samchain/econo-pairs-v1 huggingface dataset:
The SNB continues to monitor the developments on the real estate and mortgage markets very closely. Our focus is to assess if the banking sector’s overall resilience is adequate given the level of risk-taking and the level of vulnerabilities in the macroeconomic environment. The build-up of regulatory and voluntary buffers in response to the GFC has led to a substantial increase in the overall resilience of the banking sector. Going forward, this resilience must be preserved. As evidenced by the recent reactivation of the SCCyB, this implies adjusting capital buffers in response to the development of vulnerabilities in the mortgage and residential real estate markets. Let me conclude by underscoring that ensuring banking sector resilience is not a goal in itself. Rather, it is instrumental in achieving more stable economic growth, and ultimately benefits not only the banking sector, but society as a whole. 14  For a more detailed explanation, cf. Swiss National Bank, Financial Stability Report, June 2021, p. 13. ​Macroprudential policy beyond the pandemic: Taking stock and looking ahead Fritz Zurbrügg Vice Chairman of the Governing Board Swiss National Bank International Center for Monetary and Banking Studies (ICMB) Geneva, 29 March 2022  Slide 1  2  29.03.2022  Slide 2  3  29.03.2022  Slide 3  4  29.03.2022  Slide 4  5  29.03.2022  Thank you for your attention!

3/4  BIS central bankers' speeches  *** Dear participants, I avail the opportunity for addressing to this Conference and highlighting the importance of sharing knowledge and experiences among us on such an important theme. I would like to conclude my speech by thanking you again for the invitation! 4/4  BIS central bankers' speeches
Ratios of household debt and post-tax interest expenditure to disposable income (per cent)  debt ratio (lhs)  mar-06  mar-05  mar-04  mar-03  mar-02  mar-01  mar-00  mar-99  mar-98  mar-97  mar-96  mar-95  mar-94  mar-93  mar-92  mar-91  mar-90  mar-89  mar-88  mar-87  0 mar-86  0 mar-85  2  mar-84  20  mar-83  4  mar-82  40  mar-81  6  mar-80  60  mar-79  8  mar-78  80  mar-77  10  mar-76  100  mar-75  12  mar-74  120  mar-73  14  mar-72  140  mar-71  16  mar-70  160  interest ratio (rhs)  Sources: Statistics Sweden and the Riksbank  8  BIS Review 105/2006

Such a framework would almost certainly entail more focus on unwinding large balance sheet problems (both with respect to the sovereign and the financial system), reducing sovereign debt to more sustainable levels, making debt dynamics less vulnerable to shocks, increasing liquidity buffers, and preserving appropriate exchange rate arrangements. Addressing these issues would help reduce the risk of future capital account crises. It would create better conditions for private sector growth. In virtually every context where public sector debt burdens are high and fiscal deficits large, more ambition in the adjustment path should be positive for growth through the effect on confidence, interest rates, and the exchange rate. Of course the Fund can’t want reform more than its members. The principal burden for running a set of policies more commensurate with the risks emerging markets face in this world rests with their governments. The role of the Fund should be to help guide and encourage them to the point where they build in a more substantial degree of self-insurance. The Fund should not acquiesce in and validate policy frameworks that fall substantially short of the threshold necessary to safely navigate this world of high variability in the external environment and occasional domestic political pressures to weaken policies. Changing the surveillance framework Part of the challenge entails reorienting surveillance, the process through which the Fund’s policy advice is delivered, to make it more effective.
The increasing scepticism of the 1960s and the 1970s about monetary policy’s ability to fight inflation has given way to confidence that prudent, consistent and forward-looking monetary policy can contain the destructive forces of inflation. Global inflation figures suggest that such confidence is largely justified. In the industrialized world, inflation declined from 12% in 1980 to 1.4% in 2002.2 In the developing world, the decline of inflation has been even more remarkable with yearly rates tumbling from an average of 31 percent in the early 1980s to currently under 6%.3 Along with a significant decline in inflation, volatility of economic growth has fallen everywhere. Both in the U.S. as well as in Germany, the volatility of real GDP, averaged over four quarters, was about 30 percent less during the 1984 to 2002 period than it was between 1960 and 1983.4 The evidence therefore confirms that monetary policy efforts to achieve and maintain price stability promote stability in output and thereby help create economic conditions which are ultimately conducive to employment creation. (see annex for table 1)  2. New Challenges for Monetary Policy  Not unlike successful athletes, central bankers must never be complacent in victory. It would therefore be at best inappropriate and at worst irresponsible for the global central banking community to consider its job done. There will be no “End of Central Banking”. For one thing, there is no guarantee that the elimination of inflation throughout much of the world economy is a permanent achievement.

In contrast, during the 9/11 attacks on the World Trade Centre, a sustained commitment by a large multinational financial service provider to strengthen its BCM and continuously improve its evacuation procedures over almost a decade, enabled it to reduce the time taken to evacuate its employees from four hours to 45 minutes, saving thousands of lives. Within the financial sector, a key focus of reforms since the global financial crisis has been on the development of recovery plans which aim to protect the continuity of critical functions and core business lines in a situation of financial stress. Work has also been initiated to implement this in Malaysia. Financial institutions are expected to develop a menu of options for recovering from events of severe stress in order to restore business to a stable condition. These plans must be regularly updated to reflect changes in a firm’s business model and operational arrangements. At its most basic level, recovery plans are helping financial institutions to better understand their operational and financial interdependencies and how this can affect recovery options that are available to the institution. Some institutions are finding through this process that their operations have become far too complex to support credible recovery strategies. These institutions are taking or considering steps to restructure parts of the business to achieve wider options for recovery.
Sabine Lautenschläger: Regulation, supervision and market discipline - striking a balance Statement by Ms Sabine Lautenschläger, Member of the Executive Board of the European Central Bank and Vice-Chair of the Supervisory Board of the European Central Bank, at a conference hosted by the Financial Stability Institute, Basel, 18 September 2017. * * * Almost nine years ago to the day, the investment bank Lehman Brothers failed. What followed was a financial crisis that wreaked havoc on economies around the globe. But it did more than that. The crisis also shattered many beliefs about how the banking system works and how it should be regulated and supervised. There was a time when many people believed that the market could bring about a stable and efficient banking sector on its own. They thought that market forces would ensure banks had sustainable business models that were resilient to the ups and downs of the economy. We now know that this did not turn out so well. In fact, there are three pillars that support a stable banking sector: regulation, supervision and market discipline. The crisis made clear that all of these pillars were in need of some repairs. The good news is that we have come a long way – today, the banking sector rests on more solid foundations than before. But some issues still need to be resolved. Let us briefly look over them, beginning with regulation. Once the crisis had started, everyone agreed that the rulebook needed to be rewritten.

Yes, we could add page after page to the rulebook, setting out detailed rules, definitions and thresholds governing how banks should deal with risks and specifying, for instance, which tools supervisors should use in certain situations, and when. But with each new page, more loopholes open up. It becomes easier for 2/4  BIS central bankers' speeches  banks to game the system. This defeats the purpose of a rulebook and poses a threat to stability. Second, there is the problem of interaction. The more rules there are, the more they can interact and interfere with each other. If there are two rules, there is just one way in which they can interact. If there are 1,000 rules, they can, in theory, interact in at least 500,000 ways. It becomes ever more difficult to foresee the overall effect of the rules, and the danger of unintended sideeffects increases. And third, there is the issue of costs. The thicker the rulebook, the more expensive it becomes for banks to comply with it and for supervisors to do their jobs. These costs are justifiable if each additional rule reduces the risk of another crisis. However, at a certain point the costs of the rules begin to outweigh the benefits. So, instead of having overly detailed rules, we should have a strong basic set of rules that allows supervisors some discretion. .Supervisors have the relevant skills and experience, and in-depth knowledge of the banks they supervise. We should ensure that supervisors can continue to apply their judgement.
The US yield curve is currently at its flattest level for more than ten years, with ten-year Treasuries yielding just about 60 basis points more than two-year bonds. At the start of 2017, the difference was around 130 basis points. You can also see that the German Bund curve is currently about twice as steep as the US Treasury curve and has remained relatively stable, with ten-year bonds over most of the time yielding around 100 basis points more than two-year bonds – not very far from the average observed over the past 20 years. My second slide focuses on the US Treasury curve. What you can see here is the ten-year yield 1/7  BIS central bankers' speeches  and a model-based breakdown of the yield into its two main components: the average of the current and expected future short-term interest rates over the maturity of the bond and the term premium. All series are shown as cumulative changes since the start of last year. Two facts can be drawn from this chart. The first is that the recent marked flattening of the curve reflects what markets call a “bear flattening” – that is, short-term rates have been rising faster than long-term rates. This is evident from the fact that the ten-year yield – the blue solid line – today is about the same as it was a year ago. Short-term interest rates, meanwhile, have risen by around 90 basis points.

John C Williams: Welcoming remarks - Investing in America's Workforce Book Launch Event Welcoming remarks by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Investing in America's Workforce Book Launch Event, New York City, 9 November 2018. * * * As prepared for delivery  Welcome Good morning. I am very pleased to welcome you all to the Federal Reserve Bank of New York for the launch of Investing in America’s Workforce: Improving Outcomes for Workers and Employers. I would like to thank our colleagues across the Federal Reserve System, the Heldrich Center for Workforce Development at Rutgers University, the Ray Marshall Center at the University of Texas at Austin, and the W.E. Upjohn Institute for Employment Research for collaborating with us on this initiative. My colleagues and I are proud to co-sponsor this event today and appreciate everyone who contributed their time and effort to making the Investing in America’s Workforce publication a reality. With over 100 contributors, pulling this together was not an easy feat. I recognize the value of sharing knowledge and resources and am pleased that we can help facilitate this effort. I congratulate my colleagues and our partners for this accomplishment and believe this is just the beginning of our work to support the workforce field.
Importantly, behind the growth of sectors other than natural resources—Other GDP—was the fact that improvements in human capital, the incorporation of women into the labor force, and immigration, would help to offset the negative effects of the aging of the Chilean population and the tendency to reduce the actual number of hours worked that comes with development. This projection assumed a relatively neutral role for capital, in the sense that it expanded at the same rate as Other GDP. This assumption is consistent with the capital/product ratio remaining near its historical average, a stylized fact observed in other countries as well. For this to occur, however, it is necessary for investment to grow in consistency with potential GDP growth again. Our projection also assumed that total factor productivity of the sectors unrelated to natural resources would go back to grow at rates around its average of the last twenty years, a major challenge, but clearly possible. The recovery of the growth trend of productivity of these sectors will be especially important, given the declining trend of natural resources, mainly associated with mining ore downgrade. Finally, we show that the Chilean evidence suggests that there are significant inefficiencies in the allocation of resources among firms and that there would be first-order gains from measures to improve them, which, unlike the case of human capital, could generate  5  profits sooner. Although these policies fall outside the scope of the Central Bank, we believe it is important to reiterate their relevance to this Committee.

Mervyn King: Monetary policy developments Speech by Mr Mervyn King, Governor of the Bank of England, at the Lord Mayor’s Banquet for Bankers and Merchants of the City of London, London, 16 June 2010. *  *  *  My Lord Mayor, Mr Chancellor, My Lords, Ladies and Gentlemen, May I join the Lord Mayor in welcoming you, Chancellor, to your first Mansion House Dinner? You have set a rapid pace in your first month in office, not least in your announcements this evening. In previous years I have sometimes set this gathering a quiz question. Tonight I want to reverse the process by providing the answer and asking you for the question. The answer is 23, and later I shall ask you – to what question is 23 the answer? Over the past year, there has been no slackening in the pace of economic and political upheaval. The financial crisis that began in 2007 is not yet over. Much of the recent market volatility reflects concerns about the ability of governments to service their own debt and provide assistance where necessary to weakened banking systems, especially in the euro area. Such risks have the potential to derail recovery and we cannot ignore them. At home we face the challenge of ensuring recovery while rebalancing the economy, reducing the fiscal deficit, and reshaping the structure and regulation of our banking system. In playing its part to meet this challenge, the Bank of England has two priorities.
Inflation fell from 4.0 per cent in October to 0.9 per cent in December. Inflation was much lower than we had expected in December, as a result of the repo rate cuts made in the autumn having a greater impact on mortgage rates than anticipated and petrol prices being lower than forecast. Underlying inflation excluding interest rates and energy (the CPIF excluding energy) declined slightly from around 2 per cent earlier this year to 1.7 per cent in December, entirely in line with the forecast at the most recent monetary policy meeting. The krona has weakened further since the beginning of December. Since the financial crisis moved into an acute phase in mid-September, the krona has weakened by around 12 per cent when measured against a trade-weighted index. This could give a slightly larger inflationary impulse than we had previously forecast. There are a number of signs that the situation in the financial markets has improved somewhat since the beginning of December. The TED spreads have fallen to the levels that applied prior to September and it has to some extent been possible to issue bonds. The forceful measures taken in many countries have in any case meant that it has been possible to avoid a collapse in the financial markets. But there are other signs that are more worrying. The financial markets are still far from functioning normally. Surveys indicate that the companies’ difficulties in obtaining loans have increased, although there is as yet no solid data showing that bank lending has begun to decline.

Originally written down by John Hicks in 1937, as a distillation of what he viewed to be the essential arguments in Keynes’s General Theory, it still serves as the introduction to the subject for many students. And right at its heart, IS-LM has this same assumption built into it that monetary policy can only affect demand and inflation via interest rates and asset prices (Chart 6). As described by the “IS” curve, you need lower yields to boost demand ([1] can in fact be seen as a slightly more modern underpinning for this relationship). It’s therefore only by those means – only by lowering interest rates and bond yields – that an injection of money, which serves to shift the “LM” curve to the right, can affect spending or ultimately inflation. Page 11  Chart 6: In the IS-LM framework, monetary policy affects demand via prices  ‘Y’ is real output and ‘r’ is the real interest rate. In ‘IS-LM’, ‘IS’ stands for investment-saving and ‘LM’ for liquidity preference-money supply. How does that happen? The textbooks –the now-ancient tomes I was given as an undergraduate, at least – describe a process very much like QE. Central banks are said to influence the yield curve by buying and selling government debt in the open market, supplying and withdrawing reserves in the process. In Chart 7 the demand for this central bank money is given by the MD line.
2  BIS Review 94/2009  •  Finally, cyclicality in the real economy can be beneficial to long term growth as it is one mechanism through which "creative destruction" can take place in the productive system. Real and significant damages occur if and when financial imbalances are allowed to build for a long time with two consequences: first asset prices significantly deviate from their fundamental trend, which creates distortions in the allocation of resources; and second, those imbalances unwind suddenly and abruptly, triggering major disruptions in growth and the economic cycle. This is what is happening right now. And this closely resembles the definition of a bubble. This clearly points to one possible mandate for macro prudential supervision that, it were feasible, would be both pragmatic and legitimate: to avoid bubbles. Bubbles are not always triggered within the financial system. They may have roots in productivity shocks, for instance. But cyclical fluctuations cannot develop into a bubble – like process unless some amplification mechanisms are allowed to work fully in an overall permissive financial environment. What role did procyclicality play in the current crisis? During the first phase of the crisis, it was possible to take a "short term view" of procyclicality. It may have looked as if mark to market accounting, together with highly illiquid markets, generated downward spirals in asset prices and created "excessive" losses, with no relation to real underlying economic reality. Such liquidity spirals may have occurred at some critical moments 7 .

Similarly, it reached a turning point in mid-2022, when the other indicators were still rising. That said, the PCCI is based on a complex statistical methodology and the signal provided by its recent changes remains to be confirmed. Along the same lines, indicators that focus on “momentum” and on quarterly rather than annual changes can provide useful additional information in the current phase. At this stage, there are no clear and convergent signs in all of these indicators that would allow us to assert that underlying inflation has indeed reached a turning point. Lastly, we are closely monitoring the changes in wages, which are notably crucial for services inflation. Nominal wage growth is still accelerating across the euro area, although has so far remained below price growth; however, this is not leading to a wage-price spiral beyond what is included in our projections. The inflation expectations of households and businesses As I mentioned in the first part of my speech, market expectations have clearly improved, admittedly against a backdrop of falling energy prices. However, the inflation expectations of economic agents (households and businesses), particularly over the medium term, are also essential as they are the ones that determine the path of prices and wages. These expectations, which traditionally change more slowly than those of the markets, are giving more mixed signals.