samchain/econo-pairs-v1 huggingface dataset:
Growth in public demand, stronger confidence in financial markets and low key rates are fuelling investment abroad. Even though the global economic situation now seems to have stabilised, there is still a risk of continued low growth for a fairly long period ahead. The severe downturn and fall in commodity prices has led to very low or negative consumer price inflation in many countries. Inflation is still moving down and is now negative in for instance the US, the euro area, Sweden, Japan and China. Core inflation is more stable, but has also shown a slight decline recently. The current low level of activity and high unemployment will also act as a brake on inflation in the period ahead. One characteristic of the crisis was the substantial increase in money market rates. Confidence between banks evaporated. Banks reacted by raising interest rates on loans to businesses and households. They started to turn off the lending tap. Measures implemented by central banks and governments have had a stabilising effect. The most important markets have also gradually become less disorderly, with less distrust among participants. The risk that issuers of credit will go bankrupt has diminished. Activity in money and bond markets has picked up and fluctuations are less pronounced. The situation in the interbank market has improved. The spread between money market rates and expected key rates, which is an indicator of risk premiums in the money market, has decreased. Money market premiums in Norway have also fallen. Equity markets have risen since early 2009.

With few exceptions, all the advanced economies were already in a net debt position and many are now facing funding problems related to an aging population. If the global economy is to recover from the crisis, government debt must be stabilised fairly soon in order to prevent a string of crises in state finances. Norway is in a unique position due to government petroleum revenues. Monetary and fiscal policy have stimulated domestic demand and output. Growth in mainland GDP was higher in the second quarter than projected in the June Monetary Policy Report. Household consumption seems to be picking up again. Petroleum industry activity has also had a stabilising effect on the Norwegian economy. There are plans to develop a number of oil fields on the Norwegian continental shelf in the years ahead, but it is likely that these investments will require an oil price of more than USD 60–70 per barrel to be profitable. BIS Review 115/2009  3  The events of September 2009 spread rapidly to the firms in Norges Bank’s regional network. In August 2009, manufacturing enterprises reported that growth would hold up. In November, the turnaround was described as a “heart attack”. Norges Bank established its regional network in 2002. Regular interviews provide information about enterprises’ assessment of the economic outlook before other official statistics are available. This information is therefore an important part of the decision-making basis in the formulation of monetary policy. Statistics Norway’s quarterly national accounts are available about 50 days after the end of the quarter.
The need for talent is particularly acute for supervisors in emerging economies, as the banking system grows rapidly. With the growing demand for risk managers, some supervisors are facing higher attrition. We have to significantly expand the talent pool, and work with international and regional bodies like the FSI, the World Bank and IMF to step up our efforts. 25. Finally, supervisors should not be acting alone in achieving the desired regulatory outcomes. Good outcomes cannot depend on a “cat-and-mouse” game of supervisors prescribing rules and then checking for compliance. The primary responsibility of having a sound bank must rest with the Board and senior management of the bank. They need to take ownership of and responsibility for managing risks, and to have the requisite knowledge, skills and experience to discharge their responsibilities effectively. 26. In this regard, MAS recently proposed a number of enhancements to the corporate governance framework for locally incorporated banks. We welcome the Basel Committee’s present initiative to revisit its 2006 corporate governance guidance, and to address weaknesses identified during the crisis. 27. In promoting shared outcomes, political support is crucial in various areas. It is difficult to build a strong banking system on weak macro-economic foundations. Supervisors in all countries, but more so in emerging economies, are sometimes under political pressure to tilt credit growth in certain directions, or to exercise forbearance. While the financial system has to be responsive to the needs of the economy, a politicised supervisory process will almost certainly bring adverse consequences down the road. Conclusion 28.

Mario Draghi: Interview in Bild Interview with Mr Mario Draghi, President of the European Central Bank, in Bild, conducted by Mr Kai Diekmann, Mr Nikolaus Blome and Mr Daniel Biskup on 25 April 2016 and published on 28 April 2016. *  *  *  BILD: Mr Draghi, when you became President of the European Central Bank (ECB) just over four years ago, the Germans were scared that, as an Italian, you would create too much inflation. Now, even an Italian is unable to generate sufficient inflation. What is going wrong? Mario Draghi (laughs): Nothing. People in Germany can rest assured that their ECB President is doing everything to restore inflation to the right level. Our mandate is price stability, which means inflation of just below 2%. BILD: In order to achieve that, you have cut interest rates to zero. German savings are melting away like butter in the sun. Don’t you care about that? Draghi: We are well aware of the situation for savers. And it’s not only in Germany that people have to face low interest rates. But interest rates are low because growth is low and inflation is too low. Think about the alternative: if we raised rates now, it would be bad for the economy and it would unleash deflation, unemployment and recession. The interest on savings comes from growth, so it is in the interests of savers that inflation stabilises and growth becomes more robust.
An improvement in the balance of the economy was also achieved last year from another source - a welcome easing in the strength of sterling which itself had been a reflection of the persistent weakness of the euro. As the euro has recovered somewhat over the past year, and sterling has moved back from its peak levels, this has, at least in degree, eased some of the pressures faced by exporters and by businesses most exposed to import competition. The result is a better balance between the externally-exposed sectors of the economy and domestically-orientated businesses, between manufacturing and services, and between different regions of the country. Two other clouds that had threatened the sustainability of our growth performance also receded somewhat last year. One was the impact throughout the economy emanating from the steep rise in oil prices, which abated as oil prices fell back from their peak levels. The other concern was that share prices had risen to levels which many felt were not sustainable in terms of reasonable expectations of future corporate profits. The fall in share prices during last year was not a comfortable experience falling asset prices rarely are - but it removed some of the sense of unreality.

First, we need to recognise that we are talking of slowdown in the US from what have been extremely buoyant rates of growth, maintained for several years past, as the US economy has reaped the benefits of the application of information technology and the rise in productivity growth that had engendered - the new economy. There is plenty of evidence that growth in the US needed to slow somewhat, to alleviate imbalances in the economy. So part of what is happening should be helpful in providing a sounder base for sustainable recovery. 2  BIS Review 22/2001  Secondly, the new economy is, in the US, a reality: there plainly has been a continuing process of improvements in efficiency, achieved by harnessing the benefits of IT, which have raised the growth capacity of the economy. It seems unlikely that those gains will vanish into the night and, if they remain in place, they should provide a basis for a recovery in US growth when the present adjustment has run its course. That, of course, says nothing about how long the adjustment may take. But a third important feature is that the Federal Reserve has demonstrated a willingness to act rapidly and vigorously in easing monetary conditions in response to the downturn. Monetary policy cannot remove economic cycles. But active and intelligent management of interest rates can help substantially to alleviate the severity of the adjustment. And a fourth factor suggests that the markets share this view.
BIS Review 134/2007  3  This is because reserves accumulation to date reflects successive years of external surpluses rather than borrowed reserves. Going forward, productivity improvement and continued careful policy management by emerging markets will help maintain this relative position. Therefore, for some or for most countries, the regime shift that we are seeing now may be more of a permanent feature. So, the world is now different, and this change needs to be recognized more fully by the market. More importantly, the configuration of policies at the international level, especially by the Bretton Woods institutions, also need to adapt to this shift. On reserves management, the size of reserves that we have now in emerging markets, the fiscal costs associated with reserves accumulation, and the opportunity cost of investing excess reserves, all these may induce reserves managers to explore opportunities for enhancing returns by adopting more aggressive investment policies. Such actions will undoubtedly affect financial markets. On this, it is important to remind ourselves that this style of investment can also come into conflict with the mandate of central banks in preserving stability and orderly markets. So, the challenge is to achieve a proper balance. Thank you, Mr. Chairman. 4  BIS Review 134/2007

Given the exceptional nature of the circumstances that would justify a CCoB release we would seek to limit the duration and scope of the distribution restrictions to the minimum required to address the risks faced. This would be dependent on the severity of the shock and the level of  Page 6  uncertainty that the banking system might have to face. [15] Enough said on capital buffers. I expect the debate on this to continue at the Basel Committee and the Financial Stability Board (FSB). Let me now turn to liquidity buffers. Liquidity framework and liquid assets usability The global financial crisis exposed the lack of sufficient liquidity in banks’ balance sheets and led to regulatory reform, including the introduction of the Liquidity Coverage Ratio (LCR), which enhances the resilience of banks to short-term liquidity runs. [16] Alongside the LCR, the net stable funding ratio (NSFR) was also introduced to ensure that banks maintain a stable funding profile over a longer horizon in relation to the composition of their assets and off-balance sheet activities. Following these reforms, we find ourselves in a much better place than before the global financial crisis. Liquidity regulation has helped banks to build strong liquidity buffers that can be used to absorb shocks. A decade after the onset of the financial crisis, liquid assets accounted for 17.2% of major UK banks’ total assets – more than double the level in 2007. Similarly, banks’ reliance on short-term funding reduced substantially – falling by more than three quarters over the same period.
To begin with, households are more negatively affected by an expansionary monetary policy that increases inflation if they have a relatively large share of assets that have poor or little protection against inflation. Cash is of course the most obvious example, even if it may in this context be of less significance for the wealth distribution, given how the use of cash has declined in Sweden. The real value of all assets and liabilities is of course affected by how high inflation is and I have earlier mentioned the redistribution between borrowers and lenders as an effect of an unexpectedly high or low inflation rate. An unexpected increase in inflation, for instance, that monetary policy has become more e xpansionary than expected, reduces the real value of assets and liabilities. This can, for instance, benefit households with relatively large debts on houses and  8 [14]  apartments, but disadvantage low income households who rent their homes. Households with large financial assets are also disadvantaged, but they are perhaps more used to, and better able to, adapting their assets to avoid the inflation risk. Hence, to study the distributional effects linked to increased capital income, it would be interesting to see how assets and liabilities are distributed between households. When it comes to liabilities, there are relatively good statistics available, but with regard to the distribution of various assets, we are unfortunately fumbling in the dark to some extent.

Today, our communication on the Swiss franc is centred around two key statements: the currency remains highly valued, and the situation on the foreign exchange market is still fragile. By communicating our knowledge of the financial markets in a clear and simple way, we bolster participants’ confidence and contribute to the credibility of our monetary policy implementation. Page 6/9  A changing money market Lastly, I’d like to take a look at another market that has seen profound change since the crisis: the money market. This market is particularly important for the SNB, especially with respect to the implementation and transmission of its monetary policy. The money market has undergone two major changes, largely driven by external factors. First, the structure of the market has evolved, with the inexorable decline of the unsecured segment and concomitant rise of the secured segment; this structural change has meant that repos now take centre stage on the money market. Second – and this change is closely bound up with the first – we observe that the framework conditions within which the money market operates have been recast following the decline of the unsecured segment. I am alluding here to the replacement of the Libor as the reference interest rate for a variety of financial products, both in Switzerland and around the world. Coming back to the first point: the drop in volume for unsecured transactions, particularly on long-dated operations (more than one month), is a global phenomenon.
For my part I considered it important to ensure, when making the interest rate decision that the strong price impulses from the world market do not push up inflation expectations lastingly and through second round effects lead to higher permanent inflation. However, there is considerable uncertainty as to how commodity prices in the world market will develop and what consequences this will have for inflation and monetary policy. Let me explain this reasoning. Relative prices are only important to monetary policy if they influence inflation… Since last autumn Swedish food prices and oil product prices in the CPI have increased rapidly. In April this year food prices had risen by around 6 per cent compared with the same month last year. They thus contributed around 1 percentage point in April to the CPI inflation, which amounted in total to 3.4 per cent. Oil product prices contributed a further 0.3 percentage points. The upswing in Swedish food prices mainly reflects the rapid price increases in the world food commodities market over the past year. Despite the turbulence in the financial markets and weaker growth in the world, food prices in the world market have increased by 60 per cent (expressed in USD) since the end of 2006. 1 Prices of many goods have reached record high levels, including prices of soya beans, maize and wheat. The oil price has also constantly reached new record levels in recent years.

16  BIS central bankers’ speeches  BIS central bankers’ speeches  17  18  BIS central bankers’ speeches  BIS central bankers’ speeches  19  20  BIS central bankers’ speeches  BIS central bankers’ speeches  21  22  BIS central bankers’ speeches  BIS central bankers’ speeches  23  24  BIS central bankers’ speeches  BIS central bankers’ speeches  25  References Acheson, G, Hickson, C and Turner, J (2010), “Does limited liability matter?” Evidence from nineteenth –century British banking, review of Law and Economics, Vol 6(2), pages 247–73. Admati, A and Hellwig, M (2014), “The Bankers” New Clothes: What’s Wrong with banking and What to Do about it’, Princeton University Press. Alessandri, P and Haldane A G (2009), “Banking on the State”, speech delivered at the Federal Reserve Bank of Chicago, available at: http://www.bankofengland.co.uk/archive/Documents/historicpubs/speeches/2009/speech409. pdf. Allen, F. and Gale, D (2000), “Comparing financial systems”, MIT Press. Asker, J, Collard-Wexler, A and De Loecker J (2014), “Dynamic Inputs and Resource (Mis)Allocation”, Journal of Political Economy, vol 122. Bagehot, W (1862), “Limited Liability in Banking” – I’ and “Limited Liability in Banking” – II’ in St John-Stevas, N (1978) “The Collected Works of Walter Bagehot Vol. 9”, The Economist, London. Bailey, A (2014), speech delivered at the City Banquet London, available at: http://www.bankofengland.co.uk/publications/Documents/speeches/2014/speech763.pdf. Becht, M, Bolton, P and Roell A (2011), “Why Bank Governance is Difference” Oxford Review of Economic Policy, vol 27.
Also, in this respect Sweden has changed in recent years: the introduction of inflation targeting and expenditure ceilings should reduce the risks of new economic policy mistakes. In addition, there are strong indications that the correlation between Swedish and eurozone growth will increase if we join the EMU, as trade and integration with the euro countries will thereby be strengthened. We can see already how the long-term Swedish market rates have covaried strongly with those in the eurozone in recent years, even during periods with differences in business climate 1  2  Report on the EMU investigation (SOU 1996:158). BIS Review 92/2001  between Sweden and the eurozone. As far as a Swedish membership of the EMU would reduce these differences in business climate, it will lead to a long-term interest rate development that is more adapted to the business climate. If we still believe that Sweden could become radically out of synch with the rest of Europe, there is of course an alternative to using an independent exchange rate and monetary policy as shock absorbers. The more robust budget situation Sweden enjoys today, for example, should provide a slightly greater scope than during the early 1990s for using fiscal policy for the purpose of stabilisation. One can also imagine building up buffer funds to pay for reduced payroll tax in crisis situations (known as internal 2 devaluation) of the type introduced in Finland.

Of course the foreign exchange costs in the eurozone were limited right from the start of the EMU in 1999, but they will now disappear completely. For the economy as a whole, however, this exchange of cash has involved a relatively small cost, which is nevertheless symbolically important. A somewhat larger cost has arisen from the handling charges the companies have been forced to bear to hedge against undesirable fluctuations in exchange rates. This cost disappeared as early as 1999 within the eurozone, but it is not particularly large in relation to our GDP – perhaps a few tenths of a percentage point. A single currency will promote competition within the EU and benefit the consumers, who will experience lower prices and thereby have more money in their pockets. When everyone uses the same unit of currency, it is easier to compare prices between countries. It will also be an advantage for the national economy as a whole, since competition facilitates the work on holding down inflation. Some differences in prices are unavoidable and arise from transport and information costs, but not all of the differences can be attributed to these costs. Despite the fact that we now have a common market with free trade for goods and services throughout the entire EU, there are still large differences in prices between different countries within the union.
Implementation of monetary policy • If it appears that inflation will be higher than 2½ per cent, with unchanged interest rates, the interest rate will be increased. • If it appears that inflation will be lower than 2½ per cent, with unchanged interest rates, the interest rate will be reduced. • It is just as important to avoid a rate of inflation that is too low as it is to avoid a rate that is too high. Fafo og Makt- og demokratiutredningen 6. september 2002  The mandate implies that the interest rate must be adapted to the outlook for the Norwegian economy. If it appears that inflation, with unchanged interest rates, will be higher than 2½ per cent, the interest rate will be increased. If it appears that inflation, with unchanged interest rates, will be lower than 2½ per cent, the interest rate will be reduced. This orientation of monetary policy will normally also contribute to stabilising production and employment. Monetary policy functions with considerable and variable lags. The current inflation rate does not provide sufficient information to determine the level at which interest rates should be set now. Our analyses indicate that a substantial share of the effects of an interest rate change will occur within two years. Two years is therefore a reasonable time horizon for attaining the inflation target.

William C Dudley: Panel remarks at the International Symposium of the Bank of France Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the International Symposium of the Bank of France “Central Banking: The Way Forward?” Paris, 7 November 2014. *  *  *  If all goes according to our forecast and the U.S. economy continues to make progress towards the Fed’s dual mandate goals of maximum sustainable employment and 2 percent inflation, the Federal Reserve will likely begin to raise its federal funds rate target off the zero lower bound sometime next year. For the United States, the start of the normalization of U.S. monetary policy will be a very welcome development. It will indicate that the U.S. economy has made great strides in healing itself from the damage caused by the U.S. housing boom and bust, and the financial crisis. However, this shift in policy will undoubtedly be accompanied by some degree of market turbulence. Moreover, it could create significant challenges for those emerging market economies (EMEs) that have been the beneficiaries of large capital inflows in recent years. What can the Federal Reserve do to minimize these risks? These are some of the very important issues raised by Helene Rey’s work. Let me begin by highlighting some of the key points I will be making.