samchain/econo-pairs-v1 huggingface dataset:
4  BIS Review 11/2003  EMU fosters economic and financial integration Financial Europe under construction: the reorganisation of capital markets In 1999, as soon as the euro was launched, one of the expected advantages was the prospect of deeper, larger and more integrated capital markets contributing to reducing the cost of capital for businesses and giving Europeans a greater range of saving options. These expectations have become reality in both the money market and longer-term capital markets. On the euro money market, the unsecured deposit inter-bank market is highly integrated. EONIA and EURIBOR have provided the market with uniform benchmarks that are fully accepted by all market participants. This is reflected, for instance, in the huge development of the euro interest-rate swap market. On the euro bond market, the integration process has registered three main developments: •  a rapid internationalisation: The introduction of the single currency has fostered the euro-denominated private bond market, by enlarging the potential pool of investors, notably international investors. •  increased competition between issuers, which has encouraged the standardisation of sovereign bonds, the gradual convergence towards “best practices”, the development of a range of attractive and actively traded benchmark issues (especially for sovereign bonds). Besides, competition has also enhanced liquidity as issuers have increased the average size of outstanding bonds.

For that reason, they became relevant for our monetary policy. 2  BIS central bankers’ speeches  The role of domestic inflation These global factors, however, have by no means been the only force driving disinflation in the euro area. If we decompose inflation in the euro area and the United States, a striking difference is that, at least until the start of this year, domestic factors explain a much more important part of our disinflationary trend (Figure 3). This stronger role for domestic forces in the euro area has contributed to core inflation diverging from some other advanced economies. It has hovered consistently around 1% since mid-2013 (Figure 4). The ECB’s objective is headline inflation, and there are good reasons for this, not least to keep purchasing power stable. Headline inflation is also a better predictor of short-term inflation developments. But core inflation has to be taken into account because it is more closely linked to medium-term inflation trends. In fact, ECB staff analysis shows that core inflation is a better predictor of medium-term headline inflation than headline itself. Persistently low core inflation is therefore a risk to our mandate. So why have domestic factors affected inflation more in the euro area? The main reason is that, from 2011 onwards, the euro area experienced a sovereign debt crisis and a double-dip recession, while other advanced economies recovered (Figure 5). That led to a very prolonged downturn, which was associated with a decline in employment, depressed wage growth, and low business and consumer confidence.
Aizenman, J., Y. Jinjarak and D. Park (2010), “Reserves and Swap Lines: Substitutes or Complements ?”, NBER Working Paper No 15804 March. Backus, D., Henriksen, E., Lambert, F. and C. Telmer (2009), “Current Account Fact and Fiction”, NBER Working Paper, 15255, November. Baclet, A. and Vidon E. (2008), “The World Distribution of External Imbalances: Revisiting the Stylised Facts”, Banque de France Occasional Paper, 6, June. Bernanke, B. (2005), “The Global Saving Glut and the U.S. Current Account Deficit”, Remarks at the Sandridge Lecture, 19 March. Blanchard O., Milesi-Ferretti G.M. (2009), “Global Imbalances: In Mid-Stream?” IMF Staff Position Note. 12  BIS Review 76/2010  Blanchard, O., F. Giavazzi and F. Sa (2005), “The U.S. Current Account and the Dollar”, MIT Department of Economics Working Paper, No 05–02 and NBER Working Paper No 11137, February. Bracke, T., M. Bussière, M. Fidora and R. Straub (2008), “A Framework for Assessing Global Imbalances”, ECB Occasional Paper No. 78, January 2008. Bussière, M., M. Fratzscher and G. Müller (2010), “Productivity Shocks, Budget Deficits and the Current Account”, ECB Working Paper No. 509, August 2005, forthcoming Journal of International Money and Finance (December 2010). Caballero R. (2006), On the Macroeconomics of Asset Shortages. Caballero R. (2009), “The ‘Other’ Imbalance and the Financial Crisis”, Paolo Baffi Lecture, Bank of Italy. Caballero R. and P. Kurlat (2009), “The ‘Surprising’ Origin and Nature of Financial Crises: a Macroeconomic Policy Proposal”. Caballero, R. (2009), “Sudden Financial Arrest”, IMF 10th Jacques Polak Annual Research Conference. Caballero, R., E. Fahri and P-O.

Does that get to you? Draghi: I don’t take anything personally in my job. A polite and constructive debate is actually welcome and helps us to explain our policies. BILD: Really? Draghi: Yes. But one thing is clear: the ECB obeys the law, not the politicians. Or, as one of my predecessors put it, it is normal for politicians to comment on our actions. But it would be abnormal if we listened to them. BIS central bankers’ speeches  1  BILD: Does such criticism from the Finance Minister or from the German Vice Chancellor threaten the independence of the ECB? Draghi: No. But any perception that the ECB’s independence is under attack can unsettle businesses and consumers. They might then postpone investment and spending decisions that would be good for jobs and growth. That might force the central bank to do more to achieve price stability. BILD: Has the strength of the criticism from Germany also got something to do with the fact that you are an Italian, and what do you think of demands that the next President of the ECB must be a German? Draghi: There is really nobody in the world who is interested in the fact that I am an Italian apart from the German media. And what difference would it make if a non-Italian were now in office? None at all. He or she would pursue the same course as we do now. All other large central banks in the world are pursuing similar policies.
Looking after our money Speech given by Sir Jon Cunliffe, Deputy Governor Financial Stability, Member of the Monetary Policy Committee, Member of the Financial Policy Committee and Member of the Prudential Regulation Committee  University of Warwick Monday 26 February 2018  1  All speeches are available online at www.bankofengland.co.uk/speeches  I want to talk tonight about money. It is not something we talk about very much. We spend a lot of time talking about what we could, or should, do with money – who has it, who hasn’t, how it is distributed and so on. But money, the thing itself, rather than what it buys or does, is not really something we think about much. That is not surprising. Like other basic things we depend on in society – electricity, water supply, nowadays the internet – it only has to be reliable and safe. You don’t have to understand how it works. And yet, I suspect, we generally understand even less of what money, the ‘thing’ itself, actually is than we understand of the other basic essential technologies we use. While we use it every day, unless it goes wrong, we don’t actually notice it much. This is not new. J S Mill described money itself, for most of the time, as an ‘insignificant’ thing, simply a ‘machine for sparing time and labour… for doing quickly and commodiously’, only ‘exerting an influence of its own when it gets out of order’.

1  But it has not always been the case that we do not talk much about money itself. There have been times, times when the machinery of money itself has failed or when it has changed, that there has been debate, often long and bitter, about what money is and how it should work. th  The creation of the Bank of England itself, which caused much controversy, in the late 17 century, can be seen as ingenious marriage between the King’s fiscal needs and the economy’s need for a larger and a state authorised money supply using the new technology of ‘notes’ or claims drawn on banks. 2  The same period also saw a protracted debate about the debased state of the English coinage and how to fix the value of money, a debate involving John Locke among others and leading to a painful set of statutory and technological reforms carried out by Isaac Newton no less. The development of modern economies has been punctuated by debates about the nature and technology of money. 1  Milton Friedman made use of Mill’s characterisation of money as a machine when describing ‘what monetary policy can do’ in his seminal address to the American Economic Association in 1967. 2 In 17th century England, goldsmiths would take custody of their customers’ gold and issue a paper note in receipt.
The lower levels of yields would be expected to boost other asset prices as investors substitute into alternative asset classes. These patterns describe what researchers often refer to as portfolio balance effects. Such effects are important to consider, because they have implications for monetary policy. If the Fed’s holdings of assets have produced lower long-term interest rates, the FOMC has to carefully take into consideration how it will manage the size of its balance sheet going forward. In particular, a rapid and substantial reduction in our holdings of assets would likely push up long-term interest rates that is, it would put upward pressure on those rates by unwinding the portfolio balance effect. That increase in long rates would, in turn, weigh on other asset prices, reversing the positive effects that had been associated with the expansion of the Fed’s balance sheet. Under this view, the size of the Fed’s asset holdings becomes a relevant policy lever. Accordingly, this will be the first tightening cycle for which there are two broad policy decisions in play, as the FOMC will have to set out not only the path of the short-term interest rate, but also the path of its asset holdings. The decisions on these two variables will have to be made in conjunction with one another to produce the desired outcome for economic activity and inflation. These considerations leave open a range of outcomes for how the two instruments will be used.

The strategy to be employed has not been fully decided,  6  BIS Review 39/2010  but recent speeches by FOMC members and the recent FOMC minutes have begun to convey some of the possibilities. Many of the potential steps described seem to guard against the risks involved. For example, reducing the size of the Fed’s balance sheet through redemptions for now will produce a gradual adjustment that will be easier for the markets to digest. In addition, steps taken to drain reserves ahead of policy tightening may best ensure the success of interest on reserves at influencing other short-term interest rates. Overall, an approach along these lines should help to ensure a smooth exit from the current accommodative stance of monetary policy. Moreover, if the Fed’s intentions are well communicated to the financial market participants, they too should be fully prepared and in the best possible shape for navigating this exit. BIS Review 39/2010  7
Market-based measures include a time-varying risk premium that may explain the modest movements in that measure.6 In contrast to longer-run expectations, short-run and, to a lesser extent, medium-run inflation expectations responded to the sharp rise in inflation. The lower portion of Table 1 reports summary statistics for one-year-ahead inflation expectations from the Michigan survey and one- and three-year-ahead expectations from the New York Fed’s Survey of Consumer Expectations (SCE). Consistent with past experience, one-year-ahead inflation expectations have been highly sensitive to incoming inflation during the recent period. The sensitivity of three-year-ahead inflation expectations is far less than that for one-year-ahead expectations. And they have been significantly less sensitive to incoming information during this period of high inflation than during the period before the pandemic. This suggests households view the run-up in inflation in 2021 as likely being less persistent than in prior episodes.7 Although the SPF includes a longer-run forecast of PCE price inflation, most other measures of inflation expectations do not exactly correspond to the PCE price index that the FOMC has stipulated for its long-run goal. This complicates a direct comparison of these measures to the FOMC’s stated goal. For example, the SCE refers to the “rate of inflation,” and the Michigan survey refers to “prices in general,” rather than referring to a specific price index.

The second pillar has a considerable importance for inflation’s performance, particularly in the long-run. Inflation, in general, is a monetary phenomenon and as such, it depends considerably on the money supply and the pace this latter increases relative to the Gross Domestic Product. The right tie which exists between these variables imposes that the growth of monetary supply in the long-term not be faster than the growth of the economic activity, thus the central bank and its monetary policy not lead to inflation. BIS Review 117/2010  1  Having the maintaining of prices stability and the financial stability as main priorities, the Bank of Albania is determined to make all endeavours to encourage and play an active role in the convergence process of the country with the European standards. One of the steps to be made immediately in this direction is the compilation of a new economic growth model, which should avoid the weakness of the current model built on the increase and expansion of lending and consumption high levels rates. In May of this year, Bank of Albania held a scientific round table, which was concentrated in the identification of the economy sectors which may provide a stable economic growth in the future. The meeting concluded that the next model of the economic growth imposes the designing of a national strategy for the economic development. at home The next model should be based on the upsurge of output factors in all sectors of the economy.
Øystein Olsen: Managing wealth – some thoughts on economic policy and the allocation of national savings Speech by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), at a meeting hosted by the Norwegian Embassy, Rome, 29 November 2012. *  *  *  Introduction European economies are currently going through hard times, with repercussions of the crisis still being felt throughout the world economy. For all of us, it is a humbling experience to observe how closely interconnected markets and economies have become across national borders. My intention here this evening is not to point at solutions to the challenges currently facing the euro area. What I can offer, however, is the perspective of a friendly neighbour and a substantial investor. In this modest capacity, I hope to sound a note of optimism from a region of Europe that in its recent past went through a grave crisis, which was followed by a series of reforms and, eventually, the return of prosperity. The Nordic experience with the cycle of crisis, reform and recovery might provide some perspective for those European countries now facing similar challenges. I will also make some remarks on the current situation in financial markets in general, and government bond markets in particular, from the viewpoint of a global investor.

While other economies have been spared having to deal with the curse of cheap credit, US households and European sovereigns have, over the last decade, largely the same story to tell. Easy money is bad for you. 2  Speech by Mario Draghi at the Global Investment Conference in London, http://www.ecb.int/press/key/ date/2012/html/sp120726.en.html  BIS central bankers’ speeches  5  Throughout economic history, mobility of both capital and labour has been an important engine of growth. Today it is discomforting to see signs, albeit small, of financial protectionism. Walls are being erected between countries in the form of investment quotas, taxes and other measures. These walls harm borrowers, savers and investors alike. Norway is a rich country, and over the years we have benefited enormously from exploiting our bountiful natural resources. However, our future wealth is still conditional on a prosperous future for the whole world. Europe remains our most important trading partner, and still accounts for a large part of our financial investments. We have a large and direct interest in Europe’s success. European economies need to carry out deeper structural reforms to restore competitiveness and growth. The burden of high and rising debt will otherwise become too heavy to carry over time. Until these issues are clarified in more detail, the uncertainty and its associated risk premiums may persist in the market for some time to come. For Europe, it is now possible to see the light at the end of the tunnel.
On average, 750,000 jobs were added per month over the three months through August, and the unemployment rate now stands at 5.2 percent. At the same time, we’re seeing indications that the labor market recovery is being impaired by the recent COVID surge. Job gains slowed noticeably in August, with the weakening concentrated in sectors most sensitive to the pandemic, including leisure and hospitality. Health concerns, early retirements, and childcare challenges continue to weigh on labor supply. 1/4  BIS central bankers' speeches  Anecdotally, a lack of immigration and work visas is affecting labor supply as well. Another storyline that’s taken hold is the cycle of hires and quits in the labor market. Clearly, demand for workers is very high—we see this in an elevated number of job postings and hires. At the same time, people are leaving their jobs in large numbers, either to look for new work or exit the labor force altogether. These conditions reflect the extraordinary nature of the pandemic, and also illustrate that we still have a long way to go until we achieve the Federal Reserve’s maximum employment goal. In fact, there are over five million fewer jobs today than before the pandemic, and the unemployment rate is still far above levels reached early last year. When tracking progress toward maximum employment, it’s important to take two points into consideration. First, even if job postings are at a record high, job postings are not jobs.

In particular, they looked at longer-term inflation expectations and found that expectations of inflation five years in the future have barely budged over the past two years.2 This evidence is reassuring that, despite the highly unusual swings in inflation over the past year and a half, inflation expectations are still well anchored. In addition, measures of underlying inflation that are not overly influenced by the effects of the pandemic have remained stable. With underlying inflation and inflation expectations running at levels consistent with our 2 percent longer-run goal, I expect inflation to decline to about two percent next year as the pandemicrelated effects on prices subside. Still, there is a great deal of uncertainty about the inflation outlook, and I will be watching the data on inflation and inflation expectations closely. New York Conditions These numbers tell the story of the economic outlook on a national level. But the New York economy faces unique challenges, and they may be more serious relative to other parts of the country. New York State’s unemployment rate is well above the nationwide rate, and New York City’s is almost double the national figure. Private sector employment in the state is down nearly 10 percent, with the hard-hit leisure and hospitality sector down 27 percent. That said, the most recent data show signs of improvement: employment across the state grew at roughly double the nationwide pace in August, with outsized growth in New York City.
As I said to a group of foreign firms a few weeks ago, all firms, regardless of size, need to keep this information in mind and get better at planning in advance, ensuring their recruiting efforts are providing a steady stream of qualified candidates, and looking for opportunities to move people around within the organization, particularly between the front office and control functions, to develop more well-rounded professionals. This is likely to mean more aggressive, creative and targeted searches and a commitment to ongoing training. As the competitive landscape and regulatory requirements change, firms will need to find the right balance between hiring new talent with specific expertise and training current staff to keep them up to speed and capitalize on institutional knowledge. 3. Continuing to Build Resilience – Stress Testing and Risk Management: No, I am not suggesting that all firms, regardless of size, are going to be required to participate in CCAR. However, I believe that incorporating the motivating principles behind stress testing into your planning – namely thinking about the many ways that tomorrow could be different from today and what that could mean for your business – is at the heart of managing your risk and your business with foresight and prudence. Sound risk management demands a thorough understanding of the organization’s full risk profile today and how it could evolve tomorrow. 1  Employee Tenure in 2014. 2  Talent Report: What Workers Want in 2012.

The Federal Reserve’s role is to ensure that the institution has the necessary strong processes in place to achieve this objective. As risks emerge, supervisors intervene, within the realms of their safety and soundness mandates, to require that banks take corrective actions as necessary. Supervision can reduce the chance that a financial firm fails, but it can never provide a guarantee against failure. Supervisory policies have undergone important changes over the past few years, especially in the context of the largest financial institutions. Banking supervision no longer focuses solely on the safety and soundness of individual institutions – so-called micro-prudential supervision – but now also focuses on the implications for financial stability more generally. The evolving supervisory framework has resulted in a number of organizational changes in the way supervision is conducted at the New York Fed and in the Federal Reserve System more broadly. A very important change in the Federal Reserve System is that supervision of the largest, most systemically important financial institutions are now coordinated across districts through the Large Institution Supervision Coordinating Committee (LISCC). The LISCC is a System-wide committee, chaired by the director of the Board of Governors of the Federal Reserve’s Division of Banking Supervision and Regulation, and composed of senior officers at the Board and Reserve Banks. In addition, the Federal Reserve has instituted three major horizontal evaluations, which are a key element of the new enhanced supervisory framework for large banking companies.