samchain/econo-pairs-v1 huggingface dataset:
It became clear that not just commodities, but also more and more other goods and services were being affected by price increases. In such situations, monetary policy must intervene decisively to prevent inflation from becoming entrenched above the range of price stability. We have therefore gradually tightened monetary policy since June 2022 by raising interest rates and selling foreign currency. The SNB policy rate is currently 1.5%, compared to - 0.75% a year ago. Moreover, in net terms, we sold foreign currency worth CHF 22.3 billion in 2022. At our most recent monetary policy assessment in March, we emphasised that we would continue to tighten monetary policy if necessary. Contribution to financial system stability Ladies and gentlemen, the National Bank Act entrusts us with the key task of ensuring price stability. Furthermore, it also charges us with contributing to the stability of the financial system. Alongside stable prices, a stable financial system is an important prerequisite for growth and prosperity. While ensuring price stability is a task that the SNB can perform alone using its monetary policy instruments, several entities are involved in safeguarding financial stability. To this end, we cooperate closely with FINMA and the federal government. The work is divided up as follows: FINMA supervises banks and is responsible for enforcing banking legislation. It monitors banks with the aim of protecting creditors and investors, assessing the soundness of individual institutions, and identifying associated risks to the financial system. The SNB has a different role.

Liquidity is lent against sufficient collateral and is subject to an interest rate that is higher than the policy rate. 2/4  BIS - Central bankers' speeches  SNB's contribution to managing Credit Suisse crisis This brings me to Credit Suisse. Credit Suisse has long struggled to cope with a loss of confidence and with outflows of client funds. The collapse of Silicon Valley Bank in the US triggered a swift deterioration of the situation in mid-March, despite the fact that there was no direct link between the bank in California and Credit Suisse. Credit Suisse's counterparties cut credit limits and clients withdrew deposits at a rapid rate. If Credit Suisse had collapsed, many Swiss households and SMEs would no longer have had access to their deposits, and payments via Credit Suisse would no longer have been executed. Furthermore, SMEs in particular would no longer have been able to benefit from existing credit limits at Credit Suisse and maturing loans would not have been renewed. The economic fallout would have been enormous. But there was even more at stake here. The collapse of Credit Suisse would have sent a shockwave through the global financial system. The consequences for the real economy, both in Switzerland and abroad, would have been dramatic. This extremely demanding situation required quick and decisive action. The federal government, FINMA and the SNB worked together under high-pressure conditions to find a solution that was viable and as market-based as possible in order to safeguard financial stability and protect the Swiss economy.
When inflation reappeared, persistence did so too, and many analysts then thought that it would stay with  BIS Review 41/2009  7  us for a long time, since they believed indexation had revived strongly. I do not wish to discard this reasoning, but we have learned a lesson here, which should be confirmed in future research, that persistence is not stable, highly non-linear, and it greatly depends on the global context. This is particularly valid in a small and quite open market economy.7 Finally, I would like to make a reflection on the communicational challenge we are now faced with. Not only must we apply the right policies, but also put them in the right context. I have described a highly adverse global outlook, and some could have reservations about an authority doing this, since it could generate some degree of pessimism. Quite on the contrary, I believe that one must talk realistically and, besides, if we ignore how serious the global situation is, it would mean that we don’t have a clue to what is really going on. Trust is gained with sincerity and adequate policies for the current times. There is a second element that enables me to talk freely and bluntly: the conviction that our economy is healthy and very well prepared to face this present condition, which is something that did not happen in any of the former external crises.

This is mainly because it is necessary to give time to the transmission mechanisms of the monetary policy to work, so that the consequences of decisions already made can be seen in practice. Final remarks I would like to end with some lessons about monetary policy conduct which have stemmed from the great inflation rise that has taken place since mid-2007, into our current international situation. In the first place, many times it had been noted that Chile was one of the countries where the highest increase in inflation – more than tripling the target – was observed, with the interest rate rising less than in other economies with lower inflationary pressures. As I have already argued, our policy response was completely consistent with a flexible monetary policy framework. As the price shock became stronger and more persistent, monetary policy became more restrictive. This same flexibility in managing monetary policy enables us to react quickly to the strong deterioration of the external conditions today. Fortunately, our economy is solid enough to absorb significant changes in the course of monetary policy, without this being a threat to stability. In the second place, inflationary dynamics are highly complex and cannot be linearly mechanized based on historical evidence. Early this decade, when inflation was consolidating at low levels, we saw that persistence of inflation had dropped substantially, thereby reducing the impact of propagation via indexation and other phenomena that were characteristic of our high-inflation past (García and Valdés, 2005).
That looks likely to be a substantial drag on recorded growth in the first quarter of the year, possibly leaving the headline figure for activity close to flat. But surveys point to much more modest falls in construction output. And growth in the sector is estimated by the ONS to have resumed in February. Also, construction was very weak in the first quarter of 2011, only to bounce back on the ONS measure in Q2. Mismeasurement, in what is still a fairly new monthly statistical series, can’t be ruled out. Those straws in the wind suggest that the drag on growth may prove to be temporary, so long as the global environment does not deteriorate. Second, the additional bank holiday for the Queen’s Diamond Jubilee in June will reduce the number of days worked. Taken together, all this means that you will probably see weak headline ONS numbers for growth in the first two quarters. The MPC will be focused mainly not on headline growth but rather on indicators of underlying activity. Surveys of UK companies’ output have, in fact, continued to tick up, with the most recent CIPS readings, taken as a whole, at the highest level for over a year. Survey measures of private sector employment have begun to edge up too. Overall, surveys point to growth in underlying activity over the first half of 2012 – not stellar growth, indeed modest growth, but growth nonetheless.

Either via vendor financing, where a company allows a customer to purchase a product or service on credit. Or by extending credit directly to some of their suppliers. Or by supporting their supply chain indirectly by setting up programmes to allow suppliers to borrow against unpaid invoices. ACT data suggest that so-called “buyer driven receivable programmes” have been growing in recent years. And there is some anecdotal evidence from the Bank’s network of Agents that larger firms are helping out smaller firms a bit. But it is fanciful to entertain the notion that anyone other than the banking system can be the main backstop for working-capital finance – for small and large companies alike. Banks are unique in that their deposits comprise the money we all use for day-to-day purchases, so they and they alone can provide liquidity insurance (provided they are financially sound). For much of our history, the Bank of England worked with the grain of that by lending against bankers’ acceptances in our monetary operations: the famous Bill on London. The bill market atrophied in the mid-1990s, and withered away completely a few years later. But during the crisis I have wondered more than once whether a revival would be useful – although it was a market that relied upon guarantees from banks whose names were close to undoubted. That is for you, as corporate treasurers, and bankers to pursue if you wish to.
Initiatives are already underway to resolve such weaknesses through mergers and recapitalisation of such finance companies through strategic investors. It should also be mentioned that in addition to the Board of Directors, the senior management of these institutions are also equally responsible for the operations of the institutions. The Central  19  Bank will consider implementing the legal provisions against the errant senior management, if warranted, in the interest of depositors. In mid-2017, we set up an ‘Enforcement Division’ within the Legal and Compliance Department of the Central Bank to carry out duties relating to enforcement and resolution issues pertaining to financial institutions, combating the pervasion of prohibited schemes and other unauthorised financial undertakings, while also curbing violations related to exchange management. This Division has been converted into a full-fledged Department as at 1 January 2018. We have also undertaken measures to enhance our surveillance mechanism. Improvements to the early warning systems are also being effected. During the last year, the system has helped provide proactive and timely guidance. In addition, the existing internal mechanism has also undergone a review process. As announced in the Road Map 2017, the capital levels of licensed finance companies (LFCs) and specialised leasing companies (SLCs) are expected to be strengthened further. The minimum core capital requirement has been revised upwards from Rs. 400 million to Rs. 1 billion by 01 January 2018, followed by Rs 1.5 billion in 2019 and Rs. 2 billion by 2020.

We have taken several progressive measures to communicate more information, including cut-off yield rates of the OMO auctions and overnight liquidity estimates with a view to encouraging more efficient price discovery in the money market and promoting informed decision making by market participants as well as to improve market signaling of OMO. The Central Bank will continue to actively engage in liquidity management, while guiding the short-term interest rates along a desired path. Several measures, such as reviewing the compilation methodology of benchmark interest rates, strengthening the operational framework pertaining to the Intraday Liquidity Facility (ILF), introducing a rule-based code of conduct for Authorised Money Brokers and promoting market development will be taken to improve the efficiency and compliance in respect of money market operations. 11  As announced last year, the Monetary Policy Consultation Committee (MPCC) was reestablished in mid-2017 to draw on external expertise to support the conduct of monetary policy. We will continue to take on board stakeholders’ views and align our policies in a way, which is mutually beneficial for stakeholders and the Central Bank. As the conduct of monetary policy is dependent on an effective and prudent exchange rate policy, the Central Bank has introduced a more market based exchange rate system. It has allowed more flexibility in determining the exchange rate based on the market conditions and has intervened only to smoothen volatility and to build up reserves.
By the 2018 G20 Summit in Argentina, the FSB will report whether any additional financial resources are required to resolve safely CCPs. The financial system is fairer The system is fairer because of reforms that are ending the era of “too big to fail” banks and addressing the root causes of a torrent of misconduct. A decade ago, large complex banks operated in a “heads I win tails you lose” bubble. They privatised profits in the run-up to the crisis before socialising the losses when the music stopped. The loss of confidence in private finance that crystallised in the autumn of 2008 could only be arrested by public support over the following year that totalled $ trillion in bail-outs, government guarantees of bank liabilities and special central bank liquidity schemes. 9  To bring back the discipline of the market and end reliance on public funds, FSB members have agreed standards to ensure that major banks can fail safely in future. 7  Such collective investment vehicles with run risk now account for almost two-thirds of identified shadow banking up from about 40% prior to the crisis. 8 Work on liquidity mismatches in open-ended funds is scheduled to be completed by end-2017 and development of consistent leverage measures by the end-2018. The FSB has now completed its work under the Shadow Banking Roadmap. It has not identified new shadow banking risks that require additional regulatory action at global level.

What a Difference a Decade Makes Mark Carney Governor of the Bank of England Chair of the Financial Stability Board  Remarks at the Institute of International Finance’s Washington Policy Summit, the Reagan Centre, Washington DC 20 April 2017  I am grateful to Alice Carr, Wayne Chapman, Carsten Jung and Iain de Weymarn for their assistance in preparing these remarks. 1  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  Introduction It’s a pleasure to be back at the IIF’s Washington Policy Summit. 1  Last time I spoke here (in 2011) it was still early in the international financial reform process. From the IIF’s perspective at the time, there were three major concerns: -  The consistency of implementation across the G20;  -  The possibility of significant regulatory arbitrage in shadow banking; and  -  Whether the FSB/G20’s ambitious agenda would impair the recovery. Today, those debates have largely been settled. First, the new international minimum standards are being, by and large, consistently and promptly implemented in G20 jurisdictions. This progress is regularly assessed and transparently reported by the FSB 2  and the IMF. And in general, when countries have deviated from international standards, it’s because they have chosen to go further. Second, activities which give rise to similar risks are being treated consistently regardless of where they originate. A series of measures have addressed the major regulatory arbitrage opportunities that encouraged shadow banking. Contingent exposures of banks have been brought on balance sheet and appropriately capitalised.
4  BIS Review 68/2010  Figure 4 Inflation and inflation expectations Annual percentage change 16  16 CPI Historical mean  14  14  12  12  10  10 1993-2010 M ean 1,5 Std dev 1,4  8  8 6  6 4  4  1971-1992 M ean 8,3 Std dev 3,0  2  2  0  0  -2  -2 71  74  77  80  83  86  89  92  95  98  01  04  07  10  5  5 CPI Inflation expectations  4  4  3  3  2  2  1  1  0  0  -1  -1 -2  -2 94  96  98  00  02  04  06  08  10  12  14  Note. Inflation expectations refer to money market participants. Sources: TNS SIFO Prospera, Statistics Sweden and the Riksbank  More or less at the same time as inflation decreased and started fluctuating less, growth also became more stable. This increased macroeconomic stability was a more or less worldwide phenomenon, being generally known as “The Great Moderation”. There exist various hypotheses on what may lie behind this increased stability. One of them is that monetary policy had started to be conducted in an improved manner, in which an emphasis on low and stable inflation allowed inflation expectations to be better anchored.

One difficulty is, for example, that the financial sector is often rather underdeveloped in the models used by central banks in their analysis work. At present, fairly intensive efforts are being made in many areas to better include financial variables in the central banks’ forecast models. Another, not unrelated, problem is that property prices and borrowing are occasionally driven by psychological factors – exaggerated optimism and high risk propensity in upturns and the opposite effect in downturns. It is, of course, primarily this kind of development that leaning against the wind is an attempt to counteract. However, such factors are difficult to capture in economic models, as these are often based on the assumption that participants will act in a rational manner. In other words, it is difficult for a model to generate a scenario such as that represented by the unbroken curve in the figure. Even so, we know that such scenarios occur. It is part of human nature to reassure oneself by believing that “this time is different”, which, at the end of the day, is seldom the case. 5 The difficulty in making forecasts that capture and quantify the risks that may be associated with a credit-driven property boom has meant that monetary policies that lean against the wind are often described as the adoption of “extra action” or the increase of the interest rate “over and above” the forecasts for inflation and the real economy by the central bank.
The UK has begun the process of redefining its relationship with its largest trade and investment partner. To be clear, the intention is not to turn inwards but rather to increase openness over time. In particular, the UK government’s objective is a “comprehensive, bold and ambitious free trade agreement with the European Union.” Leaving the EU is intended to enhance the UK’s ability to strike trade and investment agreements with a wide range of countries beyond those covered by virtue of its membership of the EU. But Brexit is an example of reculer pour mieux sauter. 44  That’s because any reduction in openness with the  EU is unlikely to be immediately compensated by new ties of a similar magnitude with other trade partners. And even if new agreements with other partners could be struck instantaneously, the reorientation of business relationships will take some time. This makes Brexit, relative to the experience of the past half century, unique. It will be, at least for a period of time, an example of de-globalisation not globalisation. It will proceed rapidly not slowly. Its effects will not build by stealth but can be anticipated. Let me turn to those effects. The first is the obvious disinflationary impact of Brexit given that the EU takes 44% of UK exports.

But that does not mean global effects are absent. The doubling of the effective global labour pool represents a huge, positive supply shock for the global economy. It has encouraged the shift of the production of goods and services that use lower-skilled labour intensively to countries with an abundance of lower-skilled workers – predominantly emerging market economies – while production of goods and services requiring more highly skilled labour has concentrated in countries with a greater share of higher skilled labour – predominantly advanced economies. The growing ability to split production components and tasks through global value chains has amplified this effect. 19  Globalisation has also increased the contestability of labour markets, weakening the extent to which slack in domestic labour markets influences domestic inflationary pressures. 20  That is, the increased ease with which  activities can be off-shored or domestic vacancies filled by sourcing workers from abroad may have reduced the relative bargaining power and wage expectations of workers. While it is difficult to measure precisely, available evidence suggests that contestability effects could be significant. 21  Greater openness appears to  22  and led to growth in domestic  have reduced the sensitivity of wages to domestic labour market conditions unit labour costs (ULCs) becoming more closely tied to global ULC growth. 23  Overall, the greater global supply of labour has lowered the relative wages of lower-skilled workers in advanced economies.
Hearing of François Villeroy de Galhau, Governor of the Banque de France,  Before the Finance Committee of the French National Assembly Paris, 1 March 2023  Page 1 sur 5 Mr President, Mr Rapporteur General, Ladies and Gentlemen Thank you for welcoming me to this hearing today, the first of 2023. The economic context is sending out mixed signals, with rather good news regarding economic activity, but significant inflation and uncertainty, and the Russian war against Ukraine still in the background. I will first seek to shed light on these economic signals and the resulting monetary policy developments (I), before discussing the effect of monetary policy on the financing conditions of the economy, i.e. businesses, households and public debt (II). I. No recession, but still too high inflation  Although it slowed down - as expected - at the turn of winter 2022-23 in France and in Europe, economic activity is faring better than expected, as confirmed month after month by our monthly business survey of 8,500 companies. Average purchasing power was finally preserved in 2022. The risk of recession that was hanging over our economies can now be dismissed, barring a major global event. We will update our quarterly macroeconomic projections on 20 March. In France, growth is expected to be slightly positive in 2023 - a priori slightly higher than the +0.3% forecast in December - before picking up again in 2024.

Real interest rates were low to a large extent because of global imbalances, the global saving glut and investment shortage. I believe that somewhat higher interest rates would have made little or no difference. Empirical evidence indicates that only a small portion of house-price increases can be attributed to monetary policy. 10 Bernanke (2010) shows that the recent phenomenon of a higher share of adjustable-rate mortgages was unlikely to have significantly increased the sensitivity of house prices to monetary policy. The availability of new, more exotic mortgage types mattered much more for initial mortgage payments than the level of shortterm interest rates. In my view, interest rates would probably have had to be raised very high so as to cause considerable damage to the real economy in order to stop the credit growth and housing boom. 11 That could have thrown the U.S. right into Japanese-style deflation and eventually a liquidity trap. Certainly, higher interest rates would have had no impact on the regulatory problems, distorted incentives and information problems mentioned above  7  I remember this period very vividly, because I was fortunate to have the opportunity to discuss and debate the problems of current monetary policy, deflation and liquidity traps in a group of great economists at Princeton University that included Ben Bernanke (before he left to be a Governor on the Federal Reserve Board), Alan Blinder, Paul Krugman, Chris Sims and Michael Woodford. 8  See Svensson (2003) for a discussion of policy options before and in a liquidity trap.