samchain/econo-pairs-v1 huggingface dataset:
As a result, they will not be forced to dump assets, further depressing market prices, increasing volatility and the upward pressure on haircuts. The deleveraging will still take place – and we have seen it – just not so quickly and violently that it would destabilize the entire financial system. The second major intent of the liquidity facilities has been for the Fed to expand its balance sheet and, by doing so, offset some of shrinkage that has been occurring among non-bank financial intermediaries. The fact is the banking system is capital-constrained, with insufficient capital to expand its balance sheet fast enough to offset the shrinkage evident in the non-bank sector. Although the Federal Reserve cannot create capital for banks, it can provide funding directly to the private sector, attenuating the consequences caused by a balance-sheet-constrained banking system. The CPFF and the TALF are both important in restoring the flow of credit to borrowers. The CPFF essentially jump-started the commercial paper market, which had largely shut down following the failure of Lehman Brothers in September. The TALF’s purpose is to restart the securitization markets, and thereby lower the cost of borrowing to households and business. The TALF does this by providing term, non-recourse loans to investors against AAA-rated collateral. Investor demand for these loans leads to downward pressure on AAA-rated financing rates, lowering the cost of credit.

This is a task that is not confined only to the Central Bank, but is for all economic and financial policy makers. Beyond these risks, in the scenario we consider today to be the most likely, the Chilean economy will expand at a pace that is consistent with its trends. Inflation will gradually return to 3% as specific temporary factors that have influenced recent indicators dissipate. Let me describe this scenario and the risks identified in some detail. Macroeconomic scenario Since the last Monetary Policy Report, the Chilean economy has continued to show high strength and inflation has remained limited. Contractionary risks coming from abroad have eased, while expansionary risks originating domestically have gained importance. Domestic output and demand growth exceeded projections, with a greater boost from investment and more recently also from private consumption. Dynamic expenditure has resulted in a smaller trade surplus and a high degree of internal resource utilization. Headline and core inflation indicators have dropped to near 1% annually because of a number of temporary factors, and forecasts are that they will return to 3% within the projection horizon. Internationally, the threats associated with the situation in the Eurozone are still in full force, but other risks, relating to the U.S. and China, have moderated. In this scenario, the Board has held the Monetary Policy Rate (MPR) at 5%. As I mentioned at the beginning, Chile’s GDP grew 5.6% in 2012.
The most well-known e-payment company is PayPal, which is registered in Luxembourg, but which is active around the world. Almost exactly ten years ago Stefan Ingves, the current Governor of the Riksbank, held a speech on the theme “Electronic money from a central bank perspective”. He then said that “the situation today on the e-money front can, put briefly, be described as there being a lot  5  In 2006, 85 per cent of all giro transfers and other credit transfers were made electronically, the remainder were paper-based. In terms of value, 96 per cent of these transactions were made electronically. Sveriges Riksbank. 4  BIS Review 16/2008  happening at different places in the world, although a breakthrough on a broad front is still in the future”. This summary can probably said to still hold today. 6 But not all development is tied to e-money. Mobile phones are now also used to make payments. For example, we can pay our bus and underground journeys by sending a text message. A few seconds later we receive a text message back from the operator, confirming that a ticket has been purchased and that it can be shown to the driver or conductor. If one has a prepaid card the cost is drawn directly, otherwise it will be put on the telephone bill. There are shops that have begun to use smart cards.

The banks we allow to access our markets need to meet the high standards we expect and be capable of being effectively supervised. What does responsible openness mean? Sam Woods set out the three pillars of responsible openness in 2019 (and, also built upon this in his Mansion House speech3 last November). 1. First that we should engage strongly in international standard-setting processes and make sure that we are at the forefront of implementing those rules in a thorough way; 2. Second that we adopt practices and structures which promote strong collaboration with colleagues in other jurisdictions; and 3. Third, that we are open to hosting cross-border business in the UK – but only if it is resilient and appropriately controlled and governed, and if we have sufficient visibility of and influence over the necessary supervisory outcomes. My policy colleagues take the lead on our work in international standard setting. As we have reinforced many times now4, we have absolutely no intention of weakening prudential regulation in the UK. The changes that we introduced post 2008, have stood the banking sector in very good stead, for example in enabling it to withstand the stresses posed by the Covid pandemic in 2020. This statement sets out our expectations on the second and third of these pillars.
As banks and securities markets become increasingly integrated, new and interesting questions arise with regard to the best means of exercising international supervision and oversight. Plans are also being drafted for the European payment system. The ECB plays a central role in this work. Whether or not we have a place at the decision-making table affects the conditions for the financial sector in Sweden, a sector that currently employs around 80,000 people, which is almost twice as many as, for instance, the forestry-based industries. Even more important here is the broader economic policy decision-making, primarily through the Ecofin Council, where the Ministers of Finance meet regularly. The trend is clear, although the changes have so far been tentative and gradual. An increasing number of the important issues are discussed and decided in practice in the small circle of countries participating in the Eurosystem, what is known as the Euro group. It is not difficult for me to point out issues from recent years where we could probably have exerted greater influence if we had been members. During the early years, when the ECB was being built up, we sat at the decision-making table. When it then became clear that we and the Brits intended to remain on one side, our colleagues quite simply decided to postpone a number of important issues where we had strong views, including the monetary policy framework with inflation targeting, transparency, etc. This also applied to various payment system issues, where our position was weaker on the outside.

When it then became clear that we and the Brits intended to remain on one side, our colleagues quite simply decided to postpone a number of important issues where we had strong views, including the monetary policy framework with inflation targeting, transparency, etc. This also applied to various payment system issues, where our position was weaker on the outside. If we now say “no” to membership, if not for good but at least for the foreseeable future, the situation will worsen further, as I have described already. I think this would be very unfortunate. BIS Review 39/2003
There are five broad areas where reforms are urgently needed: first, reforms to improve education (and on-the-job training), boost research and development, enhance innovation and facilitate the diffusion of technological advances, so as to fully exploit the potential of an increasingly knowledge-based economy; second, reforms to increase competition in product and services markets; third, reforms in labour markets to increase flexibility and adaptability of the workforce; fourth, policies and institutions to create a more favourable business climate; and fifth, reforms to promote integration, enhance competition and foster innovation in European financial markets, with a special emphasis on venture capital. Time constraints do not permit me to go into detail on the multitude of the necessary reforms that I mentioned. What I would like to do, in line with the topic of my presentation, is to examine and explain how and why the necessary adjustments to market structures should be accompanied by fundamental adaptations of the pertinent economic institutions and changes in social attitudes (which are much  4  BIS Review 43/2007  harder to achieve), in order to improve the performance of the European economy.2 To this end, I will now concentrate my remarks on the labour market. In other recent papers, I have examined the role of the financial sector and of education in fostering Europe’s growth performance. The importance of institutions for the functioning of labour markets in Europe can hardly be overstated.

BIS Review 131/2009  9  But the social and economic costs have been considerable, particularly reflected in the dramatic fall in output and employment in most advanced economies. Moreover, government support for banks has been costly in many countries. The crisis has shown that regulation of systemically important banks should be considerably more stringent. This can be achieved by introducing overall higher capital requirements or seeking to restrict growth in these institutions by imposing stricter requirements than for other banks. In Switzerland, it has been decided that the capital adequacy requirement for the country’s two large banks in good times will be twice the international minimum requirement. To prevent a procyclical impact, this target will apply as of 2013. 10  In Norway and other countries, all banks are subject to the same capital adequacy requirements, but the large banks have generally chosen to leverage their capital further than other banks. This is not advisable. The UK government intends to propose a plan that would require large banks to elaborate a plan for orderly unwinding, often referred to as “living wills”, stating which parts of a bank’s operations will be sold if a distressed bank is compelled to raise fresh capital. 11 The authorities will then be able to split up or wind down banks quickly, whatever their size or complexity. But an additional economic cost is incurred when governments rescue banks. This may have adverse effects on bank behaviour.
With regard to trades, Hong Kong continues to serve as the major channel for the rest of the world to access Mainland China. Notwithstanding the decrease in the proportion of China’s exports of goods going through Hong Kong, our role as the intermediate hub for trading has never been diminished. Nowadays, the offshore trade conducted through Hong Kong and the re-export trade of Hong Kong still accounts for 30% of China’s total trade volume. And what kind of role has Hong Kong been playing in the reform and modernisation of the banking system in China? Can you recall the difficult times in the 1990s? In 1994, China implemented the significant reform of the exchange rate system and introduced the unification of the official and swap exchange rates. At the same time, transformation of stateowned banks into commercial banks started. Due to various reasons related to the history and the system of Mainland banks, the bad debt ratio of the banking system was very high. The International Monetary Fund once estimated that the total bad debt in China’s banking  BIS Review 166/2010  1  system reached RMB2.3 trillion, accounting for 23% of the total loans of the banking system and 19% of the GDP. At that time, many people were not optimistic about the prospect of China because they thought the reform of the banking system would unlikely be able to succeed. If the reform failed, not only would economic growth slow down, the entire system of reform and opening up may also collapse.

In 2021 the impact of the health crisis on the economy waned, prompting a decline in household savings, although these remained high from a historical standpoint. There has been a pronounced reduction in household savings flows since end-2021, against a backdrop of high inflation rates in which the nominal consumption growth rate is outpacing income growth. As a result, in 2022 Q3 the household saving rate fell below the levels observed in the years leading up to the pandemic. The high savings levels seen at the height of the pandemic owed to household consumption dropping far more sharply (more than 12% in 2020) than income, with the latter partially underpinned by the public support measures deployed to mitigate the adverse economic effects of the pandemic. The main factor behind the slump in consumption (and the  1  attendant growth in savings) were the health restrictions, which presented a barrier to spending on certain services such as hospitality and entertainment. Bear in mind that the savings growth recorded over the last few years was not distributed evenly across households. On the spending side, the restrictions had a greater impact on the consumption patterns of higher-income households, for whom hospitality and entertainment make up a larger share of the consumption basket. On the income side, they were hit less hard than lower-income households, since low-income individuals account for a larger share of employment in the sectors most severely affected by the health crisis.
Other annexes are still under development and will be finalized during the course of this year. Second, I would like to inform the Committee of the results of an evaluation that the CBC voluntarily underwent as part of the International Monetary Fund’s (IMF) pilot scheme for the new Central Banks Transparency Code. The Code, which was approved by the IMF in July 2020, covers transparency in governance, policies, operations, outcomes, and official relations.7 This evaluation was done over five months, and concluded that “the Central 5  This document can be seen at https://www.imf.org/-/media/Files/Publications/PP/2020/English/PPEA2020038.ashx The Panel was composed by former Governor of the Bank of Israel Karnit Flug (Chair of the Panel); Senior Research Fellow at the Brookings Institution, Member of the Financial Stability Committee of the Bank of England, and former Vice Chairman of the US Federal Reserve Donald Kohn; Professor at the University of Cambridge, England, and Expert Evaluator on Transparency and Communication of Monetary Policy Petra Geraats; Professor at the University of Columbia University, United States, and former Chief Economist of the IADB Guillermo Calvo; and University of Pennsylvania Professor and former IMF Research Fellow Enrique Mendoza. The Panel conducted its work between January and September 2019. Both the final report and the CBC’s response to each of the Panel’s recommendations are available at https://www.bcentral.cl/documents/33528/2077651/BCCh_Evaluaci%C3%B3n_Externa-Respuesta_BCCh.pdf 7 For the IMF’s Central Bank Transparency Code, see footnote 5. For the result of the CBC evaluation, see 6  Page 13 of 27  Bank of Chile has implemented broadly advanced transparency practices.

Page 23 of 27  Figure 19 MPR Corridor (*) (percent) 4.0  Corridor FTS  3.5  Confidence interval: 66% EES  Confidence interval: 33% Forward  3.0 2.5 2.0 1.5 1.0 0.5 Jun/23  Mar/23  Dec/22  Sep/22  Jun/22  Mar/22  Dec/21  Sep/21  Jun/21  Mar/21  Dec/20  Sep/20  Jun/20  Mar/20  0.0  (*) The corridor is built following the methodology of Box V.1 of the March 2020 Report. It includes the FOS of Jun 3, the EES of May 11 and the quarter’s mean smoothed forward curve. The methodology corresponds to the extraction of the implicit MPR considering the forward curve on the interest rate swap curve up to 2 years discounting the fixed rates for each term at the simple accrual of the ICP. Source: Central Bank of Chile. Figure 20 Monetary policy interest rate (*) (percent) 8  Chile  Developed  Emerging  Jan-15  Jan-16  Jan-17  7 6 5 4  3 2 1 0 Jan-11  Jan-12  Jan-13  Jan-14  Jan-18  Jan-19  Jan-20  (*) For both developed and emerging economies, the rates are weighted by respective country's GDP at PPP. Sources: Central Bank of Chile and Bloomberg.
There was apparently supposedly a subway line that was really close to the gold vault, and so they just had to punch a little hole in the subway tunnel and the gold vault was right there. But it doesn’t really actually work that way. So sorry. My point is, there’s a lot of different activities that we do. Obviously in education, Bachelor’s or Master’s, is sort of I think probably a good place to start. The more analytical skills you can get in terms of math and economics and business – those are the skills that are very attractive to us. Training and public policy because that’s what we do, is very important. It’s a great place to work. The typical New York Fed employee joins the Bank and says I’m going to be here two, three years. And then the next stop I ask them how long have you been here? “25, 30 years.” Which I think means that it has – it’s a good place to work. Reasonable pay, good benefits But mainly, a great culture. People are very committed to what we do. People have a strong sense of mission and integrity. I tell people that one of the great things about working at the New York Fed is there’s no moral ambiguity at any day about why I’m going to work. We’re there to serve the public interest, and that’s a nice thing to think about every day when you go to the office.

President Dudley: Well, if I said it was politically-driven, that would be an unbelievable news story. Because we try to stay as apolitical as possible and set monetary policy, not based on the political winds and fortunes of the different political parties, but what we think is appropriate to keep the economy on an even-keel and to achieve our goals of maximum sustainable employment in the context of price stability. So, we’re basically trying to set the level of interest rates in a way that will keep the economy close to our objective of full employment, with relatively stable price. It’s 2% inflation. That’s sort of where we are right now. So, why are we raising interest rates a little bit? First of all, I would point out that the interest rate rise that we’ve had in place has been extraordinarily gradual. The short-term interest rates that the Federal Reserve sets, the federal funds rate, that range is three-quarters of a percent to 1%. If you lived like I did through the 1970s and ‘80s, you realize that that’s an extraordinarily low level of interest rates. Monetary policy over the last few years has been what we think is accommodative. In other words, it’s been supporting economic activity. As we get closer to full employment, we want to make monetary policy a little bit less accommodative because if monetary policy were too accommodative, we would actually get an inflation problem over time.
And what if the bad shock the system might need to deal with is fundamentally different to the 2008 recession? What if, for example, it’s a cyber attack? The general point is that it isn’t possible to specify a target for how resilient the system should be that is appropriate for all forms of threat, across all forms of finance. 6  All speeches are available online at www.bankofengland.co.uk/speeches  6  And even if one day it were possible to specify a complete set of resilience targets, that would be proved quickly out of date as the financial system evolved and the circumstances in which it operated changed. Any operational target must be flexible so that it can keep up with events. Hardwiring into legislation isn’t a recipe for flexibility. So the challenge was how to specify a clear mandate. Parliament’s secret sauce for doing so had three ingredients. The first was to specify the mandate not as a single target but as a set of preferences. Put simply, Parliament’s intent, enshrined in law, is that we should build as much resilience in the financial system as possible, without harming the expected growth of the economy over the medium to long run 6. We must aim for a level of resilience that involves short-run sacrifices only insofar as they are outweighed by long-run gains. This is our rule for constructing a resilience target for each area of the system at each point in time and for each threat.

Taken together with workers’ apparent willingness to accept lower real pay levels, the non inflationary rate of unemployment, or NAIRU, looks to be at a lower level than we might have expected. The MPC already built into its August forecasts the possibility of some positive labour supply shock. It took the judgement then that, contrary to previous assumptions and the experience of previous recessions, the labour participation rate would be less affected by an ageing population. And, having seen little evidence of pay pressure, it took the view that the NAIRU had fallen to 5.5% – not far off the 5% rate that prevailed in the UK before the crisis. But even relative to last August’s judgement on labour supply, pay growth still looks weak relative to models calibrated on the pre-crisis period. At the same time, unemployment is still falling more rapidly than expected. 4  BIS central bankers’ speeches  The MPC is left with a judgement whether those falls in unemployment presage an imminent sharp pick up in pay growth. Or whether the continued weakness in labour costs means we can afford to let falls in unemployment continue to run for some time yet. As always with economics, it is possible to make a good case on either side. We will know more when we see the extent of pay pressures in the big annual settlement rounds in the first quarter of next year.
The responsibility to address these flaws rests with the banks themselves. Many industry leaders have initiated reform programs within their firms. It is important to keep the momentum going. Reform requires relentless and sustained effort: from the top of an institution to its most junior employees, and across all of the institution’s business activities. Reform must include the full scope of an employee’s career, beginning with recruiting and continuing with annual performance management, compensation and promotion decisions. We in the official sector will be looking to the industry to fulfill its end of the bargainto act consistent with the public well-being, to value long-term stability over short-term gain, and to take account of all stakeholders in making decisions. Thank you for your time and attention. 15  4  https://www.newyorkfed.org/governance-and-culture-reform/index.html. BIS central bankers’ speeches

Within minutes, the exchange rate exceeded the CHF 1.20 mark. Seen from the outside, this may have created the impression that a minimum exchange rate can simply be generated by pressing a button and that such an exchange rate is a normal monetary policy measure which is straightforward to implement. That is far from being the case. A minimum exchange rate is an extreme measure, only to be introduced in a situation of massive overvaluation, with the aim of averting the worst developments. It is neither a panacea capable of solving all the problems facing the Swiss economy, nor can it simply be implemented for any desired level, free of any risk. On the contrary. A minimum exchange rate can only be successfully implemented if there is a clear economic justification for its introduction, such as a massive overvaluation resulting from adverse developments on the foreign exchange market. Within the framework of a system of flexible exchange rates, it is also important that it be internationally accepted, and that it is not seen as a competitive depreciation. Finally, a vital element in the successful implementation of such an exchange rate is the central bank’s credibility, in other words, the belief that the central bank will indeed defend the minimum exchange rate, if need be. Financial markets are constantly changing their assessment of risks. A situation may also occur in which the market decides to test the defence of the minimum exchange rate.