samchain/econo-pairs-v1 huggingface dataset:
In particular, the Bank for International Settlements had maintained since the early 2000s that, in specific circumstances, central bank conduct in the face of severe risks to financial stability would have to be pre-emptive and not only reactive. Simply put, the damage wielded by a financial crisis might be so great that some price stability slippage in the present would be  BIS central bankers’ speeches  1  warranted in exchange for preventing a future, more serious deviation that might prove more difficult and costly to reverse. The Bank for International Settlements also asserted that the combination of a price stabilityoriented monetary policy and a merely micro-prudential supervisory policy did not ensure the stability of the financial system as a whole. In this connection a third tool was needed: a macro-prudential supervisory policy. While it is still too early to draw all the economic policy lessons arising from our experience of this crisis, I believe certain necessary changes can be discerned. Among these, the need to pursue macro-prudential policies is one of the most evident implications. Macro-prudential policy The crisis has demonstrated that the previous combination of monetary policy and microprudential policy is insufficient both for shoring up the stability of the financial system as a whole and for ensuring, in the event of crisis, that the impact on the real economy is limited. To achieve these goals a macro-prudential policy is also needed, and it must be equipped with new objectives and instruments.

Both of them understood, among other issues, the importance of capitalizing the Central Bank to strengthen its equity situation, an agreement that was finalized with the special support by Finance Minister Andrés Velasco, whereby the Bank would be capitalized at a pace of half a percentage point of GDP per year over a period of five years. I was able to maintain the best institutional relationship with Congress. During my administration I had the chance to work with four Senate presidents – senators Andrés Zaldívar, Hernán Larraín, Sergio Romero and Eduardo Frei Ruiz Tagle – and with presidents of the Finance Commission Alejandro Foxley, Carlos Ominami and Camilo Escalona. Our relationship was always cordial and with strict observance of the provisions set forth in our Constitutional Organic legislation. Today we must all feel proud of the place that the Central Bank of Chile now occupies in the international scene. Several measurements rank us today among the best evaluated institutions among central banks around the world in various aspects of our day-to-day operation. This is the fruit of a serious and very patient work that requires dedication and effort. I have also the satisfaction of having helped to complete the process of entry of the Central Bank of Chile as a member of the BIS (the Bank for International Settlements), and of having led a campaign to have smaller countries and those admitted in September 2003 participate in its bimonthly meetings on the global economy.
Despite the extent of the changes that have occurred to date, the world is some distance from a fully open or integrated economic and financial system. This observation is important because it highlights the potential for an evolving global environment to complicate the challenge of crafting economic policy, and in particular, monetary policy. Economic theory is most comfortable with fully integrated systems in which prices and flows of goods and services along with real and financial capital responding continuously and completely to market forces. Significantly harder to capture in our models are the aspects of the world that do not fully, or quickly, adjust to market incentives, or where those incentives are hidden. Nations still retain a range of measures designed to insulate parts of the domestic economy from trade and competition. Capital controls remain in place in a substantial number of large economies and in most smaller ones. Policymakers in many economies still have implicit or explicit mandates to limit the variability of their nominal exchange rate against that of their major trading partners. These measures have the potential to distort the incentives of businesses and investors, and the resulting flows of goods, services, labor and capital. To understand the policy implications of globalization, one has to try to understand both the impact of these constraints and distortions and the  BIS Review 102/2006  1  interaction of these policies with the forces of technology and competition that are pushing or pulling economies and financial systems closer together.

Timothy F Geithner: Global economic and financial integration – some implications for central banking Remarks by Mr Timothy F Geithner, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Columbia Business School Center on Japanese Economy and Business' 20th Anniversary Conference, Columbia University, New York City, 26 October 2006. *  *  *  Thank you. This is a time of remarkable evolution in the world economy. The share of the world’s population exposed to the opportunities and pressures of economic and financial integration is higher now than ever before. While we almost certainly do not fully understand the precise implications of this process for long-run global growth and welfare, we know that the gains to global growth and welfare have the potential to be large and pervasive. To acknowledge this potential is to acknowledge the merits of investing substantial intellectual capital into strengthening our understanding of the policy challenges and implications of global economic and financial integration. Compared to even a decade ago, world financial and product markets are significantly more integrated. Trade is a substantially larger and rising share of GDP, and the share of goods and services that constitute the “tradable” sector is increasing. Cross-border flows of real and financial capital have also increased dramatically - a reflection of the recent notable reduction in the degree of home bias in capital markets.
One of the SSM’s four directors general and two of its seven deputy directors general are from the Banco de España, while by the end of this year almost 100 Spanish experts will have joined the SSM as junior analysts or managers, almost all of them from the Banco de España. Of the 102 management posts corresponding to the SSM’s top six management levels (which include directors general, deputy directors general, directors, heads of division, deputy heads of division and head of section), 19 are from the Banco de España, making it the national supervisory authority that has supplied the most managers. Naturally, as a result, we have had to fill the gaps left by the staff who have moved to the ECB. On our estimates, the target staffing level in the Directorate General Banking Supervision in order to meet the needs of the new supervisory model is approximately 440, which is virtually the same as before the launch of the SSM. The Banco de España has already set in motion the selection and hiring processes to fill these vacancies. To conclude, I would like to sum up my address in three points. First, the creation of the Banking Union is, without doubt, the most ambitious European project undertaken since the launch of Economic and Monetary Union. It is the first step in a new phase of economic integration, establishing a more robust institutional and regulatory framework that will help restore confidence in banks, safeguard financial stability and lay the foundations for more stable economic growth.

The centrepiece of the supervision of significant banks will be the Joint Supervisory Teams, responsible for the day-to-day oversight of these banks. These teams will be made up of specialists from the ECB and from the national authorities, under the leadership of a coordinator designated by the ECB, and a sub-coordinator designated by the national supervisor. Approximately 75% of those making up the teams will be drawn from and designated by the national supervisors; in the case of Spanish banks, it will of course be staff from the Banco de España. Inspection visits to significant banks, what is known as on-site inspection, will continue to be conducted by the national authorities, and their results will be passed onto the ECB for the adoption of the appropriate measures. With regard to the less significant banks, national authorities will continue to directly supervise them as they have to date. Over 3,600 banks across the euro area are involved here. The ECB will define common practices and criteria, it will monitor the actions and position of these banks and it will always be entitled, if it considers it necessary, to re-claim direct supervision over any of these banks. 2  BIS central bankers’ speeches  The competences and responsibilities of the Banco de España in the framework of the new Mechanism I would now like to address the competences and responsibilities of the Banco de España, as a national supervisor, under the new Mechanism.
Instead, the Government, on the advice of the Central Bank, announced on 29 September that it was taking a 75% equity stake in Glitnir valued at € m. This implied a big fall from what such a stake was valued at in the market the week before. In the following week, the equity price collapsed further, ending the week 75% below its value at the end of the preceding week. This action did not boost market confidence in the Icelandic banking system. On the contrary, it intensified the run. On the following day, both the sovereign and the banks were  2  Baba, Naohiko, Frank Packer and Teppei Nagano, (2008). “The spillover of money market turbulance to FX swap and cross-currency swap markets”, BIS Quarterly Review, March 2008, 73–86; Baba, Naohiko, and Frank Packer, (2008). “Interpreting deviations from covered interest parity during the financial market turmoil of 2007–08”, BIS Working Papers, No. 267. See also Box III-1, “The recent turmoil in the Icelandic foreign exchange swap market” in the Central Bank of Iceland Monetary Bulletin 2008/1, pp. 26–29. 4  BIS Review 9/2010  downgraded by two notches, followed by widespread margin calls and closing of credit lines. The foreign deposits that had helped to alleviate the foreign liquidity squeeze experienced outflows. And the equity loss involved in the Glitnir takeover created a domino effect within the Icelandic financial system.

As I mentioned before, the ECB’s independence in implementing monetary policy towards the price stability objective can be ensured in this way. The second important characteristic of the ECB is its credibility. High credibility will increase the confidence of the public in the ECB’s policies and objectives, which in turn will help it achieve its primary objective. The most important ingredients of credibility are transparency and success in attaining its monetary policy objectives. For years now the central banks of Germany, France and the UK have been earning credibility, and the confidence of firms, institutions and individuals in these banks has increased considerably. The ECB, established in an environment of confidence provided by the credibility of national central banks, believes its growing credibility will translate into confidence in its conduct of monetary policy. The third important characteristic of the ECB is transparency, already mentioned as one of the keys to greater credibility. Transparency means openness about the ECB’s objectives, its policy implementation, its monetary policy deliberations and the forward-looking orientation of its policies. The ECB has explained, clearly and explicitly, that its main goal is maintaining price stability and described the strategies by which it is seeking to achieve it. I have already pointed out the additional issues of growth and unemployment. There is still discussion, but there is consensus concerning the primary objective. Discussion of these topics will continue in publications, announcements, speeches by ECB authorities and discussions. This kind of transparency is an important characteristic of the ECB.
These assets would serve as a reference for other asset classes and contracts and, at times of uncertainty, they would provide a safe haven for investors without triggering financial fragmentation. Currently, the supply of risk-free assets in the euro area is very limited, as only the debt of a small group of countries is perceived as riskless. Admittedly, a common safe asset cannot replace sound fiscal policies in the Member States. But it would weaken the doom loop between sovereigns and banks by reducing incentives for cross-border flights to safety, by contributing to diversification of risk in portfolios held by banks and investors, and, more generally, by providing for a more ample, stable and equitable supply of safe assets for the EMU as a whole. A true Capital Markets Union will also attract global institutional investors, strengthening the international role of the euro and providing Europe with more geopolitical leeway. Crucially, it will help reshape capital markets in Europe after Brexit. Thank you. 2  See P. Hernández de Cos (2019): "The EMU at 20: from divergence to resilience”. Opening remarks at the Banco de España Third Annual Research Conference. https://www.bde.es/f/webbde/GAP/Secciones/SalaPrensa/IntervencionesPublicas/Gobernador/Arc/Fic/hdc160919en. pdf 14

Excluding short-term influences, bond yields in the major countries - apart from the special case of Japan - are converging around a level of around 7% which suggests that relative macro-economic, monetary and fiscal discipline will be sustained, though it will stop short of effective price stability. I conclude, secondly, that the markets see current developments in the US and the UK as essentially cyclical; and that they anticipate a pick-up in activity elsewhere somewhat further ahead. And I conclude, thirdly, that there remains some considerable uncertainty about the prospect for European Monetary Union, in particular about its initial membership but also about the extent of the discipline it will involve. Now, of course, these conclusions are based on the bond markets as they currently are, which is a bit like forecasting the past! What you really need to know is how the markets will evolve in the future. Happily it is not my task to venture down that path. It is during our next session that the market experts will seek to “forecast the future”. But I do hope they will tell us whether they agree that relative stability will indeed persist, in the medium and longer term, how they see the different national situations evolving in the more immediate future, and what prospects they see for EMU. These seem to me to be the key issues for the future and I look forward to listening to what they have to say. BIS Review 22/1997
It is important to show with one’s actions that it is the inflation target that is the central focus for monetary policy decisions.18 I therefore think it was very welcome that a unanimous Executive Board was able to agree on an interest-rate cut in December after the weak inflation outcomes in the autumn. Moreover, we lowered the repo-rate path, that is, our own forecast for the repo rate, quite substantially. However, there is some element of leaning against the wind even in the current repo-rate path. As described in the most recent Monetary Policy Report, an even lower repo rate is expected to bring inflation back on target sooner and steer unemployment towards a long-run sustainable level faster. Given this, I felt at both the monetary policy meeting in December 2013 and the one in February 2014 that the alternative of an even lower repo rate needed careful consideration. My one reason for not advocating an even lower repo rate was that I felt the timing was wrong. Increasingly strong international developments and rising resource utilisation here in Sweden were nevertheless expected to lead to inflation rising gradually. It is unusual for central banks to cut their policy rates substantially or repeatedly during an economic upturn. However, there is a risk that inflationary pressures will prove to be even weaker than we have assumed. Inflation in January and February proved to be somewhat lower than we were expecting when we made our decision in February.

•  Firstly, nominal convergence, which is requested in order to adopt the euro, must be sustainable and therefore constitutes a medium-term objective, rather than a short-term priority. Indeed, the EU Treaty calls, as a prerequisite for adopting the euro, for a high degree of sustainable convergence in the fields of price stability, government fiscal position, stability of the exchange rate, and long-term interest-rate levels. Therefore, nominal and real convergence should be pursued in parallel, and are not antagonistic, in the interest of both accessing countries and the euro area. •  Secondly, I note that many accession countries have already expressed their intention to join ERM II as soon as possible after EU entry. This intention is to be welcomed. However, it should be clear that the ERM II is not expected to be adopted by new members immediately after EU accession, nor is intended to be limited to only two years, which is the minimum period of time prior to adopting the euro. It would be misleading to consider ERM II as a mere “waiting room” before euro. On the very contrary, ERM II is to be considered as a “training room”. This mechanism will allow countries to retain some limited exchange rate flexibility during the catching-up process.
Monetary policy strategy in 2007 and beyond  Monetary policy is the mechanism that is used by central banks all over the world to direct an economy along a non-inflationary, growth path. Such policy would ideally be supported by a series of other policies and strategies as well. The policy framework adopted by the Central Bank of Sri Lanka is a monetary targeting framework with reserve money as the operational target and broad money (M2b) as the intermediate target 1 . Such targets are carefully computed and set after taking into consideration, the potential growth and after assessing the liquidity needs of the economy to move along the projected growth path while keeping inflationary pressures in check. The veracity and accuracy of the values derived from the computation of the demand for money and the value of the money multiplier 2 are important prerequisites for effective monetary targeting. In that context, it is important to note that in Sri Lanka, there is a stable relationship between the operational target, i.e., reserve money, and the intermediate target, i.e., broad money, with the money multiplier consistently remaining around 5 during the recent past. The long-term relationship of monetary aggregates and inflation also indicates that money would be a useful leading indicator for inflation. Hence, we believe that monetary targeting could continue to be an effective framework for Sri Lanka in the short to medium term. In 2001, Sri Lanka moved to a “Floating exchange rate” regime thereby allowing market forces to largely determine the exchange rate.

Based upon the aforementioned assumptions and trends, the Reserve money target for end 2007 has been computed by allowing the necessary increase from that as targeted at the end 2006 value to accommodate the expected GDP growth of 7.5 per cent, inflation of 8.5 per cent, and an extra 1.6 per cent to cover the change in velocity, a total of 17.6 per cent. The Broad money (M2b) target too, has been computed by applying the properties of the Quantity Equation, the inflation target and expected economic growth 3 . The Reserve money growth will be facilitated by two major developments, the change in the Net Foreign Assets and the change in the Net Domestic Assets of the Central Bank. The Net Foreign Assets of the Central Bank have been determined by the expected BOP surplus of US dollars 200 million. As already explained, the planned monetary programme requires the Reserve money growth to be maintained at 17.6 per cent from the targeted level of Reserve money as at the end of 2006. At the same time, the expected reserve build up of the Central Bank indicates an increase in Net Foreign Assets of the Central Bank by Rs. 21 billion while the Net Credit to the Government from the Central Bank will increase by Rs 11.5 billion, which includes provisional advances of Rs 12.5 billion, and a decline of Treasury bills by Rs. 1.0 billion. 3  A crucial factor in developing the monetary programme is the assumptions in velocity of money and money multiplier.
In addition, we consider other relevant information that is available, not least the exchange rate that can be said to be more fundamentally reasonable. Which of these three approaches is most appropriate - given that game situations and the risk of sudden shifts could be disregarded - is not self-evident. Personally I cannot see why we should not treat the exchange rate in much the same way as other forecast variables. We normally try to consider all the relevant information that can be gathered on a particular variable. It seems reasonable to do so in this case, too. Another matter is the considerable degree of uncertainty that surrounds virtually all forecast variables and particularly the exchange rate. That is why we also produce an assessment of risks. Our policy is then based on an overall assessment, including a valuation of the various risks. Exchange rate theories It is often said that for the conduct of economic policy, the best help in practice is a good theory. In the case of exchange rates, however, the relevant theories have not been particularly successful at either explaining or predicting movements of the Swedish krona or other currencies in recent years. A basic difficulty with theories for determining exchange rates is the fact that an exchange rate is a nominal price, whereas economic analysis is constructed to explain relative prices.

If importers expect a price change to be temporary, they will no doubt be more prone to absorb the exchange rate fluctuations in their profit margins. That this may have been the case is indicated by some preliminary studies. BIS Review 75/2001  5  •  Generally increased confidence in the low-inflation regime may also have tended to reduce the exchange rate’s pass-through to inflation. More stable expectations about future inflation should make prices less volatile. •  During the 1990s, moreover, competition in the Swedish economy has generally increased, for instance as a consequence of EU membership, continued tariff cuts, the reduction of other barriers to trade and deregulation of the domestic economy. Increased IT trade and the advent of new low-cost producers have had a similar effect. Although such changes are of the one-off type, in the past decade they have affected a series of markets and thereby presumably had a more protracted effect on the aggregate price level. Fig 2. Exchange rate impact on consumer prices 0.20  0.20  0.15  0.15  0.10  0.10 Recursive estimations of TCW coefficients lagged 3 quarters  Jan-01  Jan-00  Jan-99  Jan-98  Jan-97  Jan-96  Jan-95  Jan-94  Jan-93  Jan-92  Jan-91  Jan-90  Jan-89  Jan-88  Jan-87  0.00 Jan-86  0.00 Jan-85  0.05  Jan-84  0.05  Source: The Riksbank  The conclusion from all this is that the pass-through from the exchange rate to consumer prices has probably decreased.