samchain/econo-pairs-v1 huggingface dataset:
The recovery in financial markets that we have seen in the past 6 months or so, is in part driven by the statement that the ECB will do “whatever it takes” to keep the euro area together and the perceived commitment that the Fed will do whatever it takes to restore growth in the US. The belief in these policy approaches has been immensely powerful. But it must be backed not only by perceived intent but also by capability and delivery if needed – and economies always generate some surprises. If the actions don’t follow the words when necessary, then similar policy statements in future will be less effective. In the UK, market expectations are already consistent with monetary policy remaining very supportive for some time to come, indicating no change in Bank Rate until well into 2015. Yet there is still a debate about whether the MPC should give more “forward guidance”. In practice we have being doing this through the Inflation Report. The most recent edition makes it clear that we do not see much pressure arising from domestically generated inflation. Rather, we continue to see inflation being driven by factors such as tax changes, higher commodity and energy prices, and other external influences. These and similar adverse relative price changes have made us all financially worse off and contributed to keeping inflation higher than target over the past few years. In response, the Bank could have chosen to tighten monetary policy to keep measured inflation rates down.

Broad money demand will fall if individuals or firms use the increased cash injected into the system to pay down bank debts, or simply seek to borrow less. Similarly the supply side of broad money can contract if banks consciously shrink their balance sheets. That would happen, for example, if the banks are short of capital or funding, or simply can’t earn sufficient return on their assets. All of these demand and supply factors have been at work in recent years. As a result, the balance of forces between the demand and supply of broad money against the injection of narrow money has meant that growth in the stock of broad money in the economy has remained weak. That does not mean that QE has been unsuccessful, as many commentators seem to conclude. Without QE, the amount of broad money in the economy would clearly have shrunk much further than it did – it actually held up reasonably well while the economy was contracting. Had broad money shrunk a lot further, the resulting deflation would have meant that the outcomes for output and employment in the UK would have been far, far worse than they have been.
In the context of this more protracted weakness of the euro area economy, both realised and projected inflation have been persistently below levels that are in line with the ECB Governing Council’s medium-term aim. Headline inflation remains well below 2%, while inflation excluding the more volatile food and energy components has been hovering around 1% for an extended period of time. Underlying inflation remains muted, as the weaker economic outlook may imply a delay in the pass-through of wages to prices. In particular, firms are absorbing increases in labour costs in their profit margins rather than passing them on to customers. Meanwhile, indicators of inflation expectations stand at low levels. Although the likelihood of deflation remains limited, market expectations of inflation over the medium term are settling around values that are not consistent with our inflation aim. Since my last hearing here, we have revised down the inflation outlook over the entire projection horizon, first in the March 2019 staff projections and then again in September, reflecting weaker economic activity and lower energy prices. Inflation is currently expected to average 1.2% in 2019, 1.0% in 2020 and 1.5% in 2021, which is well below the Governing Council’s medium-term aim of below, but close to, 2%. The ECB’s response to the current outlook So when the Governing Council met two weeks ago, it was confronted with a more rapid and extended slowdown than previously anticipated, persistent and prominent downside risks to the growth outlook, and a further delay in the convergence of inflation towards our aim.

In addition, China plans to launch its international payment system, known as CIPS, in 2014. The development of a single centralised cross-border RMB payments infrastructure also augurs well for market efficiency and standardised practices for RMB payments across the region. 3  4  CNBC, 17 Jan 2013. “China’s outbound investment leaps to record high in December”. BIS central bankers’ speeches  Singapore’s role as an offshore RMB market 32. As an international trading and financial centre, Singapore will seek to support the growth of a resilient offshore RMB market in the Asian region by: i. Building RMB liquidity;  ii. Enhancing access to RMB for funding and investment purposes; and  iii. Integrating the offshore RMB with existing Asian local currency markets. 33. Firstly, Singapore can leverage on its strengths as a key wholesale funding centre to increase liquidity and circulation of the RMB in Asia. We are already seeing good growth in RMB deposits, both non-bank and interbank. We are also one of the largest centres for RMB payments outside Hong Kong. As a major regional funding centre, Singapore has traditionally supported the liquidity of the Asian markets and can partner China in promoting sustainable offshore use of the RMB. 34. In February this year, ICBC Singapore was appointed by the People’s Bank of China (PBC) as the RMB clearing bank in Singapore. The RMB clearing bank will be an important channel for RMB liquidity to circulate between China to Singapore. 35.
This suggests that the Monetary Policy Committee did not explain well enough that sometimes it is better to raise rates now so as to avoid a much larger rate increase later on. In view of this criticism, I think it appropriate to explain this more fully. In general, Central Bank attempts to keep interest rates as low as possible — but as high as necessary — at any given time. What that optimum level is, however, depends on conditions, and it changes from one time to another. If Central Bank rates deviate from this optimum, the public will bear the expense. If they are higher than need be, inflation could fall below target and GDP growth would be weaker than it might be otherwise. If they are lower than need be, inflation could get out of hand and economic instability could take root. In that case, a much larger rate hike would be needed later on. So interest rates that are too high or too low do not come without costs to the general public. In this instance, it should not be forgotten that household mortgages tend to be long-term loans, and a majority of them are indexed to the CPI. If inflation is kept at target over the long term, these mortgage rates will be lower in the long run than they would be otherwise, even though an increase in short-term central bank rates might sometimes be required.

But dealers are usually borrowers in our money markets, not lenders, meaning they had limited capacity for these kinds of transactions, especially during the crisis. Knowing that fact, we designed the System’s securities portfolio to accommodate some amount of sterilization. The portfolio was composed of a substantial stock of short-dated Treasury securities, so that, as these securities matured, the supply of reserves would shrink. Draining reserves in that way takes time, however, and the amount of liquidity that would have been needed to ease the strains in our financial markets far exceeded the amount that could be supplied while still keeping control of the federal funds rate. 5 Another way to drain reserves is by selling assets. The Desk did some of that in response to the crisis, but, for a variety of reasons, including operational constraints and concerns that sales of securities could have counterproductive effects, the amounts were small. Other tools that can be used to drain reserves, which were  4  The Federal Reserve Statistical Release H.3 shows that the monthly average of excess reserves of depository institutions was $ billion in August 2008 and $ billion in December 2008. During that period, the effective federal funds rate was often well below its target, sometimes by more than a percentage point.
MONETARY POLICY REPORT PRESENTATION BEFORE THE HONORABLE SENATE OF THE REPUBLIC  Mario Marcel Governor Central Bank of Chile 6 September 2017    The Monetary Policy Report of September 2017 can be downloaded from http://www.bcentral.cl/en. [INF*RES*AS] Introduction Mr. President of the Senate, Senator Andrés Zaldívar, honorable senators, ladies, gentlemen, Thank you for inviting the Board of the Central Bank of Chile to present our September Monetary Policy Report. As is the case every September, its publication coincides with the annual report that, as provided for in the CBC’s Organic Law, we must submit to the Senate. The report I will be summarizing for you now depicts the Board’s vision about the recent macroeconomic and financial developments in Chile and the world, together with prospects and implications for the conduct of monetary policy. It also includes the CBC’s financial results for the first half of the year, plus the results of international reserves management and a summary of the main decisions adopted by the Board this year to date. This presentation will describe two additions to the traditional report, namely an analysis of the determinants of trend GDP in Chile —as a supplement to the Report— and some refinements that the Board has decided to apply to the monetary policy process, summarized in a box alongside the main text.

These figures are similar to those presented in previous years, reflecting that the Board has not changed its view on the medium-term productive capacity of the Chilean economy. However, we cannot ignore the fact that, because in recent years the growth rates of investment and productivity have been below their trend levels, short-term productive capacity has suffered. Actually, the Board estimates that the potential growth of the economy is now around 2.5%, a little short of previous estimates. Adjustments to the monetary policy making process Another area where we are making progress is in the transparency and communication of our monetary policy decisions. The Bank conducts its monetary policy in an inflation targeting framework, which, to function correctly needs to properly communicate its actions and the reasons behind them, as well as a good diagnosis of the evolution of the economy, locally and internationally. The adoption of these decisions and their communication are structured around the Monetary Policy Meetings and the Monetary Policy Report, whose organization, priority, content and dissemination are currently based on procedures and standards that were mostly established in the first half of the 2000s. After a thorough internal assessment based on accumulated experience and international best practices, the Bank Board has decided to make some modifications to its monetary policy decision-making and communication process. Essentially, the number of Monetary Policy Meetings (MPM) is reduced from twelve to eight per year, to align them with the most common practice among the central banks of low-inflation countries (figure 14).
Miguel Fernández Ordóñez: Seeking solutions to Spain’s economic, financial and fiscal issues Address by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, to the Annual Assembly of the Instituto de Empresa Familiar (IEF) Madrid, 23 May 2011. *  *  *  Many thanks for inviting me to talk at your Assembly. And since one of the functions of your Institute is to seek solutions to the legal and institutional environment in which the company moves, I’ve decided to focus my address today on what I think about this matter. Resolving a country’s economic problems should be no different from what any individual or company does to improve its situation. First, acknowledge that we have problems; second, identify the changes needed; and third, apply them. I’ll try to apply these guidelines to what, in my view, are our main problems: the relatively low level of educational attainment of the labour force; the need to adjust the imbalances accumulated over the course of 14 years of expansion; massive unemployment; and, for a year now, the mistrust of the markets to which we have to resort for funding. Let’s begin by looking at two examples where problems were not properly identified. The first of these was thinking that the main source of our difficulties was the international financial crisis and not the imbalances accumulated further to a long expansion based on indebtedness and the deterioration of our competitiveness.

Back then employment could be generated through the reduction in wage costs that a devaluation entailed and thanks to the improvement in competitiveness that immediately came about in companies. But this formula is no longer viable, and thankfully so, because the benefits for Spain of being part of the euro far outweigh those of retaining the peseta in the long run. But if we accept this constraint now upon us, we must be consistent and accept that this time we can no longer, as we did on several occasions in the past, adjust our competitiveness and, therefore, increase our growth rate without changing our singular institutional framework. And in this forum I should mention the responsibility that large and small firms alike must embrace. With all due diligence they should adopt the organisational reforms and adapt their working procedures so as to enable them to use as soon as possible all the changes introduced into our legal and institutional framework aimed at making hiring easier. Let me move on now to the problems I mentioned at the start of my address. These concern the markets’ doubts, reflected in the higher cost that the Kingdom of Spain has been paying for a year to raise funding. Blaming this on greedy or evil markets would be a waste of time, and might distract us from the fact that these costs can only be reduced if we adopt the domestic measures and reforms needed as soon as possible.
This issue is important because measures of the “original sin” come from Panizza’s work, who will be part of the panel (Eichengreen et al., 2002; Hausmann and Panizza, 2003).  Based on the previous point, it is worth clarifying what kind of CBM are in place in Chile. In addition, does the fact that in Chile almost all-international bond issuing is in foreign currency represents a constraint/vulnerability for the local financial system? Page 1 of 12  Central Bank of Chile September 2019  -  Financial literacy and educational programs to support better decisions at the household level. 2. Background In Chile, the current approach to deal with potential vulnerabilities associated to volatile capital flows can be seen as orthodox, as we rely heavily on the importance of a flexible exchange rate regime and capital account openness, in conjunction with a consistent monetary and fiscal policy framework, and a sound banking regulation and supervision. However, it is important to remind to the public that we have come a long way. In fact, nearly 40 years ago, Chile faced one of the world’s costlier financial crises precisely because the lack of several of these elements. In particular, FX exposures at a heavily leveraged and unsupervised banking sector contributed to the spread of the banking crisis after the fixed exchange rate regime collapsed in the early 1980s. As a result of this experience, banking regulation and supervision was substantially upgraded.

The team visited a petroleum refinery complex 1/3  BIS central bankers' speeches  in Pengerang. It was towards the end of the event; it had been a long day and all they could think of was going back to be in the comfort of their own accommodation. This was when they noticed a number of migrant workers of various nationalities, noticeably tired from many hours of working – they were using their mobile phones; engaged in highly animated video conversation with their families back home. Some of these workers had not seen their family for years; some were fathers who left for Malaysia before their children were born – and the closest that they can get to see their families was through the small screens of their mobile phones. Listening to this story, I was reminded to a quote by the former Secretary General of the United Nations, Ban Ki- Moon on migration. He said “Migration is an expression of the human aspiration for dignity, safety and a better future. It is part of the social fabric, part of our very make-up as a human family.” Indeed, the single most important reason why these workers travelled thousands of kilometers away, was to seek for opportunities to secure a better future for themselves and their families; and the simplest form of these opportunities is to earn more money. This brings me to my second story; on remittances.
Sterling’s exit from ERM in the autumn of 1992 led to an overhaul in the way monetary policy was conducted, with the adoption of an explicit target for inflation, and a number of moves to make the process of policy-making more transparent through the publication of minutes of what was popularly known as the Ken and Eddie show, and a new Inflation Report, produced by the Bank. 3  What was special about the 1997 arrangements? In the event, 1992 marked a break with the past. But while the policy innovations of the 1993-97 years were showing promise, the framework remained relatively informal. And decisions about interest rates stayed in the hands of the Chancellor. The change in Government in 1997 led to a far-reaching effort to institutionalise and depoliticise monetary policy arrangements. A new Bank of England Act stipulated that the objective of monetary policy should be domestic price stability, and only ‘subject to that’ to support the Government’s objectives for output and employment. The Act left responsibility for setting an annual remit for inflation in the hands of the Chancellor; but it gave the Bank ‘operational independence’ to set interest rates to meet this target. Interest rate decisions were to be taken by Committee of nine, which was to include four appropriately qualified external members. With these changes, the UK had a fully articulated, credible domestic monetary policy framework, underpinned by statute, which gave the Bank, through the Monetary Policy Committee, an independent role in meeting an explicit inflation target.

In that respect, we have an obligation to understand the risks relating to climate change and the channels through which they might affect the pursuit of our main aims. At the same time we need to make sure that the participants in the financial system are equally aware of those risks. However, in my opinion, central banks are not the ones who are to be expected to take the lead fighting climate change, since their instruments are not as efficient as the ones government can employ to fulfill that task. In addition, if faced with a conflict between maintaining price stability and/or financial stability, and fighting climate change, central banks would and have the obligation, to give priority to price stability and financial stability as their primary mandates. With today’s conference we, at the Croatian National Bank, are appealing to banks and other financial institutions to reflect on how to incorporate climate risks into their business strategies and make their business-making more robust and resilient to hazards connected with climate change. We would also like to encourage banks to seize the opportunities brought about by transition towards low-carbon and nature-neutral economy. Finally, and equally important, we want to note that we do not save nature only by switching to low-energy lightbulbs or choosing a hybrid or electric car but also by investing consciously. Banks could have a noticeable positive influence if they were to finance environmentally friendly projects and make green investments.
And the tougher the regulations, the greater the reason for the banks to try to circumvent them. If they succeed, no one has won. Instead, there is a risk we will be lulled into a deceptive security, despite the risks merely being moved or hidden in other forms. I might also add that regardless of which regulations are introduced, one still needs effective oversight and supervision of the financial system as a whole and of individual institutions. If we take all of these aspects into account, I believe the Basel Committee’s proposals are a successful balancing act. They entail a substantial upgrading of the bank system in terms of resilience. And the costs to the banks and society are small. BIS Review 159/2010  7  Long phase-in period The Swedish banks are well-capitalised and the costs of the new capital requirements are therefore small or non-existent. But we must remember that the situation is more difficult for many banks around the world. If we force the banks to observe the new teachings immediately, their ability to offer loans to companies and households may be impaired. This could jeopardise the economic recovery. Because although the world economy appears to be slowly recovering, the situation is still fragile. To avoid this, the Basel Committee has agreed on a long phase-in period. Some of the new regulations will begin to apply in 2013. Most of them will be phased in gradually. It will take a further ten years or so before all of the regulations apply in full.

But this requires that the unified supervisor is really integrated and not just a combination of separate branches. I have seen bad examples of unified supervisors where the staff are not allowed to discuss mutual issues since there are still legal barriers between the departments within the authority! I have also seen bad examples of turf battles within a unified authority, which has certainly not facilitated information sharing. A unified authority will imply some cost savings because of economies of scale. However, this should not be exaggerated. Some administrative overhead costs may be reduced but other costs will remain. Most of the costs emanate from the supervisory operations and there is little scope for savings in this area. More substantial cost savings and more efficiency in supervision may be achieved through better streamlined cooperation between different sector supervisors but this can be achieved both when they are located separately and when they are within the same authority. The authority conducting banking supervision is in most countries more advanced and has more resources than the other supervisory authorities. By combining bank supervisors with other supervisors it is hoped that the former can share resources and knowledge with the weaker sectors. This argument if often heard, but in practice it does not always work as planned. The risk is rather that  3  Haubrich (1996) and Di Noia and Di Giorgi (2000).