samchain/econo-pairs-v1 huggingface dataset:
More importantly, while EMEs accounted for about 55% of global GDP since 2009, their contribution to global economic growth was as high as 80%. So, a slowdown in EMEs will be an impediment to recovery in the US and other advanced economies. 15. Fifthly, zero interest rates and QE have indirectly widened the income gap. Because of ultra-low interest rates and excess liquidity seeking better returns, stock and property markets rallied in many parts of the world. This is especially true in places with more promising growth prospects like Mainland China, Hong Kong and Singapore. However, lowincome groups, with little if any stocks and properties, have missed out altogether. And their savings in deposit accounts have earned next to nothing. This has exacerbated inequality, resulting in negative implications for social stability and harmony. 16. Sixthly, zero interest rates and QE have changed the global investment environment. Yields on the traditionally more conservative bonds and fixed income investments have declined. For example, 10-year US Treasuries’ yield has fallen from 5% to about 2%, and some sovereign bond yields in the Eurozone have even plunged into the negative. At the same time, both the exchange rates and bond prices in EMEs have experienced sharp swings recently. With the soon-to-start normalisation of US interest rates, and distorting low-returns and high-volatility in the bond markets, the investment environment will become even more complex and difficult. 17.

And, if it is true that the central bank should not be confined to an ivory tower, it holds equally true that economic media should avoid slipping into cheap sensationalism, which only yields short-term gains. Eventually, the media should help its public take informed decisions, to the benefit of overall economic developments. I am well aware that shaping the public opinion is neither simple, nor linear. It is hard for a generation that has learnt that prices are formed by adding the planned benefit to the planned cost to grow accustomed to today’s reality, when price formation depends on demand and supply. Hence the greater difficulties faced by economic policymakers, analysts and the media alike. Disseminating – sometimes in good faith – the statements of certain market participants may equally generate confusion. For instance, let us recall that representatives of some edible oil producers claimed a few months ago that the price of their products would be on the rise, although this year’s market supply is several times higher than a year earlier. As it was normal, edible oil prices entered a downtrend which is likely to persist given the change in the supply-demand ratio. Another example is that of a businessman who said that weaker demand in a particular industry would entail higher prices in the producers’ attempt to safeguard their profits. This was another statement that did not receive an adequate response, so that the message conveyed to the market is that prices will rise no matter what.
A likely explanation for this favorable record is that Fed tightening generally occurs during periods of strong U.S. economic performance. Recent research from the IMF bears out this hypothesis, finding that higher U.S. interest rates associated with stronger U.S. growth represent a net positive for EMEs. 2 Financial performance of EMEs has been more diverse across Fed policy cycles. The strongest contrast is between the tightening cycle that began in 2004, and the one beginning  1  See January 27–28, 2015 Federal Open Market Committee statement. 2  See “Spillovers from Unwinding Monetary Support in Advanced Economies,” 2014 Spillover Report, Chapter 2. See also, “On the Receiving End: External Financial Conditions and Emerging Market Growth Before, During and After the Global Financial Crisis,” World Economic Outlook, April 2013, Chapter 4. 2  BIS central bankers’ speeches  a decade earlier, in 1994. EME asset prices strengthened considerably during the 2004 cycle, but weakened considerably during the earlier cycle. Notably, the 1994 cycle was associated with a large increase in U.S. long-term bond yields, and appears to represent a case in which there was some distance between Fed policy and market expectations. Other IMF research suggests that anticipated Fed tightening moves have historically been followed by only a minor pullback in private capital inflows, while unanticipated tightening has typically been followed by a pullback in private flows some four times as large. 3 This evidence highlights the importance of transparency and clear messaging in how the Fed is evaluating the evolving economic landscape.

•  Indeed, these investigations must be undertaken hand in hand with private intermediaries. The tokenisation of finance creates a new ecosystem which is also a challenge for them, especially as their role could be transformed by decentralised technologies. •  And we need to ensure that this ecosystem is fully interoperable with legacy securities and payment systems, which are likely to remain an important element of the landscape. •  In that context, our goal at the Banque de France is to facilitate responsible innovation from the market, while safeguarding the use of central bank money and thus financial stability. •  My final point is to say that today’s discussion showed that central banks need to further their exploration of new technologies to prepare for the future of finance. This is the goal that Banque de France has been pursuing since the launch of its first experiments on wholesale CBDC in 2020. We are now taking this endeavour a step further with a second round of experiments. Let me stress that it is a collective work, whose conclusions will feed the Eurosystem’s reflection on CBDC. •  The entry into force of the European "pilot regime" next year offers an invaluable opportunity for private players but also for public players. In this sense, offering settlement solutions in central bank money - for the cash leg of transactions involving tokenised securities - could allow tokenised finance to benefit from the most secure and liquid asset. •  Thank you again for your participation. Page 3/3
5/5  BIS central bankers' speeches

Moreover, the first round impacts of the recent hikes in end-user electricity and natural gas prices on end-2008 inflation are expected to be around 0.6 percentage points, which is higher than what we assumed in the previous Inflation Report. Meanwhile, considering the lagged impacts of last year’s drought and elevated prices of agricultural commodities in global markets, we now envisage that the price increases in processed food will persist for a while and the inflation in this item will stay at relatively high levels throughout 2008, albeit a slight decline. Upside revisions on the assumptions for food and energy inflation imply that it may take longer to bring headline inflation to 4 percent than envisaged in our previous Inflation Report. Therefore, in the absence of a significant correction in food inflation, headline inflation will most probably exceed the target level of 4 percent at the end of 2008. Forecast Range*  Medium-term Target  Uncertainty Band for 2008  Output Gap  2009-  2009-III  2009-II  2009-I  2008-  2008-III  2008-II  2008-I  2007-  12 10 8 6 4 2 0 -2 -4 -6 2007-III  Percent  Figure 15: Forecasts for Inflation and Output Gap  *The shaded region indicates the 70 percent confidence interval for forecast.
In that financial utopia, the interests of accountants, investors and regulators would be perfectly aligned. Accountants would have a verifiable valuation yardstick; investors a true and fair view of their true worth; and regulators an objective means of evaluating solvency. Fair value would serve treble duty. In practice, the fair value debate is contentious and has been for at least a century. Through history, accountants, investors and regulators have not always sung in tune. Today, accountants are singing opera Pacioli-style, regulators are rapping at 300 words a minute, while investors are left to whistle. In part this discord has been blamed on failures of EMH, “the precarious yardstick of current market quotations”. It should come as no surprise that fair value principles have faced their stiffest tests at times of crisis – the Great Depression during the previous century, the Great Recession during this. For it is at crisis time that EMH itself faces its stiffest test, perhaps none greater than recently. The heterodox British economist George Shackle observed: “Valuation is expectation and expectation is imagination”. 9 Imagination, and thus valuation, is apt to run wild at the peak of the boom and trough of the bust. These episodes of over-active imagination, or deviations from EMH, can be grouped roughly three ways.

James, H (1992), “Financial Flows Across Frontiers during the Interwar Depression”, Economic History Review, 594–613. Laux, C and C Leuz (2009), “Did Fair-Value Accounting Contribute to the Financial Crisis?”, University of Chicago, Booth School of Business, Working Paper No. 41. Khan, O (2009), “Does Fair Value Accounting Contribute to Systemic Risk in the Banking Industry?”, SSRN Working Paper No. 1327596. Pacioli, L (1494), Summa de Arithmetica, Geometria, Proportioni et Proportionalita. Plantin, G, Sapra, H and H S Shin (2008), “Fair Value Accounting and Financial Stability”, University of Chicago Graduate School of Business Research Paper 08–15. Seligman, J (2003), The Transformation of Wall Street: A History of the Securities and Exchange Commission and Modern Corporate Finance, 3rd Edition, Aspen Publishers. Shackle, G (1972), Epistemics and Economics – A Critique of Economic Critiques, Transactions Publishers. Shiller, R (1981), “Do Stock Prices Move Too Much to be Justified by Subsequent Changes in Dividends?”, American Economic Review, 71(3), 421–36. Shiller, R (2005), Irrational Exuberance, Princeton University Press. Simonson, D G and G H Hempel (1993), “Banking Lessons from the Past: The 1938 Regulatory Agreement Interpreted”, Journal of Financial Services Research, 249–267. Smithers, A (2009), Wall Street Revalued: Imperfect Markets and Inept Central Bankers, John Wiley & Sons. Turner, A (2010), Banks Are Different: Should Accounting Reflect that Fact?, speech given to the Institute of Chartered Accountants in England and Wales (ICAEW), London. United States Securities and Exchange Commission (2008), Report and Recommendations Pursuant to Section 133 of the Emergency Economic Stabilization Act of 2008: Study on Mark-To-Market Accounting.
1.8  Conclusion  At this point, no unequivocal conclusion can be drawn concerning Iceland’s optimal currency and exchange rate policy option. All of the possibilities have advantages and disadvantages. Although the assessment of these options is based on a relatively sound economic foundation, there is no simple economic formula stating how these pros and cons should be weighted together so as to yield a clear answer. In addition, it is quite uncertain how these factors will develop in the future. But it should also be noted that this report contains numerous findings indicating that the selection of a currency and exchange rate policy may be less important for economic welfare and stability than might be expected in view of the public discussion on the issue. An example of this is how different countries have fared during the financial crisis (see Chapters 16 and 17) and how likely asset price bubbles are to develop inside and outside a currency union (see Chapter 11). Based on the limited experience to date, it appears that fiscal policy, financial system structure and regulatory framework, and the incentives and opportunities of private agents to borrow are much more important. One of the reasons it is difficult at this point to draw a clear conclusion about which path Iceland should take is the uncertainty about near-term developments in the two most likely scenarios: an improved framework for the króna and removal of the capital controls, or EU membership and eventual adoption of the euro.

It is likely, though, that the flexibility of the króna has facilitated adjustment to severe downturns under certain circumstances, such as the collapse of the herring stocks in the late 1960s and the steep contraction following the 2008 financial crisis. The possible reasons for this are explored in the above-mentioned chapters. It is too soon to draw any final conclusions, however, and research beyond the scope of this report or conventional economic analysis is needed in order to shed light on why the objectives of low inflation and economic stability seem so elusive in Iceland, and why undisciplined stabilisation policy and an environment of loose financial regulation and supervision was allowed to flourish during the pre-crisis years. However, as is pointed out in the report, the ineffectiveness of independent monetary policy and the possible procyclical influences of floating currencies are not uniquely Icelandic phenomena, nor are they due solely to flawed stabilisation policy. To some extent, they can also be attributed to exchange rate volatility where, as with any other asset price, expectations and speculation play an important role. In addition, there are indications that smaller countries have more difficulty than large ones in pursuing independent monetary policy while they are becoming more integrated globally. In this context, it is worth noting that, prior to the financial crisis, Iceland was by far the smallest country in the world with a floating currency. Further discussion of the possible reasons for small countries’ vulnerability to such problems can be found in Chapters 9 and 13.
Certainly, a lot of work has been done in the London market, co-ordinated and steered by a team in the Bank, to ensure that London is as well prepared as other European BIS Review 67/1997  -6-  centres for EMU. And our assessment now, which I believe is shared by the EMI and the Commission, is that London is as well prepared as most if not all European centres. I can assure you that the Bank of England itself will be ready for EMU on 1 January 1999, whether or not the UK is a member. We will be able to offer euro accounts and euro settlement facilities. We have taken the lead in work on market conventions across Europe. EMU is likely to bring harmonisation of conventions such as day count and frequency of coupon payments among Europe’s bond markets, and the London market is ready to do that. We have been in regular discussion with ISDA which is taking a leading role in co-ordinating preparations of those involved with swaps and other OTC derivatives. And a recent working group chaired by the Bank has examined the adaptations that may be needed in the gilt market, covering re-denomination of gilts into euro, whether to quote in decimals or fractions, the frequency of coupon payments, etc. There seems a reasonable chance that the dramatic move to abandon 30 seconds as the basis for gilt pricing may come about before too long.

That puts the house-price-to-earnings ratio back to its level in 2003. Transactions are running at 2005 levels – a little over 110,000 a month. Looking at the most recent data, there has been a slowing in the monthly pace of increase. In the three months to February this year, prices grew at an annualized rate of 11% and transactions increased at an annualized rate of over 50%. But the very latest figures for March, however, could suggest a pause in the growth in prices and activity – prices were flat on the month and transactions actually fell by 5%. And the latest mortgage approvals numbers, which came out this morning and tend to lead transactions, fell again in March leaving the number of approvals for house purchase down 12% on their January peak. Discussions with the lenders suggest that the checks that lenders now need to do under the FCA’s new Mortgage Market Review rules, about which I will speak later, may be slowing the speed with which approvals can be processed. But just as one cuckoo does not signal spring, it is far too early to say, on a couple of month’s figures, whether this is the beginning of a turning point in the market. Indeed it would be dangerous to ignore the momentum that has built up in the UK housing market since the spring of last year.
The session will also discuss how to improve the fiscal governance framework to support the achievement of fiscal objectives in the medium term, both at the national and European  3/9  Union levels. These are crucial issues, and their discussion in this Conference is fully warranted. Let me briefly share with you some thoughts on how we see at the Banco de España the key challenges for the Spanish economy that arise from the domain of public finances. The economic and social impact of the recent crisis has been deep and painful in many aspects, including in the case of public finances. During the past decade, public authorities in Spain had to deal with the challenge of keeping welfare state services functioning, while, at the same time, delivering the necessary fiscal adjustment that could ensure the long-term sustainability of public finances. Between 2011 and 2017, the public deficit-to-GDP ratio was significantly cut, from a peak of 9% in 2011, excluding financial sector assistance, to 3.1% last year. In that process, public expenditure was reduced, as a proportion of output, by more than 3.5 percentage points (pp). Notwithstanding this effort, the historically very high debt-to-GDP ratio of the Spanish General Government sector, currently around 98% of GDP, poses specific risks for economic growth. Economic literature finds evidence that maintaining a very high public debt-to-GDP ratio over a prolonged period tends to hamper economic growth, becoming a source of economic vulnerability, which, in addition, reduces the stabilising capacity of the public budget.

It is also worth noting that common debt issued under the SURE programme (Support to mitigate Unemployment Risks in an Emergency) and even more so the Recovery Fund will make the European Union one of the largest debt issuers in Europe relative to national sovereign debt issuers over the coming years. These changes do not seem to have altered the good functioning of the euro zone sovereign market. On the contrary faced with the economic and financial shocks triggered by the corona virus pandemic, they have fared well and proved resilient. They have consequently strongly helped, with the banking system, governments and the Eurosystem to implement forceful policies that have proved effective to help the private sector to absorb those shocks. In my initial remarks today I would like to highlight some dimensions of this resilience, looking in turns to bond and the repo market but also highlight a few vulnerabilities and point of attention from a financial stability standpoint that the role and functioning of Eurozone sovereign markets during the crisis has also revealed. 1. The resilience of European sovereign markets a) Regarding the sovereign cash market, its resilience during the crisis is first illustrated by financing conditions, which have remained favorable since March 2020. In 2020, yields on euro area country sovereign bonds continued to decline, to record lows including for the euro area’s most highly indebted countries, despite the strong increase in debt issuances ; and the dispersion of yield spreads between countries also narrowed.
Rapid expansion of exports and moderate increase of imports led to improved trade and current account deficits, contributing to foreign currency demand and supply balancing and increased exchange rate stability. Monetary and fiscal policies have conveyed a careful macroeconomic stimulus. Withdrawal of the fiscal stimulus during the second half of the year, led to a more stimulating monetary policy, by reducing the key interest rate in July and a fuller introduction of it into the financial markets during the following period. Financial markets were characterised by an improvement of liquidity indicators and a decline in interest rates in almost all financial instruments. Furthermore, a prudent fiscal policy rendered budget deficit and public debt in line with 2010 forecasts. These developments are expected to be brought forward, in broad terms, in 2011 as well. Economic growth is expected to remain comparable to levels of 2010. However, it is expected to be driven by domestic demand to a large extent. The banking system is in a much better position compared with two previous years in terms of supporting the increase of domestic consumption and investment with funds. Moreover, inflation pressures are forecasted to be under control, budget deficit and public debt are expected to be further consolidated, and external position of the economy is expected to be more stable. Respecting this picture has important implications, which I will address later in more details, for policymakers and economic agents. Latest developments in global economy are characterised by continued economic growth in most developed countries and emerging economies.

The problems I have seen are based on a combination of inflation having clearly undershot the target, the Riksbank’s inflation forecasts having been more optimistic than those of other analysts, the Executive Board’s repo-rate paths having indicated a tighter monetary policy than the market and analysts have expected and the repo-rate paths having been revised down time after time. I have said that in such a situation it is better to cut the rate immediately rather than continuing to present a repo-rate path that is not perceived by outsiders as entirely credible. However, these problems have become a little less important in recent months as other analysts’ forecasts of inflation and the repo rate have been revised up. Thirdly, it is not self-evident that taking into account household debt means setting a higher repo rate than we would otherwise have done. The current repo rate, 1 per cent, is undeniably low. In the long run, the repo rate will be raised to much higher levels. But we cannot raise the repo rate until we see that inflation has clearly begun to move towards the target of 2 per cent. And when this happens will of course depend on monetary policy. If we cut the repo rate now, inflation will rise faster towards the target. If the repo rate is left unchanged it will take longer before inflation begins to rise, and this in turn means that it will take a long time before the repo rate can be raised.
Let me finally express my gratitude to the organisers for making this conference possible and to all of you for attending. I wish you a very productive meeting and a pleasant stay in Madrid. Thank you very much. 6

It is thus due to the instruments available on the market that the largest part of our foreign currency investments is in euros (55%) and in US dollars (25%). The remainder of our investments is composed of yen (10%), Canadian dollars (4%), pounds sterling (3%) and other currencies (3%). Finally, taking a general and somewhat longer-term view, the following point should be noted. The SNB’s currency reserves are made up of foreign currency investments and gold. In a risk-averse environment, losses tend to occur on foreign currency investments and profits on gold, while in a risk-friendly environment the opposite is true. Consequently, diversification of a portfolio to include gold and foreign currency helps to stabilise earnings over an entire risk cycle. BIS central bankers’ speeches  3