samchain/econo-pairs-v1 huggingface dataset:
These ABSs are in the balance sheets of non-banking financial entities (NBFEs) throughout the world, such as hedge funds agencies, or financial vehicles tied to banks, the latter particularly in Europe. Although the main global banks do not seem to be directly and significantly exposed to this component of mortgage loan risk in the US, they do have indirect exposures through credit lines or guarantees to NBFEs and in Europe they also have direct exposure to financial vehicles or conduits that they own. As these ABSs are illiquid, no direct information exists on their market value, which restricts the access to the market for NBFE trade securities that have – or are suspected to have – ABSs backed by sub-prime mortgage loans among their assets. This uncertainty has eroded insurance companies and pension funds’ appetite for buying NBFEs’ trade securities, which has substantially raised costs and reduced access to financing, hindering the renewal of their liabilities. Thus, the central point of this adjustment is located in the ABS-backed trade securities’ market and in NBFEs that have – or are suspected to have – large investments in ABSs backed by sub-prime mortgages. In addition, in face of the difficulties to renewing their traditional funding sources and investors’ redemption claims, occasionally these agencies or funds have been forced to make aggressive changes in their investing and financing strategies by selling off assets, using their commercial banking credit lines, raising capital contributions or resorting to sponsor banks’ guarantees.

In order to preserve independence of monetary policy, that is, not to subordinate it to the foreign exchange policy nor to a specific value of the exchange rate, the chosen method was a pre-announced and mechanical daily purchase of 50 million dollars. In fact, the degree of independence was such that, later on, the interest rate could be raised when faced with a more complex inflationary scenario, without the need for stopping intervention. Halfway through September, liquidity tensions grew substantially around the world, as well as in Chile. This led the Board to bring the reserve purchase program to an end when almost 6 billion dollars had been accumulated, and the country had reached quite a comfortable international liquidity position, which would enable us to mitigate any possible sudden stop of capital flows. Besides, in view of the worsening of liquidity problems, the Bank announced the supply of liquidity in pesos and dollars through repos and swaps. Later on, in October, the range of eligible collaterals was broadened and the dollar swap program was extended for six months. Then, in December, an extension for all of 2009 was announced for the repos and swaps program, and the range of eligible collaterals was broadened further. The purpose of these measures was to align market rates with the Monetary Policy Rate and to alleviate foreign currency liquidity tensions. Both objectives have been accomplished, and the scarce demand for dollars through swap transactions show that our economy still has a fluid access to the international financial markets.
In October we had revised down our growth forecasts for Sweden and abroad considerably and in December we revised the forecasts down by as much again; the economic slowdown had hit with even greater force than we had earlier expected. The weaker krona together with the fall in energy and food prices appeared to some extent to be able to counteract the severe slowdown in the economy. According to our forecast in December, Swedish GDP will decline by 0.5 per cent in 2009, but recover during 2010, when growth increases to approximately 2 per cent. We also revised down the inflation forecast substantially, primarily because of falling energy prices and declining interest expenditure for households. According to our assessment, CPI inflation will on average be just over 1 per cent in 2009. However, inflation will then rise towards the target level at the end of 2010, as economic activity improves and the effects of falling energy prices and interest expenditure no longer affect the inflation figures. The assessment in December was that resource utilisation would be lower than normal over the coming years, while inflation would undershoot the target for a while. Given this, we Executive Board members were agreed that a substantial and long-lasting cut in the repo rate was needed to avoid an unnecessarily long period of inflation undershooting the target and of weak real economic development. Nor were there any advantages to adjusting the repo rate in gradual stages.

We forecast that the rate of inflation will decline rapidly in 2009 and this will probably mean that people will continue to talk about deflation. If so, it is important to remember why inflation is falling. A large part of the explanation comprises falling energy prices and falling interest expenditure; that is factors that are favourable to growth. And it is also important to remember that a temporary fall in the rate of inflation towards zero, or even below zero, should not be confused with a prolonged process with falling prices that affects long-term inflation expectations. In the latter case, consumption and demand may come to a halt, which could further reduce inflation expectations and thus affect demand in an ongoing negative spiral. Our forecasts, and those of most other experts, indicate that growth will recover in 2010 and that inflation will then increase. Expectations of generally falling prices over a long period of time should not thrive in such an environment. We expect the financial crisis to peter out during the course of the year that has just begun. However, the analysis of what has happened and of what needs to be done in terms of regulation will continue. The discussion of the consequences for monetary policy and the monetary policy framework will also continue. One question that will probably arise again is whether, and if so how, central banks should take the development of credit and asset values  BIS Review 2/2008  7  such as property prices into account.
Four factors seem to have been especially significant: •  At the beginning of the period with an inflation target, particularly in 1996, the CPI was affected considerably by the dramatic decline in interest rates that ensued when the credibility of the new regime was established. •  On a couple of occasions in the past years, rapid rises in energy prices in particular, but also in food prices, have pushed up inflation. The rises were essentially related to supply factors, such as water shortages in hydroelectric power companies’ reservoirs. The effects were judged to be temporary, which also proved to be the case. •  During certain periods, not least recently but also in the latter part of the 1990s, imported inflation has been unexpectedly low. •  At the end of the 1990s and the beginning of this decade, productivity growth has been unexpectedly robust. It is interesting to note that during several periods when inflation was below target, monetary policy was clearly loose at the same time as GDP growth was high. But in spite of this, inflation has been too low. What has happened above all is that unexpected supply changes have dampened inflation. This has been a global phenomenon to a large extent; in other words, a situation that we have shared with other countries.

The limit for how long and how much monetary policy can raise employment is determined in practice by the economy’s long-term growth potential, which in turn depends partly on how well the labour market functions. When we conduct monetary policy with an inflation target, this means under normal circumstances that we can help stabilise actual output around its long-term potential. If the Riksbank is to be able to take any account of employment in the short run, however, it is particularly vital that economic agents have confidence in monetary policy and the inflation target; this is a clear lesson from the situation in the 1970s and 1980s. As you know, the principal instrument we use to try to meet the inflation target is the repo rate. We set this rate with the aid of forecasts of inflation a couple of years ahead. Naturally, a lot can change in the space of two years so that our forecasts do not prove accurate. We can make up for this to some extent by being able to change the rate in the light of new information. But we can’t compensate entirely for such events, of course. Sometimes, developments affect inflation at very short notice: a sharp hike in electricity prices, an equity price bubble that bursts, a war that heightens unease in the world and curbs demand, etc.
So have the inputs, the thousands of air-miles and hours spent in meeting rooms and the outputs, the new global standards and rules, secured the outcome – a safer global financial system? This is the final question I will turn to. The inputs and the output have achieved more internationally than ever before. They are necessary conditions for success. But they are not in and of themselves sufficient. To achieve success, to make the international financial sector truly safe, this programme of reform needs to meet two further conditions. The first, and, wild difficult, the easier of the two, is the condition of coherence. The second, and harder, is the condition of mutual trust. I am often reminded by financial sector firms of the need for “coherence”. “How do all these reforms fit together?” “Given the interconnectedness of all things in the financial sector what about unintended consequences?” And, most pointedly, “when will this regulatory tsunami end?” I have sympathy for these concerns. Financial firms need to be able to plan. They do not have unlimited resources. They need to know as soon as possible the regulatory end point they are working towards. And it is true that some of the regulatory reforms overlap. Some address the same issue from different angles. We cannot be sure how they will work together in practice. But remember, neither was the crisis “coherent”. It threw up multiple and complex failures and problems that then sparked multiple regulatory responses.

More specifically, the ECB enhanced its Asset Purchase Programme (APP) with the introduction of the Pandemic Emergency Purchase Programme known as PEPP, the size of which was 1.85 trillion Euros, in order to lower borrowing costs and re-establish  1/3  BIS - Central bankers' speeches  favourable financing conditions within the Eurozone. Focusing on Cyprus, the total amount of net asset purchases in government bonds reached € billion Euros at the end of February, 90% of which was purchased by the CBC. At the PEPP announcement, amid severe market fragmentation, the Cyprus 10 year sovereign bond yield increased to 2,21% while within a quarter of these Eurosystem bond purchases dropped by 1,25% (reaching 0,96% in June), exemplifying the benefits of these purchase programmes. Furthermore, the Cypriot banking system benefited from the use of TLTRO III, as well as from the easing of macro prudential measures, in order to support access to credit. It should also be noted that through the explicit assurance to maintain supportive monetary policy for as long as needed, through our Monetary Policy Forward Guidance, the ECB is decisively strengthening the efforts to boost economic activity. Turning to the current challenge that we are faced with, the Russian invasion of Ukraine has moderated expectations of a continued strong GDP expansion in the Eurozone and Cyprus, at least in the short-term.
At the end of 2017, the rate on government securities with short maturities was between 20 and 35 basis points lower than the Riksbank's policy rate, depending on the measure used (see Figure 2).6 Event studies show that the rate on government bonds fell by 30-50 basis points in total as a result of the Riksbank's purchases during 2015-2017. Erikson's study indicates that the entire decline in long-term interest rates occurred as a result of the short-term interest rates on government securities being pushed down and expected to remain so. The interest rate effect appears to have arisen through a general shortage of government securities (a negative liquidity premium, even on the very shortest maturities) rather than the term premiums being pushed down. If our purchases entailed lower premiums on government bonds, the rate on government bonds should have fallen in relation to the expected average policy rate over the maturity of the bond. One way of examining this is to compare the rate on government bonds with expectations of the future policy rate, as in the left panel of Figure 3.7 We see a clear fall in the interest rate differential of about 20 basis points when purchases started in early 2015 and then a further fall around  5 See De Rezende, Kjellberg and Tysklind (2015), and Melander (2021).

At the same time, faith in the ability of the financial markets to work effectively in all situations has been undermined. An effective financial sector contributes to growth and prosperity in the economy, and it is indisputable that more effective regulation and supervision are now required. In my opinion, however, it is important that the changes in the regulatory structures that are now being implemented are balanced and well considered. Above all, I believe that it is important to avoid the sum total of all the regulations that are introduced restricting growth or, in the worst case, giving rise to new crises. It would be a mistake to underestimate the inventiveness of the financial sector and its ability to circumvent regulations of different kinds. Producing a regulatory framework that makes the financial system safer and more secure without losing important welfare gains is really the major challenge that the authorities now face. Thank you! BIS Review 135/2009  9
Cross-border payments  Page 5  are by their nature more complex than purely domestic ones. They involve more, and in some cases numerous, intermediaries, time zones, jurisdictions and regulations. In some instances, a cross-border payment can take several days and can cost up to 10 times more than a domestic payment. That is why enhancing cross-border payments was set as a priority in 2020 by the G20 and the UK has been playing a leading role in the comprehensive work programme led by the FSB[6] and which the CPMI and the BIS more broadly are closely involved in. One of the main frictions in the cross-border space is where the same transaction must be reviewed multiple times to ensure that the parties are not exposing themselves to illicit finance under different national regulations and sanctions lists. The current costs of AML/CFT compliance are significant[7]. Experience with complementary innovations such as digital IDs has already demonstrated the potential for cost savings[8]. There is also a significant time and resource benefit as sanctions alerts have typically been generated on a far greater number of transactions than actually are “true” hits. The mismatch between an alert and identification of a sanctioned transaction creates extra layers of review which extend transaction timelines and add cost – particularly where additional manual controls are needed. The G20/FSB Roadmap on cross-border payments is, amongst other things, focussed on how a more effective use of and greater standardisation of data could help to streamline AML/CFT and sanctions compliance.

Page 4  RTGS and ISO 20022: enhancing the quality of payments data In the UK the way that payments are made and settled is being transformed with the renewal of the Bank’s Real Time Gross Settlement (RTGS) Service. This is the critical infrastructure which delivers final and risk free settlement and virtually every sterling payment is settled over RTGS eventually. As an integral part of upgrading its hard payments infrastructure the Bank is joining to global push to enhance the soft infrastructure of payments by introducing ISO 20022 messages in the renewed RTGS and in CHAPS. As everyone at this conference will no doubt be aware ISO 20022 is a gamechanger for the financial system. It is an open international data standard that allows financial institutions to communicate through a common data language. It will enable financial systems to understand each other wherever they are in the world. One of you could walk down the road and send a payment from a local bank branch in Kaunas and the information conveyed within the message would be the same information as available to my local bank here in London. ISO 20022 also allows for more structured and enhanced data, which can be user driven. In other words it can develop according to the user’s needs either through adapting the language by adding new data fields or by adapting to meet different technology needs.
A further problem that has plagued the credit schemes meant for poverty alleviation has been the tendency for providing loans at subsidised interest rates. Such subsidies have been prompted by the belief that they would allow the poor to obtain the required credit facilities at affordable costs. However, when credit is subsidised, borrowers would flock around such credit schemes, not because they want to use the funds for gainful self-employment projects, but to enjoy the subsidy and use the funds for other uses. Hence, borrowers of such subsidised credit have the pre-intention of misusing the funds and eventually defaulting the loans thereby passing a cost on the lending institutions. As a result, such borrowers are adversely selected right at the beginning and those credit schemes are doomed to failure. Hence, the more important requirement for sustainable poverty alleviation is not subsidised credit, but the rectification of impediments such as lack of physical, human and financial infrastructure and absence of competition and efficiency 16 . Part II Sustainable poverty alleviation: lessons from the Isuru Project As mentioned above, mid-1980s became a crucial period in the history of Sri Lanka with rising poverty levels at both the national level and in isolated pockets. It, therefore, became necessary for Sri Lanka to address this issue on a priority basis. Accordingly, supported by IFAD and CIDA with funding, Central Bank of Sri Lanka (CBSL) pioneered a model poverty alleviation project in four selected districts 17 in 1989.

Hence, the new job opportunities which the pro-poor growth should create should harness these labour services in full in self-employment and in wage employment. Successful poverty alleviation should focus equally on both these types of labour engagement. When the poor are to be provided with self-employment opportunities, they should have access to land, credit, infrastructure, technology and productive inputs so as to keep their labour services continuously and gainfully employed 7 . Similarly, when the poor are to secure wage employments, both industrial and agro-based enterprises should be promoted in rural as well as urban centres. Any concentration of such enterprises in urban areas would result in an undesirable migration of the poor to urban centres and an uneven development across different regions of a country 8 . The pro-poor growth strategy in Sri Lanka, as has been the case in other countries pursuing this strategy, has placed heavy emphasis on developing the rural agricultural sector 9 . The reasoning behind this policy would have been the belief that agriculture is the main stay in the economy and the development of labour intensive agriculture as against capital intensive industry would enable the rural population to increase their income levels. However, this rural bias in growth strategy poses several problems for the sustainability of the policy. First, the policy is urban-neutral and, hence, if the incomes of the urban sector do not increase correspondingly, the rural folk would find it difficult to market their products.
I believe we need to have this new framework in place by 2010, as the current crisis is left behind, hopefully, and growth and stability are restored. As part of the work program already laid down in the G-20, critical points in the reform include the need to make regulatory capital more neutral over-the-cycle, by integrating the macro prudential framework into the required capital of individual institutions; the need to reach, with prudential regulation and supervision, all quarters of the financial industry; and the need to enhance transparency of financial instruments and markets. Thank you very much. 2  BIS Review 44/2009

Hervé Hannoun: The Banque de France’s view on gold and comments on the euro  Speech by Mr Hervé Hannoun, First Deputy Governor of the Banque de France, at a dinner organised by Goldman Sachs on the occasion of the Financial Times Gold Conference held on 26 June 2000. * * *  Introduction: silver and gold Ladies and gentlemen, it is a great pleasure and privilege for me to be speaking here in the Hôtel des Invalides in front of such a distinguished audience. The organisers gave you the opportunity to visit Napoléon’s tomb. So let me, as an introduction, highlight some historical facts, which may not be so far away from the topics I intend to discuss later. Two hundred years ago, the First Consul Napoléon Bonaparte created the Banque de France with himself as one of the shareholders. At the same time, Napoléon built a monetary regime based on a bimetal system (a combined gold and silver standard) that prevailed throughout the 19th century. At that time, many currencies in the world were based on a gold standard, while a few had a silver standard. France had defined the Germinal franc - which remained absolutely stable for almost 120 years - with respect to its weight in both silver and gold. One Germinal franc was equivalent to 5 grams of silver and to 322 milligrams of gold; the famous 20 franc coin, called the Napoléon, was issued at that time (with a weight of 6.45 grams).