samchain/econo-pairs-v1 huggingface dataset:
This is why I have spoken of the danger of fragmentation in payments akin to the Middle Age, with so-called “cryptocurrencies” having limited constituencies and acceptance. 3. But do we agree about the solutions? In principle yes: in order to avoid repeating past mistakes, we would need a collective momentum towards a stable and market oriented multipolar  Page 4 sur 7 International Financial System. A more multipolar IFS would help deal with the modern version of the Triffin dilemma: the supply of USD global safe assets is limited by the fiscal capacity of the US, while demand for them is bound to increase. It could also offer more monetary policy independence to Emerging Markets, by reducing the influence of US financial and real cycles spillovers. That said, the political conditions for such a major shift are not very favourable, to say the least: imagining the US, China and other major emerging economies converging today on a new IFS, while they didn’t for decades, could appear as utopian. Let me be more positive: we need to keep this concept of a more balanced multipolar system on the horizon, at least as a “creative frontier”. And we Europeans need to be active and committed on what depends on us. To move towards a more resilient global system, the euro should play a more important international role. It is a currency in a jurisdiction with solid democratic and stable institutions, including independent central banks and the rule of law.

Developing as an invoicing currency, for instance in energy markets or in the context of free trade agreements, would be important steps to gain a global role.viii Indeed, it would create the need to store euros for future trades, and consequently lead to the development of a full range of euro-based financial tools. 3. Safeguarding cross-border payments by technological advances in international financial infrastructures The euro area should remain on the frontier for cross-border payments, including the G20 agenda adopted in October 2021. The G20 roadmap for 2027 has indeed committed to bring profound improvements in this area including in setting ambitious targets on costs, speed, and accessibility of cross-border payments. But the challenge for all the stakeholders, central banks, regulators as well as the private sector, is to deliver and ultimately meet the expectations  Page 7 sur 7 of end-users. This remains a strategic priority for the Banque de France, which in parallel has paved the way for a more prospective solution: namely a wholesale CBDC that could be issued by the Eurosystem, deploying experiments such as the Jura project of cross border wholesale payments in coordination with the BIS and the Swiss National Bank. ** In the 1960s, US Secretary of Treasury Henry Fowler warned that "Providing reserves and exchanges for the whole world is too much for one country and one currency to bear." ix To Fowler, we answer: “We in the euro area are happy to help.” I thank you for your attention and I wish you a good forum.
This cyclical difference in the short-term interest rate prospect largely explains the pronounced yield differential between the US and the UK and the other countries at the very short end of the curve. Out to 2 years, for example, whereas yields in the US and UK are within ½% either side of 6%, yields in Germany and France are below 3½%, and they are below ½% in Japan. These differences in the short-term interest rate prospects feed through into yield differentials on longer term bonds, and changes in them also help to explain the recent movements in exchange rates. But rather more interesting is the relative slopes of the yield curves further ahead, US and UK yields are only about 1% above present short-term yields, at +/-7%; but they are 3% or more above present short term yields in Germany and France, also at +/-7%; and they are 3% higher than short-term yields even in Japan, at 3¾%. The implication is that, if you abstract from immediate cyclical influences, longer-term economic performance - and particularly performance with respect to inflation - is not expected to be very different between the major countries, though Japan remains an outlier. It is difficult to know what interpretation to put on this observation. The fact that the yield curves in Germany and France are practically identical is consistent at least with EMU going ahead - at least with a narrow membership.

Real yields, again measured by our own indexed gilts have fallen back to a little more than 3¼%; and the first US indexed bond issue yields much the same. And nominal yields have fallen by 200 basis points or more in continental Europe and Japan - though rather less in the United States and the UK. There has been more excitement in the foreign exchange market, with the dollar in particular first weakening against the yen and the major continental currencies until the spring of 1995 and then progressively recovering. BIS Review 22/1997  -2-  These developments were certainly influenced by the factors which I mentioned a moment ago. In particular they have been influenced by the continuing broadly-based consensus - in countries all around the world, and across a large part of the political spectrum within countries - on the importance of macro-economic policy discipline. Macro-economic policy is no longer seen as an instrument for short-term demand management, which can be used to trade-off the conflicting demands of growth and stability in the short run. It is now much more widely understood and accepted that the rate of growth that can be sustained, or the level of employment that can be achieved and maintained in anything other than the short run, depend fundamentally on the structural, supply-side, characteristics of the economy, and not just on the level of demand.
The assumption that the repo rate will develop in line with expectations in the financial markets should not be interpreted as a stance with regard to which interest rate path the Riksbank considers to be most desirable, just as the assumption of a constant repo rate was no reflection of this. If the forecasts of inflation two years ahead are on target, it means that the interest rate path expected by the market could be a desirable path for the repo rate. However, we must also evaluate the course for inflation and the real economy that the interest rate path is expected to entail. The monetary policy decisions and how we regard market expectations are based on a total assessment of these courses of events. Personally, I think the time is right to go one step further and publish our own interest rate path. My experiences of increased transparency have been only positive. As we have gone over to the new interest rate assumption, it has been a natural progression to abandon the simple policy rule that was previously used to explain monetary policy and relied on forecasts based on a constant repo rate. One purpose of the rule was that it would be simple to understand. However, it often did not provide a sufficiently good description of the monetary policy considerations. For instance, the policy rule did not give any guidance as to how the Riksbank views future interest rate developments.

Lastly, when participating in non-sovereign markets for the first time, a central bank might need to learn more about the asset class and build or refine the internal systems needed to operate in that market.11 In all these cases, a central bank might choose to diversify across different asset classes to achieve its policy objective. With these considerations in mind, I now want to turn to a discussion of the large-scale asset purchase programs pursued by the Federal Reserve. My focus will be on the Fed’s agency MBS purchases—which provide the central bank with an additional policy transmission tool and significant additional capacity to provide policy accommodation. Although the purchase of U.S. Treasuries is not central to my remarks, it is important to note that the Federal Reserve is fortunate in having a sovereign debt market that is the deepest and most liquid in the world and is sufficiently large that there are no close capacity limits. The experience with the three LSAP programs and the Maturity Extension Program showed that the Federal Reserve was able to purchase Treasuries at a fast pace without affecting market functioning. Before continuing to the main part of my discussion, I would also note that my intention is to consider the practical and operational issues surrounding the implementation of LSAPs, rather than to debate the merits of LSAPs relative to other potential monetary policy tools. There are a number of important issues linked to the potential costs of LSAPs but unrelated to these implementation issues.
Having given at our last policy meeting the assurance that we would continue this as long as is needed and at least until the beginning of next year, means that we have given the assurance to the banks that the easing policy will continue for quite a long period of time. Having said that, what we need to look at now is not the theory. We have to be pragmatic, and look at what works and what does not work. The objective of so-called additional measures would be to act where parts of the credit market are not working, the transmission mechanism is not working. A central bank may consider that at a certain point it is appropriate to intervene directly in these markets. At the moment, we have some signs that the transmission mechanism, in terms of interest rates in almost all segments of the credit market, works relatively well. All money market segments have seen interest rates go down very significantly. It is interesting to note that if  2  BIS Review 29/2009  you take the 3-month reference rates, there is only 30 basis points difference between the euribor and the dollar libor, and no difference vis-à-vis sterling, so that in practice the transmission is quite efficient in the euro segment. Finally, the possibility for corporates to issue securities – short term or long term – seems to have revived significantly since December.

In contrast, during the 9/11 attacks on the World Trade Centre, a sustained commitment by a large multinational financial service provider to strengthen its BCM and continuously improve its evacuation procedures over almost a decade, enabled it to reduce the time taken to evacuate its employees from four hours to 45 minutes, saving thousands of lives. Within the financial sector, a key focus of reforms since the global financial crisis has been on the development of recovery plans which aim to protect the continuity of critical functions and core business lines in a situation of financial stress. Work has also been initiated to implement this in Malaysia. Financial institutions are expected to develop a menu of options for recovering from events of severe stress in order to restore business to a stable condition. These plans must be regularly updated to reflect changes in a firm’s business model and operational arrangements. At its most basic level, recovery plans are helping financial institutions to better understand their operational and financial interdependencies and how this can affect recovery options that are available to the institution. Some institutions are finding through this process that their operations have become far too complex to support credible recovery strategies. These institutions are taking or considering steps to restructure parts of the business to achieve wider options for recovery.
Measures which set an upper limit for individual household indebtedness can therefore be effective in terms of reducing the risk of weak macroeconomic growth, even though the effects of the total debt-to-income ratio would be limited. The Riksbank’s previous analysis has also shown that a debt-to-income limit (that is to say a limit for how large debt can be in relation to disposable income) could be an effective complement to the current loan-to-value limit. 16 This is due to the fact that incomes grow in a more stable way than housing prices. Whenever housing prices increase sharply, there is a risk that debts will continue to increase in relation to incomes if the only limitation is a loan-tovalue limit. A debt-to-income limit is also more effective in terms of preventing interest payments taking up too large a share of incomes in the future. So those are the measures we could take. But what would happen to household indebtedness if no further measures were taken? A few different scenarios for household indebtedness Normally, the Riksbank creates forecasts regarding household indebtedness three years ahead. Making an assessment any further ahead than this would involve considerable  16  See the article “Debt-to-income limit as a policy measure” in the Financial Stability Report 2015:1, and Alfelt, G., Lagerwall, B. and Ölcer, D. (2015) “An analysis of the debt ratio ceiling as a policy measure”, Economic Commentary no. 8, 2015. Sveriges Riksbank. BIS central bankers’ speeches  13  uncertainty.

Tarisa Watanagase: The changing financial environment and implications for central banks Welcome address by Dr Tarisa Watanagase, Governor of the Bank of Thailand, at the 27th SEANZA Governors’ Symposium, Bangkok, 20 September 2008. *  *  *  Fellow Governors, Distinguished Guests, Ladies and Gentlemen, It is my privilege to extend a warm welcome to all SEANZA Governors and distinguished participants to the 27th Governors’ Symposium and the Central Banking Course. At the outset, I would like to take this opportunity to express my sincere gratitude to Mr. Jaime Caruana, the former Governor of the Bank of Spain, and currently the Counsellor and Director of the Monetary and Capital Markets Department of the IMF, who flew half way around the world to be with us today to share his views and enrich us with his experiences from a global perspective. This year’s theme of the Governors’ Symposium is “The Changing Financial Environment and Implications for Central Banks”. I believe you would all agree that the discussions on this topic couldn’t have come at a more appropriate time, given the current financial market turbulence we are encountering today. Right now, all eyes are focusing on what solution central banks will come up with to resolve the current global crisis.
(2) Considers implicit volatility on option from US S&P 500 index. Sources: Bloomberg and JP Morgan Chase. 4  BIS Review 97/2007  However, even if this is a normalization process, the dynamics, deepness and extension of market adjustment are difficult to foresee. As with earlier episodes of sharp increases in risk premiums and market volatility, some market segments and specific agents have found themselves unexpectedly in weaker financial positions, which generate tensions and doubts about particular entities’ risk vis-à-vis their counterparties. In this sense, beyond the slow recovery of the past week, the risk remains being a worsening of the international financial scenario if this correction deepens, with more severe implications on the functioning of the principal markets and global financial intermediaries and, ultimately, on world economic activity. Although this correction was triggered by the deterioration of sub-prime mortgage debtors’ payment capacity in the US, what is surprising is that the exposure to such deterioration has spread to financial entities elsewhere, causing tension in the trade securities market and even in the global interbank market. These mortgages were originated by companies specializing in mortgage loans; then they were sold to institutions that packed them as bonds collateralized by payment flows associated to these mortgages, to higher quality mortgages and to other credits. These bonds are known as ABS. With the increase in sub-prime mortgage delinquency rates, widespread uncertainty arose regarding the value of the ABSs because of lack of clear information on their content of sub-prime mortgage credits and the increase in payment delays.

Although this process of financial market normalization is part of a necessary correction, it is neither easy nor prudent to express what this correction will finally be like. What can be said with some certainty, however, is that volatility will be here for a while and will be associated to lost or reduced access to financing from non-banking financial institutions or even particular banks. The longer and deeper this adjustment, the larger the effects on financial markets and the world economy overall. The most likely final effects will be increased risk premiums (an inevitable or even healthy correction), a deeper and more prolonged adjustment in the US housing market, and some less economic growth in the US and in the world. Evidently, a deepening of these problems could be more hurtful for global growth and the commodity prices. This adjustment comes on after a long period of very expansionary monetary policies in industrial economies that had begun a normalization process. But still, one should not overlook the fact that this correction finds the world economy close to completing the best five-year growth period since the early seventies, with large commercial banks in a very solid position, enterprises with good profits and the main industrial economies with flexible exchange rate regimes, controlled inflation and central banks that have gained great credibility for their commitment to price stability.
Secondly, it is necessary that central government finances continue to be in surplus in the next 10-15 years, which can be used for amortisation. A lighter debt burden creates scope for future increases in costs. The government’s expenditure ceiling and balance targets aim at creating such space. At present, the prospects for growth in the economy are so good that the surplus in central government finances is expected to be sufficient to amortise central government debt at a rapid rate and to reduce income tax. The challenge lies in maintaining this ambition over a long period. It is therefore important that economic policy is focused on creating the conditions for growth. In this perspective, it would in my opinion be unfortunate to take decisions on a shortening of working hours since it would worsen the prospects for growth by reducing the supply of labour. By taking responsibility for stable prices and financial stability, the Riksbank can make a contribution to creating favourable conditions for long-term good and even growth. 1  BIS Review 98/2000  Stable inflationary prospects and free resources make possible low interest rates The strong upswing that we are now experiencing has been supported by the Riksbank being able to keep the interest rate at a relatively low level due to low inflationary pressure. Despite us being ahead of Europe in the cycle, we have an instrumental rate which is one per cent lower than in the euro area.

Total GDP growth for the three years 2010–2012 is just above 10 per cent, which is four percentage points more than growth according to trend of just above 6 per cent. What does resource utilisation mean to inflation and current monetary policy? Previously, I said that the Riksbank also strives to stabilise production and employment around development paths that are sustainable in the long term, and that by potential GDP I mean the level of GDP that is compatible with a utilisation of available resources sustainable in the long term and that will not push inflation up or down. As you know, the target for monetary policy is to keep inflation at a low and stable level. However, one problem when shaping monetary policy in practical terms is that the link between resource utilisation and inflation is not particularly clear. I will now discuss what resource utilisation means to inflation. 6  BIS Review 130/2010  In Sweden, the link between resource utilisation and inflation has been weaker since the mid1990s than it was previously. This is due to the fact that monetary policy has gained a high level of credibility. As long-term inflation expectations among households and companies are now solidly anchored around the inflation target of 2 per cent, there is simply not much scope for other variables to affect inflation. However, it is also due to the fact that inflation is affected by many other factors than resource utilisation, such as variations in energy prices, exchange rate fluctuations and changes in interest rates.
That said, in the second quarter of 2007 the euro area's GDP grew less than expected, although it held at levels in line with potential growth. The fundamentals underlying this growth pattern remain firm, so conditions are generally favourable for the continuation of the current economic boom. Significant in this respect is, firstly, the favourable trend of employment, which is a necessary, albeit not sufficient, condition for the increased buoyancy of private consumption in the area. Secondly, European firms on the whole enjoy a healthy financial position and are posting substantial profits, a situation which is conducive to the growth of private productive investment. In the external sector, however, most of the available forecasts point to a loss of steam in the US economy in the coming quarters. But this will be countered by the continued thrust of the  BIS Review 130/2007  1  emerging economies which, as stated, are showing notable resilience to the type of financial tensions currently at large. The sound economic performance of the area has, moreover, been compatible with continued low inflation rates. The rise evidenced by the September figure – which will probably continue in the closing months of this year and in the opening months of 2008 – is largely attributable to the more volatile components of the HICP.

Second, the progressive normalisation of the real estate market, against a background in which the demographic factor and the buoyancy of employment are lending greater support to housing demand than in previous property cycles, would limit the effect of slower house price rises on consumption and soften the impact of the cyclical change on residential investment. At the same time, the step-up in private- and public-sector investment in recent years has raised the level of capitalisation of the economy following a prolonged period of intense job creation, and this should manifest itself in higher long-term potential growth. Although it is unlikely that the expansion of business investment and non-residential investment in construction will maintain the pace of recent quarters, the growth outlook for both spending components is, at first sight, favourable. In any event, it seems unlikely that productive investment alone can offset the lower contribution from household spending. Hence, as I pointed out in my previous testimony, the role of net external demand will be fundamental in making some containment of spending compatible with a continued growth rate of around 3%. As we have seen in the last few years, the contribution of this variable to growth depends very much on the performance of Spain’s export markets, but also on the competitiveness of Spanish production.