samchain/econo-pairs-v1 huggingface dataset:
Treasury bill yields rose a bit less than other rates on instruments of comparable term and now trade at yields somewhat below the ON RRP rate. Treasury bills have some attractive qualities in comparison to ON RRP, such as round-the-clock liquidity. In addition, there seems to be strong demand for bills from investors who don’t have direct access to the ON RRP or IOR, and it appears that most Treasury bills are owned by such investors. Also, bills have typically traded below other money market rates during tightening cycles, as they do now; periods where bills trade at or above other rates have been the exception and not the rule.36 Thus, the smaller increase in bill yields than in rates on other term instruments is not surprising, and I do not read it as undermining the general conclusion that the policy rate increase was effective in firming money market conditions.37 December 31 Now, I mentioned earlier that fed funds traded within the target range on all but one day. Let’s talk about that day, which was December 31. 6  BIS central bankers’ speeches  On that day, the effective federal funds rate, calculated as a mean from the FR 2420 data, printed at 20 basis points, 15 basis points below its prior-day value and 5 basis points below the FOMC’s target range. The median dropped a bit more, by 20 basis points to a level of 15 basis points.

Even the safety valve of a floating exchange rate cannot insulate an economy from its trading partners. World trade fell by around 5% in the final quarter of 2008. 54 of the 56 nations for which data are available for the fourth quarter registered falls in industrial output. 7 of those suffered double digit declines. For many years trade has been the route to faster growth. Now trade is leading the world down as the economies most adversely affected by the current downturn are those most dependent on exports, such as Japan and some of the other Asian economies, not those with the worst banking problems. Sharp changes in sentiment, confidence, animal spirits – whatever words you care to use – are capable of wreaking havoc on the world and our own economy. I shall turn later to our immediate response to the crisis. I want first, however, to ask whether central banks have the right instruments and the right policy frameworks to deal with a world in which some of the biggest risks are of the type I have discussed earlier, namely events which occur very infrequently but when they do so have large adverse effects; events such as those through which we are living. In other words, was our framework suitable for a world of stability but inadequate for preventing or responding to large adverse shocks?
Projections The persistently high external costs and more dynamic consumption than anticipated lead to a significant revision of the inflation trajectory with respect to the previous MP Report. Part of it had already been incorporated in the May policy decision, when the Board decided to raise the MPR to 8.25%. The central scenario assumes that the annual CPI variation will continue to rise to somewhat less than 13% during the third quarter. Then it will begin to decline, ending 2022 around 10%, which exceeds the March estimate significantly. Core inflation is also revised substantially. Our forecast for December is changed by 2.5 percentage points up from March. In this case, the main changes are due to higher food prices included in this index, the effect of the exchange rate hike and logistical bottlenecks in the prices of goods. The greater private consumption that is being observed and the secondround effects of the increase in expected inflation also play a role. Looking ahead to 2023 and 2024, the central scenario continues to assume that headline and core inflation will decline steadily, both to around 3% by mid-2024, i.e., the end of the two-year policy horizon. In this projection, headline inflation will close 2023 at around 3%, while core inflation will be closer to 4% annually. The decline in core inflation will be  4  slower than in headline inflation and will start later than anticipated in March, reflecting the greater persistence of external cost shocks and the importance of second-round effects (figure 10).

10  Figure 1 Inflation (1) (2)  Core inflation (1) (2)  (annual change, percent)  (annual change, percent)  18  Headline CPI  14  Core CPI  Volatiles CPI  15  Goods  Services  12 10  12  8 9 6 6  4  3  2  0  0 15  16  17  18  19  20  21  22  -2  15  16  17  18  19  20  21  22  (1) Dotted vertical lines show statistical close of March 2022 Report. (2) For details on the different groupings and their share in headline CPI basket, see box IV.1 in December 2019 MP Report, Carlomagno and Sansone (2019), and Economic glossary. Sources: Central Bank of Chile and National Statistics Institute (INE). Figure 2 Cumulative inflationary surprises in MPR reports (percentage points) 2  Core goods excl. foods Other volatiles  Total foods (*) Core services  Volatile energy Total surprise  1,6 1,2 0,8 0,4 0 -0,4 Jun.21  Sep.21  Dec.21  Mar.22  (*) Sum of volatile and non-volatile foods. Sources: Central Bank of Chile and National Statistics Institute.
The point-to-point change in the Colombo Consumers’ Price Index (CCPI) which is popularly considered as “inflation”, has been increasing since April 2006 and the CCPI increased by around 19 per cent during each of the last two months. Although it was noted that a part of the increase was due to very high prices in vegetables, affected by extreme weather conditions, we noted with concern that core inflation too, which is a measure of inflation directly caused by demand pressures, had also risen to 15 per cent by November 2006. These pressures were somewhat aggravated by supply side developments, such as the upward adjustments in administered prices, increases in prices of some of the imported consumer items, and adjustments in import tariffs applicable to some consumer food items. Such factors, of course, would essentially cause a one-time price increase and would necessarily contribute to long term inflation only if such impact is accommodated by continuing monetary expansion. In the meantime, we observed with satisfaction that increased economic activities had led to lower unemployment during the year. The Labour force grew by approximately 1.0 per cent to 8.1 million by end 2005, and was expected to increase further to 8.2 million by end 2006. As a consequence, the  2  BIS Review 8/2007  unemployment rate declined to a level of 7.2 per cent in the first quarter 2006 and to its lowest level of 6.3 per cent in the second quarter 2006. Savings and investment, both recorded upward trends.

The Fair and Effective Markets Review – which I am leading along with my cochairs, Martin Wheatley from the Financial Conduct Authority and Charles Roxburgh from the Treasury – was set up to restore confidence in the operation of these markets. We don’t want to do this alone. That is why we have launched a consultation document today soliciting the views of anyone with an interest in FICC markets. The consultation is open for three months, and we will issue our final recommendations in June. In the meantime we want to work closely with: •  Market participants – who have the primary responsibility for putting things right. We have enlisted the help of a panel of senior market practitioners to help launch and take forward the Review’s final recommendations. •  International policymakers and regulators – because these markets are global in scope, although a significant share of these markets is based in London. •  The academic community – with which we are actively consulting – including the audience here tonight. •  The general public - including companies and households, for whom, I will argue, these markets matter most of all. In the rest of my speech I would like first to dismiss any notions you may have that Fixed Income, Currency and Commodity markets don’t affect your lives. Then I’ll talk about what went wrong in these markets and why, including a discussion of some of the markets’ key characteristics.
Governance of the information that firms have on customers is a particularly important issue. It appears reasonable that, if it is considered necessary for this information to be available to all operators, such an obligation should have no exceptions, and that its scope should be clear, always observing customer rights. BigTech also exerts pressure on the sector’s profitability, which is already weakened by the impact of the pandemic and by developments in the wake of the global financial crisis. To improve matters, banks should pursue efficiency gains, cutting costs and using new technologies more intensively. In particular, they should refine the use of the information they have, which enables them to improve their business model without raising their risk profile. Consolidation processes may also be useful, though an evaluation of the merits of each proposal is needed, particularly regarding the impact on financial stability. European transnational operations would be particularly positive, given that they would help further the Banking Union. As you can see, the to-do list is an ambitious one, given both the number of tasks and how demanding they are. This is why we must set to work as soon as possible, mindful that the rewards are substantial. Accomplishing these tasks is a job for all of us: authorities, legislators, firms and citizens. We can all contribute to reducing uncertainty when it comes to foreseeing how the future will be.

6  3  Uncertainty about the distribution over time and the use of the NGEU programme’s funds also conditions the projections. In this case, as regards our December forecast, a delay in the investment expenditure financed by the programme in 2021 is assumed. Accordingly, the impact on GDP is expected to fall from 1.3 pp in December to 1 pp in the latest projections, with the estimated contribution for 2022 rising at the same time, as a result of the assumptions that funds not invested this year will be applied the following year. Based on these assumptions, GDP would grow by 6% in 2021 under the baseline scenario, dipping to 3.2% under the severe scenario and increasing to 7.5% under the mild scenario. Following a sluggish first half of the year, activity would quicken in the second half under the baseline scenario. Greater dynamism as from the summer would give rise to a powerful carryover effect in 2022, added to by the greater estimated impact of the European funds for next year, whereby GDP would post high growth in 2022 of 5.3%, before easing to 1.7% in 2023. These figures represent a downward revision of 0.8 pp in GDP growth for this year compared with those projected in December. The lesser momentum of activity in the short term and, to a lesser extent, the revised distribution of spending under the European funds largely account for this revision.
With hindsight, the “original sins” of Economic and Monetary Union, an otherwise carefully thought-through and consistent project, were weak fiscal institutions, tolerance of economic imbalances and the lack of an integrated mechanism to supervise and resolve banks. As a matter of fact, financial fragmentation has led to a “two-gear” monetary union, in which the marginal cost of borrowing for banks varies according to the jurisdiction. 4  BIS central bankers’ speeches  1. Banks belonging to jurisdictions considered by markets as financially sound can generally access the interbank money market and get overnight financing at the EONIA rate, which is currently as low as 0.10%. 2. Banks in jurisdictions where risks and uncertainty are elevated generally have limited access to the interbank money market and rely to a large extent on central bank liquidity, charged at the MRO rate, currently 0.75%. The distressed funding conditions faced by banks in some parts of the euro area, compounded by expectations of a worsening macroeconomic outlook, have in turn resulted in fragmented credit conditions for households and firms, again along national borders. For one thing, credit supply standards applied by banks in their lending to the real economy have diverged across euro area countries. A similar message comes from the cross-country comparison of bank lending rates.

The Bank promotes stability in sterling payments in four ways: through its operation of RTGS; through the provision of liquidity insurance to the banking system; through its supervision of CHAPS, the other recognised payment systems, CREST and Central Counterparties; and through the prudential supervision of banks by the PRA. As discussed at the Open Forum in November, where there are coordination or market failures the Bank can and has used its unique position to shape financial markets for the public good. 7 The Bank of England has a long history of using its convening powers to solve collective action problems, not least the introduction of RTGS itself in the mid-1990s. Around the same time, the Bank also had to step in to take over the design and construction of the UK’s securities settlement infrastructure CREST, after the collapse of the Stock Exchange’s TAURUS project. We were strong supporters of the Continuous Linked Settlement 8 initiative, which since 2002 has played a major role in reducing settlement risk in foreign exchange transactions. More recently, the Bank has taken opportunities to modernise and innovate in response to the changing external environment. For example, the Bank has overhauled its framework for liquidity provision and is preparing to introduce polymer banknotes. 7  The Open Forum session on the role of central banks in financial markets can be watched here: https://www.youtube.com/watch?v=SJCilk1XdZ0&index=12&list=PLslyOrpjJ0z38nDN-8fCiDKpCDpKMKZc9. 8  Further information on the Continuous Linked Settlement system can be found here: http://www.clsgroup.com/Pages/default.aspx.
Same as most central banks throughout the world, the National Bank, as specified by the Statistical Research Program generates three sets of macroeconomic statistics: •  Monetary statistics that includes processing and presentation of data on the money supply (monetary aggregates), banks' interest rates on approved credits and accepted deposits, and many other data on the banking sector;  •  Balance of payments statistics that includes processing and compiling data on the developments in the balance of payments in the Republic of Macedonia; and  •  External debt statistics that includes processing and presentation of data on the foreign debt of the country. The National Bank has developed all these major sets of macroeconomic statistics in line with the international recommendations and standards. The harmonization of the method of developing such statistics with the international recommendations and standards has permanently been subject to verification by international institutions and organizations, primarily by the International Monetary Fund, as an institution that creates the methodological standards and recommendations in the area of central banking statistics. I would like to take this opportunity to mention the report of the so-called IMF ROSC (Report of the Observance on Standards and Codes) Mission, where the assessments of the  BIS Review 100/2006  1  central bank statistics are particularly positive, i.e. the development of the NBRM monetary and balance of payments statistics is largely harmonized with the international recommendations and standards.

Furthermore, taxpayers should obviously not be liable for any losses incurred by CCPs. Losses should be entirely borne by the CCPs themselves and their participants, in an appropriate and proportional manner, and in line with prudent incentives. In particular, the involvement of indirect participants should be carefully considered: their contribution to the loss allocation process should take into account the fact that they have no contractual agreements with the CCP, and, unlike direct members, have no part in the CCP’s risk governance process (and therefore have no say in the CCP’s risk management). Lastly, the issue of compensating clearing members for losses incurred during a recovery or resolution process remains comparatively unexplored and deserves careful attention.10 Let me now turn to the various tools that authorities could use to address potential shortcomings in CCP risk management and loss-absorption capacities. These options have very different implications, namely in terms of sharing the funding needs between CCPs and participants, and in terms of providing the right incentives to CCPs’ stakeholders. Increasing the level of pre-funded resources held by CCPs to cover default losses beyond the current standards. One possible conclusion from the current review of the international implementation of regulatory requirements, and the analysis and assessments being carried out in parallel, could be that standards regarding margins and stress testing are sufficiently stringent, but are not implemented consistently across CCPs and jurisdictions.
It did not make sense to export out of the subsidiaries in ASEAN when it was cheaper to buy directly from the plant in Japan. The weaker yen also has a tendency to slow foreign direct investment from Japan, as it is no longer so expensive to produce in Japan. 29. As we are all aware, this combination of Asian monetary problems has recently put tremendous pressure on the financial markets, in particular the foreign exchange markets, in the region. This was compounded by speculators who took advantage of these market developments to set up their attacks, resulting in the currency turmoil in Asian currencies that we have seen. 30. Here I cannot possibly resist the temptation to offer a few comments. There is a common perception that the adoption of more flexible exchange rate regimes by a number of Asian economies implied a failure of fixed exchange rate systems. This is in my view a mistaken perception. As all central bankers are aware, there is no one perfect exchange rate regime. One of the dilemmas of any exchange rate regime is how the exchange rate can reflect the underlying economic conditions, which are constantly changing, so that external balance can be achieved. A fixed exchange rate regime can function well if there is strict financial and fiscal discipline, and flexibility of domestic goods and services markets to adjust for any structural changes in the economy.

The framework has been applied unchanged to all countries since 2010. But enhanced surveillance is not a programme and does not entail conditionality – I assume this is exactly why the government accepted it! It therefore does not comply with our framework. 2/4  BIS central bankers' speeches  That being said, the lifting of the waiver was a “non-event” for banks, as one Greek bank CEO recently pointed out. Greek banks have broadened their market financing and successfully shifted parts of their financing from monetary policy operations onto the interbank repo market. The significant increase in deposits during the summer months helped as well. Overall, bank liquidity has been continuously improving. It is important that this trend is further supported in the period ahead. Is the Greek debt sustainable according to the ECB? We were wondering, if you consider it sustainable, why you couldn’t have included the Greek bonds in the public sector purchase programme (PSPP – also known as QE) for at least a few weeks after the Eurogroup decision on debt measures, when the waiver was still in force. Are you going to publish the ECB’s debt sustainability analysis? The agreement reached by the Eurogroup on 22 June was a significant step towards restoring debt sustainability, especially over the medium term (that is, until the end of the deferral period). In the long term, we welcome the Eurogroup’s readiness to consider further debt measures if there are adverse developments. Indeed, downside risks to both macroeconomic and fiscal assumptions remain sizeable.
But the large volume of other Solvency II work is certainly not being ignored. Part of the purpose of this conference is to draw attention to the requirements in relation to the standard formula, other approvals and reporting requirements; which affect both internal model and standard formula firms. The title of today’s conference is “countdown to implementation” and in the sessions that follow we will: •  Set out, as far as policy certainty allows, some of the key requirements and deadlines for firms between now and 1/1/16;  •  Provide you with the information you need to be ready for transposition and implementation;  •  And provide an opportunity for you to ask questions and discuss key topics with representatives from the Bank. On the internal model approval process (IMAP), good progress is now being made by some firms on their models; however many of you are behind and timelines look very tight for remedial action. In order for the PRA to review models, we must receive all necessary documentation and evidence of compliance in good time and produced to a sufficient standard. The deadline for pre-application submissions is March 2015; although firms should be striving to submit as soon as they are ready to give themselves more time to respond to PRA feedback on their models.

There is also an extensive exchange of information with the supervisors in the Banking Insurance and Securities Commission. Twice a year, Norges Bank publishes its financial stability report where the risks to the present and future solvency of financial institutions in Norway are assessed. The aim is to detect the first signs of banking problems more quickly and possibly prevent them from escalating into a crisis. However, the financial system is evolving rapidly. Tomorrow’s problems could easily be different from the past. Today, a large part of our banking industry is part of Nordic banking groups. This raises the question of whether a model for crisis resolution only based on national considerations would work. In light of this challenge, Nordic central banks have issued a memorandum of understanding setting out principles for the establishment of a structure for crisis management and the handling of information if a pan-Nordic bank should have problems. Nevertheless, the emergence of multinational banking groups raises the question of whether some banks may be “too big to save”. Another difference from the early 1990s is the government’s one-third ownership in the largest bank. In terms of crisis resolution, this is most probably a further complication. Banking crises have occurred at irregular intervals as long as banks have existed. And it could happen again. We need to be vigilant and alert in our macro prudential supervision, and willing to consider new approaches in crisis resolution to lessen the impact of any new financial crisis. Thank you for your attention.