samchain/econo-pairs-v1 huggingface dataset:
Should central banks lower interest rates below this bound, the effect on the economy may be contractionary rather than expansionary, owing to the adverse effects on the financial system as a whole.10 The level of this lower bound on interest rates is not directly observable and varies over time according to the financial sector’s situation. In any event, it represents the floor for central bank interest rate cuts. In Europe, the ECB’s deposit facility rate was already set at -0.5% before the COVID-19 crisis.11 In our statements, we have stressed that this rate could be further lowered in the future. Yet, taking a longer perspective, it seems clear that conventional monetary policy — i.e. that based on controlling the short-term interest rate — has less scope for action in the current context than, for example, a few decades ago. 10  See, for example, Brunnermeier and Koby (2018) for a discussion of the effect of interest rates on banks’ profitability and their ability to lend. 11  Arce et al. (2018) estimate that this level of negative rates does not necessarily reduce the supply of credit by European banks and in particular by Spanish ones. 14  The lower bound on interest rates generates significant asymmetry in monetary policy conduct. As I commented earlier, if inflation rises above its target, central banks may increase interest rates as much as necessary in order to “cool” the economy and reduce inflation to levels compatible with their target.

“October 2020 Bank Lending Survey in Spain”, Analytical Articles, Economic Bulletin, 4/2020, Banco de España. 20
There are several reasons for this:  4  BIS Review 65/2008  First, labour has flowed into Norway from other countries. The opening of the labour market to the new EU countries has provided us with access to a reserve of labour. Initially, workers came to Norway on short-term assignments. They produced in Norway, but their consumption largely took place in their home country, with an attendant increase in the economy’s net production capacity. An increasing number of workers subsequently moved to Norway and took up residence here, often accompanied by their families. This still increases production, although the higher number of foreign workers who want to settle in Norway also puts added pressure on domestic resources. Per capita output is not likely to increase as a result of this kind of immigration. Access to foreign labour may nonetheless relieve shortterm bottlenecks in some sectors. In 2007, the population increased by about 55 000, with net immigration coming to 35 000. This is the highest rise in the population ever recorded. This trend seems to have continued so far this year. BIS Review 65/1008  5  Second, businesses in Norway have become more efficient in their operations, resulting in lower costs. It has been profitable to hire more employees despite the high wage level in Norway. The business sector has made use of new technology and businesses have been restructured. The many sweeping reforms of the 1980s and 1990s – the fundamental shift in 1 the Norwegian economy – resulted in more efficient markets.

BIS Review 65/1008  9  There are signs of a cooling housing market throughout the country. House price inflation peaked about a year ago. For Norway as a whole, house prices have remained approximately unchanged over the past twelve months. There are nevertheless regional differences in house prices. House prices are rising fastest in Rogaland, and falling fastest in Hordaland and the inland regions. Housing investment gradually slackened through 2007, reflecting higher interest rates, rising inventories of unsold homes and increased construction costs. Several large residential construction projects have now been shelved. We also expect commercial property starts to show a gradual decline. 10  BIS Review 65/2008  Developments in capacity utilisation abroad have an impact on capacity utilisation at home. After several years of strong growth in the world economy, growth is slowing in a number of countries. Growth in the US seems to have come to a halt, and there are fears of a downturn. Growth is also slackening in many western European countries, but emerging economies such as China and India are still growing at a brisk pace. Inflation is picking up in many countries due to rising food and energy prices. Central bank key rates have been cut in the US and the UK to address deteriorating growth prospects. In the euro area the interest rate has been kept unchanged, while the Swedish central bank has increased its interest rate. Developments in the world economy will affect the Norwegian economy.
A few examples serve to illustrate the point (Figure 1). A first distinction is between interventions in the boom and bust phases of a credit cycle. Imagine that some information came along to suggest that the banking system, while adequately capitalised currently, will taken as a whole be stretched down the road if credit continues to expand rapidly. Assuming for the moment common information to the market and the authorities, in this case a macroprudential intervention to require banks to build up capital in order to underpin their resilience in the period ahead might add only a shade to the cost of finance, as banks lose a small proportion of their tax shield. And if banks choose to de-lever, shedding risk to achieve the temporarily higher capital requirement, that action in itself might slow the boom. Now imagine a scenario in which information came along to reveal the system was seriously under capitalised right now. Maybe a bubble had gone unnoticed until it burst or some banks or funds unexpectedly fail, revealing inadequacies in the regulatory regime. Once the market came to appreciate that capital levels were too thin, funding costs would rise sharply. In those circumstances, an injection of additional capital, if it could be achieved, could help to bring financing costs back down. Although reliance on relatively expensive equity would be increased, that is dominated by a large fall in the cost of debt finance as failure becomes a more remote possibility.

Whether it is liquidation or resolution that beckons makes a difference, as resolution can materially reduce both the private and social costs of bankruptcy. Relative to a world in which liquidation is a credible threat, having an effective resolution regime will tend to reduce the cost of bond finance and so increase its share in the capital structure. But as explained earlier, it will tend to raise the cost of bonds and reduce their share in the capital structure relative to a state of affairs in which government bailouts are confidently expected. Effective  5  See Kashyap, Rajan and Stein (2002), “Banks as liquidity providers: an explanation for the coexistence of lending and deposit-taking”, Journal of Finance, vol, 57(1), pp. 33–73. 6  See Kashyap, Lamont and Stein (1994), “Credit Conditions and the Cyclical Behaviour of Inventories”, The Quarterly Journal of Economics, Vol 109, Issue 3 (Aug. 1994), P565–592. That bank failure itself has wider spillovers, through impaired credit availability, is itself another departure from Modigliani-Miller, which assumes that all households and firms have symmetric access to credit markets. 7  In addition, the management of the bank will find themselves out of a job. In contrast to the managers of failed firms in other sectors, they face regulatory hurdles to re-entering the industry. That provides a clear incentive to avoid a fragile capital structure. As widely discussed, that needs to be reinforced by remuneration packages that expose their wealth to downside risks. Agency issues internal to banks are not covered in my remarks today.
Add to this that monetary policy interest rates are at their all-time lows, with which the capacity of central banks to increase the stimulus is also limited. In short, the tools traditionally used to boost growth have little room for maneuver in the developed world. Another source of risks that is being increasingly debated is the possibility of developed economies, especially the U.S., enduring a long time of slow growth. Excessive private debts, particularly of households, and public debt, combined with weak labor markets, are determinants of this assessment. This could shape a similar situation to that of Japan after the bursting of its housing bubble in the late 1980s, which gave way to a period of stagnation that has seen no end. Although we believe this to be an unlikely scenario, its consequences on the global economy could be severe. Amidst these conditions, emerging economies continue to grow strongly. The risks of overheating we saw only a few months back have diminished, partly because of the very action of the adopted economic policies and, especially, of monetary measures. There are still risks, however. For one, it is obvious that if developed economies continue to lag, the external demand facing the emerging world will fall, hurting their growth potential. Although in the current scenario some dynamism and a certain degree of decoupling are expected, this cannot go on indefinitely. Given the weakness of domestic demands in developed countries, they rely on their exports to grow and to resolve their global imbalances.

The reality is that many Asian governments and corporations receive credit ratings that are lower than the minimum thresholds acceptable to institutional investors, including the managers of official reserves. There is certainly merit in strengthening the dialogue between the Asian issuers and the international credit agencies to facilitate a better understanding of the Asian situation by the rating agencies and improve the transparency and accountability of the rating process. There is also a case for considering whether it is advisable or viable to establish national or regional credit rating agencies, with or without support from the authorities. On top of these, I think there is a need to consider the introduction of market-based mechanisms for credit enhancement or guarantees. In Asia, I am aware of problems encountered by private sector initiatives in this field. It has proved difficult objectively to assess and manage the risks involved in such operations. Indeed, one feature of the recent explosion of international finance is market volatility that has been much higher than had been thought possible in the light of historical experience. But I think we have learnt from the recent years of financial turmoil and I hope we are now in a better position to identify and therefore properly price the risks involved in the provision of credit enhancements or guarantees.
As a result cumulative transfers to HM Treasury have now reached over £ The direction of these transfers is, however, likely to reverse in the future under many possible scenarios, once the economy recovers from Covid and yields start to rise. The potential size and timing of any such reversal is uncertain and will vary depending on a number of factors, such as the total size and composition of asset holdings, the future path of Bank Rate and the path of any asset sales. In response to one of the IEO review’s recommendations the  On page 36 of the Bank’s 2019/20 Annual Report. The Bank has £ of total capital of which £ is loss-absorbing. Ultimately, the Bank is fully backed by HMT, who have committed to replenishing the Bank’s capital in those extreme circumstances where the Bank could take a material loss. 24 The exchanges of letters between the Chancellor and the Governor confirming the indemnity arrangements are available on the Government and Bank of England websites, as is the exchange of letters agreeing the cash transfer arrangements. 22 23  12  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  12  Bank will publish later in 2021 updated analysis of how such factors are likely to influence the size and direction of future transfers.25 Certainly the transfers are material and worth highlighting – but they are a side-effect of QE, not its goal.

Jean-Pierre Roth: Switzerland - a financial centre in the heart of the euro area Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the Belgian Financial Forum, Brussels, 16 February 2004. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  Switzerland is not a fortress. In relation to the rest of Europe in particular, it is an economy that is very much open to mutual exchanges - notably with regard to trade and finance. It is not by chance that Switzerland has become a major financial centre. This can be ascribed to a number of positive factors, including specialist knowledge, a long-established banking tradition, the quality of the financial infrastructure, and customers’ confidence in the soundness of the country’s financial institutions. Switzerland’s political stability, its high level of savings and the international standing of the Swiss franc have also enhanced the appeal of its financial system. Increasingly, however, Switzerland is not alone in offering such advantages. Moreover, the Swiss financial centre - like all the others - has to face the challenges of globalisation and the fight against financial crime. As banking secrecy does not afford any protection to funds of dubious origin, the Swiss authorities are able to combat money-laundering with a reasonable degree of efficacy. In this area, Switzerland has implemented measures that have received international recognition.
A key past case is the boom in issuance of Collateralised Mortgage Obligations (CMOs) in the run up to the 1994 mini-crisis, an episode that I tried – too timidly – to highlight in 2006.3 Of many examples from the run up to the recent bust , a great one is the late-cycle CPDOs – constant proportion debt obligations – which were rated AAA, paid around 200bp over money market rates, and had a big exposure to tail risk.4 And on the great awakening, Shleifer himself gives the example of a realisation about ABCP, ABS and so on in mid-2007 after subprime delinquencies had risen and faith – note, faith – in rating agency ratings of structured finance securities had evaporated. This exactly chimes with the market intelligence that the Bank was picking up in August 2007. I well remember Stuart Gulliver, now CEO of HSBC, saying to me very early on something to the effect of “anything with “ABS” or “securitisation” in the label is now toxic”. Indeed, Shleifer’s story, and the broader one told by Adair this evening, fits with the thrust of the Bank of England’s strategy towards Market Intelligence, framed in around 2002/03. This amounted to saying that we needed to think about markets somewhat differently when we are doing monetary policy and financial stability. For monetary policy, in most circumstances a reasonable default assumption is that core markets are more or less efficient most of the time.

Paul Tucker: Discussion of Lord Turner’s lecture, “Reforming finance – are we being radical enough?” Remarks by Mr Paul Tucker, Deputy Governor of the Bank of England, at the Clare Distinguished Lecture in Economics, Cambridge, 18 February 2011. *  *  *  Master, it is a real pleasure to be here this evening. And it is a real pleasure to kick off the discussion of Adair’s paper. We spend a great deal of time together – constructive and productive time – at international fora, and this evening Adair has typically provided a splendidly thorough survey of responses to the financial crisis. Adair casts it as about “Radicalism”. I don’t think it’s necessary to frame the issues in that way. In his monumental survey of the long-eighteenth century revolution of ideas and practice, Radical Enlightenment,1 Jonathan Israel argues that the “true” force of the Enlightenment was the democratic urge of a loosely allied group of thinkers underemphasised by mainstream historiography. But even if he is right, the so-called “mainstream Enlightenment” still, surely, turned the world upside down. One does not need to sign up to Whig views of history to believe that, by largely separating the world of enquiry from the world of faith, it set in train profound forces. But if I do not see a need for one of the organising rhetorical constructs of Adair’s lecture, I do most certainly think that we need to deliver fundamental change in the “rules of the game” for the financial system.
Borrowers will benefit from documentation that is easier to understand because it is written in (relatively) plain English and strikes an appropriate balance between the interests of lender and borrower. I understand that the Association’s documentation embodies both these concepts. It is important that the borrower community should buy into the new documentation. In this connection, it is reassuring to know that the new documents are based substantially on those of the Loan Markets Association (LMA) in London. These have already been widely adopted in the European loan market and were developed in association with the UK Association of Corporate Treasurers. I believe that it is also intended to seek input from the borrower community in Hong Kong to help further develop the documentation. Standardised documentation can therefore be described almost unreservedly as a good thing. This is subject to only two provisos. The first is that the basic documents will still need to be tailored to suit individual transactions - and the documents leave gaps for this to be done. This means that banks should not be lulled into a false sense of security. Legal advice will still be required for individual transactions, which should be good news for at least some of the people in this room. Second, the standard terms will need to evolve and be revised to take account of changing market circumstances and particular issues that arise. They may on occasions need to be tested in the courts.

Jan F Qvigstad: On institutions – fundamentals of confidence and trust Speech by Mr Jan F Qvigstad, Deputy Governor of Norges Bank (Central Bank of Norway), at the Norwegian Academy of Science and Letters, Oslo, 12 November 2013. The text below may differ from the actual presentation. This speech does not contain assessments of the economic situation or current interest rate setting. *  *  *  I have received valuable assistance in drawing up this speech, in particular from Mike Bordo, Arne Jon Isachsen, John Llewllyn and Anders Vredin outside Norges Bank, and from Norges Bank staff; Øyvind Eitrheim, Amund Holmsen, Marie Norum Lerbak, Inka Rogne, Øystein Sjølie, Birger Vikøren and Jan Fredrik Øksendal. I would also like to thank Helle Snellingen for the translation into English. Institutions The concept institution has many meanings. For example, there is an important distinction between its meaning as an abstract concept and as a concrete one. The judicial system in Norway is an institution in an abstract sense, while the Supreme Court is concrete. The Norwegian Opera & Ballet is a concrete cultural institution within our more abstract cultural heritage. In my own field, the monetary system is abstract whereas Norges Bank is concrete.
Speeches  Published Date: 09 March 2023  "Three New Drivers of Asset Markets" - Opening Remarks by Mr Ravi Menon, Managing Director of Monetary Authority of Singapore, at the IMAS-Bloomberg Investment Conference on 9 March 2023 Ms Jenny Sofian, Chair of IMAS Mr Steven Yankelson, Head of ASEAN for Bloomberg Ladies and gentlemen, good morning I am happy to join you at this annual conference in-person this year. Congratulations Jenny on your appointment as Chair of IMAS. IMAS has been working closely with MAS, to grow green finance, develop talent, and digitalise the asset management industry. We look forward to further strengthening this productive partnership. The investment business has never been more interesting – if by interesting we mean dealing with new uncertainties and unknowns. Let me highlight three key uncertainties that will drive financial market returns and risks: over the short term: inflation over the medium term: geo-economic fragmentation over the long term: climate change SHORT-TERM: INFLATION  In the short run, the key driver of risk and return is the trajectory of interest rates – which in turn depends on the inflation outlook and monetary policy response. The good news is that inflation seems to have peaked and come off a bit. The bad news is that it is still quite high. [1]  Global headline inflation appears to have peaked, averaging 5.6% in Q4 2022 compared to 6.0% in Q3. This has taken place in line with the sharp fall in food, energy, and logistical costs.

If we do this right, we can over time grow a strong Singaporean core in the technology functions – just as we have done in the broader financial sector. Thank you. © 2021, Government of Singapore.
Urban Bäckström: Monetary policy in a small open technology-oriented economy outside the major currency blocs Speech by Mr Urban Bäckström, Governor of the Sveriges Riksbank and Chairman of the Board of Directors and President of the Bank for International Settlements, at the Conference on New Challenges for Credit Markets and Monetary Policy, hosted by Handelsbanken and held in Stockholm, 18 May 2001. *  *  *  Thank you for inviting me to this conference and to discuss the Swedish economy and monetary policy with such a distinguished group of people. Today I intend to begin by looking back at economic developments in recent years in Sweden. That should help to put the current discussion about the Swedish economy in perspective. After that I shall be saying something about the economy's recent cyclical path and how I assess the future in the light of the information that is presently available. Economic policy realignment in the early 1990s The direction of Sweden's economic performance during the 1990s contrasts sharply with the unstable, inflationary path we experienced in the 1970s and '80s. That stop-go policy contributed to the recession in the early '90s, which was the worst for over sixty years. The 1970s and '80s illustrate how a long period of high and variable inflation creates an atmosphere of uncertainty and instability. Slowly but surely, long-term conditions for production deteriorate. It was partly in the light of these experiences that Swedish economic policy was realigned in the early 1990s.

Limited losses on subprime loans ultimately led to the destruction of millions of jobs throughout the world, and the links between finance and the real economy were cruelly laid bare. ii)  But finance can certainly not be considered “all powerful”: in my opinion, the world of finance only has the political power that State governments choose to give it. •  Granted, the difficulties some countries were facing, notably in the euro area, were exacerbated by financial market pressures – think back to the attacks on Italian debt in the summer of 2011. But if the markets were able to exert this pressure, it was because those countries had, in a sense, put themselves at their mercy by demanding that they finance their ever-expanding public deficits, even during periods of growth. •  In nearly all the crises faced by the euro area since 2009, it is true that market reactions were often brutal and even extreme. But these reactions were frequently based on legitimate fears: for example the sustainability of Greek debt, weaknesses in the institutions of monetary union and divergences in competitiveness between euro area Member States. Again, it was by failing to make the necessary efforts (to ensure budget discipline, preserve competitiveness or finalise the institutions of a European financial union, for example) that these countries put themselves in a position to be rushed or even pressured by the markets and bear the consequences of their overreaction. Governments should not use finance as an alibi or as a scapegoat.