samchain/econo-pairs-v1 huggingface dataset:
Before I go any further, I will give the standard Fed disclaimer that the views I express here are my own and do not necessarily reflect those of the Federal Open Market Committee (FOMC) or anyone else in the Federal Reserve System. Overheating Whenever I talk about monetary policy, I start with the Federal Reserve's dual mandate: price stability and maximum employment. With the unemployment rate back to very low pre-pandemic levels, and a variety of indicators showing the labor market is very strong, maximum employment has been achieved. But, with inflation rising to unacceptably high levels, we are far from our longer-run goal of 2 percent inflation. High inflation harms those who are most in need. Too many families are now struggling to meet the increasing cost of necessities. I am resolutely focused on restoring price stability, which is the foundation for a vibrant and healthy economy. Over the past year, inflation has increased rapidly and dramatically to levels last seen in the early 1980s. A year ago, overall inflation, as measured by the percent change in the personal consumption expenditures (PCE) price index, was 2.5 percent. In March, it was 6.6 percent. A portion of this sharp rise reflects global increases in food and energy prices. But, even excluding energy and food costs, the "core" inflation rate has increased from 2 percent a year ago to 5.2 percent today. 1/4  BIS - Central bankers' speeches  Three major imbalances are contributing to an overheating economy and high inflation.

Traditional banks are taking the new technologies on board, occasionally through strategic alliances with new technology firms. New companies are also being incorporated into the sector, ranging from small start-ups to large firms. The new firms must, however, win the confidence of consumers and investors,  6/7  something that traditional financial institutions have secured over a long period of time, anchored by strong regulation and financial supervision. From the standpoint of the regulators, the fintech challenge affects both prudential and consumer protection policies. From the prudential perspective, regulators must strike a balance between catalysing innovation and the efficiency that new technologies can provide, and maintaining a sound regulatory framework. The guiding principle should be to apply the same regulation for the same type of financial services. In this respect, as the presence of fintech increases, it might be useful to put greater emphasis on the regulation of services, instead of placing it on the institutions that provide these services. Turning to consumer protection policies, it is vital that investors and consumers should understand how the new services function and the attendant risks, including, for example, credit, cyber-security and privacy-protection risks. Here we should strengthen our information and financial education policies. We are mindful at the Banco de España of the need to step up our efforts in this area.
Share of credit flows by interest rate type 100  percent  percent  100  10  10  0  0  Housing loans variable interest rate  Sep.17  20  Sep.16  20  Sep.15  30  Sep.14  30  Sep.13  40  Sep.12  40  Sep.11  50  Sep.10  50  Sep.17  60  Sep.16  60  Sep.15  70  Sep.14  70  Sep.13  80  Sep.12  80  Sep.11  90  Sep.10  90  Consumer loans (maturity below 5 years) fixed interest rate (1-5 years)  fixed interest rate  Source: NBR  20  Figure 28. Level of indebtedness by loan type and net monthly wage 60  percent  50 40 30 20 10 0 (minimum (average >2 x wage; wage; average average 2 x average wage wage] wage]  TOTAL  (minimum (average >2 x wage; wage; average average 2 x average wage wage] wage]  Housing loans  TOTAL  Consumer loans  DSTI for all loans in stock in September 2016 (median) DSTI for all loans in stock in September 2017 (median) DSTI of debtors with new loans in September 2016 (median) DSTI of debtors with new loans in September 2017 (median) Source: NBR, CB, MPF  21  Figure 29. Share of households with housing loans by income quintile (September 2017) 12  percent  Figure 30.

$ trillion of global assets are held in investment funds that are particularly flighty, reflecting their promise of daily liquidity to investors despite investing in potentially illiquid underlying assets, such as EME debt.30 This structural mismatch means that these funds can behave particularly pro-cyclically. Bank of England work finds that redemptions by EME bond funds (with large structural mismatches) in response to price falls are five times those for EME equity funds (with lower structural mismatch). In turn, EME equity funds are twice as responsive as advanced economy equity funds. Under stress, investment funds may need to fire sell assets, magnifying market adjustments and triggering further redemptions – a vicious feedback loop that can ultimately disrupt market functioning and the availability of finance to the real economy. The vast majority of these funds are managed out of the US and Europe, including the UK. As is the case for banks, it is a global public good to ensure that investment funds prudently manage their leverage and liquidity. The Bank of England is acutely conscious of these responsibilities, given the City’s role as the world’s leading international financial centre. That’s one reason why we have transformed the resiliency of UKbased banks, why we are well on the path to ending too big to fail, and why we have fundamentally overhauled our liquidity facilities to support continuously open markets. And it’s why the Bank of England’s Financial Policy Committee has supported the FSB’s 2017 recommendation that funds’ assets and investment strategies should be consistent with their redemption terms.
At one end of the spectrum are those who say that the crisis has meant that the dividing line between monetary policy and financial stability policy has in many ways been erased, or at least become less evident. If the central bank does not already have the clear and express task of maintaining financial stability, it should be given this – in addition to the natural task of acting as “lender of last resort” in a crisis. Monetary policy should be regarded as a legitimate tool in the financial stability toolbox.3 At the other end of the spectrum we find those who say that monetary policy and financial stability policy are distinct policies that should not be confused with one another. They claim that monetary policy and financial stability policy differ in the same way that monetary policy and fiscal policy differ, and they have different targets and methods. The policy rate should therefore not be regarded as an instrument for financial stability policy. Both types of policy should react to one another, but they should not be coordinated and conducted together as  1  The concept “balance sheet recession” was introduced a few years ago as an explanation for developments in Japan and its “lost decade”; see Koo, R.C., Balance Sheet Recession: Japan’s Struggle with Unchartered Economics and its Global Implications, Wiley, 2003.

Of course, one must remain vigilant and constantly assess the risks – and try to reduce them when necessary. But it is probably quite rare that one will actually need to use macroprudential tools, or the policy rate, to subdue a credit boom and thus reduce the risk of a crisis. Growth in lending is normally something positive. It is, of course, difficult to say how often problems may arise, but one can conclude, for instance, that we in Sweden have experienced two financial crises with not quite twenty years between them, and this is regarded as unusually often. For the great majority of the time the central bank will thus be able to conduct its monetary policy in a normal way. Monetary policy and financial stability policy have, so to say, slightly different time dimensions. …and by those who say they should be entirely separate But I also believe that the problems are exaggerated by those who warn against integrating monetary policy and financial stability policy. For example, I believe that one can decide on both the policy rate and macroprudential supervisory measures at the same time and in a coordinated way, without either monetary policy or financial stability policy being perceived as less clear.
I welcome especially the intention of the Spanish EU Presidency to lend impetus to this ongoing process. The Eurosystem also supports the strategic conclusions of the Committee chaired by A. Lamfalussy on the integration of the European securities markets, ratified by the European Council meeting in Stockholm in March 2001 and approved by the European Parliament in early February 2002. We are convinced that the implementation of these broad guidelines and the new cooperation structures at the European level will help make it possible to take full advantage of the introduction of the euro. 7  -  Since the tragic events of 11 September and their impact on financial stability, concerns over the potential abuse of the financial system for the financing of terrorism have received top priority in international and European regulatory discussions. The international community and, within it, the financial community, should step up its efforts to hunt down money used by organised crime and terrorism. We shall not be successful overnight, but, today, there is a strong political determination on the part of the international community to cooperate on this issue. As far as the fight against organised crime and terrorism is concerned, we can no longer accept that certain players are not prepared to observe the rules of international legal cooperation. Beyond structural reforms and financial stability, the accession of new Member States to the European Union and to EMU is the third challenge that I have identified. The last challenge but not the least.

These will help affected professionals, including women and working mothers, to find jobs suitable for their skills. We believe that industry professionals such as yourselves will be able to make significant contributions towards this initiative, and we urge you to participate in any way that you can. BIS central bankers’ speeches  3  20. As leaders in your respective companies, we hope that you will be welcoming to those looking to rejoin the industry, and acknowledge the experience that these professionals bring to the table. 21. Thirdly, given the challenging environment in financial services, it is more important than ever for employees to take charge of their own learning, careers, and development. Each of you can do much to encourage and institute training initiatives in your company, and to allow more time for employees to pursue further education in their specialisations. We look to FWA to continue being that strong influence in encouraging professionals to pursue continual rejuvenation, both in terms of skills and mindsets. Celebrating successes 22. I am glad to say that many financial institutions are with us in the journey of developing talent in the sector. In fact, a number of them are institutional members of FWA, who not only are close partners with us in building a strong manpower pipeline, but are also especially supportive of nurturing female talents. 23. For instance, Barclays, our host today, is the first bank in the world to join the United Nations initiative, HeForShe, which promotes gender parity in corporations.
Such bank runs can lead to instability in the financial system. We have not observed such movements in Norwegian banks’ funding for a long time. Both the bank guarantee scheme and banks’ strong financial position have likely played an important role here. With the introduction of CBDC, digital bank runs might occur more easily and with greater speed. Avoiding digital bank runs are therefore an important factor to consider when designing CBDC. In addition to assessing the consequences of the introduction of CBDC, we must also analyse the consequences of a payment system without central bank money. We must ask ourselves 3/6  BIS central bankers' speeches  whether we can maintain confidence in the monetary system and achieve the goal of an efficient and secure payment system using instruments other than introducing a CBDC. We do not have the answer yet. Norges Bank will decide how the Bank will proceed with its work on CBDC in the first half of next year. We want to be transparent about our work. Three reports have been published so far, and there are plans to publish another report early next year. We hope that this will provide inspiration for continued dialogue with and contributions from a broad set of stakeholders. And already next week – on 9 November – we will be hosting an open webinar about the project. Further to my remarks on CBDC, I would also like to comment briefly on the central bank money we already have, namely cash.

As the use of digital solutions increases, attack surfaces expand. Cyber attacks have increased during the pandemic. A successful attack can result in users being unable to make payments, heavy financial losses and 5/6  BIS central bankers' speeches  sensitive information falling into the wrong hands. The entire financial system can be affected. Norges Bank will, in cooperation with Finanstilsynet (Financial Supervisory Authority of Norway), draw up a proposal for a framework for testing the cyber resilience of the banking and payment system in Norway. This will build on the TIBER-EU framework, which has been developed by the ECB. The aim is to enhance the cyber resilience of the financial sector and promote financial stability. The national framework will be designed in cooperation with the industry and relevant authorities. Conclusion Let me conclude. Private individuals, firms and the economy as a whole depend on an efficient, reliable and secure payment system, which Norway largely has today. But there is more to be done. We must constantly be on the lookout for ways to make improvements. Many of you participating in this conference are likely already working on this. Norges Bank is particularly focused on improving the common infrastructure for payment services, which will provide a solid foundation for competition, innovation and security in the payments market. Our ambition is to contribute in making a sound Norwegian payment system even better, in dialogue and collaboration with the industry. 6/6  BIS central bankers' speeches
The world today is encountering more extreme disasters such as epidemics and unpredictable weather-related calamities. In our own country, the worst flood disaster experienced in decades last year saw over 250 thousand people displaced with estimated costs of more than two billion ringgit to repair damaged infrastructure. This presents a sober reminder of the responsibility of all corporations to ensure that they are well prepared for and remain resilient against calamities, not just for their own survival, but in the interest of employees and the community that depend on them. Role and prospects of the insurance industry in advancing risk management The cost associated with negative tail-risk events will only escalate as business networks grow in complexity. The use of insurance continues to be an important way in which companies can reduce this cost by transferring risks to insurance providers. Insurers are well-placed to assume such risks given their long standing history in risk analytics which enables them to effectively exploit the law of large numbers and benefit from risk pooling. Among emerging economies, however, there is still a sizeable protection gap in spite of the increased frequency and severity of weather related disasters and other natural catastrophes. In 2014, insured losses in Asia only covered about 10 percent of total losses incurred as a result of natural and man-made disasters. Combined insurance premiums written from emerging markets accounted for only 18 percent of global premiums in 2014, against 82 percent recorded from the advanced economies.

), Stalin celebrated the arrival of the [Spanish] gold with a banquet at which he [toasted], “The Spaniards will never see their gold again, just as one cannot see one’s own ears.” Sometimes there is illustrative power in a negative example, even from one whose transgressions went exceedingly beyond being an untrustworthy custodian. The antithesis of what this Bank stands for could not be expressed with more force or greater clarity. The ultimate foundation of this institution, you see, far beyond its technical capacities in monetary policy execution, or its supervision of financial institutions, or its provision of financial services, is trust. This trust must be earned, every day, across every mandate, especially in an era in which confidence in public institutions has waned. The nature of this trust is fickle: it accrues slowly, and can evaporate instantly. It is a charge we take very seriously, especially when it comes to the resiliency and security of the foundational elements of our nation’s payment system. Thank you for your generous attention today. I’d be pleased to respond to a few questions. 3/4  BIS central bankers' speeches  4/4
This is not to say, for example, that I 1/5  BIS central bankers' speeches  agreed with every element of the package. But once something has been approved, I defend it. Is the consensus broken? No. This is actually one of the top priorities of the new President. Each of us will have our own ideas about the situation and the appropriate measures to take, that’s one thing, but it’s something else entirely to air disagreements in public. You and Mr Draghi have met at various forums since 2011. How was the past year when you were working side by side? Mario Draghi will go down in history as one of the founding fathers of the euro, even though he isn’t one in the strictest sense. There were two stages to his presidency. The first was saving the euro, with his famous “whatever it takes”. The second was fighting deflation. These were his two main interventions, and he was successful in both. He will be remembered very positively. When he uttered those famous words in London in 2012, he changed the outlook in the euro area. The banking union was implemented right away. Four or five years ago we were facing the risk of deflation and the asset purchase programme was launched, which brought the ECB in line with other central banks. Mario Draghi has modernised the instruments of monetary policy.

All of this in an environment of lower growth, zero rates and stimulus plans. When you were in government you joked that you slept like a baby, in that you woke up crying every two hours. How are you sleeping now? Well. Very well! I wouldn’t wish what happened in 2012 on my worst enemy. The situation now is totally different; back then we were on the brink of collapse. The Spanish economy, the Italian economy, doubts about the integrity of the euro… the situation of the Spanish banking industry was terrifying and contagion was spreading to the Treasury. It was a dramatic situation. I don’t think there is going to be a recession in Europe, that’s very unlikely. But yes, I am worried that we 2/5  BIS central bankers' speeches  will have two or three years of subdued growth, of below-potential growth. That is what is worrying me at the moment. And that this subdued growth may mean that the price stability objective is not met. Monetary policy is not the philosopher’s stone, it cannot be used to fix everything. Other policies are needed. So do you echo the calls of Presidents Draghi and Lagarde for countries with fiscal space, above all Germany, to boost spending and investment? This is important, yes, but my proposal goes further than that. Our current system of national fiscal policies and national budgets, with a set of rules like the Stability and Growth Pact, is not sufficient.
The part of the project which is quasi-consensual, with strong use-cases, is the one which raises little public interest – which does not mean that it is not key: wholesale CBDC. I will come back to this later. But let me start with the other face of the CBDC mountain: retail CBDC; this one, by contrast, is the focus of both public excitement and private questions. I. A ‘retail’ CBDC for a renewed intermediation in the digital age Let me suggest three hopefully shared principles to climb together this face of the mountain. 1. Our means of payment are and must remain a partnership between central bank money and commercial bank money  Page 2 sur 7 Until now, the coexistence and partnership of central bank and commercial bank money has structured the retail payment landscape and preserved the stability of the monetary system. Their respective roles are clearly assigned: central bank money anchors the stability of the financial system while the multiplicity of issuers of commercial bank money preserves competition and innovation. Their interplay and their interchangeability at par value ensures the safety and efficiency of the monetary and financial system. Neither one is better than the other, but in a joint venture each partner needs the other: a digital euro should never mean disappearance of commercial  bank money; conversely,  digitalisation cannot mean the disappearance of central bank money. Indeed these foundations – and especially the role of central bank money – are increasingly threatened by the digital revolution of the financial sector.

It is essential to channel them more towards financing the two major transformations of the coming decade: the ecological and digital transformations. As regards the economic situation, listening to more than 8,000 companies, we will publish our next monthly survey on Tuesday 11 January, and will provide a first assessment of the effects of the fifth wave. We remain confident that they will be relatively limited: we have learned over the past two years that every Covid wave, however serious, has diminishing economic effects. In our December projection, we showed that even an adverse scenario of further severe health restrictions – which is not the case today – would not prevent the French economy from returning by next year to the GDP trajectory it would have followed in the absence of the Covid crisis. These possible restrictions would admittedly reduce average growth in 2022, but this should be fully offset by additional growth in 2023. The other short-term issue is of course that of inflation: it is now close to its peak in our country (December showing first signs of stabilisation) and in the euro area. While remaining very vigilant, we believe that supply difficulties and energy pressures should gradually subside over the course of the year. We should then return not to the low inflation of the past, but to a new inflation regime close to our 2% target, with monetary policy normalising in stages accordingly.