samchain/econo-pairs-v1 huggingface dataset:
BIS Review 52/2008  In their expansion, the banks exploited the particularly favourable opportunities offered in the global financial markets in the form of abundant liquidity at historically very low prices. Thus, they relied on capital markets funding for their operations, raising the share of borrowed funds on the liability side of the balance sheet. The rapid expansion of the banks did not go unnoticed. It drew the attention of many observers at the end of 2005 and the early part of 2006, resulting in considerable headwind for the banks in that period. Questions were raised about their business model, their reliance on wholesale funding in international markets and low level of deposits, lack of transparency and cross ownership among other things. The banks responded effectively to the criticism levelled at them. They increased transparency, reduced cross ownership, and placed emphasis on raising the share of deposit on their funding side. They also significantly strengthened their capital base and last but not least greatly improved their liquidity position. As a result they were much better prepared for the sudden change in global financial conditions after the middle of last year. Most importantly, they had a strong liquidity cushion. The Icelandic banks have been the focus of considerable international attention in recent months. Questions have been raised about their viability and those have been reflected in their extraordinarily high CDS spreads since late last year.

But, as we mentioned before, the cycle for climate risks is much longer, and there is a lack of comparable historical data, so we should not overstate the precision of stress testing tools as of today, and be ready to examine multiple scenarios and assumptions and learn progressively. This would help to properly complement our regulatory and supervisory framework. 6/6
There are, however, still various risks associated with the introduction of a single currency. Two I would like to mention: First, problems related to the decision on which countries are allowed to participate right from the start, and second, problems related to the transition period. In an ideal world, the decision on which countries can participate in EMU would be based primarily on economic factors. Given the various expectations associated with the single currency, it is unavoidable that EMU is as much a political as it is an economic project. The decision on membership will thus be influenced by both political and economic factors. As the likelihood rises that some important countries will not be able to comply strictly with the convergence criteria, political factors will become more important. A loose interpretation of the convergence criteria for some countries would make it politically much more difficult to exclude other countries, which also miss some convergence criteria, from participating in the EMU. Depending on how well this selection process is handled, expectations about the future course of monetary policy by the ECB will be either positively or negatively affected. Should political BIS Review 102/1997  -4-  factors unduly dominate economic factors, there is undoubtedly a potential for creating expectations about a less than optimal degree of political independence for the ECB. The ECB would therefore face an uphill battle at the start of EMU.

We as central bankers are concerned here with avoiding overburdening monetary policy by the next recession, but it is of course the responsibility of politicians to act. 1/ The first cliché that emerges when we talk about reforming the euro area is the opposition between vision – be it French or otherwise – and pragmatism – seen as a northern European virtue. We must be practical, and take real needs and particularly those of businesses and entrepreneurs as our starting point. At the same time, we need a political ambition if we are to act – call it a “vision” if you wish. Today, the key to growth in the euro area is investment and innovation. But to innovate, in digital technology or in the energy transition for example, companies need to be able to take more risks, which requires more equity financing over the 1/3  BIS central bankers' speeches  long term, rather than debt financing. The euro area is seriously lagging behind in this respect: equity capital amounted to only 73% of GDP in the third quarter of 2017, compared to 123% in the United States. This brings me to my first solution for strengthening our Economic Union: a European-level "Financing Union for Investment and Innovation", which would better channel the euro area’s EUR 350 billion savings surplus into equity financing for innovation, in digital or renewable energy technologies.
First, large fiscal burdens in many advanced economies have altered the risk profile of the supposedly risk-free assets such as their government securities. As the line between traditionally risk-free and riskier assets becomes blurred, investors would be more willing to search for yields and switch back and forth between assets more easily. Second, although the money used by advanced economies’ central banks to purchase securities has ended up mainly in the banking system for the time being, quantitative easing does help raise investors’ risk appetite. On the one hand, QE is likely to make the  BIS central bankers’ speeches  1  recovery of advanced economies a bit firmer through improved consumer and business sentiment. With that, investors’ risk-appetite has risen, driving investors to riskier assets, including commodities and emerging market securities. On the other hand, QE drives down yields in advanced economies. The combination of rising risk-appetite and low yields in advanced economies pushes investors to search for higher yields elsewhere and thus makes commodities and emerging market securities more attractive. Of course, we must note here that despite the altered risk profiles, government securities of advanced economies are likely to remain the ultimate safe haven assets. As such, portions of capital flows could reverse themselves very easily when risk appetite wanes. Experiences have shown that the so-called “risk aversion” episode could coincide with large withdrawals of funds from emerging markets back to advanced economies. These fluctuations in capital flows could potentially pose important challenges for emerging markets.

The Monetary Policy Committee set out its latest economic outlook in the February Inflation Report. That Report went to great pains to stress the considerable uncertainty surrounding the prospects for the economy. Nobody can predict with any certainty how the UK economy, or indeed the world economy, is likely to fare over the next year or so. So beware of anyone that suggests otherwise. With that warning in mind, let me outline my central economic outlook, which is broadly similar to that described in the February Report. Near-term prospects are bleak. Output is likely to contract further in the first half of this year, as a weakening labour market and  2  BIS Review 46/2009  concerns about job prospects weigh on consumption, companies run down their stocks and scale back investment spending, and the synchronised slowing in world demand restrains export growth. But as we go through 2009, I believe it is most likely that the pace at which output is contracting will ease and that we will see some signs of recovery by around the turn of this year. This view is based on the substantial stimulus that is already starting to flow through the pipelines of our economy.
Fahad Bin Abdullah Almubarak: Achievements and developments during the past nine years in Saudi Arabia Speech by H E Dr Fahad Bin Abdullah Almubarak, Governor of the Saudi Arabian Monetary Agency, on the occasion of the 9th Anniversary of Allegiance to the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz, Riyadh, 27 April 2014. *  *  *  On the 26th of Jumada II, 1435 H, the Saudi people celebrate the occasion of Allegiance anniversary to the Custodian of the Two Holy Mosques, King Abdullah bin Abdulaziz Al Saud – may Allah preserve him- in its ninth year, expressing their deepest affection and sincere loyalty to the leader and the country. These sentiments are based on deep-rooted foundations, at the top of which are his characteristics – may Allah preserve him- of wise leadership of the affairs of the state, the national economy and great attention paid to citizens’ different interests. This has resulted in comprehensive developmental achievements that have raced time and exceeded the set goals, since his assumption of the reins of power on 26/6/1426 H, corresponding to 1/8/2005 to the present time. It is difficult to count down the achievements of these past nine blessed years in brief, but I will touch upon some of them with some statistics that are the best evidence of achievement and development.

On the other hand, the need of private businesses to carry out new investments has been low, against the backdrop of a moderate demand for goods and services and the existence of spare capacities in production. Fiscal policy has been stimulating during 2011. For the first ten-month period of the year, budget deficit posted ALL 30.9 billion or about 33.0% higher than a year earlier. The performance of budget deficit has been determined by the sluggish increase in expenditures and revenues by an annualized rate of 3.9% and 1.4%, respectively. The stimulating fiscal  BIS central bankers’ speeches  1  policy has been winding down steadily following the first quarter of the year, as also shown by the decelerated increase in public spending and budget deficit. This fiscal stance has contributed to maintaining the level of public debt under control. The Bank of Albania assesses the latter as one of the most essential indicators of macroeconomic stability at home. In this context, we encourage fiscal authorities to take appropriate measures, in order to ensure long-term sustainability of public debt. Foreign demand has supported the Albanian economic growth, notwithstanding the concerns surrounding the global economy and especially our trading partners. Albanian exports continue to grow, albeit at decelerated paces compared with the previous year. Exports grew 27.3% in the third quarter of the year, while imports grew 8.6% over the same period. Trade deficit increased 6.8% in the first nine-month period of the year.
Taking this into account, it is not unreasonable to believe that securitisation will become a more attractive option. Increased competition can thus lead to a growing market for securitisation. Alternatively, the opposite may apply, ie that improved opportunities for securitisation will increase competition. This is what happened in Australia, where the mortgage market was deregulated during the 1990s. Legislation facilitating securitisation reduced the previously high market entry barriers, paved the way for new players and reduced costs for borrowers by as much as a couple of percentage points. Conclusion Overall, most factors point to an increase in competition on the mortgage market. New forms of financing, new technology and possible EMU participation will contribute to reducing costs for new players trying to enter the mortgage market. Since mortgages are standardised products, lenders will compete on price, ie the rate of interest on the loan. The financing issue will therefore be a decisive one for issuers of mortgages. Traditionally, mortgage institutions have financed their operations by borrowing using their entire balance sheet as collateral. This method of financing is relatively expensive for mortgage institutions and as competition on the mortgage market increases, so will the need for cheaper methods of financing. Securitisation and gilt-edged bonds have been discussed as possible methods for mortgage institutions to reduce their financing costs. Of these two financing methods, securitisation stands out as having the greatest potential for reducing financing costs, since securitisation makes the most efficient use of equity. BIS Review 99/2000  8

Even bearing in mind the caveat that I have outlined earlier on the lack of a clear benchmark, it looks like international capital flows are too abundant in good times, potentially fueling domestic bubbles and destabilizing national financial systems, and prone to “sudden stops” in bad times. Emerging market economies have experienced numerous examples of “surge” episodes of capital inflows followed by perilous sudden stops. Current (and preliminary) data suggest that some EMEs are currently experiencing very large outflows. The potentially destabilizing effects of capital flows may be magnified in the current situation, with disappointingly slow economic growth (of a cyclical and structural nature), high volatility in commodity and asset prices, the persistence of both internal and external imbalances in key countries and regions, substantial amounts of currency mismatch on balance sheets in emerging market economies, etc. BIS central bankers’ speeches  1  II. So what should be done? I think that we should try to be both pragmatic and ambitious. If we are not pragmatic we will waste time exploring paths that will not lead us anywhere, but if we lack ambition we will never make progress. We should, first, develop a framework to prevent excessive capital flow volatility. Here I see three main avenues to explore: (i)  improving the monitoring of capital flows and hence taking forward the work on data gaps on foreign currency exposures and mismatches.
1.1 Naturally, it is on the euro money market that the highest degree of integration can be found, as a result of the unification of monetary policy, and thanks to the efficiency of the cross-country largevalue payment system that support it, i.e. the TARGET system. Interest rates differentials between what are nowadays regional deposit markets have quickly vanished following the advent of the euro and the “law of one price” applies to the transactions conducted within a deep and highly liquid euroarea wide market. The recognition granted to money market reference rates such as EONIA and Euribor, the sheer development of derivatives markets based on these references - the OIS-based swap market and Euribor futures and options contracts, the impressive increase in cross-border transactions are illustrations of this already well-advanced, if not already completed unification. On the inter-bank market, cross-border transactions conducted with EU counterparties represent more than 50% of the whole inter-bank euro deposit business. Similar developments are recorded in the  BIS Review 32/2003  1  repo market: the increasing share of non-domestic euro area collateral in transactions combined with the growing use of tri-party agreements, as well as the share of cross-border transactions - which is more than 50% - provide clear evidences of an increasingly integrated market. 1.2 Changes have also been impressive, albeit more contrasted, on the securities markets. The euro had clearly stimulated the rapid development of the corporate bond markets.

2  BIS Review 121/2007  inflation expectations from becoming entrenched below the operational target of 2.5 per cent was one of the main reasons the interest rate was lowered to a very low level in 2003 and 2004, when inflation receded and approached zero. Low interest rates have stimulated demand and output and gradually led to the prospect of higher inflation, which we are addressing by increasing the interest rate. Consumer price inflation is still fairly low, but capacity utilisation is now at such a high level that inflation is projected to move up gradually to 2.5 per cent. Higher interest rates will contribute to a gradual decline in capacity utilisation, thereby preventing inflation from becoming too high. In the long term, monetary policy cannot influence real economic variables such as output and employment; it can only influence nominal variables such as inflation, the nominal interest rate and the nominal exchange rate. When monetary policy serves as an anchor for inflation expectations, it allows the interplay between monetary policy and other components of the economy to function. A good result can be achieved if the social partners take the role of "leader" and the central bank the role of "follower". Wage growth can then be determined in the knowledge of the monetary policy response. Flexible inflation targeting provides a fixed framework for monetary policy and gives a clear indication of how the central bank is to respond in different situations.
Indeed, any decision to instead rely on morerestrictive interest rate policies to achieve financial stability at the expense of poorer macroeconomic outcomes must pass a cost–benefit test. And such a test would have to clearly illustrate that the adverse economic outcomes from more-restrictive interest rate  3  I should note that increases in interest rates since last spring have increased discount factors and thus lowered the present value of pension fund and other fixed nominal liabilities. For instance, see Fitch Ratings (2013). 4  BIS central bankers’ speeches  policies would be better and more acceptable to society than the outcomes that can be achieved by using enhanced supervisory tools alone to address financial stability risks. I have yet to see this argued convincingly. Macroprudential tools Let’s discuss some of these macroprudential tools. One simple but important tool is enhanced monitoring. Even before the recent financial crisis, central bankers were well aware of the key role played by stable financial markets in economic activity. Since the crisis, however, the analysis of financial stability issues has been greatly expanded and given a more prominent role in the FOMC’s deliberations. We comb through reams of data looking for evidence of incipient risks to financial stability. The Federal Reserve also has revamped its approach to bank supervision substantially to expand the focus on macrofinancial risks. Traditional bank supervisory tools are being used more intensively, and new tools have been developed. Bank capital stress tests are one wellknown addition to our supervisory toolkit.

Non-energy industrial goods inflation fell to 6.2 per cent in April, from 6.6 per cent in March, when it declined for the first time in several months. But services inflation increased to 5.2 per cent in April, from 5.1 per cent in March. Inflation is still being pushed up by the gradual pass-through of past energy cost increases and supply bottlenecks. In services, especially, it is still being pushed higher also by pent-up demand from the reopening of the economy and by rising wages. The information available up to March suggests that indicators of underlying inflation remain high. Wage pressures have strengthened further as employees, in a context of a robust labour market, recoup some of the purchasing power they have lost as a result of high inflation. Moreover, in some sectors firms have been able to increase their profit margins on the back of mismatches between supply and demand and the uncertainty created by high and volatile inflation. Although most measures of longer-term inflation expectations currently stand at around two per cent, some indicators have edged up and warrant continued monitoring. Risk assessment Renewed financial market tensions, if persistent, would pose a downside risk to the outlook for growth as they could tighten broader credit conditions more strongly than  2/4  BIS - Central bankers' speeches  expected and dampen confidence. Russia's war against Ukraine also continues to be a significant downside risk to the economy.
The impetus to growth wears off unless mortgage rates keep dropping, stimulating additional rounds of refinancing activity. The second channel is that low interest rates will gradually reduce the interest income of savers and this could eventually affect their consumption. Household interest income has fallen considerably over the past few years. This effect is likely to work quite slowly. The fact that interest rates are low for six months or a year probably does not have much impact on households’ expectations of their long-term interest income and thus, does not have much of an impact on consumer spending. But, as low interest rates are sustained, this could eventually lead to a downward adjustment in households’ assessments of their interest income over time and influence their spending. One way to look at this is through the prism of forward real interest rates. If interest rate expectations many years forward have fallen, then expectations about the permanent level of interest income should have declined as well. As shown in Exhibit 5, forward real rates five years ahead have declined notably over the past few years. This could be a reasonable  3  Primary mortgage rates are the rates paid by conforming borrowers, MBS yields are the rates received by investors. BIS central bankers’ speeches  5  proxy for savers’ expectations. Note that the decline in Exhibit 5 has not been precipitous, it has occurred very gradually over time. However, policymaking is about making choices between available alternatives.

After reducing the traditional policy tool, the target for the overnight federal funds rate, to close to zero, the Fed has aggressively employed two complementary types of non-traditional tools – asset purchases and forward guidance on the policy rate – to provide additional stimulus through their effects on long term rates and various risk premia. Effective forward guidance on interest rates causes market participants to lower their expectations and uncertainty about future path of interest rates and to anticipate that easier financial conditions will persist well in to the future. This pushes down the yield curve and leads to easier financial conditions. Federal Reserve asset purchases also make financial conditions more accommodative. Such purchases, by taking duration out of private hands, push down term premia and lead to lower long-term rates than would otherwise be the case for any given economic outlook. Agency MBS (mortgage-backed securities) purchases absorb prepayment risk and reduce secondary and primary mortgage rates, stimulating demand for housing and increasing purchasing power through refinancing. Lower long-term rates support the prices of equities and housing, boosting wealth and easing balance sheet constraints, while an accommodative monetary policy stance reduces downside risks for the economy and this leads to lower default risk premia on corporate debt. Our two tools work in a complementary manner. Asset purchases strengthen the credibility of the forward guidance on interest rates, while forward guidance provides information about how long the FOMC is likely to hold on to the assets it purchases.