samchain/econo-pairs-v1 huggingface dataset:
BIS central bankers’ speeches  7  Some notable points include:   Over the period 2010 to 2050, the average scale of capital inflows, relative to market capitalisation, for the G20 emerging markets is around 8% per year. That is greater than the peak inflow experienced in the recent past, including in 2010, during which time asset prices rose significantly and protective policy measures were put in place.   Given the likely variation in these inflows year by year, the picture is even more striking. Potential “peak” inflows are into double digits for the majority of G20 emerging markets. As context, peak portfolio equity inflows to East Asian countries in the three years preceding their 1990s crisis averaged 4% of market capitalisation.   For some individual emerging market countries, these capital inflow patterns are dramatic. For example, over the period 2010–2050, average inflows to India and Indonesia exceed 10% of their equity market capitalisation. Taken together, these projections do not suggest a dissipation of the BFSP problem. More likely, they suggest it could intensify, perhaps significantly, in the period ahead. If capital markets operated efficiently, these portfolio flows need not cause waves in emerging credit and asset markets. In practice, frictions in the functioning of these markets mean that asset market spillovers seem very likely to persist. In other words, the splashes from the big fish risk causing waves every bit as great, and potentially greater, than those seen recently.

Over the past decades, LIBOR has been so widely used and deeply ingrained in our global economy that the pricing and return of a broad range 1/4  BIS central bankers' speeches  of financial products were referencing to this critical benchmark. To help us tackle this complex exercise and further expedite our transition progress, collaborative efforts would be key. This means that – not only banks, sell-side and buy-side institutions should continue to push forward with their preparatory work, but also their corporate and SME clients should step up the transition efforts. 7. To facilitate a smooth transition, tremendous efforts have been put in by various industry associations in the past few years. Alongside their close engagement with industry stakeholders, they have developed useful resources and materials to promote greater awareness and readiness. In this respect, we strongly encourage market participants to draw reference from these industry publication, and make good use of the existing tools available when preparing for the transition. 8. With that, I would like to highlight and draw your attention to a joint information note published by the Asia Pacific Loan Market Association (APLMA) and Treasury Markets Association (TMA) last month, which sets out the key options available in the loan market for replacing US dollar LIBOR. We hope that, with this publication, loan borrowers and market participants could develop a better understanding on the characteristics of these options, and make timely action to transition away from LIBOR. 9.
And I will also touch on what role other policies might play in supporting growth, here in the North-East and nationally, in particular when it comes to boosting skills, innovation and productivity. A Two-Car Economy I want to set the scene by describing an imaginary economy. Now I know what you are thinking – typical economist, head in the clouds, aimlessly theorising without any grounding in the real world. But bear with me on this one, as I think my stylised economy might help in making sense of the real world to which I promise I will then return. This imaginary economy comprises, for simplicity sake, two regions - Red Car region and Blue Car region. These two regions have quite different economies. The economic make-up of their firms and households is  1  BBC News October 2015, ‘SSI Redcar Steelworks to be shut’. 2  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  2  different in terms of their production processes and spending patterns. So too, as a result, is the level of activity, income and productivity in the two regions. Red Car region comprises a set of firms who make red cars. To do so their production processes rely on few machines and lots of workers. Because there are few machines, the workers employed do not need especially high skills. And because firms employ lots of these lower-skilled workers, their levels of productivity – the number of cars produced per worker – is relatively low.

A corollary fundamental principle in the design of monetary policy in this environment is that – in order to avoid a long-term de-anchoring of inflation expectations – easing measures must be sufficiently pre-emptive to guard against a further downward drift in inflation dynamics. Furthermore, under conditions in which policy rates are likely to rise only gradually over time, fiscal measures have an especially powerful macroeconomic impact, both by providing stabilisation in the event of adverse shocks and by supporting the return of inflation to our aim. In conclusion, I have briefly described some of the forces shaping the ECB’s current monetary stance. However, there are still many open questions that are raised by the combination of low interest rates and low inflation. Accordingly, this year’s review of our monetary policy strategy provides an excellent opportunity to take stock, reflect on our experiences and listen to a wide range of external voices. 1 For a more detailed discussion, see: Lane, P. R. (2020), “The monetary policy toolbox: evidence from the euro  area”, speech at the US Monetary Policy Forum, New York, 21 February; and Lane, P. R. (2019), “ Determinants of the real interest rate”, remarks at the National Treasury Management Agency, Dublin, 28 November. 2/2  BIS central bankers' speeches
We have to demonstrate the same spirit with which the European Union was progressively developed over the past half-century: setting objectives, agreeing deadlines and mobilising the necessary political will within Parliaments. Europe’s governments are committed to pursue fiscal consolidation. Those within the euro area have formally declared that they will take “all measures needed to meet fiscal targets this year and the years ahead in line with excessive deficit procedures” (Euro area heads of state or government declaration of 7 May 2010). Some of them have made precise additional commitments to accelerate fiscal consolidation and ensure the sustainability of their public finances. Fiscal consolidation is being put in place at the same time as we strengthen the resilience of the European banking sector. Publication of the detailed results of a harmonised panEuropean stress test is an important step in the right direction. These tests will increase transparency and enhance investors’ confidence in Europe’s banking sector. They will also contribute to restoring the important intermediation role of the interbank market in channelling funds within Europe. 3. Where next? So where do we go from here? As I have indicated, collectively as European and global policy-makers, we need to ensure economic recovery and renewed confidence, while reducing fiscal deficits and remaking the financial system into one that supports the real economy. This needs to be our clear sense of direction. 1  Keynes (1937), “How to avoid a slump”, Article in The Times, 12 January 1937.

Jean-Claude Trichet: Recovery, reform and renewal – Europe’s economic challenge Speech by Mr Jean-Claude Trichet, President of the European Central Bank, at the conference “The ECB and Its Watchers” XII, Frankfurt am Main, 9 July 2010. *  *  *  Ladies and Gentlemen, It is a pleasure to be with you in this 12th edition of the ECB Watchers’ Conference. Today, I would like to consider where we are in the financial crisis and the economic recovery; to describe the emerging contours of the post-crisis order both in Europe and the wider world; and to reflect on what has been achieved by the global policy response to the crisis and what remains to be done. 1. Where do we currently stand in the crisis? We are now almost three years into the crisis. The development of the crisis was marked by a progressive collapse of confidence: a seizing up of markets, dramatic financial events impacting the global financial system, a sharp decline in trade and a freefall in economic activity in the industrial world. We can all feel relief that the collective international efforts to avert catastrophe in the winter of 2008/09 have been successful. But events over the past few months have made clear that it is still too early to declare the crisis over. And, just as they have done throughout the crisis, governments and central banks in Europe and around the globe continue to respond to shifting economic and financial circumstances with swift, decisive and effective action.
And hence the commitment I reaffirm today to bring inflation back towards 2% by 2025, is consistent with the full transmission of the monetary tightening at work until summer 2023. b. Against this backdrop of significant transmission "in the pipe" and still to come in real economy, a deceleration in the size of the policy steps (from 50bp to 25 bp) was wise and cautious. We obviously keep our hands free, but we add the capacity of observing and monitoring the pass-through of our massive past hikes. Persistence is now more important than speed; the duration for which we will maintain rates is now more important than the precise terminal level we will reach. Or in other words, for interest rates as with ballistics, "longer" is becoming more significant than "higher". c. Hence, our next rate decisions should not focus such attention; we already have completed most of our rate-hiking journey, and we are clearly in restrictive territory. That said, as I said already last January, I expect today that we will be at the terminal rate not later than by summer, which starts in June and ends in September. Hence we have three possible Governing Councils either to hike or to pause; but don't deduce a guidance from this or a preference for a given terminal rate. We will remain data driven, looking meeting by meeting at the outlook for headline as well as for underlying inflation. Monetary policy is at work and rest assured, we'll do the job: we'll bring inflation back towards 2%.

Nonetheless, for the time being, the size of these adverse effects can only be estimated with an extraordinary degree of uncertainty. Naturally, this will depend on the severity and duration of the conflict. Second, in such an extraordinarily uncertain scenario, caused by a shock that has little to do with economic fundamentals, it is vital that economic policy should respond forcefully, providing support focused on the most vulnerable affected households, firms and sectors, as well as certainty. In particular, in response to a shock of this nature, the contribution of supranational European policies and national fiscal policies is fundamental. For their part, the latest decisions taken by the ECB are the result of an analysis that weighs up the different risks arising from the current context for our price stability target. The measures agreed strengthen the data-dependent nature of our decisions, increase the flexibility and optionality available in our various monetary policy instruments and provide certainty to economic agents as a whole, with a clear commitment to adopt all the measures that may be needed to fulfil the ECB’s price stability mandate and to safeguard financial stability. Third, the sharp rise in the prices of energy and certain other commodities at global level in recent quarters, which has intensified as a consequence of the conflict in Ukraine, entails for the Spanish economy – a net importer of these products – a negative shock to our terms of trade. This reduces national income and raises inflationary pressures in the near term.
As all risk managers know, you can’t manage what you can’t measure. This is equally true in the area of misconduct risk. At the same time, while hard data is important, I don’t believe it is sufficient to convey all of the complexities of a firm’s culture or all of the ways it can impact business outcomes. In recent years, we have seen firms develop dashboards that seek to bring together various metrics from across their organization. This is an important and necessary step. Data sources that we’ve seen include internal quantitative information such as compliance and policy violations, completed trainings, audit results, and risk metrics like limit breaches, policy violations and external metrics like customer complaints, stakeholder perceptions, and client surveys. There also are qualitative data based on employee surveys. Some firms have begun to do more frequent pulse surveys with small cohorts of staff. Other firms have found that long-term trends are more insightful than short term changes. These types of data, while necessary, are not sufficient to make progress. Supplementing hard data with interviews, focus groups, dialogue, and external benchmarking can greatly enhance an organization’s ability to manage and strengthen its culture. Measurement and metrics are best used as a starting point to spur further analysis and probing as boards and senior management seek to identify trouble spots and build strong cultures.

Across the world, the prices of all kinds of assets have risen - not just of government bonds, but also of equities, houses and other real estate, commodities and gold and other precious metals. Moreover, risk premia have become unusually compressed and the expansion of money and credit may have encouraged investors to take on more risk than hitherto without demanding a higher return. It is questionable whether such behaviour can persist. At some point the ratio of asset prices to the prices of goods and services will revert to more normal levels. That could come about in one of two ways: either the prices of goods and services rise to “catch up” with asset prices as the increased money leads to higher inflation, or asset prices fall back as markets reassess the appropriate levels of risk premia. In neither case would it be easy to keep inflation close to the 2% target. I do not pretend to know whether the signpost of low levels of long-term interest rates is primarily related to underlying preferences for saving and investment, or to the global growth of money and a possible under-pricing of risk, or, in all probability, to some combination of the two. Nor, since we do not know the causes of low long-term rates, can we be sure for how long they will persist.
As has happened under different circumstances, any movements of the exchange rate away from the trend assumed as a working assumption is possible in a floating regime, and its potential effects on the financial system, output or employment will be considered by the Board as inputs for their future decisions. Summarizing, for the rest of this year, annual CPI inflation is expected to return to figures around 3% to then move to the upper limit of the tolerance range for some months. This short-term trajectory is influenced by one-time effects, which will eventually revert, permitting inflation to hover around 3% throughout 2011 and to the end of the relevant projection horizon, this time the third quarter of 2012. Y-o-y CPIX1 inflation will describe a more gradual convergence to 3%, largely because the shorter-term effects on inflation are concentrated in items outside the CPIX1. Private expectations are not very different from this (figure 10). The Board estimates that it will continue withdrawing the monetary stimulus at a pace that will depend on how domestic and external macroeconomic conditions unfold. This process of MPR normalization was begun in June and continued in the meetings of July and August – with increases of 50 basis points each time – taking the MPR to 2% y-o-y. Going forward, the market has internalized a process of withdrawal of the monetary stimulus in the coming quarters. This is consistent with the progressive normalization of credit conditions, which is visible in various markets and indicators.

Jean-Pierre Roth: Rising oil prices – a challenge for monetary policy? Speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, Déjeuners de la Finance, Geneva, 2 November 2005. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  Despite oil prices being at a historically high level, inflation has increased only slightly in recent quarters and growth appears to be robust. Are we to assume, therefore, that oil no longer plays an important role in today’s economic environment? What challenges does the current situation pose for monetary policy? For the first time, the steady rise in energy prices is not the result of a political boycott by oil-producing countries, but of an increase in energy demand, coming in particular from the newly industrialised countries in Asia. In other words, the rise in crude oil prices this time can be attributed to the strong growth in global economic activity. This does not mean, however, that the role of monetary policy has changed. Although core inflation currently appears to be under control in most countries, a persistent and continuous rise in energy costs could have an effect on all prices and wages in the long run, thereby jeopardising monetary stability. Notwithstanding the low level of inflation (excluding energy prices), it is vital that the monetary authorities maintain a forward-looking stance so as not to put their credibility on the line and to ensure long-term price stability. 1/1
I am confident that the FOMC’s plan will promote good market functioning in the Treasury and agency mortgage-backed securities markets as the portfolio declines, and that it will not prove disruptive to the U.S. mortgage market or the U.S. Treasury’s debt management program. And I am also confident that the plan’s design, and the FOMC’s clear communication prior to the plan’s implementation, will mitigate the risk of sharp or outsized asset price reactions to the decline in the portfolio’s size over time. I want to expand on this last point. We cannot and should not prevent Treasury and MBS prices from reacting to relevant economic and financial developments, or indeed from gradually moving over time in response to the progressive decline in the size of the Federal Reserve’s holdings and consequent increase in the amount of securities held by the private sector. In fact, we actively want asset prices to respond appropriately and fully to economic and financial news. Over the coming years, such news could span a wide variety of topics, such as central bank policy in this country and abroad, the ongoing debate over fiscal policy, and the evolution of expectations for the longer-run neutral rate of interest. That said, we do seek to mitigate the risk that our operational actions contribute to unnecessary surprise, disruption, or volatility. I am confident that the FOMC’s plan appropriately manages this risk. Now, confidence doesn’t mean certainty: there is always a risk that events could unfold differently from expectations.

First is Mainland authorities’ efforts to connect the interbank and exchange bond markets, which will allow participants in each market to access securities in the other market through an infrastructure connection without having to open separate accounts. This should ultimately be beneficial to the growth of both the CIBM and exchange bond markets, thus creating a bigger pie. 15. Foreign investors who access the interbank market through Bond Connect or CIBM Direct will be able to trade in the exchange market, which is the platform where most non-financial corporate bonds are lodged. The construction of the system linkage between the onshore infrastructure institutions is under way. Upon completion, the HKMA’s Central Moneymarkets Unit will explore with the Mainland side on the system enhancements required for Bond Connect investors to participate in the exchange bond market. 16. This development moves closer to having a single access point to the onshore bond market and will further open up access to the fast-growing credit bond market which remains relatively untapped by international investors. This presents an opportunity for investors to look further along the credit curve for diversification and yield. Relatedly, the entry of foreign firms into the onshore credit rating business is expected to facilitate this process, speed up the convergence of local and global ratings standards, and enhance foreign investors’ analysis of corporate credit. 17. Secondly, Mainland and Hong Kong stock exchanges have reached an agreement to include eligible ETFs in the Stock Connect scheme and technical preparations are under way.
4  BIS central bankers’ speeches  Economic environment and the introduction of the minimum exchange rate Now I’d like to discuss the motivation for introducing the minimum exchange rate. The rate was not implemented to stimulate exports, but rather to ensure that the appropriate monetary conditions prevailed and that the SNB could fulfill its mandate of price stability. The European sovereign debt crisis escalated dramatically in the summer of 2011. It became increasingly evident that, in addition to Italy and Spain being engulfed by the crisis, France also was potentially exposed. At the same time, the debt-ceiling negotiations in the United States and the consequent downgrade of the U.S. by Standard and Poor’s added to the tension. During these months, the Swiss franc appreciated rapidly against all major currencies. This development is shown in Figure 5 for the exchange rate of the Swiss franc against the euro and the U.S. dollar. The increase in the value of the franc, which reflected market panic rather than economic fundamentals, drastically tightened domestic monetary conditions. With annual inflation already close to zero, Switzerland risked falling into a deflationary trap. What policy options were available? The massive Swiss franc appreciation left the SNB with few options to combat the restrictive monetary conditions. As a result of the response to the global financial crisis of 2008/2009, our policy rate was already at the lower bound.

In so doing, it exports capital abroad and runs a current account surplus, so that it can smooth its consumption in the future when the labor force shrinks. Similarly, a young emerging economy chooses to save less than it invests, attracting foreign investors, and running a current account deficit. It does this to increase its current consumption and its future output. Prescribing maximum levels for current account surpluses and deficits completely ignores the fact that countries operate within different structural environments. If we do not allow countries to smooth their consumption over time, why do we allow individuals to smooth their consumption by letting them take out loans or invest in foreign companies? Certainly, it is a difficult question. What is considered to be a sustainable current account deficit or surplus? One thing is sure – forcing countries to adhere to an arbitrarily chosen range and ignoring their structural factors, the measurement biases, and their savings characteristics is not an appropriate strategy in an international economic order which is still based on the principle of free markets and free trade. 10  11  See www.bloomberg.com/news/2010-10-22/geithner-push-for-g-20-trade-gap-targets-opposed-before-g-20talks-start.html. Between 1980 and 2012, the current account balances of the G20 countries were outside of the –4/+4 range 23.4% of the time, while for OECD countries the range was exceeded 34.9% of the time. 12  For more information regarding accounting bias in the Swiss current account, see IMF (2011, 2012): Switzerland Article IV report.