samchain/econo-pairs-v1 huggingface dataset:
Towards the end of our stay, we too were almost ready to switch camps to the adherents of fundamentally new economic principles in which real estate prices go in only one direction – up. But, as you all know, in 2006 the massive price correction set in after all. As an example of the build-up of systemic risks and the excessive optimism of economic agents, I can again also refer back to the Swiss real estate boom in the second half of the 1980s (cf. slide 13). Strong growth and income prospects and favourable conditions in the mortgage market boosted demand for property. Real estate was increasingly purchased for  16  Shiller (2000). 17  Reinhart and Rogoff (2009) coined the term ‘this time is different syndrome’ for such misguided expectations during the boom phase of the credit or financial cycle. Minsky’s financial instability hypothesis is also based on the idea of a self-reinforcing effect between the prices of assets and increasing speculation on continued capital gains during an economic upturn, which is additionally driven by borrowing (cf., e.g. Minsky (1992)). Keynes (1936) in turn coined the expression ‘animal spirits’ as an explanation for the excessively ‘naive’ optimism of investors. Here he described the phenomenon that a general feeling of confidence among economic agents is primarily caused by intuition and emotions rather than by mathematically/rationally based expectations. Page 9/16  investment purposes since it promised high returns through value appreciation. The higher demand in turn led to further rises in real estate prices.

TL Loan Rates  Commercial Loan Standards*  (4-Week Average, Percent)  (Net Change)  Source: BRSA, CBRT. * Banks are requested to state the change in the demand for credit. Net percentage change of indexed responses indicates the direction of the change in credit demand. The index is calculated as [the sum of percentages for (Increased Somewhat + Increased Considerably)] – [the sum of the percentages for (Decreased Somewhat + Decreased Considerably)] +100. Index values greater than 100 signify increase in credit demand. Source: CBRT. As a result of these developments, credit growth gained pace in the last quarter of the year (Chart 12). Accordingly, annual rate of growth in total credit stock materialized around 16 percent at the end of the year, slightly higher than the 15 percent benchmark level for the medium term (Chart 13). Total credit growth proved robust in early 2013, and the uptrend of 13 weeks in credit volume stood close to the past years’ average. 4  Chart 12. Chart 13. Loan Growth Rates  Annual Growth Rate of Loans  (Adjusted for Exchange Rate, 13-Week Average, Annualized, Percent)  (Percent)  Source: CBRT. Source: CBRT. BIS central bankers’ speeches  There is a risk of further acceleration in credit in the forthcoming period. Financial conditions index continued to ease with rapid capital inflows, improving credit supply conditions, and accommodative liquidity policy (Chart 14). This outlook necessitates a cautious stance against macro financial risks.
Fundamental reforms after the 1990s crisis provided stability This is something which in many respects we can thank the crisis at the beginning of the 1990s for. The Lindbeck Commission, appointed in December 1992, noted that the Swedish crisis of the 1990s was not just a result of an unlucky combination of an international economic downturn, overly generous lending and individual policy errors, but in fact had much deeper roots.1 In their assessment it was to a large extent a “political and institutional crisis”, which exposed weaknesses in the way the political system worked. What they meant by this was that there was an underlying “systemic error” in the Swedish economy – a built-in bias towards systematically overly expansionary economic policy, which meant chronic problems with excessively high inflation, recurring cost crises and growing national debt. The Lindbeck Commission therefore advocated a policy which followed certain predetermined principles, or a “rule-based” policy.2 Several important institutional and structural changes were implemented in connection with the crisis and in the following years to create greater stability and sustainability in economic policy. One of the more comprehensive reforms was that monetary policy was more directly focused on keeping inflation low and stable, instead of, as previously, indirectly by maintaining a fixed exchange rate. Sweden thereby became one of the first countries to adopt inflation targeting. The price stability target was later written into the law and the interest rate decisions were delegated to an independent Executive Board.

But as we move to the next phase of post-crisis regulation, many commentators find it tempting to succumb to world-weary arguments. That any reform will be arbitraged That any insurance will promote risk taking That there is a trade-off between stability and growth  4  BIS central bankers’ speeches  And that there will always be financial crises. We were right to reject such fatalism when we embarked on reform and we are right to reject it now. While all recognise that future crises cannot be ruled out, the steps taken in the past six years have certainly reduced the likely frequency and severity of such crises. Where banking systems have raised capital and restored trust in their creditworthiness, access to credit has returned. This central lesson from the US and the UK recoveries could not be clearer. Publicly provided insurance is being removed from the system as the Too Big to Fail problem is addressed and the public subsidy for globally systemic banks is eliminated. Market forces are being restored. The system is more transparent. It is clear who bears risk. And the scope for arbitraging new regulation has been reduced through a global approach to reform that has established common standards and encompassed shadow banking. In short, any serious look at the experience of post-crisis reform shows that reform and regulation support – not damage – long-term prosperity. As I said in Washington three years ago: in no other aspect of human endeavour do men and women not strive to learn and improve.
The first concerns the electronic money and payment service activities and the associated risks, which are now very similar. And yet, there are still differences in their prudential and antimoney laundering frameworks. There are also differences between the competent authorities when it comes to assign innovative payment solutions to regulatory categories. My second example concerns the draft European MiCA regulation on crypto-asset markets. This draft regulation distinguishes between two kinds of stablecoins: those intended as investment instruments and backed by baskets of assets, Asset-Referenced Tokens (ART), and tokens for payments, Electronic Money Tokens (EMT), whose requirements are similar to those for electronic money. This distinction requires vigilance in two respects: first, if they are not subject to the same rules, ARTs should not be able to be used for payment purposes; second, care should be taken to ensure that the regulatory requirements are clearly formulated in order to avoid multiple layers of redundant regulation. 2- The second lesson concerns the technical means to be implemented to reconcile openness and security, and in particular the use of APIs. Should there be an extension of sharing to other financial data, the PSD2 directive calls for a more explicit definition of shareable data, a clearer allocation of responsibilities for authentication, and the promotion of the use of standardised APIs. Part II: Innovation and integration A- Let me now turn to the new challenges posed by the development of open banking and its extension towards open finance.

London has more foreign banking institutions than any other financial centre, and it is the largest financial centre for cross-border bank lending. London is the world’s leading centre for foreign exchange business, with average daily net turnover six times that of Frankfurt. More foreign exchange business in dollars, Deutsche Mark and French francs takes place in London than in each currency’s country of origin. London is the principal centre for the international bond markets, with 60% of primary international bond syndication and 75% of secondary market trading. The London Stock Exchange is the world’s largest centre for the listing and trading of foreign equities, and LIFFE is the largest financial futures exchange in the world outside Chicago. London is also one of the largest centres for the fund management of institutional equities, and one of the largest centres for insurance business. London’s position derives from the critical mass of markets and financial services available, and the concentration of the strongest financial businesses from all over the world. London’s strengths include a long track record of innovation and capitalising on new opportunities. The most well-known example is the creation of the Eurodollar markets, which US firms in London did so much to promote. London is the home of the English language. It is in a convenient time-zone between Asia in the morning and New York in the afternoon. It has an abundance of trading and other financial skills and professional support services - in law, accountancy, tax, property and communications.
Full and consistent implementation of the Stability and Growth Pact over time and across countries remains crucial to ensure confidence in the fiscal framework. At the same time, it is essential that all countries intensify efforts towards achieving a more growthfriendly composition of fiscal policies. We are now at your disposal for questions  2/2  BIS central bankers' speeches

And will that mean that they can no longer be described as the most hazardous economic institutions known to man? This development has come further in the United States, where market financing is considerably more important than in Sweden or the rest of Europe. So what would a similar trend, where the current predominantly relation-based lending is replaced by market funding, imply for the cyclical supply of credit in Sweden? Stronger focus on aspects of efficiency A third driving-force that most clearly affects the financial system is the stronger focus on aspects of efficiency. Permit me to touch on this briefly. Improvements to the financial infrastructure in recent years have made this safer and more robust in various ways. For example, the settlement routines used by both BGC and VPC are considerably more secure that before. Every component of the infrastructure now has better solutions for continuity, which means that operations can be ensured even in connection with more extreme events. Now that the most serious shortcomings have been rectified, the focus has shifted to enhancing efficiency in the given framework for safety. Considerable social gains are to be had by making the infrastructure more efficient. This applies to the central settlement systems and perhaps even more to the different payment instruments. Increased automation and a greater use of electronic payments instead of paper-based instruments and cash can generate large savings for society in general.
In our better moments, we reflect on all that we have learnt, through bad times as well as good. But there are days when we peer in the mirror and ask anxiously whether we have lost our freshness and drive. Have we become too set in our ideas and in our ways? Have others stolen a march on us? Have we become, to a degree, prisoners of our own past Maybe even victims of our own perceived success? The only way to deal with such fears is to confront them. That is a far larger task than I can do justice to tonight, and it needs to be part of a continuing effort to improve our performance. But let me try and give you an overview of some of the main issues in the remainder of my remarks. 5  “The Inflation Target five years on”, lecture delivered by Mervyn King at the London School of Economics, October 1997. BIS Review 20/2007  3  Intellectual development I want to start with the MPC’s intellectual development. As the world around us changes, it throws up new policy challenges which force us to examine old ideas and develop new ones. So the MPC has been on an intellectual voyage of discovery since it was established. The formation of the MPC unleashed a ferment of intellectual debate and activity inside the Bank. It was a thrilling time for those who were closely involved.

Since 2004, global oil prices have more than doubled, a far sharper rise than at any time since the 1970s, when as some of you may recall, inflation took off, eventually peaking at 25%. Then, last winter, UK wholesale gas prices surged, as a result of supply and storage problems that were, in large part, specific to our market. The resulting increases in household gas and electricity bills have had a large direct impact on inflation. By December, they alone were directly contributing 1pp to the measured inflation rate. These energy price shocks are now starting to unwind, at least for now. The oil price has fallen back, although the outlook remains uncertain – the thin margin of spare capacity continues to make oil prices unusually sensitive to all kinds of news, from politics to weather and supply. We can have more confidence that the gas price shock is ebbing. The temporary supply and storage issues which caused the price spike last winter have been addressed. Together with a milder winter, this has helped to bring wholesale prices back to where they were two years ago, and retail prices have started to fall back. So, just as energy price increases have boosted inflation over the recent past, it now seems likely that energy price falls are going to reduce it – possibly quite sharply – over the year ahead. Indeed we expect inflation to fall below the target by the end of 2007. Let me make two observations about this episode.
For example, I have said on behalf of the Bank of England7 that in principle the Bank, as the UK’s resolution authority, would be prepared to step aside and allow UK subsidiaries of the big US financial groups to be resolved as part of a group-wide resolution led by the US authorities. To take this further, the Bank of England needs to set out the conditions that would need to be met in practice for it to deliver on its “in principle policy”. Second, the UK needs the US authorities to make a reciprocal “in principle statement” about their being prepared to step back to facilitate a UK-led top-down whole-group resolution of UK groups with a presence in the US. That cannot, in my view, wait very long after the EU’s Resolution Directive is passed. And, third, similar commitments need to be made between other pairs of countries – particularly the major jurisdictions in which the headquarters of global systemically important financial institutions are domiciled. On that, I can tell you that progress in this field is not limited to the US and UK. Separately, some technical impediments need to be removed. Perhaps most obviously for this audience, the standard market agreements for derivatives and repos need to be amended so that putting a firm into resolution or the exercise of a resolution power is not an event of default. If necessary, there will have to be regulatory changes to induce or require this. That too is on the FSB’s agenda for the next year.

The technological breakthrough, based on the microchip and the computer, that together with the new information techniques has come to be known as the “new economy” is something that is very much alive and will leave its mark on many countries, including Sweden, for a long time to come. The present economic downturn, which to some extent is a hangover after excessively optimistic expectations, will give way to another upswing. That will impart renewed vigour to the technological breakthrough that the global economy is experiencing. However, we do not know either just how deep the ongoing slowdown will be or just when it will bottom out. But it would be hard to argue that this will not happen. The underlying cyclical rhythm with upward and downward phases in economic activity has always been there. Economic history also contains periods of what I would call “growing pains”. Things do not always turn out as well as people often hope, or at least they do not happen as quickly, but neither are they ever quite as bad as we sometimes fear. My conclusion about the technological breakthrough’s impact on corporate profits is maybe not quite as optimistic, at least for share investors. Roughly speaking, historical experience indicates that the true winners are consumers, not shareholders. That conclusion is perhaps even more valid today since the breakthrough is very much a question of information. Better informed consumers tend to lead to stronger competition and depressed profit margins rather than the opposite.
So we have two goals: employment and inflation. And if the world is a really good place, it maybe makes it a little easier to achieve those goals. And if the world is at a more difficult place, maybe it makes it a little harder to achieve those goals. But it doesn’t change our goals, and it doesn’t change our monetary policy mission. Maureen O’Hara: Let me turn that, our focus, just a tiny bit. You’ve been a leading critic of culture in the banking industry, and I kind of have a two-part question here. Do you think the era of bad behavior in banking is behind us? And here’s the second part of the question: some people would argue that the behavior wasn’t really that bad but instead the regulators… President Dudley: Who are those people? Maureen O’Hara: There was Elizabeth Warren, I’ll say that, I think she’s convinced. But some people would argue 6 / 13  BIS central bankers' speeches  that the regulators used the opportunity to extract excessive fines from banks for behavior that maybe wasn’t ideal but wasn’t so horrible. There’s two different perspectives. I think no matter how we look at it, some of the behavior of the banks was sort of unacceptable. Are we past that, do you think? President Dudley: Well, first thing I would say is a lot of the behavior was just totally egregious, totally unacceptable. Not in the gray area.

That has become the prime objective of all societies today as has been demonstrated by the choice of the theme of this Stat Day Event. Wealth is created in any society by people who make choices between consumption and production, decide on appropriate production methods and take risk on what they do. A vital input which they use for this process is “information”. Statistics is nothing but another name for information presented in a more sophisticated and analytical form. Hence, any society desiring to attain the highest level of economic development cannot disregard the importance of statistics. BIS Review 36/2009  1  The use of statistics as an input If statistics are an input, like any other input, there should be a demand for them. If statistics help people to create wealth, they should be prepared to pay a price to acquire them. When there is a price for statistics, there should be a supply of statistics as well. It, therefore, connotes that there is a market for statistics, like the market for all other inputs. This means that people who have information that can be traded in the market will have to package and sell it. The packaging should be done in such a way that the users would be able to consume statistics as an instant product without having to process them further in-house. This is the biggest challenge which statisticians face today: how to sell their product to would-be users as a readily consumable product and help them to create wealth.
This will foster an alleviation of effects of the restrictions for households and businesses, accelerate the return of economic activity to normal, and also mitigate the risks of inflation deviation downwards from the target over the next quarters. In the course of our key rate discussions, we considered model estimates of the influence of such additional fiscal measures on GDP, inflation and the monetary policy path. We will certainly consider possible developments in fiscal policy, in the Russian and global economies in the course of further adjustments of our baseline scenario. Nonetheless, our current analysis suggests that virtually all possible scenario variants allow for monetary policy easing, including amid a certain additional expansion of fiscal measures designed to support the economy. The Board of Directors proceeds from the existing potential for cutting the key rate and discussed possible options at the current and next meetings. The discussion concluded that given such extraordinary developments, it may not prove sufficient to adjust our policy by employing the small-step method we used. To return inflation to the target and stabilise the situation in the economy, we may need to implement more decisive measures. At our today’s meeting we have decided to cut the key rate by 50 bp to 5.50% per annum. We continue to see the potential for the further easing of monetary policy at our next meetings.

Elvira Nabiullina: Review of recent inflation developments in Russia and economic outlook Statement by Ms Elvira Nabiullina, Governor of the Bank of Russia, in the follow-up to the Board of Directors meeting, Moscow, 24 April 2020. * * *  Today, the Board of Directors has decided to cut the key rate by 50 bp to 5.50% per annum. This implies that we have switched to accommodative monetary policy. Moreover, we hold open the prospect of further key rate reduction if the situation develops in line with the updated baseline forecast of the Bank of Russia. Our today’s decision is based on the profound revision of our view of economic development and inflation trends in the next three years. Since the last Board of Directors’ revision of the key rate, three events have happened which have defined our view of the situation. They are primarily associated with the spread of the coronavirus pandemic. Firstly, this is a drastic decline in the global economy. Secondly, there has been another round of a slump in oil prices, despite the new OPEC+ deal. Thirdly, the Government has introduced nation-wide restrictions. As a result, a large number of businesses have suspended their operations or switched to the remote work mode. A lot of citizens are currently in self-isolation. As to positive factors, I would focus on a slight stabilisation in global financial markets as compared to March, which was largely driven by measures being implemented by the central banks of reserve-currency countries.