samchain/econo-pairs-v1 huggingface dataset:
And by being clear about how we view future monetary policy we can also increase the efficiency of monetary policy (slide 1). It is not merely the current interest rate decision and the current level of the interest rate that are important to future inflation and demand in the economy. Households and companies do not base their financial decisions only on the current interest rates. Expectations of how the repo rate will develop over the coming years are at least as important. But there are also other reasons for the increased openness. As I mentioned earlier, public support and legitimacy are a fundamental requirement for monetary policy to work. We have freedom with responsibility and with this come demands for insight and accountability. Openness is also something that has long imbued Swedish public administration. The principle of free public access which means that public authorities' activities shall as far as possible be carried out openly, was established as early as the late 18th century, a time when few other countries had such ideas. So this is a long tradition we are maintaining. The fact that we are examined closely is also something that affects the efficiency of our work. The more open we are, the easier it is for a member of the Committee on Finance or any other member of society to evaluate how well monetary policy works. Clarity and increased openness outwards lead to a better discussion of monetary policy.

Two counteracting forces give largely the same interest rate path as in June…  Higher cost pressures Tighter labour market  14  Financial unrest Weaker growth in USA and euro area  BIS Review 132/2007  14. Higher repo rate in the forecast Per cent. Broken line refers to the Riksbank’s forecast. 7  7 90% 75% 50% Repo rate  6  6  5  5  4  4  3  3  2  2  1  1  0 dec-02  dec-03  dec-04  dec-05  dec-06  dec-07  dec-08  dec-09  0 dec-10  Source: the Riksbank  15. Risks  Higher cost pressures  Financial unrest and weaker  international growth  BIS Review 132/2007  15  16. Summary  The Swedish economy is doing well  Balanced development  Changes for a better monetary policy  16  BIS Review 132/2007
Ravi Menon: Singapore's financial sector agile and resilient amid Covid-19 Edited transcript of fireside chat by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at ACI Live Aid: Financial Markets Give Back, 29 May 2020. * * *  Operational Resilience The financial sector has been quite remarkably resilient in the face of Covid-19. All financial services have remained open, except those involving face-to-face interactions with customers outside of bank branches. During the circuit breaker1 period, 85% of workers in the financial industry have been able to work from home. MAS itself is close to 90% of staff working from home. I am sure there is some degradation of productivity but, by and large, the sector has been able to function. We are grateful for the strong investments that Singapore’s financial sector has made in digital transformation over the last five to six years. This has put the financial industry in a good place during the circuit breaker. If our financial sector had not made these investments - imagine if there was no retail electronic payment system, or if there were no infrastructure for digital banking or selling insurance online or trading from home - we would be in a much worse situation today. A good part of financial sector activities has moved on to virtual platforms. The current situation is of course not without its challenges. Many financial institutions have had to make significant adjustments to the new environment.

MAS has gotten very good feedback on the growing electronic FX trading system in Singapore. Singapore has attracted key liquidity providers and platforms to base their pricing and matching engines here. We already have about seven banks and non-banks who have moved these activities to Singapore. Now, we have got another two global banks joining us.2 So even during this period, we are seeing positive, encouraging developments on the FX front. Upskilling Industry Workforce Talent development and upskilling the industry workforce is another key area that MAS has been focusing on during this period, so that finance professionals are able to function effectively and have a competitive advantage in the future. During this period of slower growth, MAS has been working with financial institutions to retain their talent, use the opportunity to upskill their human capital, and explore ways to build longerterm capabilities in digital functionalities, so that the industry can emerge stronger from the crisis. Last month, in April, MAS announced a $ million package, basically to support smaller financial institutions and FinTech firms, through the downturn. As part of this package, we launched a training allowance grant, which allows financial institutions, especially the smaller ones and FinTechs, to make use of the downtime to train and deepen the capabilities of their employees. We also set up a new digital acceleration grant. The larger financial institutions are able to invest heavily in digital platforms and digital capabilities. The smaller ones do not have the capacity to do that.
In the event of a bad state of the world – default by the reference entity in a CDS context – the writers of the insurance suffer a significantly negative payoff, eliminating the apparent alpha earned in good states (Figure 3). This was, in effect, the AIG strategy. AIG is believed to have written around $ trillion of CDS protection. This strategy delivered large apparent “alpha” returns during the disco years. But when the music ceased and true beta was revealed, AIG required state support of around $ These five strategies are the latest incarnation of efforts by the banking system to boost shareholder returns and, whether by accident or design, game the state. For the authorities, it poses a dilemma. Ex-ante, they may well say “never again”. But the ex-post costs of crisis mean such a statement lacks credibility. Knowing this, the rational response by market participants is to double their bets. This adds to the cost of future crises. And the larger these costs, the lower the credibility of “never again” announcements. This is a doom loop. The “St Petersburg paradox” explains how a gambling strategy which starts small but then doubles-up in the event of a loss can yield positive (indeed, potentially infinite) expected returns. Provided, that is, the gambler has the resources to double-up in the face of a losing streak. The St Petersburg lottery has many similarities with the game played between the state and the banks over the past century or so. The banks have repeatedly doubled-up.

So should its content, for instance: "since early 2018, nine of the biggest international banks have increased the assets booked at their eurozone entities more than sixfold to almost € trillion"; "if any city can make claim to being the bloc's new pre-eminent hub, it's Paris", "many executives who spoke to Bloomberg said they expect headcount to keep growing from local hiring [in Paris]". Indeed, Paris is the only financial center to offer such a wide range of financial activities, from global asset management to insurance and banking. Beyond the large number of subsidiaries established in or relocated to Paris since Brexit – at least thirty banks, twenty asset managers, several market platforms for instance –, we should also consider the activities performed through branches in Paris, especially trading rooms and desks, which are sometimes far more significant than the subsidiaries to which they are legally bound. Contrary to other cities, which have attracted one or two kinds of financial services, Paris is the only one to have benefited from relocations on all segments of the financial industry. More importantly still, these moves were not one-off events: the momentum has lastingly shifted from London to continental Europe. We observe a steady shift, which shows no sign of losing steam.
According to our model, a rise in house prices has a strong and prolonged effect on household debt, as it takes time before all dwellings have been traded at the new higher price level. Growth in credit to households can therefore remain high for quite some time, even if the increase in house prices should start to subside. What then is driving house prices? In our empirical model, house prices are determined by household income, banks’ lending rates after tax, the housing stock, unemployment, and an indicator of household expectations of their future financial situation and of the Norwegian economy as a whole. 3 Household income has contributed most to the rise in house prices in the last two years. Interest rates  3  D. H Jacobsen and B.E. Naug (2005): “What drives house prices?”, Norges Bank Economic Bulletin, no. 1/05, pp. 29-42. BIS Review 106/2006  5  have increased since the summer of 2005. Given the lags involved, the cumulative contribution from interest rates to house prices is still positive. Nevertheless, in the period ahead, the normalisation of interest rates in Norway may moderate the rise in house prices. Observations from other countries, such as the UK and Australia, indicate that a rise in the key interest rate by the central bank has been followed by slowdown in house prices. Growth in household debt has been higher than growth in disposable income for several years now.

He says: “Policies that are too timid in leaning against financial booms but that are then too aggressive and persistent in leaning against financial busts may end up leaving the authorities with no further ammunition over successive financial and business cycles” 1 Yes, this is the case in many countries, including the Czech Republic now we have reached the zero lower bound. So, to put it more bluntly: the problem also might be that we central bankers are sometimes more procyclical and less symmetric in our thinking than we should be. And the fourth constraint is our own disbelief in the power of monetary policy. Our experience – even in a small open economy – is that autonomous monetary policy can be very much of help, if not key, in stabilising the general macro-environment compared to the situation where monetary policy is just being passively accepted from abroad. And I say that despite the fact that inflation stabilisation in the current circumstances is a necessary but not sufficient condition for long-term financial stability. As the debate today shows, what this sufficient condition for long-term financial stability is, is not entirely clear and remains to be determined. But I would tend to believe that if there is any way forward in the area of financial stability, monetary policy will have to play an absolutely key role – a bigger role than many now think or admit. Thank you.
Speech  Embargo 14 November 2019, 6.30 pm  Climate risks and central banks: an SNB perspective Money Market Event  Andréa M. Maechler and Thomas Moser Member of the Governing Board / Alternate Member of the Governing Board ∗ Swiss National Bank Geneva, 14 November 2019 © Swiss National Bank, Zurich, 2019 (speech given in French)  ∗ The speakers would like to thank Fabio Panzera and Nicolas Stoffels for their support in drafting this speech. They also thank Toni Beutler, Till Ebner, Erich Gmür, Alain Kouo, Mico Loretan, Alexander Perruchoud, Bertrand Rime, Sandro Streit and Jonas Stulz for their valuable input as well as SNB Language Services. Page 1/12  Ladies and Gentlemen I wish you a warm welcome to the Swiss National Bank’s second Money Market Event in 2019. The SNB’s monetary policy continues to evolve in a particularly dynamic context. The global growth outlook is clouded by considerable uncertainty – principally of a political, geopolitical and economic nature. This general environment is reflected in the Economic Policy Uncertainty Index developed by Baker, Bloom and Davis. As you can see in chart 1, this index hit a new high in August 2019. The level of uncertainty captured in the index is currently almost three times above its historical average. Among other things, this context has exerted strong downward pressure on long-term interest rates – indeed, this pressure has been stronger than macroeconomic indicators have suggested in recent months.

As you may be aware, a literate citizenry is a key prerequisite for a sustainable economic future. It is now my honour and privilege to declare the 2008 ZAMBIA BOOK FAIR officially open. I thank you all for your kind attention. 2  BIS Review 74/2008
Nevertheless, in line with the easing of uncertainty perceptions during the last period, the forecasts given in the last chapter of the Report are based on the projections that the change in global liquidity will be moderately realized and international liquidity conditions will not experience any sudden changes. Interpretation of forecasts Distinguished Guests, As I emphasized in the introduction to my speech, it takes a certain period of time for the monetary policy decisions to manifest their effect on the economy. Taking this fact into consideration, the Central Bank establishes its monetary policy under a medium-term perspective and focuses on the consistency of future inflation with the target, not that of today’s inflation. In this framework, since it is considered that the average control horizon of monetary policy on the economy involves a period of time of one and a half-years, the forecasts are presented so as to include the remaining three quarters of 2006 and the first three quarters of 2007. BIS Review 67/2006  17  Graph 25.Inflation and Output Gap Forecasts  10 9 8 7 6 5 4 3  Forecast range*  2  Output gap  1  ± 2 Uncertainty Band  0 -1 -2 7:03  7:02  7:01  6:04  6:03  6:02  6:01  5:04  -3  *The probability of inflation staying within the forecast range is 70 percent.

Let me summarise the three main points: •  The Eurosystem is exploring synergies between TARGET2 and T2S, with the ultimate goal of achieving a consolidated Eurosystem market infrastructure. •  We are assessing new service opportunities arising from bringing the two infrastructures closer together. In particular, we are considering enhancements to the TARGET2 services in the field of instant payments. •  The Eurosystem will increase harmonisation of its own collateralisation techniques and procedures. We will also consider the business case for a common Eurosystem collateral management system. As part of this morning’s panel, we will delve a little deeper into this vision and will discuss some of the challenges we can expect the future to bring. I would like to welcome the panel members and Marc Bayle who will moderate this session. 2  BIS central bankers’ speeches
Owing to the characteristics specific to the Norwegian credit market, policy rate cuts quickly result in lower borrowing costs for households and enterprises. One characteristic is that most households prefer floating-rate loans. We need look no further than to Sweden to find a considerably lower share of floating-rate loans than in Norway. In the UK and Germany, only a small minority show the same preference as Norwegian households. Chart: Share of floating-rate loans – new mortgages Another characteristic of the Norwegian credit market is that a large share of corporate financing is obtained via banks and often at floating rates. Changes in the policy rate will pass through to banks’ funding costs through short-term money market rates. The high share of Norwegian loans issued at floating rates has its counterpart in banks’ preference for floating-rate funding. Fixed-rate payments on bank bonds are typically swapped for floating-rate payments in the derivatives market. In addition, most retail deposits pay interest at a floating rate. Under normal conditions, changes in funding conditions will in the next round be passed on to banks’ retail borrowers. Thus, the structure of the Norwegian credit market makes changing the policy rate an effective tool. But how far can the policy rate be lowered before monetary policy loses its effect? In Norway, the policy rate has never been lower than half a percent. In other countries, policy rates have been as low as minus 0.75 percent. Negative policy rates in other countries have on the whole passed through to money market rates.

And the US could be the first country to show signs of a turnaround in inflation. 3/7  BIS central bankers' speeches  Its output and unemployment gaps are more or less closed. And the recently announced tax cuts could end up boosting aggregate demand beyond the productive capacity of the economy. The structural factors could well be having a “one-off” effect on prices, rather than a continuing dampening impact on inflation. The disinflationary effects of globalisation may not persist for much longer. The world has already globalised considerably over the last two decades. With populist pressures, it is unlikely the trend will continue at the same pace. Technological change may still have some legs to run and its disinflationary effects may persist for a while longer. But will they be strong enough to offset the short-term inflationary pressures from tightening cyclical conditions? So what happens if inflation returns sooner or comes in higher than expected? Central banks will obviously have to tighten monetary policy faster and by more. That in itself should not derail economic growth as long as the tightening is done judiciously and credibly. No central bank wants to cure inflation by creating a recession. But monetary policy tightening has always been a tricky business fraught with risk. More so now, with the economy attuned to a prolonged period of very low interest rates for such a long time. An increase in interest rates could put considerable strain on debt service ratios and lead to sharp cutbacks in household and corporate spending.
Its forecast published in March this year indicates that inflation will decelerate rapidly in the second half of this year and into 2008, and will be close to target after the middle of next year. One of the forecast assumptions is that the policy rate will be lowered in the final quarter of this year and continue to come down next year and into 2009. Such a development need not affect carry trades. However, it could depend on the scale of the reduction in the current account deficit. The more that it narrows, the less risk investments in Icelandic currency should entail, other things being equal. Under such circumstances, conditions may well emerge in which carry trades can continue with a smaller interest rate differential between Iceland and abroad than has been the case in recent times. Nonetheless, the Central Bank underlines that investors should be aware of the risk involved in investing in króna-denominated bonds. It is clear, as already mentioned, that some investors in glacier bonds have not made the effort to acquaint themselves properly with this risk. The way that events unfolded in 2006 was instructive. It is important to point out that no serious incidents or credit events ever arose and if there had been a risk of a real financial crisis a year ago – which we considered unfounded – it is scarcely present now. Many lessons can be learned from last year’s experience. First, the open financial system and free capital movements gave opportunistic investors the chance to discover Iceland.

Their trading has a range of positive effects but also poses a  4  BIS Review 60/2007  risk of heightened volatility and fluctuations in exchange rates and interest rates. Icelandic financial companies have expanded rapidly overseas, and too rapidly in some people’s view. Meteoric growth tends to raise questions anyway, and when small institutions are involved from a country that has not had a high profile in the banking world, these questions may be more aggressive and critical than otherwise. Icelandic banks discovered this last year. They have learnt a valuable lesson and clearly realise the importance of transparency and open communication, and the need for leeway in their funding and good credit ratings. This experience must not be forgotten. General market discipline and scrutiny will help to prevent that from happening. For government authorities, it is important to pursue balanced and credible economic policies and ensure that the administrative and financial infrastructure remain solid, including strong and efficient financial supervision. The Central Bank tightened its monetary stance sharply last year, one result of which was a lower rate of inflation than otherwise. The Treasury has shown a surplus for many years and privatisation proceeds were deployed to retire debt. Today, the Treasury’s foreign debt is not higher than the Central Bank’s foreign reserves, i.e. roughly 15% of GDP, and its domestic debt only 10% of GDP. Financial supervision has been boosted and will be strengthened further. It is in line with best European practice.
It is, for instance, tempting to compute the cost of home ownership on the basis of a permanently low rate, a practice which can lead to grossly overestimating the cost advantage of home ownership. The persistent real estate price increases reported in Figure 1 are also relevant in this context. This can lead to an overestimation of housing wealth, on the one hand, or to an underestimation of the riskiness of mortgages granted on the basis of these elevated housing prices, on the other. A long period of rising prices also tends to feed beliefs that prices can only go up, contrary to all historical experience (“this time is different”-argument10). At the same time the low interest rates put pressure on the margins of lenders. This increases their propensity to compensate lowered margins with increased volumes. All this leads to increasing fragility and added riskiness. For Switzerland, indications of such a high risk appetite are found in recent survey data.11 Summing up, the analysis of the Swiss situation suggests that although structural factors can possibly explain a high level of credit-to-GDP in Switzerland in international comparison, they are unlikely to rationalize the most recent upward move in this ratio. The latter is likely to be a cyclical movement that could reverse when interest rates themselves return to more normal levels at some point in the future. 5. Conclusion: Fasten your seatbelts! What does this analysis imply for market participants?

My conclusion is that the easing of financial conditions resulting from non-traditional policy actions has had a material effect on both nominal and real growth and has demonstrably reduced the risk of particularly adverse outcomes. Nevertheless, I also conclude that, with the benefit of hindsight, monetary policy needed to be still more aggressive. Consequently, it was appropriate to recalibrate our policy stance, which is what happened at the last FOMC meeting. As I argued in a recent speech, simple policy rules, including the most popular versions of the Taylor Rule, understate the degree of monetary support that may be required to achieve a given set of economic objectives in a post-financial crisis world. That is because such rules typically do not adjust for factors such as a time-varying neutral real interest rate, elevated risk spreads, or impaired transmission channels that can undercut the power of monetary policy.2 One reason that monetary policy may have been less powerful than normal is that one of the primary channels through which monetary policy influences the real economy – housing finance – has been partially impaired. This has both quantity and price dimensions. Credit availability to households with lower-rated credit scores remains limited and households with homes that have fallen sharply in value have lost most or all of their home equity and this makes it very difficult for them to refinance these mortgages. 2  Dudley, William C. (2012). “Conducting Monetary Policy: Rules, Learning and Risk Management”.