samchain/econo-pairs-v1 huggingface dataset:
So when Gordon Brown announced radical changes to the Bank of England and the monetary policy framework two years ago they were widely welcomed because they offered the basis for a durable commitment to price stability. What, then, is the substance of the main reforms announced in May 1997? First, there is a clear and unambiguous objective for monetary policy – an inflation target of 2½%, set by the Government, with inflation defined as the increase in retail prices, excluding mortgage interest  1  BIS Review 63/1999  payments, over the previous twelve months – RPIX inflation. Second, decisions on interest rates are taken by a Monetary Policy Committee, or MPC, comprised of nine individuals with expertise in monetary policy – five executive members of the Bank and four non-executives – who operate on the basis of one person one vote. Third, the process is characterised by a high degree of transparency and accountability, both to provide the public with explanations of the MPC’s actions and to hold members of the MPC individually accountable for their decisions. Have these reforms made a difference to the UK economy? My aim this evening is to pose and begin to answer three questions about the MPC two years on. (1) What is the track record of the MPC after two years? (2) What has the MPC learnt during that period? (3) What are the challenges for the next two years? What is the MPC’s track record?

Following the recent review of data on average earnings, it has been decided to put the relationship between the Bank and the Office for National Statistics on a more formal basis with a Service Level Agreement between the two organisations. Good progress has been made on drafting that Agreement. But the MPC cannot live by official statistics alone, nor even on a diet of business and household surveys. In addition, the Bank has a network of twelve Regional Agents. Their main task is to ask local people how they view the current state of the economy. Each year the Bank’s Agents make, in total, around 7,000 visits to business contacts across the country. The attraction of this information is that it is timely and focussed on the Committee’s needs. Other data are often published with a considerable lag. And there are frequently gaps and puzzles in those data which the Agents can help to resolve. Each month the MPC decides on a “question of the month” which the Agents then put to their contacts. Recent questions have covered trends in employment, the behaviour of earnings, the reaction of exports to the rise in sterling, and the likely effects of the Millennium on investment expenditure. Within a couple of weeks, the responses from a sample of about 150 companies are available to the MPC.
Bandid Nijathaworn: Are there limits to transparency? Remarks by Mr Bandid Nijathaworn, Deputy Governor of the Bank of Thailand, at the IMF Conference on Central Bank Communications, Mumbai, 23 January 2006. *  *  *  First, let me thank the IMF and the Reserve Bank of India for the invitation. It is a pleasure to be here in Mumbai. And I should also congratulate the IMF for putting up what seems to be another useful and successful seminar. My contribution today is to speak on limits to transparency. Given the limitations of time, I want to begin by looking at the needs of central banks for limiting transparency, especially in the context of central banks’ own operations. Then, I want to speak on the challenge facing central banks in designing appropriate disclosure policy. And finally, I want to share with you my thought on how to approach transparency in the context of monetary policy. Transparency has now become an important policy aspect of central banking. Not only is transparency linked directly to the governance issue, but greater transparency also imparts important benefits to the effectiveness of central bank policies. In broad terms, three benefits from greater transparency are often cited. First, greater information provided by the central banks allows market participants to accurately evaluate the behavior and the performance of central banks. This is most important for public organizations like central banks. Second, financial markets tend to work more efficiently with greater transparency.

This is to say central banks should always have room to act, especially in response to an unforeseen emergency situation. So, given the benefits that central banks can gain from greater transparency and the rationale for having some limits, the challenge is to find the right balance in disclosure policy that maximizes the economic benefits of transparency while, at the same time, limits the unnecessary risks and provides flexibility to act when needed. The second issue I want to speak on today is the challenge to central banks in designing disclosure policies. On this issue, I want to begin by saying there is no absolute level of appropriate transparency. This is to say appropriate level of transparency to a central bank is not firm or fixed but always changing, depending on the circumstances which include the capacities of the central bank to provide information, the demand for information from financial markets and stakeholders, and how much  BIS Review 10/2006  1  credibility does the central bank has. Such are the forces that eventually shape the extent to which the central bank should be transparent in the eyes of the public. Another point about disclosure policy is that disclosure policy cannot be separated from the central bank’s own communication policy. This is because data release by itself is mostly not sufficient. The central bank will need to communicate what those data mean and, on the basis of those data, what is the rationale for the central bank to pursue certain policies.
As a response, the economic governance in the euro area is being reformed. The Stability and Growth Pact is being strengthened to focus more on fiscal sustainability and reducing government debt levels, with a clearly defined debt reduction rule and sanctions. A surveillance procedure for macroeconomic imbalances is being instituted which will include a new “Excessive Imbalances Procedure” and a special focus on the euro area. This is complemented by the European Semester and Euro Plus Pact, which aim to improve ex ante policy co-ordination. If crises are still relevant, a permanent mechanism, the ESM, is being put in place to provide bridge funding while countries with liquidity challenges implement a deep adjustment programme, correct imbalances and regain market access. These measures represent an important step forward towards providing a more comprehensive economic governance framework in the EU and the euro area. But there is also a second lesson revealed by the crisis, which I would like to highlight. It falls outside what I might call the “conventional” economic governance debate and refers to the channels through which financial instability can spread in the euro area. Monetary union was associated with a structural increase in financial integration in the euro area. The resulting interconnectedness, coupled with the balance sheet structure of the financial sector, constitutes a powerful mechanism to propagate economic shocks between sovereigns and the financial sector. Negative feedback loops are the key transmission mechanism.

However, the establishment of an Euro Area Resolution Fund, funded by ex ante private sector contributions, is an avenue that could be considered. Such a fund could both mitigate the systemic impact of bank failures and help to solve the burden sharing problem, which could allow a swift intervention in a crisis. Naturally, clear, stringent and properly communicated conditions for the use of the fund would be a crucial component of the scheme, outlining that any form of bail-out is to be excluded. On a more fundamental level, moving towards a true euro area regime of supervision and crisis resolution requires a stronger concept of the euro area as a legitimate entity requiring separate treatment. Prior to the crisis, this concept was underdeveloped. Since the crisis, a stronger focus on the euro area has been evident in, for example, the meetings of the European Council in euro area composition and the agreement of the Euro Plus Pact. Ultimately, to give the euro area dimension real impetus requires a permanent political centre of gravity. In my view, institutionalising the European Council in euro area format would go a long way towards creating the specific economic governance concept that the euro area merits. Fifth: involvement of central banks in financial stability Finally, a comprehensive discussion on how to ensure financial stability within the economic governance framework should, of course, also look closer to home and to the proper involvement of central banks.
Figure 2 Changes in financial markets since December 2019 MP Report US dollar parities (1) (2)  Nominal 10-year rates (1)  (percent)  (basis points)  Russia  23.6  South Africa  23.3  Brazil  23.2  Mexico  21.6  Colombia  15.7  Ind onesia  15.7  Norway  15.1  Turkey  14.5  Australia  10.5  Hungary  8.4  N. Zealand  8.1  Canada  6.4  Poland  6.1  Chile  6.1  Ind ia  5.2  Sweden  5.2  Singapore  4.3  U.K.  4.2  Korea  3.5  Peru  1.5  China  0.9  Euro area  0.3  Denmark  South Africa Peru Colombia Brazil Ind onesia Hungary Russia Chile Portugal Poland Mexico Italy Spain Greece Japan Korea -13 Sweden -20 Euro area -21 Ind ia -28 Australia -31 N. Zealand -32 U.K. -40 China -51 Norway -52 Singapore -53 Canada -77 U.S. -109  0.2  Japan  -1.1  U.S. (3)  -4.6 -20  0  Stock markets (1)  20  40  -200  -100  (percent) 240 182 180 169  77 48 42 34 27 18 17 13 12 11 6  0  100  200  300  China N. Zealand Malaysia U.S. Russia Korea South Africa Japan Mexico Portugal Norway Canada U.K. Euro area Germany Australia Italy Hungary Chile Spain Ind onesia Poland Colombia Peru Ind ia Brazil Greece  -4.5 -14.5 -15.4 -15.6 -16.7 -17.9 -18.2 -18.9 -19.6 -21.7 -22.2 -23.2 -23.6 -23.7 -24.3 -24.5 -25.8 -26.3 -26.3 -27.3 -28.0 -28.2 -29.4 -30.6 -31.1 -31.5 -37.4 -60  -40  -20  0  20  (1) Green bars stand for emerging economies; orange bars for Latin America; blue bars for developed.

The drop in fuel prices will also help to contain the inflationary pressures and will contribute to sustain disposable income (Figure 5). A second transmission channel relates to the worsening of financial conditions. The global increase in risk perception and deep adjustments of financial prices restrict access to goverment and corporate funds. This has driven various central banks to take action to ensure the proper operation of the markets. In Chile, among other measures, the CBC Board adjusted the operation of liquidity programs it has been applying since November 2019, included corporate bonds among eligible collateral for all the liquidity operations in pesos offered by the Bank and launched the purchase of banking bonds from the open-market operations system (SOMA) participants for an amount in UF1 equivalent to up to USD 4 billion. At our Monetary Policy Meeting yesterday we also communicated that we will raise the amount of this bank bond purchase program to up to USD 8 billion. And for the outstanding balance (USD 5.5 billion) the maturity constraint for eligible instruments will be eliminated. The steep drop in companies’ activity because of social isolation of workers and clients and their inability to carry on their normal tasks has resulted in a significant increase in their financial needs, as they must continue to cover their costs in a context of heavy loss of income.
This has naturally affected analyses of the Riksbank’s behaviour and resulted in a somewhat new type of discussion about monetary policy and, not least, the Riksbank’s communications. That brings me to the next point. 2. New Executive Board means new conditions  Transparency desirable The new Riksbank legislation has altered the conditions for how the Riksbank operates and communicates externally. The strong statutory independence makes it extra important that openness is practised as much as possible and that what we do can be examined and evaluated. These are basic arguments in the interests of democracy. The law makes the Executive Board collectively accountable for running the Riksbank as well as for its monetary policy decisions. The Board concluded that the important discussion ought to be held in session, not in corridors, and ought also to be minuted in such a way that it can be assessed. Having established this, the way in which we should communicate externally more or less presented itself. Each Board member should be answerable for her/his opinion. The members’ individual responsibility is thereby clarified. So when one of us makes a speech, it is not normally a joint monetary policy signal but the expression of a personal opinion. I willingly admit that this was accompanied by purely practical considerations to do with the difficulty of coordinating six strong wills before every speech or interview. There probably are not many other collective decision-making assemblies that publish their members’ positions so openly or so soon after decisions have been made.

News conference  Berne, 15 June 2017 Fritz Zurbrügg  Introductory remarks by Fritz Zurbrügg  In my remarks today, I will present the key findings from this year’s Financial Stability Report, published by the Swiss National Bank this morning. In the first part of my speech, I will look at the situation of the big banks, focusing on the progress made in implementing the revised ‘too big to fail’ regulations (TBTF2) that came into effect almost a year ago. In the second part of my remarks, I will outline our current assessment of the situation at domestically focused banks. Big banks  Let me start then with the big banks and the TBTF2 regulations. The revised regulations are designed to resolve the ‘too big to fail’ issue in Switzerland, so that systemically important banks no longer have to be bailed out with taxpayers’ money in the event of a crisis. The TBTF2 regulations rest on two complementary pillars. First, they are aimed at strengthening the resilience of systemically important banks in a going-concern perspective. They therefore specify higher requirements for going-concern capital in particular, thereby reducing the likelihood of a systemically important bank getting into financial distress. Second, if a systemically important bank nevertheless gets into financial distress – this is called the gone-concern perspective – the regulations provide a framework for orderly resolution, ensuring the continuation of systemically important functions without the use of public funds.
As major central banks pursued their policy of flooding the market with liquidity, risks had been compressed, intentionally or otherwise. BIS central bankers’ speeches  1  Recently though, despite ample global liquidity, investors have grown worried about the diverging paths of monetary policy among major central banks. That is, the Federal Reserve or the Fed is poised to begin its tightening phase while the European Central Bank, the Bank of Japan, and the People’s Bank of China are likely to continue their ongoing monetary easing for a considerable period of time. The implications of diverging monetary policy stance for asset markets have weighed on the minds of investors around the world. As I shall elaborate, it is probably not the excess liquidity per se that generates turbulence and volatility, but prospects of the exit – or reversal – that does so. In the near future, global markets are bracing for the impacts from the Fed “lift-off”, leading to growing nervousness in the markets. Although the prospect of an interest rate increase by the Fed has been widely anticipated ever since the taper tantrum in 2013, the uncertainty over its timing and possible impacts has in part contributed to episodes of market turbulence this year. After the eventual lift-off – whenever that may be – the markets will turn their attention to the pace of monetary tightening – or rate increases. The shift in market expectation over the pace will prompt volatility going forward.

these parameters will be equal for national and cross-border payments). The following assumptions have been made to achieve the objective: -  a coherent and technically neutral (i.e. independent of any specific type of devices) legal framework should be provided for all payment services within the European Union (excluding cash handling and cheques); this framework should allow for the implementation of various solutions,  -  uniform technological and business standards should be provided for suppliers of payment services,  -  self-regulating mechanisms in business relations between participants of payments should be provided; simultaneously, intervention of legislative authorities should be kept at minimum. European authorities play an important role in the implementation of SEPA. The European Commission and the European Parliament are the main initiators and promoters of the idea of SEPA. They stimulate works on the project by issuing specific regulations and directives. 3  P O Gourinchas, H Rey, “From World Banker to World Venture Capitalist: US External Adjustment and the Exorbitant Privilege”, UC Berkeley Working Paper, August 2005. 2  BIS Review 97/2006  The European Central Bank is also an active participant of the SEPA project. However, it acts only as an observer in the EPC. Central banks of individual Member States do not directly participate in the EPC works on SEPA. Their involvement is important in groups organised under the aegis of the ECB, especially as regards the works within the Eurosystem.
Our track record of the last year and a half provides a good example of how flexible our monetary policy is to respond to significant changes in economic conditions. In hindsight, monetary policy remained expansionary with a stable MPR between October 2014 and September 2015, despite the increase in inflation resulting from a sharp exchange rate depreciation, rightly interpreting that it was a transitory phenomenon derived from supply-side pressures on prices. Towards the end of 2015, a normalization process began, sustained on a scenario where growth was projected to equal potential, and with bounded capacity gaps. This adjustment, however, occurred gradually and prudently, with an increase of 25 basis points in the MPR in October and December 2015. This prudence, accompanied by a vision focused on the future prospects of the economy, allowed the monetary policy orientation to be adjusted quickly when the macro scenario began to change. Indeed, the exchange rate appreciation and signs of weakening in the first half of 2016 led the Bank to revise its inflation and growth projections. As these adjustments revealed a new macroeconomic scenario, characterized by weak economic activity, greater exchange rate stability and a faster deceleration of inflation, the Bank successively adjusted its monetary policy options and bias, culminating in four 25-bp cuts in the policy rate in the last five months. Thus, in response to changes in the medium-term macroeconomic scenario, the MPR has accumulated a decline of 100 bp since January of this year, to 2.5%.

However, a not inconsiderable risk capital or guarantees from the owners have also been required. Capital adequacy in the Swedish companies is shown in figure 3. If – or rather when – the owners’ requirements for return on the capital contributed increase this can be problem. Mortgage banks capital ratio and tier 1 capital ratio 1998. Per cent Capital ratio  Tier 1 capital ratio  • Handelsbanken Hypotek  10,7  10,0  • Stadshypotek  13,1  12,7  • Spintab  16,0  11,1  • SBAB  10,6  6,9  • Nordbanken Hypotek  10,5  8,8  • S E B BoLån  8,4  4,3  During the financial crisis in Sweden, the balance sheets were for obvious reasons insufficient to enable the institutions to borrow at competitive prices in the international market. This uncertainty on asset values was all too great for a while. Since then, however, creditworthiness has been continually increased, which is reflected in a gradually improved international rating. The Swedish housing loan institutions have today around 13% of their borrowing abroad. Traditionally the Swedish insurance companies and pension boards have been large purchasers of housing institution bonds. A part of the international borrowing has taken place in Europe, in particular in London, while the major part has originated from investors in the USA and Japan. An interesting issue is whether the ability to borrow in euro will make the Central European investors more interested in Swedish risks than before? It remains to be seen.
It contributed 11% of annual tax revenues or over £ billion per week in 2016. 1  1  Employment and tax data is from “Total tax contribution of UK financial services, Tenth edition”, City of London & PWC, November 2017. Lending data from Bank of England statistics and calculations. 2  All speeches are available online at www.bankofengland.co.uk/speeches  2  Internationally, the UK is the pre-eminent financial centre. It accounts for 40% of global foreign exchange volumes and trades in over-the-counter interest rate derivatives. More international banking activity is booked here than anywhere else. The UK hosts the world’s second largest asset management and fourth largest insurance industry. The City is Europe’s investment banker, and it is leading the internationalisation of green, Islamic, renminbi and rupee finance. Being at the heart of the global financial system reinforces the ability of the rest of the UK economy, from manufacturing to the creative industries, to compete globally. And it broadens the investment opportunities and risk-adjusted returns for UK savers. This evening, I want to set out some of the ways the UK financial system can continue to serve the UK and the world in the face of major structural changes. II. Core attributes of UK leadership The City’s pre-eminence reflects lessons learnt over the centuries that an effective financial system must be resilient, fair and dynamic. Resilient so that it can finance households and businesses through good times and bad. A resilient system is anti-fragile – robust even to risks we do not anticipate.

30 November 2017  Speech on the 60th Anniversary of the National Association of Specialised Lending Institutions (ASNEF) Luis M. Linde Governor  Good evening everyone. It is a pleasure for me to take part in this celebration of the 60th anniversary of the National Association of Specialised Lending Institutions. As your president, Fernando Casero, has just mentioned, throughout its history your Association has played a very important role in promoting and enhancing consumer lending, which is a key factor in driving economic growth. Indeed, consumer lending has a series of characteristics that make it especially relevant both for the financial system and economic activity. On the one hand, it is highly cyclical and is, therefore, a leading indicator of confidence among both consumers and financial institutions. On the other, it generally leads the way in terms of adaptation to innovation. As is well known, in the past consumer lending played an important part in the expansion of credit cards, and more recently it has been at the forefront of the incorporation of new technologies. In the expansionary phase that began after 2000, consumer lending grew rapidly in Spain, reaching a balance outstanding of € billion in mid-2008. The financial crisis reduced these figures, down to almost half that amount by early 2015. Since then, in keeping with the economic recovery, consumer lending has been very dynamic.