samchain/econo-pairs-v1 huggingface dataset:
Last Thursday’s agreement represents an important element of a satisfactory resolution to the euro area crisis, but there are still many details to be worked out. Moreover, the announcement by the Greek government that it plans to hold a referendum on its package has injected additional uncertainty. And, even if the 27 October agreement is eventually implemented, the peripheral economies of the euro area will still be faced with substantial adjustment challenges, including the need to rebalance their economies and improve their competitiveness. So the strains in the euro area seem likely to continue for some while yet. The second factor behind the unexpected slowing in growth is the substantial rise in energy and other commodity prices during the latter part of 2010 and first part of this year, associated with strong growth in the emerging economies as well as interruptions to the supply of oil as a result of geopolitical developments in the Middle East and North Africa. UK inflation over the past year has consequently been around 1½ percentage points higher than the central view in our November 2010 Inflation Report, with the twelve-month rate reaching 5.2% in September. That has added to the squeeze on real household incomes already taking place as a result of earlier increases in energy and other import prices, together with the increase in the standard rate of VAT to 20 per cent.

2  BIS central bankers’ speeches  experience after previous recessions following banking crises suggests that it is likely to be highly persistent (see Chart 5, which shows the UK experience since the start of the recession, together with the range of analogous historical experiences). Initially, households and businesses were protected from the full impact of this downward shift in prospective incomes by the previous Government’s decision to let the budget deficit temporarily take the strain. But the necessary subsequent fiscal consolidation has led inevitably to a higher tax burden and lower public spending growth. As already noted, inflation reached 5.2 per cent in September. But much of that reflects the combined impact of higher VAT and prices for energy and other imports. A range of estimates of the impact of these factors is provided by the blue swathe in Chart 6. The remainder is attributable to domestically-generated inflation, estimates of which are provided by the green swathe in the same Chart. This appears to have been running well below the 2 per cent target, reflecting in large part the unusually low rate of pay growth, which is in turn symptomatic of the slack in the economy. As we go into next year, so last January’s increase in VAT will drop out of the calculation, knocking around one percentage point off inflation. And commodity prices have started to fall back as the pace of global expansion has eased (Chart 7).
Furthermore, the logic of sequencing is closely linked to the use of the APP as a stance measure that reinforces the effect of forward guidance on short-term interest rates; if we wish to withdraw monetary accommodation, we should first release the accelerator pedal by stopping adding stimulus. By the way, if we started to raise rates before the end of net purchases, the risk would be to excessively flatten or even invert the yield curve. The fact that the reduction of the balance sheet occurs only in a third step is intended to avoid a brutal impact of the withdrawal of accommodation: the presence of the ECB in the markets, via reinvestments, allows us to contain these destabilising risks including on fragmentation. Hence, the direction of the navigation is clear. But as I have already said recently, we will retain our full optionality about its pace: its calendar will remain gradual, state-dependent and open in moving from one stage to the other. The second compass is our forward guidance on interest rates, as adopted last July. Before coming to it, let me in the order of our sequencing, starting with some considerations on our APP guidance.

News conference  15 December 2022, 10.00 am  Introductory remarks by Andréa M. Maechler In my remarks, I will talk in more detail about the implementation of today’s monetary policy decision, which Thomas Jordan has already touched on. I will start, however, by giving you an overview of how we have steered interest rates since the switch to a positive SNB policy rate in September. The switch from a negative to a positive SNB policy rate required us to make an adjustment to the implementation of our monetary policy in the money market. The new approach comprises two elements: reserve tiering – that is, tiered remuneration of the sight deposits that banks and other financial market participants hold at the SNB – and reserve absorption. This approach has proved successful. Following our monetary policy decision on 22 September, secured short-term Swiss franc money market rates moved quickly towards the new SNB policy rate (cf. chart 1). We are also continuing to see solid activity among participants in the money market, which ensures a robust basis for the calculation of SARON. From the outset, the market responded favourably to the deployment of our monetary policy instruments to absorb liquidity. On the very day of the monetary policy assessment in September, we started conducting repo transactions on a daily basis and issuing SNB bills on a weekly basis (cf. chart 2). In this way, we were able to reduce the liquidity supply in the money market sufficiently to allow us to steer interest rates effectively.
Headlines: UK heads for credit crisis. Closed for credit. Credit card sales dive. Facts: bank and building society lending up by 0.7% in the latest month (September) and by 8.8% over the past year. Credit card lending was up by over 26% on a year ago. Headlines: House prices hit as recession clouds gather. Facts: house prices rose by 6.7% over the past year on the Halifax index and by 7.5% according to the Nationwide. Now I say all this, President, not to draw attention to the proclivity of headline writers, and some economic/financial commentators, to sensationalise. My serious point is that, especially at a time of unusual uncertainty as at present, we all need to focus more carefully than ever on the evolving facts, and on the more probable outcomes and not allow ourselves to become preoccupied with extreme, even if possible, outcomes. Against that background, let me offer you my own assessment of where the UK economy has come from and where it is headed. Since the recession of the early 1990s the economy as a whole has, as I say, grown at an average annual rate of just over 3% - well above trend.

What we have to do, in actually operating monetary policy is to monitor all the relevant evidence as it emerges for signs that the economy is proving to be either stronger or weaker than we expect, and modify our view of the prospect for inflation - and our monetary policy - in the light of that. And in that context I repeat the assurance, which I gave recently to the TUC in Blackpool, that we will act symmetrically. We will be - have been - just as rigorous in reducing interest rates with the overall evidence pointing to the balance of risks to inflation on the downside, as we have been - and will again be - in raising rates with the evidence pointing to a significant or sustained overshoot of the inflation target. Now there are those - perhaps even one or two of you here this evening - who regard this assurance as cold comfort. It misses the point - they say - because the present approach to monetary policy focuses too narrowly on inflation. What we want - they say - is a monetary policy which puts more emphasis on growth and employment. You hear this complaint not just in this country but increasingly these days in Continental Europe. I must say, President, that it leaves me totally bemused. What it suggests is that growth and price stability are seen as alternatives - you can have a bit more of one if you’re prepared to accept a bit less of the other.
Lim Hng Kiang: The Tokyo Stock Exchange and Singapore Speech by Mr Lim Hng Kiang, Deputy Chairman of the Monetary Authority of Singapore and Minister for Trade and Industry, at the Tokyo Stock Exchange Singapore Representative Office 10th Anniversary, Singapore, 14 December 2006. *  *  *  Congratulatory remarks I am delighted to be here with you this evening to celebrate the 10th anniversary of Tokyo Stock Exchange Singapore Representative Office. Firstly, I would like to thank the Tokyo Stock Exchange for its commitment to Singapore and the region over the past decade and I hope Tokyo Stock Exchange will continue to scale greater heights in coming years. Growth of Asia and Japan When Tokyo Stock Exchange established its overseas office in Singapore in 1996, Singapore and the region were experiencing strong economic growth with Asian economies developing at rates of about 5 to 10% per year. Today, we continue to witness the rise of Asia on the back of the twin drivers of China and India. Prospects for South-East Asia have improved considerably and Japan, after years of stagnation, is firmly back on the track of healthy sustained growth and is a major investor in South-East Asia. As of 2005, Japan's FDI into South-East Asia totaled $ billion, and it is the top investor in Indonesia, and the third largest investor in Vietnam. Changes in the global exchange landscape The competitive landscape in the global exchange arena has also changed significantly.

We need to cultivate and foster greater bilateral, if not, multilateral cross-border relationships with each other to develop greater liquidity in regional securities and derivatives markets. The current economic growth in Japan, Singapore, as well as in the broader South-East Asian region, gives us a window of opportunity to act swiftly to deepen and enhance trading linkages so as to strengthen Asia's competitive edge. Together, I believe we can present an attractive value proposition to global investors who are looking to Asia for growth. BIS Review 124/2006  1  Conclusion On that note, let me extend my heartiest congratulations to the Tokyo Stock Exchange on its Singapore Representative Office 10th anniversary celebration. The Tokyo Stock Exchange and Singapore have enjoyed an excellent relationship over the years and I do treasure the very important ties and partnerships between Japan and Singapore. I certainly look forward to many more years of close and fruitful cooperation between the 2 countries in future projects. I wish Tokyo Stock Exchange great success in their endeavours. Thank you. 2  BIS Review 124/2006
In fact, by January 2015 expected real rates had started rising – increasing by almost half a percentage point in the previous few months alone. The cost of deflation protection had also gone up by 185 basis points between 2 December 2014 and 9 January 2015, showing that investors saw a material risk that inflation could fall further. We therefore had to react preemptively and decisively, and at the lower bound this leaves a single option – large-scale become the only tool to reinforce the monetary policy impulse in a way that has an immediate and meaningful impact on expectations. While our switch to asset purchases had already begun in September with the launch of our private asset purchase programme, it was clear by January interventions in those markets alone would not be sufficient to achieve the required impact. To firmly lift and re-anchor expectations we needed to alter both the composition of our programme – to broaden the channels through which it would raise future inflation and hence affect expectations today – and the size – so that the monetary policy impulse through each of those channels would be stronger. The only markets in which we could achieve this dual effect were public sector assets. I currently see our public sector purchase programme working through three main transmission channels. First, it is creating strong direct price effects in markets that are key for loan dynamics.

That said, we still have not reaped the full benefits of more harmonised regulation and more integrated supervision, and we need to make sure that we consolidate and build on the progress already made. From a regulatory perspective, aside from transposing the Basel Accords into EU law (the CRR 2-CRD 5 package introducing new prudential requirements such as the NSFR and the leverage ratio), we need to advance further on the application of uniform regulations. We also need to pull down all the barriers to euro area banking integration by removing all regulatory obstacles to cross-border transactions – in terms of solvency, liquidity or large exposures – and by adjusting the calculation of capital requirements for systemic institutions. In short, we need to recognise that the euro area must be treated as a single jurisdiction where a single rulebook is enforced. In terms of supervision, the priority now is to bring the largest investment firms within the scope of the SSM. We also need to increase cooperation between national authorities for the oversight of cross-border institutions (home-host relations), and for anti-money laundering and countering the financing of terrorism – the importance of which is recurrently driven home by the news. To complete the Banking Union, we also need to render its second pillar, the Single Resolution Mechanism or SRM, fully operational. The euro area has had a common resolution mechanism in place for banking crises since 2015.
The fruits of that labour were revealed in the summer of 2010, when the Bank replaced the extended LTRs with its new permanent Indexed Long-Term Repo (ILTR) operations. In the ILTR auctions, counterparties can submit bids against narrow collateral, wider collateral or both. The Bank then allocates a proportion of the funds on offer to the bids against wider collateral, where that proportion depends on the spreads offered. These new auctions solve the problems of the old LTRs. For example, expressing the bids as spreads to Bank Rate (with a minimum spread of zero) eliminates the interest rate risk arising from unexpected movements in the spread of market rates to Bank Rate. Moreover, the price of liquidity against wider collateral is determined within the auction – as the market becomes more stressed, counterparties are willing to pay more to borrow against wider collateral. So the Bank no longer has to make a judgment about the appropriate spread to charge counterparties. The most innovative aspect of ILTRs is that is that, as the degree of market stress increases (as the clearing spread on wider collateral rises relative to that on narrow collateral) the Bank automatically, within the auction, lends a greater proportion against wider collateral. And it gets a signal about the need to expand the overall size or frequency of the operations in future. As far as we know, the new format represents a global first for a public auction in any field.

Mandate, interpretation and implementation 1  New Zealand was the first country to introduce an inflation target in 1989. Chile followed in 1990, Canada in 1991, the UK in 1992, Sweden, Finland and Australia in 1993 (Finland until 1998), Spain in 1994 (until 1998) and Iceland and Norway in 2001. A number of emerging market economies like the Czech Republic and Poland, as well as Israel, South Africa and Brazil, have introduced inflation 2 targets in the last few years. The ECB shall direct its monetary policy instruments towards price stability, which the bank has defined as inflation of less than 2 per cent. The target of the Swiss central bank has a similar formulation. In the US, price and employment stability are equally important. Experience with inflation targets has generally been good. Low and stable inflation has underpinned economic growth and employment. The fact that conditions were favourable for low inflation and renewed growth in many countries following the downturn and high unemployment in the early 1990s may also have contributed positively. Norway introduced an inflation target during a different phase of the economic cycle. We have experienced a prolonged upturn. The labour market is tight. High labour force participation and demographic conditions indicate that the possibility for further growth in the labour supply is limited. In addition, reforms that reduce the supply of labour were implemented.
Spain has been one of the first European countries to have incorporated a balanced budget requirement into its constitution, with broad Parliamentary backing. A more recent example is labour-market reform. This is of great importance, because Spain had not taken such a significant step in this area since the 1984 reform. If the 1984 reform allowed Spain to create millions of jobs and to increase the welfare of Spaniards during upswings, the reform approved this year should put an end to a situation in which dismissal and an increase in unemployment are the only way of adjusting the economy. This reform leaves workers and employers free to agree to increase competitiveness by increasing productivity and/or adjusting wages, with the only obstacles or impediments being those laid down by law. It is sometimes said that all this has been done too late. Should labour-market reform have been carried out five years ago? It certainly should have. Or ten years ago in 2002, when we were enjoying the long upswing? It would certainly have been better for Spain. The same can be said about financial reform. Why were savings banks not reformed during the good times? Why were bank resolution schemes, such as the FROB, not drawn up ready to resolve the banking problems created by the upswing? These questions merely lead to gloominess and, moreover, ignore the fact that, not only in Spain, but almost worldwide, key reforms are introduced at the worst times.

With lessons learned from previous episodes and improvements over the years, emerging market economies on average are better positioned to withstand financial turbulences, both now and in the future, than in the past. They embarked on extensive structural reforms aimed at overhauling financial regulatory and supervisory systems, strengthening public finances and fiscal discipline, granting central banks independence and adopting flexible exchange rate systems. These reforms enabled them to implement more prudent and countercyclical policies. EM economies supported their post crisis reforms by accumulating adequate foreign exchange reserves as an alternative to the IMF provided financing, which carries strong conditionality, as well as by further deepening and broadening their domestic financial markets. As a result, stock and flow balances, policy frameworks, and levels of economic confidence and market development in EM economies have strengthened substantially and radically. Deepened and  BIS central bankers’ speeches  1  broadened domestic financial markets have alleviated the so called original sin problem. It is fair to say that they now look strong enough to render the adverse effects of external financial shocks manageable. Given the current IMS what EM economies can most rely on are their prudent policies, better policy frameworks, foreign exchange reserves and flexible exchange rates. As for the IMS related questions of the session namely • “Do floating exchange rates along with largely unrestricted capital flows play their role of shock absorber? Are we going to witness a return of currency crises of the 1990’s?
At last week’s 4th ASEAN Informal Summit in Singapore, ASEAN leaders launched an Initiative for ASEAN Integration or “IAI”. It is intended to narrow the divide between the older and newer members of ASEAN and enhance ASEAN’s competitiveness as a region. It is a framework for the more developed ASEAN members to help those members that most need help, and in so doing make ASEAN prosper. To kick it off, Singapore is offering a package of IT training and assistance in human resource development to Myanmar, Laos, Cambodia and Vietnam, while China, Japan and South Korea have also offered assistance that falls within IAI’s broad framework. Of course, ASEAN’s future depends as much on external factors as it does on these direct initiatives to promote intra-ASEAN trade and investment, and build up the economic strength of individual members. Our economies are highly dependent on international trade, and it is in our interest to work together actively for a freer, more stable and secure global trading environment. ASEAN therefore needs to support an open, stable multilateral trading system under the WTO, and the early launch of a new round of trade negotiations. Strong multilateral rules are the foundation for world trade, and protection against anarchic bilateral and unilateral trade policies. Small countries could not survive without them; even large economies would be much poorer off in a tit-for-tat environment. Hence ASEAN strongly supported the candidacy of Dr Supachai Panitchpakdi for the Director Generalship of the WTO.

Even if residents choose to move into foreign assets, the liquidity in the domestic currency will not disappear and will ultimately be deposited with the domestic banking system. In the end, and as a whole, the banking system is trapped. The question then is how banks will react and with what consequences for the economy. They could impose negative rates on depositors, but that is not always easy, and in the case of households, it could have a negative impact on the wealth sentiment. They could increase their credit margins, with the effect of tightening credit conditions, although that may also be difficult if the demand for credit is weak. Or the banking system could simply become weaker, with the paradox that the more a bank is conservative and well-managed, extending high-quality loans and covering them by deposits with no short-term market funding, the more it will be penalized! A second, different challenge, relates to the rigidities in the economy. Price rigidity is higher in Europe than in the United States as the goods and labour markets are less “contestable” and outsiders find it harder to compete. And in the labour market, there is a strong downward rigidity on wages. Structural rigidities have complex effects on inflation and monetary dynamics. In the very short run, price rigidity may somehow protect the economy against deflationary shocks and, more generally, increase the output response to a monetary stimulus.