samchain/econo-pairs-v1 huggingface dataset:
Any central banker’s ears will prick up at this, given the importance of an earlier literature – associated with Kydland & Prescott, Barro, Fischer 24 – in helping to explain the inflation problems of the past and to make the case for central bank independence. The ‘old’ problem was about the incentive of a monetary authority to cheat, or renege on promises, by generating surprise inflationary booms in order to secure an increase in output and jobs. This was, indeed, pretty tempting for politicians when they had their hands on the interest rate lever. In a rational world, the result was no permanent increase in jobs but a higher-than-desired steady-state rate of inflation. And the solutions variously offered by the academy included appointing a ‘conservative central banker’ more averse to inflation than society at large, or writing a ‘contract’ that incentivises the monetary authority to do the right thing 25 . In practice, the solution has amounted to a combination of central bank independence, clear goals, and transparency. These real-world central bankers care about ensuring that nominal magnitudes do not distort economic decision taking, and they care about their reputations. But they are not ‘conservative’ in the sense of being ‘inflation nutters’. Rather they are ‘dutiful’ in the sense of sticking to a clear, symmetric mandate. That, many would argue, has been a necessary condition for achieving credibility. But now it is argued that a monetary authority does, after all, still have an incentive to cheat.

That points, I think, to keeping things as straightforward as possible, without glossing over uncertainties and risks. The two threads are intertwined. We have a better chance of keeping inflation expectations anchored to the target if the target is simple to communicate; and if we do not over elaborate, or slip in to being overly ambitious about, our conduct of cyclical policy. BIS Review 46/2006  11
The Swiss franc was overvalued against a broad range of currencies, resulting in a severe deterioration in the economic and inflation outlook for Switzerland, threatening severe consequences for the real economy. To turn this dramatic tide of events, at first the SNB increased its liquidity – in August 2011 alone, liquidity expansion amounted to CHF 170 billion. This measure, however, did not have a sustained effect. Finally, in September 2011, the SNB introduced a minimum exchange rate of CHF 1.20 per euro as a temporary, exceptional measure (cf. chart 9). The SNB was thereby prepared to use its balance sheet to purchase foreign currency in order to stop the spread of panic. While this policy measure corrected the exceptional strength of the Swiss franc, the currency remained substantially overvalued. Nevertheless, the stabilisation of the euro/Swiss franc exchange rate allowed the Swiss economy to adjust to the new currency reality. In addition, the inflation outlook, which had worsened due to the strong Swiss franc, brightened again. The euro crisis impacted not just the economy in Switzerland, but also the economies and exchange rates of the other neighbouring countries under review. They, too, eased their 4  BIS central bankers’ speeches  monetary policies. In Sweden, from the end of 2011 to the end of 2013, interest rates were lowered in successive steps to 1%; between 2010 and 2011, they had been raised to 2% on the back of robust economic growth.

References  4/5  BIS central bankers' speeches  Brainard, W. (1967): “Uncertainty about the effectiveness of policy”, American Economic Review 57, 411–425 Constâncio, V. (2016): “The challenge of low real interest rates for monetary policy”, speech delivered on 15 June 2016 Hamilton, J. D., J. Hatzius, E. S. Harris and K. D. West (2015): “The equilibrium real funds rate: Past, present, and future”, Hutchins center on fiscal & monetary policy at Brookings, Working Paper 16 Hansen, F. and K. Torstensen (2016): “Does high debt growth in upturns lead to a more pronounced fall in consumption in downturns?”, Economic commentaries 8/16, Norges Bank Laubach, T. and J. C. Williams (2015): “Measuring the natural rate of interest redux”, Hutchins center on fiscal & monetary policy at Brookings, Working Paper 15 Lund, K., K., K. Tafjord and M. Øwre-Johnsen (2016): “What drives the risk premium in Nibor?”, Economic commentaries 10/2016, Norges Bank Rachel, L. and T. D. Smith (2015): “Secular drivers of the global real interest rate”, Staff Working Paper 571, Bank of England Zhu, F. (2016): “Understanding the changing equilibrium real interest rates in AsiaPacific”, BIS Working Papers 567 1 The spread between the money market rate and the expected key policy rate (the interest rate premium) can vary  somewhat over time (see Lund et al (2016) for a discussion of the premium in the Norwegian three-month money market rate). 5/5  BIS central bankers' speeches
Although at different speeds and with notable exceptions (the Bank of Japan, for instance), it becomes increasingly clear that the low interest rate era is drawing to a close. Emerging economies are usually affected when interest rates go up in advanced economies and it is essential that such episodes find them in good order domestically. 4  This is why the ongoing tensions surrounding macroeconomic equilibria in Romania since the previous Report are a reason for concern. The chief driver of economic growth was domestic consumption (Figure 21), while the external balance made a negative contribution because of the widening deficit on trade in goods (Figure 22). Investment did not contribute significantly to economic growth. Economic growth above potential is not always a cause for concern, particularly when it takes place after a recession, for instance. Moreover, there are a number of arguments that show that the economy’s growth potential can be larger than that calculated at present for both technical reasons (the time series are not long enough and were influenced by the 2009-2010 recession) and fundamental reasons, which, however, can be turned to good account only by structural adjustments. Thus, full employment is a textbook requirement for fulfilling the economic growth potential: important resources come, in this respect, from the almost 3 million Romanians working abroad and circa 4 million inactive Romanians. Nor is the growth structure per se a systemic risk, especially if part of the pick-up in domestic demand is accommodated by the rise in domestic supply.

The negative natural population growth has become significantly more pronounced over the last years, Romania reporting one of the highest values in the EU, while emigration is endemic. Furthermore, emigration also affects highskilled professions, such as those in the healthcare sector. Thus, pressures emerge that contribute to increasing tensions on macroeconomic equilibria and contain potential GDP growth. In order to mitigate risks to financial stability, the Report highlights a number of possible measures to (i) reduce the risk of public debt refinancing, also with the help of measures to further extend the maturity of debt instruments, (ii) align the structural deficit with the medium-term objective, (iii) enhance debtors’ capacity to withstand adverse developments, (iv) ensure the better targeting of the “First Home“ programme from a social perspective, (v) recapitalise the companies with net worth below the required threshold and review the market entry and exit conditions for firms, (vi) improve employment, lower the labour 8  underutilisation rate, also in what concerns regional disparities, and (vii) increase the legislative framework predictability. The National Bank of Romania monitors closely the evolution of risks to financial stability and seeks to mitigate the risk of household overindebtedness through the macroprudential policies it has adopted or prepares to adopt. Moreover, the NBR considers that debtors would be better protected in the medium run if they requested, to a larger extent, to enter fixed interest rate credit agreements.
It is available to the public in 1/4  BIS central bankers' speeches  the form of cash, and to commercial banks in the form of reserve accounts held at the Bank. Private money takes the form of deposits in commercial banks, held by the public – our bank accounts. Central bank money anchors the system – it establishes and maintains sterling as the monetary unit of account in this country. It does that by having the full force backing of the state. But it is a small part of the overall monetary system, and increasingly so when viewed through the lens of payments. The use of cash in payments has been declining for some time, and the pace of decline has picked up during the period of Covid. Somewhat paradoxically, the amount of cash in issue has not declined, and there are sections of the population who continue to rely on cash. To be clear, we have no plans to end banknotes. Commercial bank money is widely used as a means of payment, a store of value, and for making loans in the real economy. But use of commercial bank money has come to rely on its relative efficiency, the regulation of the banking system to ensure its safety and soundness, depositor protection, and public confidence that commercial bank money can be exchanged for central bank money in the form of cash at all times.

I hope from this you can get the sense of how important this potential innovation in digital money is, and why we must – both domestically and working with international partners – ensure that we understand and respond to the public interest issues that arise here, so that we can do our job of protecting stability, but also so that innovation can happen in a world where the public interest is well defined and protected. I am going to end – since time is up – by merely listing the other elements of public interest that I could, and probably should have covered, with respect to the innovation of digital currency, but which will have to wait for another day. I could have talked about monetary policy and controlling interest rates in a world of digital money. I could have talked about the public interest in competition in the financial system, about financial inclusion, and about data protection and privacy. I could have talked about the potential for digital money to speed up and reduce the transactions cost of international payments and transfers. And, finally, we cannot ignore the risks that digital money is attractive for money launderers and cyber criminals. All I can say today, I hope this gives the sense of the scale of this area of innovation and how important the subject is. Thank you I am grateful to Jas Ellis, Andrew Hauser, Karen Jude and Sam Woods for their help with preparing these remarks. 4/4  BIS central bankers' speeches
A No Deal outcome would result in an immediate, material reduction in the supply capacity of the UK economy as well as a negative shock to demand. There is little monetary policy can do to offset the former. A major negative supply shock is extremely unusual in advanced economies – the last one was the 1970s oil shock, even if the possibility of the next one is brewing in the Twittersphere. Given the exceptional circumstance associated with Brexit, the MPC would use the flexibility in its remit to support our economy’s transition as much as possible. But there are clearly limits to our ability to do so. The MPC can stretch the horizon over which it returns inflation to target but it would never do so to the point of breaking. The possibility that Brexit would lower the equilibrium interest rate and therefore the stimulus provided at a given level of Bank Rate reinforces this point. In the UK as in other advanced economies, if there is a 13  These moves in betting odds are consistent with financial market indicators of No Deal risk, such as the skew in the option-implied distribution for sterling. 14 Since the referendum, UK-focused equity prices have underperformed the FTSE-100 by around 25 percentage points and the S&P by some 45 percentage points. Sterling has hovered some 15-20% below its November 2015 peak.

We all share the same social model – to which we are strongly attached – combining a high volume of public services with markedly less inequality than in other countries – for example in the United States. The right response to inequality, therefore, is not a change of monetary policy. And it is not more protectionism, even though the rules of global trade need to ensure the benefits are spread more widely. The correct response to inequality is to develop the right social model. d) The euro is controlled by technocrats in Frankfurt Yes, Frankfurt is in Germany… just as Brussels is in Belgium. But yes, despite this, the ECB belongs to us all: not just to the Germans – as the Italians tend to think – and not just to the Italians – as the Germans tend to think. With the Eurosystem, that is the ECB and the 19 national central banks, we have had a genuine federal system, one that works, since 1999. We take our decisions collegially, within the Governing Council, and then apply them in each of our member countries. ECB staff – at the heart of the system – only account for 5% of total Eurosystem headcount. France and Italy thus have much more say in decisions today: before the advent of the euro, de facto our monetary policies closely followed that of Germany.
That is why, for example, we have clarified expectations about how firms should manage risks from cryptoassets and why, with the FCA, we set up and chaired the Artificial Intelligence Public-Private Forum to help us better understand the impact of artificial intelligence and machine learning on financial services. [3] It is also why we published this July, with the FCA and Bank as Financial Markets Infrastructure regulator, a discussion paper on critical third parties proposing proportionate measures to strengthen their resilience in a manner that supports the openness of the UK as a financial centre. [4] Good prudential regulation also changes to meet new sorts of risk, which is why we were amongst the first regulators globally to develop standards for operational resilience. [5] It turns out that white blood cells that target immune responses at threats, and direct them away from our own bodies, are called ‘regulatory T cells’, although I doubt they were named after prudential regulators! But they do what we need to do when we choose to take action. We need to boost the health of the markets we oversee, by letting our ‘regulatory T-cells’ target the threats we face in a tailored manner, leaving the healthy parts undisturbed. This is why, for example, we are  Page 4  building what we call a Strong and Simple framework for small domestic banks and building societies for whom Basel standards were not designed.

Ardian Fullani: Monetary & financial stability policies – lessons from the crisis Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the 8th International Conference of the Bank of Albania: "Monetary & Financial Stability Policies – Lessons from the Crisis", Tirana, 17 September 2009. *  *  *  Honourable Mr. Prime Minister, Dear Governors, Distinguished guests, I feel deeply privileged to open the proceedings of the 8th International Conference of the Bank of Albania entitled: “Monetary & Financial Stability Policies – Lessons from the Crisis”. I hope the proceedings will help the participants better realize the issues facing the global economy during this period and draw the proper lessons. I am personally convinced that the prominent speakers’ reputation is a guarantee in this regard. Before I invite the guests to discuss the features and lessons drawn from the global and regional crisis according to their viewpoints and experiences, allow me to say a few words on this conference. The topic chosen to be dealt with in this conference is at the forefront of the institutions’ agenda, responsible for macroeconomic policies and financial system surveillance at a national and international level. The panic that followed the Lehman Brothers’ failure almost a year ago transformed the turmoil in the U.S. mortgage loan market into a genuine globalwide financial crisis.
John C Williams: No man is an island Remarks by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the 2019 Asia Economic Policy Conference, Federal Reserve Bank of San Francisco, San Francisco, California, 14 November 2019. * * * As prepared for delivery “No man is an island entire of itself,” wrote the poet John Donne in 1624. Almost four centuries later, his words still ring true. And they are particularly salient when it comes to the financial fortunes of the global economy. Today I’m going to explore the commonalities and interconnectedness of the global economy, and what that means for the outlook in the United States. But before I delve into these ideas, I want to say what a pleasure it is to be back at the San Francisco Fed, among so many friendly faces. The Asia Economic Policy Conference is always a fascinating day, and I’d like to thank Mary Daly for the invitation to speak, and Zheng Liu and Mark Spiegel for putting together an outstanding program. I knew I was back in San Francisco when this morning I spent 20 minutes in line, waiting to spend five dollars on a cup of coffee. This is one thing for which inflation appears to be alive and well.

Because your industry has taken a lead in learning from the past, in leading the changes needed and in having a sense of your responsibility to the wider economy. Yours is a model of engagement for others to emulate. And I look forward to continuing to work together. Thank you. BIS central bankers’ speeches  5
At one time, mortgage backed and asset backed securities of government owned or government sponsored agencies, were considered good alternatives for the generation of added spreads for central banks. However, today, the market fluctuations and credit concerns arising from the mortgage and housing market crises due to overall market downturns and increased mortgage defaults in developed countries, has exposed new vulnerabilities and risks attached to such investment avenues. As a result, the vital importance of managing risks associated with reserve management have been increasing exponentially in recent times. 4. That development will lead us to another important aspect in this discussion. In the past, measuring risk was mostly based on credit ratings. For this purpose, the yardstick for measurement was usually provided by the rating agencies who were supposed to rate countries and institutions in accordance with certain predetermined norms. However, it is now clear that the rating agencies on whom we relied heavily to provide us with independent assessments of the standing  2  BIS Review 99/2008  of institutions and instruments, have obviously failed to warn of possible weaknesses in the balance sheets of such institutions and investment houses. In fact, perhaps unwittingly, they may have even contributed to the turmoil, by their ratings of pooled assets with large vulnerabilities, as assets of prime class. This may have been due to the weaknesses in their approaches, the lack of proper skills or the weaknesses of their governance frameworks.

Ajith Nivard Cabraal: Foreign exchange reserve management Inaugural address by Mr Ajith Nivard Cabraal, Governor of the Central Bank of Sri Lanka, at the SAARCFINANCE seminar on Foreign Exchange Reserve Management, organised by the Centre for Banking Studies of the Central Bank of Sri Lanka, Colombo, 15 August 2008. *  *  *  Deputy Governors, Director of the CBS, My dear friends, 1. I am pleased to participate at the opening ceremony of this SAARCFINANCE seminar on foreign exchange reserve management. I also welcome all participants to this course and extend to the participants from the central banks of our neighboring countries, our resource persons from BIS, Deutsche Bank group, Citigroup and Reserve Bank of India, a very warm welcome to our country as well. 2. At the 17th SAARCFINANCE Governors’ meeting held in Washington in April 2008, it was decided to organize a seminar in foreign exchange reserve management. It was also decided that the Centre for Banking Studies (CBS) in Sri Lanka, with its over 26 years of experience in training and developing financial sector professionals, together with the International Operations Department of the CBSL, should host this seminar, so as to provide a forum within the region to discuss the latest challenges facing the managers of sovereign reserves at present. 3. My dear friends, foreign exchange reserve management has gained increased importance in Central bank activities in the recent past, due to two factors.
I would like to hereby underline the importance of economic  BIS Review 68/2010  17  units to closely monitor our future-oriented messages rather than short-term developments, for the sustainability of monetary policy gains during the crisis. 51. As of the last quarter of 2008, we focused on containing the unfavorable impact of the global crisis on the domestic economic activity without undermining the primary objective of maintaining price stability and largely did our share in this respect. A prudent monetary policy is necessary, but not sufficient by itself to maintain the resilience of the economy against global risk. Strengthening the commitment to fiscal discipline and the structural reform agenda is crucial for supporting the favorable outcomes of monetary policy decisions and maintaining low interest rates. In this respect, timely implementation of the structural reforms both entailed in the harmonization and convergence process to European Union and also in the Medium Term Program remains critically important. Therefore, I would like to end my speech by reminding that we will continue to closely monitor public finance developments while determining our medium term monetary policy strategies. Thank you. 18  BIS Review 68/2010

(Exhibit 5) Of course, the Federal Reserve’s large scale interventions in the Treasury market over this period may also have had an impact on this measure. Turning to corporate bonds, given their heterogeneous nature, liquidity in the corporate bond market depends on the ability and willingness of dealers to hold these securities on their balance sheets while they find buyers. Disaggregated data on dealer balance sheet holdings have only been published since April 2013. While limited in terms of its history, these data indicate no clear reduction in investment grade security holdings over time, but do show a significant reduction in high-yield security holdings since the end of the financial crisis. This might be indicative of deterioration in market liquidity in corporate bonds. To investigate corporate bond market liquidity in more detail, let’s examine three liquidity measures: the average trade size, “effective” bid-ask spreads and price impact. The evidence on the average trade size for investment grade corporate bonds indicates a slight reduction from between $ to $ in the early 2000s to around $ in the last few years. (Exhibit 6) However, price measures of corporate bond liquidity do not substantiate the trend in this quantity measure. The effective bid-ask spread has been trending down since the early 2000s, around the same time that TRACE reporting was introduced. The spread spiked during the financial crisis, but is now lower than its pre-crisis levels.