samchain/econo-pairs-v1 huggingface dataset:
I appreciate that such reforms are not always easy, not least because the benefits which they yield occur mainly in the medium to long term. However, they are unavoidable. In those euro area Member States that have taken up the challenge of structural reform, unemployment has fallen significantly. Other euro area Member States should and must take note: structural reform throughout the euro area is fundamental to the success of Monetary Union and to improving Europe’s economic performance. In this respect, we may also be able to learn something by looking at the reasons behind strong employment growth and low unemployment in some of the Member States of the European Union and in the United States, in particular regarding the flexibility of labour markets and the incentives to create and accept new jobs. Today, I shall describe the main features of the stability-oriented monetary policy strategy of the Eurosystem which underlie our single monetary policy. Against this background, I shall briefly explain the recent monetary policy decisions adopted by the Governing Council of the ECB. Finally, I shall summarise how we currently see the outlook for maintaining price stability in the euro area. I. The stability-oriented monetary policy strategy The Treaty on European Union, commonly referred to as the “Maastricht Treaty”, assigns the European System of Central Banks (ESCB) the primary objective of maintaining price stability in the euro area. In order to steer expectations of future price developments, the Governing Council has announced a quantitative definition of its primary objective.

And the New York Fed's Global Supply Chain Pressure Index has declined to a level that indicates supply chain pressures are now actually somewhat lower than normal.6 At the same time, the March price data indicate some moderation in overall rent inflation. And rents for new leases have been showing slower rates of increases, which should bring down shelter inflation in coming months. This is important because shelter inflation had been a significant driver of higher inflation over the past year. But the most persistent area of inflation is in core services excluding housing, which has been running around 4-1/2 percent since last August . This is driven by a continued imbalance in overall supply and demand, and it will take the longest to bring down. Bringing Back the Balance In "The Rise of Skywalker," Anakin urged Rey to "bring back the balance." The FOMC has been taking strong actions to do just that. Last week, the FOMC raised the target range for the federal funds rate to 5 to 5-1/4 percent, its tenth consecutive rate increase. In its post-meeting statement, the FOMC indicated that "in determining the extent to which additional policy firming may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.
Timothy F Geithner: Risk management challenges in the US financial system Remarks by Mr Timothy F Geithner, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Global Association of Risk Professionals (GARP) 7th Annual Risk Management Convention & Exhibition, New York City, 28 February 2006. *  *  *  Thank you for giving me the opportunity to speak to you today. We have seen dramatic changes in the U.S. and global financial system over the past 25 years, and we are now in the midst of another wave of innovation in finance. The changes now underway are most dramatic in the rapid growth in instruments for risk transfer and risk management, the increased role played by nonbank financial institutions in capital markets around the world, and the much greater integration of national financial systems. These developments provide substantial benefits to the financial system. Financial institutions are able to measure and manage risk much more effectively. Risks are spread more widely, across a more diverse group of financial intermediaries, within and across countries. These changes have contributed to a substantial improvement in the financial strength of the core financial intermediaries and in the overall flexibility and resilience of the financial system in the United States.

However, we are still far from achieving the employment levels prevailing before the crisis, given the enormous impact that it had on our labour market. Unlike in previous upturns, the growth of activity and employment is proving to be compatible with the ongoing correction of the economy’s imbalances. The more balanced and sustainable nature of the current recovery is closely related to the factors that have made it possible, some of which should be considered temporary while others may have a more persistent impact. I would like to refer to two central issues to explain this more balanced growth: the improvement in competitiveness and the normalisation of financial conditions. Competitiveness improvements One of the most important changes in the functioning of the Spanish economy since the crisis has been the recovery in external competitiveness. Cost and price adjustments have stimulated exports and have also enabled our productive sectors to compete better in their domestic markets with imports. This has led to an increase in the demand for resources, driving business investment decisions and encouraging job creation. The increase in employment, favoured by moderate wage growth, has led to a significant recovery in household consumption. Unlike in previous upswings, the moderate growth of prices and costs is helping to ensure that the increase in economic activity is not achieved at the expense of a deterioration in the external balance.
The swaps were priced at rates that were well below those available in the market at that time, causing usage of the swap lines to rise dramatically to a peak of nearly $ billion in December 2008. In the current circumstances, although the swaps have been priced in the same manner as during the crisis, this pricing is less advantageous relative to the funding rates available in the market, limiting the usage of the swap lines at this time. The swaps were essentially put in place in a preemptive manner, under the view that their presence would provide a backstop for dollar funding markets and help to bolster market confidence. Reflections on the TALF I am now going to switch gears and discuss the TALF, which is a liquidity program of a very different nature. Later this month, we will be holding our final subscription for the TALF. However, because no deals have been presented for review for the final subscription, we know that the extension of new credit under the TALF has effectively come to an end. Although the structure of the TALF differed considerably from the other liquidity programs initiated by the Federal Reserve, its basic role was similar in many ways to the traditional  2  BIS Review 80/2010  central bank function of providing liquidity to the financial system and encouraging the flow of credit. In this case, however, the program was geared toward providing support for marketbased credit intermediation, as opposed to the traditional banking sector.

Both of these programs provide important insights into the role of the central bank as a provider of liquidity, leading to a few observations and to a few questions that I believe warrant further exploration in considering future policy actions. 1 Liquidity swaps with foreign central banks The second half of 2009 and the early part of 2010 were marked by substantial improvements in financial markets, ranging from short-term funding to longer term risk assets. There was good reason for those improvements: Efforts by the government to stabilize markets and support financial institutions were successful, and a virtuous circle appeared to be under way in which increasing optimism about the economic outlook and improving conditions in financial markets fed upon one another. The gains in asset prices were dramatic, with broad equity indexes reversing most of the declines experienced in late2008 and early 2009 and with some measures of short-term funding spreads returning to pre-crisis levels. However, more recent developments have demonstrated that conditions in financial markets can change abruptly. These developments have been widely discussed at this point, and I will not go through them in detail, except to highlight the two broad themes in play. First, investors have become concerned about the fiscal positions of some European countries, leading them to re-price sovereign risk for those countries and to question whether austerity measures and other supporting efforts will prove sufficient to restore market confidence.
First, by communicating a change in outlook and the bias of monetary policy, inducing an important decline in market rates at all horizons. Then, in January 2009, with a clearer assessment of the reduced inflationary pressures, the MPR was lowered by 100 basis points. Later, with the evidence of alleviated inflationary pressures and a sharp contraction in demand, the Central Bank decided to cut the MPR by 250 basis points at both its meetings of February and March. The monetary easing process continued and completed 775 basis points in seven monthly meetings, bringing the MPR to 0.50% in July 2009, the minimum level deemed adequate for a normal functioning of money markets (figure 6). In addition, the Central Bank also announced that the MPR would be held constant at this minimum level for a prolonged period of time. In order to strengthen the commitment to this announcement, which goes beyond the regular monthly MPR setting, the Bank adopted some non-conventional monetary policy measures, extending the overnight liquidity facility for banks at the MPR to 180-day term through a term liquidity facility (Facilidad de Liquidez a Plazo, FLAP). The extraordinary liquidity measures provided during the crisis extinguished in mid 2010 and their withdrawal did not generate stress in the money market. The shift to a countercyclical policy stance was also taken forcefully on fiscal policy. In January 2009, the government announced a sizable fiscal stimulus package, amounting to $ billion for that year, equivalent to 3% of GDP.

José De Gregorio: Policy responses to the global crisis Presentation by Mr José De Gregorio, Governor of the Central Bank of Chile, at the conference “Monetary Policy and Central Banking in the Post Crisis Environment”, Santiago, 17 January 2011. *  *  *  In the last years economic policymakers have had to deal with many unprecedented challenges. The severe inflationary shock that began in 2007 was followed by the worst financial crisis since the Great Depression and the deepest worldwide economic recession in the postwar period. Currently, even though recovery is underway, the rebound in economic activity has been characterized by a dichotomy: whereas emerging countries are posting strong growth rates, in the developed world activity is sluggish, with high unemployment rates and excess capacity. This bifurcated economic scenario has brought many tensions to the global economy. In Chile, to the shocks that have affected the world economy in this period, one has to add the earthquake and tsunami that hit our country almost a year ago and that had both short and medium-term effects on our economy. One of the main lessons we have learned these years is the importance of having a robust policy framework. In the case of Chile, institutional developments, low level of public debt and high availability of liquidity allowed unusual vigor in monetary and fiscal policy to confront the negative effects on demand and output of all the shocks that have affected us.
He does this difficult job with immense grace and diplomatic skill. He is also the "sports captain", among central bankers, and organises the annual Governor’s Cup at a very fine golf course close to the Franco-Swiss border. In addition, Andrew doubles up as our gastronomic and oenological consultant at the informal social events that are an important part of any international gathering. Andrew has been a staunch supporter of Hong Kong and the HKMA for a very long time – indeed, formerly as an Executive Director of the Bank of England, he played an instrumental role in the conception of the HKMA. Since he became General Manager of the BIS in 1994, the HKMA’s ties with the BIS have gone from strength to strength. We joined the BIS as a shareholder in 1996. In 1998, Hong Kong became the location of the BIS’s first overseas office – an office which has become extremely active in this region, with its most recent event being the organisation in Hong Kong of a major BIS Governors’ meeting, held just this last weekend. In 1999, Hong Kong was invited, as one of the four non-G10 economies, to join the Financial Stability Forum, which Andrew chairs: this forum has the job of proposing reforms to the international financial architecture, and it is making good progress in this herculean task.

This is central banks should, in parallel, incorporate this evaluation into their own decision making, investing in research, which is something that we have done traditionally. There is an additional element that I think is important. We know that citizens very often do not understand what we are doing. It will also be very difficult for them to understand the results of our evaluation. This is why we should also invest in financial literacy and financial education. This is something that we are doing more and more. 1  So let me focus just for a few minutes on what the Basel Committee is doing. As you know, the Basel Committee is the global standard setter for the prudential regulation of banks and our main objective is to enhance global financial stability. When I was appointed chair of the Basel Committee three years ago, I was very positively surprised to find that the Basel Committee has a permanent evaluation programme of its own activities. In fact, now, we have two branches of this evaluation that are running in parallel. The first one is on whether the whole of the regulatory reform agenda that was approved after the global financial crisis is working as intended. The second, a decision that we took in 2020, is basically to see whether the COVID-19 crisis has also taught us anything in terms of whether the standards that we had approved are working as intended. So, let me share with you some of the results of this evaluation.
They make use of technology at many different levels: from traditional cross-harbour ferry and metallic coins to advanced transcontinental passenger planes and real-time electronic clearing. And usually both transport systems and financial infrastructure receive attention only when something goes wrong. Financial infrastructure suffers the further handicap that it is largely invisible – a matter of wires and electronic pulses – with none of the glamour or nostalgia that physical transport can sometimes evoke. So, quite understandably, the general public take it for granted – indeed may not even be aware – that Hong Kong has for some time had some of the most advanced, efficient and secure payment, clearing and settlement systems of any financial centre in the world. One of the responsibilities of the HKMA is to promote the development of these systems in collaboration with dedicated service-providers and the financial industry generally. In addition to its responsibility for Hong Kong's domestic systems, the HKMA also has a specific responsibility for promoting the development of systems in Hong Kong that facilitate the safe and efficient conduct of international and cross-border financial activities. We have been paying special attention to this aspect of our work in recent years in a way that has a very direct bearing on the development of financial markets in the region.

Nevertheless, there is much that the government can do to facilitate financial-market development by clearing the way, particularly where this involves markets of a regional nature. Three areas of work in which the HKMA – with various partners – is taking an active role are worth citing here. The first involves the gradual introduction and expansion of renminbi business within Hong Kong, which requires primarily co-operation between the Mainland and Hong Kong authorities at various levels, including both political and technical. The second example is our collaboration with other central banks in the region, under the auspices of EMEAP, on the Asian Bond Fund, which is intended not just to encourage business in the debt market, but also to stimulate regulatory reforms in economies in the region. The third example is our work in encouraging the development of Islamic finance in Hong Kong, through ensuring a level playing field, stimulating interest in Hong Kong among Islamic countries, encouraging product development, and raising market awareness within Hong Kong, particularly through the educational work of the Treasury Markets Association. All of this work looks both to the past and to the future for inspiration. Looking to the past, we have the still-recent experience of the Asian financial crisis, one element of which was the undeveloped state of some of our financial markets, in particular the debt market. Many of the market-development initiatives on which we have been working have been intended to address these deficiencies.
It is estimated that 1 out of 9 jobs in Norway are linked to the oil industry. BIS central bankers’ speeches  1  Fiscal rule It was established at an early stage that Norway’s oil and gas resources belong to the Norwegian people. The tax system for the petroleum industry was designed to make sure that the bulk of the large revenues, the economic rent from the petroleum sector, would accrue to the state. Petroleum companies pay a surtax of 51 percent of profits, on top of the normal corporate tax rate of 27 percent. The government also has direct ownership shares in the most profitable oil fields. However, policymakers’ handling of Norway’s newly discovered petroleum wealth got off to a rather bumpy start. During the first 25 years of oil production, Norway experienced two deep recessions. Both downturns were rooted in hugely optimistic income expectations. In the 1970s, the public sector was the big spender, and the government had to tighten policy later on. In the 1980s, a credit-fuelled consumption boom in the private sector led to necessary cut-backs after the oil price plunge in 1986. These two episodes of turbulence made clear how vulnerable a small open economy is to terms of trade disturbances, as well as to short-termism and exuberant expectations. To prevent the same mistakes from being made again, fiscal institutions were set up in the 1990s. Among the most important of these are the oil fund and the fiscal rule.

The Icelandic economy has witnessed huge changes in recent years following the deregulation of cross-border capital movements in the 1990s and market liberalisation. In the 1990s, the Central Bank of Iceland adhered to a fixed exchange-rate regime with tolerance limits, which was supposed to provide an anchor for the core policy of keeping inflation under control. The arrangement was successful then and for much of that decade inflation in Iceland was close to or below the OECD average. Over time it became increasingly clear that a fixed exchange rate was incompatible with full deregulation of capital movements. Bearing this in mind and because a floating exchange rate would arguably suit the Icelandic economy better, the tolerance limits were extended in phases from 2.25% at the beginning of the 1990s to 9% early in 2000. In the course of the 1990s, an episode of overheating began. It originated in a massive increase in foreign investment in the aluminium sector but gradually became driven by private consumption. Inflationary pressures amplified and the current account deficit widened sharply to 10% of GDP in 2000. Market expectations shifted and the Icelandic currency, the króna, began to depreciate. Over the year and a half from spring 2000, the króna depreciated by one-third. The Central Bank raised its policy rate, although its hands were partly tied by the fixed exchange rate regime. It also repeatedly intervened in FX market trading to defend the króna, significantly eroding its net foreign reserves.
Or other macro-economic 18  All speeches are available online at www.bankofengland.co.uk/speeches  18  factors may have more than offset their impact in order to keep inflation stable. How the evidence is reconciled could have important implications for inflation dynamics and the setting of monetary policy. 19  All speeches are available online at www.bankofengland.co.uk/speeches  19  References  Abdih, Y and Danninger, S (2017), ‘What Explains the Decline of the U.S. Labor Share of Income? An Analysis of State and Industry Data’, IMF Working Paper, No. 17/167. Acemoglu, D and Restrepo, P (2018), ‘Artificial Intelligence, Automation and Work’, NBER Working Paper, No. 24196. Aghion, P, Bloom, N, Blundell, R, Griffith, R and Howitt, P (2005), ‘Competition and Innovation: an Inverted-U Relationship’, Quarterly Journal of Economics, Vol. 120, No. 2, pp. 701-728. Andrews, D, Criscuolo, C and Gal, P (2016), ‘The Global Productivity Slowdown, Technology Divergence and Public Policy: A Firm Level Perspective’, Hutchins Center Working Papers. Autor, D, Dorn, D, Katz, L, Patterson, C and Van Reenen, J (2017), ‘The Fall Of The Labor Share And The Rise Of Superstar Firms’, NBER Working Paper, No. 23396. Baldwin, R (2016), The Great Convergence: Information Technology and the New Globalization, Harvard University Press. Ball, L and Romer, D (1990), ‘Real Rigidities and the Non-Neutrality of Money’, Review of Economic Studies, Vol. 57, No. 2, pp. 183-203. Baquee, D and Farhi, E (2018), ‘Productivity and Misallocation in General Equilibrium’, NBER Working Paper, No. 24007. Barkai, S (2017), ‘Declining labor and capital shares’, London Business School.

The euro exchange rate remains high by historical standards (6% in real terms above its average over the past decade). Finally, interconnectedness, which creates contagion inside Europe, also works well beyond the euro area. Banking and market pressures have been transmitted globally. Asia may be 6,000 miles away from Europe, but, for the financial markets the distance is less than 30 seconds. Origins and causes How could the crisis have been allowed to develop? There have been lags in the decisionmaking process. Fiscal discipline has not been respected in the past. European rules have not been implemented. Also, some policy decisions have produced unintended consequences. One example is private sector involvement (the so-called PSI) in sovereign debt resolution. On the face of it, it sounds totally appropriate. Economists like saying that, once debt has become unsustainable, it is better to reduce it immediately. Beyond simple economics, PSI is seen as necessary for eliminating moral hazard and ensuring market discipline. When investors have taken excessive risks, they should normally pay a price. Finally, PSI has a strong, and legitimate, political appeal: tax payers cannot be called to bear the consequences of the reckless behavior of borrowers and lenders. 2  BIS central bankers’ speeches  However compelling, this line of reasoning misses an important point. The sovereign bond market is more than a means of financing governments. It is the pillar on which all financial systems ultimately rest.