samchain/econo-pairs-v1 huggingface dataset:
That decision clearly improved the appeal of the program, suggesting that having some flexibility in structure can be beneficial. However, policymakers will have to decide the appropriate degree of flexibility to exercise in the future. Of course, both of those dimensions—having a wide range of counterparties and using a more flexible lending structure—have the potential to increase risk to the central bank. The TALF was able to offer credit on these terms without compromising the safety of the Federal Reserve’s balance sheet by requiring sufficient collateralization of the loans and by relying on the loss buffer provided by the Treasury. Without the Treasury’s contribution to the program, it would have been more challenging to design a program that was both appealing to the markets and safe for the Federal Reserve. Thus, a third open issue for future policies is determining the circumstances under which such cooperation between the monetary and fiscal authorities is appropriate. A final issue is that, if the central bank provides a back-up source of liquidity to the markets, whether through its traditional discount window function or these other facilities, it should consider the effects on the risk taking behavior of market participants. Efforts should be taken to ensure that expectations of the availability of Federal Reserve lending facilities do not lead to excessive risk taking on the part of financial institutions. In the case of banking institutions, this moral hazard is offset by appropriate supervision and regulation.

As European central banker, supervisor and scholar of the law I will be even more forceful: our mandate requires us to be ready. 1. “The looming legal showdown on climate justice”, Financial Times, 10 November 2022. 2. Article 2(1)(a) of the Paris Agreement. 3. Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (“European Climate Law”) (OJ L 243, 9.7.2021, p. 1). 4. Recital 25 of the European Climate Law. 5. Article 5 of the European Climate Law. 6. Case C-11/00, Commission v ECB, EU:C:2003:395. 7. Article 284(3) TFEU and Article 15.3 of the Protocol on the Statute of the European System of Central Banks and of the European Central Bank. 8. Articles 127(1) and 130 TFEU. 9. “ECB presents action plan to include climate change considerations in its monetary policy strategy”, press release, ECB, 8 July 2021. 10. Currently under revision. See Proposal for a Directive of the European Parliament and of the Council on the energy performance of buildings (recast) COM/2021/802 final. 11. See “ECB Banking Supervision – Assessment of risks and vulnerabilities for 2021”, ECB, 2021. 12. See Guide on climate-related and environmental risks, ECB, November 2020. 13. Proposal for a Directive of the European Parliament and of the Council amending Directive 2013/36/EU as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks, and amending Directive 2014/59/EU (COM/2021/663 final). 14. See also Articles 73 and 74 CRD VI.
Joseph Yam: Asian finance Speech by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the Swiss National Bank Event, International Centre for Banking and Monetary Studies, Geneva, 9 November 2004. * * * Introduction I am delighted to have been invited to speak here at the International Centre for Banking and Monetary Studies in Geneva. I understand that you have in the past had many lectures from central bankers from Europe and the United States, but no one yet from Asia. I therefore feel particularly honoured to be the first Asian central banker to speak to you. This is timely, since banking and monetary developments in Asia have been receiving increasing international attention, particularly after the Asian financial crisis of 1997-98. I realise, of course, that monetary union in Europe must have been the monetary event of the past decade, in terms of occupying the time of academics and practitioners in the field, particularly in Europe. It has also had a large impact in the financial landscape of other economies, as I am sure the many members of the Swiss financial community that are here today would agree. But with the successful birth of the euro, I hope we can all devote a little more time to Asia. I am confident that giving greater attention to Asia will turn out to be a most fruitful venture. Indeed, I would argue that such initiatives are now of strategic importance to the future of the global financial system.

4  All speeches are available online at www.bankofengland.co.uk/speeches  4  Chart 5: The distribution of capital flows to emerging market economies Unconditional distribution  Probability density 0.10  Negative shock  0.08 0.06 0.04  A  B  0.02 0.00 -8  -6  -4  -2  0  2  4  6  8  10  12  14  16  18  Capital flows as a % of GDP  Sources: IMF and Bank of England staff calculations. Notes: This chart shows the unconditional distribution of capital flows to EMEs over 2006-2018, and an estimated distribution conditional on a one standard deviation negative shock to pull factors. The diamonds highlight the fifth percentile, which is our preferred measure of Capital Flows-at-Risk. We estimate several quantiles of the distribution through quantile regression and then fit a skewed-t distribution; hence, the distribution can both shift and change shape in response to shocks - see annex for further details. The grey line in Chart 5 shows the unconditional distribution of capital flows, and the purple line shows how the distribution shifts in response to a negative shock. “Capital Flows-at-Risk” are defined as capital outflows in a severe, low-probability event (that with 5% probability or less). The left tail ‘fattens’ if bad outcomes become more likely and/or the “5% probability event” becomes more severe – shown by the shift from A (Capital Flows-at-Risk of 1.2% of GDP) to B (Capital Flows-at-Risk of 4.2% of GDP).
One example of when this happened was during the banking crisis at the start of the 1990s. During the years 1992-93, fully 40 per cent of the banks’ loan losses stemmed from the commercial property market. Let me begin by discussing how I view the developments in the commercial property market and then move on to the analysis of the housing market. Because the two markets have shown completely different developments in recent years. The commercial property market The equity market decline in 2000 was accompanied by a weakening in demand for office premises, and rents and prices for commercial property began to fall as the number of vacancies rose. In recent years, turnover of properties has risen again. Presently, the drop in prices seems to have decreased and in some regions prices have even risen. Even though it is difficult to determine whether there has been a definite turnaround yet in the price developments for commercial property, such a turnaround can be expected to come when demand for labour recovers more clearly. Vacancy levels are still high, though, which means that rents have not yet risen more generally. In the long run, a rise in property prices should be accompanied by an increase in rental income, since rental income is the underlying return on property investment. The situation today differs considerably from the conditions seen at the time of the property crisis in the early 1990s, when property prices had risen rapidly over a long period without any corresponding upswing in rental income.

The confidence indicator has risen for both the manufacturing and construction industries as well as for trade and services industries. New orders in manufacturing have picked up, mainly in the export market but there has also been a clear improvement in the domestic market. Monthly data for foreign trade in goods also indicate an increasingly bright picture for exports. Like the developments elsewhere in the world, the Swedish purchasing managers index for October also showed a positive development. New data for retail sales point to continued relatively strong rises. At the same time, the NIER’s consumer survey for October provides somewhat mixed signals. Households have become slightly less optimistic about the Swedish economy and unemployment, while their expectations regarding their own finances have improved. As regards the labour market, we noted in the October Inflation Report that there were signs of an improvement in the situation. The strengthening of domestic demand and the announced measures in the Budget Bill were judged to lay the foundation for a rise in employment in the period ahead. However, the change in methods in the labour force surveys means that developments in the labour market are particularly hard to interpret at present. Employment growth appears perhaps to have been somewhat stronger than we expected in October. Developments in the number of new job vacancies and redundancy notices also point to an upturn in the labour market. In addition, the NIER’s latest quarterly business tendency survey contained a number of positive signals regarding companies’ hiring plans.
A Framework for All Seasons? Speech given by Mark Carney Governor of the Bank of England  Bank of England Research Workshop on The Future of Inflation Targeting 9 January 2020  I am grateful to Clare Macallan for her assistance in drafting these remarks and to Nishat Anjum and Alexis Tessier for background research and analysis. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches  Introduction Following a chequered history of high and volatile inflation in the post-war era, the UK finally found monetary success as an early adopter of inflation targeting in 1992. The UK’s current regime, launched in 1997, delegated operational independence for setting monetary policy to the Bank of England and included many institutional innovations that have stood the test of time – most notably a Monetary Policy Committee with a mix of internal and external members; transparent, independent voting; and a clear accountability framework. Since operational independence for inflation targeting was delegated to the MPC, there have been a raft of improvements, both large and small. Transparency has steadily increased with initiatives ranging from publishing detailed assumptions underlying forecasts ex ante to assessing forecast accuracy ex post as well as the simultaneous release of Monetary Policy Summaries, Minutes, and Inflation Reports. More recently, the MPC has introduced layered communications, with simpler, more accessible language and graphics to reach the broadest possible audience, and we have launched the Monetary Policy Report in order to give greater prominence to the most pressing issues shaping each monetary policy decision.

One reason why equilibrium interest rates are low at the moment is because the distribution of economic outcomes has become more skewed to the downside. In this regard, low rates are a consequence of riskier environment, not the cause of higher risk premia. 26 For example, see Ihrig, J, Klee, E, Li, C, Wei, M, and Kachovec, J (2018), ‘Expectations about the Federal Reserve’s balance sheet and the term structure of interest rates’, International Journal of Central Banking, vol. 14(2), pp. 341-390. 21  All speeches are available online at www.bankofengland.co.uk/news/speeches  21  V. Winter – Monetary policy in a persistently low r* world Looking ahead, deep structural changes in economies are creating disinflationary pressures at a time when conventional monetary policy space is already limited. Inflation targeting frameworks will be tested in new ways. It feels like winter is coming. In all likelihood, equilibrium interest rates will remain low for a prolonged period as many of the structural forces that have pushed them down are set to persist for years. Moreover, these could likely to be reinforced by flaws inherent in the international monetary and financial system27 and the disinflationary effects of advances in technology and the changing nature of commerce.28 The principle structural force leaning in the other direction on inflation is that the shift towards deglobalisation with the potential fracturing of the global trading system.
Jürgen Stark: Towards a stability-oriented policy framework Speech by Mr Jürgen Stark, Member of the Executive Board of the European Central Bank, at the conference “Reconstructing the world economy – redesigning the macro-framework”, organised by the Korea Development Institute and International Monetary Fund, Seoul, 25 February 2010. *  *  *  Ladies and Gentlemen, In discussing the current macroeconomic framework, I will focus on the institutional aspects that have proved successful, in particular, from the European perspective. These are central bank independence, the centrality of price stability for monetary policy and the need to adopt a medium-term, rules-based perspective in the conduct of monetary and fiscal policies. The financial crisis has not contested or discredited these three principles. However, it is certainly true that other aspects of the international consensus framework merit some deep re-thinking. I will take this opportunity to share my thoughts on four such elements, namely inflation targeting, central banking as risk management, monetary policy and asset prices, and fiscal policy. The reference model Inflation targeting, together with the canonised version of the New Keynesian model on which it is predicated, is perhaps the main building block of the pre-crisis consensus paradigm. Although they are closely connected, I wish to separate the policy prescriptions from the underlying model, and address each in turn. The shortcomings of the New Keynesian modelling paradigm have been recognised before. But addressing them has not yielded a paradigm shift to overcome them.

The canonised version of the model does not allow for an understanding of how institutional strength and a track record affect credibility. Institutional strength requires central bank independence, for which, in turn, legal independence is a necessary, but by no means sufficient prerequisite. BIS Review 22/2010  1  Inflation targeting The reference model has been at the heart of inflation targeting approaches. In brief, inflation targeting can be summed up as follows: First, take inflation and output gap forecasts as summary statistics of the state of the economy. Second, ignore a host of variables, particularly money and credit. Assume that these adjust to the state of the economy, but do not influence it independently. Third, fine-tune the policy instrument so that inflation forecasts – whatever the nature of the shocks that might have caused them – are stabilised, and output volatility is minimised, at a pre-set horizon. It has long been known that it is misleading to limit the information set to output gap and inflation forecasts. Output gaps are ill-defined and cannot be accurately measured. Furthermore, inflation forecasts are not summary statistics of the state of the economy. Different underlying shocks – even though they might lead to the same inflation forecast – can have vastly different implications for policy. Risk management It has frequently been argued that central banks should act as risk managers by organising their framework around events with a high deflationary impact.
The average price difference is 16 per cent,  BIS Review 92/2001  1  which means that the difference is approximately 40 per cent larger than is the case between various states and regions in the USA. The price of a normal Volvo, for instance, can differ by 15 per cent or more from one country to another in Europe. Some of this difference is created by difference in cultures and languages, but new studies indicate that the actual psychological barrier involved in differing units of currency may bear a large part of the responsibility. The US economist Charles Engel, for instance, has calculated in extensive studies of price differences between the USA and Canada that a currency border creates price differences corresponding to a geographical distance of almost 8,000 km, even if the countries on either side of the currency border (as in the case of Canada and the USA) are entirely open to one another and share the same language and culture. The largest negative effects of having different currencies probably have to do with trade and resource allocation. In the same way that we believe inflation results in large national economical costs by creating uncertainty about future expenses and income, a fluctuating exchange rate does too. In addition, the allocation of resources in society is distorted by an exchange rate that is not fully motivated. The EMU has particular significance for trade.

However, there are some structural problems here: an unmotivated weak exchange rate risks strengthening certain parts of the export industry that do not constitute expansive future sectors. Sweden's future hardly lies in competing with low costs and prices, but rather with quality, cutting edge technology and know-how. When the krona eventually appreciates to a level more motivated on the basis of fundamental factors, Sweden will have an industrial structure poorly equipped to meet the requirements of the future. Conclusions The Riksbank assumes that the krona will appreciate. It is possible that we have already seen the beginning of this development very recently. When the upturn does take place, it may prove even stronger than the Riksbank estimated in its latest Inflation Report. This does not prevent the fact that the recent valuation of the krona has brought new perspectives to the question of Swedish membership in the third phase of the EMU, i.e. participation in the eurozone. The volatility of the krona creates difficulties for export and import companies in making decisions regarding trade and investment. However well monetary policy functions, it still cannot supply the efficiency gains at the microeconomy level that ensue from a single currency. The effects on growth through both price competition over the borders and increased trade could be greater than we have previously often assumed. 4  BIS Review 92/2001  An independent monetary policy will of course remain the main argument against EMU membership. The question is how valuable this is.
Having a central bank with a dual mandate for both price stability and financial stability might undermine the primary objective to pursue price stability. In addition, as elaborated above, such a dual mandate raises questions concerning appropriate accountability mechanisms, especially in view of the need for more stringent accountability obligations in the area of macroprudential policy. Macroprudential policy tools can be put into three broad categories. First, capital-based tools, which target the capital of credit institutions and aim, inter alia, to enhance their resilience. An example of such a tool is the counter-cyclical capital buffer. Second, borrower-based tools, which essentially target borrowers, inter alia measuring the debt they can contract against their ability to repay. Caps on loan-to-value ratios and loan-to-income ratios, for example, seek to address this objective. Third, liquidity-based measures, which are aimed at containing banks’ vulnerabilities deriving from overexposure to cheap but unstable sources of finance. Examples of such measures include requirements regarding loans-todeposits ratios, liquidity coverage ratios and net stable funding ratios. Although monetary policy and macroprudential policy pursue different goals, one policy domain can influence the other. This has already been reflected in the ECB’s monetary policy strategy. The design of the ECB’s monetary policy strategy takes into account that credit developments deserve special attention, and allows for a good amount of built-in flexibility.

European firms were lagging behind US firms in terms of foreign direct investment and they are now catching up. European firms have entered a “globalisation process” whereby they aim to reach a global size through acquisitions. BIS Review 61/2000  6  Conclusion Allow me to conclude. The euro area has adopted a sound macroeconomic policy and has embarked upon a fairly comprehensive programme of structural reforms. These reforms will still take time to be fully completed. But they are well underway and have already boosted economic growth, job creation and corporate restructuring. This move has been triggered by the creation of a monetary union and a vast unified financial market. I am impressed by what has been achieved during the past years and the National Central Banks as well as the ECB are strongly encouraging governments and businesses to foster structural reforms in the future. The euro exchange rate is clearly misaligned relative to euro area fundamentals (robust domestic growth, steady implementation of the single market, abundant domestic savings, healthy external accounts). This is the reason why we consider that the euro has a strong potential for appreciation. The Eurosystem, which is the guardian of the euro on behalf of the people of Europe, knows that our fellow citizens want the single currency to be at least as solid as their previous national currencies. In France, to give but one example, 96% of the population want the euro to be at least as solid as the franc.