samchain/econo-pairs-v1 huggingface dataset:
The initial lift from the fiscal stimulus will likely wane over the course of this year. And financial conditions have become less accommodative over the past several months. In addition, we are now seeing some emerging headwinds to growth from the partial government shutdown in the United States and elevated geopolitical uncertainties abroad. Other “data” confirm that the winds in our sails have calmed. The headlines have been about investors’ concerns around growth, which have contributed to volatility in markets. This is also showing through in surveys of households and businesses, who say that they are somewhat less confident about future economic prospects. For example, the latest Empire State Manufacturing Survey and New York Fed Business Leaders Survey both point to slowing growth in the region. And there is no doubt that my colleagues and I are hearing the same thing directly from our business and financial market contacts, who are more focused on the possibility of a weaker economic outlook this year.3 But let me be clear: a softer economic outlook doesn’t mean we should prepare for doom and gloom. On the contrary, it’s likely we’ll see GDP growth somewhere between 2 and 2½ percent this year. That’s a step down from 2018, but still consistent with a healthy, growing economy. Supporting a Strong Economy So, how should the Fed respond to an outlook of slowing growth and one that’s less certain than, say, this time last year? In a word: carefully.

Sources: Statistics Bureaus of each country. 10  BIS Review 41/2009  Figure 4  Inflation and expectations  (annual change, percent) 12  12  9  9  6  6  3  3  0  0  -3  01  02  03  CPI  04  05  06  07  CPIX  08  09  -3  8  8  6  6  4  4  2  2  0  0 06  CPIX1  Jul. 07  Jul. 08  BI 1 in 1 (1) BI 3 In 2 (1) BI 5 In 5 (1)  Jul. 09  EES 1 year (2) EES 2 years (2)  (1) Breakeven inflation calculation based on swap contracts. (2) Economic Expectations Survey conducted by the Central Bank of Chile. Sources: Central Bank of Chile and National Bureau of Statistics (INE). Figure 5 Monetary policy rate, deposit rate, and forward rate (percent) 12  12  10  10  8  8  6  6  4  4  2  2  0 Jan. 08  0  May 08  180-day prime deposit rate  Sep. 08 MPR  Jan. 09  6-month forward rate  Source: Central Bank of Chile.
The Banque de France tries to follow this piece of advice. To do so, we have adapted our organization and our governance structure with the creation of a Fintech hub within our supervisory function (which has already supported more than 300 FinTechs), the appointment of a Chief Digital Officer and the launch of a Lab to foster innovation within the Banque itself. We are experimenting with new technologies: the Banque de France has been the first central bank to implement a fully-fledged project based on DLT which is now fully operational 3 and we have successfully ran 8 artificial intelligence projects. We are also hosting discussions between 3/4  BIS central bankers' speeches  regulators and the industry: the latest working group on artificial intelligence will deliver its conclusion by end of this year. Finally, as we are doing with today’s conference, we are seeking insights from economic research and trying to be a platform for open debate. I wish you fruitful discussions, and now give the floor to David Andolfatto, Vice President at the Federal Reserve of Saint-Louis, for his keynote lecture. 1 Exemples: Ant Financial (Alibaba Group’s financial services), Tencent, Amazon, Apple, Facebook. See Ztezsche,  Buckley, Arner, Barberis 2017, “From FinTech to TechFin : The regulatory challenges of data-driven finance” 2 E.g. : financial conduct, price manipulation, market integrity risks or money-laundering. 3 Madre  4/4  BIS central bankers' speeches

For a start, regulation goes hand in hand with supervision. We will continue to ask searching questions about the quality of a firm’s assets, the rigour of its risk management, the experience on its board, the plausibility of its resolution plan and so on. That is the bread and butter of our role. Meanwhile, the reforms will be treated to revisionist history and the calls of counter-revolution. Now, reasonable people can disagree about the right balance of financial regulation in order to achieve our goals. The most celebrated example of this is how to trade off the cost of higher bank lending rates, which dampens investment in the economy, versus the benefit of reducing the probability or severity of future financial crises. Unless some other breed of revolutionary brings an end to capitalism itself, then I think that debate will go on for a long time after we are all dead. But in my view, the post-crisis reform package – taken as a whole – strikes the right balance between the competing interests present within our mixed economy system. Brexit does not affect this judgement. The UK financial system must be robustly regulated and supervised whatever the outcome of the government’s negotiations with the European Union. As my colleagues on the Financial Policy Committee and I put it last month: “the FPC will remain committed to the implementation of robust prudential standards in the UK financial system.
Considering that banks’ need for FX swaps can be further reduced through a rise in the use of this option and in the limits allotted to banks, we increased these limits from USD 3 billion to USD 3.6 billion and from EUR 900 million to EUR 1.8 billion as of 7 January 2016. Moreover, we raised the maximum ratio of 50 percent that banks are able to pledge as FX-denominated collateral against their borrowings at the CBRT Interbank Money Market to 70 percent effective 13 January 2016. We expect this arrangement to play a stabilizing role against the stress likely to be experienced in credit risk pricing due to global factors and boost the demand for FX-denominated bonds issued abroad by the Treasury. Detailed information about our Turkish lira liquidity policy of 2016 can be found in the “Monetary and Exchange Rate Policy for 2016” we published on 9 December 2015. Besides interest rate and liquidity policies, we continue to promote prudential borrowing by employing other policy instruments that support financial stability. We have enacted a series of measures since end-2014 with regard to FX required reserves and remuneration rates on TL required reserves which aim to support core liabilities and extend the maturity of non-core liabilities. These policies have proved effective in extending the maturity of FX liabilities and suspending the upward trend in the loan to deposit ratio (Chart 7).

Second, how can central banks more broadly balance between supporting financial innovation whilst ensuring financial system safety and soundness? Third, what can central banks collectively do to this end? In 1963, John F Kennedy famously said “Change is the law of life. And those who look only to the past or present are certain to miss the future.” On that note, let me thank you again for being here and I wish you productive discussions in the Forum. 3/3  BIS central bankers' speeches
Although decisions on interest rates still resided with politicians, the Bank now had a better-informed voice. That voice became louder as a result of two great leaps forward in monetary policy transparency: the publication by the Bank, from 1993 onwards, of a quarterly Inflation Report; and the publication of monthly minutes of the meetings between the Chancellor and Governor at which monetary policy was decided – the “Ken and Eddie Show”. Both put the Bank’s analysis and judgements on the economy and monetary policy in the public domain, for the first time ever. This did not give the Bank a vote on monetary policy, but did give it a public voice. That voice became increasingly influential in shaping external debate on policy through the 1990s, constraining somewhat the Chancellor’s hand. It also re-shaped the Bank’s own processes, which became more rigorous and resource-intensive. Transparency plus a clear target imposed discipline on the Bank as well as the Chancellor. Whereas before Bank forecasts went into the bin, now they went into the quarterly Inflation Report. 4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  During this time, I was lucky enough to work on the issue I had joined the Bank to pursue – design of the UK’s monetary framework, inflation-targeting. Having been introduced in haste, there were a wide range of design issues to be researched and agreed.

Separation, it was said, avoided reputational contamination of monetary policy from financial firm failure. This, however, came at one obvious cost: it severed, institutionally, any link between the micro and macro, the brain and the hands. This would come back to haunt, not just the Bank but the world, a decade later. After the separation of the Bank from the Financial Services Authority (FSA), the new financial services regulator, the Bank found itself with too little international resource. This was unfortunate because the Asian financial crisis was raging. Two new international divisions were set up to plug this gap – one on the monetary policy side headed by Andrew Bailey (another whose progress I have lost track of), the other on the financial stability side headed by me. I moved to set up the new division on Monday 10 August 1998. The following Monday, Russia defaulted on its debts and devalued the rouble, triggering another emerging market-cum-global crisis. The next day I briefed Eddie George on the Russian crisis. Eddie spoke Russian, had worked in Russia and had an astute working knowledge of the Russian economy. I was in week two. I wasn’t long into my briefing before eyebrows were raised. The next few years brought crises aplenty as they spread contagiously through emerging markets. Spotting these crises, their unique dynamics, the way markets turn, the blend of politics and economics, is part instinct, part science. The emerging market crises at the time enabled me to cut my teeth on understanding financial crises.
Despite the adverse effects of the recent global economic crisis, the country recorded an impressive real GDP growth of 6.3% in 2009. This is at a time when other countries in the region and world over were posting negative growth rates. The country also attained a single-digit inflation level of 9.9% at end December 2009 while the exchange rate of the Kwacha against major currencies has remained relatively stable. In addition, the financial sector has been stable with improvement in banking services. These impressive economic trends suggest that the reform programmes that the Government has implemented are now bearing fruit. The reforms have focused on  BIS Review 51/2010  1  the restructuring of the economy, to let markets determine key decisions so as to allow the private sector take the lead in providing investment in the economy. However, despite the progress noted above, we are still far from achieving many of our developmental objectives. We are alive to the fact that we cannot achieve our development ambitions if we close ourselves from the rest of the world. The economy faces enormous financing needs especially in view of the high levels of poverty among our people. We are also alive to the fact that these challenges do not just end at obtaining a good sovereign rating or raising low-cost finance, but more importantly prudently deploying funds raised to projects with a high rate of both social and economic return. This is the challenge we face.

This strength in consumption was accompanied by solid income growth, as real disposable income increased at a 3.6 percent annual rate in the fourth quarter, reflecting the stronger labor market. The pace of improvement in the labor market has slowed in recent months from the strong pace at the end of last year. Nonfarm payroll employment increased in the first quarter by about 200,000 per month, well below the pace of the fourth quarter. This slowdown was broad-based, with job growth slowing in both the goods-producing and the service-providing sectors. The unemployment rate was 5.5 percent in March: analysis by my staff suggests that the unemployment rate is nearing the point where we may begin to see a pickup in the pace of real wage gains. If this proves correct and unemployment continues to decline as I expect, then these stronger wage gains could help support solid income growth even if the pace of employment growth slows. However, it will be important to monitor developments to determine whether the softness in the March labor market report evident on Friday foreshadows a more substantial slowing in the labor market than I currently anticipate. The March labor market report is another indicator that the first quarter is likely to be quite weak. Our current projection is that the economy will grow at about a 1 percent annual rate in the first quarter of 2015. This softer performance is suggested by a wide range of recent indicators that have surprised to the downside over the past couple of months.
I will focus my remarks on the work done at the international level by the Basle Committee on Banking Supervision, which issued a report and sound practice recommendations on January 28 with regard to banks’ dealings with HLIs. Before I get too far into the details, let me share with you my overall approach to the issues we will be discussing this morning. My views have been shaped not only by my positions as Chairman of the Basle Committee on Banking Supervision and President of the Federal Reserve Bank of New York, but also by my 22 years of experience as a commercial banker. Both my private and public sector experience have led me to conclude that the LTCM episode, and the proper supervisory response to it, are fundamentally about two things: leverage and good judgment. Leverage is an important part of our financial system. Most of the time leverage plays a positive role, resulting in greater market liquidity, greater credit availability, and a more efficient allocation of resources in our economy. But problems can arise when financial institutions go too far in extending credit to their customers and counterparties. That’s where good judgment comes in. In my view, the most important decisions a banker can make are whom to do business with and how far that business relationship should be pursued. Those judgments are not easy: one of our fundamental aims as supervisors should be to see that banks are using the right tools to make those decisions.

It has provided the platform needed going forward to restrain inflation pressures, and to maintain anchored inflation expectations, at a time when, understandably, there is public debate about the outlook given that CPI inflation rose above 3% for the first time, triggering an open letter from the Governor, on behalf of the Committee, to the Chancellor. Looking ahead, my votes, and my approach to communicating our monetary strategy, will depend on balancing the medium-term prospect for demand pressures alongside uncertainties about supply conditions and near-term inflation expectations caused by volatility in energy costs. This will entail making judgments about a whole range of influences, including whether or not residual slack in the labour market might in time, given robust business investment, help to ease capacity constraints; whether or not competitive conditions amongst retailers will dampen the feed through of accelerating producer prices into consumer prices; and, most crucially of all, whether wage bargainers and price setters recognise the absolute determination of the Committee to maintain price stability. Risks to the global capital markets If anchored inflation expectations have so far been maintained, here and elsewhere, two other risks in, and for, the global financial environment continue to preoccupy commentators: current account imbalances; and compressed risk premia, together with an apparently high risk appetite, in credit markets. There are, I would suggest, some interesting contrasts between these two risks, which – following the Bank’s Financial Stability Report – I shall call “global imbalances” and “low risk premia”.
In fact, it appears that in the current environment, higher prices are being passed on more quickly – and are also being more readily accepted – than was the case until just recently. In conjunction with this, longerterm inflation expectations have also been moving upwards slightly over the past quarters. Furthermore, there are clear indications of wage growth gathering momentum. How is the SNB handling this situation? We already made our initial response to the impending inflationary pressure in the final months of 2021. Both inflation and our inflation forecast at that time were still at a very low level. At our monetary policy assessment in December, we announced that we would allow the Swiss franc to appreciate to a certain extent in nominal terms in order to reduce the inflationary pressure from abroad. The Swiss franc gained around 4% in nominal terms between autumn 2021 and spring 2022, making imports cheaper and so countering the general increase in prices. In June 2022, we then raised  Page 4/16  the SNB policy rate for the first time in 15 years, by half a percentage point to −0.25%. At the same time, we signalled that further interest rate moves may be necessary in the foreseeable future. With our policy rate rise, the Swiss franc appreciated further. The need for monetary policy tightening is shown by our conditional inflation forecast of June 2022 (cf. Chart 5).

Sources: Statistics Sweden and the Riksbank  10. GDP gap, September and in real time Per cent 6  6  4  4  September 2011 Real time  2  2  0  0  -2  -2  -4  -4  -6  -6  -8  -8 05  06  07  08  09  10  11  12  13  Note. September 2011 refers to the PF gap. Real time refers to the HP gap except from October 2010 and onwards when the PF gap is used. Sources: Statistics Sweden and the Riksbank  BIS central bankers’ speeches  13  11. Capacity utilisation Per cent, seasonally-adjusted data 100  100 Capacity utilisation in the manufacturing sector  95  95  Mean, 1996-2008  90  90  85  85  80  80  75  75  70  70 95  97  99  01  03  05  07  09  11  Source: Statistics Sweden  12.
5  This is discussed in detail by my former MPC colleague, Stephen Nickell in ‘Why Has Inflation Been So Low Since 1999?’  6  Estimates from Kenneth Rogoff, ‘Globalization and Global Disinflation’, paper prepared for the Federal Reserve Bank of Kansas City conference on ‘Monetary Policy and Uncertainty: Adapting to a Changing Economy’ Jackson Hole, WY, August  2  BIS Review 70/2006  decline has been particularly marked in Africa, Latin America and the transition economies but is also significant in the UK and other developed countries. None of this makes monetary policy any less important. Ultimately inflation in the UK is a product of our monetary policy. Inflation would certainly reappear if we relaxed. But the disinflationary pressures from the Far East and elsewhere have made our job easier. In the UK, interest rates are set to deliver the inflation target. If there is disinflationary pressure from the rest of the world then that allows us to set lower interest rates (and accommodate a higher rate of price increases in services) than would otherwise have been the case. Thus the consequence is lower interest rates as well as low inflation. Prospects for UK inflation That leaves the question whether that benign trend is likely to continue in the future. Over the past year, the downward trend in the prices of imported goods has stopped and import prices have started to rise, even after excluding oil and erratic items (Chart 4).

In an open letter published three weeks ago on climate-related financial risks from the Governor of Bank of England Mark Carney, Governor of Banque de France François Villeroy de Galhau and Chair of the Network for Greening the Financial Services Frank Elderson, the significant effects of climate change are highlighted and a call for action from central banks and supervision is issued, with specific recommendations where central banks are encouraged to integrate sustainability into their own portfolio management. In closing, the authors recognize that “climate change is a global problem, which requires global solutions, in which the whole financial sector has a crucial role to play”. Today we have unlocked the gates towards exotic, yet newsworthy debates here, in Bucharest. Therefore, permit me to extend an open invitation to you all for further discussions at the National Bank of Romania about the impact of climate changes on economies, finance and central banking. We will be honored to host such a conference in Bucharest. Thank you for your attention. 2/2  BIS central bankers' speeches
In my remarks this evening, I’m going to talk about the current state of the economy, where it’s headed, and what the Federal Reserve is doing to boost growth while keeping inflation low. My remarks represent my own views and not those of others in the Federal Reserve System. It’s been over two-and-a-half years since the end of the worst recession of the post-World War II period. The economy is growing, and the recent economic news has been increasingly positive. This is very welcome progress, but it’s brought us only part of the way back. Unemployment remains a huge problem, and that means real hardship for millions of Americans. The severe recession and subdued recovery have prompted the Fed to carry out a series of extraordinary policy actions to restore the economy to health. Most notably, we’ve kept our benchmark short-term interest rate near zero for over three years. This aggressive Fed response is an important reason why the economy has moved to more solid ground. But, as I’ll explain, the Fed’s job is not over yet. Far from it. Congress has assigned the Fed two goals: maximum employment and stable prices. We have lots of work to do before we can say we’ve met those goals. Looking at past deep recessions, you would have expected the economy to be doing much better than it is by now. Why has this recovery been so lackluster? The reason has everything to do with what took place beforehand.

In these three countries labour market institutions are currently assessed to be more flexible than in Luxembourg, Italy, France, Germany, Belgium and the Netherlands. This should help achieve a balance of employment protection that gives both stability – encouraging workers to invest in firm-specific skills – and mobility – allowing for reallocation between productive and non-productive sectors.1 These same countries have also introduced several measures to help connect wage levels more closely with actual productivity developments. The link between collective bargaining and economic conditions has been strengthened by the possibility for more firm-level agreements. In Greece, wage floors have been significantly reduced to boost youth employment creation; in Portugal, they have been frozen and overtime pay considerably reduced. Wage indexation has become less prominent in Spain and in Cyprus it has been abolished. In all these countries the labour market reforms have started to have an impact on private sector wages. Private sector compensation per employee has fallen significantly in Greece since 2011, correcting what was an unsustainable increase prior to crisis, and it has also started to adjust in Spain, Portugal and Cyprus in 2012–13. I fully recognise the difficulties this process creates, yet this has to be set against the need for wages to adjust to reduce unemployment and restore external competitiveness. We are expecting that that these positive effects will dominate going forward and help employment to begin recovering in the near future.