samchain/econo-pairs-v1 huggingface dataset:
About monetary policy, the baseline scenario just described uses as a working assumption that the MPR will follow a trajectory that is similar to the one that can be deduced from the financial asset prices at the statistical closing of this Report (figure 8). This means that monetary policy will advance in its normalization throughout the policy horizon, in line with the assumed economic outlook at that horizon, only a little more slowly than we thought in March. Under this assumption, monetary policy will continue to provide a boost to the economy. It is important to stress that monetary policy has kept a very expansionary stance, helping the economy to weather the changes in macroeconomic conditions as best it can. In this way it has succeeded in accommodating a significant depreciation of the peso and inflationary consequences without jeopardizing our monetary policy’s medium-term anchor: inflation expectations two years out. Unlike other economies, we have been able to sustain an expansionary monetary policy without driving inflation expectations away from the target (figure 9). This expansionary monetary policy is most notorious in market interest rates. On one hand, Chile’s long-term rates are low by historic standards and also in a cross-country comparison. The same is true for lending rates, which are now below their historic averages and, in the case of mortgage loans, even at or near record lows (figure 10). Risk scenarios As usual, the implementation of monetary policy will respond to incoming information about the projected inflation dynamics.

Regarding output, first-quarter GDP and demand growth figures exceeded March expectations, influenced by improved figures in agriculture and, somewhat less, mining. Overall, our growth outlook is essentially unchanged. We expect the economy to continue to grow below potential for some quarters, due mainly to poor performance of those sectors with closer links with investment. Anyway, it is worth noting that retail trade and personal services have proven more resilient, reflecting a more gradual adjustment on the consumption side. The baseline scenario of this Report sees GDP growing between 1.25 and 2.0 percent this year and between 2 and 3 percent in 2017. This estimate is based on the assumption that the economy will resume near-potential growth towards the end of the projection horizon. Finally, it uses as a working assumption that public expenditure will follow a trajectory consistent with the fiscal rule and the Administration’s announced budgetary consolidation path. The process of growth normalization will be slow. Of particular concern is the behavior of investment, which the baseline scenario estimates will drop for the third year in a row. Indeed, this year several indicators, among which the survey of the Capital Goods Corporation, the levels of imports of capital goods and business confidence, anticipate a further drop in investment. Moreover, the housing sector will have a limited performance after being highly dynamic in 2015, and public investment will follow a trajectory consistent with the objectives of fiscal consolidation.
The financial crisis is a vivid reminder that there can be many risks to financial stability, and of the need for strong internal and external constraints on banks. Here, the “three pillars” of regulation, supervision, and bank culture must all play effective roles. Regulation establishes what is legally permissible for banks to do; supervision helps to reinforce those rules and evaluate whether the bank’s controls and other processes are conducive to safety and soundness; and bank culture sets the norms for what is appropriate behavior. 9 But, at the same time, these pillars are mutually reinforcing. Regulation and supervision, for example, attempt to address various market failures in banking that can contribute to excessive risk taking.10 Bank culture, in turn, helps establish norms in areas where regulation may be silent. In this way, regulation, supervision, and bank culture are complements, and deficiencies in any of these pillars can be problematic. For example, as we have seen in cases of unsafe or unethical behavior in recent years, strong regulation and supervision cannot substitute for deficiencies in bank culture—especially not on a timely basis. It is the public sector’s job to establish and enforce rules, but rules are inherently limited in their ability to constrain conduct and behavior. Much of our regulatory regime has been developed in response to financial problems that have arisen over time. Because regulation is typically reactive in this way, it may not always keep pace with the evolution of the financial system or the broader economic environment.

Asides from these efforts, the HKSAR Government has issued two rounds of institutional green bonds since 2019, with the 30-year green bond to be the longest tenor green bond issued by a government in Asia. As part of our continued commitment in promoting sustainable development, Hong Kong has also set up the world’s first government Global Medium Term Note Programme dedicated to green bond issuances. We believe this could not only create a strong demonstrative effect, but also help establish a benchmark yield curve, which is critical in supporting the further development of the green bond market in Hong Kong. Other Initiatives 16. Indeed, Hong Kong is already one of the major green finance hubs globally, with a strong presence of finance and legal professionals, global institutional investors and asset managers committed to green and sustainability. As the manager of the Exchange Fund (EF), the HKMA is also integrating sustainability into our investment strategy. We are not only supportive of responsible investment at the EF level, but also seek to collaborate with like-minded investors and international organisations to promote ESG standards in investment process. 17. Looking ahead, we believe that green and sustainable bonds will continue to be the key growth driver. In May, Hong Kong launched the Green and Sustainable Finance Grant Scheme to support green and sustainable bond issuance and lending. The scheme, which will last for three years, provides subsidy for eligible bond issuers and loan borrowers to cover their expenses on bond issuance and external review services.
The key difference from SIVs was that the underlying assets were largely purchased from third-parties and not necessarily in securities form. 6  BIS central bankers’ speeches  We now want to turn to an example of a structure that did at least partially survive the crisis: UK RMBS master trusts. These are versatile structures that allow an issuer to transform a portfolio of assets into a very different investment product. In principle, the master trust purchases mortgages from the bank and issues tailored bullet-maturity securities. The assets and the liabilities can be very different, e.g. the demand for the securities may be stronger in US dollars than in sterling, so an FX swap converts the cash-flows into dollars. Or most of the mortgages may be floating rate, whereas investor demand is stronger for fixed-rate product, and an interest rate swap(s) converts the cash flows accordingly. Mortgages typically pay down somewhat randomly and relatively quickly, whereas investors prefer straight-bullet maturities. The master trust can accommodate this by allowing on-going reinvestments of the pay downs and conversely allowing the trust to put assets back to the bank if the cash-flows are not sufficient to make a particular principal repayment. The downside is clearly that the on-going linkages between the issuer and the trust remain very strong, and it is thus hard to identify where economic risks ultimately reside. RMBS master trust securitisations are designed to be called on their bullet maturity date and that is how they were priced and traded.

This scenario assumes that, on average, output gaps will remain closed throughout the projection horizon. On the demand side, the stronger growth during the first quarter obeyed primarily to the acceleration of private consumption. The baseline scenario assumes that in 2011 this expenditure component will grow more than forecast in March, although with a slowdown in durable consumption. This latter component has shown some early signs of moderating, as can be inferred from the behavior of car sales, among other factors. Overall, the expected expansion of consumption will have a significant incidence on domestic demand growth, which will increase 8.5 percent in the year. Gross fixed capital formation will reduce its incidence on GDP growth, but will continue rising at double-digit annual rates, so investment – at 2003 prices – will be somewhat less than 30 percent of GDP. Volume exports of goods and services will increase around 7 percent this year, with the non-mining component increasing more. In the case of the public sector, the baseline scenario assumes that the structural deficit will converge to one percent of GDP towards the end of the present Administration, as has been announced by the respective authority (table 1). Global conditions, particularly the terms of trade, our trading partners’ growth and external financing, are still favorable to Chile, but some negative risks have intensified. At the same time, the dichotomy between developed and emerging economies has widened in terms of growth prospects and interest rates.
Concluding, I would like to underline that the Bank of Albania shall always be at the position the public expects it to be, in order to satisfy, at any given time, its legal responsibilities for price level and banking sector stability. In this process, state authorities, in particular the judiciary, would be needed to offer their indispensable cooperation and consider banking system issues a high priority, with the knowledge that a stable economic development of the country depends on it. The Bank of Albania calls on all relevant factors to accelerate their structural reforms on property title and execution of collateral as well as undertake a number of other administrative and bureaucratic regulations which affect banking system costs. Inviting you to openly discuss on these issues, I thank you for your attention! BIS central bankers’ speeches  3

James McAndrews: Challenges and rewards associated with data in the New York Fed Remarks by Mr James McAndrews, Executive Vice President and Director of Research of the Federal Reserve Bank of New York, at the Fifth Data Management Strategies and Technologies Workshop, Federal Reserve Bank of New York, New York City, 4 February 2014. *  *  *  Introduction Welcome to the Federal Reserve Bank of New York. We are fortunate to have many central bankers and international nongovernment organizations represented here today. Because we are part of the Federal Reserve System, the central bank of the United States, we share many of the same data obstacles you are currently facing. As the head of Research and Statistics at the New York Fed, I’d like to share with you the challenges and rewards associated with data in our organization, particularly the data that we use to analyze policy questions. The New York Fed is uniquely positioned for several reasons. In addition to being the largest of the twelve Federal Reserve Banks, it has the distinction of including a Markets Group that conducts Open Market Operations for the Federal Reserve System. Additionally, the New York Fed supervises financial institutions, including foreign banks doing business in our district. These special responsibilities contribute to our tremendous reliance on data. Data is crucial to our core objectives and all aspects of our work. Data is the foundation for developing international standards in bank capital and liquidity requirements.
The Initiative includes studies on issues such as new securitised debt instruments, issuance of debt by international financial institutions, regional credit guarantees and enhancement facilities, and the establishment of local and regional credit-rating and credit-enhancement agencies. Another initiative, known as the Asian Bond Fund project, represents collective efforts of the Executives' Meeting of East Asia-Pacific Central Banks, or EMEAP, to broaden and deepen the bond markets in the region. The ABF project will bring about many benefits. First, it introduces and promotes new fixed-income products to the Asian markets. Secondly, it helps improve market infrastructure. Thirdly, the initiative has helped accelerate tax and regulatory reforms in both the regional and domestic markets. The Bank, with its mission as the region's development bank, is well positioned to assist emerging market economies in Asia to cope with the challenges of globalisation. In the past year, the Bank has contributed to the issuance of local currency-denominated bonds in India, Hong Kong, Malaysia and Singapore. The Bank is also providing valuable support to the Asian Bond Markets Initiative through the former Regional Economic Monitoring Unit, which is now known as the Office of Regional Economic Integration. Mr President, your decision to expand this Office and dedicate it to regional cooperation matters is most timely and welcome, as a well defined agenda for the Bank on regional cooperation will enhance financial stability by strengthening regional surveillance and cooperation. Despite these efforts, developments, and - dare we say it - successes, there are many challenges lying ahead of us.

One-fifth of world population is still living in poverty, with the majority of them in Asia. How to address the poverty issue and the uneven distribution of income amid globalisation has become your biggest challenge. Mr. President, I believe more wealth could be generated if savings in  BIS Review 32/2005  1  the region could be recycled to finance investments in the region, if intra-regional trade could grow faster, and if investors could move funds easily from one economy to another in the region. Mr. President, I am confident that under your leadership, the Bank will play an even greater role in the integration of trade, finance and investment in the region. You have our unremitting cooperation and support. Thank you. 2  BIS Review 32/2005
3 It is true that the households’ total assets exceed their debts by a broad margin. However, these assets are largely illiquid, which means that they would be hard to convert into cash if the households needed to reduce their debts quickly (see Figure 13). Few other tools are in place – monetary policy has its part to play We can also examine the issue of indebtedness more generally by reviewing the history of stabilisation policy in Sweden. During the period with a fixed exchange rate prior to 1992, when responsibility for stabilisation policy lay with fiscal policy, it was not considered that the sovereign debt imposed any limitations on fiscal policy. This eventually led to the sovereign debt becoming unsustainable, and we had to reform the framework for public finances. We gradually managed to put public finances into much better shape and to achieve a falling tend in the sovereign debt as a percentage of GDP (see Figure 4). After the fixed exchange rate regime was abandoned in November 1992, we also needed new rules for monetary policy. The inflation target was the solution adopted. Inflation has been low and stable since the mid-1990s and the expectations of the public and the market participants have been anchored around the target of two per cent (see Figure 11). We can thus claim that the current framework for stabilisation policy has enabled us to gain control over the sovereign debt and inflation.

The object of this forum is to discuss the prime pre-conditions to be met by the Bank of Albania before launching the implementation of a new monetary policy strategy, with a particular emphasis on Albania’s membership to the European Union in the long-term run. The fact that we have been successful in controlling inflation during the last years holds true. We have managed to attain a general stability and I believe the policy adopted by us has been one of the key factors. Another fact which holds true is that, for some time, we have been considering to take another step, attempting a more sophisticated, effective and certainly a more responsible and transparent monetary policy approach. To this aim, we have come to the conclusion that the actual framework of the monetary policy requires the necessity of being further completed and perfected with standard elements, adopted by other countries in the world and where the targeting inflation regime has proven to be successful. We are aware that this is not an effortless initiative to be seized. Therefore, I consider that this is a great fortune for the Bank of Albania to have the possibility, on the verge of discussing the preconditions of adopting this regime, to closely discuss and consult the distinguished guests present in this seminar. I trust straight opinions and recommendations shall be brought forth, be they challenging to be accomplished. According to theory, inflation targeting is a direct regime.
As to the second phenomenon, it seems that while outside a monetary union deep current account deficits worry investors and can, in extreme situations, lead to currency crises, for countries that have already joined the common currency they do not matter much. An example of the three Baltic States (Estonia, Latvia and Lithuania), whose currency board arrangements are close equivalents of a monetary union, shows that enormous current account deficits (9-16% of GDP in 2006) have no apparent negative consequences for the economy. The case is, however, different with inflation pressure. In theory the margin for local demand-driven price increases in small member states of monetary unions is very narrow. This is guaranteed by the so called law of one price – the expectation that the same product should have the same price in various countries of a monetary union. In practice, however, there are several obstacles for this law to hold perfectly – some goods cannot be traded, most goods do not have perfect substitutes, there are transportation costs and tax differentials – so local demand pressures can play a role in driving prices in monetary union member states. As a consequence, products manufactured in these countries become more expensive and such countries loose competitiveness (e.g. Estrada, Lopez-Salido 2001). It is relatively difficult to foresee how the Polish economy will react to demand pressures once in the euro area. However, as in the case of asymmetric shocks, labor market flexibility is probably the best answer to the described phenomena.

The forthcoming NGFS work should therefore also focus on shorterterm horizons (2030, and not only 2050) as the transition to a low-carbon economy may be less linear than anticipated, with tipping points accelerating the transition in a disorderly way. [Slide] We generally need to better understand the long-term trade-off, in terms of GDP, between transition and physical risks and the cost of delayed action. The chart breaks down the GDP losses under three scenarios into the costs of transition and physical damages. Under the “Paris Agreement” scenario, GDP would be 5% lower in 2060 and around 7% lower in 2100, and most of this reduction can be attributed to transition policies. Under the two “Too-little too-late” scenarios, the transition costs are limited, but by the end of the century the impact of physical risks becomes much larger, leading to overall losses that could range between at least 10 and 20% of world GDP level. From an economic and rational standpoint, the prescription is clear-cut: an orderly transition would require a governmental forward-looking guidance, sending long-term signals and anchoring credible but ambitious commitments. This “climate forward guidance” should include an appropriate pricing of carbon; and as long as we don’t have such global pricing, a carbon border adjustment mechanism (CBAM), as recently put forth by the EU in order to prevent carbon leakage is appropriate. We all know how politically sensitive these issues are, domestically as well as internationally.
Since the monetary policy meeting of 18 April, some new statistics have become available for Sweden, including figures for unemployment, the retail trade and foreign trade in March and the tendency survey of the National Institute of Economic Research for April. By and large, these statistics do not indicate any significant changes in the course of development than that we saw ahead of us in the Monetary Policy Update in April. However, I think we should be cautious about reading too much into figures for individual months. I will therefore wait to make an overall assessment of the new statistics until our next monetary policy meeting in July. A factor that I think should be highlighted – although it did not directly determine my stance at the latest monetary policy meetings – is the link between monetary policy and financial stability. Let me explain this in more detail. The link between monetary policy and financial stability In my opinion there are links between monetary policy and financial stability. We should be careful to monitor the incentives that low policy rates can create over time (see slide 5). Both housing prices and household debts have increased dramatically in Sweden for some time  BIS central bankers’ speeches  3  now. This has been noted, for example, by the European Commission in an Alert Mechanism Report.4 These tendencies have slowed down over the last 12 months.

Despite enormous support measures, the recovery has been slow in both Europe and the United States, and few people would dare to guess what the final bill for the crisis will be. In other words, we need to do all we can to avoid ending up in a similar situation again. This involves strengthening the resilience of the financial system and counteracting the development of risks. The latest crisis also clearly demonstrated that we live in a world with a highly-integrated financial system. The financial institutions have major exposures to each other, which means that problems at one institution can spread like wildfire throughout the financial system and even between countries. With hindsight, it is easy to see that we lacked institutions and regulatory frameworks with the ability to predict and manage a global financial crisis. This lesson has led to the emergence of an entirely new policy area – macroprudential policy. Focus on the financial system as a whole – and its link to the macroeconomy Macroprudential policy can be seen as a complement to both traditional supervision and monetary policy when it comes to promoting financial stability (see slide 6). The focus changes from supervising individual institutions to analysing systemic risks in the financial sector and the links between the different players in the financial system. Macroprudential policy also aims to analyse the links, between the financial system and the macroeconomy over time.