samchain/econo-pairs-v1 huggingface dataset:
In countries where the use of the euro as a medium of exchange is highly significant, such as the Central and Eastern European Countries, 60% to 80% of exports and imports were settled in euro. B  The euro contributes to the stabilization of exchange rate regimes and financial systems  The euro is an instrument for the diversification of foreign exchange reserves •  According to the latest available data from the Bank for International Settlements (BIS), the euro is the second reserve currency after the US dollar (19.7% of the total amount in 2003 compared with 63.8% for the dollar) but the share of the euro has increased significantly (it stood at 12.6% in 1999). This is an important factor of protection for many countries with regard to strong exchange rate fluctuations because it allows public investors to diversify their reserves assets. Moreover, it constitutes a stabilizing factor for the international monetary and financial system as a whole. The euro is a factor of stability for exchange rate regimes •  In 52 countries or territories, the euro serves as the anchor of exchange rate policies or as the sole reference currency or as part of a currency basket. This mainly concerns the countries that have trade or institutional arrangements with the euro area (acceding countries, accession countries, the Balkans, North Africa and the Franc zone). These exchange rate regimes are the result of unilateral decisions that do not involve the Eurosystem.

The primary objective of the Eurosystem is to maintain price stability, which has been defined as a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2% in the medium-term. In May 2003, the ECB Governing Council confirmed this definition and specified that, in the pursuit of price stability, it will aim to maintain inflation rates close to, but below, 2% over the medium-term. The monetary policy conducted by the Eurosystem has led to a low level of inflation, which averaged 2% between 1999 and 2004, and to very favorable financing conditions as both short-term and long-term interest rates have reached very low levels. •  Moreover, in principle, fiscal policies cannot undermine the objective of price stability as the Treaty prohibits monetary financing and as Member States are committed to implementing the Stability and Growth Pact. However, the lack of fiscal discipline in some euro area countries and the recent debate at the EU level have illustrated the fact that it is still necessary to enhance the efficiency of the European fiscal framework and, especially, to strengthen the preventive arm of the Stability and Growth Pact, which deals with the surveillance of budgetary positions. The fiscal framework enshrined in the Treaty on European Union and in the Stability and Growth Pact is a cornerstone of Economic and Monetary Union and, thus, of central importance to the cohesion of Monetary Union itself.
Our understanding of the dynamics of the markets in which we operate – including the motivation and behavior of different market participants, linkages among financial institutions, and the microstructure of financial instruments – is therefore vital to our ability to structure and execute operations to achieve the objectives of policymakers.3 By monitoring markets and maintaining deep expertise in them, we remain vigilant to changes in the financial market landscape that might alter our assessment of our operational toolkit. On that note, I’ll now turn to significant changes in U.S. money markets in recent years and their implications for the Desk’s implementation of monetary policy. The changing landscape of U.S. money markets Prior to the financial crisis, the Desk met the FOMC’s interest rate directives primarily by controlling the supply of reserves in the banking system.4 The Desk conducted open market operations to manage a supply of reserves at a level that was expected to match the estimated quantity of reserves demanded at the FOMC’s overnight fed funds rate target. The rate prevailing in the market each day is the effective fed funds rate. In the aggregate, the system at that time was operated with a “structural deficiency”, meaning that permanent additions to the supply of reserve balances fell somewhat short of the total need, so the Desk conducted additional daily operations to add balances temporarily to get to the desired level.

Open market operations are merely a means to an end – tools for implementing the FOMC’s decisions.1 In designing these operational tools, the Desk aims to effectively and efficiently implement the FOMC’s directives.2 Of course, Desk operations don’t take place in a vacuum. We  1  Additional policy tools related to depository institutions, such as the discount window, interest on reserves, and the Term Deposit Facility, are overseen by the Board of Governors of the Federal Reserve System and implemented by the Federal Reserve Banks. 2  The FOMC issues a “directive” to the New York Fed after each of its meetings. The directive outlines the approach to monetary policy that the FOMC considers appropriate for the time period between its policy meetings (for example, its target fed funds rate or range, or an amount of long-term securities to purchase) and authorizes the Desk to conduct transactions in the SOMA in furtherance of it. BIS central bankers’ speeches  1  operate in the open market, conducting transactions with a range of private market participants who are motivated by their own business needs, balance sheet constraints, regulatory incentives or disincentives, and individual perceptions of current and future economic conditions and risks. We rely on both internal and external infrastructure and systems to trade, settle, and clear our transactions.
The ratio of private sector credit used by households and firms to GDP has also rapidly increased, though it is still low in international standards. Of course, raising the share of private credits in the financial system does not necessarily mean that each and every segment of the population would gain access to financial services. The low-income segment of the society, in particular, may not have access to capital and that would have two principal adverse effects. First, they may not be able to raise the expected value of their income and therefore of consumption and future investment and asset accumulation. Second, due to lack of access to credit, the poor would face high variation in their income and consumption, and the downward risk on income threatens their ability to satisfy basic consumption needs. Increasing the funds available for entrepreneurs that have micro-scale business plans but do not have access to credit, have merits such as contributing to the production level and unemployment ratio while also strengthening the social structure of a country. Of course, it should be noted here that while the benefits from financing these activities are more or less common, selection of main business areas where these funds should be used obviously depends on country specific circumstances and needs. Dear Guests, In the last part of my speech, I would like to share with you my thoughts on the external sources of “access to finance”.

There should be wider benefits from contracts based purely on the risk-free rate rather than embodying liquidity premia and credit-risk premia of various kinds. That is something for the industry. But better liquidity-insurance technology and better risk management will not abolish the credit cycle. Looking further ahead, the big question will be whether the authorities can tame the credit cycle without sacrificing the incentives to enterprise that are so important in a dynamic economy. The debate about the micro regulation of banks will need to take account of whether or not we can deliver that macroprudential objective. For too long, the debate has got sidetracked. Into whether we can rely on monetary policy “mopping up” after bubbles burst. Or into whether monetary policy could be used to control asset prices as well as doing its orthodox job of steering nominal trends in the economy, which I should say can include taking account of prospective risks of inflation volatility over the medium term. Ideas circulating already include minimum margin requirements or capital ratios that vary not only across firms but also through time as credit conditions change. We need calmly to explore whether there are also other possibilities. But let me make this absolutely clear: there are formidable obstacles to finding a solution. In the monetary sphere, a regime of floating exchange rates allows individual countries to pursue their own domestic monetary objectives.
Nominal interest rates were kept low although price inflation and the value of tax-deductible interest expenses rose. Frequent devaluations in the period from 1976 were ultimately ineffective with regard to preventing a relative decline in manufacturing industry. On the contrary, the devaluations proved to be self-reinforcing. Chart 7  Over a period of 15 years from 1973 to 1988 consumer prices in Norway rose twice as much as in Germany. In the same period, the value of the krone was virtually halved against the Mark. While we paid around 2 kroner for one Mark in 1973, 15 years later we had to pay close to 4 kroner. Since then the krone has remained relatively stable against the Deutsche Mark. Today the exchange rate is around 4 kroner and 10 øre. The last devaluation came in 1986 after the fall in oil prices. Thereafter, the krone exchange rate was fixed. The Norwegian economy had to go through a severe economic turnaround. Confidence in the krone had to be restored in order to avoid persistent inflation. This required very high interest rates. The Norwegian economy entered the worst recession experienced since the interwar period. Unemployment rose from about 2% in 1987 to almost 6% in the winter of 1992/1993. Many companies went broke and households were faced with debt problems. The financial sector was hit by crisis. The fixed exchange rate regime led to a gradual decline in price inflation, but not to deflation as was the case in the 1920s.

The chart shows income on the horizontal axis, and health expenditure on the vertical axis. Norwegian health service expenditure is on a par with or higher than in that of other western countries, with the exception of the US, Germany and Switzerland. However, as a percentage of income, health expenditure in Norway is still not particularly high. A further reason for the situation outlined above might be the composition of the population. We know that in a few years health expenditure will rise sharply because of an ageing population. However, current demographic trends do not indicate particularly strong pressures. The challenges will increase considerably in the years ahead. Continued growth in incomes and an ageing population will boost demand for health and care services. Moreover, it will be possible to offer services and forms of treatment that are not available today. All this has to be provided for within tight personnel and budget constraints. The increase in social security expenditure on pensions will lay claim to a steadily increasing share of overall central government expenditure. Even with sizeable government financial assets, these resources will primarily be used to finance the increase in pension expenditure associated with the ageing of the population. Taxes cannot be increased unaccompanied by a weakening of the position of the business sector. Therefore, it would be inappropriate to base policy decisions on the assumption that growth in public expenditure items other than pensions can exceed GDP growth. Allow me to illustrate this.
All these policies, and others which, for brevity’s sake, I have not mentioned today, are essential to generate solvent credit demand and to ensure that a solid banking system can respond to such demand. Having tried to raise your spirits, I must tell you that, despite the huge effort made so far, we are unlikely to see a prompt recovery in the Spanish economy. Emerging from crises caused by over-borrowing and competitiveness losses in a monetary union is a very slow process,  BIS central bankers’ speeches  5  and for that very reason we cannot afford to be complacent. The pace of the changes and reforms adopted by this country in recent years has to continue steadily. What remains to be done in relation to the current-account balance and bank restructuring (to continue with the examples chosen)? To improve the current-account balance Spain must continue to improve its competitiveness, in order to generate current-account surpluses for a number of years and so reduce its negative net international investment position. Moreover, this is urgent while the worst consequence of the euro crisis, i.e. financial market fragmentation, persists. As regards bank restructuring, much has been done, but there still remains much to do, not only to continue to repair the effects on the banking system of an economic crisis that regrettably can still not be deemed to be over, but also to give us a framework for action to enable us to combat future crises.

By contrast, the volume of cash withdrawn at ATMs continues to be slightly below its pre-crisis level. How much of a long-term impact these developments will have on the use of cash remains to be seen. The survey on payment methods, which the SNB carried out this autumn for the second time since 2017, will provide us with more information on changes in the payment  Page 3/4  Zurich, 17 December 2020 Fritz Zurbrügg  News conference  habits of households in Switzerland. The survey also asked specific questions regarding the impact of the coronavirus pandemic on cash use. The SNB will communicate the detailed survey results in mid-2021. Page 4/4
24  All speeches are available online at www.bankofengland.co.uk/speeches  24  Chart 17: Investment intention indicators Percentage change on a year ago  20 10 0 -10 -20 -30  2007  2008  2009  2010 BCC  2011 CBI  2012 2013 Agents  2014 EEF  2015 ONS  2016  2017  Sources: Bank of England, BCC, CBI/PwC, EEF, ONS and Bank calculations. Notes: (a) ‘ONS’ is the chained-volume measure of business investment. Data are to 2017 Q1 and adjust for the transfer of the nuclear reactors form the public corporation sector to central government in 2005 Q2. (b) EEF and CBI measures are net percentage balances of respondents reporting that they have increased planned investment in plant and machinery for the next twelve months. EEF measure corresponds to the manufacturing sector and CBI sectoral surveys are weighted together using shares in real business investment. (c) BCC measure is the net percentage balance of respondents reporting that they have increased planned investment in plant and machinery. Sectoral surveys are weighted together using shares in real business investment. Data are non-seasonally adjusted. (d) Agents measure shows companies’ intended changes in investment over the next twelve months, with sectoral surveys weighted together using shares in real business investment. Last observation in the quarter.

Chart 10: Distribution of offered wage by occupation, with and without the term ‘flexible hours’ in the job advert  Sources: Reed and Bank of England calculations. Notes: ‘SOC code’ refers to standard occupational classification code. The area labelled ‘True’ shows distribution of offered wages for job adverts which include the term ‘flexible hours’, and the area labelled ‘False’ shows the distribution for adverts which do not. The data are drawn from a cross-section of online job vacancies. Distributions are constructed using data covering the period 2008-2016. 21  All speeches are available online at www.bankofengland.co.uk/speeches  21  Chart 11: Long-run UK Phillips curves  Sources: Thomas and Dimsdale (2017) and Bank of England calculations. Note: Output gap is estimated using a HP-filter technique. Wage series used is a composite based on English and Great Britain estimates. Chart 12: Measures of domestically generated inflation Percentage change on a year earlier  7 6 5 4 3 2 1 0 -1  Average of measures 1997  1999  2001  2003  2005  2007  First principal component 2009  2011  2013  -2 -3  2015  Sources: ONS and Bank of England calculations. Notes: Swathe includes core CPI services, inverse import-weighted CPIX, inverse import-weighted core inflation excl. education, unit labour costs, whole economy and private unit wage costs, GDP deflator (unadjusted, as well as versions excl. exports, oil & gas), services GVA deflator, GVA deflator (unadjusted, as well as excl. government) and services PPI.
Már Guðmundsson: Recent economic and financial developments in Iceland Speech by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, at the 54th Annual General Meeting of the Central Bank of Iceland, Reykjavík, 26 March 2015. *  *  *  Mr. President; Speaker of Parliament, Minister of Finance and Economic Affairs, Minister of the Interior, Directors, and Ambassadors; Ladies and Gentlemen: We have come together today for the 54th Annual General Meeting of the Central Bank of Iceland. When we met for the Bank’s Annual Meeting five years ago, the Icelandic economy was at the bottom of the economic recession that followed the financial crisis of 2008. The future was highly uncertain. Had the economy hit bottom? How strong would the upswing be? How much would the unemployment rate fall? Would we be able to bring inflation back to target and keep it there? How would the sizeable debt owed by Iceland’s central government, households, firms, and the national economy evolve? How would the newly established domestic-oriented banks fare? Was Iceland’s external position sustainable? When and how would we manage to lift the comprehensive capital controls that proved necessary during the crisis? In my speech at that meeting five years ago, I listed three challenges that, in my view, the Icelandic authorities faced under the conditions then prevailing. What I said was this: First, it is critical to allow the economy to adjust without allowing inflation or unemployment to become entrenched.

Iceland’s external position has proven to be sustainable. The trade surplus has been around 8% of GDP since 2009. This is the longest continuous period with a surplus over 5 % of GDP in the history of the data, which extend back to 1875. The current account balance as a whole has averaged 5.5% of GDP per year; that is, excluding the effects of the failed banks and other factors that do not reflect Iceland’s financial burden. The current account balance has reduced Iceland’s debt, cutting underlying net external debt almost in half since year-end 2008, to about 45% of GDP by the end of 2014. But all of this does not change the fact that Iceland still faces a balance of payments problem, which is reflected in the fact that a too large share of its debt is too short-term, and a part of the debt takes the form of possibly volatile ISK assets held by non-residents. This situation could put substantial pressure on the  BIS central bankers’ speeches  1  exchange rate or the Central Bank’s foreign exchange reserves if these ISK assets were free to exit the country. The three new commercial banks have also performed well in a number of areas, as can be seen in various indicators, including their capital ratios, which have risen from a 2009 average of 16% to last year’s average of nearly 29%.
Third question: with the gradual shift in Singapore’s economic structure towards services (which are typically regarded as being non-tradable), does the exchange rate have as much impact on aggregate demand and prices in the economy? It is true that services have indeed contributed more to GDP growth recently. But a significant portion of these services are exportable, such as financial, IT and professional services. External-oriented manufacturing  4  BIS central bankers’ speeches  and services sectors together continue to account for more than half of Singapore’s GDP. The fundamental structure of the economy as an export-dependent one has not changed. Firms – both MNCs and SMEs – have consistently highlighted the importance of keeping the exchange rate stable for planning and investment purposes. The exchange rate continues to play a key role in household and business decisions, and is an important equilibrating price for the economy. Calibration of monetary policy responses So, the monetary policy framework centred on the exchange rate remains valid. But has its calibration been sufficiently responsive to recent challenges to price stability? The chief consideration underpinning the stance of monetary policy in recent years has been to anchor inflation expectations and contain the risk of a wage-price spiral arising from the short-term effects of economic restructuring. Since April 2010, the policy band of the Singapore Dollar nominal effective exchange rate has been on a modest and gradual appreciation path. The nominal effective exchange rate has strengthened by about 3% per annum on average during this period.

There are also many doubts about the structural damage wreaked by the crisis on the productive system, particularly in those sectors and countries most affected and where it is proving most persistent. In these circumstances, international cooperation is, in my view, all the more important. Healthwise, the crisis will clearly not be resolved until immunity against the virus has been achieved in all countries. On the economic front, divergences in the rate of recovery may be particularly harmful for economies that are in a more vulnerable situation. A premature 1  tightening of international financial conditions could pose a serious obstacle to the efforts of recovery of those economies with limited space for their national policies. And that could delay their recovery and, ultimately, also adversely affect the global economy. Thus, in accordance with the communication approved by the International Monetary and Financial Committee last week, international cooperation is crucial both for accelerating vaccine production and for making distribution affordable and fair for everybody. In the economic arena we must also maintain the stimulus measures for as long as necessary, adapting them to countries’ changing circumstances, until the recovery has taken root. Only then may these stimuli be cautiously withdrawn. The current juncture is, in fact, a particularly timely one to give fresh impetus to multilateralism, where the multilateral institutions have a crucial role to play.