samchain/econo-pairs-v1 huggingface dataset:
So I am very grateful for the opportunity to expand on our role here today. I want to cover three main themes. First, I want to explain the Bank's approach to the exercise of monetary policy, and then, second, give you some assessment of the current state of the British economy. And, third, I want to discuss the Bank's other key role - that of maintaining financial stability in the system as a whole. That role is, I think, less well understood than our monetary policy responsibilities. But financial stability is every bit as crucial to our national welfare. So I'd like to spend a few minutes setting out our objectives, and picking up on one or two themes of current concern. Maintaining monetary stability I turn first, though, to the Bank's better known role, that of maintaining monetary stability. Our target for monetary policy is extremely clear. We aim for 2½% inflation in retail prices (excluding mortgage payments) at all times. That target is set by the Chancellor. And it is symmetric: that is to say, we worry as much about being below the target as we do about being above it. That makes sense because the problems of severe deflation are just as great as the problems of severe inflation. Since May 1997, when the current arrangements were put in place, RPIX inflation has averaged 2.3%.

Before the crisis, the balance sheet was much smaller. It reached its present size as a result of the FOMC’s large-scale asset purchase programs, which were undertaken to support the economic recovery by easing financial conditions to a greater extent than could be achieved solely through reducing the federal funds rate, as the FOMC’s ability to provide further monetary accommodation through this instrument was limited by the zero lower bound on interest rates. 2 / 15  BIS central bankers' speeches  These asset purchases had two effects on the balance sheet: they increased the size of the asset portfolio, and they equally increased the size of the Federal Reserve’s liabilities, largely through growing the stock of bank reserves.4 In addition to being larger than it was before, the balance sheet has a significantly different composition than before the crisis. On the asset side, the most important change has been the addition of agency MBS. For many years, the FOMC has made it clear that it did not intend for the balance sheet to remain at this size forever. 5 Instead, through its statements and its Policy Normalization Principles and Plans, it has indicated its intention that the Federal Reserve will, in the longer run, hold no more securities than necessary to implement monetary policy efficiently and effectively, and that in the longer run it will hold primarily Treasury securities.
Yves Mersch: Challenges for completing Europe’s economic and monetary union Speech by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the MNI Connect event, Singapore, 13 October 2015. *  *  *  Over the past few months, Europe has faced two exceptional challenges. First, there was the new adjustment programme for Greece. And second, there has been the large influx of refugees, a challenge that is very far from the competences of the European Central Bank (ECB). Though very different in nature, these two events offer a common lesson for future challenges that we will collectively face: that Europe is strong only when it acts on the basis of solidarity and cooperation. I would like to talk about two further topics of importance today: first, the ECB’s assessment of recent economic developments and their implications for our monetary policy stance; and second, the necessity for completing Europe’s economic and monetary union. Over the summer, industrial production and other indicators of economic activity in the euro area have shown signs of resilience. Yet at the same time, the macroeconomic environment has become more challenging. The ECB’s latest macroeconomic projections indicate a weaker economic recovery and a slower increase in inflation rates than was expected earlier in the year. Inflation will remain close to zero in the very near term, before rising again towards the end of the year.

Prudential measures applied since the 1990s have been successful in containing the build up of such financial imbalances, thus reducing the risk to financial stability. The world going forward is likely to continue to be affected by financial crisis. History has shown that there have been more than a hundred distinct banking crises in these two recent decades. The prospect of surviving such a crisis is not only about building resilience but also having the capacity to manage it. The institutional arrangements for financial stability continue to be a key area of debate. The main issues have tended to centre on the role of the central bank in financial stability, and whether there should be a single or multiple supervisory authorities. Given that the central bank is the lender-of-last-resort, the central bank is invariably in the frontline of the actions to restore stability. While there is no general agreement on the optimal structure for the supervision function, it is recognised that financial systems have become increasingly complex and interconnected. Whether a country adopts an integrated model or a model that is organized along sectoral lines, effective coordination is critical to effectively safeguard financial stability. As the entity responsible for monetary policy, the Central Bank undertakes surveillance on macroeconomic conditions and in undertaking open money market operations and the management of international reserves, the Central Bank has direct contact with the financial markets.
All recent incoming information had fully confirmed our view that, in a context of vigorous money and credit growth and sound economic fundamentals in the euro area, the risks to price stability over the medium term are clearly on the upside, as I said, on behalf of the Governing Council, after our meeting on Thursday, 6 December 2007. The recent substantial increase in oil and food prices, together with unfavourable base effects from energy prices, owing to the marked decline in oil prices a year ago, are having a strong upward impact on inflation in the current context. Looking ahead, the inflation rate is expected to remain significantly above 2% in the near future, and it is likely to moderate only gradually in the course of 2008. Hence the period of temporarily high inflation rates would be somewhat more protracted than previously expected. Looking further ahead, the December 2007 Eurosystem staff macroeconomic projections foresee annual HICP inflation to be between 2.0% and 2.2% in 2007, to then rise to between 2.0% and 3.0% in 2008, before moderating to a range of 1.2% and 2.4% in 2009. Compared with the September 2007 staff projections, the ranges for 2007 and 2008 have shifted upwards. These staff projections are based on two key assumptions. The first is that recent oil and food price dynamics and their impact on HICP inflation will not have broadly-based second-round effects on wage-setting behaviour. The second key assumption is that growth in profit margins will moderate over the projection horizon.

Denny H Kalyalya: Expansion of Zambia’s banking sector Remarks by Dr Denny H Kalyalya, Deputy Governor-Operations of the Bank of Zambia; at the official opening of Bank of China’s new premises, Lusaka, 9 December 2008. *  *  *  • Honourable Minister of Finance and National Planning, Dr. Situmbeko Musokotwane, MP; • His Excellency – the Chinese Ambassador to the Republic of Zambia; Mr. Li Qiangmin; • Managing Director of the Bank of China (Zambia) Limited; Mr Du Qiang; • Distinguished Invited Guests; • Ladies and Gentlemen. I am greatly honoured for having been invited to speak on the occasion of the official opening ceremony of Bank of China’s new premises. Ladies and Gentlemen As part of the on-going Zambia-Chinese relationship, the Bank of China was established in 1997. Since then the Bank has recorded tremendous progress. Distinguished Invited Guests During the past 8 years, the overall financial performance and condition of the banking sector has been satisfactory. The sector has continued to expand and we anticipate increased economic and investment activity in the period ahead. Banks are expected to continue to provide the required level of finance to consolidate the economic gains registered so far. The Bank has achieved tremendous growth since its inception in 1997. During the last eleven years, total assets have increased by 325% to K507.9 billion in October 2008 from K13.8 billion in December 1997. Regulatory capital increased by about 1,000% to K41.9 billion in October 2008 from K3.8 billion December 1997.
Zdeněk Tůma: Forecasting at the Czech National Bank Speech by Mr Zdeněk Tůma, Governor of the Czech National Bank, at the Bank’s Forecasting Dinner, Prague, 18 February 2010. *  *  *  Ladies and gentlemen, dear colleagues, Over the last seven years I have had the privilege to welcome you here at the premises of the CNB and open the Forecasting Dinner with my thoughts on forecasting and related issues. Unsurprisingly tonight it won’t be any different. However, as it is almost certain that this is my last chance to speak to such distinguished audience still as the governor of the Czech National Bank, I would like to use this opportunity and discuss the forecasting process in the Czech National Bank from a little bit broader perspective. Those of you who were expecting exact inflation and GDP growth numbers I will kindly ask to refer to our latest Inflation Report that was published last Friday. As many of you well know it is generally recognised that central bank policies must be forward-looking. As emphasised by Milton Friedman, for example, there are long lags between monetary policy actions and their impact on the economy.

It would therefore be impossible for the Eurosystem to conduct a successful policy by mechanistically following a simple rule whereby policy decisions are closely linked to a few indicator variables or to a central inflation projection at a particular point in time. Two key features of the ECB’s communication with the public and the markets are our Monthly Bulletins and the monthly press conferences. The latter usually directly follow the first Governing Council meeting of each month. By these means we publicly conduct a detailed review of current monetary, financial and other economic developments in the euro area against the background of the strategy. This aims at illustrating the application of the strategy in practice, guiding market expectations. Although the strategy is complex, we generally try to end with an overall assessment which summarises the opinion of the Council on the future situation. The press conference provides prompt information in an even-handed way, and it offers the opportunity for immediate two-way communication. As far as I am aware, no other central bank regularly communicates with the public in such a prompt and open manner immediately after its monetary policy meetings. We are convinced that this contributes to reducing uncertainty in the markets and thus gives important and clear guidance, also with regard to short-term policy moves. In this respect, one should recognise that the ECB is facing a completely new environment.
One of these messages was our expectation that the cards industry in Europe will issue “chip-only” cards from 2012. But if the industry decides to retain the magnetic stripe on cards for practical reasons, we would ask that any data enabling the processing of magnetic stripe transactions should be removed. This should ensure that sensitive account information can no longer be copied. The current levels of fraud clearly show that something needs to be done urgently in this respect. The increasing level of card-not-present fraud carried out over the internet can be addressed by the introduction of secure payment protocols (e.g. 3D Secure or virtual cards). To encourage the use of such security measures, a liability shift – which has been used, for example, as an incentive for EMV migration – could be applied. BIS Review 159/2010  3  Clearly, SEPA requires a harmonised minimum level of security for retail payments to ensure transparency and a level playing field. In order to achieve this, we need to have more clarity about the security requirements as well as about the actors involved in setting these requirements. We have recently launched the idea to set up a Forum for Security Issues and have received a positive feedback from banks. Such a forum would monitor market developments. In addition it could enable the relevant authorities, including banking supervisors and central banks, to align their expectations on security. The Eurosystem is currently investigating what could be the precise mandate and composition of such a forum.

When it comes to the question of which payment instruments should become the credit transfer and direct debit schemes used for euro payments in the EU, for me it is obvious that the answer is the SCT and SDD. This is, in fact, the position of the Eurosystem, which was clearly communicated in the seventh SEPA  1  The survey involved 42 European banks in nine countries. See the press release (in German) available at: http://www.bearingpoint.de/PMI_SEPA_081110.pdf  BIS Review 159/2010  1  progress report. Of course, it is one thing to set a goal, but it is far harder to achieve it. However, I am confident that the European Commission will make this possible through a legislative proposal. Despite the debate surrounding the end date in the past few weeks, we should not forget that we all share the same goal: we all want to make SEPA a reality. Of course, SEPA will only be a success story if it goes beyond credit transfers and direct debits. This brings me to my next New Year’s resolution: New Year’s resolution number two: let’s establish the requirements for a competitive cards market Any cards market should meet a number of requirements in order to facilitate competition and efficiency. The principle of separating card scheme management from processing entities is one of the core elements of SEPA that aims to guarantee open access. The SEPA credit transfer and direct debit schemes are built on this principle; it should be applied in the cards market too.
Insurers can therefore partially reverse any deterioration in their capital position due to a higher risk margin if interest rates fall by applying to the PRA to recalculate their TMTP upwards. For example, TMTP recalculation would have reduced the decrease in aggregate capital surplus following a 100bps fall in interest rates by about two thirds as at end-2017. Conversely, if the risk margin falls because of an increase in interest rates, the PRA may require recalculation so that TMTP is not overstated. % change in surplus (excluding any TMTP recalculation  Chart 4: Aggregate market risk sensitivities for UK life insurers 50%  Aggregate market risk sensitivities for UK life insurers YE16  YE17  25%  0%  -25%  -50%  Source: Aggregated UK life insurers market risk sensitivity submissions  Some individual insurers have published many of these market risk sensitivities. But the pattern is inconsistent across firms. I held a roundtable with insurance analysts and investors on disclosure around a year ago. 9  I took away that they find Solvency II disclosures more useful than accounting disclosures, at  least in the current state of insurance accounting. And a consistent set of such sensitivities was near the top of their disclosure wish list. I hope insurers and industry groups will work towards an industry standard in this area, perhaps drawing on what they report to us.

9  https://www.bankofengland.co.uk/prudential-regulation/publication/2017/solvency-2-solvency-and-financial-condition-reportroundtables  8  All speeches are available online at www.bankofengland.co.uk/speeches  8  Another key area where investors and analysts want better and more consistent disclosure is the drivers of the change in insurer’s SCR coverage ratio from one reporting date to another. I think of this as the ‘Solvency II P&L’. But Solvency II itself does not address measurement of changes in capital position over time. There is a reporting gap and insurers are closing it with their own content, leading to a mixed picture across the sector. Again, this is an area where insurers and industry groups could usefully develop some template approaches. As supervisors, we are also keenly interested in understanding how insurers generate capital, now and in the future. This is at the core of our analysis of the sustainability of an insurer’s business model. In particular, we want see the change in the SCR coverage ratio due to the risks and returns in the business split out from the effects of changes in broader market and economic variables and changes in modelling approach or assumptions or management actions. I have set out more detail in the Appendix. I have mentioned two areas – market risk sensitivities and a Solvency II ‘P&L’ – where insurers could improve the quality and consistency of disclosures. It is a concern that we still see evidence of analysts and investors not fully understanding insurers’ Solvency II balance sheets.
This means that while banks will, where needed, have to hold some capital above the Basel III transaction path for the reason that I  4  BIS central bankers’ speeches  set out earlier, the FSA is allowing those banks that increase lending to a lower Pillar 2 capital buffer to recognise the benefits of such lending. I should add that the FSA has also altered its guidance to banks on the liquid asset buffers they need to maintain. This reflects the Bank of England’s stance on the potential access of banks to liquidity from the Bank, and a wider desire to reduce the incentives for banks to hold excessive liquid asset buffers for precautionary reasons. This action, too, has been endorsed by the FPC, and I hope it will support credit availability. In conclusion, I have tried this morning to set out how we are thinking about and then applying macro-prudential policy, going back to first principles. This is a new field, and as I said earlier, please bear in mind that in the early days of the low inflation monetary policy regime in many countries, it took time to refine the communication. But, beyond that, we also need to fill in what for me is the big gap at present, namely how we explain and calibrate the resilience objective in terms of capital. The FPC will focus on this at its next meeting.

It is therefore too soon to assess the impact of these changes on the resilience of the financial system and on credit creation. We will monitor the results of these actions very carefully, and we will be prepared to amend our judgements in the light of experience. The key point for me is that we are applying judgement to our decisions on regulation and within a framework that quite explicitly defines and seeks to balance the objectives of resilience, the primary objective, and, subject to that primary objective, supporting credit conditions and economic activity. To be clear, in this approach of judgement-based regulation, we will not get all the calls correct, not least because the future is uncertain. But, I am a lot more comfortable that we are building a framework in which we can apply judgement more consistently and be held to account for these judgements in a more open way. Thank you. BIS central bankers’ speeches  5
All the same, the kind of moderate economic growth I forecast won’t keep bringing the unemployment rate down quickly. That rate is currently 8.3 percent. I expect it to remain over 8 percent into next year and still be well over 7 percent for several years to come. If my forecast is correct, the unemployment rate will have stayed at or above 8 percent for more than four years. Such a long period of unemployment above 8 percent has not happened in over 70 years. For its part, inflation has been relatively contained. The prices of oil and other commodities did surge early last year in the face of strong global demand. This caused the overall inflation rate to rise above our 2 percent target. Oil prices have run up again recently, and have returned to their peak levels from last spring. As far as other commodity prices are concerned, we haven’t seen a similar surge. With the economy still underperforming and wage growth modest, inflation should remain subdued. I expect inflation to be about 1¾ percent this year and to be about 1½ percent next year, down from about 2¾ percent in 2011. There’s a risk the economy could do worse than this moderate forecast. The main threat is the debt crisis in Europe. The latest news from that continent is somewhat reassuring, although more severe turmoil is still possible. Once again, European leaders have found a short-term fix to Greece’s problems.

That reduces the cost of borrowing across the board, from mortgages, to business loans, to corporate debt. Our securities purchases are an important reason why longer-term interest rates are at or near post-World War II lows. In addition, we’ve publicly announced that we expect to keep the federal funds rate exceptionally low at least through late 2014. This guidance tells investors that short-term interest rates are likely to stay low for a long time, which then gets passed through to longerterm rates. Of course, our statements are not an absolute commitment to keep rates near zero. It’s simply the FOMC’s current judgment about the best future course of policy. If the economic outlook changes, then the guidance could change too. Let me emphasize that the unusually stimulatory monetary policy now in place won’t last forever. Eventually we will cut back the size of our securities holdings and raise our unusually low interest rate target. We’ve thought hard and communicated frequently about how to exit from these special conditions.6 The key point is that the economy currently needs an  5  See Williams (2012) for a discussion of the Fed’s mandate and the implications for the conduct of monetary policy. 6  See the discussion of exit strategy in the minutes for the June 2011 FOMC meeting (Board of Governors 2011). 4  BIS central bankers’ speeches  extraordinarily supportive policy. But we’ll reverse course when the time comes to remove this support.