samchain/econo-pairs-v1 huggingface dataset:
As a result, after nearly $ trillion of agency MBS reinvestment purchases—due in large part to refinancing activity among U.S. homeowners—there will be no agency MBS reinvestments for the first time since September 2011. In my remarks, I will first review progress on the FOMC’s program to normalize the stance of monetary policy, which so far has shown that the Federal Reserve’s monetary policy implementation framework continues to provide appropriate control over the federal funds rate and other short-term rates. I will focus on the balance sheet and discuss the drivers of the longrun balance sheet size and composition. Next, I will review the relationship between reserve levels, which fall as the portfolio declines, and short-term interest rates. Then, I will discuss the technical adjustment to the rate of interest paid on reserves (IOR), which the Federal Reserve made in June to provide greater comfort that the effective federal funds rate (EFFR) would remain within the target range set by the FOMC. 5 I will discuss how this adjustment had exactly the intended effect on money market conditions, and how it has reinforced my certainty that the Federal Reserve is well positioned to maintain the public’s high confidence in its ability to appropriately control overnight interest rates. 1 I would like to thank Linsey Molloy and Kathryn Chen for their assistance in the preparation of these remarks, Darrian Robinson and Anne Chen for their assistance with data, and colleagues in the Federal Reserve System for insightful comments and suggestions.

Since the June technical adjustment, rates on federal funds transactions have continued to edge higher in the range, and most recently the EFFR has risen to the IOR rate, or five basis points below the top of the target range. 27 It is possible that the EFFR could fluctuate around the IOR rate or exceed the IOR rate. However, I don’t believe that this upward pressure on the EFFR signals that we’ve reached balance sheet normalization or that we are at the “steep” portion of the reserve demand curve, where reserves are scarce. This is supported by the lack of evidence across a range of indicators signaling aggregate reserve scarcity. Let me be clear: Observing the EFFR and other rates above the IOR rate is not a sufficient condition for reserve scarcity. 28 In the last few days, even amid upward pressure in overnight funding rates, we still have not seen the range of signs I described earlier that would indicate reserve scarcity, such as significant 25  See Minutes of the Federal Open Market Committee, March 17 – 18, 2015. Recall that before liftoff, the main concern was that rates would fall below the bottom of the target range. Thus, policymakers thought term draining operations might be helpful.
What gives me hope that this will really happen is that international pressure has increased – countries wishing to become full members of the global financial system are forced to at least live up to an international minimum standard. So which are the factors that lead to crises and how should they be dealt with? Experiences of crises in a large number of countries around the world It is possible to divide crises into those that only affect the financial sector and those where the financial sector forms part of – and aggravates – a broader economic crisis, as was the case in Sweden in the 1990s. The broader economic crises are usually based on untenable macroeconomic imbalances. Large deficits in central government finances or in the current account, unrealistic  BIS Review 83/2006  1  exchange rates or similar. One experience that Sweden shares with many other countries is that large and essentially desirable deregulation processes and other policy changes may lead to crises if they are not managed properly. The broader crises are more comprehensive and more difficult to resolve, partly because the possible solutions are not as clear-cut and entail weighing different social interests against one another. However, even the crises that specifically affect the financial sector, usually primarily the banks, often have their roots in weaknesses outside of the sector. These crises often result from a combination of "bad policies, bad banking and bad luck”.

This has already been achieved to some  BIS Review 83/2006  3  extent within the EU, but it needs to be achieved on a global basis. Moreover, the coordination and exchange of information must be strengthened both in “peacetime” and during crises. Not surprisingly, I consider it important to implement regional financial stability analyses to detect possible vulnerabilities; the type of analyses now being made in the IMF-led exercise in the Nordic-Baltic region. Furthermore, both the institutions and the public authorities must gain greater knowledge of where the risks end up and what might happen if the ultimate risk-takers suffer problems. The Nordic countries and the Baltic countries Financial integration has come a long way in the Nordic and Baltic countries. There is a close collaboration between the central banks and financial supervisory authorities in the Nordic countries. We have agreements on consultation in the event of crises and we hold joint crisis exercises. As Swedish banks play an important role in the Baltic countries, discussions are under way on the signing of a consultation agreement between the Swedish and Baltic authorities. One important weakness that remains is the unclear distribution of the financial costs between countries in the event of a crisis. A closely-linked but also unsolved issue is which country’s assessment of the situation will prevail and who may decide on measures such as closing a bank.
Banks are facing continuing pressures on their business models from a number of sources, including: •  The consequences of a low growth, low rates environment with ongoing private deleveraging;  •  The impact of a new regulatory framework designed to fix the fault lines that caused the crisis; and  •  The effect of determined progress on removing the implicit public subsidy of TooBig-To-Fail. Finally, some residual concerns about regulatory uncertainty, particularly in the euro area, may have been secondary reinforcements to the macroeconomic drivers of recent market turbulence. Financial reform and the state of the financial system However, this is not 2008. The largest cross-border banks are considerably stronger than during prior episodes of market stress. Common equity requirements are seven times the pre-crisis standard for most banks. For global systemically important banks (G-SIBs), they are more than ten times higher. Global standards require banks to hold much higher liquid asset buffers, to strengthen their trading books, and to reduce and simplify the formerly complex web of interbank exposures. In response, banks have built higher and better quality capital buffers (Chart 7), largely through retained earnings, and have reduced leverage. Between 2008 and 2015, advanced economy G-SIBs raised close to $ of equity, while almost $ was raised by major UK banks, over a period during which these banks’ risk-weighted assets fell.

In any given country, a monetary expansion aimed at boosting domestic demand will tend to reduce effective interest rates 9 relative to their equilibrium level, generating an excess of domestic investment over domestic saving that must be met with a capital inflow from abroad. But viewed from overseas, the corresponding capital outflow will tend to raise the short-term equilibrium rate (Chart 12), giving conventional monetary policy overseas more traction. In this way, the rising tide of global demand would raise all boats. 8  Svensson (2003), “Escaping from a Liquidity Trap and Deflation: The Foolproof Way and Others”, Journal of Economic Perspectives, makes the case that exchange rate intervention can help fight deflation in a small open economy. 9  That is, interest rates adjusted for the effects of any quantitative or credit easing. BIS central bankers’ speeches  13  Chart 12 Smaller domestic current account (CA) surplus lifts all boats  Wider policy implications Ultimately, for monetary policy at the zero lower bound to bridge to a better equilibrium, it must be reinforced by other policies. That is, the low interest rate environment puts a premium on domestic and international policy coordination. For example, lower interest rates create space for fiscal policy to boost domestic demand directly, should it be necessary, by lowering the financing cost faced by governments. And it doesn’t take a genius to recognise that a prolonged period of low interest rates can lead to a build-up of vulnerabilities which could derail an expansion and deepen a subsequent recession.
1 Since the crisis, there have been hundreds of conferences on the future of finance. Typically, these are full-to-bursting with bankers, central bankers, regulators and academics. And, typically, they are in transmit mode. These are conversations among the elite in the language of the elite. The Open Forum was a different animal, its cast much wider, its language much plainer. Attendees were in receive mode. The most important and compelling message the Bank received at the Open Forum came in the first session. The Bank had conducted some polling of perceptions of the financial sector – for example, by asking people what one word best described the future of financial markets. Among the Bank’s usual contacts, including those in the financial sector, the most used word was “regulated”. Many of us will have heard that message from financial insiders concerned about the perils of over-zealous regulators. For me, the more revealing responses came from the general public, from the customers, rather than the producers, of financial services. The word most used by them when describing financial markets was a rather different one: it was “corrupt”. Not far behind were words like “manipulated”, “self-serving”, “destructive” and “greedy”. I am sure many of you have heard those messages too. They are certainly ones I have encountered frequently on my visits around the country. Chart 1 shows the “word clouds” from the two samples. For the Bank’s usual contacts, 69% of the most-used words were either positive or neutral.

It is important to remember that the SNB’s activities must primarily be measured against the effectiveness of its monetary policy as well as the financial return on its investments. Conclusion To conclude, let me reiterate two points that have come up several times during my remarks. First: While the SNB is a global investor, it is also a special investor and rather far removed from the classical definition that applies in the private sector. Its investments are the direct result of its monetary policy. That policy continues to have priority over purely profit considerations in financial terms. The SNB must also meet specific requirements when selecting investments; return is obviously a factor, but it also needs to take risk and market liquidity into consideration. Finally, it must invest a significant volume of funds without disturbing the markets. This can prove difficult, and requires transitional periods in order to achieve the desired allocation. Second: The SNB tries to pursue the most efficient investment strategy possible. The fact that several central banks inform themselves about and are inspired by our experiences goes to show that we are sometimes an example for them. In so doing, the SNB also tries to be as transparent as possible, thereby meeting its duty to inform the public. The investment strategy is largely made public, and we are one of the few central banks to publish its results on a quarterly basis. Ladies and Gentlemen, I have now come to the end of my remarks.
Norges Bank can be of assistance in helping the industry to make the “proper” choices by providing a regulatory framework which maintains competition, while also encouraging that participants are faced with relative prices reflecting the real costs of the systems. Allow me to comment on these factors: 4.3.1. The importance of reliable information on risk and a clear division of responsibility  It is important that the banks provide more information on the actual risk in the payment systems, so that the risk is known and understood (see the second Lamfalussy minimum standard). Our knowledge of settlement risk in the Norwegian system is still insufficient. We know too little about exposure throughout the day, how it arises and the optimum approach to reducing it. We have to gain more insight into these factors, particularly since risk information will be an important element in granting licenses to interbank systems. Moreover, this information is also essential for the correct pricing of risk in payment services. In this connection, I would also like to point out what it means to specify the respective responsibilities of the netting provider and the participants (see the third Lamfalussy standard). I firmly believe that the law’s requirement that there shall be “one operator who is responsible for the establishment and operation of the system” may result in the necessary clarification of the division of responsibility in the payment system. For this reason, this requirement is not just a formality, but a real opportunity to create more transparency relative to the present system.

3  BIS Review 7/2000  Chart 2: The Lamfalussy minimum standards  Lamfalussy standards • Well-founded legal basis • The risk must be known and understood • Clear division of responsibility • Exposure limits • Settlement is to be completed even if the largest participant experiences problems • Objective and publicly-disclosed admission criteria • Operational, reliable technical systems • Satisfactory back-up routines  The Lamfalussy minimum standards are still viable but, as mentioned above, some adjustments have been necessary in the light of what has been experienced since they first appeared in 1990. A proposal for revised standards is currently being evaluated in the BIS3 and a final version is expected to be available some time next year. I have pointed out these requirements because they are also relevent for us in Norway. If there should ever be any link to TARGET,4 our interbank systems would be expected to meet similar requirements. Moreover, we must assume that foreign bankers will demand that our systems satisfy international requirements. We could probably discuss whether these requirements are equally relevant for all portions of the NICS-system,5 but I think that in a given situation involving a link-up with an international system, we will have only one choice - full implementation of the requirements! In the proposed system for licensing interbank systems, emphasis will be placed on evaluating whether the systems fulfil such international requirements. 3. Risk and efficiency in the Norwegian payment system  3.1.
For instance, the 2019 UN Global Assessment Report on Biodiversity and Ecosystem Services (IPBES)5 reminds us that human activity caused a catastrophic decline in Earth’s biodiversity (e.g. the current rate of extinction of species is between 100 and 1,000 times higher than the reference rate of the past million years). More recently the Dasgupta review6 in the UK states how severe the risks linked to biodiversity loss are and how complex the interactions between human actions and nature are. The scientific community actually tells us that these ecological risks are interconnected and should not be addressed in silo. For example, the concept of One Health developed by several international organisations suggests that human, animal and environmental health are interconnected and can only be addressed jointly. In its final declaration of the Global Health summit in Rome (May 21), President Mario Draghi stated:7 “The Rome Declaration rightly emphasises the importance of pursuing a One Health approach ‐ and here I’m coming to climate ‐, to preserve human, animal and environmental safety. This is the key priority of Italy’s G20 Presidency. The Scientific Expert Panel has stated how most infectious diseases are caused by pathogens that are derived from animals. Their emergence is largely driven by deforestation, wildlife exploitation, and other human activities. Effective environmental action can help to defend animal welfare and ultimately mitigate the risk of new health threats. When pursuing a common strategy to prevent future pandemics, we must uphold our commitment to limit environmental damage and tackle the climate crisis.

It is not only a topic for today’s conference but a challenge for each of us, for our societies and democracies, as well as for the financial system in the long run. Thank you for your attention  8
Within imports, the downward adjustment of consumer goods stands out, in response to the performance of car sales in the local market, but also to the decrease in the purchase of machinery and equipment (specifically trucks), which is estimated to continue beyond the first quarter. This is reflected in the current account, which will have deficits of somewhat under 3% of GDP in the projection horizon. III.3. Working assumptions The baseline projection scenario is made using a set of information and analysis that determine how inflation will converge to the target. This includes the expected behavior of the activity gap—which factors in potential and actual growth—, the copper price, the oil price, the dollar in the world, etcetera. Page 6 of 18  The baseline scenario also includes working assumptions for variables such as the real exchange rate, the behavior of fiscal policy and the MPR. In particular, with respect to the real exchange rate, we foresee that during the next two years it will fluctuate around its averages of the last 15 and 20 years. In the fiscal area, it is assumed that in 2019 the economy will receive a boost consistent with the approved budget. From then onwards, it is assumed that the structural deficit will follow the path of gradual descent defined by the authority. No modifications are introduced as a result of the recent announcements to streamline public investments given that, according to authorities’ statements, these will be made within the limits imposed by the structural balance target.

As part of this effort, two key global standards are relevant to the trust industry – (i) transparency of beneficial ownership, and (ii) tax transparency through Automatic Exchange of Information (“AEOI”) between tax jurisdictions. These rules, when applied appropriately and consistently across all jurisdictions, can help to more effectively combat money laundering and other serious financial crimes including on tax. This in turn, will safeguard the integrity of the global financial system, of which the trust industry is a part, and create the conditions for sustainable growth. Increased focus on transparency of Beneficial Ownership 11. Let me first touch on the increased focus on beneficial ownership. 12. Given the risks of the misuse of corporate vehicles for illicit purposes, there has been increased international focus on transparency of beneficial ownership. Initiatives such as the FATF Anti-Corruption Work Group and the work of the Global Forum on Transparency and Exchange of Information for Tax Purposes (“Global Forum”) are good examples. 13. There is also growing recognition that transparency of beneficial ownership will help to prevent and combat financial crimes. We can thus expect international standards setters such as the FATF to probe deeper in their assessment of how countries promote transparency of beneficial ownership. For example, the revised FATF Recommendations  2  BIS central bankers’ speeches  now include additional elaboration on the manner in which countries can go about enhancing the transparency of trusts.
For Kabwe Municipal Council, the main accountability and responsibility will be to maintain and preserve the tree and its surroundings to ensure that the area is well protected and cleaned. The Bank has also worked closely with Zambia Electricity Supply Corporation (ZESCO) who have kindly facilitated the provision of power to enable us light the MUKUYU TREE on a continuous basis. We have also worked closely with the National Heritage Conservation Commission whose input has been invaluable in providing insight into the history and status of the MUKUYU TREE as a national heritage site. On behalf of the Bank of Zambia Board of Directors, senior management and staff and indeed on my own behalf I wish to thank all our partners for the good cooperation and oneness of vision that has culminated in the commemoration and re-launch of the MUKUYU TREE today. Distinguished Guests Before I conclude my speech, I wish to pose a challenge to the general members of the public and in particular to the people invited to grace this occasion today. The MUKUYU TREE has been identified and depicted as a national monument under the Laws of Zambia. By this assignment the tree belongs to all ZAMBIANS, young and old alike. My challenge to you all is to cherish it and preserve it.

This experience, unfortunately, did not only affect us here, but the whole continent and beyond, touching lives far and wide. I am referring to the infamous Slave Trade Era. Historians, time and again, narrate to us tales of how this wonderful tree was used as the resting place for our forefathers, who were captured into slavery as they were marched across this land, being traded as commodities from Africa to far away lands. It is now common knowledge, rather than myth, that our fore-fathers were being traded under this same spot on which we stand today, proud and free. After the abolition of the Slave Trade, the TREE attained a new significance as a “rendevous” or meeting place. It was from under this very tree that some of our fore-fathers were recruited and taken to fight in the First and Second World Wars. As mentioned earlier, later came the happy times of celebrations at Christmas, Independence Day and Labour Day. In the year 2002, the Bank decided to recognize the historical significance of the Mukuyu Tree and depicted it on the highest denomination of Zambian currency, the K50,000 banknote. It was therefore a matter of concern for us when the Tree and its surroundings fell into a deplorable state due to the Municipal Council’s inability to meet the financial obligations attendant to its maintenance as a historical monument and national heritage site. The Bank therefore decided to adopt the Tree as part of its corporate social responsibility.