samchain/econo-pairs-v1 huggingface dataset:
I will not dwell on it tonight because we are in a “silent period” ahead of the next Governing Council meeting. But in a world of uncertainty, European monetary policy is a very valuable source of predictability: our decision of 8 December 2016 clarified financing prospects for economic players over the next twelve months. the euro. Our common currency is strong and recognised throughout the world. Euro area citizens are very largely attached to it, at 70% according to the latest Eurobarometer of the European Commission of December, the highest figure reached since 2008. This leads me to make two wishes for 2017: First, at the risk of a bold paradox, that the euro area in this election year be an area of relative stability, in the face of American and British uncertainties. We do not yet know how Brexit will unfold, but I note that it has resulted in lowering the official British growth forecast 1/3  BIS central bankers' speeches  below that of the euro area, to only 1.4% for 2017. We did not want Brexit, but in the negotiations we will move forward with a clear principle – the single market is not to be divided – and with a decisive card to play for the euro area and the Paris financial centre. We must all remain fully mobilised to demonstrate and reinforce the attractiveness of the Paris financial centre; we have received very significant marks of interest from many international companies, with whom we are talking discreetly but seriously.

in the third quarter 2009 compared to a deficit of US $ million in 2008. Similarly, owing to favourable performance of the external sector, international reserves have increased to US $ million in 2009 (end-Sept) from US $ million in December 2003. (v)  Equity markets have begun to reverse their large losses and FDI and portfolio flows are returning to Zambia’s financial sector. BIS Review 161/2009  5  (vi)  Zambia’s financial sector remains strong and stable largely due to banks being adequately capitalised, as confirmed by a recent Financial Sector Assessment Programme (FSAP) Survey by the IMF and World Bank. VI. Challenges  The unfavourable effects arising from the recent global financial and economic crises are huge but surmountable. To this end, we need to do more than what we have done in the past. One of the key challenges relates to need to maintain macroeconomic stability. Macroeconomic managers in less developed countries have to be careful not to use the global economic crisis as a reason to slip back to unsustainable macroeconomic policies of the past. In addition, the crisis has brought to the fore, once again, the ever important challenge of accelerating the diversification process. Our reliance on export of primary commodities, copper in the case of Zambia, exposes our countries to external risks such as the ones we are currently experiencing. VII.
Domestic banks are flush; they have on deposit at the 12 Federal Reserve banks some $ trillion in excess reserves, earning a mere 25 basis points – a quarter of 1 percent per annum – rather than earning significantly higher interest rates from making loans to operating businesses. These excess bank reserves are waiting on the sidelines to be lent to businesses. Nondepository financial firms – private equity funds and the like – have substantial amounts of investable cash at their disposal. U.S. corporations are sitting on an abundance of cash – some estimate excess working capital on publicly traded corporations’ books exceeds $ trillion – well above their working capital needs. Nonpublicly held businesses that are creditworthy have increasing access to bank credit at historically low nominal rates. I have said many times that through the initiatives we took to counter the crisis of 2008–09, and the dramatic extension of the balance sheet that ensued, the Fed has refilled the tanks needed to fuel economic expansion and domestic job creation.

Why shouldn’t I wait until the sky is clear?” Based on past behavior of fiscal policy makers, businesses understandably regard the debt ceiling agreement and the political outcome of negotiations between Congress and the president with the suspicion akin to how the British humorist P.G. Wodehouse regarded his aunts: “It is no use telling me there are bad aunts and good aunts,” he wrote. “At the core they are all alike. Sooner or later, out pops the cloven hoof.”2 It will be devilishly difficult for businesses to commit to adding significantly to their head count or to meaningful capital expansion in the United States until clarity is achieved on the particulars of how Congress will bend the curve of deficit and debt expansion and the “cloven hooves” are revealed. No amount of monetary accommodation can substitute for that needed clarity. In fact, it can only make it worse if business comes to suspect that the central bank is laying the groundwork for eventually inflating our way out of our fiscal predicament rather than staying above the political fray – thus creating another tranche of uncertainty. In the interest of full disclosure, I should add that I was also concerned that just by tweaking the language the way the committee did, our action might be interpreted as encouraging the view that there is an FOMC so-called “Bernanke put” that would be too easily activated in response to a reversal in the financial markets.
One of the first means of paying tribute to him that occurred to us was to publish a book with a broad selection of these texts. On reading it you will see how many of the subjects he tackled over the course of his term of office, from 1992 to 2000, remain fully valid in today’s economic debate. Along with the publication of this book we decided to hold this Conference as a tribute, structuring it around a discussion of the pivotal areas of Ángel Rojo’s economic thought. We are joined by a select group of speakers whose common denominator, in addition to their professional standing, is to have shared concerns and experiences with him at different times in his life and in his various fields of academic, institutional, domestic and international activity. The Conference comprises four sessions that turn on subjects which largely reflect the main areas in which he developed his body of academic work and his best economic policy contributions. The first session addresses monetary and fiscal policy; the second, the challenges of European integration; and the third and fourth, the Spanish economy and the role Ángel Rojo played in the design of Spain’s economic policy. Ángel Rojo’s main achievement as Governor was his contribution to Spain joining the euro as a founding member.

As to other economic policies, these were subject to even laxer oversight procedures, and proved worthless in redressing other imbalances. The list of structural weaknesses in the area’s governance framework would not be complete without mentioning the failure to design any crisis-management mechanism capable of making a rapid and forceful response in the initial stages of tensions, preventing the problems from becoming protracted and untreatable. These shortcomings in the original design of Monetary Union have played an increasingly greater role as the crisis has advanced. Currently, investors have become fully aware of the particular fragility of the euro area countries’ sovereign debt markets, which differentiates them substantially from the debt markets of other developed countries with their own currency and central bank. I refer, naturally, to the fact that the euro area combines a single central bank and single currency with 17 independent States and, therefore, 17 different sovereign risks. Under these conditions, the well-known mechanisms that countries with monetary sovereignty have to counter potential liquidity problems on their national sovereign debt markets are blocked by the fact that the action needed would entail some transfer of income between States, action that the institutional arrangements of the euro area not only do not envisage, but which, it is assumed, must be avoided.
Although the Western Mail and the South Wales Echo stopped running such competitions in 1992 – at the same moment that the  BIS Review 63/2007  1  inflation target was being introduced – I am sure many of you will remember that in those competitions the key piece of information, the location of the ball or, in our case, the outlook for inflation, is missing. You are shown the position of the players from which you have to deduce the position of the ball. That is no easy matter. To pinpoint the ball you need to ask: why is that player jumping? Or why is that player looking there? Only when you have identified the factors to which the players are responding can you try to spot the ball itself. And obviously in our case there is rather more than guesswork involved. In essence, each month the Monetary Policy Committee is trying to identify the changes in the driving forces to which the economic data are responding. Those changes are described, somewhat obscurely by economists, as “shocks”. That is not to say they are necessarily sudden, violent upheavals. “Shocks” are forces that stop the economy running with clockwork regularity. They are the answer to the question “why?” The Monetary Policy Committee is constantly engaged in an exercise of “spot the shock”. Without understanding why the economy is moving in the way that it is, we cannot gauge correctly where it might be going and hence set the right course for interest rates.

Last year our Agents – Adrian and Ian – drove 30,000 miles to talk faceto-face with you. The rugged scenery is, I suspect, less appealing to them as they wind their way – slowly – through the valleys and mountains. When you talk to them, you are speaking to the Monetary Policy Committee at only one remove before it sets interest rates. On this occasion, I am not in Wales to enjoy the scenery. I am here to listen to your views at first hand. But tonight I want to explain. Over the past year Bank Rate has risen four times to reach 5½%. A year ago, few expected that to happen – markets thought that by now Bank Rate would be only 4¾%. Market expectations of where Bank Rate will be at the end of this year have risen from 5% in the middle of last year to 6% now. So what has happened over the past twelve months? The right place to start is with inflation – that is, after all, the Bank of England’s target. A year ago inflation was bang on the 2% target. The latest figure – for April – is 2.8%. In recent months inflation has been volatile, rising to above 3% in March, when I had to write an open letter to the Chancellor, and subsequently falling back. The number for May, to be published tomorrow, is awaited with interest. Many column inches have been devoted to these short-run movements.
This dimension of economic research is often overlooked: it is nevertheless crucial to grasp complex interdependencies between physical and economic phenomena, across sectors and countries, and across time horizons (2) disclose: impose transparency requirements including on counterparties; (3) incorporate climate risk, into our operations on corporates (on both asset purchases and collateral policies). II. Not “too many”: how to transform global discussion into global action In less than 4 years, the NGFS has grown from 8 to almost 100 members, but we will never be too many. This increasing number nevertheless raises the challenge of our efficient work together at the international level. We must definitely transform global discussion into global decision and – at the end of the day – global action. We have functioned with voluntary and expanding coalitions like NGFS, or TCFD for business. And while Europe was key at the core of this coalition, from the very beginning, our colleagues from China, Mexico and Singapore, were around the table. Now, with the new administration in the United States, “mandatory” bodies enter the stage. Standard-setting bodies, international  organisations and international fora have now put sustainable finance as their top priority. In this context, the NGFS is actively requested and involved in the new international climate roadmap of the G20 and the FSB.

It covers an array of conceptual and operational issues such as: the need for integrated financial supervision; risk-based supervision; corporate governance for non-banking financial institutions; the risk management capacity of financial institutions; operational and systemic risks from an integrated perspective; macroprudential and micro-prudential supervision instruments; central bank oversight of financial markets infrastructure; supervision of conglomerates; stress testing for a sound financial system; institutional coordination at the European Union level, and, not least, consumer protection. BIS central bankers’ speeches  1  Europe is not yet out of the woods when it comes to overcoming a very deep financial and economic crisis. There are some good signs, but there is still quite a long way to go – as Mario Draghi recently reminded us in the Committee on Economic and Monetary Affairs of the European Parliament on December last year. The major lessons of the financial crisis are incorporated into this reform. We mostly recognize now that price stability is not sufficient for ensuring financial stability and light touch regulation has failed. There is a derailment of finance, that needs to be corrected, and this is the objective of reforms under way in Europe and the United States. Interconnectedness has grown immensely in the latest couple of decades against the backdrop of technological change (new IT technologies) and financial deregulation. Consequently, systemic risks have grown enormously, banks and other financial entities have neglected them and regulation and supervision underestimated them.
Our knowledge is quite simply too brittle to enable us to lead the economy exactly by fine tuning monetary policy at perfectly chosen moments. The second reason why fine tuning of monetary policy is doomed to failure is that the repo rate is only one of the factors affecting the economy. The most important economic decisions in our society, such as house purchases and corporate investment, are mainly due to developments in long-term interest rates, and monetary policy decision-makers can only have an indirect and very limited effect on these. This reasoning therefore comes to the conclusion that we should not have overly high expectations of what the Riksbank can achieve to influence real economy developments, as has been the focus of recent debate. There is in actual fact every reason to be humble with regard to what we can actually achieve. But if we can keep inflation within our target area of 1-3 per cent and clearly anchor inflation  2  BIS Review 37/2005  expectations around two per cent, this will have great significance for growth and employment in the long term. Monetary policy is not an exact science. Sometimes monetary policy is described as a car, where gentle acceleration or easing on the gas adjusts the speed of the journey down a winding road. This is a very misleading image.

According to The Economist (20-26 May 2023), the renminbi's share of trade finance has risen from 2% to 4.5% since February 2022. ii Voir notamment Solar PV Global Supply Chains, Agence internationale de l’énergie, juillet 2022 iii Triennal Central Bank Survey of foreign exchange and Over-the-counter (OTC) derivatives in 2022, Bank for International Settlements (BIS) iv Horn, S., Reinhart, C., and Trebesch, C., China’s overseas lending, Journal of International Economics, November 2021 v Horn, S., Parks, B., Reinhart, C., and Trebesch, C., China as an International Lender of Last Resort, National Bureau of Economic Research, 2023 vi Eichengreen, B., Macaire, C., Mehl, A., Monnet, E. and Naef, A., Is Capital Account Convertibility Required for the Renminbi to Acquire Reserve Currency Status?, Centre for Economic Policy Research, 2022 vii See in particular Weiss, C., Geopolitics and the U.S. dollar’s future as a reserve currency, International Finance Discussion Papers, Federal Reserve, October 2022 viii Farhi, E., and Maggiori, M., A Model of the International Monetary System, Quarterly Journal of Economics, 2018 ix The international role of the euro, European Central Bank (ECB), June 2022 x Council Conclusions on the EU’s economic and financial strategic autonomy: one year after the Commission’s Communication, 29 March 2022 xi Capital Markets Recovery Package xii For example, to finance the NGEU recovery programme and macro-financial assistance for Ukraine. xiii Villeroy de Galhau, F., Multipolarity and the role of the euro in the International Financial System, speech, 16 May 2022 i
Another proposal is to set a ceiling for the loan-to-value ratio, that is the size of the loans the banks may offer in relation to the value of the collateral. In addition, there are various proposals that aim to reduce the liquidity risks that have arisen because the banks have become increasingly dependent on short-term funding on the securities markets. The corrective tools also include more or less automatic mechanisms that we can use to reduce the kind of procyclical behaviour in the financial sector that I mentioned before. These are tools that can hinder financial bubbles from developing and reduce incentives to take  BIS Review 135/2009  7  excessive risks. Proposals that have recently been mentioned in the general discussion include allowing the banks' reserves for loan losses to vary in a way that reduces rather than reinforces fluctuations in economic activity, so-called dynamic provisioning. Another proposal with a similar effect is to introduce contracyclical capital buffers, that is, that we should require the banks to maintain larger capital buffers in boom periods when there is a tendency for the provision of credit to expand, but smaller buffers in periods when growth is more limited. Finally, and just as important, there is a need to coordinate the gathering of in-formation and the use of various tools to promote stability between national and international authorities. Work is now underway in Europe to set up a new body, the European Systemic Risk Board.

At the same time, faith in the ability of the financial markets to work effectively in all situations has been undermined. An effective financial sector contributes to growth and prosperity in the economy, and it is indisputable that more effective regulation and supervision are now required. In my opinion, however, it is important that the changes in the regulatory structures that are now being implemented are balanced and well considered. Above all, I believe that it is important to avoid the sum total of all the regulations that are introduced restricting growth or, in the worst case, giving rise to new crises. It would be a mistake to underestimate the inventiveness of the financial sector and its ability to circumvent regulations of different kinds. Producing a regulatory framework that makes the financial system safer and more secure without losing important welfare gains is really the major challenge that the authorities now face. Thank you! BIS Review 135/2009  9
In addition, corporations or organisations in this new environment can no longer function by departments or sections, but as an integrated organisation. This also requires new governance arrangements. For an economy or a financial system, we have seen how a crisis in one segment was thought to be confined, but it had pervasive consequences on the entire financial system and the economy. Sixth, is that despite the increased connectivity of the world, as exemplified by the swift spread of the financial crisis and economic shocks throughout the global economy and international financial system in 2008, the institutional arrangements for the cross-border dimension of policy-making have yet to reach the levels commensurate with the degree of economic and financial integration in the world. Finally, the response to the crisis needs to be comprehensive. While addressing the weaknesses and lapses is important, equally important is the enabling environment for the measures to yield results. Pro-growth policies are vital for this purpose. During the Asian financial crisis, Malaysia gave equal attention to financial sector resolution to restore the financial intermediation process and thus credit supply. Equally emphasis was placed on addressing the problems of borrowers. Debt restructuring and mechanisms for support were put in place for the corporate sector, small and medium-scale enterprises and the household sector. This supported growth of the economy and at a fraction of the cost of the financial sector resolution.

The mandate: price stability The Eurosystem has been entrusted with a very clear mandate by the European treaties;1 its primary objective is to “maintain price stability”, in other words to avoid prolonged periods of excessive inflation – as seen in Germany after World Wars I and II – or deflation – seen following the crisis of 1929 –, which have consistently negative effects on the economy. Some observers still advocate a “dual mandate” to target both inflation and growth or full employment, as is the case with the US Federal Reserve, for example. This would have been politically unattainable given the traumatic history of inflation in some European countries. Besides, let me recall two elements: price stability is to be maintained “over the medium term”. As stressed inter alia by F. Smets, there is an “equivalence between the length of the policy horizon and the weight on output gap stabilisation”,2 and hence employment. as stated by the treaty, "without prejudice to the objective of price stability”, the Eurosystem should support “the general economic policies in the Union” Let me add that the more precise and focused the mandate, the more accountable the ECB can and must be. Yet, those who advocate a broader mandate are often the same people who quite inconsistently are quick to criticise the lack of accountability of the ECB. In 1998, the ECB established a quantitative definition of price stability that it went on to clarify in 2003: to maintain inflation rates below, but close to, 2% over the medium term.
And to countries that are thinking about joining the banking union through close cooperation agreements, it might look even more complicated. 3/7  BIS central bankers' speeches  In order to take a decision, we have to follow a finely balanced procedure. One of the reasons is that two bodies are involved which have to interact in a careful manner. The first one is the ECB’s Supervisory Board, which brings together the ECB and all the national supervisors. The second body is the ECB’s Governing Council; it brings together all the national central banks and acts as the ultimate decision-making body. While both bodies play a role when it comes to taking decisions, they are, at the same time, subject to what is known as the separation principle. This principle was put in place to deal with potential conflicts of interest between monetary policy and banking supervision. It does so by ensuring that these two functions of the ECB remain independent from each other. You can imagine that this results in a complex set-up. In very broad terms, first the banking supervisory arm of the ECB prepares draft decisions, then the Supervisory Board approves and submits these draft decisions to the Governing Council. If the Governing Council does not object to a draft decision, the decision is adopted.

You are all familiar with the challenges we face. But alone, none of you, none of us, would be able to find the perfect solution for regulating and supervising the financial system. No single person, no single institution and no single country has the perfect solution. We can and must learn from each other. And we can and must work together. 6/7  BIS central bankers' speeches  The banking union now allows us to do so – effectively and efficiently. Thank you for your attention. 1 Article 1 of the SSM Regulation (Council Regulation (EU) No 1024/2013). 7/7  BIS central bankers' speeches