samchain/econo-pairs-v1 huggingface dataset:
But I do not think that is where we are today. So since I joined the MPC just over a year ago I have not voted to increase interest rates – despite the fact that inflation has more often than not been above the target. But even though price rises over the past year have been running at relatively high levels, the underlying domestic inflationary pressures are not strong. Wage rises – despite a move up in household inflation expectations – remain low. Without a pick up in wage inflation I find it hard to think it at all likely that inflation being significantly above target is sustainable. Of course wage pressures may build significantly over the next year or so, though I do not believe this is the most likely outcome. And risks of an extended period of low growth – which would further weaken those pressures – are real. In talking about the possibility of an extended period of low, or no, growth I may sound blasé about inflation risks. But the point about risks is that more than one can exist. There are risks that inflation stays well above the target level; there are also risks that demand in the economy falls even more below supply capacity so that inflation further ahead drifts below the target. In considering how to balance these risks there is a need to look through short run and potentially transitory factors.

Yet they all failed to some degree to prevent the accumulation of risks that finally produced the crisis. So it is unlikely that there is a simple answer. Any plan for reform should take into account the nature of financial risk. Why were so many people misled for so long? And was there an inherent weakness in the structure of modern banking? Banks are dangerous institutions. They borrow short and lend long. They create liabilities which promise to be liquid and hold few liquid assets themselves. That though is hugely  BIS Review 32/2009  1  valuable for the rest of the economy. Household savings can be channelled to finance illiquid investment projects while providing access to liquidity for those savers who may need it. But given how risky banks are, it should not be surprising that from time to time they get into trouble. And they have done so regularly since banking began. Confidence in a bank can disappear quickly making it vulnerable to a destructive bank run. If a large number of depositors want liquidity at the same time, banks are forced into early liquidation of assets – lowering their value. And, of course, if banks make sufficient unwise loans to borrowers who do not repay, then that can threaten solvency as well. Banks can of course take their own actions to ensure that investor confidence is maintained. For example, a visible source of liquidity helps.
Covered bonds are secured primarily by a preferential claim on a pool of residential or commercial mortgage loans. They are protected from potential bail-in under the new crisis resolution regime and are subject to special supervisory monitoring. The European Commission has determined that covered bonds may be included as level 1 qualifying assets in fulfilling banks’ liquidity coverage ratio requirements. Covered bonds also receive favourable treatment both under Solvency 2 and in the regulation of large exposures. In addition, the European Central Bank’s Asset purchase programmes have supported market liquidity. Covered bonds have a long history of strong performance in general and they have survived and developed during shifting market conditions. The safety of covered bonds supports high and stable ratings. It also drives demand and market depth, confirming their position as liquid assets. Large falls in house prices may present a key risk for the covered bonds market, given the dominance of residential mortgages as collateral. At Norges Bank, we have looked at this risk and we have so far concluded that Norwegian covered bonds are quite robust against a potential decline in house prices. In the 2015 Financial Stability Report, Norges Bank estimated that a 40% fall in house prices would reduce the eligible cover pool by around 20%. In such an extreme scenario, refinancing costs may rise for covered bonds. However, the rise in costs would probably be somewhat limited compared with the rise in refinancing costs for unsecured funding.

All the more, ad hoc policy meetings based on ad hoc policy documents should be minimized. This not only helps the central bank in its communication with the public, but also helps the decision-making body to maintain internal discipline. Separateness emphasizes that special attention should be paid to monetary policy in the central bank’s agenda. In order to avoid any attempt to displace the policy agenda by any other ‘extremely  1  For further details see Lombardelli, Proudman and Talbot’s article ‘Committees Versus Individuals: An Experimental Analysis of Monetary Policy Decision Making’, published in International Journal of Central Banking, Vol. 1, No. 1, May 2005. BIS Review 88/2005  1  important’ issue, separate meetings should be established for policy discussions. Indeed, a policy decision is worth a special ‘policy day’, split into: (i)  a staff presentation, when staff present the outcome of their analysis (based on a standard set of policy documents)  (ii)  a discussion of the analysis  (iii)  the policy decision  (iv)  communication of the decision to the public  Staff independence should protect the members of the decision-making body from the filtering of undesirable information which can occur whenever a particular decision maker directly manages the ‘Economic Department’. Although such behaviour is, with high probability, not intentional, this member can influence the interpretation of the ‘staff’ analysis in a way convenient to his own opinions. It could happen that the rest of the decision-making body members receive a biased analysis.
The way forward towards faster growth lies in the first instance in striving to maintain the competitive advantage of traditional sectors – which typically rely heavily on cost advantage and where market share is being lost -, while promoting the development of new activities that exploit the potential offered by Malta’s strategic assets. These include EU membership, a modern technological  2  BIS Review 84/2005  infrastructure and a skilled and flexible labour force. The current, encouraging expansion in new activities such as financial services, software development and pharmaceuticals attests to the competitive edge which our economy indeed enjoys in these areas. This advantage must, however, also be supported by a stable operating environment that is responsive to changing market conditions. Elements of a coherent policy framework Such an environment requires a coherent policy framework on three levels: the first is the macroeconomic level, where a sound financial system and prudent fiscal and monetary policies should combine to provide favourable conditions for the restructuring of the productive base. At the microeconomic level, resources must be more efficiently allocated and managed by enterprises so as to obtain the maximum possible degree of cost-effectiveness and market penetration. The third involves what may be termed as meso-level policies, involving specific sectors. Policy at this level should primarily avoid distorting the mechanisms that facilitate economic activity. Supportive macroeconomic policies are already in place … At the macroeconomic level, the recent track record has been largely positive. Fiscal consolidation is progressing in line with the projections of the convergence programme.

Mervyn King: Monetary policy developments Speech by Mr Mervyn King, Governor of the Bank of England, at the Great Hall, Winchester, 10 October 2006. *  *  *  My Lord-Lieutenant, Ladies and Gentlemen Thirty years ago, inflation reached 27% – the highest that any G-7 country has experienced in the past fifty years. A few months later, Southampton won the FA Cup for the first, and only, time. You will be pleased to know that I see no causal relationship. Later in 1976, Jim Callaghan, as Prime Minister, delivered a famous speech to the Labour Party Conference in which he said “We used to think that you could spend your way out of recession … I tell you in all candour that option no longer exists, and in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step”. One of the economists who developed that insight – an American, Professor Edmund Phelps – was yesterday awarded the Nobel Prize. Low and stable inflation – 2.5% at present – is now the cornerstone of our economic policy. In that 1976 Cup Final every one of the players came from the British Isles. Today, it is hard to find British players among the top Premiership teams – globalisation is everywhere.
Asia has no shortage of funds, only that its high level of savings are invested in less liquid long-term investments. Thus, one of the more pressing issues in Asia is to build a more competitive, stable financial system and a robust infrastructure to facilitate efficient financial intermediation. The better risk management of the financial system would also assist both corporations and investors to manage also their risks better. Ultimately, a balanced and flexible economy with sound risk management will then be in a better position to withstand global shocks and avoid crisis. The need for national risk management 20. We are all aware of the complexities of risks in financial markets. Aside from credit risks, market risks such as interest rate, exchange rate, legal risks, operational risks and systemic risks all have to be managed, both at the micro level and at the macro level. All markets suffer from the “fallacy of composition”. Mistakes at the corporate or bank level will add up to national mistakes, which now may add up to regional or international crisis through contagion. Traditional risk management at corporate or sectoral level simply shift risks from one sector to another. Risks still remain in the economy as a whole. Thus, increasingly in the 1980s, there emerged the awareness that financial sector regulation was all about national risk management. 21. National risk management covers six major aspects:  •  Credible policies, with monetary and fiscal policies consistent with each other, and applied consistently. •  Capital account liberalization should be phased appropriately.

Jean-Pierre Roth: Review of the Swiss economy Speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the Bank’s Annual General Meeting, Berne, 29 April 2005. *  *  *  Dear shareholders Dear guests  2004: the economic upswing continues The economic upswing that began in summer 2003 continued last year. Economic growth moved into the positive zone and came close to its potential level once again. While growth was slightly negative in 2003, it reached 1.7% for 2004 as a whole. The recovery in Switzerland is due in large part to the rebound in global economic growth, which reached its highest level since 1976. Swiss companies have benefited from this situation: last year, exports rose by 6.7% – a significant increase compared with the 2003 figure. This figure reflects our exporters' continuing wish to adapt to changes in demand, as well as the untiring efforts to streamline Swiss industry and maintain Switzerland's appeal as a location for business. The Swiss economy's strong presence on the international markets has been a reality for a long time. As our direct investments abroad have grown, however, it has taken on a new dimension in recent years. Not everyone is aware that while Switzerland is a champion in savings, it also boasts a performance in the area of foreign investments that is unrivalled. In 2003, we invested some CHF 20 billion abroad – a sum equivalent to almost 20% of national savings.
Heng Swee Keat: The impact of the global financial crisis on Asia Keynote speech by Mr Heng Swee Keat, Managing Director of the Monetary Authority of Singapore, at the International Institute of Finance (IIF) Asia Regional Economic Forum, Singapore, 4 March 2009. *  *  *  Introduction Ladies and Gentlemen, Good afternoon. I welcome the International Institute for Finance (IIF) for holding its Asia Regional Economic Forum in Singapore. It is good to see such a diverse group gathered here for this Forum. An unprecedented crisis The most commonly used adjective to describe the current financial crisis is "unprecedented". Indeed, many aspects have been exceptional – •  the speed at which events unfolded and triggered a series of domino effects;  •  the scale of the impact, which has become global; the range of financial institutions and investors affected;  •  the near-perfect correlations of markets and asset classes that had been uncorrelated when conditions were benign;  •  and the range of unconventional measures taken by financial authorities globally to try and arrest the unfolding crisis. These features of the crisis are exceptional. But perhaps the most crucial aspect that has had a profound effect on the dynamics of this crisis and its impact on emerging economies, is that unlike various past crises, this current crisis originated in the US.

And the threat posed by climate change means we need to give serious consideration to the resilience of our physical and digital infrastructure. The New York Fed has the appearance of an historic institution, but behind the stone façade 1/2  BIS central bankers' speeches  we’re grappling with these issues in the same way that you are. In our economic research, our supervision of financial institutions, the payments systems we operate, in short – in all that we do. Talent, technology, and innovation challenge us every day. They create incredible opportunity, but they also test us by exposing new vulnerabilities. I know that over the next couple of days there will be lots of valuable insights shared by experts about how to handle the challenges posed by big data, cryptocurrency, and climate change. But first, to kick off the conference, it’s my pleasure to introduce John Dugan, Chair of Citigroup. Citigroup has operations in over 150 countries, with about 200 million customer accounts worldwide.2 As head of a global employer with complex, international operations, John is no stranger to the changing nature of risk. John became Chair of Citigroup at the start of this year. Prior to that he was chair of the Financial Institutions Group at the law firm Covington & Burling LLP, where he spent much of his career. He has also held a number of public sector roles, including Comptroller of the Currency during a critical time for our financial system and economy, from 2005–2010.
From the changing economic role of China and the Asia Pacific, to the rise of new technological applications – these are going to be very exciting times. 57. I would like to close with a personal note. All of us, in the HKMA and the industry, have achieved a great deal over the last 10 years. 58. This would not have been possible without the dedication, expertise and integrity of the HKMA’s own management and staff. They are a credit to Hong Kong. 59. But at the same time, we could not have done it without the professionalism of all of you in the banking industry. So I would like to thank all of our friends in The Hong Kong Association of Banks and the Hong Kong Institute of Bankers. Your constructive feedback and positive attitude to our relationship has made our mutual success possible. 60. As I say farewell, I trust that our collaborative relationship will continue, to the benefit of not only the banking industry but the whole Hong Kong economy and community. 61. I wish you all the very best for the future. Thank you all very much. 5/5  BIS central bankers' speeches

“Eventually, the Riksbank has realised that its policy was wrong and has made a 180-degree turn.” The last part of the criticism is that the Riksbank rather late in the day realised that it had been wrong all the time and therefore made a 180-degree turn. I have indirectly answered this in part as well. Let me, to be able to make the points I wish to make, describe how I view the way the Riksbank has been conducting monetary policy. In the same way as the conventional flexible inflation-targeting framework in some situations needs to find a balance between stabilising inflation and stabilising economic activity, one may sometimes also need to take various risks into account in the deliberation. The risk that the Riksbank has included to some extent has thus been that a rapid and persistent rise in housing prices and debt could cause setbacks later on and potentially lead to major problems for the development of the economy in general and for monetary policy. BIS central bankers’ speeches  9  Leaning against the wind is a question of degrees – not either or But it is important to realise that it is a question of achieving a balance. Allowing risks of this nature to influence policy-rate decisions does not mean neglecting the traditional monetary policy objectives. For one thing, the purpose of trying to manage the risks is to stabilise inflation and economic activity in a sustainable manner, by avoiding, or at least alleviating, dramatic downward adjustments in housing prices and indebtedness.
4  BIS central bankers’ speeches  The analysis in the Report suggests a key policy rate of approximately 1 percent in the coming years, followed by a gradual increase. The analysis suggests that inflation will increase somewhat in the coming quarters before edging down and lie slightly above 2 percent later in the projection period. Capacity utilisation in the mainland economy is projected to decline further, before returning to a more normal level. Let me summarise. After the global financial crisis, the Norwegian economy quickly rebounded, supported by robust public finances and strong growth in the petroleum sector. Since last summer, oil prices have fallen. Activity in the petroleum sector has probably passed the peak. So far, the impact on the real economy has been modest. At the same time, the Norwegian economy is facing new challenges. Vulnerabilities established during the golden years must be addressed. From being in a unique economic position, Norway is now headed for a period of restructuring. Norway’s starting point is favourable. Inflation is well anchored and the krone is functioning as a stabiliser. In addition, we have been able to transform oil in the ground into financial wealth in a period when oil prices were high. We have significant fiscal leeway. But the conditions and forces necessary for growth in the economy in the longer run will have to be brought more into line with those of other countries. Thank you for your attention. BIS central bankers’ speeches  5

Developments in the Swiss housing market have been relatively steady, despite the strong demand pressures discernible in certain regions. At present we do not detect any obvious signs of a speculative bubble that might culminate in a sudden fall in prices. The main explanations for the rise in real estate prices in the past few years have been higher expectations and good financing conditions. Around Lake Geneva the pressures on the limited available space and the fast growth in the residential population have acted as special stimulants. Thus there have been no speculative developments as witnessed at the end of the 1980s. Now that the business cycle has peaked in Switzerland, it is very likely that we will move into a phase of more moderate price increases. BIS Review 73/2008  1
4/7  In any event, the improvement in the Spanish banking system has allowed it to support the economic recovery and job creation seen in recent years through a more efficient allocation of credit to businesses and industries. The paradigm shift in bank resolution This transformation of the Spanish financial sector has occurred in parallel with a farreaching review at international level of the regulatory and supervisory frameworks for financial institutions. The aim has been to increase the resilience of the banking system and to reduce the impact of financial crises on the economy, with a wave of reforms, the last phase of which was completed in December 2017 by the Basel Committee on Banking Supervision and will be implemented progressively over the coming years. In Europe, these reforms have been accompanied by very significant institutional changes, in particular, creation of the banking union. And one of the pillars of the banking union is the Single Resolution Mechanism. As regards bank resolution, these reforms have in fact generated a paradigm shift, as a result of the high cost of the global financial crisis for the public sector in numerous advanced countries. The paradigm shift consists in moving from a bail-out to a bail-in system of bank resolution, that is to say, from rescue or recapitalisation using public funds to rescue using private funds, belonging to the bank itself, through the use of capital, hybrid instruments and, where applicable, the most subordinated debt.

Another institution set up during the crisis, in which the FROB has a stake, the Sociedad de Gestión de Activos Procedentes de la Reestructuración Bancaria (Sareb), also played a significant role in this process. Between December 2012 and March 2013, Sareb assumed property development loans with a gross value of approximately € billion and foreclosures of € billion. Thus, against a background of notable declines in their activity levels, banks have managed to reduce the weight of troubled assets on their balance sheets very significantly. Specifically, the non-performing loans ratio has decreased by more than eight percentage points and currently stands at 5.7% of total credit. Foreclosures, meanwhile, are at half the level recorded in 2014. Over this period there was also a significant improvement in the solvency ratios of Spanish credit institutions, which increased their tier 1 capital ratio from 7.5% in 2007 to 13.5% at the end of 2018. Despite these improvements, the Spanish financial sector clearly continues to face significant challenges. Among other factors, these arise from a non-performing loans ratio that is still higher than before the crisis, a rate of return below the cost of capital, and capital levels that, despite exceeding the minimum regulatory requirements, are on average below those of other European countries and below those needed to restore its reputation. 1  Consolidated groups and institutions not belonging to a group that are Spanish owned.