samchain/econo-pairs-v1 huggingface dataset:
The view that much of this growth reflects structural changes of this sort is supported in my view by the way the spread between deposit and loan rates of interest has vanished in the last few years (Chart 13). Of course that might be the product of competition between banks to lend more and attract more deposits; it also seems plausible that much of this lending is more about balance sheet restructuring than making a profit. However deposits associated with special purpose vehicles and intra-group only account for part of the growth. Even if we strip out all OFC deposits the growth rate of money has still been strong compared with the growth rate of money spending (Chart 14). In my final section I want to discuss what we should make of this. The significance of the money supply In the Treasury in the 1980s I was a close observer of the attempts to find a monetary aggregate as an intermediate target to guide policy. We were looking for both a predictable relationship between the policy instrument, interest rates, and the measure of money and a predictable relationship between that and our final objective, inflation. I remember the frustrations when both links proved unreliable. I am in no doubt that we are better off focussing directly on our final target, inflation. However I was struck, returning eighteen months ago to the economic debate, how the place of money in our debates had changed. Our model, like most others, is “new Keynesian”.

I want to use these remarks to explain why we are doing this, covering four main topics: -  First, why achieving net zero requires action from everyone, including central banks;  -  Second, how a clarified remit, coupled with market mispricing of climate risk, gives the Bank the green light to adjust the composition of our Corporate Bond Purchase Scheme to support net zero in ways that don’t compromise its monetary policy goals;  -  Third, why those adjustments should aim to improve firms’ incentives for delivering net zero, not simply minimise the current carbon footprint of the Scheme; and  -  Fourth, how we will turn our words into action, starting with the next scheduled reinvestment operations this autumn. The framework we are setting out today is a first for central bank monetary policy operations. But, as a famous frog once sang, it’s not easy being green.1 Some worry central banks will go too far, straying into territory best left to government. Others worry they will be too timid, under-using their influence for change. So we need your help. Do our proposals get that balance right? Have we missed anything? And how do we work with others to amplify our impact, recognising that central banks’ voices and influence are at least as powerful as our buying power? Our draft framework already draws heavily on emerging best practice. But today marks the start of an intensive period of listening and learning, framed by the questions set out in the Discussion Paper.
Figure 2: Processed and Unprocessed Food Prices (Annual Percentage Change) Processed Food  25  Unprocessed Food 20 15 10 5  06.08  05.08  04.08  03.08  02.08  01.08  12.07  11.07  10.07  09.07  08.07  07.07  06.07  0  Source: TURKSTAT, CBT. 2  BIS Review 100/2008  Developments in energy prices have been the other major factor driving inflation in the second quarter (Figure 3). Soaring oil prices continued to lead to significant hikes in the prices of domestic fuel products, also putting pressure on housing utilities such as electricity and natural gas. Figure 3: Energy Prices (Quarterly Percentage Change, Percentage Point Contribution) 10  Fuel (Percentage point contribution)  8  Energy for housing (Percentage point contribution) Energy (3-Month percentage change)  6 4 2 0  08-II  08-I  07-IV  07-III  07-II  07-I  06-IV  06-III  06-II  -2  Source: TURKSTAT, CBT. Services inflation displayed a limited rise in the first half of 2008. Food and energy prices continued to exert upward pressures on the prices of catering and transport services. Rents and other services, on the other hand, continued to decelerate (Figure 4). Figure 4: Subcomponents of Services Index (First Half Cumulative Percentage Change) 12  2006-2007 Average  10  2008  8 6 4 2 0 Services  Rent  Transport Services  Restaurants and Hotels  Other Services  Source: TURKSTAT, CBT.

I would like to underline that adverse impacts of the supply side shocks on the economy will be more limited should all the economic agents take these targets as a benchmark in forming their expectations. Prudent monetary policy is a necessary but not sufficient condition for attaining price stability. The support from fiscal policy and structural reforms are as critical as the monetary policy in this respect. Sound fiscal policy has been one of the main factors in driving inflation down to single digits. The role of fiscal policy will continue to be critical on the road to price stability. Preserving the resilience of the economy, especially under current conditions, requires the continuation of fiscal discipline and structural reforms. In this respect, the European Union accession process and the implementation of structural reforms envisaged in the economic program remain to be of utmost importance. I would like to conclude my remarks by stating that advances in structural reforms, which would improve the quality of fiscal discipline and enhance productivity, are monitored closely by the CBT with regard to their implications on macroeconomic and price stability. Thank you. 14  BIS Review 100/2008
As banks grow in complexity and sophistication, I believe that it will be necessary for supervisors to place a greater emphasis on understanding banks’ own risk assessments. It is therefore vital that we complement the traditional accounting-based approach to supervision with a greater emphasis on analysis of the risks affecting banks and the control systems  BIS Review 38/2005  3  that banks have in place to mitigate such risks. This cultural shift may not be easy, but I believe it will be beneficial not only for us as supervisors, but also for banks and for the stability of our financial systems. Clarity The third “C” is clarity. I believe that Basel II will provide greater clarity regarding banks’ measurement and management of risk. This will be achieved first of all through the third pillar – market discipline – which aims at ensuring that the market provides an additional layer of oversight. The third pillar is intended to focus the board and senior management on heightening disclosure, which should strengthen incentives for prudent risk management. Greater transparency in banks’ financial reporting should allow majority and minority shareholders, depositors, debt-holders, and other market participants to evaluate banks and reward or penalise them according to how prudently they are managed. This should provide a window on how the bank is governed, and should serve to curb excessive risk-taking in advance. Basel II will enhance clarity in other ways as well.

Our history and that of the region is paved with stabilization measures based on the exchange rate, which generated severe setbacks, and ended in balance of payments crisis, financial turmoil and economic disasters. For this reason, we have evolved into a floating exchange rate regime, which permits to better reconcile the stability of the Chilean economy with the volatility of the external scenario. This is not the time or the place for a lengthy discussion on the subject; suffice it to recall that every economic crisis in Chile over the past fifty years – except the recession of 2009 we are leaving behind with unprecedented vigor – have been associated to exchange rate misalignments and rigidities. Furthermore, a very significant element to explain why the emerging economies were spared the worst effects of the recent global crisis was that their currencies floated, which allowed them to absorb the shocks, eliminated the invitation to investors to wager against currency weakening and opened room to relax monetary policy and provide liquidity. However, although a floating exchange rate has many advantages for economic and financial stability, it may happen that, at times of high uncertainty or excessive optimism, financial flows could persistently push the real exchange rate away from its medium- and long-term fundamentals, with negative effects on the economy. In such situations, the Central Bank may intervene in the foreign exchange market with the purpose of mitigating or eliminating these imbalances.
Appendix When the financial markets are large, it is important to try to assess their vulnerability and systemic risk, that is, the risk of a disturbance in the financial system that can lead to large socio-economic costs. The Riksbank has developed a measure of this, the so-called systemic risk indicator.10 In brief, this means that one aggregates five separate indicators for the various sub-markets that reflect developments in the banking sector, household sector, corporate sector, property market 10 See Dominika Krygier and Peter van Santen, “A new indicator of risks and vulnerabilities in the Swedish finan-  cial system”, Staff memo, May 2020, Sveriges Riksbank and Dominika Krygier and Tamás Vasi, “Quantification of systemic risks with Growth-at-Risk”, Staff memo, May 2022, Sveriges Riksbank. 15 [16]  and in a group of variables referred to as external factors. Like all indicators, it does of course have its shortcomings, but it gives an indication of developments over time. From immediately after the 1990s crisis to the global financial crisis, the indicator remained at a low level, but it has remained relatively high after the financial crisis. Diagram 10. The Riksbank’s indicator for risks and vulnerabilities in the financial system Deviation from mean value 2  1  0  -1  -2  90  95  00  05  10  15  20  Systemic riskindicator  Non-financial corporate sector  Banking sector  Property market  Husehold sector  External environment  Note. A higher value means greater risks and vulnerabilities.

Furthermore, companies are financing themselves much more often in the market today, by issuing certificates and bonds. Thirty years ago, most of them borrowed from banks. Changes in financial markets can affect the transmission of monetary policy, which we need to take into account in our monetary policy assessments. Diagram 9. Borrowing among non-financial corporates Percentage of GDP, quarterly data 100 80 60  40 20 0 1990  1995  2000  2005  2010  2015  2020  Loans from monetary financial institutions Securities borrowing  Note. Includes securities borrowing in both Swedish kronor and foreign currency. Sources: Statistics Sweden and the Riksbank. In short, the development of the Swedish economy over the past 30 years may be summarised as good on the real economic side, but with some worrying signs on the financial side. 12 [16]  Forward planning difficult but important I would like to broaden the perspective a little. Thirty years ago, Swedish economists and politicians alike agreed that a steadfast defence of the fixed exchange rate was the only way to break with the weak development of the Swedish economy and lead it onto a new path. Many in Sweden were stuck in a particular way of thinking, a paradigm, where we did not realise that economic reality had changed so much that our frameworks also needed to be fundamentally changed. With free capital movement, a deregulated credit market and a poorly functioning economy, the fixed exchange rate was not a good instrument for creating economic stability and prosperity.
Zeti Akhtar Aziz: Strategic positioning in a changing environment Keynote address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the 2006 Dialogue Session with Insurers and Takaful Operators, Kuala Lumpur, 22 August 2006. *  *  *  In a rapidly changing environment, rethinking the future and strategic repositioning needs to be a high priority agenda. Strategic positioning is not only necessary to deal with the new emerging challenges but more importantly, it needs to be part of the process that will shape the future. The changes taking place are on several fronts. •  Nations are becoming increasingly inter-linked and integrated in a more globalised environment. •  The Malaysian economy continues to experience significant structural shifts into new areas of growth and comparative advantage. •  Consumers are becoming increasingly discerning in terms of the range and quality of financial products and services. •  The financial system is transitioning into a more competitive environment as institutional arrangements become increasingly more deregulated and liberalized. •  Technological advancement has enabled greater innovation in the development of financial products and services, operational processes and delivery channels. •  The regulatory and supervisory approaches to maintaining financial stability are becoming more principle and risk-based. With these changes intensifying, it is timely to reflect on the emerging issues for the insurance and takaful industry.

The global economic performance for 2006 has so far been favourable with a more balanced growth among the major economies, including in Japan and Europe . The world economy is however, facing an extended period of high energy prices and its consequent effects on inflation. Following these developments, interest rates have been raised in most economies. While risks are now emerging for a slower growth in a number of the major economies, growth in the Asian economies have continued to remain robust and resilient. This trend has not only increased Asia 's relative significance in the world economy but it has also contributed to a more balanced global growth. The Malaysian economy has benefited from this favourable external environment. Growth has been supported by both the strengthening exports performance that has be reinforced by strong domestic demand. Domestic demand also continues to be driven by the private sector as private consumption and investment have been an important source of growth. The continued expansion in private investment is particularly important in ensuring the long-term sustainability of the growth. BIS Review 76/2006  1  The focus of the monetary policy in this environment continues to be towards achieving macroeconomic stability. More recently, the higher energy costs have resulted in an increase in consumer prices. In this environment, interest rates have been raised three times. In May this year, a pause in this increase was announced. With limited evidence of demand induced inflation, the assessment is for inflation to moderate in the second half of this year.
The size of the effect varies significantly across countries, however; the UK is a little below average. 14 This depends, of course, on whether the good/service in the supply chain is sold on to become a final good/service in the same country or exported. 15 This is true both across countries and over time. See Auer, R, Borio, C and Filardo, A (2017), ibid. 16 See Cesa-Bianchi, A, Kindberg-Hanlon, G, Nelson, B and Thwaites, G, Bank of England, forthcoming. The speed at which changes in import prices are passed through to final goods is likely to differ across products. For example, for the UK, consumer food and energy prices appear to respond more quickly than the prices of other goods and services. In part, that appears to be because margins at each point in the supply chain are tight. For food, it also partly reflects the fact some imported food is already the final consumption good – i.e. the supply chain is short. 17 See Goldberg, L and Campa, J (2010), ‘The sensitivity of the CPI to exchange rates: distribution margins, imported inputs, and trade exposure’, The Review of Economics and Statistics, Vol. 92, Issue 2, pages 392-407. 8  All speeches are available online at www.bankofengland.co.uk/speeches  8  arguably, as work by the IMF and others has shown,  18  technological progress has played a more significant  role. Technology, not globalisation, is estimated to be the main reason why labour’s share of income has been falling across advanced economies.

So if a large share of a country’s imports is invoiced in a foreign currency, changes in its exchange rate will mostly show up in changes in the domestic currency price of imports – in other words, pass-through will be higher. For the UK, Gopinath finds that just under half of imports are invoiced in US dollars. 55 There is evidence of threshold effects in exchange rate pass-through. Pass-through of bilateral exchange rate movements that are larger than 5% is around four times larger than that of changes smaller than 5%. See Lewis, J (2016), ‘What can Big Data tell us about the pass-through of big exchange rate changes?’, Bank of England Staff Working Paper No. 579. 54  20  All speeches are available online at www.bankofengland.co.uk/speeches  20  Turning finally to the policy implications, it is critical to recognise that Brexit represents a real shock about which monetary policy can do little. Monetary policy cannot prevent the weaker real incomes likely to accompany the move to new trading arrangements with the EU, but it can influence how this hit to incomes is distributed between job losses and price rises. And it can support UK households and businesses as they adjust to such profound change. On balance, the de-integration effects of Brexit can be expected to steepen the Phillips Curve and to be inflationary. At present, the main question concerns the extent to which this adjustment has been brought forward.
They might actually boost risk-taking incentives among banks which are not subject to prudential intervention. BIS Review 168/2010  21  Chart 18 UK credit cycle across monetary regimes  (1) Gold Standard. (2) Inter-war suspension. (3) Resumption of Gold Standard. (4) Sterling Area. (5) Bank of England nationalised; Bretton Woods. (6) Bretton Woods; Sterling full external convertibility. (7) Monetary Targeting. (8) Exchange Rate Mechanism. (9) Inflation Targeting. (10) Bank of England independence. Source: Bank calculations. Chart 19 US credit cycle across monetary regimes  (1) Gold Standard. (2) Inter-war suspension. (3) Resumption of Gold Standard. (4) FDIC established; Federal Reserve reorganisation. (5) Bretton Woods. (6) Treasury-Federal Reserve Accord (1951). (7) End convertibility into gold (“Nixon Shock”) (1971). (8) Volker era. (9) Greenspan era. (10) Bernanke era. Source: Bank calculations. 22  BIS Review 168/2010  To see that, consider a two-bank variant of the model described by the payoffs in Table 4, in now references the market’s prior over the macro state, which it updates having which is neither too big nor too small, there are observed a bank’s earnings. When two symmetric Nash equilibrium strategies in this game: {Risky, Risky} and {Tight, Tight}. When Bank 1 sets {Risky}, Bank 2 does not want to set {Tight} and declare negative earnings as this is more likely to signal low ability, provided the long term costs are not too big. On the other hand, if Bank 1 sets {Tight}, Bank 2 sets tight too if long term costs are not too small.

Moreover, whether a country intends to implement the New Accord by the end of 2006 or perhaps later, the Basel Committee recommends that supervisors everywhere encourage their banks to strengthen their abilities to identify, measure, and manage the full range of risks they face through internal processes. At the same time, I am very encouraged to hear that banks and supervisors share the notion that none of our countries, regardless of our stage of development, can foster our own economic growth unless our banks are adequately capitalised and well managed, our financial systems stable, and our markets transparent and open. I believe that the New Basel Accord goes a long way toward achieving and strengthening those three objectives. Certainly we hope that, over time, more banks and more banking systems will adopt the more advanced approaches to risk measurement and management laid out in the New Accord. When banks are adequately capitalised and well-managed, they are better able to promote growth by providing credit to consumers and businesses alike. But more broadly, when banking systems worldwide are  BIS Review 52/2003  5  adequately capitalised and well-managed, the international financial system becomes more stable, better able to promote sustainable growth, and more resilient during periods of distress. Thank you for your attention. 6  BIS Review 52/2003
Due to the size of our foreign exchange reserves, the SNB could quickly acquire large shares in companies, and this might be misconstrued as strategic participations in the event of active management of our equity holdings and corresponding overweightings in some areas. Our strategy ensures that holdings in individual companies remain low. Third, through a passive strategy we can minimise our market influence, since our policy does not cause us to give preference to individual securities or sectors. Fourth, our investment horizon is very long-term, that is, it spans several business cycles. The academic literature shows that, taking account of the costs, it is almost impossible to beat a broad stock index in the long term and systematically. 2  2  Cf. Carhart, Mark M. 1997. On Persistence in Mutual Fund Performance. The Journal of Finance 52 (1): 57–82; also Fama, Eugene F. and Kenneth R. French. 2010. Luck versus Skill in the Cross-Section of Mutual Fund Returns. The Journal of Finance 65 (5): 1915–1947. BIS central bankers’ speeches  5  However, there are two areas in which we limit our investment universe in a selective manner. First, we exclude mid and large cap banks from our portfolio in order to avoid conflicts of interest. Second, we do not include companies that are in gross violation of ethical principles. I will explain these two points in more detail.

The SNB is now expecting inflation of 0% in the current year and 0.4% in 2015. In 2016, inflation should increase to 1.0%. Furthermore, the value of the Swiss franc is still high. With the three-month Libor close to zero, the minimum exchange rate continues to be the right tool to avoid an undesirable tightening of monetary conditions in the event of renewed upward pressure on the Swiss franc. Through the minimum exchange rate, therefore, we are in a position to fulfil our price stability mandate. However, the consistent enforcement of the minimum exchange rate has contributed to the substantial increase in our currency reserves. Slide 1 shows that, since 2009, our currency reserves have increased by a factor of about six, and the foreign  BIS central bankers’ speeches  1  exchange reserves are almost ten times higher. Our foreign exchange reserves, that is, currency reserves excluding gold, currently amount to almost CHF 450 billion, which is over 70% of Switzerland’s annual economic output. The expansion of our foreign exchange reserves means that our balance sheet is more exposed to the volatility of the financial markets than it used to be. Even slight price changes can have a strong influence on our investment performance. This has made our investment policy even more challenging. However, thanks to established processes and a high level of expertise, we are in a position to meet these demands.