samchain/econo-pairs-v1 huggingface dataset:
Consistent with this global scenario, the ECB has done and, within its mandate, will continue to do whatever is needed to pursue its price stability objective which now implies also trying to foster growth, in order to close the negative output gap that is putting negative pressure on inflation. However, other policies must also act to deliver a lasting and sustainable improvement in economic growth prospects. Such a common European effort should entail a three-point action plan:  1  Since June 2014, euro area government bond yields have fallen, on average, by around 120 basis points. Furthermore, funding conditions for banks and companies in the euro area have improved markedly: the respective bond yields have declined by around 65 and 55 basis points on average. 2  Bank lending rates for non-financial corporations in the euro area have fallen on average by some 80 basis points since June 2014. Lower lending rates, in turn, have triggered a marked response in the supply of, and demand for, bank credit: the volume of credit to both euro area households and firms has been on a steady recovery path since mid-2014. 3  ECB estimates suggest that, had there been no asset purchase programme (including the recalibration of December 2015), inflation would have been negative in 2015. ECB assessments also suggest that the asset purchase programme (including the recalibration of December 2015) will contribute to raising the GDP of the euro area by around 1.5% in the period 2015–18.

In the past few months, a discussion has started about the need for a new risk reduction agenda. But, before discussing such further steps, it is worth recalling that we have already made significant progress – since the beginning of the crisis – in “de-risking” Europe’s financial system. We enhanced and implemented the single rulebook; defined a common resolution framework for banks to protect European taxpayers; established the Single Supervisory Mechanism and Single Resolution Mechanism, and conducted a Comprehensive Assessment of banks to deal with legacy issues before the start of Banking Union. The results are tangible. The Common Equity Tier 1 ratio has risen, on average, from around 9% to 13% since 2012 for significant institutions. Most European banks have managed to meet the fully-loaded capital requirements by now. While a lot has been achieved, there is no room for complacency: too many of our banks are still troubled by the ghosts of the past, legacy assets and NPLs. The ECB as supervisor is actively looking into this and has identified the issue as a priority. So, what is left to be done to mitigate the remaining risks and make the financial system more resilient? It is important to further improve and fine-tune what we have started. First, there is still room for improvement when it comes to establishing a truly level playing field, for example by creating a truly single rulebook.
A Background Note of the Financial Stability Board.”  22  The Widening Gap: The Great Recession’s Impact on State Pension and Retiree Health Care Systems’, Pew Centre of The States, April 2011. 10  BIS central bankers’ speeches  Summary and conclusions The international reform agenda to make firms more resilient, and especially to address the Too Big To Fail problem, is absolutely essential, the number one priority. But we should take care not to neglect the importance of the rules of the game for capital markets. Once upon a time banks extended and held illiquid loans, overseen by banking supervisors. And in a largely separate universe, securities regulators policed the integrity of individual transactions and offerings on public exchanges served by specialist intermediaries. The growth of private markets, over the counter markets, derivatives, securitization, and banks as intermediaries in capital markets has changed all that, as the crisis cruelly exposed. Banking supervisors are having to recover their historic mission for systemic stability, but this time round that calls for greater attention to markets and, in particular, not simply assuming that what’s in a bank’s trading portfolio and warehouse must be liquid. Securities regulators are having to look well beyond their roots, accepting that their rules and policies influence the resilience of the system. And financial stability authorities, including central banks, have to become as comfortable debating the (hard and soft) infrastructure of core capital markets as they are with, say, the intricacies of the capital structure of banks.

Benoît Cœuré: Completing Europe’s Economic and Monetary Union Speech by Mr Benoît Cœuré, Member of the Executive Board of the European Central Bank, at the Palestinian Public Finance Institute, Ramallah, 23 September 2012. *  *  *  I would like to thank Stefan Huemer for his contributions to the speech. I remain solely responsible for the opinions expressed herein. Mr Governor, Mr Consul General, Mr Vice President of the Board of the Palestinian Institute for Fiscal Policy, Deputy Ministers, Heads of Public Administration, Directors General, Ladies and Gentlemen, It is a great honour for me to speak at the Palestinian Public finance Institute. The establishment of the Institute marks an important step in the development of the economic governance framework in the Palestinian Territories. I wish this project every success. It relies on the commitment of so many dedicated people in the Ministry of Finance and in Adetef. As Jean Monnet, one of the founding fathers of the European Union, once put it: “Nothing is possible without men; nothing is lasting without institutions.” His words related to Europe but in fact they are relevant worldwide. The Middle East and Europe have always had close ties. They are both part of the Mediterranean region, which is economically and financially interlinked. And currently, both are experiencing an institutional transformation. In this part of the world it has come to be called the “Arab Spring”.
The reason for that partly stems from the lack of statistical knowledge about the interaction between variables. Therefore, the models mostly tend to rest on simplified assumptions based on subjective judgments. I do not want to go into details about the technical aspects of the risk measurement methods, but I would like to emphasize that it is necessary to combine them with sound judgment and common sense. Since these models are no more than simplified and limited images of the real world, they are better to be used having this fact in mind and the decisions must be taken not solely relying on the results of these models. The results should be supported with scenario analysis, stress testing and most importantly with the sound judgment of the decision makers. Another important aspect of risk analysis is that it should be integrated, meaning that the analysis results for different risk types should be comparable with each other to facilitate decision making. It necessitates that the assumptions, data, valuation models used in analyzing different types of risks be the same or at least consistent with each other. Organizationally, the integration of risk analysis requires that there be a single, common risk management authority for the whole organization. At the beginning, it might not be easy to look at risk on an institution wide basis. Since it requires a considerable amount of capital to be invested either in terms of technology, or in terms of staff.

This is no surprise given the rich cultural heritage in both our countries. It seemed to us, however, that as central banks we should devote today’s symposium to economic history and analysis. Japanese philosophy teaches us that “visiting the past teaches us new things" (“fuluki wo tazume atalashiki wo shilu”). I’m pretty confident that the historical approach of our morning session will shed light on the more recent economic developments that will be our focus this afternoon. Modern central banks emerged with the advent of industrial economies in order to facilitate trade and centralise the regalian function of issuing currency. While being strictly national, the issuing banks of 150 years ago quickly became used to keeping pace with globalisation. From the nineteenth century onwards, the appearance of central banks and the emergence of their role allowed them to meet the needs of economies that were already global, with an integrated production function in the wake of the industrial revolution. Lenders of last resort in critical moments and ultimate guarantors of their currencies, central banks extended their role in the twentieth century to include the construction and monitoring of business cycle indicators by drawing on highly-specialised knowledge of the credit sector, built up both in France and Japan through their branch networks. As well as producing statistical data and remaining vigilant with regard to internal stability in a more open and flexible environment, our central banks also became responsible for the external value of money in this period, and played an active role in international bodies.
It is precisely the increases in asset values and increased ability to borrow that stimulate the economy that are the proper concern of prudential regulation.” The hypothesis that there is a risk-taking channel for monetary policy is not undisputed, but it has become increasingly accepted and the empirical support for it is increasing (see, for instance, Altunbas et al., 2014 and Gungor and Sierra, 2014, for a couple of recent contributions). 6  BIS central bankers’ speeches  Let us be more concrete – some simple calculations So far, I have spoken about monetary policy and macroprudential policy in theoretical terms. Let me now go on to talk about them in more concrete terms with regard to resolute decisions. An obvious problem we need to deal with immediately is the high and increasing indebtedness in the Swedish household sector. On aggregate, household debt currently amounts to 174 per cent of their total income.16 However, this figure is based on all households, regardless of whether or not they have any loans. If we only include households that actually have loans, the figure is higher, 263 per cent, which is shown by data from the eight largest banks in Sweden gathered by the Riksbank. The same data show that the figure has risen to 313 per cent, if we only include households with mortgages. These figures give cause for concern, and should not just be allowed to continue growing; we will unfortunately need to deal with this situation in the foreseeable future.

However, since four of the national central banks which form part of the ESCB continue to conduct their own autonomous monetary policies, one cannot accurately refer to the ESCB as the authority responsible for conducting monetary policy in the euro area. We must instead use the term “Eurosystem”, which comprises the ECB and the 11 national central banks of those countries which have adopted the euro, and which has been adopted as a “user friendly” expression to denote the form in which the ESCB performs its tasks and responsibilities. The Eurosystem is set up, like the Federal Reserve System, in a distinctively decentralised manner. At the same time, however, the Eurosystem disposes of marked centralised structures, since the definition and implementation of the single monetary policy are carried out under the exclusive responsibility of BIS Review 4/2000  2  the decision-making bodies of the ECB. These are, first of all, the Governing Council, which defines the single monetary policy for the euro area and takes all other decisions of fundamental importance to the Eurosystem. The Members of the Governing Council are the Governors of the 11 national central banks and the six members of the Executive Board of the ECB. Basically, all decisions are taken by simple majority, whereby each member has one vote. The other important decision-making body is the Executive Board of the ECB, which is basically responsible for the implementation of monetary policy in accordance with the decisions taken by the Governing Council.
Over the past five years, Switzerland has  BIS central bankers’ speeches  5  been the sixth largest FDI investor and eight largest job provider through foreign investment in the U.S.13 Conclusion: the current account and SNB monetary policy Let me return to the question of Swiss monetary policy and the current account posed at the beginning of my speech. I have argued that the key components driving Switzerland’s current account surplus – notably financial services, merchanting, and direct investment income – are not closely linked with either the exchange rate or the domestic economic situation. I have also argued that, historically, an appreciation of the Swiss franc has not led to a reduction in Switzerland’s current account. Yet this disconnect between the exchange rate and the current account balance does not diminish the exchange rate’s importance for the Swiss economy. Given the high degree of openness of our economy, the exchange rate – next to the interest rate – is the key definer of monetary conditions and thus has a strong impact on both prices and production. The Swiss economy has shown in the past that it can handle volatility and appreciation in the real exchange rate when these are based on fundamentals. However, excessive and abrupt appreciations driven by financial market turmoil have a disruptive impact on prices and production, resulting in deflation and recession. What, in practical terms, does this mean for the SNB’s monetary policy? It means that we do not gear our monetary policy to the current account.

BIS Review 71/2009  1  Evidence from South East Asia indicates that capital flows engendered a financial crisis in that region in 1997 and 1998. In light of this evidence, the results of the Foreign Private Investment and Investor Perception Survey are intended to assist the Government to effectively monitor private capital flows. Accurate and reliable data on private capital investment will be helpful in understanding recent developments in the Zambian economy. Better information on investor perceptions will assist Government in designing policies that will attract more investment into our economy. Further, the results of the survey should prove useful to the private sector and other stakeholders. On the whole, the importance of timely and reliable information on capital flows in the design of appropriate policy responses by Government and thus enhancing macroeconomic stability can hardly be overemphasised. Adequate and consistent information on capital flows will also greatly improve Balance of Payments Statistics for Zambia and serve as an early warning system for Government on potential international financial crises and other external shocks. Mr. Chairman, Zambia, like many other developing countries, has inadequate capacity to collect, analyse and disseminate data and information on foreign private capital investment. Compared with other countries in the African sub-continent, Zambia has serious gaps with respect to data on foreign private capital investment. For instance, while we are now at the second phase of the Survey, Uganda, Tanzania and Malawi are in the sixth, fourth and third phases, respectively.
We have seen the emergence of principal trading firms, changes in regulations of key intermediaries, and the growth of nonbank financial institutions.2 With this evolution, it is vitally important to ensure that safeguards and systems also evolve so that these markets function well in all circumstances and conditions, including unprecedented events like the pandemic. We need to reflect on and learn from these experiences and consider ways to make these and other markets more robust, thereby minimizing the potential negative consequences to the economy and the need for extraordinary policy responses. Market Conditions in September and March I know it might seem like a lifetime ago, but allow me take you to mid-September of last year. A number of otherwise ordinary occurrences—including corporate tax payments and settlement 1/4  BIS central bankers' speeches  of newly issued Treasuries—were expected to put some upward pressure on short-term rates, but the market response was out of proportion to the magnitude of the shock. Conditions in funding markets became highly volatile, with both secured and unsecured lending rates rising sharply. Indeed, the size of the reaction in repo rates, the spillover to the federal funds market, and the emergence of strains in market functioning were well outside of recent experience. And the market stress was looking to get worse, not better. 3 4 In response to these developments, the Federal Reserve conducted a series of large-scale repo operations with the aim of calming conditions in funding markets and bringing the federal funds rate within the target range.

We need to do this in order to rebuild confidence and to ensure that we do not repeat the type of financial boom and bust that has characterized this cycle. Thank you very much for your kind attention, I would be happy to take questions. BIS Review 28/2009  7
For the future, it becomes an important task to encourage research to improve our understanding of measures of expectations. 8  BIS Review 39/20086  Inflation expectations surveys (weekly average, percent) 5,0  5,0  4,5  4,5  4,0  4,0  3,5  3,5  3,0  3,0  2,5  2,5  2,0 Jan.06  2,0 May.06  Sep.06  Jan.07  Money desks 1 yr. ahead EES 12 months ahead (*)  May.07  Sep.07  Jan.08  Money desks 2 yrs. ahead EES 24 months ahead  (*) Economic Expectations Survey (EES). Source: Central Bank of Chile. Forward inflation compensation from swap rate average (moving weekly average, percent) 4,5  4,5  4,0  4,0  3,5  3,5  3,0  3,0  2,5  2,5  2,0  2,0  1,5 Jan.05  1,5 Jul.05 Jan.06 IC 1 in 1  Jul.06 Jan.07 IC 5 in 5  Jul.07 Jan.08 IC 3 in 2  Source: Central Bank of Chile. BIS Review 39/2008  9  Inflation compensations and analyst’s forecast error variability (percentage points) 4,5  4,5  4,0  4,0  3,5  3,5  3,0  3,0  2,5  2,5  2,0  2,0  1,5  1,5 1,0  1,0 06 IC 1 in 1 IC 3 in 2 IC 5 in 5  Jul. 07 Jul. 08 Bloomberg analyst’s forecast error variability  Sources: Central Bank of Chile and Bloomberg.

All this can derive on an inflation spiral, fueled by higher prices, higher indexation practices, accelerating wages and increases in inflation expectations. These processes can be very persistent and extremely costly to the economy. In some cases they may even result in sudden uncontrolled inflation acceleration with catastrophic consequences. Nevertheless we have learnt the lesson, and we know today the importance of price stability and appropriate risk management. References Bernanke, B. (2007), “Inflation Expectations and Inflation Forecasting,” speech delivered at the Monetary Economics Workshop of the NBER Summer Institute, Cambridge, Massachusetts, July 10. De Gregorio, J. (2007), “Comments,” in Clarida, R. (ed.) G7 Current Account Imbalance, Sustainability and Adjustment, NBER and Chicago University Press, also as Documento de Política Económica No. 115, Banco Central de Chile. Fatas, A. (2002), “The Effects of Business Cycle on Growth”, en N. Loayza y R. Soto (eds. ), Economic Growth: Sources, Trends and Cycles, Banco Central de Chile. Galí, J. y L. Gambetti (2007), “On the Sources of the Great Moderation”, mimeo, UPF. Mishkin, F. (2008), “Monetary Policy Flexibility, Risk Management, and Financial Disruptions,” speech delivered at the Federal Reserve Bank of New York, January 11. Obstfeld, M. and K. Rogoff (2007), “The Unsustainable Current Account Revisited,” in Clarida, R. (ed.) G7 Current Account Imbalance, Sustainability and Adjustment, NBER and Chicago University Press. Ramey, G. y V. Ramey, (1995), “Cross-Country Evidence on the Link between Volatility and Growth”, American Economic Review, Vol. 85, No. 5, pp. 1138-1151. BIS Review 39/2008  11
Finally, on 22 January 2015, the ECB announced a quantitative easing programme going well beyond market expectations in terms of length, target volumes and the wide range of the securities eligible for purchase. The euro lost even more ground against the US dollar and the pound sterling. For its neighbours, the ECB’s monetary policy easing had both positive and negative effects. On the one hand, the measures promised to support economic recovery in the euro area, which, thanks to real economic linkages, would also benefit neighbouring states. On the other hand, as with the US dollar and the pound, it led to increased upward pressure on the euro area’s neighbour currencies. Switzerland’s monetary policy situation saw a fundamental shift. Let me explain this situation by means of interest rate differentials on call money (cf. chart 15).7 The call money rates enable the best comparison of monetary policy restrictiveness. In a positive interest rate environment, they reflect movements in the main refinancing rate, and in a negative interest rate environment, they follow central bank deposit rates. In the phase leading up to the crisis, the interest rate differentials between the euro area and the Czech Republic, Denmark and Sweden were close to 0%. In contrast, Swiss interest rates have historically been below the euro area’s interest rates. This interest rate differential reflects Switzerland’s status as a safe haven. In exchange for the greater security of Swiss investments, investors accept lower interest rates than they would receive abroad.

The annual yield – including the gold price movements – fluctuated very strongly between minus 25% and plus 20%. For the assessment of future developments in earnings, these figures are only of limited significance, however. The level and spread of our earnings are determined by the balance sheet total, the structure of the assets and the achievable financial market yields. Since these measures change over time, it is rather difficult to estimate the long-term earnings potential of the SNB. At the end of 2004, the National Bank’s assets amounted to CHF 118 billion. After distribution of the proceeds from the gold sales in spring 2005, the invested funds contracted by CHF 21 billion. Furthermore, higher profit distributions to the Swiss Confederation and the cantons should deplete the existing distribution reserve by 2012, thus decreasing our assets by a further CHF 10 billion as compared with the end of 2004. From today’s perspective, this leaves the SNB with assets in the region of CHF 85 billion. At present, the National Bank’s assets comprise 25% Swiss franc investments, 45% foreign exchange reserves and 30% gold. Foreign currency investments generate interest and dividend income. Given the globally low inflation rates, the nominal interest income is currently substantially lower than in the 1980s and 1990s. In addition, the valuation of bond and equity portfolios, foreign exchange positions and gold holdings at market prices result in valuation gains and losses. Meanwhile, the interest income on Swiss franc assets – primarily repos – is marginal.