samchain/econo-pairs-v1 huggingface dataset:
True, some of them had to do with political change and policy uncertainty to the heart of the developed world, but on top of that, major empirical and theoretical puzzles are challenging central tenets of monetary policy. In particular, inflation appears not to be responding to monetary policy as expected in advanced economies. Despite record- low interest rates over many years and massive liquidity injections by central banks through asset purchase programs, inflation has not picked up as expected. Explaining the apparent unresponsiveness of inflation has become a theoretical and empirical challenge that has drawn great attention from academia and policymakers in the last couple of years. Inflation dynamics and the way they interact with other economic variables are, of course, crucially important to central banks that have price stability as their core mandate. Most of them currently deliver on this mandate under a forward inflation targeting framework, whereby the stance of monetary policy seeks to achieve convergence of forecasted inflation to the target over a medium-term horizon. This prevents central banks from having to respond to short-term price volatility, but if inflation does not respond to monetary impulses as predicted by models, policymaking may become a much more complex game. If price responses get delayed in a highly accommodative environment, financial imbalances may build up, fiscal discipline may be eroded and inflation risks may get underpriced by markets, exposing themselves to reversals with data surprises in the future.

Central Bank of Chile October 2018  Central Bank of Chile’s Twenty-Second Annual Conference: “Changing Inflation Dynamics, Evolving Monetary Policy” Opening remarks by Mario Marcel, Governor of the Central Bank of Chile October 25, 2018 – Santiago, Chile Welcome remarks Good morning everybody and welcome to the Twenty-Second Annual Conference of the Central Bank of Chile. It is a pleasure to host this event that every year gives us the opportunity to reflect and discuss about issues that have direct implications on our work as central bankers and stimulate the related academic agenda. I am looking forward to active discussions today and tomorrow on this year’s conference theme: changing inflation dynamics and its implications for monetary policy. This conference is being followed online via live streaming on our website. Inflation dynamics and monetary policy in recent years The last ten years have been an extraordinary time for macroeconomics. The deepest financial crisis since the Great Depression was followed by an unprecedented bold, coordinated, unorthodox and persistent response by central banks in advanced countries. In all, a decade in which the world economy stood a long way from normal and, as it depended so much on emergency support, it was not easy to detect how much the economy was changing underneath. So it is perhaps not that surprising that once the same central banks began to envisage a gradual, cautious and well communicated approach to monetary policy normalization, some challenges appeared on the road.
This, in turn, significantly reduced the risk that a dealer would not be able to obtain short-term funding through the tri-party repo system.3 Over much of this period preceding the failure of Lehman Brothers, U.S. commercial banks were relatively insulated from the liquidity run dynamics that plagued the securities dealers.4 This relative stability was due, in part, to the broad access these commercial banks had to the Fed’s discount window through the traditional primary credit facility and through the Term Auction Facility (TAF), which had been introduced earlier in the crisis in response to liquidity strains in the interbank market. The fact that most commercial banks relied on insured deposits for significant portions of their funding was also important. Not only were these insured deposits stable sources of funding because they were guaranteed by the Federal Deposit Insurance Corporation (FDIC), but also because they were unsecured; these deposits freed up collateral that could be used by banks to secure borrowing from the central bank and elsewhere. However, once Lehman Brothers failed, many commercial banks and other financial institutions encountered significant funding difficulties. News that the Reserve Fund – a large money market mutual fund – had “broken the buck” due to its holdings of Lehman Brothers paper led panicked investors to withdraw their funds from money market mutual funds. This caused the commercial paper market to virtually shut down.

I am sure that much the same view is held by my colleagues in the small group of countries — consisting of New Zealand, Canada and the United Kingdom — that formally introduced the regime at much the same time as Sweden in the early 1990s. Since then, more and more countries, including some of the emerging industrialised countries, have changed to a regime with an explicit inflation target. The other week it was announced that two of our Nordic neighbours, Norway and Iceland, are also to focus monetary policy on an inflation target. But we cannot settle down to a quiet life. Our thoughts about both the implementation of monetary policy and its analytical framework must be developed continuously. That is, indeed, an ongoing process at the Riksbank. Early in 1999, for instance, the Executive Board made some formal clarifications. It was noted that monetary policy should aim to fulfil the inflation target, expressed in terms of the consumer price index, one to two years ahead but that under certain specific circumstances there can be grounds for deviating from that aim. In some respects the clarification 1 amounted to a codification of what had been practised for a number of years . Today I shall be discussing how the Riksbank ought to react when the economy is exposed to structural changes of various types. Firstly, how should monetary policy handle price effects of deregulations. In that deregulations can lower the general price level, they may occasion a temporary dip in the rate of inflation.
In this context, the Bank of Albania will continue to work on improving the control and management systems, to reduce operational risks and improve communication and transparency. In addition, the Bank of Albania emphasizes the need to continue structural reforms, which will allow faster, more sustainable and more inclusive growth for different social levels of the society. Thank you! 2  BIS central bankers’ speeches

Denis Beau: The industry of confidence - how to build the financial sector of tomorrow Speech by Mr Denis Beau, First Deputy Governor of the Bank of France, at the FINTECH R:EVOLUTION 2021, Paris, 14 October 2021. * * * Ladies and Gentlemen, First of all, I would like to thank France Fintech and its chairman Alain Clot for inviting me to take part once again in this major annual meeting of the French fintech industry: Fintech R:evolution. At the Banque de France and the ACPR, we believe it is essential to maintain a sustained and high-level dialogue with all the innovative players in the French financial sector and, more importantly, to contribute, in our own right, to the vitality of the French fintech ecosystem. It is therefore with satisfaction that I observe, year after year, the strengthening of the ties and trust between the Banque de France and France Fintech. After the partnership concluded two years ago, the year 2021 marks a new step since we are co-organising this week dedicated to fintechs, the French Fintech Week. I see this as a concrete illustration of "team spirit", which is an asset of the French financial centre and which I believe should be maintained and developed. With this in mind, I would like to share with you some observations on the ongoing transformation of the financial landscape, on its consequences for our role as central bank and supervisor, and finally on the challenges that we must not miss collectively. 1.
In the short term, the public health crisis is disinflationary, as exemplified by the drop in oil prices. Inflation is currently very low, at 0.3% in the euro area and 0.4% in France in April; granted, it is particularly tricky to measure prices in the wake of the lockdown, due to the low volume of data reporting and transactions, and the shift in consumer habits, temporary or otherwise. In the short term, our estimates suggest that the dominant effect will be that of price moderation, caused by the slower pick-up in demand than in supply. The mediumterm consequences are more open to debate, due notably to uncertainties over production costs, linked for example to health and environmental standards and the potential onshoring of certain production lines; the differences between sectors could be significant, leading to variations in 1/5  BIS central bankers' speeches  relative prices rather than a general upward path. According to the different forecasts, overall inflation should not move above 1% at least until 2021, which is in line with market expectations. This sluggishness in prices comes after a decade of persistently below-target inflation, which has averaged 1.3%. Beyond these figures, I would like to underline three qualifying criteria for our inflation target, which are all interlinked. Our inflation target of close to 2% is symmetrical, flexible and mediumterm. – symmetrical: if our central target is perceived as a ceiling, we are less likely to reach it. Clearly, therefore, we will be prepared in the future to exceed 2% on certain occasions.

Thomas Jordan: Monetary policy and uncertainty Summary of a speech by Mr Thomas Jordan, Member of the Governing Board of the Swiss National Bank, at the University Freiburg im Breisgau, Freiburg, Germany, 15 January 2008. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The economy is a complex system. Moreover, it is constantly changing as a result of technological advances and globalisation. Consequently, monetary policy operates in a very uncertain environment. The unforeseen and radical developments in the international financial markets emanating from the current crisis in the US housing and mortgage market have – once again – brought home the major role of uncertainty in monetary policy. We are uncertain about the exact way in which the economy functions, the current state of the economy and about future exogenous shocks. This uncertainty can express itself in the form of risk, with a known probability distribution. Alternatively, it may take the form of Knightian uncertainty, in which the probability distribution is unknown. It is the latter form of uncertainty which presents monetary policy with the greater challenges. Uncertainty is a reason why changes to the monetary policy instrument are generally applied only gradually and in small steps. However, if the economy is thought to be facing major threats, uncertainty may demand rapid and decisive action. Monetary policy decision-makers must be aware of uncertainty and the limitations of their knowledge.
Second, instruments are needed that enable early detection of potential slippage in revenue and expenditure during the fiscal year. The new Stability Law demands significant improvements in the transparency of general government conduct, particularly in relation to the budget outturn figures for regional and local government, which should be released with the same periodicity, degree of detail, lag and ready accessibility as central government data. Third, the mechanisms enabling the prompt correction of any potential slippage must be reinforced. Once again, the Stability Law includes new instruments, such as the automatic adjustment of regional government spending in specific cases of non-compliance, the possibility of establishing sanctions and also of central government imposing adjustment measures. These new provisions may be effective in ensuring discipline, a matter that is all the more important following the extraordinary measures adopted by the State to offer liquidity support to regional and local government, such funds being conditional upon compliance with adjustment plans. And, fourth, the reinforcement of the credibility of the fiscal consolidation process takes on great importance in the current situation of the sovereign debt crisis. It may be of help here to establish a medium-term budgetary horizon providing sufficient details of the expected trend of public revenue and spending and the assumptions on which they are based, and on the contents of the planned measures and the expected effect they will have. That would all contribute to reducing economic agents’ uncertainty and would help identify the problems ahead in the medium term.

Meantime, public spending climbed significantly, largely as a result of the increase in unemployment benefits and in the interest burden, but also as a result of spending on pensions and on government consumption. A further expression of the rapid deterioration in the deficit was the most substantial rise in public debt as a proportion of GDP. The first conclusion that may be drawn from this analysis, and one which is very relevant for understanding our present difficulties, is that the budget deficit arising with the crisis was eminently structural. That is to say, it was not only due to the downward cycle, or to the temporary discretionary measures with no lasting effect on public finances. In any event, the outcome has been that the public debt/GDP ratio has not stopped growing since 2007, and  BIS central bankers’ speeches  3  we will end the current year 2012 with a level close to 85%: i.e. an increase of almost 50 pp of GDP over a period of only five years, which in itself is an indicator of the seriousness of our crisis. Reducing the budget deficit from its 2009 peak is proving anything but easy. Indeed, the correction made in 2010 and 2011 was very scant, and was of course less than that initially planned and desired. The budgetary adjustment is being made in highly adverse economic and financial circumstances, compounded by the impact in the short run of the austerity measures on economic activity.
5  Central Bank of Chile 29 June, 2017  Slide 8  Insurance companies coverage: international comparison Penetration of the insurance industry, 2015 (direct gross premiums as a percent of GDP) 40 35 30 25 20 15 Life  10  Non-life  5 LU IE KR US DK UK FR SZ JP IT SE PT DE BE AU NO AT FI ES NL SI IL CL CA NZ EE CZ BR PL AR SK CO IS HU LV MX GR PE TR  0 Source: OECD. [SLIDE 9] The development of finance in developed countries of course didn’t prevent them from getting into a big crisis a decade ago. But if you think that was big you should consider crises in developing countries, like the debt crisis of the early 1980s, the Tequila crisis of 1994 or the economic and political crisis in Argentina in 2001. [SLIDES 11 and 12] They devastated the entire financial system of those countries, evaporated or froze deposits, brought countries into deep recessions and massive unemployment and were only resolved after massive bailouts and debt write offs.

Ardian Fullani: Overview of Albania’s latest economic and financial developments Speech by Mr Ardian Fullani, Governor of the Bank of Albania, on the Monetary Policy Decision-Making of the Bank of Albania’s Supervisory Council, Tirana, 31 October 2012 *  *  *  Today, on 31 October 2012, the Bank of Albania’s Supervisory Council reviewed and approved the quarterly Monetary Policy Report. Based on the analysis of Albania’s latest economic and monetary developments, and following discussions on their performance outlook, the Bank of Albania’s Supervisory Council decided to keep the key interest rate unchanged, at 4.0%. The Supervisory Council deems that the current monetary conditions are adequate to meet Bank of Albania’s inflation target in the medium term. Keeping the key interest rate at its minimum historical level ensures the necessary monetary incentive to promote Albania’s domestic demand and economic growth. Let me now proceed with an overview of the economic and monetary developments and key issues discussed at today’s meeting. *** The Albanian economy was faces with a challenging global environment over the first three quarters of 2012 due to difficult situation of the world economy, and particularly of the euro area. Domestically and externally generated supply shocks determined the economic growth profile and continued to test Albania’s macroeconomic and financial foundations. Over this period, the Albanian economy was faced with slow foreign demand growth, increased financial risk premia and tendencies of several financial market agents to reduce exposure to Albanian economy. These developments were also reflected in low consumption and investment levels.
The euro area suffers from a lack of competitiveness and productivity, which of course take different forms in individual Member States. Structural problems and current weak demand lead to unsatisfactory economic growth and unacceptably high unemployment in many countries. Tackling these challenges in the long term is not the job of monetary policy. Crisis management must tackle the root causes for the long term and we, the ECB, will therefore not tire of reminding governments that we can only provide them time for the urgently needed reforms. Against this backdrop we could ask whether it was appropriate that the ECB took action. I think it was – precisely because of the path of inflation, even if there is room for discussion about the some of the measures and their design. The list of our crisis management measures is long. In June and September this year we lowered key interest rates further. The main refinancing rate is now just 5 basis points. The interest rate channel has thus been exhausted. For the first time in our history we have resorted to a negative deposit rate in an effort to achieve the desired monetary policy accommodation within the tried and tested corridor system. This justified monetary policy step – which favours investment – was not an easy decision for us, not least because of its possible side effects for the financial sector and for savers.

The first essential is that the design features of the DIS itself should provide incentives for risk-minimising behaviour by market participants. This means in particular avoiding over-generous protection and limiting the scope of the DIS strictly to the protection of small depositors. There was general agreement in the public consultation that coverage in the DIS should be kept relatively low, in the range of $ to $ It appears that the lower end of this range would probably be acceptable. The second element in reducing moral hazard is to maintain effective supervision to curb excessive risk-taking by banks. In this connection, we are presently in the process of enhancing our supervisory system to make it more risk-focussed. The final safeguard derives from the market discipline exercised by those stakeholders in a bank – the uninsured depositors, bank creditors and shareholders – who are exposed to the risk of loss if a bank fails. Such persons have a vested interest in monitoring the behaviour of banks and in sending the appropriate market signals, in the form of withdrawal or higher cost of funds, or lower share price, to banks that are taking too much risk. To do this, of course, the market needs sufficient information about the financial position and performance of banks. Increased financial disclosure is something that the HKMA has been encouraging over the last few years. The other main issue to emerge from the consultation is that of cost.
As Jens Weidmann and I wrote last year, the equity financing of businesses, across European borders, must be a priority. Europe is lagging far behind in this area: such financing only represents 67% of GDP in the euro area compared with 125% in the United States. Thus, innovation, which is inherently more risky, is less well financed in Europe. The second project, on which we could make progress after the elections that will take place this year, is a collective economic strategy in the euro area. I know that when the French talk about coordination in Europe, the Germans sometimes think that it may be a new way to wriggle out of reforms. This deadlock must be broken: we need both national reforms and a European coordination. Growth and employment would be stronger in Europe with more structural reforms where they are a priority, such as in France and Italy, and more fiscal or wage support in countries with room for manoeuvre, such as Germany. Regarding reforms, like you, I would like France to pick up the pace; I say it frequently in my own country. But you must not consider that your French neighbour is “unreformable”. France has not been immobile over the past few years: pensions have been reformed, corporate charges have been cut considerably, and deficit reduction targets have been met. In practice, in order for this European coordination to exist, the euro area needs an institution that inspires confidence between countries.

We now follow a “fixed rate full allotment” tender procedure and have significantly expanded the maturity of our operations. Banks have been granted access to essentially unlimited liquidity at our policy interest rate at maturities of, initially, up to six months. This is an exceptional mode of operation. In normal times we auction a given amount of central bank credit and let competition between the bidders determine the interest rate. This unusual mode of operation implies that we currently act as a surrogate for the market in terms of both liquidity allocation and price-setting. •  Our second building block is the long list of assets that we take as collateral. This list was already very long before the crisis, but we have extended it even further and now accept an even wider range of securities as collateral. •  The first two building blocks offer unlimited refinancing against a very wide range of collateral. But they can only reach the financial system if they are coupled with the third building block, namely the very large number of counterparties that have always been able to take part in our refinancing operations. Even before the financial crisis, this number was higher than for the other major central banks. Following the changes to our operational framework in October last year, this number rose further. All these non-standard measures have now been supplemented by further exceptional steps that the ECB’s Governing Council decided to take at its last meeting on 7 May.