samchain/econo-pairs-v1 huggingface dataset:
To address this, one approach has been to distinguish between the two facets of financial stability: the systemic importance of a given financial institution on the one hand, and the procyclicality of the overall financial system on the other. Such taxonomy implies that macroprudential policy should aim to improve the resilience of the financial infrastructure in these two aspects. With respect to systemic importance, various measurement tools have been developed, ranging from the network externality approach to the concept of conditional value-at-risk or CoVaR associated with the works of Adrian and Brunnermeier. The latter method has since been applied to the cases of Hong Kong and Thailand, by their respective central bank staffs. 1 On the second facet, there have also been attempts to get a handle on procyclicality quantitatively. Notably, credit-to-GDP ratio has been proposed as an intermediate indicator around which macroprudential policy such as countercyclical capital buffer can be designed. While scientific work on the conceptual and measurement issues are still progressing, central banks implementing macroprudential policies will need to be content with something less holy. At the Bank of Thailand, implementing macroprudential policy involves monitoring a large set of indicators, covering seven important areas in which experience and history have shown are prone to financial vulnerability. Such a wide coverage is designed to make up for any shortfall in terms of scientific measurement and increase the chance of detecting financial imbalances as they begin to develop.

Similarly, in our case, the Bank of Thailand recently launched the Financial Sector Master Plan 2, in which we outline the key principles and guidelines for further strengthening of the financial sector over the next five years. Chief among the agenda are our commitments to bring down financial transaction costs through further deregulation and promotion of more competition in the banking industry. The second element of financial soundness is the integrity aspect. That is, financial institutions must be sufficiently immune to “runs”, which I define loosely as correlated and large-scale withdrawals of deposits, triggered by sudden loss of confidence in the solvency of banks concerned. On this, a key lesson for emerging markets from the global financial crisis is that the push for financial market development must be accompanied by constant efforts to review and bolster as necessary the supervisory framework and standards, so that financial soundness can be ensured without compromising the financial system’s integrity. The third and last element of financial soundness is the stability aspect. The financial sector, while playing an important role in supporting the real economy, can at the same time be the source of risk and instability to the real sector. As we know, the spillover effects from financial to real sector can take many forms. For example, the tendency for financial institutions to extend more credit during economic upswings, and scale back lending precisely during downturns, can contribute to the amplitude of the business cycles.
6  BIS Review 126/2010  Figure 3 IMACEC (1) (index, 2003=100)  Contribution to GDP growth (real annual change, percentage points)  135  135  130  130  125  125  120 115  120 115  07  08  09  25  25  20  20  15  15  10  10  5  5  0  0  -5  -5  -10  -10  -15  07  10  III  08  III  09  III  -15  10  GFCF Inventory change Government consumption Private consumption Net exports (2) GDP (1) Seasonally-adjusted series. (2) Goods and services exports minus goods and services imports. Source: Central Bank of Chile.

The objective must therefore be to constantly try to find new ways of raising growth without jeopardising economic stability. This also entails a continued challenge for the Riksbank to regularly analyse the Swedish economy’s growth potential so that monetary policy will also continue to be well balanced in the future. Thank you! 6  BIS Review 45/2003
It is also easier to raise prices, as competitors do the same. We saw an example of this in the Riksbank's Business Survey last autumn, where more than two out of three companies responded that they were now raising their sales prices more often than normal and that this is mainly because costs are rising all the time. In turn, the price increases affect other companies' input costs, raising expectations of future cost increases for which they want to compensate with higher prices – and so on. Companies' labour costs are also affected if wage increases are pushed up by demands for compensation for the high inflation. Another problem is that if inflation is high, it varies more over time than if it remains at a low level. This makes it more difficult for households and companies to plan and make financial decisions and it leads to a poorer functioning of the economy as a whole. In such an environment, it becomes more difficult, for example, to interpret the cause of price increases on individual goods and services. Is the price increase a sign of a general price increase in the economy, or has the price of the product actually increased more than other similar goods? The risk is that consumers become hardened in the long run and accept all price increases as part of inflation, making it easier for companies to keep raising prices. It is therefore important to remain active and compare prices.

Dimitar Bogov: Challenges of bolstering growth rates and ensuring their sustainability Opening statement by Mr Dimitar Bogov, Governor of the National Bank of the Republic of Macedonia, to the Bank for International Settlements Working Party on Monetary Policy in Central and Eastern Europe, Skopje, 11–12 February 2016. *  *  *  Dear colleagues, dear guests, It is my honour to welcome you for the Annual Meeting of the BIS Working Party on Monetary Policy in Central and Eastern Europe, hosted by the National bank of the Republic of Macedonia. I look forward to discussions on the key issues the policymakers are currently facing. Many of the economies in our region have strong trade and financial linkages with the rest of the world. Therefore, a natural starting point would be to assess how conducive the global environment is for our key goal of bolstering growth rates and ensuring their sustainability. Unfortunately, almost a decade after the acute stage of the crisis, it seems that the global environment is still fragile. Although the world economy is recovering, growth rates do not seem to be strong enough, and what is even more problematic, this “low growth mode” might be here to stay. The frequent downward revisions of global growth prospects indicate that uncertainty is weighing on growth. Global growth rates are staggering slightly above 3%, on average, and the medium-term prospects do not seem to differ much.
12  Figure 1  New daily confirmed cases of Covid-19 (*) (number of persons per million inhabitants)  Selected economies  225  U.S.  180  Latin America  225 300  Perú  180 240  Spain  300  Chile  240  Brasil  135  135 180  180  90  90 120  120  Italia  45  France  Alemania 0 15-03 15-Mar. 15-06 15-Jun. Colombia 60  45  60  0  0 21-mar. 03-21  México Argentina  0  21-jun. 06-21  (*) Moving 14-day average. Sources: European Centre for Disease Prevention and Control (ECDC) and Chile’s Ministry of Health. Figure 2  Annual GDP change and drops in mobility - 2020.Q2 (percent)  0 Korea  -5  U.S. Annual GDP change  -10  Chile  -15  -25  Mexico  France Spain  U.K.  -30  Germany Italy  Colombia  -20  -35  Japan  R² = 0.7678  Peru -80  -70  -60  -50  -40  -30  Drop in Google Mobility Index Drop in Google Transit Sources: Bloomberg and Google.

The scope of the directive may also include hitherto unregulated technical service providers supporting payment services. Next, the future architecture of payment services in the European Union will be built on immediate payments. In this regard, the Commission plans to assess the need for a statutory obligation to participate in the SEPA scheme of the European Payments Committee for immediate credit transfer in euros (SCT Inst.). To encourage the use of immediate payments, consideration is being given to requiring that immediate payment fees be no higher than ordinary credit transfer fees. In Bulgaria, Borika AD, in close cooperation with the BNB as an operator of the real-time gross settlement payment system (RINGS), is in an advanced stage of development of a project for immediate payments in BGN, based on the requirements of the SEPA scheme for immediate credit translations (SCT Inst.). The ambition of the company is in 2021 for the payment service 1/2  BIS central bankers' speeches  providers in the country to be able to provide their customers with immediate credit transfers in BGN. Interconnection and interoperability between the various payment systems providing clearing and settlement is required to ensure cross-border reachability in the execution of immediate credit transfers in euro. In July 2020, the ECB announced its decision to introduce measures to ensure a trans-European scope of immediate payments in euro by the end of 2021. As a result, all payment service providers that have joined the SCT Inst scheme will be required.
When this is carefully done the Riksbank – say some of the critics – can use the expected higher inflation (that we ourselves have created) as an argument for making the interest rate increases we have wanted to make all along. This type of criticism was common last autumn, for example, when the BIS Review 14/1998  -8-  Riksbank spoke in various connections about its inflation outlook and explained that interest rate increases might be necessary. I have the following answer to these criticisms. To begin with, the Riksbank’s focus on inflation developments is entirely natural. It is undoubtedly our task to show clearly the reasons for our decisions. Without a candid accounting of monetary policy from the Riksbank’s perspective it would be more difficult for the political decision-makers and the general public to evaluate monetary policy and our fulfilment of our objective. Think what type of debate we would have and how monetary policy would be seen if the Riksbank only made its decisions without commenting at all on the outlook for inflation and without giving reasons for its policies. Thus the need for the Riksbank to speak about inflation is obvious. Naturally it cannot be ruled out that in doing so it will influence households and businesses in their views on price developments, however our influence should not be exaggerated. The cause-and-effect relationship is rather the reverse: the Riksbank reacts to inflationary developments, which in turn are determined by a great number of decisions by businesses and households.

A quite short time horizon means that substantial changes in the interest rate are required in order to achieve the objective. Such substantial changes may in turn result both in monetary policy appearing abrupt and in undesirable and significant fluctuations in growth and employment. In contrast a very long time horizon will bring greater short-term stability to growth and employment, but at the same time lead to considerable fluctuations in inflation. These fluctuations may weaken confidence in the price stability policy and lead to higher instrumental rates over time. Here monetary policy is obviously faced with a balancing problem. The more credible the policy is, the more room there is to manoeuvre in practice. There may be reasons for completely abstaining from reacting to certain inflationary impulses of a one-time nature. An example of such “one-time inflation” is indirect tax hikes. If price disruptions are judged to have merely temporary effects on inflation and do not affect expectations of future inflation, it would imply unnecessary real economic instability to prevent the price increases from having an impact on the consumer price index. Question 6: Doesn’t the Riksbank itself “talk up” inflation? Now and then the criticism is made that the Riksbank stresses the risks of inflation in the economy and is thereby guilty of “talking up” inflation.
Jean-Pierre Danthine: Causes and consequences of low interest rates Speech by Mr Jean-Pierre Danthine, Vice Chairman of the Governing Board of the Swiss National Bank, at the Swisscanto Market Outlook 2014, Lausanne, 14 November 2013. *  *  *  I would like to thank Till Ebner, Fabian Gunzinger and Patrick Saner for their very valuable support in drafting this speech. Introduction In the wake of the financial crisis, long-term and short-term interest rates have been at historically low levels for several years already. This holds for advanced economies, in general, and for Switzerland, in particular. Central banks have certainly been important actors in this play, as the financial crisis and its economic consequences called for decisive action: central banks around the world lowered their policy rates sharply; they then adopted unconventional measures, often to exert direct downward pressure on long-term rates and risk premia. But interest rates developments are not just about monetary policy; they reflect the economic and financial circumstances that prevail in a given situation, circumstances to which monetary authorities have to adapt. With this in mind, I will, in the first part of my speech, review the facts behind the currently low interest rates. In doing so, I will focus on the two phenomena highlighted in chart 1: a secular decline in long-term interest rates since the 1980s, which had already brought interest rates to low levels before the financial crisis began, and a cyclical component that led to the extreme lows we have seen over the last few years.

Even if our economies are slowing down, no recession lies on the horizon. Some lessons so far for the euro area The crisis is clearly not over and all the consequences of accumulated financial imbalances have not unravelled yet. However, after more than seven months, I think it is already possible to take stock of what we have learnt so far. My concluding remarks will draw tentative lessons along three main lines. 1. As regards liquidity management first, it should be emphasized that close cooperation between central banks, and notably between the ECB and the Fed has been crucial for dampening the effects of the protracted confidence crisis that has frozen up international money markets. Our coordinated actions with the Fed and other major central banks, notably to provide euro area resident banks with US dollars under swap agreements with the Fed, have clearly demonstrated our determination to act collectively to restore normal liquidity conditions in the interbank markets. Enhancing swift and complete information exchanges between central banks, and also between central banks and supervisors is certainly a continuing priority. I have to say that the French model of bank supervision, where the supervisors are inside the central bank, has shown once more its advantages in the current context. 2. As regards monetary policy, I want to stress that even a flexible policy – as inspired by risk management considerations à la Miskin – can only be implemented if needed when inflation expectations remain appropriately anchored to the central bank’s objective.
More recently, however, in the face of slowing economic growth, they have adopted a range of measures to support domestic credit. A sharp slowdown in economic growth would make China’s elevated debt levels significantly less sustainable. China’s external debt is small and denominated in its currency. Although a number of international banks are active in its jurisdiction, its financial system is not highly integrated into the global system. A debt correction in China would first and most directly affect the Chinese economy. The impacts could be expected to spillover, however, to wider financial stability through a number of channels. The Chinese economy is now pivotal to regional growth and one of the main pillars of world growth and trade. As well as the economic effects and effects directly through banking exposures, it is likely that there would be a severe impact on financial market sentiment, this effect was seen in 2015 when a period of sharp correction in domestic Chinese financial markets sparked a correction in US financial assets. 11  All speeches are available online at www.bankofengland.co.uk/speeches  11  Pricing of risk  Finally, I have tried today to trace a line from financial stability risks in the overall level and growth rate of global debt to those that may lie beneath the surface of the aggregate numbers.

Financial crises are much more likely to be associated with corrections of asset values where asset purchases have been financed with debt rather than equity. Aggregate global debt – public, private and financial – is now around 320% of global GDP, close to its record highs. Excluding financial sector debt, the debt of the real economy is around 240% of global GDP.6  But aggregates can only tell you so much. And they can hide a multitude of sins. We need to need to look not just at the level of the total, but the growth rate and sustainability. And we need to drill down into the composition to see where the risks are most prominent. Growth, level and sustainability  Research suggests that it is the growth rate of debt rather than its actual level that is the leading indicator of financial crises. Bank of England work based on 130 downturns in 26 advanced economies since the 1970s suggests that a rapid build up of debt is the best early warning indicator of a recession.7 Other academic work supports this conclusion.8  The actual level of debt matters rather in determining the depth, as opposed to the probability, of the crisis. So we need to look at the growth rate as well as the level. 6  See IIF Global Debt Monitor. Of the 317% of global debt to GDP, 60pp is household debt, 90pp is to non-financial corporates, 86 is government, and 80pp is financial corporates.
William C Dudley: How goes the recovery? Challenges for the nation, the region and the Fed Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at Cornell University, Ithaca, New York, 25 October 2010. *  *  *  Good morning. I am pleased to have this opportunity to speak to you as I travel through Upstate New York to meet with various communities in the region. This afternoon I will focus on national and regional economic conditions and what the Fed is doing about them – with particular attention to the housing sector and to conditions in Upstate New York. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee (FOMC) or the Federal Reserve System. Introduction to the New York Fed As many of you know, this is my first chance to speak at Cornell University since I became president of the New York Fed. So, by way of introduction, let me start with a synopsis of what the New York Fed is, what we do and what makes my job so interesting. The New York Fed is part of the Federal Reserve System, America’s central bank, and was created by Congress in 1913. With this act, Congress delegated to the Fed System its constitutional authority to manage the money supply – and designed it be decentralized, representative of all of America and independent of the political process.

On the sales side, even though low mortgage interest rates and falling home prices have together boosted housing affordability to its highest level in 40 years, the current pace of sales is quite sluggish. Impediments to home sales include tight lending standards, a weak job market and continued uncertainty about home prices. Importantly, the large drop in home prices between 2006 and 2008 also reduced homeowner equity broadly, making it more difficult to “trade-up” and move into better homes. With lower home prices, many families now owe more on their mortgages than their homes are worth. This means that they cannot refinance or sell their homes easily if they experience a crisis such as a job loss or a serious illness. Foreclosure completions are at an all-time high, although the initiation of new foreclosures may be finally slowing. Recently, attention has focused on cases where some of the documentation used in the foreclosure process may have been flawed. The Fed actively encourages efforts to find viable alternatives to foreclosure. Not many people know this, but a team of New York Fed officials work with mortgage counselors and community activists to support distressed homeowners, and our lawyers support legal aid programs for people facing foreclosure. At the same time, it is  BIS Review 141/2010  3  important that foreclosures that comply with the law can ultimately take place. This is a necessary part of returning the housing market to more normal conditions.
Second, the conduct of monetary policy is based on day-to-day discretion. The exercise of this discretion, however, is limited by Norges Bank's mandate and our interpretation of it. Furthermore, we have ourselves contributed to restricting the exercise of discretion by being transparent in our response pattern, our analyses of economic developments and our assessment of the results of the monetary policy that has been conducted. We hope, and believe, that this contributes to consistency over time and makes an important contribution to building confidence and credibility. Thank you for your attention. References: Duisenberg, Willem F. (2000): "Making monetary policy in a broad monetary union", BIS Review 2000/88. Eitrheim, Øyvind, Espen Frøyland and Øistein Røisland (1999): "Can the price of currency options provide an indication of market perceptions of the uncertainty attached to the krone exchange rate? ", Economic Bulletin 3/1999, Norges Bank. Kloster, Arne (2000): "Estimating and interpreting interest rate expectations", Economic Bulletin 3/2000, Norges Bank. Storvik, Kjell (1998): "Current economic and monetary policy issues", address given by Kjell Storvik, Governor of Norges Bank at the 43rd annual general meeting of FOREX NORWAY on 28 August 1998. Svensson, Lars E.O. (1997): "Inflation forecast targeting: Implementing and monitoring inflation targets", European Economic Review 41, pp. 1111-1146. BIS Review 7/2001  13

Only if investors outside the euro area are confident that their purchasing power will be preserved over time, will they engage in euro-denominated financial activities. Therefore the commitment of the ECB to pursue price stability in the medium term remains a key factor behind market confidence in the euro as a stable currency. Besides price stability, the current and expected growth performance of the euro area economy is an additional factor behind the attractiveness of the euro. Sustained non-inflationary growth in the euro area economy would have beneficial effects on market expectations and foster the international use of the euro. As regards the private use of the euro, recent trends show that it has mainly been used as a financing currency. With regard to international debt securities, the euro is more widely used than the former national currencies of the euro area countries. The issuance of euro-denominated assets by residents outside the euro area accounted in 1999 for almost 30% of total issues denominated in a currency different from that of the borrowers’ respective geographical residences. By comparison, the combined share of all former national currencies of the euro area countries and the ECU amounted to only 18% of total gross international issuance in 1998. The growing use of the euro was mainly mirrored in a decline in the share of US dollar-denominated issues from 58% to 48% between 1998 and 1999. These trends are even more striking if one focuses on the bonds and notes segment of the market.