samchain/econo-pairs-v1 huggingface dataset:
15  In addition, the Federal Reserve Board has been testing a facility through which it offers term deposits to credentialed depository institutions. Term Deposit Facility (TDF) transactions could be used to temporarily immobilize reserve balances. An eight-week series of tests this summer explored how demand for term deposits responds to variations in the maximum individual award limits and rates. Higher offered rates relative to IOER attracted greater use, both in the number of participants and the total dollar volumes. The next round of TDF testing, which gets underway in October, will incorporate an early-withdrawal feature, as well as gradual increases in the maximum individual award amount and rate. For details see http://www.federalreserve.gov/newsevents/press/monetary/20140904a.htm. BIS central bankers’ speeches  7  Conclusion In conclusion, during normalization the FOMC will continue to communicate the stance of policy through a target for the fed funds rate, and will move the fed funds rate into the target range primarily by adjusting the IOER rate. ON RRPs and other supplementary tools will be used as needed to control the fed funds rate. The Committee will continue to test features of the ON RRPs to determine how a facility might best be structured to supplement IOER in the control of the funds rate while limiting the potential for unintended effects in financial markets. Given the range of available tools, I am confident in our ability to raise short-term interest rates from the zero lower bound when the time to do so arrives.

Prior to the crisis, many banks typically borrowed fed funds in order to satisfy reserve requirements or obtain short-term  1  2  The effective fed funds rate is a measure of the prevailing rate in the market each day. This is calculated as a volume-weighted average of rates on trades arranged by major brokers, and is published by the New York Fed. See http://www.newyorkfed.org/markets/omo/dmm/fedfundsdata.cfm. BIS central bankers’ speeches  financing. In recent years, however, the Fed’s LSAPs have led to very high levels of reserve balances, and thus reduced the need for banks to borrow fed funds to meet reserve requirements and clear payments. 2 As a result, trading activity in the fed funds market today is smaller and the nature of that activity is different than it was prior to the crisis. 3 Nevertheless, a new Federal Reserve data collection that captures both brokered and bilateral transactions shows that trading activity in fed funds remains significant. 4 These data indicate that daily trading volumes are about $ billion and are relatively stable. Moreover, longer-term correlations between the fed funds rate and other money market rates remain robust. As a result, the fed funds rate continues to be a suitable measure of the marginal cost of funding for banks, and remains connected over medium-term horizons to other short-term interest rates that also matter for the transmission of monetary policy.
Chart 7: Mutual fund flows to emerging economies seem particularly prone to abrupt stops Gross mutual fund flows (per cent of GDP) during surges and stops in capital flows Advanced Economies  Emerging Economies  Sources: Hoggarth et al (forthcoming), EPFR, IMF World Economic Outlook and Bank of England calculations. Notes: EPFR Global defines institutional investor funds as funds targeting institutional investors only or those with the minimum amount of $ per account. All other funds are labelled ‘retail’. Chart 8 Market-based finance can worsen the trade-off between higher output growth and lower probability of a crisis  Source: Aikman et al (forthcoming). Chart shows the menu of choices available to the policymaker in the market-based finance model described in the appendix in response to a 15pp increase in 3-year real credit growth. The y-axis shows the period 1 welfare cost in the model from higher inflation and lower GDP, converted into the equivalent average loss in 3-year GDP that would leave the policymaker indifferent, were inflation to remain unchanged. Thing Global, Act Local  Speech given by Minouche Shafik, Deputy Governor for Markets and Banking On the 24th October 2016 At the joint Bank of England, IMF & Hong Kong Monetary Authority conference on  Monetary, Financial and Prudential Policy Interactions in the Post-Crisis World, Hong Kong

For the day when this event will not only be our dream, but also our reality, the National Bank will continue to promote the fulfillment of its goals and tasks in accordance with European standards and best practices, which is of exceptional importance for the future the process of admission of the country into the membership of the European Union. Therefore, I assure you that we, the management and the employees of the National Bank, will be committed to this Project, we will openly and constructively cooperate during the implementation of all project activities, and use this opportunity provided by the European Union for further strengthening the capacity and credibility of our institution. At the end of my speech, let me wish the successful work of the project leaders and all the experts participating in the Project. I believe that after eight months we will be able to summarize a successfully completed Project, and in the period after that, after we have implemented the recommendations, we will write one of the many historical pages about the contribution of our institutions to the European integration processes of our country. Thank you! 2/2  BIS central bankers' speeches
10  BIS Review 15/2010  Property taxes account for about two per cent of GDP in OECD countries. In Norway, the share is slightly higher than a half per cent. 5 It would be reasonable to introduce property tax rates and revenues on a par with that of other countries. This would generate additional annual tax revenues of around NOK 35 billion. 6  5  The tax on housing can be regarded as neutral when the return on housing investment relative to other investments is the same as it would have been without tax. In that case, mortgage interest deductibility must be matched by taxation of ownership and use of a dwelling. With a tax rate of 28 per cent and a mortgage rate of 7 per cent, this requires an annual tax that at the margin comes to about 2 per cent of the value of the dwelling. Denmark has a property tax at about this level. 6  A fully neutral taxation of property in relation to other capital will generate considerably higher tax revenues, cf. National Budget for 2010, Table 4.8, p. 124. BIS Review 15/2010  11  When evaluating the tax system, an increase in property taxes will be matched by a reduction in the tax on labour and entrepreneurship. As shown in the menu of options in the chart, an increase in property taxes will provide a basis for reducing the tax on ordinary income.

As we all know, this crisis started little over a year ago, with the end of the real estate boom in developed economies, which would end up exposing both the weakness and the excesses of the subprime mortgage loans. However, and as was apparent in the subsequent developments, the problem went far beyond lending to agents with low payment capacity. Overall, an asset price bubble, particularly in the housing sector, fueled by an accelerated credit expansion has proven to be a dreadful combination. Maybe bubbles cannot be made to disappear, but the integrity of the financial system must be preserved and requires continuous monitoring. BIS Review 134/2008  1  The collapse of Lehman Brothers can be considered a landmark event that took the financial markets from a period of turmoil to a major crisis. In fact, after the downfall of this investment bank, commercial banks in developed economies, regardless of size, began fearing that their counterparts might go broke and stopped lending to each other, which nearly dried up an already precarious interbank market. Every fragility indicator in this market, and stock exchanges around the world, reflected the onset of a confidence crisis. Whether or not it was a prudent decision to let Lehman Brothers go bust will be argued over for years to come, an institution whose fragility was common knowledge since early this year. Probably some bet on a Bear-Sterns-type rescue, a clear example of moral hazard. Maybe it should have been intervened months ago.
In fact, capital controls were only fully lifted on the eve of EU membership in 2004. During the experimental phase, the liberalisation of direct investment and other long-term flows preceded that of flows with a shorter maturity. At this time in particular the Bank ensured that its policy interest rate contained a sufficient premium over euro rates so as to make Maltese lira assets relatively more attractive. As a result, and despite the persistence of a relatively high current account deficit, the Maltese lira did not experience undue selling pressures. This was reassuring, but it was not enough. When it was time to decide on the strategy to pursue in ERM II, therefore, the Bank only put forward its proposal to eschew the use of the 15% fluctuation bands after it had carried out the necessary studies to assess the level of the equilibrium exchange rate. These studies, based on different methodologies, showed that the Maltese lira exchange rate was not significantly out of line with its estimated equilibrium level, and so promised to be broadly sustainable. The ECB and the EU Commission reached a similar conclusion. Hence the decision to enter ERM II at the market rate prevailing the previous day and the commitment not to allow the lira to move from its central parity rate in ERM II. Such a commitment, of course, could only be made against the background of a strong external reserves position.

MAS is also involved in the Basel Committee Task Force on Climate-Related Financial Risks, which is analysing the transmission channels through which climate risks affect financial institutions and developing methodologies to quantify these effects. Stress testing is a very useful tool to assess the impact of the physical and transition risks associated with climate change. MAS will conduct by end-2022 stress tests on the financial industry under a range of climate 2/9  BIS central bankers' speeches  change scenarios. We will reference climate scenarios developed by the NGFS and best practices in climate stress testing approaches taken by other regulators. We need to urgently enhance the quality and consistency of climate-related disclosures. Reliable and comparable climate-related disclosures are critical for: better pricing of climate-related risks; more effective risk management and market discipline; and effective allocation of capital towards financing green and transition activities. The lack of consistent climate disclosure standards has resulted in selective reporting against different frameworks, impeding the growth of sustainable finance globally. MAS is encouraged by the recent acceleration in progress towards a global sustainability reporting standard. The G7 countries have expressed support to move towards mandatory climate-related financial disclosures. The G7 has also agreed on the need for a baseline global reporting standard for sustainability which jurisdictions can supplement. Efforts by the International Organisation of Securities Commissions (IOSCO) and International Financial Reporting Standards (IFRS) Foundation towards a baseline global sustainability reporting standard have gained significant momentum and support.
The employment forecasts appear on average to have been more accurate than the GDP forecasts. Forecasts for productivity Productivity is a central variable in the monetary policy analysis. The most common measure of productivity is labour productivity, that is, the ratio between GDP and the number of hours worked. It has not been possible to evaluate this measure here, as there is not enough historical forecasting data on the number of hours worked. Instead the ratio between GDP and employment has been used as an approximation. The analysis shows that our forecasts have under-estimated productivity growth on all forecasting horizons (Figure 4).7 The time series model is on the whole slightly more accurate than our forecasts have been during this period. The forecasting memory for productivity has only extended one quarter ahead (Figure 7). The same applies to the correlation between forecasts and outcomes. It is 0.7 one quarter ahead, while it is zero both one and two years ahead (see Figure 9). Inflation forecasts When it comes to inflation measured as the annual rate of increase in the CPIX, we have made fairly accurate forecasts during a large part of the period evaluated, that is, 2000-2006 (Figure 3). Something we missed was the sharp upturn in inflation in spring 2001. This was primarily due to an outbreak of mad cow disease which led to rising food prices. But since then we have made inflation forecasts that have been close to the outcomes.

With regard to the forecasting memory for GDP, that is, how far ahead we can make a forecast with some information value, this stretches four quarters ahead (Figure 5). This agrees with experiences in other countries. One result of an evaluation that analysed the forecasting memory of Canadian and US macro variables shows that it is often limited to the first forecasting year.6 Another means of analysing the forecasting performance is to look at the correlation between forecast and outcome (Figure 9). The correlation shows the strength in the relationship between forecasts and outcomes. A correlation of one year is a perfect relationship, if it is zero there is no relationship at all, while minus one is a perfect negative relationship. The correlations shall thus preferably be positive and as close to one as possible. One year ahead the correlation between the GDP forecast and outcome is just over 0.6 and two years ahead it is around 0.1. This supports the picture we obtained when we compared  3  Andersson M. K., Svensson J. Karlsson G., “An evaluation of the Riksbank’s forecasting performance”, Sveriges Riksbank Economic Review (2007:3), Sveriges Riksbank. 4  The forecasts for employment and productivity have been evaluated during the period 2002-2006 as there are no quarterly forecasts documented further back in time for these variables. 5  The forecasting memory is defined as the longest horizon where the forecast error variation (measured as the root mean square error) is lower than the series’ variation (standard deviation).
We now face a different set of circumstances in which inflation has been persistently high relative to the target, and is set to remain so for some time. There are clearly upside risks to the expectation of low and stable inflation in this environment, and this is beginning to be reflected in surveys of households and businesses and in the expectations of financial market participants. Unlike the period before the recession, individuals and firms can no longer look back with so much confidence on a track record of inflation close to the 2% target. And so a large burden of weight is being placed on the view that the Bank of England will return inflation to target before too long, despite not having delivered on promises to achieve just that over the past couple of years. In my view, this policy would be much more credible and we would have a much better chance of anchoring inflation expectations if the MPC was willing to act to steer the economy in the direction of a low inflation trajectory. By adopting a very relaxed monetary policy in the recession and allowing a large depreciation of the pound, the MPC has sent the signal to the private sector that it has been prepared to accommodate price increases as the economy adjusts from recession to recovery.

Throughout the postwar history of the UK economy, policy-makers have had to strike a balance between the impact of the external value of the currency on the competitiveness of exports and its potential effect on inflation through import costs and the pricing climate. In my view, we have allowed the pound to depreciate more than is necessary or desirable to support the growth of manufacturing and exports. For example, allowing sterling to rise by about 10% from its current level against the euro £ = € would still leave it at a relatively competitive level by historical standards £ = € The very significant fall in sterling from mid-2007 to early 2009 probably helped to support manufacturing industry and exports and hence stabilise the economy in the depths of the recession. But now the world economy is recovering, exports and manufacturing activity are being strongly boosted by the growth of world trade. Meanwhile, worries about deflation have been replaced by the concern that the UK economy now faces a sustained period of relatively high inflation which is endangering our track record of price stability. In these circumstances, our approach to the value of sterling needs to strike a different balance from the view we took in the depths of recession.
I will not attempt to do any analysis here but I will limit my remarks to saying that the inflation targeting and the flexible exchange rate regime we have chosen in Albania has served us perfectly well. 1/3  BIS central bankers' speeches  Our monetary framework has strengthened our successful transition and has increased the resilience of our economy. Over the past two decades Albania has enjoyed: (i) rapid economic growth, – with GDP growth averaging at 5 percent; (ii) price stability, – with inflation rates averaging at 2.4 percent; and, (iii) a rapid monetization, – with financial assets increasing from 52 to 92 percent of GDP. Furthermore, the flexible exchange rate has proved to be a reliable shock absorber. The Albanian lek depreciated by around 11% in the aftermath of the 2008 crisis. This depreciation occurred in the face of reduced external demand, decreased capital inflows, and higher risk premia in the domestic financial market. This helped us regain some external competitiveness, but it also allowed us to pursue an expansionary monetary policy and to avoid recession. 2. Exchange rate movements under an inflation targeting regime  An exclusive commitment to price stability does not necessarily mean that central banks can afford to ignore exchange rate movements. In small open economies, such as ours, exchange rates have both, a direct effect on prices through the imported goods, and an indirect one through their impact on cost competitiveness, external balances and aggregate demand.

Lek appreciated on average by 2.3 percent against the euro in 2016 and 2017, while it appreciated by around 7 percent during the first half of 2018. Our analyses indicate clearly differing explanations for the pre and post 2018 appreciation. The 2016–2017 lek appreciation has been largely in line with improving fundamentals in the economy. Some of these structural improvements include: Declining current account deficits, on account of improved exports; Increased capital inflows, on account of high FDIs; Reduced financial market risk premia and increased confidence in our financial institutions. 2/3  BIS central bankers' speeches  On the contrary, the rapid appreciation we experienced in 2018 has been largely a FX market driven phenomenon. News of a sudden and sustained influx of foreign currency induced onesided expectations in the FX market. These expectations were reflected in an accelerated supply of foreign currency and delayed demand for it, generating a vicious cycle of continued appreciation. The Bank of Albania did not react upon the real appreciation trend of the past two years. While minor miss-alignments were still present, we assessed the trend was largely driven by improving fundaments. Thus, it allowed us to focus our monetary policy on achieving our 3 percent inflation target. We also did not react upon the recent financial market driven appreciation, in full consistence with our monetary policy and exchange rate regimes. We expected for the market to self-regulate and contain these shocks. However, this did not prove to be the case and the exchange rate appreciation accelerated.
It’s time for us to get our act together, to reform, and to grow. Thank you very much for your attention. 6  BIS central bankers’ speeches  Chart 1 Credit growth to the private sector in East Asia and the euro area (in percentage changes, year to year)  Sources: IMF WEO and Haver Analytics. BIS central bankers’ speeches  7  Chart 2 Current account balances in East Asia and the euro area (in % of GDP, East Asia in 1996, euro area in 2008)  Sources: IMF WEO and Haver Analytics. 8  BIS central bankers’ speeches  Chart 3 Real GDP growth in East Asia and Japan before, during and after their crises (in percentage, year to year)  Source: Haver Analytics. BIS central bankers’ speeches  9  Chart 4 Export and Import volumes of goods and services in East Asia (in percentage changes, year to year)  Sources: IMF WEO and Haver Analytics. 10  BIS central bankers’ speeches

Over the last two decades, China has grown into one of the two largest economies in the world. At the same time, authorities are constantly announcing new steps to increase the renminbi (RMB) convertibility and develop its use in international transactions. It is therefore natural to wonder whether the RMB will emerge as a major international currency in the foreseeable future. In line with my introductory remarks, I will refrain from any geopolitical speculation on this question and present a few technical – and personal – remarks on the nature of a global currency. What does it take to become a reserve currency? It is generally assumed that this status brings important privileges, some of them “exorbitant”. It is also forgotten that it comes with significant obligations. First, being a reserve asset means that the currency enjoys full and unconditional capital account convertibility towards both residents and non-residents. The economy is therefore fully integrated with global capital markets and fully exposed to external financial shocks. This creates a very demanding environment. Convertibility essentially means that you accept the judgment of “foreigners” as to the true value and purchasing power of your domestic currency. Although it is not often perceived as such, it entails some abandonment of sovereignty, through the loss of some independence in monetary policy. This is the famous “Mundell trilemma”: no country can simultaneously have a fixed exchange rate, full capital  2  BIS central bankers’ speeches  convertibility and monetary policy independence. Indeed, all reserve currencies today have fully flexible exchange rates.