samchain/econo-pairs-v1 huggingface dataset:
William C Dudley: Regional economy and trends in household debt Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the quarterly regional economic press briefing, New York City, 14 February 2011. *  *  *  Good morning and welcome once again to the New York Fed’s Quarterly Regional Economic Press Briefing. I am pleased to have this opportunity to talk with the journalists covering our region – and through you, to the people in our District. This morning I will discuss national and regional economic conditions, with particular attention to household debt in the nation and especially in the Second Federal Reserve District, which covers New York; northern New Jersey; Fairfield County, Connecticut; Puerto Rico; and the U.S. Virgin Islands. Following my remarks, my colleagues will provide more detail. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System. National economic conditions To provide context, let me first comment on national economic conditions. Since the Great Recession ended in 2009, the economy has grown at a modest pace. When we last met, in October, the available data showed that we hit a soft patch at mid-year. The recovery had slowed, extending the time before employment and inflation could be expected to return to levels consistent with the Federal Reserve’s dual mandate. And, with the loss of economic momentum, downside risks had increased.

The main challenge is to understand these activities, technologies, players and instruments before it is too late and they originate disruptive episodes. Largely, this can only be achieved through strengthened  1  8  See “The Cost of Cybercrime”, Ninth Annual Cost of Cybercrime Study, Accenture, 2019.  and strategic collaboration not only across regulators but also with financial market participants. -  ESG principles: climate-related risks  Besides the new risks stemming from the irruption of new technologies, at a time when ESG principles are gaining momentum I would also like to highlight risks to financial stability from climate change and governance failures. Climate change and the transition towards a more sustainable economy is currently a most topical issue. This is so for obvious reasons. It is a challenge that affects virtually all economic and social agents, and it has the potential to lead to a major transformational change not just for the economy but for society at large. Of course, the financial sector is not immune to these developments. In particular, climate change may affect financial stability through two types of risks. Following a classification that has already become standard, we can distinguish between physical and transition risks. The former have to do with the direct consequences of climate change on the value of financial and real assets, due for instance to natural disasters, floods, drought and migration flows.
It should be underlined that fiscal discipline of the past several years, by reducing the longterm risk premium, has been the key force allowing the achievement of robust output growth during a remarkable disinflation period. In that sense, I believe it is useful to emphasize once more that maintaining the prudent fiscal policy during an episode of worsening risk appetite is even more critical for preserving the resilience of the economy. Our medium term projections are based on the assumption that government expenditure targets will be met in 2008. Moreover, we assume that any extra need to readjust the primary budget balance will be implemented primarily through expenditure cuts rather than hikes in indirect taxes. Therefore the medium-term outlook that I mentioned above does not envisage major shocks arising from administered price adjustments, except the hikes in electricity and natural gas in January 2008. It should be kept in mind that any deviation from this assumption may alter the inflation and monetary outlook. The recent increase in end-user energy prices may continue to exert some temporary upward pressure on headline inflation in the coming months. However, these adjustments will also support lower inflation in the medium term as they contribute to a prudent fiscal stance and facilitate an expansion of the domestic energy production. Hence the central bank’s policy will not to react to these price adjustments, except to contain second-round effects.

This observation shows that inflation target, to a significant extent, continue to serve as an anchor and that economic agents expect the disinflation process to continue in the medium term. Nevertheless, the fact that currently medium-term inflation expectations are significantly above our medium term target of 4 percent necessitates a cautious policy stance 1 . Figure 10: Medium-Term Inflation Expectations* 9 12-Month  24-Month  8  7  6  5  0108  1107  0907  0707  0507  0307  0107  1106  0906  0706  0506  0306  0106  1105  0905  0705  0505  0305  0105  4  Expectations regarding the period after 24 months have been published since May 2006. Source: CBRT. 1  As of January, one-year and two-year ahead inflation expectations are 6.01 percent and 5.17 percent, respectively. BIS Review 20/2008  7  3. Inflation and monetary policy outlook  Distinguished Guests and Press Members, After summarizing inflation and monetary policy developments in 2007, in this part of my speech, I would like to share our evaluations on inflation and the monetary policy outlook. First of all, I would like to summarize several factors that might enable the disinflation process to continue in the upcoming period: Annual percentage change in CPI excluding food, energy and tobacco imply an inflation trend of 4.8 percent (Figure 11) 2 . In other words, underlying inflation in the past year was not far away from the medium-term targets.
30.10.2018  Welcome address Banco de España-SUERF Conference “Financial Disintermediation and the Future of the Banking Sector” Pablo Hernández de Cos Governor  Good morning. I would like to welcome you to the conference “Financial disintermediation and the future of the banking sector”, hosted by the Banco de España and co-organised with SUERF. Let me start by thanking our colleagues from SUERF for their participation and involvement in the conference. SUERF is a unique institution that has been very successful in creating an active network of academics, financial practitioners and policymakers for the analysis and discussion of monetary and financial issues. Its outreach is achieved through the organization of international events, such as today´s conference, publications and a very active sponsoring of research. It is well known that capital markets in Europe are less developed than in the United States. This is related to the more significant role played by banks in Europe for the provision of funding to firms than their US peers. To illustrate this, let me give you some figures. In 2017, the ratio of financing through fixed-income securities to total debt financing was 12% in the euro area versus 43% in the United States. Also, the ratio of equity market capitalisation over the domestic credit provided by banks to the private sector was almost four times larger in the United States than in the euro area at the end of 2016 according to the latest data provided by World Bank DataBank.

Understanding the driving forces of this trend is important in order to assess its main implications. Some factors are possibly of a transitory nature. Among these factors are the post-crisis monetary policies and their implementation. In particular, the introduction in mid2016 of the Corporate Sector Purchase Programme (CSPP) as part of the ECB Asset Purchase Programme, has contributed to lower the cost of firms’ financing through the issuance of fixed-income securities relative to the cost of bank funding, thus encouraging 5  See Bentolila, S., Jansen, M., and Jiménez, G. (2017) "When Credit Dries Up: Job Losses in the Great Recession", Journal of the European Economic Association, 16, 650–695, and Martínez-Pagés, J. (2014) “Impact of restructuring plans on lending to non-financial corporations” Economic Bulletin Banco de España, July – August 2014. 6  See Special feature A “Financial integration and risk sharing in a monetary union”, in Financial Integration in Europe,  ECB, April 2016 and Box 1 “What could enhance private financial risk sharing in the euro area?” in Financial Integration in Europe, ECB, May 2018. See also Asdrubali, P., Sorensen, B. and Yosha, O., (1996) “Channels of interstate risk sharing: United States 1963-1990”, Quarterly Journal of Economics, 111, 1081-1110; Athanasoulis, S. and van Wincoop, E. (2001) “Risk sharing within the United States: What do financial markets and fiscal federalism accomplish?”, Review of Economics and Statistics, 83, 688-698. 4/6  large companies to switch bank financing to bond financing.
Last but not least, our Project will be implemented by 7 authorities – three of them from EU member states and four from the beneficiary country. The strong commitment and cooperation between the partners is a prerequisite for our success. I would like to thank our twinning partners for the cooperation we have already established, owing to which this project came to its successful start and will further develop to its ultimate success. I would also like to thank in particular the Central Bank of Montenegro, for providing the facilities and hosting our resident twinning advisor for the next 18 months. I wish success to all of you and to our joint project. 2  BIS Review 168/2009

D’un point de vue technique, le passage à l’euro au cours du dernier week-end de 1998 a été une réussite Au cours du week-end de passage à l’euro , le SEBC a suivi le déroulement des opérations de conversion à la BCE, dans les banques centrales nationales participantes et dans les principaux établissements. Des échanges réguliers d’informations ont eu lieu par l’intermédiaire d’un réseau de points de communication entre la BCE et les BCN. Il n’a été signalé aucun incident susceptible d’entraver le démarrage sans heurt du système, qui a ainsi pu débuter normalement ses activités le 4 janvier, à l’ouverture des marchés. Ces résultats témoignent de la qualité des préparatifs auxquels se sont livrés la communauté des banques centrales et les opérateurs privés des marchés de capitaux, ces derniers mois et années. Pour ce qui concerne la communauté bancaire et financière française, la fin de l’année dernière a été consacrée à la planification et aux phases de tests en vue d’organiser le basculement des marchés financiers au cours du dernier week-end de 1998. C’est grâce à ces préparatifs que le processus de conversion a été un grand succès. 2. Ces préparatifs ont permis une introduction réussie de l’euro sur les marchés de capitaux Le 4 janvier, l’introduction de l’euro s’est effectuée avec succès.
It is this tradeweighted krona rate that the Riksbank tries to analyse and forecast. If one looks at the period with a floating exchange rate (since November 1992), one can draw the conclusion that the nominal and real exchange rates are strongly correlated. This is because exchange rates, which translate prices into a common currency, change quickly, while price levels change slowly. Nominal exchange rates are determined at the trading counters daily, while it takes time to change prices. Figure 4 Nominal and real TCW-weighted exchange rates Index, 18 November 1992=100  Note. Broken lines represent the Riksbank’s forecasts. The real exchange rate has been calculated using Swedish and TCW-weighted CPI. Sources: Statistics Sweden and the Riksbank. How do we compare the impact from the nominal exchange rate on inflation, which I took up earlier, with Figure 4, which shows a strong correlation between the nominal and real exchange rates? According to the earlier example, only around 15 per cent of a nominal exchange rate change “spills over” into domestic inflation. This means that 85 per cent of the nominal exchange rate change does not have any effect on inflation and that the real exchange rate is thus affected by 85 per cent of the change in the nominal exchange rate. There is thus a strong, but not complete, correlation in the short term between the nominal and real exchange rates.

This is consistent with the research results; over very long periods of time, real exchange rates appear to “level off” and not show any special trend. In the very long run the theory of relative purchasing power parity thus appears to apply. 23 If the real exchange rate does not have any trend, it will return to its average in the long run. There are thus results in the academic research indicating that real exchange rates fulfil relative purchasing power parity in the very long run. 24 However, these results have little value for those trying to forecast exchange rate developments in the short and medium term. As I mentioned earlier, it is moreover the trade-weighted krona exchange rate that the Riksbank tries to forecast. Figure 5 showed only the development of the krona against the dollar. If we return to Figure 4, we can see that the real trade-weighted krona rate shows  22  Interestingly, there is research indicating that price differences for a Big Mac between countries even out over time in accordance with relative purchasing power parity. See, for example, Cumby (1996) and Parsley and Wei (2007). 23  See, for example, Froot and Rogoff (1995) and Rogoff (1996) for a scientific survey of the research into purchasing power parity. 24  See, for example, Taylor (2002)  10  BIS Review 3/2010  large variations over fairly long periods. 25 The krona is much weaker in real terms at the end of the period than at the beginning of the period.
To support banks’ capacity to lend, MAS has implemented transitional measures till endSeptember 2021: Allowing banks to recognise 100% of regulatory loss allowance reserves as Tier 2 capital; and Reducing from 50% to 25% the amount of stable funding that banks must maintain on loans to individuals and businesses maturing in less than six months. MAS also provided guidance to financial institutions on estimating their loan loss allowances in the context of COVID-19: That in assessing COVID-19’s impact on future economic conditions, financial institutions should consider the government’s support measures in bolstering economic resilience; and That financial institutions need not maintain higher loan loss allowances solely because 8 / 15  BIS central bankers' speeches  COVID-19 relief measures were applied to certain loans. MAS provided room for insurance companies to rebalance their investment portfolios in the face of uncertainties in financial markets: By extending to end-2021 the transitional measure in the calculation of their financial resources under RBC 2. OPERATIONAL RESILIENCE OF FINANCIAL INSTITUTIONS  The financial sector has been operationally resilient, functioning with minimal disruption in the face of COVID-19. The financial industry has maintained a high level of customer service throughout the Circuit Breaker period, as well as Phases One and Two of the re-opening. They have also continued to seamlessly conduct their wholesale and international businesses. The industry’s operational resilience reflects sound business continuity planning and agile adjustments to work processes.

On the contrary, support should focus on 16  Indexation clauses already cover 24.4% of wage-earners with an agreement in force for 2022, compared with 16.1% at end-2021. By 2023, they will cover 45% of wage-earners with an agreement in force for that year, although as yet this only includes a limited number of workers. 11  lower-income households, who bear the brunt of inflation, and the firms most vulnerable to this new shock. Moreover, any measures should be temporary, so as not to further increase the structural budget deficit, which was already very high even before the pandemic. They should also be designed to avoid significant distortions to price signals. But offsetting the adverse effects of the current supply-side shock also calls for ambitious policies to boost productivity growth and potential GDP. In other words, the optimal economic policy response to an adverse supply shock, such as the present one, entails structural reforms (including, naturally, of the energy market) to ease the supply-side tensions. The common European instrument to realise this ambition is the European Union’s NGEU recovery plan. Under NGEU, investment projects must be carefully selected in order to optimally complement, and act as a catalyst for, private investment. But they must also be accompanied by, or even help fund, structural reforms to support, for example, the reallocation of resources across firms and sectors. At the same time, the sustainability of national public finances must be ensured; this is essential for the smooth functioning of the monetary union.
According to unofficial statistics, Swiss banks are entrusted with about one third of the totality of the world’s assets managed by banks in other countries than those where their clients are domiciled (so-called offshore wealth management), which places them well ahead of their competitors. Indeed, asset management and private banking are the strongest segments of Swiss banking, not only in terms of market shares, but also measured by revenues. For many observers, the success of our banks in asset management and private banking can only be explained by the existence of Switzerland’s banking secrecy. I think they misunderstand the meaning of this feature. In any case, it would be short-sighted to believe that a financial centre could insure its long-term development on a single factor. A successful strategy requires strong fundamentals: a competent and dedicated workforce, reliable services and products, and efficient infrastructures. I have no doubt that you share this view with me. Necessary characteristics of a successful financial centre How can we explain the long-lasting development of the finance industry in Switzerland? It is not the result of some public strategy or industrial policy. Instead it is the combined outcome of a number of factors which all point in the same direction. a)  An open-minded economy  Firstly, Switzerland, as a traditionally very open economy, was well placed to benefit from trade liberalisation and financial deregulation. We are used to see our economic performance being constantly challenged and directly dependent on our ability to adjust to a changing world environment.

Jean-Pierre Roth: The challenges of an international financial centre: the Swiss case Speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, to the British-Swiss Chamber of Commerce, London, 26 February 2002. *  *  *  It gives me great pleasure to have the opportunity to address your distinguished assembly today. Like all the Swiss I know, I always enjoy coming to London. Even though there are considerable differences between our two countries, we have many things in common. We are both proud of our history and of our colourful traditions, we cherish our freedom and our independence. What’s more, in both our countries, the financial industry has been a pillar of our economic strength in recent times. But these days, the most striking parallelism between the United Kingdom and Switzerland can be seen in monetary affairs. Both countries are “outs”: they do not belong to the Euro-zone. In Britain, the currency is still the pound sterling and, in Switzerland, we still have a preference for our franc. We thus both face the same challenge: living next to a large currency area which absorbs most of our foreign trade. This situation is new for both of us. It is of course not up to the Swiss central bank governor to speculate how long this situation will last in the United Kingdom.
Inflation has been brought down to, and maintained at, the lowest rate we have seen in a generation; but, even more important, we have also seen relatively steady growth over this period and a sustained and very welcome fall in unemployment. But it has to be recognised that the going is now becoming more difficult, for two main reasons. The first is that we began the present period of expansion in 1992 with a good deal of slack, or spare capacity, in the economy - following the recession - and that slack has now been more or less reabsorbed. In the past year, in particular, the pace of expansion has picked up, to close to 4%, under the impact particularly of strong domestic demand, and that is well above any realistic estimate of the sustainable rate - the underlying rate of growth of supply-side capacity. And this is showing up in the labour market in evidence of skills shortages and in some signs of higher pay settlements and earnings. If we are not now to run into a period of excess demand and accelerating inflation, the rate of growth of the overall economy needs to moderate - quite soon and quite sharply. And it almost certainly will moderate during the course of this year, and may indeed have begun to do so.

The more transparent, the more cautious board members will be in pronouncing their judgments. That is why we have decided not to reveal board members’ names in the minutes, so as not to inhibit an open, technical and independent discussion. In the pursuit of monetary policy effectiveness and predictability, we feel that the discussion itself is more important than names. A recent study by Meade and Stasavage (2008) compared the Fed’s Federal Open Market Committee discussions before and after 1993, at which time it was decided to publish detailed records of deliberations of the meetings five years after they had been held. The study concluded that knowing the transcripts were to be made public had made members of a monetary policy committee more reluctant to offer dissenting opinions. In general, transparency and its limits depend chiefly on the characteristics of the Board. For example, at one extreme we have the European Central Bank which does not keep minutes and dissent is very limited; and at the other extreme we have the Bank of England where each board member has individual responsibility. 4 Chile, like the United States, takes an intermediate stance. That’s why Blinder (2004) says, there is no “one-size-fits-all” approach to communication and transparency. Communications policy The Central Bank website carries a document called “Communications Policy” which specifies the principles and norms governing the Bank’s communication with the public.