samchain/econo-pairs-v1 huggingface dataset:
This gives me reason to underscore the worrying signs that I perceive, especially at an opportunity like this, when I before you in the Riksdag Committee on Finance speak about how I see monetary policy and the Swedish economy in the future. This does not mean, however, that I am going to embark on a discussion of different concrete solutions to the problems. I don't believe that this is a natural task for us at the Riksbank. Over the last ten years, the task of monetary policy has been to safeguard price stability, that is to say, a low and stable inflation rate. This has worked fairly well; inflation has been largely in line with our target. In turn, this has contributed to relatively good economic growth, in clear contrast to the 1970s and 1980s. However, this is not enough. No matter how well stabilisation policy functions, it does not provide higher long-term economic growth. In reality, growth potential and thereby our welfare is determined by how much we work and how productive we are. Nothing can change this. The amount that we work depends on many different factors, for instance, how many people are of working age, how many of theses are employed, absenteeism, etc. Labour productivity, measured as GDP per hour worked, depends partly on the level of education and on technological progress or the prevailing conditions for businesses and investment. To this can be added productivity changes resulting from the labour force moving over from less productive to more productive sectors.

Through these changes, the New York Fed is seeking to expand and diversify the pool of firms eligible to apply for primary dealer status, while also recognizing that a certain scale of activity is needed in order to be able to meet the many business obligations to which primary dealers must commit, in supporting the operations of the Federal Reserve and the Treasury. These changes offer the opportunity to increase capacity and further support competitive pricing for the Fed’s open market operations. Going forward, the New York Fed will periodically review its counterparty policy. Turning to monetary policy, at the conclusion of its September policy meeting, the Federal Open Market Committee (FOMC) announced that it would begin to reduce the size of the Federal Reserve’s securities portfolio.2 Over the past month, the Fed took the first steps in a multiyear effort to bring the Federal Reserve’s balance sheet to its longer-run size, by not reinvesting a portion of the securities repayments it received. In the remainder of my prepared remarks today, I will offer my views on this policy from a financial markets perspective, drawing on a fuller set of remarks I delivered last month, which can be found on the New York Fed’s website.3 1/7  BIS central bankers' speeches  The message I’d like to leave you with today is one of confidence.
Today, the Single Supervisory Mechanism is the largest banking supervisor globally and successfully contributes to shaping the international supervisory framework. Since the global financial and euro area debt crises, however, the euro’s international role seems to have gradually eroded. While its importance as the currency of invoice for international trade transactions has remained broadly stable, its role in global foreign reserves and global debt markets has declined. This decline is a symptom of the fault lines in EMU exposed by the crises. Concerns about the resilience of the EMU architecture and about financial fragmentation underpinned this erosion. Indeed, stability, financial depth and liquidity are among the key determinants of an international currency. European policymakers are now paying closer attention and various calls have been made in recent months for the euro to assume a stronger international role. The Euro Summit of 2/4  BIS central bankers' speeches  December 2018 encouraged work to be taken forward to this end. The international role of the euro is supported by the pursuit of sound economic policies in the euro area and a deeper and more complete EMU. And this requires further efforts along the path of deeper integration. Completing the Economic and Monetary Union The past 20 years have revealed beyond doubt how challenging ensuring economic prosperity and stability can be. This was true both inside and outside the euro area. Nonetheless, these years also demonstrated that such a shared challenge is best faced collectively.

Many more would follow and you effectively ensured that the ECB would be accountable and therefore could legitimately be independent in carrying out its monetary policy. But I am also grateful for the support that this Committee always expressed for the actions of the ECB, a sincere support because it built on the voice of European citizens and an important support that helped the ECB through the many difficult times of the past years. As co-legislators your role was also essential in delivering reforms that further strengthened our Union. This Committee, and the European Parliament more generally, has been in my experience an attentive interpreter of the demands of European citizens. It is only by doing so that the trust in the legitimacy of the EU’s institutions and policies is built, making it possible to achieve a more effective and inclusive Union. As I have argued elsewhere, citizens demand, and Parliament may help in achieving, a “more perfect Union”. A Union that will continue providing its citizens with physical and economic security, while also promoting the values of an open, democratic and peaceful society. Thank you for your attention. I am now at your disposal for questions. 1 See Speech by Mario Draghi, President of the European Central Bank, at the plenary debate of the European  Parliament on the ECB’s Annual Report 2017, Strasbourg, 15 January 2019.
Since 15 January, we have repeatedly and thoroughly explained our reasons for discontinuing the minimum exchange rate and introducing negative interest on sight deposits at the SNB. Upholding the minimum exchange rate was no longer sustainable given the changes taking place in the international arena and the sharply diverging monetary policy stances of the world’s major currency blocks. In formulating our monetary policy, we are confronted with an exceptionally complex situation on international financial markets. What is more, the global economy is still grappling with the after-effects of the financial and economic crisis, not least in the form of high levels of uncertainty. These are the realities that the SNB – and the Swiss economy – are facing. Turning a blind eye is not an option. In this environment, we were aware that the discontinuation of the minimum exchange rate would cause Switzerland’s economy to slow. While the data from the first quarter confirm that this slowing process is now underway, the country’s economic development since 15 January has been broadly in line with our expectations. Our monetary policy is geared towards this challenging set of circumstances and is currently guided by our willingness to take an active role in the foreign exchange market and apply negative interest rates. This two-pronged approach is designed to weaken the Swiss franc. The SNB’s interventions in the foreign exchange market, which feed more liquidity into the banking system, reinforce the effect of both of these measures.

My colleague, Fritz Zurbrügg, will provide further details on interest rate developments on the money and capital markets. Despite the low interest rates, mortgage growth has continued to weaken slightly in recent months. Notwithstanding this, imbalances on the mortgage and real estate markets remain high. My colleague, Jean-Pierre Danthine, will discuss this in greater depth in his remarks. 1  2  In October 2014, Consensus Economics projected inflation expectations of 1.4% for the period 2020–2024; in April 2015, it put these at 1.5% for the period 2021–2025. Long-term inflation expectations are only surveyed on a half-yearly basis. BIS central bankers’ speeches  In light of the uncertainty regarding the future of Greece, the Swiss franc continues to serve as a safe haven currency. In trade-weighted terms, the Swiss franc is still approximately 12% higher than it was at the beginning of the year. Over time, negative interest rates on the Swiss money and capital markets should help to correct the overvaluation of the Swiss franc. The rise in long-term interest rates abroad has also led to a widening of the interest rate differential with these countries of late. As conditions continue to normalise on international financial markets, investments in other currencies should become more attractive; this, in turn, is likely to help ease the overvaluation of the Swiss franc. The slowdown we are now observing in the economy also suggests that the Swiss franc is very unlikely to remain persistently high. Monetary policy outlook I shall now move on to our monetary policy.
All the models the Riksbank has used suggest that the real exchange rate will appreciate in the coming years. So to that extent the conclusion is clear. But the size of the calculated appreciation varies a good deal; in our calculations it ranges from a few per cent up to 10 per cent from the current level. Given the reasonable assessment that the level of inflation will be much the same in Sweden and the euro area in the years ahead, this real range implies an interval for the nominal SEK/EUR rate that extends from approximately 8.20 to a little more than 9 kronor. Take the next few years into account as well  The assessment of the real exchange rate in the longer run is thus an important component when considering an appropriate central rate. It is a matter of arriving at a rate that results in a balanced economic development in the long term. But it is not just the long term that is relevant here. In practice it is highly important that the chosen rate is perceived by the market as credible in the shorter run, too. That is a prerequisite for a stable development during the period in ERM2. That in turn presupposes, for example, that the rate functions properly in relation to the prevailing level of economic activity, the current fiscal policy and so on. The underlying inflationary tendencies that are discernible in labour costs, for instance, also play a part.

The prices of those assets fell, and markets closed for a range of complex credit instruments. As I said two years ago, “risk premia have become unusually compressed and the expansion of money and credit may have encouraged investors to take on more risk than hitherto without demanding a higher return. It is questionable whether such behaviour can persist”. And, as we have seen, it hasn’t. The re-pricing of risk that is still continuing is not a process that we should try to reverse. Adjustment to this has been painful for banks in the major financial centres in two ways. First, with some asset markets closed, banks found funding more difficult. Some needed to finance loans they had made but had then expected to package up and sell. Others needed to finance off-balance sheet investment vehicles that were no longer able to fund themselves. At the outset of the crisis, banks were concerned to protect their liquidity position. But increasingly, attention has turned to a second, more fundamental concern. As a range of asset prices fell, banks began to report large losses. Uncertainty about the scale and location of losses led to concerns about the adequacy of bank capital and hence the ability of the banking system to finance continued economic expansion. At the end of last year, sentiment in financial markets worsened markedly. So in mid-December, central banks around the world announced a co-ordinated set of actions in money markets.
The introduction of a European Scientific Advisory Board on Climate Change promotes the idea that all policies should be based on up-to-date scientific insights. It is hard to overstate the importance of the Climate Law. The EU is setting the bar high. Allow me to quote what the law says about the transition to climate neutrality. It “requires changes across the entire policy  spectrum and a collective effort of all sectors of the economy and society […] all relevant Union legislation and policies need to be consistent with, and contribute to, the fulfilment of the climate-neutrality objective while respecting a level playing field”[4]. We are starting to see this happen. From housing to energy and from transport to finance, the EU is introducing reforms to put Europe on track to become the first climate-neutral continent by 2050. So how will the Climate Law affect the ECB? For me, as a member of the ECB’s Executive Board and the ViceChair of its Supervisory Board, this question is relevant to both our monetary policy and banking supervision tasks. This question matters because, in the field of the environment, the ECB is a policy taker, not a policymaker. So what does the ECB need to take from the policy and objectives reflected in the Climate Law? To answer this, we first need to consider whether the ECB is bound by the Climate Law. If so, the ECB would have to take measures towards achieving the climate-neutrality objective. There is more, though.

SPEECH  The European Climate Law and the European Central Bank Keynote speech by Frank Elderson, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, Lustrum Symposium organised by Dutch Financial Law Association Amsterdam, 1 December 2022 I am honoured to speak at this 20th anniversary dinner, with so many distinguished lawyers around me. In this setting, I feel quite comfortable dwelling on legal issues for a while. A topic close to my heart – apart from the law – is the ongoing climate and environmental crises. I am glad that we have long since moved on from the time when only scientists and activists were concerned with this topic. It is now high on policymakers’ agendas, as we saw at the recent United Nations Conference of Parties (COP27) at Sharm el-Sheikh, at which – along with world leaders and a wide range of policymakers and interest groups – the ECB was also represented. I was struck by one story in particular. [1] The tiny Pacific nation of Vanuatu is badly exposed to cyclones and rising sea levels. To the inhabitants of Vanuatu, climate change is a human rights issue. And, as Vanuatu’s president, Nikenike Vurobaravu, stated, “we are measuring climate change not in degrees of Celsius or tonnes of carbon, but in human lives.” Vanuatu now plans to ask the UN General Assembly to seek an opinion from the International Court of Justice on the human rights implications of the climate crisis.
Replenishing their inventories, companies substantially increased their demand for commodities worldwide. Russia is a major producer of key commodities. High demand for Russian exports spurs economic growth this year. As companies complete their inventories, the effect of this factor will be tapering off gradually. The growth of oil export quantities will also be supported by the easing of the OPEC+ oil production cuts in response to the recovery of demand. Taking this into consideration, we have raised the oil price path in our forecast by 5 US dollars per barrel in the next three years. According to our preliminary estimates, the expansion of oil output under the new OPEC+ agreements will add about 0.1 pp to GDP growth this year and 0.2–0.3 pp next year. Another important growth driver is domestic demand, including both consumer and investment demand. Considering these trends, we have revised our economic growth forecast for this year upwards from 3–4% to 4–4.5%. After the recovery, the economy will expand at a pace close to its potential. We forecast that GDP will equal 2–3% in the next two years. The possibility to achieve higher economic growth rates will depend both on the expansion of production and logistics capacities and on labour resources, their expertise and performance. T hird. Monetary conditions have been progressively adjusting to the earlier increases in the key rate, but are still accommodative.

Likewise, instead of preventing institutions from taking risks, we must encourage them to better identify, monitor, and control the risks they take. Constant vigilance will help institutions to monitor their own status, and pre-empt any deterioration before damage is done, either to the institution or worse to the financial system as a whole. At the same time, MAS must continue to balance its natural inclination to regulate or supervise away what is new and strange and therefore risky, with the need to encourage the financial sector to be more dynamic and innovative. Nowadays when presented with new and ingenious schemes dreamt up by investment bankers, my first reaction is often to ask whether it may be too clever to be sound. Such scepticism on the part of financial supervisors is natural and healthy, but it should not deter innovation or become our dominant mindset. More broadly, because of the emergence of global financial conglomerates and the trend towards increasing risk transfers across financial industries, regulators need a holistic understanding of what and where potential vulnerabilities are, and how exogenous shocks might impact and permeate through the financial system. MAS must therefore enhance its capabilities in integrated supervision and financial surveillance. This is more critical as Singapore becomes more closely integrated into the global economy. 6  BIS Review 62/2002  We are also conducting our monetary policy in an environment of increased market uncertainty. Our exchange rate policy band should certainly be supported by sound fiscal and macroeconomic fundamentals.
Of course, we should also support projects that foster excellence and value added in our work by not only harnessing all talent, but also by including environmental and social risks in our vision as a central bank. 8  I am personally championing the analysis of environmental risk and sustainability at my organisation. Like the promotion of equality, this is an unquestionably innovative project that requires empathy and a long-term vision. Undoubtedly, it also requires an unprejudiced ear and a very open mind to achieve patient learning and progress. Both topics are of great significance to society and may encounter resistance at first, often out of ignorance. Hence the importance of bringing together as many people as possible to address these challenges and, of course, of good communication to help raise awareness. Does my gender have a hand in this? I’m not sure, because the Banco de España’s commitment is unanimous. That said, this is perhaps a topic where women demonstrate greater awareness. Indeed, it was a woman, the biologist Rachel Carson, who is said to have sparked the modern environmental movement. She sounded the first scientific alarm about the death of the planet at the hands of human activity. It is also true that in Europe the European Commission and the ECB are leading the charge against climate change. Both institutions are led by women. Furthermore, according to a survey conducted by the Elcano Institute, women are more environmentally conscious.

The entrance of new, large emerging economies into the world trading system has strongly influenced relative prices and the prospects for nominal stability. The potential labour supply available for the global economy has doubled 7 and increased relative to the supply of capital. Wage shares have fallen and profit shares have risen, both globally and in Norway. Firms in high-cost countries increasingly offshore activities to low-cost countries. Imports of goods in industrialised countries have shifted from high-cost to low-cost countries. Furthermore, the collapse of the Soviet Union and the accession of Central and East European countries to the European Union have played a significant role for the labour market in Europe. Labour migration has increased. Off-shoring and outsourcing – or merely the threat of it – may have, at least temporarily, reduced the bargaining power of trade unions and employees. Increased competition, both in product and labour markets, has probably motivated productivityenhancing measures. Productivity growth has been unusually high. 5  John Gieve (2006): “Practical Issues in Preparing for Cross-Border Financial Crises”, at the Financial Stability Forum Workshop: “Planning and Communication for Financial Crises and Business Continuity Incidents”, 13 November. 6  Financial Times January 16 2008. 7  See Richard Freeman (2006) “Labour Market Imbalances: Shortages, or Surpluses, or Fish Stories?” presented at the Federal Reserve Bank of Boston’s Economic Conference, June. 4  BIS Review 14/2008  Lower import prices, intensified competition and high productivity growth have been important disinflationary forces both in Norway and elsewhere.
Discontinuation of the minimum exchange rate The minimum exchange rate has undoubtedly served Switzerland well during an exceptional period. However, the old adage popular among economists – “there’s no such thing as a free lunch” – holds true for monetary policy as well. The SNB Governing Board was well aware that the introduction of a minimum exchange rate would entail certain risks – and we consistently alluded to these. That the SNB would have to make large foreign currency purchases and expand its currency reserves in order to enforce the minimum exchange rate was thus to be expected. The SNB must be willing to bear these risks if doing so is necessary for the fulfilment of its legal mandate, and if these risks are justified given the chances of success. We enforced the minimum exchange rate consistently for more than three years (6 September 2011 to 15 January 2015). At the peak of the euro crisis in 2012, the SNB had to purchase CHF 188 billion of foreign currency. Adding this to purchases from prior years reveals that the SNB’s currency reserves rose from CHF 50.5 billion in 2007 to  1  In August 2011, the SNB announced that it would very significantly increase the supply of liquidity to the Swiss franc money market by expanding banks’ sight deposits at the SNB from CHF 30 billion to CHF 80 billion within a few days.

2  BIS 2013 Triennial Central Bank Survey. The Triennial Survey is coordinated by the BIS under the auspices of the Markets Committee (for the foreign exchange part) and the Committee on the Global Financial System (for the interest rate derivatives part). The latest survey of turnover took place in April 2013. Central banks and other authorities in fifty-three jurisdictions participated in the 2013 survey. They collected data from about 1,300 banks and other dealers in their jurisdictions and reported national aggregates to the BIS, which then calculated global aggregates. The survey, among other things, provides data on turnover, instruments, counterparties, and currencies, which are referenced in this speech; http://www.bis.org/publ/rpfx13fx.pdf. 3  SIFMA US Bond Market Trading Volume; http://www.sifma.org/research/statistics.aspx. 2  BIS central bankers’ speeches  Changes to market structure The foreign exchange market is a dynamic market with a long history of change and innovation. Today, I would like to focus on two of the more significant recent changes in the market’s structure: first, the broadening of participation, and second, how execution is taking place within the market. Participation in the FX market The broadening of participation in the foreign exchange market is one reason why growth in FX trading volumes has far outpaced growth in global trade. The BIS Triennial Survey on foreign exchange market activity provides evidence of the degree to which this expanded participation is taking place. 4 Traditionally, volumes in the foreign exchange market were dominated by what is known as the inter-dealer market – trading between dealers.