samchain/econo-pairs-v1 huggingface dataset:
Durant ces dix dernières années, les communiqués du G7 qui délivraient un message commun relatif aux taux de change ont toujours fait l’objet de la plus grande attention de la part des investisseurs et des marchés, et se sont révélés efficaces. Il s’agit là d’un atout inestimable que nous devons préserver avec le plus grand soin. *  *  * En conclusion permettez-moi de souligner trois points :  9  BIS Review 22/1999  D’abord, en ce qui concerne la Banque centrale européenne et le Système européen de banques centrales, j’aimerais proposer une métaphore qui pourrait éclairer mon propos. Il y a une équipe monétaire européenne composée de douze joueurs, la BCE et les 11 banques centrales nationales. C’est toute l’équipe monétaire des douze qui joue sur le terrain, avec un seul “ esprit d’équipe ”, qui constitue un des atouts inestimables de l’Europe. Deuxièmement, le GVII de samedi à Bonn nous a permis de faire de nouveaux progrès dans le renforcement de ce que l’on est convenu d’appeler l’architecture financière internationale. On a parfois un peu trop tendance, à mon avis, à insister sur les différences de sensibilité qui se manifestent ici et là. Ce qui est beaucoup plus important, c’est que la communauté internationale est en accord profond sur de très nombreux points.

En complément de ces données fondamentales saines, qui sont d’une importance décisive, nous devons préserver le processus de la coopération internationale et nous devons renforcer cette coopération . Elle s’est avérée utile au cours de ces quinze dernières années. En se fondant sur l’expérience et les enseignements de ces dernières années, on peut probablement encore améliorer cette coopération internationale, et le fait que trois devises de pays du G7 se soient actuellement fondues dans l’euro pourrait et devrait rendre plus facile et de plus en plus efficace cette coopération. Dans cette perspective, j’aimerais attirer votre attention sur quatre principes, qui sont essentiels pour l’efficacité de la coopération internationale. - Le premier principe dont nous ne devons pas nous écarter est le respect du fait que ce sont les données fondamentales qui commandent l’évolution des taux de change dans le moyen et le long termes ; - le deuxième principe est la nécessité de rechercher un consensus approprié entre les représentants du pouvoir exécutif et les autorités monétaires d’une part, entre les différents pays concernés d’autre part ; - le troisième principe est le respect de ce que j’appellerais la discipline verbale. Les marchés peuvent être troublés par des déclarations hétérogènes et contradictoires. Au contraire, ils sont impressionnés par la cohésion et par la cohérence de déclarations s’en tenant au plus près des “ termes de référence ” agréés d’un commun accord ; - le quatrième principe est la nécessaire préservation de la crédibilité des autorités dans toutes les circonstances.
In a situation where the Riksbank's monetary policy scope is not unlimited, it is important that the question of how an economic downturn shall be counteracted is on the economic policy agenda. There are currently large reserves in fiscal policy, but using them is not unproblematic. If low real interest rates persist, it may in the longer run become necessary to modify the monetary policy framework with the 2 per cent inflation target that  35 It is fairly common, especially among emerging market economies, to lower the inflation target as confidence in the inflation-targeting regime increases. However, there are few examples of countries that have raised their inflation target (see, for instance, Apel, Armelius and Claussen, 2017). 17 [24]  most central banks currently apply. Of the various proposals circulating in international debate, I am currently leaning towards a raised inflation target being the best option. At the same time as this would alleviate the problem that the repo rate cannot always be cut as much as needed, it is also relatively undramatic and straightforward. But this does not mean that it is something I feel we should do soon. A fairly major problem is that it is difficult to make this kind of change independently of other countries. But it is always good to be well-prepared in advance and it is therefore worth starting to think about possible modifications already today.

Consumers themselves would be more risk averse and prefer to stick with simple transactions and products. As mentioned already, regulatory framework would be strengthened, especially the use of macroprudential oversight that focuses on system-wide stability. As such, closer supervision of systemically important financial institutions, including non-banks, would be required. Finally, the microprudential oversight would also be strengthened to rectify previously identified shortcomings, particularly the Basel II framework, corporate governance, and incentive misalignment. Though it looks as if we could be in the process of creating a “new world order”, given what we have done so far in strengthening our financial sector resilience, I believe that this transition would be a smooth one and add further strength to our financial system. Needless to say, a strong financial system is the backbone of sustainable economic growth in the longterm. Thank you for your attention. 4  BIS Review 131/2009
While this argument for a wider pre-emptive role for monetary policy would bring self-evident benefits, we should bear in mind that it also entails some costs and can be difficult to communicate to the  4  BIS Review 34//2005  public. These costs can be understood as an insurance premium that must be paid for using monetary policy in a decidedly preventive fashion. These considerations help to highlight some dimensions of the current monetary policy context that may benefit from a sound banking capital regulatory framework. In this regard, I tend to think that certain important elements in Basel II will contribute, firstly, to restricting the build-up of financial imbalances, thus diminishing the probability of extreme adverse shocks; and secondly, to mitigating their negative consequences for the overall system. As the disorderly granting of credit is often a defining characteristic of an extreme and unstable phase of financial euphoria, a regulatory framework that provides banks with strong incentives for sound risk assessment must clearly be conducive to a more watchful and efficient allocation of credit. In this sense, one would naturally expect a more risk-sensitive capital framework to make banks more likely to account for the true risks of lending policies aimed at achieving short-run-focused targets, such as market share or portfolio size, at the expense of putting their medium-term financial health more at risk.

This observation is of special relevance precisely in times of crisis, when some bank managers may be more tempted to pursue “gambling for resurrection” strategies. Likewise, as market participants understand that banks will have stronger motivation to employ better technologies for risk management, one would naturally expect the industry to move to a safer plateau, with its capital, therefore, enjoying a lower risk premium, all other things being equal. To summarise, while I think that a reasonable degree of procyclicality of the supply of loans is a logical feature of the credit market, I sympathise with the idea that all kinds of regulations affecting banks, from accounting to prudential ones, should try to minimise or compensate for the risk of excessive sensitivity of bank lending policy to cyclical conditions. Indeed, the latter would normally appear when banks are poorly capitalised and lending decisions are based on inadequate risk assessments and driven only by current market conditions, a natural terrain for unplanned drastic swings in credit policies. I believe that all investment in technology and human capital, enhanced transparency, and better and pre-emptive risk management based on improved control structures and corporate governance will entail significant improvements not only to the stability and soundness of the financial system, but also to its efficiency in the allocation of resources. This, in my view, should benefit the cyclical behaviour of the banking system and also, it is very likely that it will be around a superior trend. 5.
Perhaps, from everyone’s point of view, the going was too good to obstruct; the expansion was too exciting to discourage; the resulting luxuries and wealth were too wonderful to hold back. No wonder therefore, that the financial world continued to happily tootle along this unrealistic path, at break-neck speed. Logically, the accident had to happen, and happen it did, and what an accident that was! A crash landing that was sudden and unbelievably disastrous, not only to the developed world, but to all economies of the globe! Mr. Chairman, the events of the recent past clearly suggest to us that the world’s financial and economic communities have, albeit unintentionally, placed the entire civilized world’s systems and structures at intense risk, and perhaps even endangered the gains of civilization built over several centuries. However, to the eternal credit of the world’s political and economic leaders, we could be relieved that we have been able to face that shock and  BIS Review 106/2009  1  emerge out of it, bruised and battered no doubt, but fortunately, with our systems still reasonably intact. Nevertheless, the major down-turn suffered by the world economy as a result of these shocks is yet to be fully overcome. The tight liquidity crunch that is suffocating our credit markets; the stubborn toxic assets that won’t go away; the suspicions with which banking and financial institutions view each other, are yet continuing, although there are signs of some abatement.

The embarrassing summersaults that various governments had to perform by unceremoniously ditching some of their most sacred and fundamental policies, have also been better understood, by many communities. Now, what is needed is to move forward decisively within this new paradigm. To do so effectively, we have to essentially place some barriers to deal with unsustainable risk taking. The freedom of the wild ass that supported unfettered and reckless economic actions to create things out of nothing has to be dealt with. At the same time, we need to revisit some of the fallacies that developed over the last decade or so, including those that indirectly said: “Don’t worry too much about a few bubbles”; “markets are always right”, “innovation should not be discouraged”; “state intervention is dangerous”, etc. In a way, some of these positions perhaps prompted a kind of an unconscious regulatory anarchy! The resulting subdued regulatory reactions were of course exploited by the greedy market and the rest is history! This time round therefore, the wisdom of such concepts and absolute reliance on them, would need to be critically reviewed. What then should we do? Maybe, we could start by making a “Wish-list”, and then moving towards making a “To-do list” to realize such wishes. What could we wish for? First, perhaps we should wish for effective “immunization” mechanisms to safeguard national financial systems from the contagion effects of globalized viruses and cross border toxic elements.
Whereas the need for better risk management has been the main driving force behind the recent wave in innovation in more advanced financial markets, this is not the case in less developed markets. The drive towards financial innovation in some instances can largely be attributed to the need to improve or maintain profitability. When talking about financial innovation, an important aspect that one needs to consider is whether or not the process is resulting in a reduction in the cost of doing business and providing banking services, on one hand, and whether it is translating into better pricing, on the other hand. We should therefore, not be surprised that innovation does not always yield the expected benefit of reduced prices. Innovation is clearly an important phenomenon of any sector of a modern economy. Successful financial innovation must reduce costs and result in the provision of improved services and affordable financial resources to users, particularly to the productive sector. A low level of innovation and development in the financial sector produces a weak impact of financial intermediation on economic growth. The right kind of innovation obviously would help the financial sector fulfill its core functions; and if the financial sector fulfilled its functions better and at lower cost, it would almost surely contribute to growth and societal well-being.

This was because Government Securities offered highly attractive yield rates (with zero credit risk) compared to other asset classes. Recently Government has maintained prudent fiscal  BIS central bankers’ speeches  1  policies and has reduced its borrowing to 1.8% of GDP leading to a significant fall in Government Securities yield rates. The reduction in yields rates on government securities has made it increasingly difficult for banks to sustain their profitability. Therefore, in order to remain profitable, banks have had to become innovative and resorted to riskier banking activities. This resulted in a shift in the asset structures of most banks from government securities holdings to an expanding loan portfolio, which offers higher returns. 3.0  The role of financial innovation in promoting the private sector  Innovation can generally be defined as a continuous process where enterprises and individuals seek new and improved products, processes, and organisation structures in order to reduce costs of production, better satisfy customer demands, and yield greater profits for themselves. When specifically referred to banks and other financial institutions, innovation, commonly is known as financial innovation, refers to any change in the scale, scope and delivery of financial services. Financial innovations can therefore be grouped as new products (e.g. adjustable rate mortgages; personal loans); new services (e.g., internet banking); and new production processes (e.g., electronic record-keeping for securities; credit scoring); or new organisational forms (e.g., Internet-only banks).
This is also the case in Switzerland. To legitimise its independence, the lawmakers have deliberately given the SNB a narrow and clearly defined mandate. They also place upon the SNB the duty of accountability of the fulfilment of its mandate. Pursuing objectives that go beyond the core task of monetary policy would undermine the legitimacy of the SNB’s independence and thus endanger it over time. Focus on price stability The institutional framework of the SNB is in line with both of the principles of regulatory policy I have described, namely independence from politics and a focus on monetary policy. In recent years, time and again these principles have been consciously or unconsciously questioned by some in politics and among the public. This has seen calls from politicians for the SNB to directly finance government tasks. For example, a popular initiative launched this spring seeks to amend the Constitution to give the SNB a direct role in financing the national pension scheme. Before I delve into why the direct financing of government tasks by the SNB is not in keeping with the principles of regulatory policy, it is helpful to first contextualise the SNB’s profit development. For it is likely that the increase in these desires is tied above all to the growth of our balance sheet and our high profits in the past few years. These high profits have led to an increase in our so-called distribution reserve. At the end of 2021, it amounted to CHF 103 billion.

Narrow mandate and independence as foundation In general, regulatory policy comprises all measures which a government puts in place to create appropriate framework conditions for the longer-term development of the economy. If, in doing so, the government follows sensible principles, it creates conditions in which the economy can optimally develop its potential and the prosperity of the population increases over time. An essential component of good framework conditions, and of good regulatory policy, is price stability. In the absence of price stability, the smooth functioning of an economy is inconceivable. Inflation as well as deflation hinder the steering role of prices in ensuring that labour and capital are used as productively as possible. Inflation also reduces household purchasing power and especially impacts the more vulnerable sections of society. In order to ensure price stability in the long term, two principles of regulatory policy are key: - First, price stability must be the fundamental guiding principle of monetary policy - and second, a central bank must be independent from politics. Both of these principles are today reflected in the legislation of many countries. In Switzerland, the independence of the central bank is enshrined in the Federal Constitution. This means that the SNB may neither accept nor seek instruction from politics or other quarters. The Constitution also states that the SNB shall pursue a monetary policy serving the interests of the country as a whole.
Real estate market indicators show an ongoing recovery in the sector which, albeit uneven in terms of market segments and geographical areas, is also contributing to the buoyancy of household spending and employment. Although investment has decelerated in recent quarters, it remains firm given the favourable situation of financial conditions and final demand. The Banco de España's projections anticipate that the current growth phase of the Spanish economy, dating back to the second half of 2013, will persist over the next few years and that it will continue to be supported by gains in competitiveness, the ongoing favourable financial conditions, and the expected positive performance of international markets. The foundations of the recovery in the Spanish economy are, in fact, the correction of certain macroeconomic and financial imbalances, which had built up previously, most notably the improvement in international competitiveness, the progress made in the financial position of households, firms and financial institutions, without forgetting the improvement in employment, with a significant decline in the unemployment rate in the last four years, although it still remains at very high levels. However, it should be noted that GDP growth in recent years has also received a significant boost from factors of a more temporary nature such as lower oil prices, the fiscal impulse which gave rise to an expansionary budgetary policy stance in 2015 and 2016, and the ECB's expansionary monetary policy. Lower growth of activity can be expected as the effect of some of these factors fades.

International policy coordination, harmonisation and the consistent application of implemented instruments are vital to ensure effectiveness and limit the possibility and impact of adverse cross-border spillover effects 25. The potential spillover of nationally implemented macroprudential policies largely depend on the degree of financial cycle synchronisation, especially within the highly integrated (economically and financially) states, as in the case of the European Union, or even more so within the currency union members with a single monetary policy. Several aspects of the potential spillover should be considered when formulating the policy stance in a highly integrated environment that challenges us in pursuing financial stability. Outward cross-border spillovers of systemic risk create a need for countervailing macroprudential measures, clearly emphasising the need for policy coordination and measure reciprocation. In contrast, inward spillover effect is a direct consequence of the regulatory arbitrage that motivates internationally operating financial institutions to seek organisational restructuring that minimizes regulatory costs. The issue of converting subsidiaries into branches has recently attracted a lot of attention, as some member states are actively trying to reduce this risk, 26 alongside international efforts directed towards formulating a framework for voluntary cross-border reciprocity 27.
The origins of the crisis lay in problems on the US housing market, but after the bankruptcy of Lehman Brothers in September 2008 the situation developed into a global financial crisis. GDP in the world as a whole fell for the first time since the 1940s (see Figure 2). There was also a dramatic fall in global trade (see Figure 3). This was then followed by a couple of years in which the global economy began to recover, and global trade increased (see Figure 3). However, it did not take long for clouds to gather on the horizon again. Problems with major budget deficits and sovereign debts became apparent in several countries in the euro area,  BIS central bankers’ speeches  1  primarily in Greece, but also in Ireland, Italy, Spain and Portugal (see Figure 4). In Europe, the financial crisis was followed by a debt crisis. However, the reasons why the various countries were hit by problems were not always the same. In Greece, for example, public finances were far too weak at the outset to cope with such a severe downturn as that brought about by the financial crisis. But countries like Ireland and Spain also suffered serious problems, despite their relatively strong public finances at the outset. How could this happen? The problems on the US housing market originally triggered the global financial crisis. But problems also arose on the housing markets in several other countries, such as Spain and Ireland (see Figure 5).

These challenges have been compounded by deeper forces that have radically altered the balance of saving and investment in the global economy.4 In the process, these have moved equilibrium interest rates into regions that monetary policy finds difficult to reach. Whether called “secular stagnation” or a “global liquidity trap”, the drag on jobs, wages and growth is real. Chart 1 Geopolitical risk doubled, on average, after 9/11  Source: Bank calculations and Caldara and Iacoviello (2016), ibid. Less visible, but more fundamental drivers of economic uncertainty are the powerful forces arising from technology and globalisation. The integration of 40% of humanity into the global economy has re-orientated production, eliminated jobs and may have depressed wages. These dynamics have been accompanied by the implications of technology for the  2  These are distinct from other types of uncertainty familiar to economists, including model uncertainty (uncertainty about the empirical properties of models as descriptions of the world), or to policymakers, such as the long and variable lags involved in the effects of monetary policy. 3  Economists have recently attempted its measurement by examining the frequency of newspaper articles containing terms like “geopolitical tensions”, “terrorist threats”, and “war risks” in a sample of global newspapers. See Caldara, D and Iacoviello, M (2016), “Measuring geopolitical risk”, Federal Reserve Board, mimeo. Political scientists have also constructed similar measures though, it seems, at lower frequency. For an application see for example Berkman, H., B. Jacobsen, and J.