samchain/econo-pairs-v1 huggingface dataset:
The ECB’s Governing Council made the decision to put in place negative interest rates on their deposit facility (DFR) in June 2014 and to lower them to their current level of –0.4% in order to further ease monetary and financial conditions. Perhaps precisely because taking such steps was unusual, they helped us convince markets that our commitment to our mandate was very firm. On the other hand, negative interest rates clearly have limitations: they are difficult to accept by households and SMEs, and so impossible in practice to pass through to them. And thus they are believed by many to deteriorate the profitability of financial intermediation. We monitor carefully that maintaining our DFR at its current level does not lead banks to reduce their supply of credit. What effects? I very much believe that our package of non-standard measures has worked and still continues to do so. Inflation is gradually recovering towards our target of below but close to 2% over the medium term: as of March 2017, the year on year euro area HICP inflation is 1.5%. It was only 0.2% in 2016. Financial conditions have eased considerably [slide]. According to our inhouse assessment, our monetary policy has contributed to a decline of about 100 bp in longterm interest rates. This is very significant. In normal times, we could have needed a cumulated decline in the short-term interest rate of about 3%2 to bring about such a reduction in the long 3/6  BIS central bankers' speeches  term interest rate.

Durmuş Yılmaz: Overview of the Turkish economy in the light of new global realities Speech by Mr Durmuş Yılmaz, Governor of the Central Bank of the Republic of Turkey, at the International Arab Banking Summit (IABS 2010), Istanbul, 18 June 2010. *  *  *  Esteemed governors and distinguished guests, At the outset, I want to express my gratitude to the Union of Arab Banks along with Turkish Banking Association, Banking Regulation and Supervision Agency and the World Union of Arab Bankers for their efforts in organizing this summit. As the Central Bank of Turkey, we are honored to be a part of this prestigious event congregating such an esteemed group of participants. In this keynote speech, first I want to discuss the post-crisis episode in a global context. Then I will continue with the extent to which the Turkish economy has been affected by the downturn in global economy. Finally, I will conclude with the opportunities and prospects in our region in the light of the new global realities. Dear participants,  As we all observe from the latest data, signs of recovery have continued in the first half of 2010, albeit at variable speeds across countries and regions. Coordinated efforts of the global community have been so far successful in averting a downward spiral similar to the one experienced during the Great Depression. Although global economy is back on its feet, there are several risks involved in this recovery process and many challenges lie ahead.
It means being able to integrate and think critically when there are only pieces of information. It means being able to provide breadth of perspective anchored by depth. For us in Bank Negara Malaysia, mastery of economics and finance is what helps us differentiate the ‘signal’ and the ‘noise’ in economic policymaking and financial regulation. It also helps us to differentiate the symptom and the root cause in the supervision of financial institutions. It also means learning the lessons from history and avoiding the same mistakes within the context of our operating environment. Thus, I encourage you to focus and follow your curiosity in exploring the depths of your field of study. There is no end to learning, and may your thirst for knowledge drive you on. Have the humility to recognise that we never stop learning. As a Chinese proverb goes, “Learning is a treasure that will follow its owner everywhere.” Second, on adaptability. Charles Darwin famously reminded us that, “It is not the strongest of the species that survives, nor the most intelligent, it is the one that is most adaptable to change.” This means one must be able to constantly learn new things. One must also unlearn things that have become outdated. No one can really be certain on the precise impact of automation, artificial intelligence and the new industrial revolution 4.0 on future jobs and the complexion of society.

It is the single most important virtue that will enable you to achieve great things and do great works. As the great English writer Samuel Johnson famously said, “Great works are performed not by strength but by perseverance.” As I conclude, it is our great privilege to be able to support and be part of your life journey. Both of you and the other scholars are the future of our country. With your tenacity and guidance from your parents, lecturers, mentors and friends, I am confident that both of you will enjoy tremendous success in life. May you pursue excellence, mastery, adaptability and persevere through every circumstances in life. In this regard, we look forward to your many future and excellent contributions to build Malaysia to be a prosperous, inclusive and vibrant nation. 2/2  BIS central bankers' speeches
During the Napoleonic war, Sweden lost Finland to Russia and in the Kiel peace treaty of January 1814 it was decided that Norway, which was then a part of the Danish kingdom, should instead join Sweden. The treaty was of course op-posed by the Norwegians, and during the spring of 1814, when Sweden was occupied with wars on other fronts, the Norwegians took action. They declared their independence, drew up a constitution and appointed a committee to plan a new Norwegian central bank. But in July Swedish soldiers arrived. After a brief battle, Norway accepted the Swedish king as king of Norway. However, the union created was fairly loose. Except for the foreign service, Norway retained all state institutions that characterize an independent state. In June 1816, exactly 200 years ago, Norges Bank was established. The bank was located in Trondheim far from the politicians in Kristiania (which we now know as Oslo) and even further away from Stockholm and the Swedish king. Norges Bank was founded in a challenging environment where the economy was in a state of chaos following the Napoleonic wars, and confidence in the monetary system was low. The previous joint currency with Denmark had col-lapsed, and attempts to restore it had failed. It took a long time before the newly established Norges Bank managed to create credibility for the Norwegian currency. In the first years of its existence, the bank’s main tasks included managing silver tax payments and handling receipts, printing and distributing banknotes and bookkeeping.

The focus here is on maturity transformation and affordability risk in mortgage lending. In the short term, this may allow banks to increase their profitability, but the flip side is that this also makes them more vulnerable to interest rate shocks and corrections on the mortgage and residential real estate markets. Domestically focused banks would be particularly exposed to a major interest rate shock. As we explain in our Financial Stability Report, in the event of a normalisation of interest rates, banks would initially benefit from the restoration of the liability margin. However, a major interest rate shock would cause net interest income to fall significantly at many banks, potentially resulting in losses. The greater a bank’s maturity transformation is, the higher these losses will be. Even if the current low interest rate period were to continue and interest rates were only to rise very gradually, the possibility of a major interest rate shock should not be ruled out. Experience has shown that interest rate corrections can sometimes be sudden and sharp. It should also be borne in mind that interest rates on the money and capital markets are currently more than 300 basis points lower than at the beginning of 2008. In other words,  2  BIS central bankers’ speeches  even if interest rates were to return to levels previously considered normal, this would still constitute a major correction.
It is notable that problems have also been encountered recently in estimating the level of the NAIRU for the United States. Yet the adjustment to low inflation occurred there back around the turn of the 1970s. For some time now, US unemployment has been below the rate that an earlier rule of thumb identified as the equilibrium level but inflation has not accelerated. Some explain this mainly in terms of favourable transitory effects, while others attribute it to more far-reaching changes of a structural nature. In any event, the US example shows that drawing conclusions about the NAIRU can be difficult even in economies where unemployment has remained close to a level that is comparatively constant. In the Riksbank’s work, estimates of the NAIRU are accompanied by, for example, calculations of the output gap, which aim to provide a picture of total capacity utilisation. The output gap is the difference between current production and the economy’s long-term production capacity or potential GDP. Like the NAIRU, the latter equilibrium level is not directly observable and therefore has to be estimated with statistical methods. The equilibrium level of output and the NAIRU evidently have  5  BIS Review 77/1999  points in common. The situation in the labour market must be a central aspect of any assessment of total capacity utilisation.

Mr Heikensten talks about the interaction between monetary and fiscal policy and labour market developments Speech by Lars Heikensten, First Deputy Governor of the Sveriges Riksbank, the Swedish central bank, to the Landskrona Municipality in Landskrona, Sweden on 16 June 1999. For more than six years now, monetary policy in Sweden has been conducted with an inflation target. Sweden was one of the first countries, together with Canada, New Zealand and the United Kingdom, for example, to adopt an inflation targeting strategy. Other countries have recently displayed an interest in targeting inflation directly as the guideline for monetary policy. Examples are countries with strong economic growth in Asia, South America and Eastern Europe. In many respects, Sweden’s period with an inflation target has been one of good economic results. Inflation and interest rates have come down to levels that are historically low and growth since the crisis in the early 1990s has been relatively high and stable. Part of the explanation is, of course, that the recession left us with plenty of unutilised resources. But new production capacity has also been created at a rapid rate. Moreover, inflation expectations have been lowered, which gives a new and better environment for price and wage formation. International inflation has also been low. The picture of unemployment is more disappointing, though here too the recent trend points in the right direction.
Oil revenue spending over time is required to correspond to the expected real return on the Government Pension Fund Global, which has been revised down from four to three percent. In our analyses published in March this year, we have assumed that oil revenue spending as a share of the economy will remain approximately unchanged in the years ahead. This will entail lower growth in public demand than in recent years. At the same time, monetary policy continues to be expansionary. According to Norges Bank’s March 2017 forecast, the key policy rate will remain close to today’s level in the years ahead, followed by a gradual rise from 2019. Chart: Key policy rate and inflation ahead In 2016, the pace of consumer price inflation was at its highest for many years, driven to a great extent by the considerable depreciation of the krone up to the beginning of last year. Inflation has slowed since last summer and our projections in the March Monetary Policy Report indicate that inflation will slow further in the years ahead. At the same time, inflation expectations seem to be firmly anchored. The upturn in the real economy appears to have taken hold and unemployment has declined. With a key policy rate close to today’s level, there are prospects that inflation will pick up again further ahead. The Ministry of Finance is currently assessing the need to modernise the regulation on monetary policy. After more than fifteen years, this is a natural step.

In 2009, i.e., during the height of the global financial crisis, Bank Negara continued to focus on developing and consolidating a comprehensive set of standards on corporate governance and risk management practices. These standards encompass overarching principles on risk governance with more specific guidance on the management of market, credit, liquidity, operational and insurance risks. Further efforts of Bank Negara include organizing the Financial Industry Conference on risk management. This Conference has encouraged further dialogue on key risk challenges facing the financial institutions and how financial institutions can further enhance their resilience to these challenges. A major milestone was the enactment of the new Central Bank of Malaysia Act 2009. This Act, which came into force on 25 November 2009, has further strengthened the ability of Bank Negara to undertake surveillance and prompt resolution to avert risks to financial stability. The existing Financial Sector Master Plan is currently in the final phase of its implementation. The measures under the Plan, which were undertaken during the past decade, have contributed towards achieving a more efficient, effective, stable and resilient financial sector. This has in turn resulted in more developed financial markets, broader and better product offerings, as well as higher levels of insurance and Takaful penetration. This trend of liberalization is expected to continue, whilst the banking and insurance sectors could possibly see further consolidation, convergence, and competition within the region.
However, we must take into account that in the long run the krone exchange rate cannot deviate substantially from the level implied by economic fundamentals. We must therefore to some extent expect a change in the krone exchange rate in response to major changes in our terms of trade. 11  BIS Review 20/1999  Norges Bank’s mandate has been formulated in the light of the experience of a fixed exchange rate policy earlier in the 1990s. This experience does not imply that the central bank is to conduct a traditional fixed exchange rate regime, with established fluctuation margins and the obligation to intervene, as reflected in the mandate. Norges Bank will orient monetary policy ‘towards maintaining a stable krone exchange rate against European currencies’. However, it is taken into account that the krone exchange rate will vary. The Exchange Rate Regulation therefore states that ‘in the event of significant changes in the exchange rate, monetary policy instruments shall be oriented with a view to returning the exchange rate over time to its initial range’. We must learn from the situation that arose in the autumn of 1996 and winter of 1997 when strong appreciation pressures prompted Norges Bank to reduce its key rates. Norges Bank’s first response to such appreciation pressures is to provide advice concerning changes in the budget. Norges Bank will orient its instruments towards maintaining a stable krone exchange rate. We must not allow ourselves to be blinded by daily exchange rate quotations.

Figure 6 Job creation by category  Wages (*)  (annual change, percent)  (annual change, percent)  15 8  8  Self-employment 7 10 6  Nominal 7  5  5  4  4  9 6  Wage  3  5  0  0  -3  -5  6  3  3  Real  2  2  1  1  -10 0  -6 11  12  13  14  15  16  17  0 11  12  13  14  15  16  17  (*) Both the nominal and the real correspond to the average of the annual variation of IREM and CMO. Source: National Statistics Institute (INE). 11. Domestic financial conditions remain favorable, particularly in terms of interest rates. Notwithstanding, credit volumes have decelerated with respect to previous years, as a result of overall subdued demand. Despite some increase in recent data, NPL ratios remain low, a clear sign that slower growth has not affected the financial health of companies and households. 12. The evolution of the local stock market has caught some attention lately, since the IPSA has increased about 17% this year and more than 30% since December 2015. Although these numbers might ring some bells, the performance of the Chilean index does not differ significantly from other regional stock markets and its recent behavior might just be a catch up from very low levels.
John C Williams: Ever upward Remarks (via videoconference) by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at St. Lawrence University, 8 September 2021. * * * As prepared for delivery Good afternoon, everyone. Thank you to St. Lawrence University for hosting today’s event. It’s especially exciting to be here at the start of an academic year, and I hope you all have a safe and successful fall semester. The motto for New York State is “Excelsior,” meaning “ever upward.” What better way to get the full New York experience than by spending time—even virtually—in the North Country. These visits around the Federal Reserve’s Second District are one of the highlights of my job, and something I very much look forward to doing again in person when it’s safe to do so. It’s now been about a year and a half since the pandemic took hold. Over that time, there’s been much change: phases and stages, highs and lows, shifts and swings, downturns and reversals. The virus and its effects on the economy are ever evolving. On top of that, the unusual and extraordinary nature of this crisis means circumstances are far beyond the norm for typical economic recessions and recoveries. Even while there are significant improvements in some areas, setbacks persist in many others. And now, the emergence and rapid spread of the Delta variant in parts of the country and around the world has introduced a new layer of uncertainty.

7 Furthermore, Governing Board members have appeared on numerous occasions before parliament committees, on public panels, as well as in print and electronic media, to explain significant monetary policy measures, such as the UBS bail-out, as well as the introduction and discontinuation of the minimum exchange rate. However, transparency is not a goal in itself, but rather a means to achieve accountability, and it has its limits. It cannot be allowed to hamper the implementation or the effectiveness of monetary policy. An obvious example here is the discontinuation of the minimum exchange rate, when it was impossible for the SNB to give any kind of advanced warning of this decision without triggering speculative attacks on the EUR/CHF exchange rate. In short, it is a fiction that the SNB has unlimited power. It is a fact that Switzerland has a well-developed system of checks and balances obliging the SNB to transparently account for its decisions. Fiction IV: Financial stability is an impossible dream With this, let me turn to another field in which the SNB has taken on a more prominent role recently, namely, financial stability. Substantial efforts are underway to improve the regulation of the financial system, both globally and nationally. Sometimes, these efforts are greeted with scepticism, based on the view – or the fiction – that financial stability is an “impossible dream”. While I accept that there are conceptual and practical difficulties in fostering the stability of the financial system, I do not share this pessimism.
I will then turn to the national level and illustrate these principles with reference to the French situation (II). I. Improving Europe’s future fiscal rules The EU and its member states have reacted vigorously in 2020. The ECB’s balance sheet is now double the size of the Fed’s as a percentage of GDP. And active fiscal policy was of the essence. In 2020, Covid-related discretionary measures were stronger in the United States than in the main euro area countries. However thanks to our social model and its higher automatic stabilizers, the overall 2020 fiscal stimulus in the euro area was almost as strong as in the United States:  Having said that, what can explain the larger loss of GDP in 2020 in the euro area compared to the United States? According to the Banque de France’s work, much [80%] of the difference in losses is due to something other than public support. In southern Europe, about 40% is explained through effective constraints on economic activity, and 40% through sectorial specialisation – the higher dependence of European countries on tourism, and the technological lead of the United States (development of teleworking before the crisis, weight of new information technology, share of e-commerce…). Three major crises in the past ten years – 2008-2009, 2011, 2020 – have nevertheless shown the need to complete the Economic Union in addition to the successful Monetary Union, starting with a permanent fiscal capacity.

(2022), “Finding the right sequence”, speech at a virtual policy panel on “Unwinding QE” at the first annual Bank of England Agenda for Research (BEAR) conference, Frankfurt am Main, 24 February. There are attempts to quantify the equivalence between changes in the balance sheet and interest rates, see Wei, B. (2022), “Quantifying “Quantitative Tightening” (QT): How Many Rate Hikes Is QT Equivalent To?”, Working Paper Series, No 2022-8, Federal Reserve Bank of Atlanta, July. 13. See Krishnamurthy, A. and Vissing-Jorgensen, A. (2011), “The effects of quantitative easing on interest rates: channels and implications for policy”, Brookings Papers on Economic Activity, 42 (2). 14. See Lee Smith, A. and Valcarcel, V. (2023), “The financial market effects of unwinding the Federal Reserve’s balance sheet”, Journal of Economic Dynamics and Control, Vol. 146, January. 15. There were periods of liquidity stress in late 2019 that can also be attributed to the banks’ desire to match the maturity of assets and liabilities after the QE-implied increase in central bank reserves. However, they did not increase the maturity of their liabilities once QT was underway. See Acharya, V. V. et al. (2022), “Liquidity Dependence: Why Shrinking Central Bank Balance Sheets is an Uphill Task”, paper presented at the Federal Reserve Bank of Kansas City’s Jackson Hole Economic Symposium, August. 16. Estimates of the term premium from other models, such as the decomposition provided using the method proposed by Kim and Wright, lead to qualitatively similar conclusions.