samchain/econo-pairs-v1 huggingface dataset:
Early on, the Monetary Policy Committee had to focus on stabilising the exchange rate in order to stop the collapse of asset prices and the automatic increase in private sector debt, most of which was either exchange rate-linked or indexed to the CPI. The scope to cut interest rates in order to stimulate demand was therefore limited, although it began to develop over the course of 2009. The capital controls that were introduced in late 2008 provided some room for manoeuvre and enabled the Central Bank to allow real interest rates to fall faster than would otherwise have been possible. Inflation, which had skyrocketed after the currency collapsed, began to subside gradually, but the inflation spike caused by contractual wage increases and excessively high inflation expectations cut into that room for manoeuvre from mid-2011 onwards. In order to understand the economic recovery in the face of these headwinds, two points are important. The first point centres on the nature of the recession. To some extent, the recession represented the inevitable adjustment of domestic demand to the fact that it was no longer possible to fund the country’s massive current account deficit and to the abrupt contraction of two sectors – financial services and construction – that had grown exponentially during the upswing. When the dust settled, the domestic economy still rested on other sturdy foundations, and the low real exchange rate stimulated some of Iceland’s tradable sectors.

Such a turn of events would have had severe effects on the real economy. In this respect, it is important to refrain from drawing too-sweeping conclusions from the banking collapse in Iceland, as the international part of Iceland’s banking system was so large and domestic banking operations were actually kept up and running at considerable cost. International cooperation on crisis management grew markedly in scope, particularly through collaboration among the G20 countries and at the International Monetary Fund. It encompassed a common perspective on fiscal measures to support the banking system and stimulate demand, and the provision of support to specific countries. Later on, emphasis shifted to the reform of the financial regulatory framework. That work is still underway. BIS central bankers’ speeches  1  But in spite of these measures, by late 2008 and early 2009 the recession on both sides of the Atlantic had become the deepest since the interwar years, and on a global level it was the most extensive and synchronised contraction in history. All of this affected the Icelandic economy, of course, but added to it were the collapse of Iceland’s banks, the plunge in asset prices, and the inevitable adjustment of domestic demand following the overheating in 2005–2007 – an adjustment that had begun before the banks fell. The contraction from the peak in Q4/2007 to the trough in Q1/2010 was the deepest Iceland has seen, at least in the post-war period. GDP contracted by nearly 12½%.
It depends on the timing of such an episode. By then, I hope that fiscal policy can become more active in reacting to such a development. It will be very important to have more fiscal space, and to use it. And that’s related to some of the reforms that are needed for monetary union to work better. Presumably, interest rates by then would not be sufficiently high for a reduction in rates to be a sufficient response. Other monetary policy tools, then, would have to be used. I think one possibility would be to go into yield curve control, meaning targeting specifically some interest rates for longer term maturities. That would require lower amounts of purchases to be achieved than we have at the moment under our asset purchase programme. It would work because it could lower medium to long-term interest rates, which are the relevant ones for expenditure decisions. Yield curve control is being used already in Japan – and it works. It has not distorted markets. [Former Chair of the US Federal Reserve Ben] Bernanke has a good answer to this issue of distorting the markets, which is to say that purchases by the central bank of government securities with different maturities have exactly the same impact as a change in maturities done by the Treasury itself. The public sector always impacts the yield curve, one way or the other.

Today, many of the ASEAN-5 countries have fairly deep and liquid local bond markets. Central banks, whose operation is contingent on a deep and liquid bond and foreign exchange markets, have been part of the development process for the government bond market. Over the years, our financial markets have become more efficient, more sophisticated and more balanced. ASEAN-5 have moved from a predominantly bank-based or credit market to a growing capital market, both equity and bond. We have also strived to better manage the impact from volatile capital flows as we seek to balance between foreign inflows and capital outflow. Here bond markets have been instrumental to help absorb the impact from the volatilities and sudden reversal of these flows. These developments have facilitated central banks in their conduct of monetary policy, manage market expectations, and guide the path of monetary policy. Today, the ABMI is taking this development further from a domestic orientation to a regional level. This is timely in view of the increasing need for Asians to find new sources for growth and new markets for their exports, and in recognition of the need for “Asian savings to finance Asian investment”. Initiatives such as the Credit Guarantee and Investment Facility (CGIF) is a case in point that aims to foster cross border fund mobilization using the tools of a regional credit guarantee vehicle.
Yet, even when the Hong Kong dollar and the financial markets were under great pressure, and the economic and monetary conditions were extremely difficult, all the measures to address the financial crisis, including the market operation undertaken last August for the purpose of preserving order in our financial markets, were entirely formulated by the government of the HKSAR on its own. During this period of financial turmoil, the Central Government has strictly adhered to the provisions of the Basic Law. The Central Government has shown confidence in the ability of the HKSAR government and has not interfered in Hong Kong’s monetary affairs. Furthermore, the success of the HKSAR government in addressing the financial turmoil has fully demonstrated the effectiveness of “Hong Kong people ruling Hong Kong”. The confidence of the international financial community and the Central Government in the ability of Hong Kong to maintain monetary stability and to continue the development of Hong Kong as an international financial centre have also been enhanced. The Monetary relationship between Hong Kong and the Mainland 8. An issue related to monetary autonomy is the handling of the monetary relationship between Hong Kong and the Mainland under the “one country, two systems” principle, especially given that the economic relationship between the two places has become increasingly close. A precise and clear approach to the monetary relationship between both places is one of the key factors in maintaining Hong Kong’s status as a financial centre.

Since then, Hong Kong has begun to play an active role in the activities of the BIS, including attending its regular meetings and participating in committees focusing on global financial issues, in particular, the Committee on Banking Supervision and the Committee on Payment and Settlement Systems. In July 1998, the BIS established in Hong Kong its Asia Pacific office, which is also the Bank’s first overseas office. In addition, Hong Kong continued to attend the annual meetings of the Asian Development Bank, International Monetary Fund and World Bank, as well as maintaining close technical co-operation with these bodies. Since the outbreak of the Asian financial turmoil, the issues of financial stability and new global financial architecture have become increasingly important. In addition to voicing our views on these topical issues under the name of “Hong Kong, China”, Hong Kong has also actively participated in the lending arrangements organised by international financial agencies. In 1998, we cochaired the G22 Working Group on Transparency and Accountability and actively promoted the disclosure standards in both public and private sectors. At present we have been invited to attend the BIS Committee on Global Financial System and its working group meetings. While the above underscore Hong Kong’s status as an international financial centre, it also demonstrates to the international financial community the successful implementation of the “one country, two systems” principle. Conclusion 21. Time flies. Nine years have passed since the Basic Law was promulgated.
I want to set out the other work we have done, and are continuing to do, to stabilise a G-SIB going through a resolution process. The first is ensuring continuity in financial contracts in keeping with the KAs. Across FSB members, we have addressed this issue domestically in our respective jurisdictions with statutory powers to stay close-out. But that has left a risk of cross-border close-out under foreign law contracts. That could be solved by statute if hosts had powers recognise or support home country resolution actions. Indeed this is included in the KAs. But in some important cases, including the US, resolution regimes have been implemented without statutory powers of recognition. Absent a reliable statutory approach, changes in all relevant contracts were needed instead. This underlines the importance of the achievement we have made in getting the ISDA Protocol 4, and credit is due to industry and ISDA for making that happen. Most of the G-SIBs have already adhered to the expanded Protocol covering not only OTC derivatives but also securities financing transactions. By the end of this year, the remaining advanced economy G-SIBs will also have adhered. But more importantly, with the jurisdictional modular protocol in place and regulation requiring adherence published for the largest jurisdictions the way is clear for the rest of the market, in particular buyside firms, to adhere.

9  Following the post-crisis adjustment, private sector debt to GDP ratio stands very heterogeneous across CESEE countries ranging from about 28% of GDP to 129% of GDP in 2017. In most CESEE countries, debt levels are below the European average which corresponds to the level of economic and financial development. Private sector debt ratios in most of the countries are below the threshold in the Macroeconomic Imbalance Procedure (133% of GDP for total private debt) and MIP based reference values for households and non-financial corporate debt. Favorable financing conditions and solid economic growth recently have alleviated debt sustainability concerns in the region. Yet, there are important differences across countries. In Albania, Romania and the Czech Republic, debt levels are well below MIP based vulnerability benchmarks with private debt having stabilized or decreasing in recent years. In other countries, such as Slovakia, North Macedonia and to some extent Poland, private debt remains moderate by international standards, but is growing post-crisis urging for close vigilance by authorities. There are also countries such as Bulgaria and Croatia where private sector is still highly leveraged and therefore is source of concern for macro-financial stability. European Commission5 notes high corporate debt in Bulgaria as potential drag on investment and growth over the medium term. Deficiencies in the insolvency framework are identified as important factor that slows down the reduction in private sector debt and the workout of nonperforming loans in the country.
10 Control of the federal funds rate has also been supported by the overnight reverse repurchase agreement  facility, which accepts cash from an array of institutional investors at a rate 25 basis points below the interest rate paid on excess reserves. 11 These exogenous factors include the U.S. Treasury’s cash balance at the Federal Reserve, the foreign central  bank repo pool, the overnight reverse repo facility, and currency outstanding. 12 Because the amount of reserves in a floor system is greater than in a corridor system, this also can be helpful in  easing frictions in terms of payment flows. With large reserve balances, banks have higher cash balances at the Fed. As a result, they are less likely to incur daylight overdrafts and, thus, they have less need to monitor, and, at times, delay outgoing payments. 13 See Minutes of the Federal Open Market Committee, November 1–2, 2016. 14 See Ben Bernanke, Monetary Policy in a New Era, Brookings Institution, October 2, 2017. 15 Others have proposed adopting a nominal GDP targeting regime, which has its own strengths and  weaknesses, but it is not considered here for the sake of brevity. 7/7  BIS central bankers' speeches

Michael C Bonello: Securing financial stability - problems and prospects for new EU members1 Speech by Mr Michael C Bonello, Governor of the Central Bank of Malta, at the Financial Stability Seminar, St. Julians, 27 March 2003. *  *  *  In today’s globalized world where private financial flows, facilitated by market deregulation and electronic trading, have become a substantial multiple of merchandise trade, safeguarding financial stability represents an increasingly complex policy challenge. For the central banking community in the accession countries, the wider scope of liberalisation implied by the rules of the Single Market and, in particular, by the EU Financial Services Action Plan, adds a further dimension to this challenge. Of particular relevance in this regard are the liberalisation of capital flows and the free movement of services, processes which are already well underway in our countries. It is, therefore, particularly appropriate that central bankers, regulators and others having an interest in financial stability should come together on the eve of EU enlargement to assess the adequacy of the institutional and policy frameworks within which they operate. Current issues in financial stability It is today generally accepted that a well-developed and healthy financial system is a prerequisite for sustained growth, not least because of its intermediary role between savers and borrowers and its ability to diversify risks. A sound financial system also contributes to exchange rate stability by way of its stabilising effects on external trade and financial flows and is, of course, necessary for the effective transmission of monetary policy.
President Wilson, having won reelection in 1916 on the claim of having kept the U.S. out of the Great War and observing strict neutrality, had directed the Federal Reserve Board in Washington to issue a clear-cut warning to U.S. banks not to invest in a pending large placement of British Treasury bills in the U.S. market. The immediate and worldwide effect of the statement was to give the impression that the U.S. had “broken with Britain,” an impression which officials were soon scrambling for ways to counteract.5 The result was the Federal Reserve Board’s decision, contrary to the terms of the account negotiations and to the consternation of the New York Fed, to unilaterally announce to the public the account agreement with the Bank of England. The whole episode spoke perhaps to the Fed’s inexperience in matters of delicate international financial diplomacy. In any event, the Bank of England magnanimously let the matter slide— noting that mistakes “may arise even in the best regulated families”—and the account agreement was executed on May 3, 1917 and operationalized on June 20, 1917.6,7 Andrew Hauser will provide more insight into this fascinating period in his remarks in a few minutes. As expedient as the accounts were for wartime needs, the historical records show they were also motivated by ambitions of the Fed’s first leaders to establish the dollar as a major international currency and, for Benjamin Strong, to establish New York as a great international financial center to rival London. They had their work cut out for them.

Let me conclude with some imagery from rural America. In the traditionalist Amish communities of Ohio, Pennsylvania, and Indiana known for simple living and for shunning modern technology, whenever there is a need for a new barn to be built, the Amish organize what are called barn raisings. In a barn raising, the community comes together to assist in building their neighbors’ barns, with the understanding that the favor is eventually returned to other members of the community. The barn raising is a showcase of Amish planning, organization, and manual labor and serves as a practical linchpin of the agriculturally-rooted Amish society. However, while the barn raising fulfills a practical need, it also serves to tie the Amish community together by reinforcing Amish society through a very visible expression of the principle of mutual aid.17 In this 100th anniversary year of the first dollar account openings for foreign central banks by the Federal Reserve System of the United States, I can think of no more moving metaphor than this for the benefits that flow from central bank cooperation through the reciprocal provision of account services. Let us work together to preserve it. Thank you for listening. 1 I would like to thank Mark Choi for his assistance in the preparation of these remarks and colleagues in the  Federal Reserve System for their insightful comments and suggestions. 2 A cash account that a bank holds with another bank in a foreign currency. 3 The first Federal Reserve Board was sworn in on August 10, 1914.
One reaction to these extremely large packages – "bailouts" – and the accompanying moral hazard is simply to say that the official sector should have no part to play in what is essentially a private international capital market. Official lending is now small relative to private capital flows. Over the last three years, private flows have been around 7.5 times greater than official flows, according to IIF data. Against that backdrop, some have argued that the IMF should be abolished. This would be to throw out the baby with the bath water. What is needed is a "middle way" between full IMF insurance and no insurance at all. This middle way would comprise IMF lending but within strong presumptive limits. A key principle underlying this approach is that the international community needs to set out as clearly as possible the criteria that will govern the size and scope of IMF lending. Since most agree that there are limits on IMF lending, there is merit in explaining those limits to both potential borrowing countries and their private creditors. This would enable debtor countries better to plan their policies. It would also allow creditors to assess risk more accurately. Indeed, put more controversially, how can sovereign risk be accurately assessed without clarity about the Fund's role? A lack of clarity about the likely response of the international community to potential crises is a recipe for inaccurate assessments of risk. Such uncertainty would add to the (already high) cost of borrowing by emerging markets.

The share of world GDP devoted to resourcing the IMF would grow rapidly over time. In fact, as private capital markets came to understand this, the scale of private capital flows could increase to an even greater extent. Private creditors and debtors would accumulate ever larger bilateral debts, safe in the knowledge of a multilateral insurance mechanism. The logical end point of this game is that the international community would be locked into providing ever increasing sums of money to countries in difficulty – in short, an international lender of last resort would be created by stealth. There is no evidence that anyone wishes to go down this route. To guard against this, it is crucial that there be some clearer presumption about the scale of "normal" access. That scale may well be higher than was the case in a world of current account crises. And the approach of defining limits in terms of multiples of quota may be unsatisfactory because the size of quotas in some cases needs to be revisited. But that is not an argument against the principle of presumptive limits; it is a case either for reconsidering quotas or, in a more practical vein, relating access to finance to some other metric. The key to limiting lending is not strict rules but stronger presumptions. These presumptions then provide the backstop for debtor-creditor negotiations and help condition expectations in financial markets.
The highest respect – coupled with a fair dose of nervousness – is also what I felt while sitting in the waiting room outside Ben’s office, having just arrived at Harvard as a young post-doc. I will never forget the moment when I first entered Ben’s office, with its traditional furniture and its walls packed with majestic books staring down at me. I could truly feel the vast amount of knowledge present in that room. Fortunately, Ben welcomed me warmly and my anxiety quickly dissipated. Indeed, I could not have hoped for a better mentor for my stay at Harvard. I have learned a great deal from Ben, not only as an economist, but also as a person. Benjamin Friedman is an unusual scholar in many respects. His research is extraordinarily broad and deep, as demonstrated by the topic of today’s lecture, namely the influence of religious thinking on economic thinking. Some of you may ask what this has to do with the Swiss National Bank. While people’s faith in the currency is an essential precondition for successful monetary policy, organising public lectures on religion may seem a little farfetched. However, allow me to reassure you that Ben has also published over 150 academic articles on monetary policy, macroeconomics and financial markets. He is therefore a most logical candidate to give the Karl Brunner Distinguished Lecture, even on a topic that may seem unusual at first sight.

The forecasters would not have known about these subsequent revisions. Nevertheless the results were certainly better than expected. Let me give you a couple of examples. In December 2015 the Central Bank projected real GDP growth for 2017 at 3.2%. Two years after, we believe economic growth has reached 6%, or nearly double what we had originally projected. Back in December 2015 we had anticipated 2017’s unemployment rate as 5.4%. Now we know it will be closer to 4%, or a quarter less. More striking is the divergence in fiscal projections. Back in December 2015 we thought Government would close 2017 with a deficit of 1.1% of GDP. Today we believe there will be a surplus of 0.9%. Two years ago we thought our national debt-to-GDP ratio would be 64% of GDP in 2017. Now we think it will be nearly ten percentage points less than that. Page 2 of 10  Malta’s current economic performance Two weeks ago, in the concluding statement following their annual official staff visit to Malta, the IMF said that “Malta’s economic growth remains one of the strongest in Europe” and projected that this robust performance will continue on the back of rising incomes and historically-low unemployment, complemented by buoyant services exports. They also concluded that Malta will remain a surplus economy, both in terms of government finances and external transactions. This is, broadly speaking, the same assessment as that made by the European Commission in their Autumn 2017 forecasts.