samchain/econo-pairs-v1 huggingface dataset:
Earlier in the program, we ended up purchasing a large concentration of off-the-run securities, including bonds that were issued 15 to 25 years ago. Given their age, these bonds are generally less liquid and less valuable to market participants, and hence dealers were willing to sell them to us at cheaper prices relative to other securities. At more recent operations, however, we have received a greater share of offers to sell more recently issued Treasury securities, including on-the-run issues, and our purchases have shifted accordingly. This suggests that older, off-the-run securities may have become harder for dealers to obtain, and that they have increasingly found it appealing to offer more recent issues, which are available in greater supply and are generally more liquid. Our procedure allows this shift to take place, as long as the more recent issues are offered to us on generally favorable terms. Overall, the Desk has endeavored to implement the FOMC’s policy decisions in a manner that ensures competitive and appropriate prices for the securities obtained and that maintains the efficient functioning of financial markets. I believe that we have managed to accomplish these objectives with our operations to date. Market developments during the purchase programs Of course, the operational objectives discussed above do not speak to the broader policy objectives of the asset purchase programs.

We do admit that the higher interest rates affected the stock market and property market. But we should also remember that high interest rates are necessary to cool the overheating in the asset markets that prevailed until recently. Given the excess demand situation in Hong Kong as the economy grew by 6.4% in the second quarter, a correction was expected. A moderation in property prices will help bring houses to more affordable levels to homebuyers. 34. Higher interest rates will also bring down inflation, by encouraging savings. Once inflation and the asset markets correct under the free market regime, Hong Kong will become much more competitive. In real effective exchange rate terms, the competitive effect of neighbouring depreciation will be offset somewhat by a rise in domestic inflation. Higher interest rates will also bring the external account more in line with the fundamentals and improve the trade balance. Hong Kong, as a free market economy, is adjusting exactly according to the textbook. 35. Moreover, our banking sector is very robust and strongly capitalized to withstand any shocks. Operating profits of the local banks grew by about 18% in the first half of 1997 and the bad debt charged fell in the first half of 1997 as the level of classified loans was 2.08%, down from 2.91% a year earlier. The capital adequacy ratios of local banks as a whole exceeds 17%. The average loan-to-value ratio is 70%, with the actual measured loan-to-value ratio being 53.3%, according to our survey at end September 1994.
Therefore, we envisage no significant pressure on unit labor costs in the upcoming period. In light of these assessments, our revised inflation forecasts are based on a framework in which domestic demand is stronger compared to the previous period, external demand continues to restrain domestic economic activity, and thus aggregate demand conditions continue to support disinflation, albeit to a lesser degree. 10  BIS Review 159/2010  As for fiscal policy, MTP (Medium-Term Program) projections revised in October constitute the basis of our forecasts. In this respect, we envisage a temporary acceleration in public expenditures for the rest of the year, to be followed by a gradual decline in the ratio of primary expenditures to national income starting from 2011. We also assume that any fiscal space that may arise due to stronger-than-expected economic activity would partially be used to reduce government debt stock, congruent to the counter-cyclical fiscal policy approach. It was envisaged that the ratio of debt stock to GDP would continue to decline and no significant change would be observed in the risk premium throughout the forecast horizon. Moreover, our forecasts are based on the assumption that tax adjustments would be consistent with the inflation targets and automatic pricing mechanisms. Distinguished members of the press, Important developments since the July Inflation Report warranted a revision of the assumptions, which our forecasts are based on. I would like to provide some detailed information on these factors to ensure that our forecasts are better understood.

At this point, I would like to underline once more that any new data or information regarding the inflation outlook may lead to a change in the monetary policy stance. Therefore, I would particularly like to highlight that assumptions regarding future stance of monetary policy underlying the inflation forecasts should not be perceived as a commitment on behalf of the CBT. 4. Risks  In the last part of my speech, I would like to elaborate the risks regarding the inflation outlook in the upcoming period and prospective monetary policy strategies to be implemented should these risks materialize. Developments regarding global economic activity would continue to be the main factor shaping inflation dynamics and the monetary policy outlook. Recently, leading indicators of economic activity continue to slow down, underscoring downside risks especially regarding the US economy. Furthermore, ongoing problems in credit, real estate, and labor markets across developed economies and uncertainties regarding the impact of fiscal consolidations suggest that the downside risks regarding the pace of global growth are likely to persist for some time. Should the global economy face a longer-than-anticipated period of anemic growth, the monetary tightening envisaged to start in the final quarter of 2011 under the  14  BIS Review 159/2010  baseline scenario might be postponed. Moreover, an outcome whereby global economic problems intensify and contribute to a contraction of domestic economic activity, may trigger a new easing cycle.
It is possible that the behaviour and incentives of an insurance company evolve in a way that does not take account of the interests of policyholders, not least because the best interests of the shareholder and the policyholder are not perfectly aligned. The receipt of premia before claims have to be paid can introduce perverse incentives for struggling insurers in particular. For instance, faced with the prospect of failure, there is a risk that insurers begin to invest in high-return but riskier assets, or rely on unsustainably priced new business to ride the tide, without being called to account by the market 1. This looks dangerously like a “gamble for resurrection”, which might in some circumstances be a rational strategy for shareholders but is unlikely to serve policyholders well. Moreover, the inability of policyholders to transfer their policy or amend the terms of what is essentially an infungibile contract limits the extent to which they can maintain the best deal. Furthermore, it is difficult for policyholders to assess the true soundness of any one firm. The absence of a tough claimholder therefore necessitates the existence of some objective standard by which insurers can be assessed – in today’s environment, this most often takes the form of being authorised by a supervisory authority that subjects firms to legal regulatory standards. Of course, this standard will always be imperfect – but I think it is far better than nothing.

Not surprisingly, the comparison between different types of cards shows that debit card transactions cost less than those initiated with charge and credit cards. However, the comparison is not entirely fair. We should bear in mind that these cards provide different types of services. Debit card transactions are also cheaper for the issuing bank than the distribution of cash to the public through the ATM system. The variable costs for cash withdrawals vary, depending on whether or not the ATM terminal and the card are owned by the issuing bank. On average, the variable cost for the bank of a cash withdrawal is 1.30 Swedish kronor, to be compared with the cost of 0.23 Swedish kronor that the issuing bank has for a debit card payment. Cash withdrawals are, however, less expensive than charge and credit card transactions. As regards the second question we posed, regarding the functioning of the price mechanism, our results show that users receive very little information through the price structure on the costs that banks have in the provision of payment services. The average Swedish bank does implement a twopart tariff, as was our assumption. However, the problem is that for a large number of payment instruments the variable fee is set to zero, although our study indicates that marginal costs are above zero. On the whole, with the exception of debit card transactions (on the acquirer side) and direct debits, variable costs and fees differ significantly.
But following the crisis and the emergence of a macroprudential approach, this need has become even more evident. Important issues to resolve in the coming years are how responsibility should be allocated between different authorities to facilitate this coordination, and what forms the cooperation should take. It is of central importance that the mandate is clear and the tools are well-defined, particularly to enable evaluation and to ensure accountability. An unusually interesting time I have now been a monetary policy decision-maker for quite a long time – almost 12 years. A lot has happened during this time, both in the Swedish economy and internationally – including normal upturns and downturns in economic activity and a number of crises in various parts of the world. The way we conduct monetary policy has also changed quite a lot. But, when seen in a broader perspective, the changes have perhaps mostly concerned details – that we have further developed the inflation-targeting policy that has always been at the core of our work. There is of course no doubt that the recent crisis has been the most dramatic one during this period. But I also have the impression that it has affected thinking about monetary policy and the central banks’ activities in general, in a way that I have not experienced before. It is not  8  BIS Review 164/2010  about us needing to throw away the old and find something completely new.

Third, as suggested by recent research by the Bank for International Settlements (BIS) [1] , soft landings are more likely when the number of job vacancies is high and when policy tightening is front-loaded. These conditions seem to be in place, at least in the US economy. The bad scenario is a longer and deeper recession – a “hard landing”. What are the risks of this happening? First, as pointed out by the BIS, when private sector debt levels are high, monetary policy tightening can trigger feedback loops through financial institutions and markets that intensify the downturn. The BIS estimates that private debt service ratios in the advanced economies could rise sharply to pre-global financial crisis levels if policy rates were to increase by the same extent as the US Fed’s tightening in 20042006. [2] Second, labour supply may continue to remain weak. Labour force participation and non-resident labour flows may not fully recover to pre-pandemic levels. This means  continued labour market tightness and wage pressures, and therefore more aggressive policy tightening to stabilise inflation. Third, fresh supply disruptions from the war in Ukraine remain a key risk. A cessation of gas supplies to Europe will likely have strong knock-on effects on global energy prices. WHERE IS INFLATION HEADED IN THE MEDIUM TERM? The medium-term inflation outlook is likely to be “higher-for-longer” compared to the past decade of low and benign inflation. Global inflation averaged 3.8% per annum during the last two decades (2001-2020).
SPEECH DATE:  31/05/2021  SPEAKER:  Governor Stefan Ingves  VENUE:  Swedish Economics Association  SVERIGES RIKSBANK SE-103 37 Stockholm (Brunkebergstorg 11) Tel +46 8 787 00 00 Fax +46 8 21 05 31 registratorn@riksbank.se www.riksbank.se  New financial environment - how is the Riksbank meeting the new challenges?1 Thank you for inviting me here to the Swedish Economics Association to speak again this year. I always enjoy coming to speak to you as it gives me the opportunity to discuss a subject in greater depth. But this year I intend to take a somewhat broader perspective and talk about the Riksbank's three main business areas: payments, monetary policy and financial stability. In the public debate, there is often a tendency to focus on one area at a time. Recently, for instance, payments have been in focus as a lot is happening in the payments market. Monetary policy is almost always in focus, but often without mentioning that financial stability is a necessary condition for price stability. But it is fairly natural that this is the case, if only because it is difficult to be an expert in all of these areas at the same time. During my professional life, I have had the privilege of being responsible for each of these areas at some point. I have also experienced what it is like when one of them is not functioning, and how this affects the other areas. This has helped me to better understand how the different areas are inter-dependent.

Miles D. (2014), “The transition to a new normal for monetary policy”, speech, Bank of England, 27 February 2014. Nilsson, C., J. Söderberg and A. Vredin (2014), “The significance of collective pension saving for the Swedish financial system”, Economic Commentaries, No. 3, Sveriges Riksbank. Rajan, R.G. (2005), “Has Financial Development Made the World Riskier?”, in The Greenspan Era: Lessons for the Future, Federal Reserve Bank of Kansas City Economic Symposium at Jackson Hole. Rey, H. (2015), “Dilemma not trilemma: the global financial cycle and monetary policy independence”, NBER Working Paper, No. 21162. Schoenmaker, D. (2011), “The Financial Trilemma”, Economics Letters 111, pp. 5759. Special edition on the e-krona, Economic Review, No. 3, 2018, Sveriges Riksbank. Swedish Government Official Reports (2019), “Sweden and the banking union”, SOU 2019:52. Sveriges Riksbank (2019), “Consultation response: A new Sveriges Riksbank Act (SOU 2019:46)”, Sveriges Riksbank. Sveriges Riksbank (2020a), “Consultation response: Sweden and the banking union (SOU 1019:52), Sveriges Riksbank. Sveriges Riksbank (2020b), Account of monetary policy 2020, Sveriges Riksbank. Söderberg, G. (2018a), ”Why did the Riksbank receive a banknote monopoly”, Economic Review No. 2, Sveriges Riksbank. Vlieghe, G. (2020), “Monetary policy and the Bank of England’s balance sheet”, speech, Bank of England, 23 April 2020. 27 [35]  Vredin, A., (2018), “Why ‘unconventional’ monetary policy has again become normal”, Forum financier/Revue bancaire et financière 2018/3. Williamson, S. and R. Wright (2010), ”New monetarist economics: methods”, Federal Reserve Bank of Minneapolis, Research Department Staff Report, No. 442. 28 [35]  Figure Figure 1.
Figure 14: Decisions on Interest Rates and Changes in Risk Premia (as of 16 April 2009) 300 Hungary  250  Change in CDS  Indonesia 200 S. Korea 150  Colombia  100 50  Chile  Mexico Poland Brazil Czech rep. S. Africa  Turkey  0 -7.5  -6.5  -5.5  -4.5  -3.5  -2.5  -1.5  -0.5  0.5  1.5  Change in Policy Rates (%)  Source: Bloomberg, CBT. Distinguished Guests, The measures taken against the global financial crisis were not limited to policy rate cuts. In this period, a lot of countries not only take measures to regulate the functioning of the markets, but also exercise non-traditional monetary policy implementations. In this period, the Central Bank of Turkey also took measures against the potential adverse effects on financial stability, a prerequisite for price stability. In the first quarter of 2009, a countercyclical monetary policy was adopted in the money market on the one hand and a number of decisions were made to regulate the Foreign Exchange and Banknotes Markets-Foreign Exchange Deposit Market on the other hand. In this framework, the maturity of foreign exchange deposit borrowed by the Banks from the Central Bank was extended; the lending rate for transactions, which the Central Bank is a party to, was reduced and the maturity of interbank transactions in the said market was extended. Besides, foreign exchange selling auctions were held at the times of ailing price movements in the foreign exchange market.

Therefore, my first conclusion is that from the economic perspective the dilemma between deepening and enlarging is rather imaginary. In fact, both these processes are going on around us at every moment, and the authorities have a limited ability to choose between these two aspects of integration. The political dimension makes the question much more complex. Despite the aforementioned conclusion that economic integration is relatively independent of political will, an appropriate institutional framework is undoubtedly important for the pace of integration and the future shape of European markets. But politicians are caught between their vision of an integrated Europe and pressure from many of their voters to defend their current positions. Their inability to explain the benefits of integration to the electorate is a source of frustration and puts limits on any further political deepening and enlarging of the more and more economically integrated area. This may lead to a temptation to use the argument of an imaginary choice between deepening and enlarging. But businesses will not ask politicians for permission to move to Balkan countries or Turkey, or to continue concentrating their activities inside the present EU. The role of the authorities is to support, not hamper these processes. Therefore, my second conclusion is that frustration with the inability to politically consolidate the existing area should not become a reason for constraining its political expansion. In the end, business would find its way through, but Europe would lose. BIS Review 50/2006  1
Brief description of the exercise  Before turning to the results, allow me briefly to recall the nature of the exercise. As you know, the Comprehensive Assessment comprised two components: an asset quality review and a stress test. Assessing asset quality involved a detailed review of bank balance sheets to determine, among other things, whether the classification of financial instruments, provisioning levels and the valuations of specific assets are appropriate. The process, conducted in a decentralised fashion, was very complex. It required the support of leading audit firms, and was subject to stringent quality assurance, where the national supervisory authorities – in our case the Banco de España – played a very important role. As a result of this part of the exercise, adjustments were made to the level of CET1 (i.e. maximum quality) capital, as defined under the Basel III Accord, which were taken into account to determine the starting point of the stress tests. The second key element of the Comprehensive Assessment was the stress test. This is an exercise that seeks to evaluate the resilience of banks in hypothetical scenarios. The stress test is an exercise basically prepared by the banks themselves, using the socalled bottom-up approach and applying the methodology of the European Banking Authority. The test was subject to strict quality assurance by the ECB and the national supervisory authorities.

2  BIS central bankers’ speeches  As a result the exchange rate situation will remain fragile, despite the calmer environment that has come about as a result of the measures taken by the ECB. However, the very low interest rates around the world are also associated with risks. The longer a low interest rate phase persists, the greater the potential danger of speculative price developments and misallocations. Investors searching for yields could place increasing amounts in real estate, and this can lead, in particular, to a rise in real estate prices and thus, to a distorted pattern of incentives. Momentum in the domestic residential mortgage and real estate markets remains exceptionally strong. Mortgage lending continues to grow briskly compared to the economy as a whole. In addition, real estate prices, already at a high level, continued to rise. As a result, risks for financial stability increased further. My colleague, Jean-Pierre Danthine, will give you an assessment of the situation in the financial sector from the point of view of the SNB. Monetary and investment policy The minimum exchange rate provides us with new challenges for our monetary policy but also for our investment policy. I would therefore like to close with a few words on our foreign currency investments. As you know, in the months May to August, in particular, we had to purchase large quantities of foreign currency in order to enforce the minimum exchange rate. Consequently, the SNB’s foreign currency investments have significantly increased.
As a result, the performance of revenue and the impact on spending of the plans announced for public-sector employment will need to be monitored over the next few years, so that, in the event of any deviation from the projections, action can be taken in time to avoid the risk of failure to achieve deficit commitments. The importance of budgetary consolidation Finally, it seems to me necessary to stress the importance of completing the budgetary consolidation process. The current environment of high growth and low interest rates is a very favourable one in which to reduce the structural budget deficit and public debt to levels more in line with those in the main euro area economies, and this opportunity should not be wasted. The cost of financing public debt (which still stands at 100% of GDP) would be reduced and there would be some scope for fiscal policy to respond to possible adverse scenarios. Moreover, consolidation is essential to address the challenge that an ageing population will pose for spending on health, dependency and, above all, pensions. In this respect, the magnitude of the adjustment needed to achieve sound public finances in Spain is still significant. Hence the need to comply with all the domestic and European budgetary framework requirements. Following their strengthening in recent years, this means not only that the budget deficit (defined in total and structural terms) and public debt must be progressively reduced, but also that the so-called spending rule must be observed.

Essentially we took the view that unbalanced growth was better than no growth at all - which was the only other option we had. This "two speed" economy has, I know, been reflected in the pattern of your own activity as FLA members, with consumer finance volumes growing strongly in recent years where business volumes have been relatively flat. In the past year alone new business written to consumers was nearly three times that written to business customers. Now clearly the imbalances can't go on increasingly indefinitely. The build-up of household debt and the related strong rise in house prices we saw last year in particular must begin to moderate at some point. So much of the recent debate has been about whether the eventual adjustment will occur gradually, within the context of continuing overall expansion, or more abruptly in which case the overall expansion could prove more difficult to sustain. On the macro-economic data it seems clear that the global economy in fact bottomed out around a year or so ago, and that we have since seen the beginnings of a recovery, notably in the US, on which so much of the rest of the world currently depends. And it is also clear that monetary policy generally and in some countries also fiscal policy - remains supportive.