samchain/econo-pairs-v1 huggingface dataset:
Monetary policy will, therefore, need to be alert to the information contained in a wide range of asset prices, to be forward-looking in its aim of maintaining low and stable inflation, and to be ready to respond to changes in the signposts. The remarkable degree of stability that the UK economy has enjoyed over the past decade has been less evident over the past twelve months. Growth slowed and inflation rose above target. But after a period driving along a smooth new highway, a change to a more challenging road surface does not, as I said recently to the House of Lords Economic Affairs Committee, mean that the wheels are coming off the economy; rather, it tells us that there are somewhat more and somewhat larger bumps on the road. Monetary policy can try to avoid some of the worst bumps, but it cannot ensure a flat road surface. Nevertheless, growth has picked up and inflation has fallen back close to its 2% target. Our central view remains one of steady growth and low inflation. But there are risks to that central view emanating from the rest of the world and we shall watch developments in world capital markets carefully. By keeping inflation close to the target, and so doing what it can to maintain economic stability, the Monetary Policy Committee aims to allow you and other businesses to follow the signposts which guide a market economy.

I cannot finish without reminding you that tomorrow is the 300th anniversary of the birth of Benjamin Franklin, arguably the greatest of the American founding fathers. During his lengthy stays in England, Benjamin Franklin visited Kent many times. To celebrate his tercentenary the American Brewing Association has produced a new recipe for Franklin’s favourite beer. The hops recommended for the recipe are Kent Goldings. Despite the fears of the demonstrators on Hop Saturday in 1908, the Kent hop industry has not disappeared altogether. The area under planting is certainly much smaller, but research in centres such as Wye College has produced the new hedgerow hops which are recognised worldwide. Employment in Kent, though, has moved into new and more productive sectors. Adapting to changes in the external environment is not easy for any of us- whether running a business or setting monetary policy - but if we do adjust the benefits will accrue, if not to everyone immediately then to the great majority over the years to come. BIS Review 9/2006  3
It is to monitor and identify the buildup of risk and the development of new types of risk. And to take action to address them. Here I think macroprudential policy is at a much earlier stage of development. In part this is probably because having crystallised in the crisis, the risks in the core banking system have been muted in the aftermath. And because the development of the new framework of regulation has consumed so much of policymaker and regulator energy. The FPC has certainly spent much of its short life so far on the development and implementation of the new framework of regulation. But it is also due to the fact that there is still a great variety of views as to how macroprudential policy should identify and respond to changing risks in the financial system. There is no consensus about which risks it should care about and which instruments are most effective in addressing them. There is not yet the extensive body of practice and of theoretical and empirical research that exists, for example, in the world of monetary policy. As I mentioned, there are now macroprudential authorities in around 40 jurisdictions. But there are very different views among policymakers as to what time-varying, countercyclical macroprudential should and could do. Some believe macroprudential policy should actively tighten regulation to lean heavily against the powerful dynamics of the credit cycle as the amplifiers in the financial system drive up credit booms and risks.

In the post war economy with closed capital and current accounts the banking system was tightly controlled by government. It was an instrument of macroeconomic management and of financial repression in order to repay the national debt. As the Chairman of Lloyds Bank at the time described it, “It was like driving a powerful car at twenty miles an hour. The banks were anaesthetised – it was a kind of dream life”. But, from the beginning of the 1970s, as the financial sector was increasingly liberalised and globalised, the old risks returned. It became apparent by 1979 that the Governor’s eyebrows needed to be bolstered with statutory regulation and supervision of banks. As capital accounts were increasingly opened up and cross border competition grew, the need for a more level playing field between internationally active banks became more apparent. Liberalisation led to a shift towards more explicit prudential standards starting with the 1975 Basel Concordat – the forerunner of today’s Basel standards. The focus was very much on promoting the safety and soundness of individual firms. Much less attention was given to the fact that the risks in the financial system are greater than the sum of the risks in its parts. Central banks were no strangers to such systemic risks. Indeed, they were recognised at the time – the forerunner of today’s Basel Committee identified them and even coined the term “macro-prudential” risks to distinguish and separate them from “micro-prudential” or firm specific risks that were the subject of the Basel Accords.
There have been a number of bankruptcies. It is common knowledge that the going is rough for Sweden’s telecom giant, Ericsson, with repercussions for many suppliers. We also know that much the same is happening in other countries, not least the United States. In order to put these developments into perspective and thereby make it easier to interpret what is going on, I believe we should take a look at the past. That can also enable us to form a better picture of where we are going. Having done so, the only conclusion I can draw is that the troublesome times through which we are now passing are transient. Let me explain. Some say that the first computer was constructed around the mid 1940s. But the real breakthrough can perhaps be dated to the 1970s, when it suddenly became possible to produce a complete computer in the form of a tiny chip — a microprocessor. From approximately 2000 at the end of the 1950s, the number of computers in world has grown to several hundred million today. At the same time, their data processing capacity and possibilities have increased by an estimated factor of as much as 4 billion, which works out at an annual increase of almost 60 per cent. Gordon Moore, one of the founders of Intel, noted some decades ago that thanks to advances in the production of semiconductors, the data capacity of a single chip could be doubled every 18 months.

The number of countries engaged in this global event and consequently the number of the involved of children and young people has been trended upwards. This year, GMW will take place in around 175 countries and will involve around 40 million children and young people. The global health and economic emergency caused by COVID-19, and its social effects have affected almost all aspects of life to all age groups of the society. We know that different age groups are experiencing these effects in different ways. Hence, related to students and younger people, in addition to health aspect, the pandemic has posed to them challenges in the field of education and employment. For these reasons, it is more important and relevant than ever, to provide them with the required knowledge on the personal finance management and the correct use of banking products. In this context, the theme of this year competitions and activities to take place is “Take care of yourself, take care of your money”. This theme highlights the crucial importance of knowledge in an evolving digitalised and innovative market, which enable people to avoid physical contact while using the financial and banking products, hence providing for a better protection of public health.
Alternatively, OPEC can take a more active position and push up prices even further by capping production. Only a few years ago, a long-term price of around USD 20-25 (in real value) per barrel was the normal estimate. Analyses such as that presented by the IMF suggest that the long-term oil price level may be considerably higher than this. Let us return to the Norwegian economy, and the possibilities and challenges facing Norway. The projections in Inflation Report 1/05, published on 16 March, are based on a gradual increase in the interest rate. This is in line with financial and foreign exchange market expectations. It is assumed that the exchange rate will shadow movements in the forward exchange rate. This implies that the krone will remain fairly stable around the current level in the years ahead. Mainly as a result of persistently high oil prices and expectations that oil prices will remain high, investment in the petroleum sector may reach record levels this year. The investment intentions survey for the petroleum sector points to very high growth. The level is expected to remain high throughout the projection period. Activity in the petroleum sector will have spillover effects on the mainland economy, initially on the engineering industry and the construction sector. The scale of petroleum investment and its spillover effects are highly uncertain. The last time petroleum investment showed a sharp increase, in 1997/1998, growth was substantially stronger than had been assumed. An upturn occurred in the Norwegian economy as a whole at the same time.

In this respect, our baseline forecasts take the Medium Term Program as given and thus assume that fiscal discipline will be maintained. A revision in the monetary policy stance may be considered, should the fiscal stance deviate significantly from this framework and consequently have an adverse effect on the medium-term inflation outlook. We will continue to focus on price stability in the formulation of the monetary policy while preserving financial stability as a supplementary objective. To this end, we will carefully assess the impact of the macroprudential measures taken by the CBRT and other institutions on the inflation outlook. We are of the opinion that strengthening the structural reform agenda that would ensure the sustainability of the fiscal discipline and reduce the saving deficit would support the relative improvement of Turkey’s sovereign risk, and thus facilitate price stability and financial stability in the medium term. This will also provide more flexibility for monetary policy and contribute to social welfare by keeping interest rates of long-term government securities at low levels. In this respect, I would like to end my remarks reminding you the  10  BIS central bankers’ speeches  importance of the steps towards implementation of the structural reforms envisaged by the Medium Term Program. Thank you very much for your participation. BIS central bankers’ speeches  11
What we need to carry with us Before saying a few words about the way forward for monetary policy in the new environment, I would like to dwell for a moment on the question of what expectations there should be about monetary policy. The fact is that we are  8 [13]  emerging from a period in which this question has, in a sense, been brought to a head. Monetary policy in recent years has been focused on bringing inflation up to the target, while consideration of other circumstances in the economy has basically had to take a back seat. I am thinking here primarily of the risks of various negative side-effects from the low level of interest rates. This is an experience we carry with us as we go forward. And it is not only of significance for monetary policy. Confidence in the inflation target cannot be taken for granted For a long time, the Riksbank has been expressing concern for the risks posed to the economy by household indebtedness and rising housing prices. And during the period up until 2014, these risks periodically had some influence on ratesetting. As always, however, it was the economic outlook and inflation prospects that directed the focus of monetary policy. But the Riksbank made use of the flexibility in inflation targeting to help subdue debt accumulation and housing price increases to some extent. This was done by keeping the repo rate marginally higher than was justified by the outlook for inflation alone.

Rest assured that the ECB Governing Council is fully committed to rein in inflation, and to ensure that it returns towards 2% by end 2024 or end 2025. II. Paris' momentum as financial centre Amidst this geopolitical and economic uncertainty, and despite the recent turmoil in the United States and in Switzerland, financial stability has been preserved in Europe. EU banks are robust, with substantial capital and liquidity buffers: they are in their overwhelming majority subject to stringent Basel requirements – which makes a big difference with the many mid-sized US banks. We have in the euro area no "Sorgenkind" or "problem child", such as Crédit Suisse; and since 2014 we have had a single and strong supervisor thanks to Banking Union. As President of the French prudential authority (the ACPR), I can in particular attest to how solid and diversified French banks are nowadays. Four of them are categorised as global systemically important banks (G-SIBS), and they act as catalysts for Paris as a financial centre. Indeed, Paris stands out as unique in the network of European financial centres: it is the only one to offer such a wide range of financial activities, from global asset management to insurance and banking, and it has further reinforced its position since Brexit.
After all, collectively these enhancements to our current regime may not solve another important problem evident within some large financial institutions – the apparent lack of respect for law,  6  BIS central bankers’ speeches  regulation and the public trust. There is evidence of deep-seated cultural and ethical failures at many large financial institutions. Whether this is due to size and complexity, bad incentives or some other issues is difficult to judge, but it is another critical problem that needs to be addressed. Tough enforcement and high penalties will certainly help focus management’s attention on this issue. But I am also hopeful that ending too big to fail and shifting the emphasis to longer-term sustainability will encourage the needed cultural shift necessary to restore public trust in the industry. One alternative strategy for dealing with too big to fail is to reduce the size of large banks by imposing size limits. While I understand the motivation, it is important to recognize that imposing size limitations might not be a very efficient means of making the financial system more stable. First, it could sacrifice some socially beneficial economies of scale and scope, especially to the global clients of large financial institutions, depending on how the size limits were implemented. Second, the resulting benefits in terms of reducing systemic risk might be quite small.

However, the TLTROs will not merely provide long-term funding. The TLTROs are targeted operations: the stronger the flows of new net lending to non-financial corporations and consumers (relative to a specified benchmark), the higher the amount that banks will be permitted to borrow from the Eurosystem at very attractive terms and conditions over a period of up to four years. Hence, we have built in strong incentives for banks to expand their lending beyond original plans – both banks with a recent record of positive lending and those that have been deleveraging. Overall, the measures adopted last month have already provided additional monetary policy accommodation. Even though substantial easing measures had already been priced in by markets before the Governing Council’s June meeting, money market rates and bond yields declined further after the announcement of our decisions. Expectations with respect to shortterm money market rates have come down some basis points from their already very low levels. Looking forward, we will maintain a high degree of monetary policy accommodation. In view of the outlook for inflation, we will keep the key ECB interest rates at current levels for an extended period of time. Moreover, the ECB continues to stand ready to take action, if necessary, to further address risks of too prolonged a period of low inflation. This could also include the use of other unconventional instruments in line with our price stability mandate. Challenges ahead Let me now turn to the challenges that the euro area will face in the years to come.
Using the earlier forest fire analogy, it was as if the Fed could not drop water directly on the burning section of the forest; rather, it had to drop the water on an adjacent section of forest and hope that somehow the water got to where it was needed. Several problems became apparent with this strategy. First, few discount loans were being taken out. There is a history of “stigma” associated with borrowing from the Fed’s discount window. Given the high degree of uncertainty in the financial markets in the autunm of 2007, this stigma effect likely became amplified. Second, given uncertainty about their own future liquidity needs, banks developed a strong “precautionary demand” for liquidity. This implied that they were less willing to lend out liquidity to other financial firms. Finally, it was becoming increasingly difficult to assess the credit risk associated with lending to other firms even if only for short terms. To use a medical analogy, the progression of a fever can be measured by a person’s temperature. The progression of problems in the interbank lending market can be measured by the spread between LIBOR and the overnight index swap (OIS) rates for a given term. Chart 7 shows the 3-month LIBOR/OIS spread. Prior to the onset of the financial crisis, this spread had been very narrow. Very soon after the BNP Paribus announcement, the “fever” shot up dramatically. The first new liquidity facility that was introduced to deal with these problems was the Term Auction Facility or TAF on December 12, 2007.

Ravi Menon: Financial advisory services – putting the customer first Keynote address by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Life Insurance Association 50th Anniversary Gala Dinner, Singapore, 26 March 2012. *  *  *  LIA President, Mr Tan Hak Leh Distinguished guests, ladies and gentlemen, good evening. Role of life insurance and financial advisory services Saving for the future, investing for returns, and protecting against risk – these are the fundamentals of managing our finances. Yet so few of us do it well. We are far better at earning an income than investing it and protecting against risk. To make matters worse, many life insurance and investment products are often not easy to understand. Many people are not financially savvy. And many of those who are, do not have the time to review the range of insurance and investment products available, and understand what is best suited for their needs. This is where financial advisory service comes in. Financial advisers can help people identify their insurance and financial planning needs and recommend suitable products. The roles of insurers and financial advisers are intimately intertwined. It must be so. Insurance protects dependants. Investments grow savings and wealth. How can we buy insurance without regard to our broader investment portfolio? Likewise, how can we invest without considering how well we are protected against death or disease? Life insurance and financial advisory services go hand in hand.
On an optimistic view, if consumption continues to hold up, and assuming that the recent underlying productivity gains can be maintained, investment spending will recover as the spread of ICT through the economy resumes, and the downward stock adjustment will come to an end. On this view we can look forward to a pick up in US activity as we move, say, into next year. But the pessimist is inclined to point to the weakness of private sector saving, which could induce more cautious consumer behaviour especially if unemployment continues to rise; he points to a possible overhang of past investment excesses; and he points to the US external deficit which will at some point need to be corrected. These adjustments might take place gradually over time, in which case the US might face a more protracted period of relatively slow growth; or, if you are really pessimistic, the adjustments might be more abrupt implying a possible period of negative growth and global financial instability. The recent somewhat erratic recovery of US stock markets from their earlier gloom suggests that they are beginning to side with the optimists; some of the survey evidence of consumer and business confidence on the other hand still supports a rather more pessimistic view. For what it is worth, and given the strong policy response in the US, I am modestly optimistic, but I recognise the downside risks.

Eurofi High Level Seminar – Lisbon, 16 April 2021 What fiscal policies beyond monetary policy support? Speech by François Villeroy de Galhau, Governor of the Banque de France  Ladies and Gentlemen, I am very happy to join you today. I would like to extend my warmest thanks to Didier Cahen and David Wright for fostering the fruitful European spirit that we all cherish, despite the difficulties of the moment. As you know, the ECB silent period has already started, so I won’t say a word on monetary policy. However, this will give me the opportunity to tackle a core issue of our incomplete Economic Union besides our successful Monetary Union: fiscal policy. Monetary policy cannot be – and fortunately no longer is – the only countercyclical tool available in the euro area. There are two other links between monetary and fiscal policy to which I would like to draw attention: an accommodative monetary policy, as we have today, supports an active fiscal policy. The second is the risk of a bank-sovereign loop, which as supervisors we are keen to avoid. Let me nevertheless stress that I have no such fear for the country I know best: French banks since 2014 have decreased their exposures vis-à-vis public debt in absolute terms and have done so dramatically as a proportion of their balance sheet. I will first talk about the “fiscal” lessons we can draw from the Covid crisis for Europe (I).
One will also require that a certain percentage of the banks’ assets are liquid, in the sense that they can be converted into cash relatively easily. This reduces the banks’ vulnerability to sudden outflows of funds deposited or maturities of loans that cannot be rolled. Put simply, they require that the bank holds a liquidity buffer. The size of the buffer is calculated to ensure that the bank can manage a 30-day period with very large withdrawals of deposits and substantial loan maturities. These two regulations – on liquidity buffers and more stable sources of funding – entail less risk that the banks will be taken by surprise as they were during the financial crisis. But above all the regulations will lessen the contagion effects on the markets. Stable liquidity management reduces the risk of turbulence in individual markets or banks quickly spreading and creating financial problems for other banks. BIS Review 159/2010  5  Stricter risk management The third part of the Basel Committee’s reform package concerns what is perhaps the most important mainstay of the banks – the way they manage their risks. If risk management is inadequate, having plenty of capital or apparently good liquidity management will not help. Risk management mainly concerns credit risks and market risks. Credit risk means that a borrower is unable to repay his or her loan.

We also carry out stress tests on the banks to measure their resilience to negative events that would cause large losses. These tests are a very important part of our work, and we are also working on developing them further. When we publish the second Financial Stability Report of the year next week, you will see examples of this. BIS Review 159/2010  9