samchain/econo-pairs-v1 huggingface dataset:
Chart 3 shows the paths of short-term forward interest rates in the UK, US, euro-area and Japan for the next 30 years. They imply that rates will rise, on  BIS central bankers’ speeches  1  average, by only 10 basis points per year in the US, 7 basis points per year in the UK, 6 basis points per year in Japan and 5 basis points per year in the euro-area. That is the most gradual of interest rate glide-paths. The eventual cruising altitude for interest rates expected by financial markets is also remarkably low by historical comparison. The level of forward interest rates 30 years hence is around 3% in the US, 2.5% in the UK, 2% in Japan and 1.2% in the euro-area. Up until the crisis, the average level of policy rates in these countries in the post-war period was 3%, 7%, 4% and 3% respectively – for most, roughly double the levels currently expected. Interest rate end-points are also remarkably low. In a growing number of countries, interest rates are not just low but have recently turned negative. At last count, eleven countries had negative shorter-term bond yields, including nine within the euro-area. In part, that reflects the effects of a recent further round of policy loosening by central banks. At present, two-thirds of countries globally have policy rates below 3% (Chart 4).

This is something on which individual banks will have to take a view, but I would like to offer some general advice. First, banks should accept that profits for 2003 may not reach budgetted targets as a result of the outbreak; and they should not strain too much to make up the difference. When profitability comes under pressure, it is important to avoid the mistakes that might arise from over-aggressive business tactics. Keep the bank healthy from a capital and liquidity point of view in order to benefit from the business recovery when it comes, as it surely will. Banks should also monitor closely the financial position of their customers and adopt a supportive attitude to those experiencing financial difficulties as a result of the SARS outbreak. This means being prepared to offer temporary relief arrangements to borrowers who find that they cannot service their debts in the current environment. This should not be seen as soft option for customers since the banks will certainly not benefit if those customers go bankrupt. Nor do I suggest that relief should be offered indiscriminately. The long-term viability of the customer or his business, his track record and his willingness to cooperate with the bank are all factors to be taken into account in deciding whether to restructure debts. Each case thus needs to be looked at on its merits.
Given that all the Swedish banks benefit from the Riksbank’s foreign-exchange reserve, it would not be unreasonable for them to share the costs of maintaining it. If we can price this in an effective way it will also give the banks an incentive to reduce their own currency risks. This would reduce the risks to financial stability in the Swedish economy. BIS central bankers’ speeches  9  It is of course no secret that we are also looking at mortgage loans from the asset side in the banks’ balance sheets. As I have already pointed out, the banks’ risk weights are very low. Finansinspektionen intends to begin applying a risk-weight floor of 15 per cent for the banks’ portfolios of Swedish mortgage loans. The Riksbank supports the proposal for a risk-weight floor of 15 per cent. We also believe that there are good reasons for analysing whether this floor needs to be raised even further. One important reason is that the public sector and non-financial companies would have to bear a large part of the risk if the debt-servicing ability of the households were to weaken. I have also spoken about the risks arising from the fact that a large proportion of the mortgage loans are interest-only loans. In this context, the Swedish Bankers’ Association’s recommendation that all mortgages that exceed a loan-to-value ratio of 75 per cent should be amortised is of course welcome, although one may ask whether this is enough.

Nothing is lasting without institutions.” The ECB is, in my opinion, a remarkable illustration of the lucidity of the conceptual founder of the Community: the institutional construction is solid and has proved to be remarkably effective in attaining its goals. This ten-year period has been short compared with the duration of the deepening of the European Union, which is an historic endeavour. But this relatively short period of time has been rich in successes. These accomplishments call for celebration, for reflection and also for continuous efforts as regards the future. In the first place, celebration. My predecessor, our dear Wim Duisenberg, in his speech to celebrate the establishment of the ESCB ten years ago, referred to “the road we have to travel in the future to make the euro a success, which means to make it a stable currency”. What can we say now, after ten years? I can sum it up in five sentences. Since day one, the single currency has fully inherited the degree of credibility and confidence that was the privilege of the most credible national currencies before the euro. The credibility was such that the medium and long-term market rates of the euro were at the same low level as those experienced by the most reliable national currencies before. In spite of a series of global shocks resulting from the prices of oil and commodities, yearly inflation since 1 January 1999 has been 2.1% on average.
Even if it were possible, going back to the ECU would present major disadvantages compared to today’s euro: until the euro was introduced, France did not actually participate in decisions on interest rate levels and had to follow German monetary policy; the franc was at the mercy of speculative attacks from the financial markets that drained our currency reserves as we saw in the 1992-1993 period. The euro was introduced to solve these problems. Today, the euro is alive and well. It is the currency of 340 million Europeans, is recognised worldwide and is trusted by the people of France. Almost 70% of French citizens are in favour of the euro because it protects their purchasing power, with prices that increase three times less rapidly than previously; because it makes borrowing easier, with interest rates that are 1.5% to 3% lower; and because it safeguards the value of their savings. Finally, I would like to add that the Eurosystem has not modified its sovereign debt purchase programme in relation to France’s presidential elections. The distribution of monthly purchases between the various countries is based on the ECB’s capital allocation principle. 1/1  BIS central bankers' speeches

And on the subject of history, I would like to make some observations. Europe's single currency has ancient roots: apart from the single currency of the Roman Empire, two thousand years ago, I could mention George of Podebrady, a king of Bohemia in the 15th century, who called for a common currency for Europe, or Victor Hugo's call for a single market with a single currency in Europe in the 19th century. By implementing the Economic and Monetary Union enshrined in the Werner report 38 years ago, we have also achieved a much older plan, an ancient vision of a unified continent, including monetary union. This historic vision has always been closely associated with the search for prosperity and the preservation of peace. Voltaire's remark: “En effet l’histoire n’est que le tableau des crimes et des malheurs” – “Indeed, history is nothing more than a tableau of crimes and misfortunes” – from the perspective of the mid-twentieth century could not have been more apt . It is no surprise that it was at that point in time that Europeans decided to accelerate the march towards European unity. The single currency is the most advanced feature of European unity and in many respects its emblem. We owe it to the lucidity of the founding fathers and to the determination of a series of visionary leaders. We saw these founding fathers a moment ago on the screen. To them we owe an immense debt of gratitude.
John C Williams: The “new normal” for growth Remarks by Mr John C Williams, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Community Bankers Conference, hosted by the Federal Reserve Bank of New York, New York City, 4 April 2019. * * * As prepared for delivery Note: These remarks are based on those delivered at the Economic Club of New York on March 6, 2019. Introduction Good morning, everyone. It’s a pleasure to be hosting this conference, and I’d like to start by welcoming you all to the New York Fed. I know there’s an opportunity to tour the gold vault later, and I definitely recommend it. There’s something very exciting about our more traditional approach to storing money… even though the gold bars pose certain logistical and practical challenges. If you drop one on your foot you’ll definitely know about it. Community Banks I’m going to start today by talking a bit about community banks. Aside from a short period running a pizza restaurant, I’ve spent all of my career in the Federal Reserve System. And I’ve had the opportunity to travel extensively throughout the United States. When you visit communities in more rural or remote parts of the country, away from big urban centers like New York and San Francisco, you really see the value of community banks. In many places you’re the only game in town when it comes to banking services and credit.

It was feared that, in order to keep the exchange rate stable, the National Bank would be forced to shadow the policy of the ECB, and, with a lower exchange rate risk, that the interest rate differential between Swiss franc and euro investments would gradually narrow. This has not occurred : both shortterm and long-term interest rates in Switzerland are still around 2 and 1.5 percentage points respectively below those applying in the euro area. We can continue to pursue an independent monetary course. Conclusion Against the background of the persistent weakness of the international economy, Switzerland is stuck in a rut as well. In the past few months we have had to revise our forecasts downwards on a number of occasions, most recently in last week’s quarterly monetary policy situation assessment. For this year as a whole we are forecasting that real GDP will stagnate. Even this modest projection presupposes that the economy will pick up in the second half-year. There are still considerable risks in this regard. The exchange rate remains also a significant downside risk. Although the geopolitical situation has eased since the end of the war in Iraq, it cannot be ruled out that the franc will come under renewed upward pressure as a safe haven currency. In the present context of business stagnation, the recent correction in the exchange rate of the franc against the euro has brought our currency back to a more realistic level, which is good news for our export industry.
Inflation and unemployment  Inflation  Annual percentage change and as a share of the labour force 4  4  3  3  2018  2  2  2011  2007  1  0  1  5.5  6.0  6.5  7.0 7.5 Unemployment  8.0  8.5  9.0  0  Note. Moving averages over 12 months. Sources: Statistics Sweden and the Riksbank  As we see in Figure 3, there is a reasonably clear negative correlation during the whole period. The following additional observations can be made if we look a little closer: (i) (ii) (iii)  During the period 2015–2017, inflation rose while unemployment fell. Over the last six months, unemployment has fallen while inflation has remained on a level consistent with the inflation target. For a given level of unemployment, inflation has tended to be lower in recent years than it was during the period 2007–2010. As I noted, the original Phillips curve was formulated in terms of wage growth and not inflation. So what does such a curve look like for Sweden over the last decade? Seen over the entire period, the correlation also seems to be negative in Figure 4. But if we look at developments since 2011 in particular, there does not appear to be a correlation – The Phillips correlation seems to be more or less horizontal.

But as the crisis deepened in late September, it became clear that we needed more than a case by case approach here to tackle the continuing loss of confidence in the banking system in the UK, in euro area and in the US. On 8 October therefore we announced a comprehensive package of measures including support for recapitalisation, guaranteed funding and enhanced liquidity. That very quickly became the template for action in other advanced and some emerging countries. The central plank of the package was the offer to underwrite capital issuance of at least £ billion and it is important to be clear what that was intended to do. It was not to establish new regulatory minimum ratios. It was intended to underpin confidence in the banks and to ensure that each institution would have a sufficient capital buffer both to absorb losses that are likely to arise during a recession and to continue lending on normal commercial criteria. Under the new Basel II rules the ratio of capital to risk weighted assets is almost bound to fall as arrears and losses mount. The aim of the package was to create the headroom for that to happen and to remove the capital pressure on banks to deleverage quickly by refusing even good credit requests. The capital raising is not complete of course but the process is underway. Banks and building societies have already secured around £ billion of guaranteed funding in the market and has facilitated new bank debt issuance without the need of a guarantee.
·  Second, let me say a word concerning the current move towards a uniform body of accounting standards and the implementation of International Accounting Standards (IAS) for listed companies. Such a move is expected to bring about greater transparency and comparability in financial reporting. However, it is crucial that all the impact of such a major reform be carefully identified and analysed. In fact, as a Central Banker and a banking supervisor I have already expressed concerns on the potential impact of some of the proposed standards (namely IAS 32 and 39) on the balance sheets of credit institutions: the rationale for an extensive fair value approach needs to be pondered against the principle of prudence and the risk of introducing artificial volatility in banks’ earnings and equity. These risks clearly show that the debate here is not only a technical one, and that standard setting bodies need to engage in a continuous dialogue with all interested parties, among them Central Banks and banking regulators. In this context, the recent decisions by the European Commission to re-examine this question is welcomed. More generally, any project of reform has to be precisely studied in order to take duly into account financial stability concerns and to prevent risks of hidden and counterproductive effects. * *  *  Ladies and Gentlemen, I will have only one concluding remark. Financial Stability should not only be an expression for appropriate use in speeches to enrich our rhetoric.

Both in the United States, through the Sarbanes-Oxley Act, and in Europe, at the level of the Commission as well as in Member States (I will only mention here the French Financial Security bill which is to adopted soon), a lot of work is being undertaken to address the problems that surfaced during the last three years in this field. I will limit myself to two comments that both evolve around the simple idea that co-ordination is crucial on these questions: ·  Financial services are increasingly delivered on a global scale. The regulation and oversight of financial markets can no longer ignore the reality that measures taken by any country may have consequences outside that jurisdiction. Hence the necessity for a reinforced dialogue between regulators, central banks and market participants as a means for managing regulatory spill-overs or frictions that otherwise could occur in highly interdependent and increasingly integrated financial markets, and more generally addressing global financial stability issues. Let me recall that structures such as the Financial Stability Forum already play a widely recognised role in fostering these exchanges and promoting co-ordination. Such a dialogue is all the more necessary between the US and European authorities, as  4  BIS Review 32/2003  they represent the main financial centres. In that regard, the recent initiatives undertaken by the EU authorities are welcome. This dialogue should be the beginning of a sustained and deepening process of mutual understanding, co operation and, above all, commitment on transatlantic regulatory equivalence.
5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5  What is true across time is also true, by and large, across regions. Chart 5 looks at a regional map of firm-level productivity, where productivity is measured as output per hour worked. This map is built up from several sources of data on output and employment collected by the ONS using surveys covering tens of thousands of firms across all regions in the UK and all sectors of the economy. 10  It paints a pretty  comprehensive picture of the regional workings of the UK corporate sector. This productivity map suggests, perhaps unsurprisingly, a wide degree of regional dispersion. The most productive region (London) has firms with levels of productivity almost 60% higher than those in the lowest productivity part of the UK (Northern Ireland). This map matches closely the regional pattern of GDP per head and wages, consistent with Krugman’s conjecture. Much of the regional variation in economic activity and household income derives, it seems, from variations in productivity among firms. These regional maps suggest a simple but coherent story about regional variations in living standards. The more productive a firm, the higher the wage it pays. If levels of regional productivity differ greatly, so too will regional levels of economic activity and household income. So Red and Blue Car regions comprise low and high productivity firms, and thus low and high income households, respectively. This is not an imaginary world; it is the real world.

So what explains these large regional variations in levels of economic activity, income and spending? Plainly, many factors are at work, economic, geographic, historic, social. There is a large literature on the 7  determinants of growth, which suggests each of these factors is important. But let me focus on one which is I think key to understanding regional differences - levels of productivity among firms. A few years ago, the US economist Paul Krugman noted: “productivity isn’t everything but in the long run it 8  is almost everything”. Krugman was talking about the determinants of growth, and hence living standards, in the economy over the longer-run. He assigns productivity a central role. The raw numbers, looked at over long spans of history and large cross-sections of countries, suggest Krugman is right. Take a simple example. Since 1850, inflation-adjusted national incomes in the UK have risen around 9  20-fold. This is a massive rise in living standards. How much of that was the result of higher productivity? Well, in the absence of productivity growth, UK living standards today would only be around double their 1850 value – in other words, at late-Victorian levels. In the UK, productivity has not been everything but it has been almost everything. The same is true elsewhere around the world. 6 7 8 9  ONS Quarterly National Accounts 2016 Q2, available here See World Economic Forum (2016) for a summary. Krugman (1994). Hills et al (2016).
However, the multilateral route is a better channel for delivering the dynamic benefits of increased global economic integration. Bilateral agreements can fragment and complicate multilateral negotiations such as the present WTO round. Moreover, small and underdeveloped economies are more likely to be left out and their ability to participate in the global economy is therefore disadvantaged. We encourage the Fund to continue to use surveillance in promoting open world trade. 2  BIS Review 42/2003  Concluding remarks Ladies and gentlemen, improving the world economy is a task that demands the participation of every nation. We must press forward with structural reforms, promoting good governance, increasing transparency, and harmonizing standards. This task must also include efforts to integrate the lowincome countries into the global economy. The current circumstances provide good reasons for addressing these issues. The International Monetary Fund has been at the center of world economic cooperation since its establishment. The Fund should continue to play a crucial role in strengthening the areas I have emphasized through its surveillance and its lending activities. BIS Review 42/2003  3

Zeti Akhtar Aziz: Asia’s role as an important growth centre in the global economy Opening address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the First Asian Central Banks’ Watchers Conference, organised by the Official Monetary and Financial Institutions Forum (OMFIF) and the Lafferty Group, Kuala Lumpur, 1 November 2011. *  *  *  It is with great pleasure that I welcome you to the first Asian Central Banks’ Watchers Conference organised by the Official Monetary and Financial Institutions Forum (OMFIF) and the Lafferty Group. Bank Negara Malaysia is very pleased to host this event here in Kuala Lumpur. Central banks have generally been the most watched organisations given the significance and far reaching implications of their actions on financial systems, the economy and the economic well being of the public at large. This is even more so during periods of financial stress and economic distress. During such periods, central banks have generally been at the forefront in managing such crisis and its consequences. Indeed, this current global crisis has prompted central banks in the United States and Europe to be closely watched given the impact of their actions on not only their own national economies but also on the rest of the world. With the growing significance of the emerging economies in the world economy, our policy actions have increasingly drawn significant interest.