samchain/econo-pairs-v1 huggingface dataset:
The monetary base has risen by unprecedented proportions as we tried to prevent a collapse of broad money and credit as happened in the US during the Great Depression and today in Greece. And central bank balance sheets have risen across the industrialised world, as shown in Table 2. That expansion has reflected both money creation through asset purchases and lending against collateral. All major central banks have created new ways to lend against collateral.5 Far from their image as conservative creatures, are central banks at risk of throwing their traditional caution to the wind and ignoring the limits on monetary policy? Two limits are relevant in current circumstances. First, no matter how much liquidity is thrown at the banking system, lending and the economy will not recover if the banking system is inadequately capitalised and suffering from excessive leverage. That is why the Bank of England’s Financial Policy Committee has placed weight on the need for the weaker UK banks to raise capital. It is not surprising that the more strongly capitalised banks in the UK are expanding lending and the poorly capitalised banks are contracting lending. Second, there are limits on the ability of domestic monetary policy to expand real demand in the face of the need for changes in the real equilibrium of the economy. I do not believe that the present problems in the United Kingdom stem only from a large negative shock to aggregate demand.

The process runs as follows: Domestic interest rates at the longer end of the maturity spectrum tend to become more closely correlated with the global rate, or the rate of the largest trading partner, and less correlated with the domestic policy rate. This means that monetary transmission tends to go increasingly through the exchange rate channel, which is only a problem, however, if the exchange rate behaves badly. Unfortunately, there is a lot of evidence to suggest that it does. Uncovered interest rate parity (UIP) does not hold except over long horizons. Interest rate differentials give rise to widespread carry trading, which is by nature a bet against UIP. Exchange rates  BIS central bankers’ speeches  1  thus diverge from fundamentals for protracted periods, followed by sharp corrections. So the exchange rate often seems to be as much a source of shocks and instability as a tool for adjustment and stabilisation. Ultimately, these cycles can take the boom-bust form and, in extreme cases, can result in serious financial instability or crisis. The research on this phenomenon is still ongoing, but there is a lot of evidence to suggest that the problem would not disappear even if macroeconomic policies in the traditional sense were perfect. This process was important in the Icelandic episode. The capital inflows were driven by the traditional push and pull factors.
The average annual growth rate of above 2.5 per cent is higher than the average in the boom period in the 1980s. In a way, perhaps this is hardly surprising. The weak exchange rate gave exports a strong impetus and there was plenty of unutilised capacity. But I do not think many people expected that such high growth could be combined with low inflation. In these years Sweden has rejected the policy from the decades of high inflation and reinstated the time-honoured tradition of annual price increases around 2 per cent. Inflation has also been low in an international comparison. Judging from the expectations of economic agents, a low-inflation regime has now been established. The composition of growth has also been favourable. After decades of growth that was generated to a high degree by rising consumption—with an accumulation of external debt—it is a healthy sign that expansion been associated with strong export demand and industrial investment. One result of this, the large current-account surpluses since 1994, has made it possible to repay external debt. A dramatic turnaround has also been achieved in government finances. Massive budget deficits have been succeeded by a surplus. This trend is primarily a consequence of the economic recovery, just as declining activity was the main cause of the earlier fiscal collapse. But without the extensive measures for budget consolidation, neither the economic upturn nor the improvement in government finances would have been feasible. Tax increases and spending cuts on the scale we have experienced in recent years obviously leave their mark.

There are several signs that exports will go on slackening; the inflow of export orders has deteriorated and confidence has fallen among purchasing managers in manufacturing. However, the weaker exchange rate may have a contrary effect on exports. The inflation statistics show that inflationary pressure in the Swedish economy is still low. In June and July the price level fell 0.2 per cent. This means that for both months the twelve-month rate of inflation was 0.6 per cent. All in all, it looks as though the growth of domestic demand in 1998 may exceed the assessment in the June report. On the other hand, foreign trade may be somewhat weaker than we counted on at that time. Thus, the figures on real economic developments that have been published since the latest inflation report do not seem to call for any substantial revision of the forecasts. Neither have the summer figures for inflation or the regular surveys of inflation expectations altered the outlook from the early summer. Weaker exchange rate In the June report we counted on some appreciation of the krona in the forecast period. During the summer the krona has weakened and I want to take this opportunity of commenting on the tendency since June. Most of the weakening has occurred in August. In effective terms (TCW) the krona has depreciated somewhat more than 3 per cent since the beginning of June, from 119 to 123.
The IMF should not attempt to impose a solution on borrowing countries. It should be willing to lend into arrears in circumstances where countries have chosen the route of a standstill and its associated conditions. But it should not create expectations that exceptional access is the norm. Conclusions Progress can be made only by closer co-operation between the developed and developing countries. The development of standards and codes, the design of IMF lending and the wider agenda of trade liberalisation and international co-operation are examples of the new partnership of which I have spoken. The closeness of the relationship between Britain and India is a compelling reason for our working together in the various international fora to improve the international financial system. In his final report to the British Government on the creation of the Bretton Woods system, Maynard Keynes wrote that "the excellence and closeness of our relations with the Indian delegation deserves special comment. Sir Chintaman Deshmukh handled his case with high dignity, ability and reasonableness; we always supported him on his interests and he always supported us on ours". Perhaps our joint work on international financial architecture will recall the common architectural heritage of the Bank of England and official buildings in New Delhi. Herbert Baker, who, with Lutyens, was responsible for the  8  BIS Review 71/2001  design of early New Delhi also rebuilt the Bank of England in the inter-war period.

Jiří Rusnok: Basel Consultative Group Meeting - welcome speech Welcome speech by Mr Jiří Rusnok, Governor of the Czech National Bank, at the Basel Consultative Group Meeting, Topic "Regulatory Treatment of Sovereign Exposures - Survey of Recommendations", Czech National Bank and Bank for International Settlements, Prague, 4 October 2016. * * * Dear Basel Consultative Group members, Dear experts from all around the world, Dear ladies and gentlemen, Let me warmly welcome you to the Czech National Bank (CNB). We are proud to host the expert meeting on the Basel regulatory reform and its design, using the perspective of emerging markets and developing countries. In the wake of the recent global financial crisis, the Basel Committee on Banking Supervision (BCBS) is making reform steps towards more healthy, stable, and resilient banks and financial systems. The latest Basel reform includes more and better bank capital, leverage and liquidity requirements, as well as macro-prudential measures, ranging from G-SIB surcharges to countercyclical capital buffers. The reform effort is successfully underway and new standards are gradually being implemented worldwide, covering advanced as well as emerging markets and developing countries. When designing further details of the regulatory reform, we have to pay special attention to differences in financial systems among countries and regions. Namely, financial systems in emerging markets and developing countries are often shallower and less liquid than in advanced economies. Therefore, emerging market countries can hardly take over all regulatory measures without modifications.
Jean-Claude Trichet: Interview in The Wall Street Journal Interview with Mr Jean-Claude Trichet, President of the European Central Bank, in The Wall Street Journal, conducted by Messrs Brian Blackstone and Marcus Walker on 19 January 2011. *  *  *  WSJ: If 2008 and 2009 were years of crisis, and 2010 was a year of stabilization and recovery. How do you see 2011? What should Davos participants be focused on this year? TRICHET: Since the start of the recovery, in the third quarter of 2009, the real economy has surprised up on the upside. This is encouraging. I see 2011 as a year of continuous hard work, to make the financial sector more resilient and to improve the soundness of fiscal policies. The crisis, which started in 2007 and intensified in September 2008 revealed the fragility of the financial sector first and then the relative vulnerability of public finances in the advanced economies. WSJ: What worries you most? Trichet: To consider that because we managed to avoid a depression and are now experiencing the recovery, we could lose momentum in the reforms that are still urgently needed. That is the main danger. WSJ: This year austerity becomes pan-European. But a recent United Nations report said austerity risks a renewed economic downturn. Do you agree? TRICHET: No, we do not. I do not buy the very simple reasoning that would suggest that pursuing sounder fiscal policy would hamper growth.

In particular, the supervisor should have the real capacity to influence bank managers’ decisions through moral suasion and to formulate non-legally binding recommendations, in the sure knowledge that they will in practice be very widely followed. Supervisory actions would otherwise be excessively hampered by a regulatory framework which, despite having been honed in recent years, can hardly envisage all situations of supervisory significance or include the full range of instruments needed to tackle such situations with the speed required in each instance. Finally, it is difficult for supervision to be effective if it does not include a thoroughgoing review of banks’ financial statements. Allow me to elaborate on this point. Evidently, an essential aim of supervision is to oversee banks’ solvency through the monitoring of capital ratios. Insofar as these ratios are calculated on the basis of accounting information, it is essential to ensure that such information properly reflects the value of the bank’s assets and liabilities. It is true that auditors and securities supervisors also perform this task. However, the specific nature and complexity of bank business, the evident relationship between published financial information and financial stability, and the occasional lack of specificity of prevailing accounting principles all make it advisable that the prudential supervisor should contribute to encouraging supervised banks to follow the best practices, in full conformity with current regulations and the distribution of competencies among institutions thereunder.
The aim of these combined measures is to reinforce the conditions for financial stability, promote a sustainable housing market and deliver socially desirable outcomes through responsible lending and borrowing behaviours. III. Financial regulatory reforms  These measures foreshadow our broader plans and priorities in the area of financial regulatory reforms going forward. While banks and insurers in Malaysia have avoided the pitfalls that have set back some of the largest and most successful global financial institutions, our ambition to develop a dynamic and robust financial system demands that we remain firmly focused on continuously strengthening the foundations for financial stability. This will take into account our assessment of the domestic conditions, and the nature and direction of risks in the financial system. The regulatory regime will be based on the framework of international standards, specifically those set by the Basel Committee on Banking Supervision, the International Association of Insurance Supervisors and the Islamic Financial Services Board. Following the global financial crisis, the most profound changes in the international standards have been focused on the banking system. However, as a result of more prudent risk management, a rigorous stress testing discipline and being subject to close supervision by the Central Bank, banks in Malaysia are largely already operating at more conservative capital levels than is being suggested under Basel III.

José De Gregorio: Macroeconomics, economists and the crisis Speech by Mr José De Gregorio, Governor of the Central Bank of Chile, at the Annual Meeting of the Society for the Chilean Economy (SECHI), Antofagasta, 4 September 2009. I thank Luis Felipe Céspedes, Eduardo Engel, Pablo García and Mariana García for valuable comments. *  *  *  This is certainly a great opportunity to speak about a subject that has triggered more than a few reflections in me recently, and that was probably best said by Queen Elizabeth’s famous question, made when she was visiting the London School of Economics last year: Why did nobody notice it? As someone who has dedicated his professional life to academic activities and policy making, the question is surely unsettling. The current global financial crisis and recession, whose depth is unprecedented in recent decades, has cast doubts about the work of macroeconomists, the usefulness of their theories, and their capacity to anticipate and deal with crises. These are the issues I will discuss today. Macroeconomics Over the past few decades, macroeconomic theory has evolved, on the one hand, as a discipline whose purpose is solving problems similar to engineering, and, on the other hand, whose purpose is to explain phenomena embodied in economic reality, similar to science (Mankiw, 2006). In fact, macroeconomics was created to solve the problems of the Great Depression. In its beginnings, it was devoted to building large models to evaluate macroeconomic policies in the tradition of engineering.
As of Monday, the per-counterparty maximum bid limit was raised from $ billion to $ billion, and an overall size limit of $ billion was imposed for each operation. If the total amount of bids received in an operation is less than or equal to the $ billion size limit, awards will be made at a fixed offering rate. However, if the total amount of bids received exceeds the overall operation size limit, the $ billion in ON RRPs will be allocated through a single-price auction using interest rates that counterparties now include with their bids. Awards are made at a “stopout rate” – the rate at which the overall size limit is achieved – with all bids below this rate awarded in full and all bids at this rate awarded on a pro rata basis. The stopout rate is determined by evaluating all bids in ascending order by submitted rate up to the point at which the total quantity of offers equals the overall size limit. 12 The Federal Reserve will be closely analyzing the results of the ON RRP exercise conducted under these new testing parameters in order to further its understanding of how an ON RRP facility might best be structured during the initial stages of the normalization process. In addition, the Federal Reserve Board has been testing a facility through which it offers term deposits to credentialed depository institutions. Term Deposit Facility (TDF) transactions could be used to temporarily reduce the quantity of reserve balances.

The BoE’s Asset Purchase Facility, through which its Monetary Policy Committee (MPC) purchased £ billion of longer-term assets between 2009 and 2012, was quite comparable in purpose and design to the Fed’s LSAP programs. Moreover, since March 2013, the BoE has reinvested the cash flows associated with maturing gilts in the facility in order to maintain the stock of securities at a steady level. In its February 2014 Inflation Report, the MPC provided guidance on its expected normalization framework, laying out an approach in which its Bank Rate – the deposit rate for central bank reserves in the U.K. – is the active marginal instrument for monetary policy while portfolio-related tools, including reinvestments and asset sales, receive less emphasis. Specifically, the MPC suggested that it intends to maintain its stock of purchased assets, including reinvesting the cash flows associated with maturing securities, at least until it raises its target short-term interest rate from its current level. Meanwhile, the BoJ is still purchasing assets under QQE, which it launched in April 2013. With a goal of increasing its Japanese government bond (JGB) holdings by ¥ trillion per year, it has not yet initiated a discussion of eventual normalization. When that time comes, however, the BoJ will be holding a large portfolio of longer-term JGBs. The BoJ’s balance sheet will therefore look markedly different than it did when the QEP ended in 2006, at which time the BoJ just allowed short-term funds-supplying operations to roll off.
The challenge will be to ensure that the various insurance and benefit systems provide the necessary basic safety net but still maintain a strong impetus for people to begin work again. It will probably be necessary to make both general changes in insurance and benefit systems and selective measures to raise labour force participation in groups where the potential to increase the work input is considered relatively large. Examples of these groups are younger people, older people and people born abroad. Conclusion Let me finally return to my starting point and the discussion of long-term growth. I have mainly concentrated on the relationship between potential growth and monetary policy. However, we must not forget that long-term growth has significance for all parts of the economy and one of the most important goals for economic policy in general is to promote a high level of long-term growth. Growth is not the same thing as increased wealth, but growth creates a foundation for increased wealth. It creates greater scope not just for households’ private consumption, but also for financing, for instance, education systems of high quality and a good level of care and welfare and provides better opportunities to achieve other political goals. Potential growth sets the framework for monetary policy. Simplified, one can say that the Riksbank’s task is to keep actual output as close to potential output as possible.

One such effort might include frequent adjustments of the institutions or deposits subject to negative rates (as we have seen recently in Denmark and Switzerland). The complications of the negative rate policy only become greater once one realizes that it is a policy that is intended to be passed through to most deposit and market interest rates, but not to retail depositors. 5. Effects of negative rates on the health of financial intermediaries  A robust financial sector is important for many reasons: to direct savings into productive uses; to assist households to smooth consumption; to facilitate trading, payment, clearing, and settlement of financial assets; and to deliver insurance and pensions to people. The health of banks and many other financial institutions depends on earning a spread between what the institutions earn on their assets and what they pay on their liabilities. Negative rates can squeeze bank profits. If banks are earning negative rates on their loans while charging a zero rate to retail depositors, they lose money. If the goal of negative rates is to ease financial conditions and provide stimulus to the economy, then the effects of the policy on the health of financial intermediaries must be carefully assessed. Pension and insurance funds too have potential difficulties in operating successfully in a negative interest rate environment. They often provide liabilities – that is, promises of future pension payments or insurance payments – at nominally fixed rates. If they can only invest in negative yield instruments, their profits could be imperiled.
This resulted in the global economy posting a strong recovery in the third quarter. Nevertheless, GDP remained significantly below pre-crisis levels in most countries. Infection numbers have unfortunately risen again rapidly in Europe and the US since October. In response to this, numerous containment measures have once more been adopted, and the population has become more cautious again when it comes to activities with a higher risk of infection. Recent indicators show that this is once more having a detrimental impact on economic activity. In various countries, this could even result in GDP shrinking in the fourth quarter. However, the effects can be expected to be smaller than in spring given that many countries have opted for less severe containment measures. In our baseline scenario for the global economy, we anticipate that the pandemic will be brought back under control in the foreseeable future, and that appropriate measures will prevent further waves of infection. The economic recovery should therefore regain momentum in the course of next year. The monetary and fiscal policy measures adopted worldwide are providing important support in this regard. However, it is likely that global production capacity will be underutilised for some time to come and inflation will remain modest in most countries. This scenario is subject to a high level of uncertainty, and there are risks on the upside and downside alike. On the one hand, the pandemic or trade tensions could additionally hamper economic activity.

News conference  Zurich, 17 December 2020 Thomas Jordan  Introductory remarks by Thomas Jordan Ladies and gentlemen It is my pleasure to welcome you to the Swiss National Bank’s news conference. Owing to the coronavirus pandemic, we can unfortunately only meet virtually today. The pandemic is placing a very heavy burden on people across the world, and Switzerland is no different. Our sympathies go in particular to those who have fallen ill themselves or who have lost relatives and friends. In my remarks, I will begin by explaining our monetary policy decision and our assessment of the economic situation. I will then discuss the topic of climate change and the SNB. Fritz Zurbrügg will report on developments in the area of financial stability and the impact of the pandemic on the demand for banknotes. Andréa Maechler will then comment on the situation on the financial markets and will look at the upcoming replacement of the CHF Libor with SARON. We will – as ever – be pleased to take your questions afterwards. Monetary policy decision  The coronavirus pandemic is continuing to have a strong adverse effect on the economy. Against this difficult backdrop, we are maintaining our expansionary monetary policy with a view to stabilising economic activity and price developments. We are keeping the SNB policy rate and interest on sight deposits at the SNB at −0.75%. In light of the highly valued Swiss franc, we remain willing to intervene more strongly in the foreign exchange market.