samchain/econo-pairs-v1 huggingface dataset:
Slow recovery Quarterly changes in per cent calculated as annual rate, seasonallyadjusted data 6  6  4  4  2  2  0  0  -2  -2  -4  -4  -6 -8  -6 Euro area  -8  USA  -10  -10 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 2004  2005  2006  2007  2008  2009  2010  2011  2012  Note. Broken columns represent the Riksbank’ s forecasts in July 2009. Sources: Bureau of Economic Analysis, Eurostat and the Riksbank  BIS Review 98/2009  9  5. The oil price, Brent crude USD per barrel 140  140  120  120  100  100  80  80  60  60  40  40  20  20  Outcome Forward rates, average up to and including 25 June 2009  0  0 00  01  02  03  04  05  Note. Broken lines represent the Riksbank’s forecasts. 06  07  08  09  10  11  12  Sources: Intercontinental Exchange and the Riksbank  6.

GDP in Sweden Annual percentage change 5  5  4  4  3  3  2  2  1  1  0  0  -1  -1  -2  -2  -3  -3  -4  -4  -5  -5 -6  -6 00  01  02  03  04  05  Note. Broken columns represent the Riksbank’s forecasts. BIS Review 98/2009  06  07  08  09  10  11  Sources: Statistics Sweden and the Riksbank  13  13. Survey indicator Index 120  120  Survey indicator Meanvalue +/ - one standard deviation  115  115  110  110  105  105  100  100  95  95  90  90  85  85  80  80  75  75 70  70 00  01  02  03  04  05  06  07  08  09  10  Source: National Institute of Economic Research (NIER)  14.
6  ]In a recent paper entitled “A monetary policy strategy in good and bad times: lessons from the recent past”(ECB Working Paper, No 1336, May 2011), S. Fahr, R. Motto, M. Rostagno, F. Smets and O. Tristani simulated a “counterfactual” monetary policy strategy which did not include credit and money among its variables of observation and reaction. The authors found that as a consequence of the shock caused by the collapse of Lehman Brothers, the euro area would have entered into a protracted period of deflation and the level of GDP at the end of 2010 would have been 2 percentage points below that which was observed. 6  BIS central bankers’ speeches  The two long-term refinancing operations achieved the purpose for which they were intended. In an environment of a near-shutdown of private credit markets, banks were not able to refinance their assets and were unable to maintain their level of exposure to households and businesses. The extensive long-term refinancing allowed for the partial and temporary substitution of private credit with central bank money and thus avoided a disorderly process of credit to the economy running dry. Nevertheless, these operations were not without their criticism. These can be summarised in three points: 1. The growth in liquidity following the two operations will ultimately lead to inflation;  2. The Eurosystem’s balance sheet is exposed to unprecedented and uncontrollable risks;  3.

The extraordinarily poor economic outcomes we see today underscore the importance of building a financial system that is resilient in its ability to provide credit to households and business throughout the business cycle. It also underscores the importance of limiting the types of financial and real imbalances that develop during times of prosperity. When such balances unwind, they can cause significant damage to the financial system and the economy. A range of reforms are in train as the Dodd-Frank Act and other initiatives are implemented in the United States and abroad. Within the Federal Reserve System, we are building a more robust framework for financial stability. And, through the Financial Stability Oversight Council (FSOC), interagency coordination in identifying and mitigating risks to financial stability is being strengthened. As we move to implement financial reform, we should not be dissuaded by those who argue that the costs of reform are too high or that the job is simply too difficult. I grant that not everyone is, or will be, happy with all the reform measures. Reasonable people can disagree about the best way to achieve certain public policy objectives or the appropriate speed of the transition. But I think that the fundamental point that the financial system needs to be changed in profound ways should be broadly accepted at this point.   Policymakers and market participants must acknowledge that the financial system is inherently unstable – that it is prone to booms and busts, and that these episodes can destabilize the real economy.
Chart 3: Credit growth coming back into line with GDP growth in the latest data Credit growth relative to GDP growth Credit growth relative to GDP growth (3-year trailling average)  15 10  1969 1971 1973 1974 1976 1977 1979 1981 1982 1984 1985 1987 1988 1990 1992 1993 1995 1996 1998 2000 2001 2003 2004 2006 2007 2009 2011 2012 2014  0 -5  Percentage points  5  -10 -15 -20 Source: Bank of England. BIS central bankers’ speeches  3  That said, increased vigilance is merited given the softness in nominal GDP growth, the stillelevated levels of household debt relative to income, the large current account deficit and pockets of more buoyant activity in areas such as Buy-to-Let mortgages, unsecured consumer credit and commercial real estate. More fundamentally, it doesn’t take a genius to recognise that a prolonged period of low and relatively predictable interest rates could encourage the build-up of excessive risks. That’s why the Bank is monitoring risks closely and has taken action where appropriate.

I want to thank you all for your support, trust and commitment, which has enabled us to reach this first step towards an integrated, more efficient, and harmonised post-trade market in Europe. In particular, I would like to take this opportunity to thank the national communities, namely the national central banks, the securities depositories and their clients, for their involvement and cooperation. Moreover, I would like to thank the 4CB (composed of Banque de France, Deutsche Bundesbank, Banca d’Italia and Banco de España) for developing and now also running the T2S platform. Let me also acknowledge the hard work and dedication of the people at the ECB who coordinated the implementation of the project. In particular, I thank Jean-Michel Godeffroy, who steered the T2S ship through sometimes stormy waters for many years, and Marc Bayle, who brought the ship to a safe harbour on 22 June 2015. And a special thanks to Ms Tumpel-Gugerell, who was the ECB board member in charge during the project’s inception. A popular saying is that “Two heads are better than one”. From the very beginning T2S has managed to unite the efforts of both the private and the public sector. T2S was not initiated by the market, but owing to its post-trade harmonisation agenda it has evolved into a marketdriven initiative which is supported by the public sector. In many ways it has been a unique project. First of all, no one was forced to join the T2S Community.
Svensson (2003) has proposed that each MPC member declares a preferred path for Bank Rate. The collective path is formed by taking the median value of Bank Rate at each date in the future. In general this collective path is not the path preferred by any single MPC member and does not reflect an internally consistent set of views, posing a considerable communications challenge. The least bad idea my staff in the Bank have been able to come up with is one that aims to balance the preferences of all committee members – that is to maximise the Committee’s overall satisfaction with the outcome. To operationalise this, there could be two rounds of voting. In the first, each Committee member would propose a preferred path for interest rates. In the second round, Committee members would vote on the paths proposed by the other members. This vote could be structured in a number of ways, for example: a simple ranking (with transferable votes to break ties); allocating a fixed number of points over the alternative paths (again with transferable votes to resolve ties); or an arrangement like the current one where, after discussion, the Governor proposes a motion which is likely to command a majority. How all this would be communicated to the public I leave as an exercise for the interested reader. 10  BIS Review 43/2007  How successful are the MPC’s communications to financial markets and business more generally, and should the Committee be considering other changes?

Ignoring developments in money and credit would, however, be a mistake when there are shocks to the supply of money. What can generate such shocks to the supply of money? Modern models of monetary policy tend to be silent on this point. Economic theorists continue to struggle to develop microeconomic underpinnings of the roles of money, both as a medium of exchange and a store of value. This explains why money is often hidden. By construction, models often ignore the role played by banks that extend credit to borrowers and, in the process, create liabilities that serve as money. In those models nominal interest rates are set according to a “reaction function” that always returns inflation to the target. The implicit assumption is that the supply of money passively and instantly adjusts to that warranted by the demand for money. In reality, of course, our ignorance about the economy is such that we can never be sure that the level of Bank Rate at any point in time is consistent with bringing inflation back to the target over the medium term. And developments in the banking sector can lead to an expansion of the supply of broad money and credit even while Bank Rate remains constant. It is quite possible, in the real world, for there to be unwarranted money supply shocks – whether stimulus or restraint. The MPC must always be looking for warning signals of this.
It is very important for our small and open economy that the powerful common market we are joining would operate as efficiently as possible and that a climate favouring innovative ideas would be predominant in Europe. According to the economic theory, the aim of the economic policy of a small country is to react fast in the changing circumstances and respond to the changes in the global economy in time. Our Estonian experience confirms this economic principle. The first prerequisite for a flexible economy is the faith in the durability of the core values of economic policy. This means abiding by the law and the fact that contracts are honoured and ownership relations stable. It certainly involves faith in the stability of the currency. The latter in turn is inseparably linked to the reliability of the financial system. •  Another prerequisite for flexible economy is education and openness to new ideas. •  Flexible economy also requires a favourable public attitude towards entrepreneurship. Entrepreneurs must have the opportunity to implement their ideas and engage capital, labour, and information at a fair market price and with as little trouble as possible. •  To sum up what has been said above, we could say that creating a flexible and competitive economic framework is the main economic policy task for Estonia. With this task we would also adopt the principal viewpoints of the Lisbon strategy comprising the economic policy priorities and directions for development in the European Union today.

In the past few years it has been customary that every regular quarterly economic survey of Eesti Pank includes a reference to the economic standstill in Europe. But today I would like to stress that even as such, at a standstill, Europe's economic power and extensive market suffices for it to remain one of the most important engines of the global economy. It is difficult to overestimate the role of the European Union in the world trade. One can, of course, be ironic about some fruit standards but, meanwhile, the same EU standards and product safety requirements affect the rest of the world. It is worth mentioning once again that 80% of Estonia's  4  BIS Review 26/2004  exports go to the EU member states while 85% of the direct investments made into Estonia are related to the European Union. I think that this calls for no further commentary. Europe's core economic policy goals are embodied in the Economic and Monetary Union. Such goals are stable economic growth and price stability. And this is what we all want. The EMU signifies the common monetary policy and coordinated economic policy. •  Why a common monetary policy and a single currency? The aim of the common monetary policy is to guarantee a low level of inflation (below but close to 2% a year) through a common currency, a common central bank system, and common interest rates.
The risk that the figures that are now emerging might herald a sharp correction in the imbalances that built up in the Chinese economy during the lengthy period of strong growth is having a negative impact on world trade, oil prices and the stock markets and foreign exchange markets. It is also very probably having an effect on the timing of the Federal Reserve’s decision to raise its key policy rates. A more positive development, however, is the approval and start-up of the Third Bailout Programme for Greece, which has mitigated another key source of uncertainty for both the European and the Spanish economy. In the euro area, GDP rose by 0.4% in Q2. This is lower than the Q1 figure (0.5%) and it is also lower than most forecasts of public and private sector analysts. Along the same lines, on 3 September the European Central Bank (ECB) revised down slightly its growth projections for the euro area, for both 2015 and 2016, to 1.4% and 1.7%, respectively. These figures continue, in any event, to be more positive than those expected at the end of last year. The inflation projections were also revised down, to 0.1% for 2015 and 1.1% for 2016. Inflation is, therefore, expected to continue to rise, in 2017 also, but at a slower pace, remaining still some distance from the price stability target of 2%. On 3 September the ECB reiterated that it was willing and able, if need be, to adopt a more expansionary monetary policy stance.

The decline, as a percentage of GDP, in government consumption, social transfers and the interest burden is particularly noteworthy. As a result of the interplay between these fiscal targets and the macroeconomic setting described above, the budgetary policy stance can be described as practically neutral, if the estimations of the change in the primary structural balance included in the 2016 Budget Plan are taken into consideration. Clearly, if any of the risks to growth I mentioned earlier were to materialise, or financing costs were to increase, it would be more difficult to meet the government deficit commitments, and this must continue to be the main aim of Spanish budgetary policy. The enhanced credibility of Spanish economic policy in recent years is a result of the achievements in the area of fiscal consolidation; to maintain this credibility we need to continue and complete the process of correcting the fiscal imbalances. Conclusions The Spanish economy has made visible progress in the correction of the external imbalance, the deleveraging of households and firms, the redressing of fiscal balances towards levels more compatible with the sustainability of public finances and the restructuring and consolidation of the banking sector. Unemployment has also begun to decrease significantly. The reforms undertaken within Spain, along with the headway made in furthering economic and monetary union and the ECB’s highly expansionary monetary policy, have proven key to restoring confidence. However, the legacy of the crisis, eight years after its onset, is still burdensome as shown by the high levels of unemployment and foreign debt.
Having a deep and solid financial system is an asset and a source of strength for Chile and that is why it is so important to safeguard the capital market as a central pillar to achieve the sustainable and inclusive growth that our country needs. 2. Moderating macroeconomic cycles and providing financial stability Let me now talk briefly about the actions taken by the Central Bank to contribute to the process of resolving macroeconomic imbalances after the pandemic as well as to mitigate the impacts of external shocks in the past moderate macroeconomic cycle. The year 2022 has been a very challenging time from a macroeconomic perspective. The end of many long-lasting quarantines and the return of economic activity as we knew it before Covid erupted in 2020 provided an auspicious start. Yet inflation was increasing both domestically and abroad. The most urgent and important, macroeconomic challenge that Central Bank of Chile had to address is inflation. Given that maintaining low and stable inflation is the main mandate of the central bank, this current situation undoubtedly represents the biggest test for the central bank at least since inflation targeting was adopted in the late 1990s. We have had a 4  difficult year in terms of inflation. In August, it reached a peaked to 14.1% yoy, and currently stands at 13.3% according to the figure released last Wednesday. This latest monthly inflation print showed an elevated number (1% for headline, 0.9% for core) highlighting that the deceleration of inflation is still not completely consolidated.

If so, then the firm becomes subject to more legal and regulatory requirements, some of which may be inconsistent with those applicable elsewhere. The result of the geographic expansion then is to increase the risk of possible compliance problems and to make the management of a global business that much more difficult. Deregulation within individual countries is also something of a two-edged sword. Clearly it affords greater business opportunities to a firm, but it also raises challenges in managing compliance risk across a firm’s business units. For example, as a result of the passage of the Gramm-Leach-Bliley Act in the US, a single firm can now engage in commercial banking, investment banking, and insurance activities. The implication for the compliance function is that it must not only keep on top of issues  BIS Review 76/2006  1  within each of these diverse business lines but also the interactions between them - for example, in policing potential conflicts of interest across the firm. Somewhat similarly, the overall compliance challenge for the firm is more than just the sum of the challenges from financial innovation, from globalization and from deregulation. There are interplays between these developments that add additional layers of complexity to the compliance challenge. Level of scrutiny The second broad consideration I mentioned is the increased level of scrutiny of compliance in the U.S. and in other major financial markets - scrutiny that is driven by major industry and political events that have changed the legal and regulatory environment over the past five years.
When banks have the right incentives to improve their management of risk and they are well capitalize, we believe that the banking sector becomes more resilient, less sensitive to the business cycle, and better able to serve as a source for credit and sustainable growth of the economy. 2  BIS Review 29/2004  This workshop explores the role of transparency in promoting the resilience and stability that Basel II has as its overarching goal. The Basel Committee certainly agrees that markets can serve as powerful allies of official supervision. We recognise that, in some cases, market discipline can exercise a more binding constraint on banks’ activities than regulations do. But I would emphasise that transparency does only part of the job. For transparency to promote stability, it must be combined with other policy approaches to achieve a goal that is as far-reaching and as significant as greater financial stability. Certainly, the Committee would agree that, when banks disclose sufficient information about their activities and controls, marketplace participants can create strong incentives for prudent behaviour. Markets can reward banks that manage their risks properly and penalise those that hold unrealistically low amounts of capital for their risk. So there is a great deal of merit in a markets-based approach. But we must remember that markets can behave inefficiently. They may overreact to minor events yet ignore significant indicators of risk, or they may be too short-sighted.

We have worked closely with our colleagues in the International Accounting Standards Board to avoid conflicts between Pillar 3 and the broader accounting standards. In fact, the Committee views Pillar 3 as a further refinement of the accounting standards that apply to banks’ specific exposures. Because we recognise that we have much to do in this area, we will continue to monitor accounting and market developments in the light of Pillar 3. Our dialogue with accounting standards-setting bodies and the accounting profession will continue to grow in the years to come. Conclusion: Basel Committee & the Global Research Community I hope that this conference will help to identify the policy options that supervisors have in order to address emerging issues in risk management, financial reporting, and transparency so that we can work toward a more stable banking system. We can expect the financial services industry to quantify new aspects of risk while refining the existing measurement and management techniques. Innovation and advances in the banking industry’s quantitative tools will open up many new areas for us to study that may enhance our ability to interpret financial information, to aggregate and report data, and to leverage the power of markets to motivate responsible business behaviour. On that note, on behalf of the Basel Committee, I would like to thank the research community in member agencies, in academic circles, and in the industry for your contributions to our work.