samchain/econo-pairs-v1 huggingface dataset:
As I said, the world will not come to an end in two years’ time. The fact that we do not have any definite answers regarding the effects of a rapid credit boom in my opinion should not prevent us from acting in a manner that will at least not aggravate the risks. Summary Let me conclude by summarising my main message here this evening. 6  •  There has been a gradual development in our reasoning on monetary policy. Compared with the clarification on the Riksbank’s monetary policy strategy published in 1999, we can now go slightly further with regard to how we communicate the considerations of the real economy taken when conducting monetary policy. •  When we make decisions on the repo rate we also try – given our overall objective to maintain price stability – to subdue fluctuations in the real economy. •  This is done by not aiming to bring inflation back on target as quickly as possible in every single situation. When there is a deviation from target, our ambition is normally to return inflation to target within a time period of two years. •  We no longer apply the simple policy rule that relied on forecasts based on a constant repo rate. This rule, among other things, contributed to excessive focus on the two-year horizon in relation to the development of inflation over time.

Speech  Embargo 16 January 2018, 6.00 pm  How money is created by the central bank and the banking system Zürcher Volkswirtschaftliche Gesellschaft  Thomas J. Jordan Chairman of the Governing Board ∗ Swiss National Bank Zurich, 16 January 2018 © Swiss National Bank, Zurich, 2018 (speech given in German)  ∗ The speaker would like to thank Samuel Reynard and Mathias Zurlinden for their support in the preparation of this speech. He also thanks Simone Auer, Petra Gerlach, Carlos Lenz and Alexander Perruchoud, as well as SNB Language Services. Page 1/12  Ladies and Gentlemen It is a great pleasure for me to be your guest here tonight. The subject of my speech is the creation of money in our economy. Since money creation in our financial system is closely linked to the granting of loans by banks, I am also going to talk about lending. I shall, moreover, address the issues of sovereign money and access to digital central bank money, insofar as they relate to our main topic. We are all aware of how profoundly the economic and monetary developments of the last ten years have been shaped by the global financial and economic crisis. Central banks responded swiftly and resolutely to the crisis, reducing interest rates and pumping large amounts of liquidity into the banking system. Once interest rates were down to almost zero, central banks were forced to adopt unconventional measures.
Across Upstate New York, the cycle of recession and recovery has been much less pronounced than in the nation, which means that the region has been more stable in recent years than many other places around the country. This has been particularly true in Buffalo, which experienced an employment decline of about 3½ percent during the downturn – a significant loss, to be sure – but well below the over 6 percent decline that occurred nationally. One reason why Upstate New York weathered the storm better than the nation as a whole is the resiliency of its housing markets. Like much of Upstate New York, Buffalo’s housing market has proven to be more stable than many other parts of the country. In fact, since the peak of the national housing market in early 2006, home prices in the Buffalo area have increased by about 10 percent, compared with a decline of more than 30 percent nationally. As a result, the drop-off in economic activity that is connected, directly and indirectly, to the performance of the housing sector has not been as severe here as in many other places around the country. 1  As measured by the 12-month change in core PCE deflator. 2  See for instance, the behavior of the three- and six-month changes in the core PCE deflator.

On the upside, there were price rises associated with the early supply- side disruptions and frictional costs of adjusting supply chains, that fortunately proved mostly transitory and “second order” in terms of contributions to overall inflation. But these cost-push factors could well rise again and thus bear close monitoring. 8. In the labour market, it is noteworthy that wages did not fall in several major economies. Wage growth was 4.8% in the US last year, 2.7% in the Eurozone, 4.3% in China, and 1.4% in Singapore. Part of this reflected some degree of nominal wage rigidity, induced by the roll-out of substantive wage subsidies meant to reduce the incidence of job separation in the initial stages of the crisis. Another statistical issue may have led to mismeasurement here. As a disproportionate number of lower wage workers became unemployed during the crisis, more so than during earlier downturns, compositional changes in employment would have led to overestimates of wage growth. The usual aggregate average wage series are typically not based on a fixed set of jobs or workers in continuous full-time employment. [1] 9. Second, at this stage, the risk of disinflation has receded as prices are oﬀ their local minima and underlying cost and consumer price pressures are picking up, though only gradually alongside the growth rebound. The IMF generally expects contained inflation pressures in most countries [2] . Higher commodity prices will mechanically raise consumer price indices in the short term.
Over time, these higher spreads might encourage these firms to seek more stable sources of dollar funding or decrease their dollar assets, either of which would likely be positive for financial stability. Indeed, we have heard anecdotally that firms of this type are increasingly shifting towards wholesale deposits from nonfinancial corporations. 37 For example, if repo rates fell relative to other rates, we might see more take-up at our ON RRP operations, or if  foreign exchange swap rates were to rise further, we might see greater use of the official dollar auctions conducted by foreign central banks that are part of the standing swap network. 38 CGFS Paper No. 54, “Regulatory change and monetary policy,” May 2015. 13 / 13  BIS central bankers' speeches

The overarching requirement for an Islamic financial institution is to ensure that its objectives and operations are in accordance with Shariah. In Malaysia, our experience suggests that mandating this requirement in the laws governing Islamic finance is fundamental not only in the context of defining the business scope of an Islamic financial institution, but also in preserving the sanctity of Shariah in Islamic finance. This legal mandate is also crucial for the Bank to take supervisory and regulatory remedy against an Islamic financial institution, which may include revocation of licence, in cases,  2  BIS Review 161/2010  where a violation by the institution poses reputational risk that might cause an erosion of confidence and could threaten the systemic stability of the Islamic financial system. The integrity and credibility of Shariah governance framework in Malaysia is also fundamentally supported by the role of the Bank’s Shariah Advisory Council (SAC), a centralized referral body for Islamic finance community, which is statutorily positioned as the highest authority in the determination of Shariah matters relating to Islamic finance. In preserving the sanctity of the Shariah, the SAC itself ensures the robustness of its rulings through a rigorous process before arriving at a decision. Another essential element in developing an effective legal infrastructure is the role of an adjudication system. A supportive adjudication system in the context of Islamic finance is one which can authoritatively enforce the principles of Shariah in dispute settlements involving Islamic financial transactions.
The contrast between the last two charts could not be more striking: in Switzerland, the secured interbank market progressively took over from the collapsing unsecured market to achieve record volumes of activity in the week following the Lehman Brothers collapse. Clearly this market showed its resilience and fulfilled its function, which no doubt helped prevent a credit crunch materialising in Switzerland. Note that later developments (starting in late autumn 2008) were strongly marked by the abundant liquidity situation created by the SNB swap agreements with other central banks and later by the interventions in foreign exchange markets. As a result, demand for short-term liquidity by market participants disappeared. Preliminary evidence strongly suggests that a key factor in the relative performance of the Swiss and US repo markets lies in the quality of the collateral backing repo transactions.6 In the US, as emphasised in a BIS study, repo markets had doubled in size since 2002, with gross amounts outstanding at year-end 2007 of roughly USD 10 trillion.7 These markets ended up financing up to one-half the total assets of the major investment banks. This growth in volume was based on a widely broadened collateral basket, including corporate bonds, bonds issued by agencies, mortgage-backed securities and other lower-rated collateral. In March 2008, following the Bear Stearns rescue, confidence waned and market participants immediately ceased accepting any collateral other than Treasury and agency securities.

BIS central bankers’ speeches  5  6  BIS central bankers’ speeches  BIS central bankers’ speeches  7  8  BIS central bankers’ speeches  BIS central bankers’ speeches  9  10  BIS central bankers’ speeches
Thus, we have made limited progress in closing the substantial output gap that was created during the recession. A similar conclusion is drawn from an assessment of labor market conditions. Although the unemployment rate has declined by about 2 ¾ percentage points since peaking at 10 percent in October of 2009, a significant portion of that decline reflects the substantial decline of the labor force participation rate over that period. It should also be noted that since the previous business cycle peak at the end of 2007, the decline of the labor force participation rate has been more than accounted for by a decline in participation of people in the prime working age of 25 to 54. The inflation data are also consistent with this overall picture of an economy operating well below its full potential. Total inflation, as measured by the personal consumption expenditures (PCE) deflator, has been quite volatile in recent years due to sharp fluctuations in energy prices. Core inflation, which excludes the volatile food and energy components and thereby may be a better guide as to underlying inflation, slowed from around 2 percent in early 2012 to just above 1 percent in mid-2013. In recent months it has shown signs of stabilizing, but remains well below the FOMC’s expressed goal of 2 percent for total inflation. Fortunately, inflation expectations remain relatively stable at levels somewhat above the current inflation rate. This stability should help prevent an undesirable further drop in inflation relative to our 2 percent objective.

William C Dudley: US and regional economic conditions Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Economic Press Briefing on Private For-Profit Institutions in Higher Education, New York City, 20 November 2013. *  *  *  Good morning and welcome once again to the New York Fed’s Regional Economic Press Briefing. I am pleased to have this opportunity to speak with you – and, through you, to the people in our District. I am going to discuss conditions in the national economy and then on conditions in our region, with a focus on private, for-profit institutions, which have become more visible in the U.S. higher education market. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee (FOMC) or the Federal Reserve System. National economic conditions Let me begin by taking stock of where we are at the moment. Then I will address my expectations for the performance of the economy in 2014 and 2015. Since the end of what is now called the Great Recession in mid-2009, the U.S. economy has experienced 17 consecutive calendar quarters of positive growth of real GDP (gross domestic product). However, the compound annual rate of growth over that period has only been around 2¼ percent, close to prevailing estimates of the economy’s potential growth rate.
For the time being, that includes the survey of the most important exporters and importers, the inflation expectations survey, and the survey of banks' credit activity. The State Statistical Office contributed to  BIS Review 100/2006  3  the realization of part of the aforementioned surveys, by providing information and consultations, for which we are especially grateful. However, I would take this opportunity to ask the entities selected for the needs of these surveys to maintain and improve their cooperation with the Central Bank, since at the end of the day, those surveys serve for the needs of the entire economy, including themselves. Central banks are providers, but also massive users of statistical information and data, which will continue to be the case in the future, too. However, the nature of the information and data necessary for performing the tasks of the central banks constantly changes. Statistics departments are aware of this fact and in order to be able to take the new challenges and meet the new requirements they have to improve their knowledge and techniques continuously, and apply operational methods in accordance with the international standards and recommendations. It is a great task, which will never come to an end.

•  Second, the central banks in developed economies are increasingly focused on more subtle analyses of the financial system stability in their countries, and inevitably, as a result and consequence of the globalization, in wider terms. It requires access to various information. We also face this imperative, if seeking to successfully address the potential financial market vulnerabilities and crises. Thus, the role of the financial sector in the economy and its interdependence with all other sectors created a need of establishment of a proper financial account statistics. Statistics that shows the flow of the financial assets across each sector in the economy. The successful delivery of this project needs joint work and cooperation between the National Bank and the State Statistical Office. I believe that the team of Ms. Novkovska and the experts of the National Bank will deliver this project successfully. Without this type of statistics, our financial stability analyses will lie on less certain ground. •  Third, there is a higher need of statistical treatment of the funds with the household sector. The steady increase in the funds of the household is an important trend which is present in the modern economy, and lately in our country, mainly owing to the fact that they have better access to banking credits. Considering the importance of this sector in the economy, there is a need of increasing the range of statistical information that refer to the household sector with a view to more relevant determining and analyzing of their current and future behavior.
Even with the benefit of hindsight, it is hard to demonstrate that the economy was running significantly above capacity in the last few years. The flow of migrants eased capacity constraints in the labour market and the surveys of capacity utilisation rang no alarm bells (Chart 4). Indeed when I arrived on the MPC, some members were arguing that we needed to cut rates again following a year in which unemployment had increased and house prices appeared to have achieved the mythical “soft landing” after a relatively light touch on the interest rate tiller. And while the expansion of low cost producers in Asia had been a helpful tailwind, the system seemed to have dealt with some big shocks, like the East Asian Crisis and the bursting of the Dotcom bubble. So most commentators concluded that a good policy framework had played its part. The last 18 months have shown that the reduced volatility of growth and inflation did not tell the whole story. There may not have been a boom in activity in the West but there certainly was in many emerging markets. And rising savings there, channelled a huge flow of funds into the world’s financial markets, depressing risk-free interest rates. After the postmillennium collapse in the world’s stock markets this was compounded by a coordinated loosening of monetary policy. Cheap money supported an increase in leverage in the financial sector (Chart 5). And banks became increasingly dependent on funding from wholesale markets rather than their traditional deposit base.

In theory, a ceiling on these ratios could have provided an effective brake on the excesses of the last boom. While this has obvious microeconomic disadvantages, the Hong Kong Monetary Authority showed how such an approach could work in practice in the 1990s: tightening the constraint on loan-tovalue ratios as their property market threatened to overheat. Another possibility would be compulsory margin requirements on trading positions. I am clear that counter cyclical capital requirements are a large part of the answer but I would be inclined to keep a number of other options open too. Having a large arsenal of policy instruments, which vary in their point of influence provides some welcome flexibility. It allows the policymaker to respond appropriately to a particular situation, rather than treating all shocks the same. For example, if problems are concentrated within the property market then caps on loan-to-income and loan-to-value ratios might be effective. If instead the problem lay in funding markets, with an unwarranted compression in risk premia, then the instruments of liquidity regulation would be more appropriate. Who calls the shots? That leads on to the issue of who should have control over these policy instruments? The answer I think very much depends on the objective of policy and the way in which policy is set. 12  BIS Review 21/2009  Clearly the application of the policy would be for the regulator.
Temporary price stabilisation would be accompanied by a destablisation of real economic activity. A similar dilemma is posed by VAT reduction, which stimulates the economy and lowers registered inflation. A monetary policy response in the form of a repo rate cut - to return inflation to the target - would act as a further economic stimulus. Here, too, temporary price stabilisation would be accompanied by a destablisation of real economic activity. I have used VAT adjustments here as an example of shocks from the supply side. Effects of the same type are associated with changes in other indirect taxes, for instance the current proposal to lower the tax on tobacco. The same applies to international oil price movements, as well as to the Riksbank’s own interest rate adjustments, which have a direct impact on house mortgage interest costs. How, then, should monetary policy deal with a situation in which prices are exposed to supply shocks of this kind? Part of the answer lies in the circumstance that - provided people’s medium or long-term inflation expectations remain unaffected - most shocks of this type are transitory. The Riksbank has concluded that in the normal course of events, transitory price effects of this type ought to be a secondary consideration in the construction of monetary policy in so far as they do not affect inflation expectations and thereby have a more permanent impact on inflation. Effects of supply-side shocks may, however, be more permanent.

One disadvantage of this index, however, is that some of its components have not yet been finalised. As an aid in the analysis of price trends, the Riksbank’s inflation reports include various indicators of underlying inflation. The tolerance interval of ±1 percentage point serves, among other things, to accommodate the various transitory price movements that normally occur. Experience has shown, however, that in periods when the transitory price effects are extensive, inflation may move outside the interval without this by itself having consequences that should be considered in monetary policy. Thus, the tolerance interval represents the range that is normally expected for fluctuations in CPI inflation. It serves to indicate that the target variable, the CPI, cannot be controlled exactly. Still, I am convinced that people’s awareness and understanding of these factors will gradually grow as time passes. This will happen not least as a result of the efforts of all those knowledgeable analysts and business journalists who follow monetary policy closely and mostly do their utmost to explain these complex details to a broader public. Exchange rate of indirect importance for monetary policy Now I should like to say something about the role of the exchange rate. Our monetary policy strategy is premised on a flexible exchange rate. In other words, the Riksbank does not explicitly target the exchange rate and, given Sweden’s position on ERM, it seems today that the rate will continue to be flexible at least until a new political decision is taken on the issue of EMU.