactions with financial institutions would continue to be the Bank’s main monetary policy instrument. Foreign exchange market intervention is also a monetary policy instrument, as I have mentioned, and other instruments can also be used, such as reserve requirements and direct intervention in the bond market. Their efficacy is generally less certain than with interest rates, however, and as a result they are used less often. The MPC would be entrusted with a capital flow management tool or tools to affect carry trade, of the type I mentioned a moment ago.

Therefore, in the long run, real economic variables are determined mainly by underlying factors such as natural resource utilisation, labour force quality, productivity, and the propensity to save. It follows from what I have just said that it is of little use to set long-term goals for monetary policy other than price stability or exchange rate stability. Although this is so, monetary policy can also attempt to mitigate volatility in real variables such as GDP and employment and counteract deviations in the exchange rate from equilibrium, particularly when such volatility and deviations originate on the demand-side of the economy. It also follows from what I have said that monetary policy must be forward-looking, as it takes effect with a time lag. Based on the findings from a number of studies, the rule of thumb is that the full effect of interest rate changes on inflation emerges in 2-3 years, while the bulk of the effect emerges within about a year. The short-term impact on real variables tapers off within the same time frame. And it follows from this that in order to pursue forward-looking monetary policy with any degree of success, it is necessary to make forecasts. These call for economic analysis and modelling. In order to understand the problems associated with monetary policy implementation, one must bear in mind that statistics relating to the recent past often contain significant measurement errors, that we do not know what the “right” economic model is, and that the future is always in some sense unknowable.
Sources: Statistics Sweden and the Riksbank  BIS central bankers’ speeches  15  Figure 11. Lending to households and companies Annual percentage change, seasonally-adjusted 20  20  Lending to households Lending to companies  15  15  Total  10  10  5  5  0  0  -5  -5  -10  -10 99  00  01  02  03  04  05  06  07  08  09  10  11  Source: The Riksbank  Figure 12. Market surprise at repo-rate decision Basis points 50  50  0  0  -50  -50  -100  -100  -150  -150 Change in the repo rate  Feb 07 Mar 07 May 07 Jun 07 Sep 07 Oct 07 Dec 07 Feb 08 Apr 08 Jul 08 Sep 08 Oct 08 Oct 08 Dec 08 Feb 09 Apr 09 Jul 09 Sep 09 Oct 09 Dec 09 Feb 10 Apr 10 Jul 10 Sep 10 Oct 10 Dec 10 Feb 11 Apr 11 Jul 11 Sep 11 Oct 11  Market surprise  -200  -200  Note. The market surprise is measured on the basis of the change in the interest rate for a 1-month STINA swap in connection with the publication of the repo-rate decision. Sources: Reuters and the Riksbank  16  BIS central bankers’ speeches  Figure 13.

It is quite simply impossible to make any reliable forecasts for two and three years ahead. My opinion is that it is normally fairly meaningless to have a firm opinion of what will happen in two and three years’ time. But there are exceptions, particularly in situations where resource utilisation is very low. During 2008–2009 we assessed that the repo rate would be at an exceptionally low level for one year and we backed this up by lending around SEK 300 billion to the banks at this low interest rate for one year. We should continue to report a main scenario for economic developments and the repo rate over the coming three years, a scenario where inflation approaches 2 per cent and resource utilisation approaches a normal level. But we should regard this merely as a potential scenario. It is important that monetary policy follows a predictable pattern. We endeavour to avoid surprising the market. This means that we normally change the repo rate and the reporate path in gradual small steps, where the steps are due to new information received since the most recent monetary policy meeting, and that we react in roughly the same way to the same type of changes in the new information. Such stability means that we can avoid causing problems on the financial markets, and that we can have a greater impact on the markets when an unexpected event occurs. We should also continue to analyse the consequences of various sequences of events.
In late 2002 and early 2003, the economic outlook and the trend of financial variables in Latin America improved perceptibly, especially following the positive developments in Brazil and Argentina. The recent crises have highlighted deep-seated shortcomings in the legal and institutional workings of these countries. Emphasis has thus been placed not only on the need to pursue policies supportive of monetary, financial and fiscal stability, but also on how important an institutional framework respectful of property rights and private enterprise is for fostering growth in these countries. Factors of a more global nature have also been pivotal in the recent crises. These have been related to greater risk-aversion on international financial markets, which has caused capital flows to some of these emerging economies to shrink. International markets have, however, tended to be more selective, and there have been fewer episodes of crises spreading from one country to another, although contagion cannot be said to have disappeared completely. The recurrence of these crises has led to reflection on the so-called “architecture” of the international financial system. Numerous reforms have been proposed in this connection. And some have been adopted, and are generally in the initial stages of implementation. Much remains to be done in this area, although the acceptance of sovereign bonds incorporating the so-called collective action clauses, issued by Mexico, Brazil and Uruguay, offer grounds for hope.

21 Banks earn a return from providing liquidity services, and so make a trade-off in deciding how much liquidity risk to run. But, because of the spillover effects from bank failures, the overall social cost of banks’ liquidity risks crystallising can be considerably greater than the costs for the individual banks themselves. Regulation by the micro-prudential authorities has been the primary tool for dealing with that issue. There is currently a very important, and long overdue, international debate about how to improve the regulation of liquidity. I want to dwell today on just one important element of this debate. This concerns whether or not the assets counted by prudential regulators as part of a bank’s liquidity buffer should be defined to include all of the assets held by the bank that are eligible in the operations/facilities of the central banks to which the bank has access. Some argue that they should. The Bank of England would regard that as a big mistake. For the reasons I have described, the collateral eligible at most central banks goes way beyond securities that can be relied upon in stressed conditions to be liquid in private markets (whether outright or repo). So if they all counted as core-liquidity for regulatory purposes, banks would in effect be liberated from having to hold a buffer of low-yielding assets that they could confidently use in the market before they turned to us.
Remarks at the C. Peter McColough Series on International Economics, Council on Foreign Relations, New York City, May 24. 4  BIS central bankers’ speeches  Federal Reserve MBS purchases have succeeded in driving down mortgage rates to historically low levels. But these purchases would have had still more effect on the economy if pass-through rates from the secondary market to the primary market had been higher. As can be seen in Exhibit 3, the Federal Reserve’s purchases significantly narrowed the spread between agency MBS and Treasury yields, with the latest round of purchases notably effective in this regard. But, as shown in Exhibit 4 the spread between primary mortgage rates and agency MBS yields3 has widened and this has limited the drop in primary mortgage rates. The incomplete pass-through from agency MBS yields into primary mortgage rates is due to several factors – including a concentration of mortgage origination volumes at a few key financial institutions and mortgage rep and warranty requirements that discourage lending for home purchases and make financial institutions reluctant to refinance mortgages that have been originated elsewhere. On a related note, higher guarantee fees charges by Fannie Mae and Freddie Mac have increased the fixed cost of originating loans and this has also increased the spread between primary and secondary mortgage rates. Factors limiting pass-through warrant ongoing attention from policymakers.

In the long run, even savers would be better off in a world in which aggressive monetary policy generates a strengthening recovery that eventually permits the normalization of interest rates, than they would be compared to a circumstance in which the United States allowed itself to fall into a Japan-style trap of low growth and low rates for decades. So I do not view the effect of low rates on savers as a reason to be less accommodative. Rather, in my view, the potential for the monetary policy impulse to be attenuated over time, is an additional reason to be aggressive in terms of the policy response. A more front-loaded program would avoid greater attenuation compared with a policy that started out less aggressive but added stimulus gradually over time. This has two benefits. First, it would likely be more successful in generating the desired recovery more quickly. Second, relative to a more back-loaded program, less would ultimately need to be done to achieve the desired set of outcomes. The fact that there are asymmetric payoffs from an economy that is weaker than expected versus one that is stronger than expected, given that we are at the zero lower bound reinforces this conclusion. In particular, if the economy were to continue to underperform, and experienced a severe shock, there would be some risk of getting stuck in a deflationary situation in which monetary policy would be even less effective.
M R Pridiyathorn Devakula: Maintaining stability with a nuanced approach Speech by Mr M R Pridiyathorn Devakula, Governor of the Bank of Thailand, at the Stock Exchange of Thailand, Bangkok, 20 September 2004. *  *  *  Distinguished participants, ladies and gentlemen, Let me begin by thanking the Stock Exchange of Thailand for inviting me here to speak today. You have already heard from our Minister of Finance a comprehensive framework for sustainable growth in the next five years, with an integrated set of targets for various sectors and various dimensions of the economy. This is a welcome initiative and an important policy development. The Bank of Thailand’s role is to ensure economic and financial stability in order to support continued growth of the economy. From our experience, monetary policy alone is not enough to achieve desirable stability. WE need to involve ourselves in two other areas, i.e. to guard against possible build-ups of financial imbalances and to further strengthen the financial sector. First of all, I will begin with our assessment of the current economic conditions to assure you that, in spite of the greater risks and challenges that have emerged this year, Thailand’s growth momentum continues to remain firm, with economic and financial stability intact. Key challenges have included increased external pressure from higher oil prices, rising global interest rates, and the potential impact of a slowdown of the Chinese economy.

Thus, with growth momentum remaining firm but with prospects for higher inflation, the Monetary Policy Committee saw less need to keep interest rates at low levels. The committee was of the view that monetary policy should be more focused on economic stability, with the adjustment being gradually paced. This was the rationale behind the increase in the policy rate in August. Ladies and Gentlemen, Adjustments in the financial markets following the policy rate increase have been orderly. There has been an across the board increase in short-term money market rates as well as a rise in bond yields. But given present excess liquidity in the system, there will be some time lag before the corresponding adjustments in deposit and lending rates take place. Going forward, especially as the economy’s expansion gains further momentum, monetary policy will need to maintain economic stability and to ensure that inflation is kept within the target. lt is our intention to do whatever necessary to keep inflation in check and to ensure a continuation of economic stability. Ladies and gentlemen, Besides monetary policy, we have also taken measures to safeguard the economy against possible buildups of financial imbalances at the sectoral level. We have learned from the 1997 financial crisis that overshooting asset prices could pose a major risk to the economy. Therefore, to maintain economic arid financial stability, we need to be vigilant in spotting potential financial imbalances, particularly in the real estate and household sectors.
[13] On occasion, it has started well. But – almost uniformly – it has eventually ended in confusion. At a time when policy rates were stuck at their absorbing effective lower bond, a case for forward guidance could be made on the grounds that it allowed for further monetary easing by flattening the forward rate curve when the conventional approach of lowering Bank Rate was no longer available. [14] But – at least for the present – that case no longer holds, now that rates have risen comfortably into positive territory. If some easing were required, Bank Rate could be raised more slowly than currently anticipated (or even reduced if necessary). Forward guidance can also help contain interest rate volatility while policy is uncertain. As central banks make the difficult transition away from the very accommodative policy settings first established in the face of the global financial crisis and maintained, more or less, ever since, a case could be made that forward guidance (capital F, capital G) has helped to ease and support  Page 9  the shift. It is on that basis that I have – somewhat reluctantly – acquiesced in the ‘further tightening’ forward guidance embodied in MPC statements through the turn of the year. But now asset purchases have ceased, Bank Rate has risen, the QE asset portfolio is shrinking, and gilt sales are under consideration. The transition from one phase of monetary policy to another is better established, and better understood.

Developments in 1998 are one example, when the krone came under growing pressure as a result of the sharp fall in oil prices, turbulence in international capital market in the wake of the Russian crisis and imbalances in the Norwegian economy. Monetary policy The long-term objective of monetary policy is to provide the Norwegian economy with a nominal anchor - domestic price stability, and thereby the basis for a stable krone. Nominal stability is the best contribution monetary policy can make to economic growth and prosperity. A nominal anchor is also a necessary precondition for stable financial markets and property markets. High inflation and wide swings in the exchange rate impair the function of prices as an information vehicle. This leads to booms followed by busts and an arbitrary redistribution of income and wealth. Inflation therefore poisons the economy. By linking movements in the krone to the euro, we have chosen to follow the same standard for nominal stability in the economy as set by the euro area countries. BIS Review 19/2001  7  Since 1997, inflation has been higher in Norway than in the euro area. The difference partly reflects a period of strong growth in Norway, while the level of activity in Europe has been low. But the relatively high inflation rate in Norway cannot continue as this will undermine the basis for stability in the krone exchange rate and weaken confidence in monetary policy.
Our strong reaction in 2006 have contained inflation expectations and we predict that inflation expectations will continue to move towards the medium term target of 4 percent as the headline inflation comes down in the next couple of months. However, it should be noted that there are also other important factors in determining the inflation expectations, such as incomes policy and the course of fiscal policy, or political aspects, etc. Apart from short-term interest rates, communication skills are also critical tools in guiding the expectations towards the target. What we do is important, but equally important is how we convey this to our target audience. That is not only what we communicate but also to whom we communicate. Of course the target audience of central banks are financial markets in particular and the public in general. When communicating we try to make our messages simple and straightforward. However this is easy said than done. Again this is the art side of monetary policy. Ladies and gentlemen, before concluding, I would like to note that the existence of independent and autonomous institutions along with the practice of good governance principles is vital for Turkey. An independent central bank has constituted and will continue to constitute a cornerstone for structural transformation towards good governance and good institutions in Turkey.

Banks and licensed agencies, despite being safer, are more expensive than the alternative unofficial means to the point of inducing many emigrants to stick to the latter means. In a comparative study of Manuel Orozco, 2003 looking at transfer costs across different countries, show that banks appear to charge less than money transfer companies. These latter tend to be costlier because of higher transfer charges and disadvantageous exchange rates they face. Moreover, some research shows that transaction costs of transferring remittances via money transfer companies in the South-Eastern Europe are higher than the region risk. Banks becoming aware of this comparative advantage, have introduced lower transfer charges while offering at the same time new financial products and services to encourage and attract savings of this segment of clients. However, I retain that although banks have the opportunity to be cheaper than money transfer companies, remain quite bureaucratic and less flexible compared to money transfer agencies, not to mention their inadequate geographical  1  Year 1997 represents a year of chaos for the Albanian economy and society, as a result of the collapse of pyramid schemes and 1999 the year of Kosovar crisis. 2/5  coverage of rural areas where more than 60 percent of population lives. Therefore, despite recent promising developments, banks have not gained much market share of remittances in Albania.